{"response":{"docs":[{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-b2020-belec-p-btext","title":"Baker County Board of Education, Newton, 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":["2020-06-30"],"dcterms_description":["Financial report for the Bacon 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":["Baker County Board of Education (Ga.)--Appropriations and expenditures--Periodicals.","Education--Georgia--Baker County--Auditing--Periodicals.","Education--Georgia--Baker County--Finance--Statistics--Periodicals.","Education--Auditing","Education--Finance","Expenditures, Public","Georgia--Baker County--fast--https://id.oclc.org/worldcat/entity/E39PBJgxqwBrwyH6QgJ7CB3hHC","Georgia Government Documents--Serial"],"dcterms_title":["Baker County Board of Education, Newton, 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-bb16-b2020-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-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 statements","financial records"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":["Education--Auditing--fast","Education--Finance--fast","Expenditures, Public--fast","Georgia--Baker County--fast--https://id.oclc.org/worldcat/entity/E39PBJgxqwBrwyH6QgJ7CB3hHC","Periodicals--fast","Statistics--fast"],"fulltext":"BAKER COUNTY BOARD OF EDUCATION \r\nNEWTON, GEORGIA \r\nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2020 \r\n(Including Independent Auditor's Reports) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION - 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 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 CONTRIBUTIONS  TEACHERS RETIREMENT SYSTEM OF GEORGIA 3 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY \r\nPUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA 4 SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY \r\nSCHOOL OPEB FUND 5 SCHEDULE OF CONTRIBUTIONS  SCHOOL OPEB FUND 6 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION 7 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES \r\nIN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \r\n \r\nPage \r\ni \r\n1 2 \r\n3 4 5 6 7 8 \r\n29 30 31 32 33 34 35 \r\n \r\n (This page left intentionally blank) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \r\nSECTION I FINANCIAL SCHEDULES SUPPLEMENTARY INFORMATION 8 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 9 SCHEDULE OF STATE REVENUE 10 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\nSECTION II COMPLIANCE AND INTERNAL CONTROL REPORT INDEPENDENT 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\nSECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\nSECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\n \r\nPage \r\n36 37 39 \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 Baker County Board of Education \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 Baker County Board of Education (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\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 August 23, 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\nAugust 23, 2021 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n (This page left intentionally blank) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 \r\nINTRODUCTION \r\nThe discussion and analysis of the Baker County Board of Education's (the School District) financial performance provides an overall review of the School District's financial activities for the fiscal year ended June 30, 2020. Comparative data is provided for fiscal year 2020 and fiscal year 2019. The intent of this discussion and analysis is to look at the School District's financial performance as a whole; readers should also review the financial statements and the notes to the basic financial statements to enhance their understanding of the School District's financial performance. \r\nFINANCIAL HIGHLIGHTS \r\nKey financial highlights for fiscal year 2020 are as follows: \r\n The total assets and deferred outflows of the School District increased by $2.4 million, which was primarily noted as an increase in deferred outflows related to OPEB and pension funds. \r\n Total liabilities and deferred inflows of resources increased for the year by $1.8 million, primarily due to an increase in liabilities associated with OPEB and pension funds. \r\n The combination of the increase in total assets and deferred outflows of resources of $2.4 million and the increase in total liabilities and deferred inflows of resources of $1.8 million yields an increase in net position of $0.6 million. \r\n At June 30, 2020, the School District's general fund reported a balance of $3.2 million, an increase of $0.6 million from the last fiscal year. Of this total, $3.1 million represents unassigned fund balance. \r\nOVERVIEW OF THE FINANCIAL STATEMENTS \r\nThis discussion and analysis is intended to serve as an introduction to the School District's basic financial statements. The basic financial statements are comprised of three components: 1) Government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. \r\nGovernment-Wide Financial Statements \r\nThe government-wide financial statements are designed to provide readers with a broad overview of the School District's finances in a manner similar to a private-sector business. The Statement of Net Position presents information on all the School District's assets, deferred inflows/outflows, and liabilities with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the School District is improving or deteriorating. It is important to note that this statement consolidates the School District's current financial resources (short-term) with capital assets and long-term liabilities. \r\nThe Statement of Activities presents information showing how the School District's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods (e.g. uncollected taxes, etc.). \r\ni \r\n \r\n BAKER COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 \r\nFund Financial Statements \r\nA fund is a grouping of related accounts that is used to maintain control over resources that have been separated for specific activities or objectives. The School District, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the School District can be divided into two categories: governmental funds and fiduciary funds. \r\nGovernmental Funds - Most of the School District's activities are reported in governmental funds focusing on how money flows in and out of those funds and the balances left at year-end available for spending in future periods. 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 you determine whether there are more or less financial resources that can be spent in the near future to finance educational programs. \r\nFiduciary Funds - The School District is the trustee, or fiduciary, for assets that belong to others such as school clubs and class funds. The School District is responsible for ensuring assets reported in these funds are used only for their intended purposes and by those to whom assets belong. \r\nNotes to Financial Statements \r\nThe notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. \r\nGOVERNMENT-WIDE FINANCIAL ANALYSIS \r\nAs noted earlier, net position may serve over time as a useful indicator of a government's financial position. As of June 30, 2020, School District assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $4.2 million, primarily due to cash on hand and the net investment in capital assets. \r\nNet position of $7.6 million represents the School District's investments in capital assets (e.g. buildings, land, land improvements, equipment) less any related debt used to acquire those assets that remain outstanding. The School District uses the capital assets to provide services to our students, faculty, and community; consequently, these assets are not available for future spending. \r\nUnrestricted net position may be used to meet ongoing obligations and operations of the School District. \r\nAn additional portion of the School District's total net position represents resources that are subject to external restrictions on how they may be used. Comprising the majority of restricted net position is net position for capital outlay projects, representing 98.4% of total restricted net position. The remaining 1.6% represents funds restricted for ongoing federal programs. \r\nii \r\n \r\n BAKER COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 \r\n \r\nThe following table details the major categories of assets, deferred outflows of resources, liabilities, deferred inflows of resources, and net position with a comparison to the prior fiscal year. \r\n \r\nTable 1 Net Position \r\n \r\nGovernmental Activities \r\n \r\nFiscal Year \r\n \r\nFiscal Year \r\n \r\n2020 \r\n \r\n2019 \r\n \r\nAssets Current and Other Assets Capital Assets, Net \r\n \r\n$ 4,152,996.95 $ 3,497,262.97 \r\n \r\n7,706,790.02 \r\n \r\n7,549,634.69 \r\n \r\nTotal Assets \r\n \r\n11,859,786.97 11,046,897.66 \r\n \r\nDeferred Outflows of Resources \r\n \r\n2,890,183.00 \r\n \r\n1,223,564.00 \r\n \r\nLiabilities Current and Other Liabilities Long-Term Liabilities \r\n \r\n541,524.55 8,087,805.24 \r\n \r\n660,069.78 6,256,814.11 \r\n \r\nTotal Liabilities \r\n \r\n8,629,329.79 \r\n \r\n6,916,883.89 \r\n \r\nDeferred Inflows of Resources \r\n \r\n1,969,296.00 \r\n \r\n1,843,539.00 \r\n \r\nNet Position Net Investment in Capital Assets Restricted Unrestricted (Deficit) \r\n \r\n7,624,210.28 474,668.45 \r\n(3,947,534.55) \r\n \r\n7,525,638.79 254,909.11 \r\n(4,270,509.13) \r\n \r\nTotal Net Position \r\n \r\n$ 4,151,344.18 $ 3,510,038.77 \r\n \r\niii \r\n \r\n BAKER COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 \r\n \r\nCHANGES IN NET POSITION FROM OPERATING RESULTS \r\n \r\nNet position increased $0.6 million from operating results in the fiscal year ended June 30, 2020 compared to an increase of $0.3 million in the prior fiscal year. Key elements of this increase are as follows on the next table: \r\n \r\nTable 2 Change in Net Position \r\n \r\nRevenues \r\n \r\nProgram Revenues \r\n \r\nCharges for Services \r\n \r\n$ \r\n \r\nOperating Grants and Contributions \r\n \r\nCapital Grants and Contributions \r\n \r\nGovernental Activities \r\n \r\nFiscal Year \r\n \r\nFiscal Year \r\n \r\n2020 \r\n \r\n2019 \r\n \r\n31,764.88 $ 3,123,058.28 \r\n439,799.46 \r\n \r\n31,684.42 2,774,708.04 \r\n32,394.54 \r\n \r\nTotal Program Revenues \r\nGeneral Revenues Taxes Property Taxes For Maintenance and Operations Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Other Sales Taxes Investment Earnings Miscellaneous \r\nExtraordinary Item \r\n \r\n3,594,622.62 \r\n \r\n2,838,787.00 \r\n \r\n2,402,775.66 \r\n271,350.97 20,338.52 1,369.47 \r\n137,530.38 - \r\n \r\n2,358,201.12 \r\n214,291.66 5,811.94 \r\n15,425.74 133,372.96 \r\n(441.19) \r\n \r\nTotal General Revenues and Extraordinary Item \r\n \r\n2,833,365.00 \r\n \r\n2,726,662.23 \r\n \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 Long-Term Debt \r\n \r\n6,427,987.62 \r\n3,095,529.84 \r\n245,596.51 357,924.32 \r\n39,948.53 303,617.51 266,944.27 277,632.01 486,164.94 392,447.64 \r\n15,327.92 2,051.00 \r\n64,278.70 236,092.55 \r\n3,126.47 \r\n \r\n5,565,449.23 \r\n2,793,970.33 \r\n287,615.02 241,183.07 147,915.95 218,920.97 178,802.55 283,516.97 453,026.82 408,919.97 \r\n797.50 40.47 \r\n46,301.15 243,719.61 \r\n1,736.54 \r\n \r\nTotal Expenses \r\n \r\n5,786,682.21 \r\n \r\n5,306,466.92 \r\n \r\nIncrease in Net Position \r\n \r\n$ \r\n \r\n641,305.41 $ \r\n \r\n258,982.31 \r\n \r\niv \r\n \r\n BAKER COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 \r\nFINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS \r\nGeneral Fund Budgetary Highlights \r\nThe School District's budget is prepared in accordance with Georgia law and is based on accounting for certain transactions on the modified accrual basis of accounting. The School District uses sitebased budgeting and the budgeting system is designed to tightly control site budgets but provide flexibility for site management. \r\nThe most significant budgeted fund is the general fund. As originally adopted, general fund revenues were projected to be $4.9 million with appropriated expenditures totaling $5.2 million, down 3.7% from the fiscal year 2019 final amended budget. \r\nAs fiscal year 2020 progressed, the final amended general fund budget increased $0.8 million for revenues, an increase of 15.3% from the original budget for the year. The reason for the amendment was to adjust federal grants from estimates to actual awarded amounts. \r\nThe original budget for fiscal year 2020 included appropriated expenditures of $5.2 million, which was $0.2 million less than the 2019 final budget appropriated expenditures of $5.4 million. \r\nGeneral Fund Operations \r\nThe general fund finished fiscal year 2020 with a fund balance of $3.2 million, an increase of $0.6 million or 23.4%, from fiscal year 2019. Actual revenues were above budget projections by $0.1 million while actual expenditures were $0.7 million less than budgeted. Several important factors led to the actual results for the year. \r\nLocal revenue sources represented 44.7% of total general fund revenues for the year, down from 46.8% in the prior year. Local revenues ended the year above budgeted projections because property tax collections were more than projected ($0.5 million). The remainder of local revenues consisted of other taxes, interest, charges for services, and miscellaneous items. \r\nTotal expenditures were under budget by $0.7 million. The significant changes occurred in the functions of instruction and maintenance and operations. \r\nExpenditures for direct classroom instruction (e.g. teacher salaries and benefits, textbooks, software, classroom supplies, etc.) accounted for 50.7% of total general fund expenditures, down slightly from the prior fiscal year. Employee benefits saw increases in fiscal year 2020. The employer share for Teachers Retirement contribution increased from 20.90% in fiscal year 2019 to 21.14% in fiscal year 2020. \r\nv \r\n \r\n BAKER COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 \r\nThe following table details the major components of revenues and expenditures by function for fiscal year 2020 as well as a comparison of changes compared to the previous fiscal year. \r\nTable 3 General Fund Revenue and Expenditure Comparison \r\n \r\nReven u es State Federal Local \r\n \r\nAmount \r\n$ 2,564,738.82 632,375.46 \r\n2,584,629.80 \r\n \r\nTotal \r\n \r\nIncrease (Decrease) over \r\nFiscal Year 2019 \r\n \r\n44.36% $ 10.94% 44.70% \r\n \r\n406,374.56 (94,788.11) 42,632.83 \r\n \r\nTotal Revenues \r\n \r\n5,781,744.08 \r\n \r\n100.00% \r\n \r\n354,219.28 \r\n \r\nE xpen di t u res 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 Debt Service \r\n \r\n2,622,654.99 \r\n229,141.88 340,983.84 \r\n30,530.70 288,784.76 229,186.64 260,850.03 458,557.93 383,961.92 \r\n15,327.92 2,051.00 \r\n64,278.70 232,060.34 \r\n19,966.89 \r\n \r\n50.64% \r\n4.42% 6.58% 0.59% 5.58% 4.43% 5.04% 8.86% 7.41% 0.30% 0.04% 1.24% 4.48% 0.39% \r\n \r\n(219,670.32) - \r\n(68,740.80) 99,413.26 (127,333.75) 54,256.92 39,714.25 (41,322.95) (16,871.59) 51,366.56 14,530.42 \r\n2,034.21 17,977.55 (15,061.09) 11,514.08 \r\n \r\nTotal Expenditures \r\nCapital Projects Fund Operations \r\n \r\n$ 5,178,337.54 \r\n \r\n100.00% $ \r\n \r\n(198,193.25) \r\n \r\nThe capital projects fund is used to account for school construction and the purchase of large capital assets. Expenditures in 2020 were comparable to capital outlay projects in the previous year. Significant improvements included HVAC upgrades and the purchase of a bus. \r\n \r\nvi \r\n \r\n BAKER COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 \r\n \r\nCAPITAL ASSETS AND DEBT ADMINISTRATION \r\nCapital Assets \r\nThe School District's investment in capital assets for its governmental activities as of June 30, 2020 totaled $7.7 million, net of accumulated depreciation. The investment in capital assets includes land, land improvements, buildings, vehicles, and equipment used in providing services to our students and community. The changes to School District's capital asset accounts came from capital asset additions and current year depreciation expense. Note 5 to the basic financial statements provides additional information on the School District's capital assets including a detailed breakdown of the types of capital assets included in the computation of depreciation charges. As of June 30, 2020, 38.0% of the cost basis of depreciable assets had been taken as a depreciation charge since the various assets were placed in service. \r\nA summary of capital assets follows: \r\n \r\nTable 4 Capital Assets (Net of Depreciation) \r\n \r\nGovernmental Activities \r\n \r\nFiscal \r\n \r\nFiscal \r\n \r\nYear 2020 \r\n \r\nYear 2019 \r\n \r\nLand Construction in Progress Building and Improvements Equipment Land Improvements \r\n \r\n$ \r\n \r\n82,372.24 $ \r\n \r\n17,228.20 \r\n \r\n5,999,922.67 \r\n \r\n537,349.26 \r\n \r\n1,069,917.65 \r\n \r\n82,372.24 32,462.33 5,827,423.07 509,669.33 1,097,707.72 \r\n \r\nTotal \r\n \r\n$ 7,706,790.02 $ \r\n \r\n7,549,634.69 \r\n \r\nDebt Administration \r\nAt June 30, 2020, the School District had $0.03 million in outstanding capital lease indebtedness. Additional information on the School District's long-term debt can be found in Note 7 to the basic financial statements. \r\nTable 5 Debt at June 30 \r\n \r\nGovernmental Activities \r\n \r\nFiscal Year \r\n \r\nFiscal Year \r\n \r\n2020 \r\n \r\n2019 \r\n \r\nCapital Leases \r\n \r\n$ 29,335.24 $ 23,928.11 \r\n \r\nvii \r\n \r\n BAKER COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 \r\nCurrent Issues \r\nThe School District is a low income, rural county School District. The majority of students are economically disadvantaged. The student population is 52% African-American, 26% Caucasian, 15% Hispanic and 7% other. The School District is located in an area where agriculture is the primary industry. Despite limited financial resources, School District personnel manage to maximize the funds in order to benefit all students. The School District has planned extensively to use its supplemental resources to support class size reduction, recruitment, retention and professional development of highly qualified staff. The School District, while small, offers students a variety of instructional programs and extra-curricular opportunities. \r\nThe School District has faced severe financial challenges in recent years but has remained relatively stable and financially sound. The financial challenges have included rising costs in employee benefits, the continued state formula allotment reductions, and a slow decline in student enrollment (FTE). \r\nThe School District's current millage rate for the 2019 tax year is 14.065 for maintenance and operations, down slightly from 2018 tax year. \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. \r\nOutlook for the Future \r\nThe School District enjoys a strong financial position in light of current economic conditions affecting local revenues as well as the effect of state revenue pressures through austerity reductions to the QBE funding formula and new programmatic requirements. While state revenues improved during fiscal year 2020, expectations are that austerity reductions will continue in fiscal year 2021 and beyond at some undetermined level. However, the State's reduction of austerity in 2017 is a positive sign of revenue collections at the state level. Until all funds are restored, the continued relaxation of class size requirements and other waivers by the Georgia Department of Education are providing the flexibility the School District needs to offset the shortfall of state funding and the decrease in SPLOST reductions in collections due to Title Ad Valorem Tax collections. The expectations of decreases due to drop in enrollment continue. \r\nAt this time, the objective is to maintain a strong financial condition to better address any further cutbacks in State funding that could have an adverse effect on operations and financial reserves. The School District continues to fluctuate in growth, but not at the rate experienced in past years. School District FTE for the upcoming fiscal year (2021) is 286. In 2020, the count was 268 as compared to 281 in 2019. Therefore, we strive for student enrollment to slightly increase in the foreseeable future with positive programs being added to meet the area workforce and needs of the student and community. \r\nThe School District recognizes its responsibility to the taxpayers in overseeing the spending of federal, state and local funds. The School District is striving to maintain sound fiscal management while emphasizing student achievement. The School District is committed to creating, building, and sustaining a culturally and economically sensitive environment that provides equal access to a high standard of educational success for all students. \r\nviii \r\n \r\n BAKER COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020 Requests for Information 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. Questions concerning any of the information provided in this report or requests for additional information should be addressed to: Dr. Roy Brooks, Superintendent, or Lauren Tabb, Finance Director Baker County Board of Education P. O. Box 40 260 Highway 37 Newton, GA 39870 \r\nix \r\n \r\n (This page left intentionally blank) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION \r\n \r\n (This page left intentionally blank) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION STATEMENT OF NET POSITION JUNE 30, 2020 \r\nASSETS \r\nCash and Cash Equivalents Receivables, Net \r\nTaxes State Government Federal Government 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 Plan Related to OPEB Plan \r\nTotal Deferred Outflows of Resources \r\nLIABILITIES \r\nAccounts Payable Salaries and Benefits Payable Interest 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 Plan 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 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\n3,750,628.29 \r\n \r\n80,418.03 209,720.16 104,619.14 \r\n128.00 7,483.33 99,600.44 7,607,189.58 \r\n \r\n11,859,786.97 \r\n \r\n1,670,573.00 1,219,610.00 \r\n2,890,183.00 \r\n \r\n2,490.76 485,569.73 \r\n219.56 53,244.50 4,187,222.00 3,871,248.00 \r\n15,588.47 13,746.77 \r\n8,629,329.79 \r\n \r\n257,176.00 1,712,120.00 \r\n1,969,296.00 \r\n \r\n7,624,210.28 \r\n7,483.33 467,185.12 (3,947,534.55) \r\n \r\n$ \r\n \r\n4,151,344.18 \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 BAKER COUNTY BOARD OF EDUCATION 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 Long-Term Debt \r\nTotal Governmental Activities \r\nGeneral Revenues Taxes Property Taxes For Maintenance and Operations Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Other Sales Tax Investment Earnings Miscellaneous \r\nTotal General Revenues \r\nChange in Net Position \r\nNet Position - Beginning of Year \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$ 3,095,529.84 $ \r\n245,596.51 357,924.32 \r\n39,948.53 303,617.51 266,944.27 277,632.01 486,164.94 392,447.64 \r\n15,327.92 2,051.00 \r\n64,278.70 236,092.55 \r\n3,126.47 \r\n$ 5,786,682.21 $ \r\n \r\n25,086.10 $ \r\n- \r\n6,678.78 \r\n- \r\n31,764.88 $ \r\n \r\n1,487,037.54 $ \r\n242,159.85 384,697.12 \r\n40,510.92 394,332.00 145,777.00 \r\n7,208.35 78,628.02 155,808.35 \r\n- \r\n186,899.13 \r\n- \r\n3,123,058.28 $ \r\n \r\n245,485.32 $ \r\n23,651.46 15,630.92 155,031.76 - \r\n- \r\n439,799.46 \r\n \r\n(1,337,920.88) \r\n(3,436.66) 26,772.80 \r\n562.39 90,714.49 (97,515.81) (270,423.66) (391,906.00) (81,607.53) (15,327.92) (2,051.00) \r\n(64,278.70) (42,514.64) \r\n(3,126.47) \r\n(2,192,059.59) \r\n \r\n2,402,775.66 \r\n271,350.97 20,338.52 1,369.47 \r\n137,530.38 \r\n2,833,365.00 \r\n641,305.41 \r\n3,510,038.77 \r\n \r\nNet Position - End of Year \r\n \r\n$ 4,151,344.18 \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 BAKER COUNTY BOARD OF EDUCATION BALANCE SHEET \r\nGOVERNMENTAL FUNDS JUNE 30, 2020 \r\n \r\nEXHIBIT \"C\" \r\n \r\nASSETS \r\nCash and Cash Equivalents Receivables, Net \r\nTaxes State Government Federal Government Other Inventories \r\nTotal Assets \r\nLIABILITIES \r\nAccounts Payable Salaries and Benefits Payable Retainages Payable \r\nTotal Liabilities \r\nDEFERRED INFLOWS OF RESOURCES \r\nUnavailable Revenue - Property Taxes Unavailable Revenue - State Grant \r\nTotal Deferred Inflows of Resources \r\nFUND BALANCES \r\nNonspendable Restricted Assigned Unassigned \r\nTotal Fund Balances \r\n \r\nGENERAL FUND \r\n \r\nCAPITAL PROJECTS \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ 3,345,727.44 $ \r\n58,148.96 169,704.96 104,619.14 \r\n128.00 7,483.33 \r\n \r\n404,900.85 $ \r\n22,269.07 40,015.20 \r\n- \r\n \r\n3,750,628.29 \r\n80,418.03 209,720.16 104,619.14 \r\n128.00 7,483.33 \r\n \r\n$ 3,685,811.83 $ \r\n \r\n467,185.12 $ \r\n \r\n4,152,996.95 \r\n \r\n$ \r\n \r\n2,490.76 $ \r\n \r\n485,569.73 \r\n \r\n- \r\n \r\n488,060.49 \r\n \r\n- $ 53,244.50 \r\n53,244.50 \r\n \r\n2,490.76 485,569.73 \r\n53,244.50 \r\n541,304.99 \r\n \r\n10,153.45 - \r\n10,153.45 \r\n \r\n40,015.20 \r\n40,015.20 \r\n \r\n10,153.45 40,015.20 \r\n50,168.65 \r\n \r\n7,483.33 - \r\n38,177.81 3,141,936.75 \r\n3,187,597.89 \r\n \r\n373,925.42 \r\n- \r\n373,925.42 \r\n \r\n7,483.33 373,925.42 \r\n38,177.81 3,141,936.75 \r\n3,561,523.31 \r\n \r\nTotal Liabilities, Deferred Inflows of Resources, and Fund Balances \r\n \r\n$ 3,685,811.83 $ \r\n \r\n467,185.12 $ 4,152,996.95 \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 BAKER COUNTY BOARD OF EDUCATION 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\nGeorgia State Financing and Investment Commission grants that are not available to pay 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\nAccrued interest payable Capital leases payable \r\n \r\n$ 3,561,523.31 \r\n \r\n$ \r\n \r\n82,372.24 \r\n \r\n17,228.20 \r\n \r\n9,687,574.73 \r\n \r\n1,465,001.47 \r\n \r\n1,111,602.75 \r\n \r\n(4,656,989.37) \r\n \r\n7,706,790.02 \r\n \r\n$ (4,187,222.00) (3,871,248.00) \r\n \r\n(8,058,470.00) \r\n \r\n$ \r\n \r\n1,413,397.00 \r\n \r\n(492,510.00) \r\n \r\n920,887.00 10,153.45 40,015.20 \r\n \r\n$ \r\n \r\n(219.56) \r\n \r\n(29,335.24) \r\n \r\n(29,554.80) \r\n \r\nNet position of governmental activities (Exhibit \"A\") \r\n \r\n$ 4,151,344.18 \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 BAKER COUNTY BOARD OF EDUCATION 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 Interest \r\nTotal Expenditures \r\nRevenues over 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\n \r\nGENERAL FUND \r\n \r\nCAPITAL PROJECTS \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ \r\n \r\n2,394,769.55 $ \r\n \r\n20,338.52 \r\n \r\n2,564,738.82 \r\n \r\n632,375.46 \r\n \r\n31,764.88 \r\n \r\n226.47 \r\n \r\n137,530.38 \r\n \r\n5,781,744.08 \r\n \r\n- $ 271,350.97 354,958.80 \r\n1,143.00 - \r\n627,452.77 \r\n \r\n2,394,769.55 291,689.49 \r\n2,919,697.62 632,375.46 31,764.88 1,369.47 137,530.38 \r\n6,409,196.85 \r\n \r\n2,622,654.99 \r\n229,141.88 340,983.84 \r\n30,530.70 288,784.76 229,186.64 260,850.03 458,557.93 383,961.92 \r\n15,327.92 2,051.00 \r\n64,278.70 232,060.34 \r\n- \r\n16,735.36 3,231.53 \r\n5,178,337.54 \r\n603,406.54 \r\n884.57 - \r\n884.57 \r\n604,291.11 \r\n2,583,306.78 \r\n \r\n- \r\n2,434.00 4,290.00 16,070.30 449,517.63 \r\n- \r\n472,311.93 \r\n155,140.84 \r\n \r\n2,622,654.99 \r\n229,141.88 340,983.84 \r\n30,530.70 291,218.76 229,186.64 260,850.03 462,847.93 400,032.22 \r\n15,327.92 2,051.00 \r\n64,278.70 232,060.34 449,517.63 \r\n16,735.36 3,231.53 \r\n5,650,649.47 \r\n758,547.38 \r\n \r\n(884.57) (884.57) 154,256.27 219,669.15 \r\n \r\n884.57 (884.57) \r\n758,547.38 2,802,975.93 \r\n \r\nFund Balances - Ending \r\n \r\n$ \r\n \r\n3,187,597.89 $ \r\n \r\n373,925.42 $ \r\n \r\n3,561,523.31 \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 BAKER COUNTY BOARD OF EDUCATION 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\nGeorgia State Financing and Investment Commission grants 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 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 capital leases \r\n \r\n$ \r\n \r\n758,547.38 \r\n \r\n$ \r\n \r\n534,703.94 \r\n \r\n(377,548.61) \r\n \r\n157,155.33 8,006.11 \r\n \r\n7,620.66 \r\n \r\n$ \r\n \r\n(22,142.49) \r\n \r\n16,735.36 \r\n \r\n(5,407.13) \r\n \r\n$ \r\n \r\n(266,328.00) \r\n \r\n(18,394.00) \r\n \r\n(284,722.00) \r\n \r\n105.06 \r\n \r\nChange in net position of governmental activities (Exhibit \"B\") \r\n \r\n$ \r\n \r\n641,305.41 \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 \r\nLIABILITIES Funds Held for Others \r\n \r\nBAKER COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET POSITION \r\nFIDUCIARY FUNDS JUNE 30, 2020 \r\n \r\nEXHIBIT \"G\" \r\n \r\nAGENCY FUNDS \r\n \r\n$ \r\n \r\n5,593.71 \r\n \r\n$ \r\n \r\n5,593.71 \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 BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \r\nREPORTING ENTITY \r\nThe Baker County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity. \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 \r\nassets, 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 \r\ncontractually 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- 8 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"H\" \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 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\nThe School District reports the following fiduciary fund type: \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 the measurement of results of operations. \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\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\n \r\n- 9 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"H\" \r\n \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\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\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\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 method 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- 10 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"H\" \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 5,000.00 5,000.00 5,000.00 100,000.00 \r\n \r\nN/A 10 to 50 years 15 to 80 years \r\n5 to 50 years 10 to 15 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\nLONG-TERM LIABILITIES \r\nIn the School District's government-wide financial statements, outstanding debt is reported as liabilities. \r\nIn the governmental fund financial statements, the School District recognizes the proceeds of debt as other financing sources of the current period. \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- 11 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"H\" \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\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\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 Baker County Board of Commissioners adopted the property tax levy for the 2019 tax digest year (calendar year) on August 19, 2019 (levy date) based on property values as of January 1, 2019. Taxes were due on December 20, 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 Baker 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 $2,230,519.03. \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\n14.065 mills \r\n \r\nAdditionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $164,250.52 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 $271,350.97 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- 12 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"H\" \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 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 fund 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\nThe Superintendent is authorized by the Board to approve adjustments of no more than 25 percent of the amount budgeted for expenditures in any budget function for any fund. The Superintendent shall report any such adjustments to the Board. If expenditure of funds in any budget function for any fund is anticipated to be more than 25 percent of the budgeted amount, the Superintendent shall request Board approval for the budget amendment. Any position or expenditure not previously approved in the annual budget that exceeds $50,000.00 shall require Board approval unless the Superintendent deems the position or purchase an emergency. In such case, the expenditure shall be reported to the Board at its regularly scheduled meeting. Under no circumstance is the Superintendent or other staff person authorized to spend funds that exceed the total budget without approval by the Board. \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 \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- 13 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"H\" \r\n \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 $3,756,222.00, and a bank balance of $3,865,511.90. The bank balances insured by Federal depository insurance were $500,000.00. \r\nAt June 30, 2020, $3,365,511.90 of the School District's bank balances was exposed to custodial credit risk. This balance was in the State's Secure Deposit Program (SDP). \r\nThe School District participates in the State's Secure Deposit Program (SDP), a multi-bank pledging pool. The SDP requires participating banks that accept public deposits in Georgia to operate under the policy and procedures of the program. The Georgia Office of State Treasurer (OST) sets the collateral requirements and pledging level for each covered depository. There are four tiers of collateralization levels specifying percentages of eligible securities to secure covered deposits: 25%, 50%, 75%, and 110%. The SDP also provides for collateral levels to be increased in the amount of up to 125% if economic or financial conditions warrant. The program lists the types of eligible criteria. The OST approves authorized custodians. \r\nIn accordance with the SDP, if a covered depository defaults, losses to public depositors are first satisfied with any applicable insurance, followed by demands of payment under any letters of credit or sale of the covered depository collateral. If necessary, any remaining losses are to be satisfied by assessments made against the other participating covered depositories. Therefore, for disclosure purposes, all deposits of the SDP are considered to be fully collateralized. \r\n \r\n- 14 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNOTE 5: CAPITAL ASSETS \r\n \r\nThe following is a summary of changes in the capital assets for governmental activities during the fiscal year: \r\n \r\nBalances July 1, 2019 \r\n \r\nIncreases \r\n \r\nDecreases \r\n \r\nTransfers \r\n \r\nBalances June 30, 2020 \r\n \r\nGovernmental Activities Capital Assets, Not Being Depreciated: \r\nLand Construction in Progress \r\n \r\n$ \r\n \r\n82,372.24 $ \r\n \r\n- $ \r\n \r\n32,462.33 \r\n \r\n17,228.20 \r\n \r\n- $ \r\n \r\n- $ 82,372.24 \r\n \r\n- \r\n \r\n(32,462.33) \r\n \r\n17,228.20 \r\n \r\nTotal Capital Assets Not Being Depreciated \r\n \r\n114,834.57 \r\n \r\n17,228.20 \r\n \r\n- \r\n \r\n(32,462.33) \r\n \r\n99,600.44 \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\n9,282,498.21 1,341,615.16 1,111,602.75 \r\n \r\n394,089.43 123,386.31 \r\n- \r\n \r\n21,475.24 - \r\n \r\n32,462.33 - \r\n \r\n9,687,574.73 1,465,001.47 1,111,602.75 \r\n \r\n3,455,075.14 831,945.83 13,895.03 \r\n \r\n254,052.16 95,706.38 27,790.07 \r\n \r\n21,475.24 - \r\n \r\n- \r\n \r\n3,687,652.06 \r\n \r\n- \r\n \r\n927,652.21 \r\n \r\n- \r\n \r\n41,685.10 \r\n \r\nTotal Capital Assets, Being Depreciated, Net \r\n \r\n7,434,800.12 139,927.13 \r\n \r\n- \r\n \r\n32,462.33 7,607,189.58 \r\n \r\nGovernmental Activities Capital Assets - Net $ 7,549,634.69 $ 157,155.33 $ \r\n \r\n- $ \r\n \r\n- $ 7,706,790.02 \r\n \r\nCurrent year depreciation expense by function is as follows: \r\n \r\nInstruction Support Services \r\nSchool Administration Maintenance and Operation of Plant Student Transportation Services \r\n \r\n$ \r\n \r\n23,497.90 \r\n \r\n15,529.44 \r\n \r\n77,306.58 \r\n \r\n$ \r\n \r\n261,214.69 \r\n \r\n116,333.92 \r\n \r\n$ \r\n \r\n377,548.61 \r\n \r\nNOTE 6: INTERFUND TRANSFERS INTERFUND TRANSFERS Interfund transfers for the year ended June 30, 2020, consisted of the following: \r\n \r\nTransfers to \r\n \r\nTransfers From Capital Projects \r\nFund \r\n \r\nGeneral Fund \r\n \r\n$ \r\n \r\n884.57 \r\n \r\nTransfers posted in prior years to move property tax revenues collected by the general fund to capital projects fund as required match or supplemental funding source for capital construction projects exceeded final project costs. Transfers are to return excess funds to the general fund. \r\n \r\n- 15 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNOTE 7: 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, 2019 \r\n \r\nGovernmental Activities \r\n \r\nBalance \r\n \r\nAdditions \r\n \r\nDeductions June 30, 2020 \r\n \r\nDue Within One Year \r\n \r\nCapital Leases \r\n \r\n$ 23,928.11 $ 22,142.49 $ 16,735.36 $ 29,335.24 $ 15,588.47 \r\n \r\nCAPITAL LEASES \r\nThe School District has acquired equipment 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\nThe following assets were acquired through capital leases and are reflected in the capital asset note at fiscal year-end: \r\nGovernmental Activities \r\n \r\nEquipment \r\n \r\n$ \r\n \r\nLess: Accumulated Depreciation \r\n \r\n82,592.49 21,251.50 \r\n \r\n$ \r\n \r\n61,340.99 \r\n \r\nDuring the prior fiscal year, the School District entered into a lease agreement as lessee for financing the acquisition of communication and technology equipment at a cost of $22,142.49. 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\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\nSchool Bus Communication Equipment \r\n \r\n2.96% 10.495% \r\n \r\n1/19/2018 2/22/2019 \r\n \r\n1/19/2022 $ 2/22/2022 \r\n \r\n60,450.00 $ 22,142.49 \r\n \r\n16,183.57 13,151.67 \r\n \r\n$ \r\n \r\n82,592.49 $ \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\n29,335.24 \r\n \r\n2021 2022 \r\n \r\n$ \r\n \r\n15,588.47 $ \r\n \r\n13,746.77 \r\n \r\n1,499.90 463.15 \r\n \r\nTotal Principal and Interest $ \r\n \r\n29,335.24 $ \r\n \r\n1,963.05 \r\n \r\n- 16 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNOTE 8: 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 describe 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 \r\nGeorgia School Boards Association Risk Management Fund \r\nThe School District participates in the Georgia School Boards Association Risk Management Fund (the Fund), a public entity risk pool organized on August 1, 1994, to develop and administer a plan to reduce risk of loss on account of general liability, motor vehicle liability, errors and omissions liability, property damage, including safety engineering and other loss prevention and control techniques, and to administer the Fund including the processing and defense of claims brought against members of the Fund. The School District pays an annual contribution to the Fund for coverage. Reinsurance is provided to the Fund through agreements by the Fund with insurance companies according to their specialty for property (including coverage for flood and earthquake), machinery breakdown, general liability, errors and omissions, crime, and automobile risks. Reinsurance limits and retentions vary by line of coverage. \r\n \r\nWORKERS' COMPENSATION \r\nGeorgia Education Workers' Compensation Trust \r\nThe School District participates in the Georgia Education Workers' Compensation Trust (the Trust), a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general workers' compensation insurance coverage. Specific excess of loss insurance coverage is provided through an agreement by the Trust with the Safety National Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $1.0 million loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided with limits of $2.0 million. The Trust covers the first $1.0 million of each Employers Liability claim with Safety National providing additional Employers Liability limits up to a $2.0 million per occurrence maximum. Safety National Casualty Company also provides $2.0 million in aggregate coverage to the Trust, attaching at 107% of the loss fund and based on the Fund's annual normal premium. \r\n \r\nUNEMPLOYMENT COMPENSATION \r\nThe School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the general fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. The School District has not incurred any liabilities for unemployment compensation during the past two years. \r\n \r\nSURETY BOND The School District purchased a surety bond to provide additional insurance coverage as follows: \r\n \r\nPosition Covered \r\n \r\nAmount \r\n \r\nSuperintendent \r\n \r\n$ \r\n \r\n50,000.00 \r\n \r\n- 17 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNOTE 9: 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 Capital Projects \r\nAssigned School Activity Accounts \r\nUnassigned \r\n \r\n$ \r\n \r\n7,483.33 \r\n \r\n373,925.42 \r\n \r\n38,177.81 3,141,936.75 \r\n \r\nFund Balance, June 30, 2020 \r\n \r\n$ 3,561,523.31 \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\n \r\nNOTE 10: SIGNIFICANT COMMITMENTS \r\n \r\nOPERATING LEASES \r\n \r\nThe School District leases equipment under the provisions of a long-term lease agreement classified as an operating lease for accounting purposes. Rental expenditures under the terms of the operating lease totaled $12,948.00 for governmental activities for the year ended June 30, 2020. The following future minimum lease payments were required under the operating lease at June 30, 2020: \r\n \r\nYear Ending \r\n \r\nGovernmental Activities \r\n \r\n2021 2022 2023 2024 \r\n \r\n$ \r\n \r\n12,948.00 \r\n \r\n12,948.00 \r\n \r\n12,948.00 \r\n \r\n1,079.00 \r\n \r\nTotal \r\n \r\n$ \r\n \r\n39,923.00 \r\n \r\nNOTE 11: 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- 18 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNOTE 12: 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 pay-asyou-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 $104,877.00 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 $3,871,248.00 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 0.031545%, which was an increase of 0.006043% from its proportion measured as of June 30, 2018. \r\n \r\n- 19 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"H\" \r\n \r\nFor the year ended June 30, 2020, the School District recognized OPEB expense of $123,271.00. At June 30, 2020, the School District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: \r\n \r\nDeferred Outflows of Resources \r\n \r\nOPEB \r\n \r\nDeferred Inflows of Resources \r\n \r\nDifferences between expected and actual \r\n \r\nexperience \r\n \r\n$ \r\n \r\n- $ 421,152.00 \r\n \r\nChanges of assumptions \r\n \r\n134,441.00 \r\n \r\n545,723.00 \r\n \r\nNet difference between projected and actual \r\n \r\nearnings on OPEB plan investments \r\n \r\n8,430.00 \r\n \r\n- \r\n \r\nChanges in proportion and differences between School District contributions and proportionate share of contributions \r\n \r\n971,862.00 \r\n \r\n745,245.00 \r\n \r\nSchool District contributions subsequent to \r\n \r\nthe measurement date \r\n \r\n104,877.00 \r\n \r\n- \r\n \r\nTotal \r\n \r\n$ 1,219,610.00 $ 1,712,120.00 \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$ (153,735.00) \r\n \r\n$ (153,735.00) \r\n \r\n$ (154,060.00) \r\n \r\n$ (152,987.00) \r\n \r\n$ (32,037.00) \r\n \r\n$ \r\n \r\n49,167.00 \r\n \r\n- 20 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"H\" \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\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 Healthcare cost trend rate \r\n \r\n7.30%, compounded annually, net of investment expense, and including inflation \r\n \r\nPre-Medicare Eligible Medicare Eligible Ultimate trend rate \r\n \r\n7.250% 5.375% \r\n \r\nPre-Medicare Eligible Medicare Eligible Year of Ultimate trend rate \r\n \r\n4.75% 4.75% \r\n \r\nPre-Medicare Eligible Medicare Eligible \r\n \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\n \r\n- 21 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"H\" \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. 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\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 3.58%, 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\n1% Decrease (2.58%) \r\n \r\nCurrent Discount Rate (3.58%) \r\n \r\n1% Increase (4.58%) \r\n \r\nSchool District's proportionate share of \r\n \r\nthe Net OPEB Liability \r\n \r\n$ 4,499,669.00 $ \r\n \r\n3,871,248.00 $ 3,360,057.00 \r\n \r\n- 22 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"H\" \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\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$ 3,261,117.00 $ \r\n \r\n3,871,248.00 $ 4,646,162.00 \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\nNOTE 13: 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 P rovided: 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. 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. For the current fiscal year, employer contributions to the pension plan were $539,568.00 from the School District. \r\n \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/financials. \r\n \r\n- 23 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"H\" \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\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 $12,375.00. \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 $4,187,222.00 for its proportionate share of the net pension liability for TRS. \r\nThe TRS 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 School District's proportion of the net pension liability was based on contributions to TRS during the fiscal year ended June 30, 2019. \r\nAt June 30, 2019, the School District's TRS proportion was 0.019473%, which was an increase of 0.003356% 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 $52,492.00. \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 $805,247.00 for TRS and $16,188.00 for PSERS and revenue of $649.00 for TRS and $16,188.00 for PSERS. The revenue is support provided by the State of Georgia. \r\n \r\n- 24 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"H\" \r\n \r\nAt June 30, 2020, the School District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: \r\n \r\nTRS Deferred Outflows of Resources \r\n \r\nDeferred Inflows of Resources \r\n \r\nDifferences between expected and actual experience \r\n \r\n$ 236,013.00 $ 1,241.00 \r\n \r\nChanges of assumptions \r\n \r\n401,819.00 \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\n99,711.00 \r\n \r\nChanges in proportion and differences between School District contributions and proportionate share of contributions \r\n \r\n493,173.00 156,224.00 \r\n \r\nSchool District contributions subsequent to the \r\n \r\nmeasurement date \r\n \r\n539,568.00 \r\n \r\n- \r\n \r\nTotal \r\n \r\n$ 1,670,573.00 $ 257,176.00 \r\n \r\nThe School District contributions subsequent to the measurement date 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\n2021 2022 2023 2024 \r\n \r\n$ 314,122.00 $ 108,413.00 $ 200,536.00 $ 250,758.00 \r\n \r\nActuarial assum ptions: 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 \r\nincluded in the measurement: \r\n \r\nTeachers Retirement System: \r\nInflation \r\n \r\n2.50% \r\n \r\nSalary increases Investment rate of return \r\n \r\n3.00%  8.75%, average, including inflation \r\n7.25%, net of pension plan investment expense, including inflation \r\n \r\nPost-retirement benefit increases 1.50% semi-annually \r\n \r\n- 25 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"H\" \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, 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\nPublic School Employees Retirement System: \r\n \r\nInflation \r\n \r\n2.75% \r\n \r\nSalary increases Investment rate of return \r\n \r\nN/A \r\n7.30%, net of pension plan investment expense, including inflation \r\n \r\nPost-retirement benefit increases \r\n \r\n1.50% 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 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 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 small stocks International developed market stocks International emerging market stocks Alternative \r\nTotal \r\n* Rates shown are net of assumed rate of inflation. \r\n \r\nTRS Target allocation \r\n30.00% 51.00% \r\n1.50% 12.40% \r\n5.10% - \r\n100.00% \r\n \r\nPSERS Target allocation \r\n30.00% 46.20% \r\n1.30% 12.40% \r\n5.10% 5.00% \r\n100.00% \r\n \r\nLong-term expected real rate of return* \r\n(0.10)% 8.90% 13.20% 8.90% 10.90% 12.00% \r\n \r\n- 26 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2020 \r\n \r\nEXHIBIT \"H\" \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 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 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%, 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%) or 1-percentage-point higher (8.25%) 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$ 6,797,086.00 $ \r\n \r\n4,187,222.00 $ 2,040,986.00 \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 and PSERS financial report which is publicly available \r\nat www.trsga.com/publications and www.ers.ga.gov/financials. \r\n \r\n- 27 - \r\n \r\n (This page left intentionally blank) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION 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 \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 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\n0.019473% $ 0.016117% $ 0.017566% $ \r\n \r\n4,187,222.00 $ 2,991,660.00 $ 3,264,695.00 $ \r\n \r\n48,076.00 13,753.00 \r\n \r\n$ 4,187,222.00 $ 3,039,736.00 $ 3,278,448.00 \r\n \r\n$ 2,376,556.00 $ 1,950,535.80 $ 2,024,988.28 \r\n \r\n176.19% 153.38% 161.22% \r\n \r\n78.56% 80.27% 79.33% \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- 29 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION 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\n2020 2019 2018 \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\n$ \r\n \r\n539,568.00 $ \r\n \r\n539,568.00 $ \r\n \r\n- \r\n \r\n$ \r\n \r\n496,700.00 $ \r\n \r\n496,700.00 $ \r\n \r\n- \r\n \r\n$ \r\n \r\n322,609.00 $ \r\n \r\n322,609.00 $ \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$ 2,552,355.50 $ 2,376,556.00 $ 1,950,535.80 \r\n \r\n21.14% 20.90% 16.54% \r\n \r\nThis schedule is intended to show information for 10 years. Addtional years will be displayed as they become available. \r\n \r\n- 30 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION 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 \"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 liability \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 \r\n \r\n0.00% $ 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\n52,492.00 $ 63,296.00 $ 61,265.00 $ \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 \r\ncovered payroll \r\n \r\nPlan fiduciary net position as a \r\npercentage of the total pension liability \r\n \r\n52,492.00 $ 63,296.00 $ 61,265.00 $ \r\n \r\n160,946.33 200,552.00 212,907.67 \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\nThis schedule is intended to show information for 10 years. Additional years will be displayed as they become available. \r\n \r\n- 31 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION 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\n2020 2019 2018 \r\n \r\n0.031545% $ 0.025502% $ 0.032609% $ \r\n \r\n3,871,248.00 3,241,226.00 4,581,551.00 \r\n \r\nState of Georgia's proportionate share of the net OPEB liability \r\nassociated with the School District \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\nTotal \r\n$ 3,871,248.00 $ 3,241,226.00 $ 4,581,551.00 \r\n \r\nSchool District's covered-employee \r\npayroll \r\n$ 2,126,028.00 $ 1,761,002.40 $ 1,725,372.62 \r\n \r\nSchool District's proportionate share of the \r\nnet OPEB liability as a percentage of its covered- \r\nemployee payroll \r\n182.09% 184.06% 265.54% \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- 32 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS SCHOOL OPEB FUND \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"5\" \r\n \r\nYear Ended \r\n2020 2019 2018 \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\n$ \r\n \r\n104,877.00 $ \r\n \r\n$ \r\n \r\n169,892.00 $ \r\n \r\n$ \r\n \r\n132,175.00 $ \r\n \r\n104,877.00 $ 169,892.00 $ 132,175.00 $ \r\n \r\n- \r\n \r\n$ \r\n \r\n2,218,298.60 \r\n \r\n- \r\n \r\n$ \r\n \r\n2,126,028.00 \r\n \r\n- \r\n \r\n$ \r\n \r\n1,761,002.40 \r\n \r\nContribution as a percentage of covered- \r\nemployee payroll \r\n4.73% 7.99% 7.51% \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- 33 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \r\nFOR THE YEAR ENDED JUNE 30, 2020 \r\n \r\nSCHEDULE \"6\" \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 18, 2-015, 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\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\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 FORVHO\\UHIOHFWDFWXDOH[SHULHQFH \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\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\nChanges 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 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. \r\n \r\n- 34 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION 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 \"7\" \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$ 1,927,850.12 $ 1,927,850.12 $ 2,394,769.55 $ \r\n \r\n- \r\n \r\n- \r\n \r\n20,338.52 \r\n \r\n2,418,705.51 \r\n \r\n2,571,085.24 \r\n \r\n2,564,738.82 \r\n \r\n245,534.50 \r\n \r\n845,325.50 \r\n \r\n632,375.46 \r\n \r\n18,090.00 \r\n \r\n18,090.00 \r\n \r\n31,764.88 \r\n \r\n- \r\n \r\n- \r\n \r\n226.47 \r\n \r\n301,544.88 \r\n \r\n302,794.88 \r\n \r\n137,530.38 \r\n \r\n4,911,725.01 \r\n \r\n5,665,145.74 \r\n \r\n5,781,744.08 \r\n \r\n466,919.43 20,338.52 (6,346.42) \r\n(212,950.04) 13,674.88 226.47 \r\n(165,264.50) \r\n116,598.34 \r\n \r\n2,712,560.25 \r\n188,714.84 274,547.73 \r\n66,950.87 254,830.97 233,554.13 287,880.00 565,977.25 393,508.85 \r\n239,780.10 - \r\n5,218,304.99 \r\n(306,579.98) \r\n \r\n2,953,393.59 \r\n247,513.78 470,633.42 \r\n66,120.87 294,275.00 234,717.04 287,880.00 595,977.25 480,288.17 \r\n217,180.10 - \r\n5,847,979.22 \r\n(182,833.48) \r\n \r\n2,622,654.99 \r\n229,141.88 340,983.84 \r\n30,530.70 288,784.76 229,186.64 260,850.03 458,557.93 383,961.92 \r\n15,327.92 2,051.00 \r\n64,278.70 232,060.34 \r\n19,966.89 \r\n5,178,337.54 \r\n603,406.54 \r\n \r\n330,738.60 \r\n18,371.90 129,649.58 \r\n35,590.17 5,490.24 5,530.40 \r\n27,029.97 137,419.32 \r\n96,326.25 (15,327.92) \r\n(2,051.00) (64,278.70) (14,880.24) (19,966.89) \r\n669,641.68 \r\n786,240.02 \r\n \r\n(306,579.98) 2,603,723.92 - \r\n \r\n41,185.00 (41,185.00) \r\n(182,833.48) 2,603,723.92 \r\n(17,723.10) \r\n \r\n884.57 - \r\n884.57 604,291.11 2,583,306.78 \r\n- \r\n \r\n(40,300.43) 41,185.00 \r\n884.57 787,124.59 (20,417.14) \r\n17,723.10 \r\n \r\nFund Balances - Ending \r\n \r\n$ 2,297,143.94 $ 2,403,167.34 $ 3,187,597.89 $ \r\n \r\n784,430.55 \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 $90,988.26 and $75,699.12, 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- 35 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \r\nYEAR ENDED JUNE 30, 2020 \r\n \r\nSCHEDULE \"8\" \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 Rural Education Rural Education Title I Grants to Local Educational Agencies Title I Grants to Local Educational Agencies Pass-Through From Mitchell County Board of Education Twenty-First Century Community Learning Centers \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\n46,501.40 131,412.44 \r\n177,913.84 \r\n \r\n84.027 84.027 84.173 84.173 \r\n \r\nH027A180073 H027A190073 H173A180081 H173A190081 \r\n \r\n84.048 84.358 84.358 84.010 84.010 \r\n84.287 \r\n \r\nV048A190010 S365B180010 S358B190010 S010A180010 S010A190010 \r\nS287C190010 \r\n \r\n3,060.00 87,105.68 \r\n2,599.00 4,931.05 \r\n97,695.73 \r\n8,912.85 839.94 \r\n3,574.48 39,239.53 257,294.68 \r\n47,009.86 \r\n356,871.34 \r\n454,567.07 \r\n \r\nTotal Expenditures of Federal Awards \r\n \r\n$ \r\n \r\n632,480.91 \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 Baker County Board of Education (the \"Board\") 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- 36 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2020 \r\n \r\nSCHEDULE \"9\" \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 Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Principal Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Mid-term Adjustment Hold-Harmless Amended Formula Adjustment Categorical Grants Pupil Transportation Regular Nursing Services Sparsity Other State Programs Computer Science Capacity Grant (CS4GA) Grant Food Services Hygiene Products Math and Science Supplements Preschool Disability Services Pupil Transportation - State Bonds Vocational Education \r\nGeorgia State Financing and Investment Commission Reimbursement on Construction Projects \r\nOffice of the State Treasurer Public School Employees Retirement \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$ \r\n \r\n93,815.24 $ \r\n \r\n- $ \r\n \r\n93,815.24 \r\n \r\n40,114.00 32,038.00 132,174.00 166,300.00 84,966.00 78,453.00 144,868.00 161,462.00 35,771.00 255,380.00 53,820.00 13,616.00 10,530.00 30,031.00 \r\n9,597.00 4,810.00 \r\n243.00 \r\n291,105.00 107,612.00 \r\n54,977.00 102,431.00 (24,275.00) \r\n130,641.00 45,000.00 \r\n368,056.00 \r\n24,360.34 6,088.00 102.00 2,101.19 5,634.05 \r\n77,220.00 13,323.00 \r\n- \r\n12,375.00 \r\n \r\n- \r\n- \r\n- \r\n- \r\n354,958.80 \r\n- \r\n \r\n40,114.00 32,038.00 132,174.00 166,300.00 84,966.00 78,453.00 144,868.00 161,462.00 35,771.00 255,380.00 53,820.00 13,616.00 10,530.00 30,031.00 \r\n9,597.00 4,810.00 \r\n243.00 \r\n291,105.00 107,612.00 \r\n54,977.00 102,431.00 (24,275.00) \r\n130,641.00 45,000.00 \r\n368,056.00 \r\n24,360.34 6,088.00 102.00 2,101.19 5,634.05 \r\n77,220.00 13,323.00 \r\n354,958.80 \r\n12,375.00 \r\n \r\n$ \r\n \r\n2,564,738.82 $ \r\n \r\n354,958.80 $ \r\n \r\n2,919,697.62 \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 BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\nYEAR ENDED JUNE 30, 2020 \r\n \r\nSCHEDULE \"10\" \r\n \r\nPROJECT 2015 SPLOST \r\n \r\nORIGINAL ESTIMATED \r\nCOST (1) \r\n \r\nCURRENT ESTIMATED COSTS (2) \r\n \r\nAMOUNT EXPENDED IN CURRENT YEAR (3) \r\n \r\nAMOUNT EXPENDED IN PRIOR YEARS (3) \r\n \r\nTOTAL COMPLETION \r\nCOST \r\n \r\nEXCESS PROCEEDS NOT \r\nEXPENDED \r\n \r\n(i) Repairing, improving, adding to, renovating, extending, \r\n \r\nupgrading, and equipping school buildings, support \r\n \r\nfacilities and athletic facilities in the Baker County \r\n \r\nSchool District useful or desirable in connection \r\n \r\ntherewith, including acquiring any necessary property \r\n \r\ntherefore, both real and personal; \r\n \r\n$ \r\n \r\n910,000.00 $ 1,022,359.58 $ 59,718.20 $ \r\n \r\n962,641.38 $ \r\n \r\n- $ \r\n \r\n- \r\n \r\n(ii) Adding classrooms; \r\n \r\n15,000.00 \r\n \r\n15,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n(iii) Acquiring transportation vehicles and maintenance vehicles and equipment; \r\n \r\n45,000.00 \r\n \r\n97,796.36 \r\n \r\n93,290.30 \r\n \r\n4,506.06 \r\n \r\n- \r\n \r\n- \r\n \r\n(iv) Acquiring and upgrading buses; \r\n \r\n50,000.00 \r\n \r\n267,434.52 \r\n \r\n- \r\n \r\n267,434.52 \r\n \r\n- \r\n \r\n- \r\n \r\n(v) Acquiring technology, safety, and security equipment; \r\n \r\n15,000.00 \r\n \r\n15,000.00 \r\n \r\n2,434.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n(vi) Improving transportation facilities; \r\n \r\n10,000.00 \r\n \r\n10,000.00 \r\n \r\n- \r\n \r\n186.27 \r\n \r\n- \r\n \r\n- \r\n \r\n(vii) And paying expenses incidental to accomplish the foregoing, and \r\n \r\n5,000.00 \r\n \r\n5,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n(viii) Debt Principal and interest payments. \r\n \r\n350,000.00 \r\n \r\n350,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n1,400,000.00 \r\n \r\n1,782,590.46 \r\n \r\n155,442.50 \r\n \r\n1,234,768.23 \r\n \r\n- \r\n \r\n- \r\n \r\n2020 SPLOST \r\n \r\n(i) Repairing, improving, adding to, renovating, extending, \r\n \r\nupgrading, demolishing, and equipping school buildings, \r\n \r\nsupport facilities and athletic facilities in the Baker County \r\n \r\nSchool District useful or desirable in connection \r\n \r\ntherewith, including acquiring any necessary property \r\n \r\ntherefore, both real and personal; \r\n \r\n910,000.00 \r\n \r\n910,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n(ii) Adding classrooms; \r\n \r\n15,000.00 \r\n \r\n15,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n(iii) Acquiring transportation vehicles and maintenance vehicles and equipment; \r\n \r\n45,000.00 \r\n \r\n45,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n(iv) Acquiring and upgrading buses; \r\n \r\n50,000.00 \r\n \r\n50,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n(v) Acquiring technology, safety, and security equipment; \r\n \r\n15,000.00 \r\n \r\n15,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n(vi) Improving transportation facilities; \r\n \r\n10,000.00 \r\n \r\n10,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n(vii) And paying expenses incidental to accomplish the foregoing, and \r\n \r\n5,000.00 \r\n \r\n5,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n(viii) Debt Principal and interest payments. \r\n \r\n150,000.00 \r\n \r\n150,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n1,200,000.00 \r\n \r\n1,200,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nESTIMATED COMPLETION \r\nDATE \r\nJune 2021 June 2021 June 2021 June 2021 June 2021 June 2021 June 2021 June 2021 \r\nJune 2026 June 2026 June 2026 June 2026 June 2026 June 2026 June 2026 June 2026 \r\n \r\n$ 2,600,000.00 $ 2,982,590.46 $ 155,442.50 $ 1,234,768.23 $ \r\n \r\n- $ \r\n \r\n- \r\n \r\n(1) \r\n \r\nThe 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) \r\n \r\nThe School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. \r\n \r\n(3) \r\n \r\nThe voters of Baker 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 \r\n \r\nsales tax proceeds, state, local property taxes and/or other funds over the life of the projects. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 39 - \r\n \r\n (This page left intentionally blank) \r\n \r\n SECTION II COMPLIANCE AND INTERNAL CONTROL REPORT \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 Baker County Board of Education \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 Baker County Board of Education (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 August 23, 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\nAugust 23, 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 BAKER COUNTY BOARD OF EDUCATION 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\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 BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2020 \r\nI SUMMARY OF AUDITOR'S RESULTS \r\nFinancial Statements \r\nType of auditor's report issued: Governmental Activities; All Major Funds; Aggregate Remaining Fund Information \r\nInternal control over financial reporting:  Material weaknesses identified?  Significant deficiencies identified? \r\nNoncompliance material to financial statements noted: \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nNo matters were reported. \r\n \r\nUnmodified \r\nNo None Reported \r\nNo \r\n \r\n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-b2019-belec-p-btext","title":"Baker County Board of Education, Newton, 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":["2019-06-30"],"dcterms_description":["Financial report for the Bacon 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":["Baker County Board of Education (Ga.)--Appropriations and expenditures--Periodicals.","Education--Georgia--Baker County--Auditing--Periodicals.","Education--Georgia--Baker County--Finance--Statistics--Periodicals.","Education--Auditing","Education--Finance","Expenditures, Public","Georgia--Baker County--fast--https://id.oclc.org/worldcat/entity/E39PBJgxqwBrwyH6QgJ7CB3hHC","Georgia Government Documents--Serial"],"dcterms_title":["Baker County Board of Education, Newton, 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-bb16-b2019-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-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 statements","financial records"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":["Education--Auditing--fast","Education--Finance--fast","Expenditures, Public--fast","Georgia--Baker County--fast--https://id.oclc.org/worldcat/entity/E39PBJgxqwBrwyH6QgJ7CB3hHC","Periodicals--fast","Statistics--fast"],"fulltext":"BAKER COUNTY BOARD OF EDUCATION \r\nNEWTON, GEORGIA \r\nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2019 \r\n(Including Independent Auditor's Reports) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION - 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\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 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 PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA \r\n3 SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY SCHOOL OPEB FUND \r\n4 SCHEDULE OF CONTRIBUTIONS  TEACHERS RETIREMENT SYSTEM OF GEORGIA 5 SCHEDULE OF CONTRIBUTIONS  SCHOOL OPEB FUND 6 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION 7 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES \r\nIN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \r\n \r\nPage \r\n1 2 \r\n4 5 6 7 8 10 \r\n31 32 33 34 35 36 37 \r\n \r\n BAKER COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \r\n \r\nSECTION I \r\nFINANCIAL \r\nSCHEDULES \r\nSUPPLEMENTARY INFORMATION \r\n8 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 9 SCHEDULE OF STATE REVENUE 10 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\n \r\nPage \r\n38 39 41 \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\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\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 Baker County Board of Education \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 Baker County Board of Education (School District), as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements as listed in the table of contents. \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 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\nManagement has omitted the Management's Discussion and Analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. \r\nAccounting principles generally accepted in the United States of America require that the required supplementary information listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. \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 \r\n \r\n procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. \r\nOther Reporting Required by Government Auditing Standards \r\nIn accordance with Government Auditing Standards, we have also issued our report dated October 14, 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\nOctober 14, 2020 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n (This page left intentionally blank) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION \r\n \r\n BAKER COUNTY BOARD OF EDUCATION STATEMENT OF NET POSITION JUNE 30, 2019 \r\nASSETS \r\nCash and Cash Equivalents Receivables, Net \r\nTaxes State Government Federal Government 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 Plan Related to OPEB Plan \r\nTotal Deferred Outflows of Resources \r\nLIABILITIES \r\nAccounts Payable Salaries and Benefits Payable Interest Payable Contracts 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 Plan 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 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\n3,047,348.37 \r\n \r\n54,006.27 209,813.87 183,316.83 \r\n2,777.63 114,834.57 7,434,800.12 \r\n \r\n11,046,897.66 \r\n \r\n795,138.00 428,426.00 \r\n1,223,564.00 \r\n \r\n94,969.38 564,707.99 \r\n324.62 67.79 \r\n2,991,660.00 3,241,226.00 \r\n7,744.54 16,183.57 \r\n6,916,883.89 \r\n \r\n310,975.00 1,532,564.00 \r\n1,843,539.00 \r\n \r\n7,525,638.79 \r\n2,777.63 252,131.48 (4,270,509.13) \r\n \r\n$ \r\n \r\n3,510,038.77 \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 BAKER COUNTY BOARD OF EDUCATION 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 Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Other Sales Tax Investment Earnings Miscellaneous \r\nExtraordinary Items Hurricane Michael \r\nTotal General Revenues and Extraordinary Items \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$ \r\n \r\n2,793,970.33 $ \r\n \r\n287,615.02 241,183.07 147,915.95 218,920.97 178,802.55 283,516.97 453,026.82 408,919.97 \r\n797.50 40.47 \r\n \r\n46,301.15 243,719.61 \r\n1,736.54 \r\n \r\n$ \r\n \r\n5,306,466.92 $ \r\n \r\n24,188.29 \r\n- \r\n7,496.13 \r\n- \r\n31,684.42 \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\nCAPITAL GRANTS AND CONTRIBUTIONS \r\n \r\nNET (EXPENSES) REVENUES \r\nAND CHANGES IN NET POSITION \r\n \r\n$ \r\n \r\n1,349,301.16 $ \r\n \r\n203,010.32 137,447.78 \r\n35,905.06 345,706.36 122,978.00 138,209.53 \r\n88,588.13 126,563.70 \r\n40.47 \r\n \r\n226,957.53 \r\n- \r\n \r\n$ \r\n \r\n2,774,708.04 $ \r\n \r\n22,254.42 $ \r\n2,037.75 471.82 7,630.55 - \r\n- \r\n32,394.54 \r\n \r\n(1,398,226.46) \r\n(84,604.70) (103,735.29) (112,010.89) 126,785.39 \r\n(53,786.80) (145,307.44) (363,966.87) (274,725.72) \r\n(797.50) - \r\n(46,301.15) (9,265.95) (1,736.54) \r\n(2,467,679.92) \r\n \r\n2,358,201.12 \r\n214,291.66 5,811.94 \r\n15,425.74 133,372.96 \r\n(441.19) 2,726,662.23 \r\n258,982.31 3,251,056.46 \r\n \r\n$ \r\n \r\n3,510,038.77 \r\n \r\n- 3 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION BALANCE SHEET \r\nGOVERNMENTAL FUNDS JUNE 30, 2019 \r\n \r\nEXHIBIT \"C\" \r\n \r\nASSETS \r\nCash and Cash Equivalents Receivables, Net \r\nTaxes State Government Federal Government Inventories \r\n \r\nGENERAL FUND \r\n \r\nCAPITAL PROJECTS \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ 2,844,273.60 $ 203,074.77 $ \r\n \r\n37,344.10 177,419.33 183,316.83 \r\n2,777.63 \r\n \r\n16,662.17 32,394.54 \r\n- \r\n \r\n3,047,348.37 \r\n54,006.27 209,813.87 183,316.83 \r\n2,777.63 \r\n \r\nTotal Assets \r\nLIABILITIES \r\nAccounts Payable Salaries and Benefits Payable Contracts Payable \r\nTotal Liabilities \r\nDEFERRED INFLOWS OF RESOURCES \r\nUnavailable Revenue - Property Taxes Unavailable Revenue - State Grants \r\nTotal Deferred Inflows of Resources \r\nFUND BALANCES \r\nNonspendable Restricted Assigned Unassigned \r\nTotal Fund Balances \r\n \r\n$ 3,245,131.49 $ 252,131.48 $ \r\n \r\n3,497,262.97 \r\n \r\n$ \r\n \r\n94,969.38 $ \r\n \r\n564,707.99 \r\n \r\n- \r\n \r\n659,677.37 \r\n \r\n- $ 67.79 \r\n67.79 \r\n \r\n94,969.38 564,707.99 \r\n67.79 \r\n659,745.16 \r\n \r\n2,147.34 - \r\n2,147.34 \r\n \r\n32,394.54 \r\n32,394.54 \r\n \r\n2,147.34 32,394.54 \r\n34,541.88 \r\n \r\n2,777.63 - \r\n22,888.67 2,557,640.48 \r\n2,583,306.78 \r\n \r\n219,669.15 \r\n- \r\n219,669.15 \r\n \r\n2,777.63 219,669.15 \r\n22,888.67 2,557,640.48 \r\n2,802,975.93 \r\n \r\nTotal Liabilities, Deferred Inflows of Resources, and Fund Balances $ 3,245,131.49 $ 252,131.48 $ \r\n \r\n3,497,262.97 \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 BAKER 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\nGeorgia State Financing and Investment Commission grants that are not available to pay 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\nAccrued interest payable Capital leases payable \r\n \r\n$ 2,802,975.93 \r\n \r\n$ \r\n \r\n82,372.24 \r\n \r\n32,462.33 \r\n \r\n9,282,498.21 \r\n \r\n1,341,615.16 \r\n \r\n1,111,602.75 \r\n \r\n(4,300,916.00) \r\n \r\n7,549,634.69 \r\n \r\n$ (2,991,660.00) (3,241,226.00) \r\n \r\n(6,232,886.00) \r\n \r\n$ \r\n \r\n484,163.00 \r\n \r\n(1,104,138.00) \r\n \r\n(619,975.00) 2,147.34 \r\n32,394.54 \r\n \r\n$ \r\n \r\n(324.62) \r\n \r\n(23,928.11) \r\n \r\n(24,252.73) \r\n \r\nNet position of governmental activities (Exhibit \"A\") \r\n \r\n$ 3,510,038.77 \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 BAKER COUNTY BOARD OF EDUCATION 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 Interest \r\nTotal Expenditures \r\nRevenues over (under) Expenditures \r\nOTHER FINANCING SOURCES (USES) \r\nInsurance Proceeds Transfers In Transfers Out \r\nTotal Other Financing Sources (Uses) \r\nEXTRAORDINARY ITEMS \r\nDamage from Hurricane Michael \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\nTOTAL \r\n \r\n$ \r\n \r\n2,357,216.63 $ \r\n \r\n5,811.94 \r\n \r\n2,158,364.26 \r\n \r\n727,163.57 \r\n \r\n31,684.42 \r\n \r\n13,911.02 \r\n \r\n133,372.96 \r\n \r\n5,427,524.80 \r\n \r\n- $ 214,291.66 \r\n1,514.72 - \r\n215,806.38 \r\n \r\n2,357,216.63 220,103.60 \r\n2,158,364.26 727,163.57 31,684.42 15,425.74 133,372.96 \r\n5,643,331.18 \r\n \r\n2,842,325.31 \r\n297,882.68 241,570.58 157,864.45 234,527.84 189,472.39 302,172.98 475,429.52 332,595.36 \r\n797.50 16.79 \r\n46,301.15 247,121.43 \r\n- \r\n7,521.89 930.92 \r\n5,376,530.79 \r\n50,994.01 \r\n \r\n- \r\n426,206.82 \r\n64,934.64 1,923.99 \r\n493,065.45 \r\n(277,259.07) \r\n \r\n2,842,325.31 \r\n297,882.68 241,570.58 157,864.45 234,527.84 189,472.39 302,172.98 475,429.52 332,595.36 \r\n797.50 16.79 \r\n46,301.15 247,121.43 426,206.82 \r\n72,456.53 2,854.91 \r\n5,869,596.24 \r\n(226,265.06) \r\n \r\n26,730.86 - \r\n(426,206.82) \r\n(399,475.96) \r\n \r\n426,206.82 \r\n- \r\n426,206.82 \r\n \r\n26,730.86 426,206.82 (426,206.82) \r\n26,730.86 \r\n \r\n(27,172.05) (375,654.00) 2,958,960.78 \r\n \r\n148,947.75 \r\n70,721.40 \r\n \r\n(27,172.05) (226,706.25) 3,029,682.18 \r\n \r\nFund Balances - Ending \r\n \r\n$ 2,583,306.78 $ \r\n \r\n219,669.15 $ \r\n \r\n2,802,975.93 \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 BAKER COUNTY BOARD OF EDUCATION 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\nFederal grant revenues recognized in the governmental funds in the current period that were reported as financial resources in governmental activities in the prior period. \r\nGeorgia State Financing and Investment Commission grants 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 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 capital leases \r\n \r\n$ \r\n \r\n(226,706.25) \r\n \r\n$ \r\n \r\n455,854.93 \r\n \r\n(335,477.51) \r\n \r\n120,377.42 984.49 \r\n(127,261.79) 32,394.54 \r\n \r\n72,456.53 \r\n \r\n$ \r\n \r\n243,955.00 \r\n \r\n141,664.00 \r\n \r\n385,619.00 \r\n \r\n1,118.37 \r\n \r\nChange in net position of governmental activities (Exhibit \"B\") \r\n \r\n$ \r\n \r\n258,982.31 \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 BAKER COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET POSITION \r\nFIDUCIARY FUNDS JUNE 30, 2019 \r\nASSETS Cash and Cash Equivalents \r\nLIABILITIES Funds Held for Others \r\n \r\nEXHIBIT \"G\" \r\n \r\nAGENCY FUNDS \r\n \r\n$ \r\n \r\n7,965.12 \r\n \r\n$ \r\n \r\n7,965.12 \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 BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \r\nREPORTING ENTITY \r\nThe Baker County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity. \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- 10 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"H\" \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 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\nThe School District reports the following fiduciary fund type: \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\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\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\n \r\n- 11 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"H\" \r\n \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 did 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 adoption of this statement did not have an impact on the School District's financial statement. \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\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\n \r\n- 12 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"H\" \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 \r\n \r\nAll \r\n \r\nLand Improvements \r\n \r\n$ 5,000.00 \r\n \r\nBuildings and Improvements $ 5,000.00 \r\n \r\nEquipment \r\n \r\n$ 5,000.00 \r\n \r\nDEFERRED OUTFLOWS/INFLOWS OF RESOURCES \r\n \r\nN/A 10 to 50 years 15 to 80 years \r\n3 to 50 years \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\nLONG-TERM LIABILITIES \r\n \r\nIn the School District's government-wide financial statements, outstanding debt is reported as liabilities. \r\n \r\nIn the governmental fund financial statements, the School District recognizes the proceeds of debt as other financing sources of the current period. \r\nPENSIONS \r\n \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\n \r\n- 13 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"H\" \r\n \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\nPROPERTY TAXES \r\nThe Baker County Board of Commissioners adopted the property tax levy for the 2018 tax digest year (calendar year) on August 22, 2018 (levy date) based on property values as of January 1, 2018. Taxes were due on December 20, 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 Baker 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 $2,212,967.65. \r\n \r\n- 14 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"H\" \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\n14.068 mills \r\n \r\nAdditionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $144,248.98 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 $214,291.66 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be 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 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 fund 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\nThe Superintendent is authorized by the Board to approve adjustments of no more than 25 percent of the amount budgeted for expenditures in any budget function for any fund. The Superintendent shall report any such adjustments to the Board. If expenditure of funds in any budget function for any fund is anticipated to be more than 25 percent of the budgeted amount, the Superintendent shall request Board approval for the budget amendment. Any position or expenditure not previously approved in the annual budget that exceeds $50,000.00 shall require Board approval unless the Superintendent deems the position or purchase an emergency. In such case, the expenditure shall be reported to the Board at its regularly scheduled meeting. Under no circumstance is the Superintendent or other staff person authorized to spend funds that exceed the total budget without approval by the Board. \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\n \r\n- 15 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNOTE 4: DEPOSITS \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\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 $3,055,313.49 and a bank balance of $3,187,895.30. The bank balances insured by Federal depository insurance were $500,000.00 and the bank balances included in the State's Secure Deposit Program (SDP) were $2,687,895.30. \r\nThe School District participates in the State's Secure Deposit Program, a multi-bank pledging pool. The SDP requires participating banks that accept public deposits in Georgia to operate under the policy and procedures of the program. The Georgia Office of State Treasurer (OST) sets the collateral requirements and pledging level for each covered depository. There are four tiers of collateralization levels specifying percentages of eligible securities to secure covered deposits: 25%, 50%, 75%, and 110%. The SDP also provides for collateral levels to be increased to an amount of up to 125% if economic or financial conditions warrant. The program lists the type of eligible collateral. The OST approved authorized custodians. \r\n \r\n- 16 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"H\" \r\n \r\nIn accordance with the SDP, if a covered depository defaults, losses to public depositors are first satisfied with any applicable insurance, followed by demands of payment under any letters of credit or sale of the covered depository's collateral. If necessary, any remaining losses are to be satisfied by assessments made against the other participating covered depositories. Therefore, for disclosure purposes, all deposits of the SDP are considered to be fully collateralized. \r\nNOTE 5: CAPITAL ASSETS \r\n \r\nThe following is a summary of changes in the capital assets for governmental activities during the fiscal year: \r\n \r\nBalances July 1, 2018 \r\n \r\nIncreases \r\n \r\nDecreases \r\n \r\nTransfers \r\n \r\nBalances June 30, 2019 \r\n \r\nGovernmental Activities Capital Assets, Not Being Depreciated: \r\nLand Construction in Progress \r\n \r\n$ \r\n \r\n82,372.24 $ \r\n \r\n- $ \r\n \r\n905,681.56 \r\n \r\n32,462.33 \r\n \r\n- $ \r\n \r\n- $ \r\n \r\n- \r\n \r\n(905,681.56) \r\n \r\n82,372.24 32,462.33 \r\n \r\nTotal Capital Assets Not Being Depreciated \r\n \r\n988,053.80 \r\n \r\n32,462.33 \r\n \r\n- \r\n \r\n(905,681.56) \r\n \r\n114,834.57 \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\n9,117,734.42 1,300,571.54 \r\n- \r\n3,220,520.81 756,581.68 - \r\n \r\n164,763.79 39,628.81 \r\n219,000.00 \r\n \r\n11,664.00 \r\n- \r\n \r\n13,078.81 892,602.75 \r\n \r\n9,282,498.21 1,341,615.16 1,111,602.75 \r\n \r\n234,554.33 87,028.15 13,895.03 \r\n \r\n11,664.00 \r\n- \r\n \r\n- \r\n \r\n3,455,075.14 \r\n \r\n- \r\n \r\n831,945.83 \r\n \r\n- \r\n \r\n13,895.03 \r\n \r\nTotal Capital Assets, Being Depreciated, Net \r\n \r\n6,441,203.47 \r\n \r\n87,915.09 \r\n \r\n- \r\n \r\n905,681.56 \r\n \r\n7,434,800.12 \r\n \r\nGovernmental Activities Capital Assets - Net $ 7,429,257.27 $ 120,377.42 $ \r\n \r\n- $ \r\n \r\nCurrent year depreciation expense by function is as follows: \r\n \r\nInstruction Support Services \r\nSchool Administration Maintenance and Operation of Plant Student Transportation Services \r\n \r\n$ \r\n \r\n$ \r\n \r\n20,760.40 \r\n \r\n5,618.86 \r\n \r\n77,746.70 \r\n \r\n- $ 7,549,634.69 \r\n231,351.55 104,125.96 \r\n \r\n$ \r\n \r\n335,477.51 \r\n \r\nNOTE 6: INTERFUND TRANSFERS INTERFUND 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 General Fund \r\n \r\nCapital Projects Fund \r\n \r\n$ 426,206.82 \r\n \r\nTransfers are used to move property tax revenues collected by the general fund to the capital projects fund as required match or supplemental funding source for capital construction projects. \r\n \r\n- 17 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNOTE 7: 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\nGovernmental Activities \r\n \r\nBalance July 1, 2018 Additions Deductions \r\n \r\nBalance \r\n \r\nDue Within \r\n \r\nJune 30, 2019 One Year \r\n \r\nCapital Leases \r\n \r\n$ 96,384.64 $ \r\n \r\n- $ 72,456.53 $ 23,928.11 $ 7,744.54 \r\n \r\nCAPITAL LEASES \r\nThe School District has acquired equipment under the provisions of a long-term lease agreement classified as a capital lease for accounting purposes because it provides for a bargain purchase option or a transfer of ownership by the end of the lease term. \r\nThe following assets were acquired through capital leases and are reflected in the capital asset note at fiscal year-end: \r\nGovernmental Activities \r\n \r\nEquipment \r\n \r\n$ \r\n \r\nLess: Accumulated Depreciation \r\n \r\n60,450.00 8,563.75 \r\n \r\n$ \r\nCapital leases currently outstanding are as follows: \r\n \r\n51,886.25 \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 Bus \r\n \r\n2.96% \r\n \r\n1/19/2018 \r\n \r\n1/19/2022 $ \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\n60,450.00 $ \r\nInterest \r\n \r\n23,928.11 \r\n \r\n2020 2021 2022 \r\n \r\n$ \r\n \r\n7,744.54 $ \r\n \r\n7,973.78 \r\n \r\n8,209.79 \r\n \r\n708.27 479.03 243.02 \r\n \r\nTotal Principal and Interest \r\n \r\n$ \r\n \r\n23,928.11 $ \r\n \r\n1,430.32 \r\n \r\nNOTE 8: RISK MANAGEMENT INSURANCE Commercial 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 describe 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 \r\n- 18 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"H\" \r\n \r\nGeorgia Education Workers' Compensation Trust \r\n \r\nThe School District participates in the Georgia Education Workers' Compensation Trust (the Trust), a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general workers' compensation insurance coverage. Specific excess of loss insurance coverage is provided through an agreement by the Trust with the Safety National Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $1.0 million loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided with limits of $2.0 million. The Trust covers the first $1.0 million of each Employers Liability claim with Safety National providing additional Employers Liability limits up to a $2.0 million per occurrence maximum. Safety National Casualty Company also provides $2.0 million in aggregate coverage to the Trust, attaching at 110% of the loss fund and based on the Fund's annual normal premium. \r\n \r\nUNEMPLOYMENT COMPENSATION \r\n \r\nThe School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the general fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. The School District has not incurred any liabilities for unemployment compensation during the past two years. \r\nSURETY BOND \r\n \r\nThe School District purchased surety bonds to provide additional insurance coverage as follows: \r\n \r\nPosition Covered \r\n \r\nAmount \r\n \r\nSuperintendent Principal \r\n \r\n$ \r\n \r\n25,000.00 \r\n \r\n$ \r\n \r\n10,000.00 \r\n \r\nNOTE 9: 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 Capital Projects \r\nAssigned School Activity Accounts \r\nUnassigned \r\n \r\n$ \r\n \r\n2,777.63 \r\n \r\n219,669.15 \r\n \r\n22,888.67 2,557,640.48 \r\n \r\nFund Balance, June 30, 2019 \r\n \r\n$ 2,802,975.93 \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- 19 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNOTE 10 : 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, 2019: \r\n \r\nProject \r\n \r\nUnearned Executed Contracts (1) \r\n \r\nPayments through June 30, 2019 (2) \r\n \r\nTrack and Field Construction \r\n \r\n$ \r\n \r\n10,332.25 $ 892,602.75 \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 11: 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 12: 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- 20 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"H\" \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 $169,892.00 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\n \r\nAt June 30, 2019, the School District reported a liability of $3,241,226.00 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 0.025502% which was a decrease of 0.007107% from its proportion measured as of June 30, 2017. \r\n \r\nFor the year ended June 30, 2019, the School District recognized OPEB expense of $28,228.00. At June 30, 2019, the School District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: \r\n \r\nDeferred Outflows of Resources \r\n \r\nOPEB \r\n \r\nDeferred Inflows of Resources \r\n \r\nDifferences between expected and actual \r\n \r\nexperience \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n73,725.00 \r\n \r\nChanges of assumptions \r\nNet difference between projected and actual earnings on OPEB plan investments \r\n \r\n4,386.00 \r\n \r\n549,079.00 - \r\n \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\n254,148.00 \r\n \r\n909,760.00 \r\n \r\n169,892.00 \r\n \r\n- \r\n \r\n$ 428,426.00 $ 1,532,564.00 \r\n \r\n- 21 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"H\" \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, 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\n2020 2021 2022 2023 2024 20.25 \r\n \r\n$ (228,847.00) $ (228,847.00) $ (228,847.00) $ (229,109.00) $ (232,940.00) $ (125,440.00) \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\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\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\n7.50% \r\n \r\nMedicare Eligible \r\n \r\n5.50% \r\n \r\nUltimate trend rate \r\n \r\nPre-Medicare Eligible \r\n \r\n4.75% \r\n \r\nMedicare Eligible \r\n \r\n4.75% \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\n- 22 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"H\" \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\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, 2017 valuation were based on a review of recent plan experience done concurrently with the June 30, 2017 valuation. \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\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. 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 -- Mid Cap Domestic Stocks -- Small Cap Int'l Stocks - Developed Mkt Int'l Stocks - Emerging Mkt Alternatives \r\nTotal \r\n \r\n30.00% 37.20% \r\n3.40% 1.40% 17.80% 5.20% 5.00% \r\n100.00% \r\n \r\n(0.50)% 9.00% \r\n12.00% 13.50% \r\n8.00% 12.00% 10.50% \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\n \r\n- 23 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"H\" \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 3.87%, 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$ 3,784,736.00 $ \r\n \r\n3,241,226.00 $ 2,802,942.00 \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 \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 of the Net OPEB Liability \r\n \r\n$ 2,724,925.00 $ \r\n \r\n3,241,226.00 $ 3,901,040.00 \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 13: 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 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. 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 \r\n \r\n- 24 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"H\" \r\n \r\nrequired contribution rate for the year ended June 30, 2019 was 20.90% of annual School District payroll. For the current fiscal year, employer contributions to the pension plan were $496,700.00 from the School District. \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\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 $11,655.00. \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 $2,991,660.00 for its proportionate share of the net pension liability for TRS. \r\n \r\nThe TRS net pension liability reflected a reduction for support provided to the School District by the State of Georgia for certain public school support personnel. The amount recognized by the School District as its proportionate share of the net pension liability, the related State of Georgia support, and the total portion of the net pension liability that was associated with the School District were as follows: \r\n \r\nSchool District's proportionate share of the net pension liability \r\n \r\n$ 2,991,660.00 \r\n \r\nState of Georgia's proportionate share of the net pension liability associated with the School District \r\n \r\n48,076.00 \r\n \r\nTotal \r\n \r\n$ 3,039,736.00 \r\n \r\n- 25 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"H\" \r\n \r\nThe net pension liability for TRS 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 during the fiscal year ended June 30, 2018. \r\n \r\nAt June 30, 2018, the School District's TRS proportion was 0.016117% which was a decrease of 0.001449% from its proportion measured as of June 30, 2017. \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 $63,296.00. \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 $266,274.00 for TRS and $14,655.00 for PSERS and revenue of $13,442.00 for TRS and $14,655.00 for PSERS. The revenue is support provided by the State of Georgia. For TRS the State of Georgia support is provided only for certain support personnel. \r\n \r\nAt June 30, 2019, the School District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: \r\n \r\nTRS Deferred Outflows of Resources \r\n \r\nDeferred Inflows of Resources \r\n \r\nDifferences between expected and actual experience \r\n \r\n$ 198,052.00 $ 6,166.00 \r\n \r\nChanges of assumptions \r\n \r\n45,143.00 \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\n81,798.00 \r\n \r\nChanges in proportion and differences between School District contributions and proportionate share of contributions \r\n \r\n55,243.00 \r\n \r\n223,011.00 \r\n \r\nSchool District contributions subsequent to the \r\n \r\nmeasurement date \r\n \r\n496,700.00 \r\n \r\n- \r\n \r\nTotal \r\n \r\n$ 795,138.00 $ 310,975.00 \r\n \r\n- 26 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"H\" \r\n \r\nThe School District contributions subsequent to the measurement date for TRS are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 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\n2020 2021 2022 2023 2024 \r\n \r\n$ 123,078.00 \r\n \r\n$ 45,506.00 \r\n \r\n$ (127,366.00) \r\n \r\n$ (51,557.00) \r\n \r\n$ \r\n \r\n(2,198.00) \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\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 mortality rates were based on the RP-2000 Blue-Collar Mortality Table projected \r\nto 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 \r\nto 2025 with projection scale BB (set forward 5 years for both males and females) was used for death \r\nafter disability retirement. There is a margin for future mortality improvement in the tables used by the \r\nSystem. 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 \r\nunder 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\n \r\n- 27 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"H\" \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\nThe long-term expected rate of return on TRS and PSERS pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target 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\nPSERS Target allocation \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 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 non-employer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS and PSERS pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. \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$ 4,993,938.00 $ \r\n \r\n2,991,660.00 $ 1,341,682.00 \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 and PSERS financial report which is publicly available at www.trsga.com/publications and www.ers.ga.gov/formspubs/formspubs.html. \r\n \r\n- 28 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2019 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNOTE 14: EXTRAORDINARY ITEMS \r\nThe School District received insurance proceeds in the amount of $26,730.86 related to Hurricane Michael damage. The insurance proceeds have been reported as an extraordinary item on the Statement of Activities. \r\nThe School District incurred expenses for the damage to facilities due to Hurricane Michael in the amount of $27,172.05. NOTE 15: SUBSEQUENT EVENTS \r\nIn December 2019, a strain of coronavirus (COVID-19) began to spread worldwide, resulting in a severe impact on 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\n- 29 - \r\n \r\n (This page left intentionally blank) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION 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 \r\nthe net pension liability \r\n \r\nState of Georgia's proportionate share of the \r\nnet pension liability associated with the School \r\nDistrict \r\n \r\n2019 2018 \r\n \r\n0.016117% $ 0.017566% $ \r\n \r\n2,991,660.00 $ 3,264,695.00 $ \r\n \r\n48,076.00 13,753.00 \r\n \r\nTotal \r\n$ 3,039,736.00 $ 3,278,448.00 \r\n \r\nSchool District's covered payroll \r\n$ 1,950,535.80 $ 2,024,988.28 \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\n153.38% 161.22% \r\n \r\n80.27% 79.33% \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- 31 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION 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 \"2\" \r\n \r\nYear Ended \r\n2019 2018 \r\n \r\nSchool District's proportion of the net pension liability \r\n \r\nSchool District's proportionate share of the net pension \r\nliability \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 proportionate share of the \r\nnet pension liability associated with the School \r\nDistrict \r\n \r\n$ \r\n \r\n63,296.00 $ \r\n \r\n$ \r\n \r\n61,265.00 $ \r\n \r\nTotal \r\n63,296.00 61,265.00 \r\n \r\nSchool District's covered payroll \r\n \r\n$ \r\n \r\n200,552.00 \r\n \r\n$ \r\n \r\n212,907.67 \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\n85.26% \r\n \r\nN/A \r\n \r\n85.69% \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- 32 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION 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 \"3\" \r\n \r\nYear Ended \r\n \r\nSchool District's proportion of the net OPEB 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\n2019 2018 \r\n \r\n0.025502% $ 0.032609% $ \r\n \r\n3,241,226.00 $ 4,581,551.00 $ \r\n \r\n- \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\nTotal \r\n3,241,226.00 4,581,551.00 \r\n \r\nSchool District's covered-employee \r\npayroll \r\n$ 1,761,002.40 $ 1,725,372.62 \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\n184.06% 265.54% \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- 33 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION 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\n2019 2018 \r\n \r\nContractually required contribution \r\n \r\n$ \r\n \r\n496,700.00 \r\n \r\n$ \r\n \r\n322,609.00 \r\n \r\nContributions in relation to the contractually required \r\ncontribution \r\n \r\n$ \r\n \r\n496,700.00 \r\n \r\n$ \r\n \r\n322,609.00 \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\nSchool District's covered payroll \r\n \r\n$ \r\n \r\n2,376,556.00 \r\n \r\n$ \r\n \r\n1,950,535.80 \r\n \r\nContribution as a percentage of covered \r\npayroll \r\n20.90% 16.54% \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- 34 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS SCHOOL OPEB FUND \r\nFOR THE YEAR ENDED JUNE 30 \r\n \r\nSCHEDULE \"5\" \r\n \r\nYear Ended \r\n2019 2018 \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\n$ \r\n \r\n169,892.00 $ \r\n \r\n169,892.00 $ \r\n \r\n- \r\n \r\n$ \r\n \r\n132,175.00 $ \r\n \r\n132,175.00 $ \r\n \r\n- \r\n \r\nSchool District's covered-employee \r\npayroll \r\n \r\n$ \r\n \r\n2,126,028.00 \r\n \r\n$ \r\n \r\n1,761,002.40 \r\n \r\nContribution as a percentage of covered- \r\nemployee payroll \r\n7.99% 7.51% \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- 35 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \r\nFOR THE YEAR ENDED JUNE 30, 2019 \r\n \r\nSCHEDULE \"6\" \r\n \r\nTeachers Retirement System \r\n \r\nChanges of assumptions: On November 18, 2015, th-e 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 \r\n \r\nexpectation of retired life mortality was changed to RP 2000 White Collar Mortality Table with future mortality improvement projected to 2025 with the \r\n \r\nSociety of Actuaries' projection scale BB (set forward one year for males). \r\n \r\n- \r\n \r\nIn 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\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\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\nIn 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 H[SHULHQFH \r\nSchool OPEB Fund \r\nChanges of benefit terms: There have been no changes in benefit terms. \r\n \r\nChanges of 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\n \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\n- 36 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION 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 \"7\" \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 Insurance Proceeds Other Uses \r\nTotal Other Financing Sources (Uses) \r\nEXTRAORDINARY ITEMS \r\nDamage from Hurricane Michael \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\n2,180,219.16 $ \r\n \r\n2,180,219.16 $ \r\n \r\n2,357,216.63 $ \r\n \r\n- \r\n \r\n- \r\n \r\n5,811.94 \r\n \r\n2,074,503.44 \r\n \r\n2,112,041.45 \r\n \r\n2,158,364.26 \r\n \r\n503,000.00 \r\n \r\n727,256.00 \r\n \r\n727,163.57 \r\n \r\n18,387.00 \r\n \r\n18,387.00 \r\n \r\n31,684.42 \r\n \r\n- \r\n \r\n- \r\n \r\n13,911.02 \r\n \r\n157,363.48 \r\n \r\n157,363.48 \r\n \r\n133,372.96 \r\n \r\n4,933,473.08 \r\n \r\n5,195,267.09 \r\n \r\n5,427,524.80 \r\n \r\n176,997.47 5,811.94 \r\n46,322.81 (92.43) \r\n13,297.42 13,911.02 (23,990.52) \r\n232,257.71 \r\n \r\n2,594,181.99 \r\n174,668.21 97,071.80 \r\n168,828.97 375,216.85 190,909.85 179,610.70 517,491.74 347,210.06 \r\n1,110.40 \r\n185,617.01 \r\n- \r\n4,831,917.58 \r\n101,555.50 \r\n \r\n2,797,152.67 \r\n309,299.94 255,910.86 166,426.11 226,394.22 175,551.15 319,506.51 573,098.88 381,595.60 \r\n797.50 16.79 - \r\n209,998.92 - \r\n5,415,749.15 \r\n(220,482.06) \r\n \r\n2,842,325.31 \r\n297,882.68 241,570.58 157,864.45 234,527.84 189,472.39 302,172.98 475,429.52 332,595.36 \r\n797.50 16.79 \r\n46,301.15 247,121.43 \r\n8,452.81 \r\n5,376,530.79 \r\n50,994.01 \r\n \r\n(45,172.64) \r\n11,417.26 14,340.28 \r\n8,561.66 (8,133.62) (13,921.24) 17,333.53 97,669.36 49,000.24 \r\n(46,301.15) (37,122.51) (8,452.81) \r\n39,218.36 \r\n271,476.07 \r\n \r\n- \r\n \r\n39,220.00 \r\n \r\n- \r\n \r\n(39,220.00) \r\n \r\n- \r\n \r\n- \r\n \r\n26,730.86 \r\n \r\n26,730.86 \r\n \r\n- \r\n \r\n(39,220.00) \r\n \r\n(426,206.82) \r\n \r\n(386,986.82) \r\n \r\n- \r\n \r\n- \r\n \r\n(399,475.96) \r\n \r\n(399,475.96) \r\n \r\n101,555.50 2,893,035.62 \r\n- \r\n \r\n(220,482.06) 2,893,035.62 \r\n14,842.09 \r\n \r\n(27,172.05) (375,654.00) 2,958,960.78 \r\n- \r\n \r\n(27,172.05) (155,171.94) \r\n65,925.16 (14,842.09) \r\n \r\n$ \r\n \r\n2,994,591.12 $ \r\n \r\n2,687,395.65 $ \r\n \r\n2,583,306.78 $ \r\n \r\n(104,088.87) \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 $68,305.99 and $66,849.94, 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- 37 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \r\nYEAR ENDED JUNE 30, 2019 \r\n \r\nSCHEDULE \"8\" \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 Rural Education Rural Education 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\n58,965.56 188,609.64 \r\n247,575.20 \r\n \r\n84.027 84.027 84.173 84.173 \r\n \r\nH027A170073 H027A180073 H173A170081 H173A180081 \r\n \r\n84.048 84.358 84.358 84.367 84.367 84.010 84.010 \r\n \r\nV048A180010 S365B170010 S365B180010 S367A170001 S367A180001 S010A170010 S010A180010 \r\n \r\n757.00 99,119.67 \r\n8,293.00 5,713.37 \r\n113,883.04 \r\n5,244.18 5,525.00 4,655.00 \r\n100.00 31.00 \r\n31,110.00 233,380.96 \r\n280,046.14 \r\n393,929.18 \r\n \r\nTotal Expenditures of Federal Awards \r\n \r\n$ \r\n \r\n641,504.38 \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 Baker County Board of Education (the \"Board\") under programs of the federal government for the year ended June 30, 2019. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Board, it is not intended to and does not present the financial position or changes in net position of the Board. \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- 38 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION 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 Remedial Education Program Alternative Education Program 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 Employee Holiday Categorical Grants Pupil Transportation Regular Nursing Services Sparsity Other State Programs Food Services Math and Science Supplements Vocational Education \r\nOffice of the State Treasurer Public School Employees Retirement \r\n \r\nSCHEDULE \"9\" \r\n \r\nGOVERNMENTAL FUND TYPE GENERAL FUND \r\n \r\n$ \r\n \r\n105,408.25 \r\n \r\n35,776.00 39,981.00 83,919.00 172,677.00 30,460.00 144,482.00 117,344.00 139,617.00 33,911.00 246,414.00 49,020.00 10,492.00 25,997.00 \r\n8,144.00 4,982.00 \r\n441.00 \r\n227,851.00 88,466.00 58,422.00 (19,845.00) \r\n125,268.00 45,000.00 \r\n350,031.00 \r\n5,932.00 3,624.01 12,895.00 \r\n11,655.00 \r\n \r\n$ \r\n \r\n2,158,364.26 \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 39 - \r\n \r\n (This page left intentionally blank) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\nYEAR ENDED JUNE 30, 2019 \r\n \r\nSCHEDULE \"10\" \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) \r\n \r\nAMOUNT EXPENDED IN PRIOR YEARS (3) \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(i) Repairing, Improving, Adding to, renovating, extending, \r\n \r\nupgrading, and equipping school buildings, support \r\n \r\nfacilities and athletic facilities in the Baker County \r\n \r\nSchool District useful or desirable in connection \r\n \r\ntherewith, including acquiring any necessary property \r\n \r\ntherefore, both real and personal; \r\n \r\n$ 910,000.00 $ \r\n \r\n962,641.38 $ \r\n \r\n- $ 962,641.38 $ \r\n \r\n- $ \r\n \r\n- \r\n \r\nJune 2021 \r\n \r\n(ii) Adding Classrooms; \r\n \r\n15,000.00 \r\n \r\n15,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nJune 2021 \r\n \r\n(iii) Acquiring transportation vehicles and maintenance \r\n \r\nvehicles and equipment; \r\n \r\n45,000.00 \r\n \r\n45,000.00 \r\n \r\n- \r\n \r\n4,506.06 \r\n \r\n- \r\n \r\n- \r\n \r\nJune 2021 \r\n \r\n(iv) Acquiring and upgrading buses; \r\n \r\n50,000.00 \r\n \r\n50,000.00 \r\n \r\n66,858.63 \r\n \r\n200,575.89 \r\n \r\n- \r\n \r\n- \r\n \r\nJune 2021 \r\n \r\n(v) Acquiring technology, safety, and security equipment; \r\n \r\n15,000.00 \r\n \r\n15,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nJune 2021 \r\n \r\n(vi) Improving transportation facilities; \r\n \r\n10,000.00 \r\n \r\n10,000.00 \r\n \r\n- \r\n \r\n186.27 \r\n \r\n- \r\n \r\n- \r\n \r\nJune 2021 \r\n \r\n(vii) And paying expenses incidental to accomplish the foregoing; \r\n \r\n5,000.00 \r\n \r\n5,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nJune 2021 \r\n \r\n(viii) Debt principal and interest payments. \r\n \r\n350,000.00 \r\n \r\n350,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nJune 2021 \r\n \r\n$ 1,400,000.00 $ 1,452,641.38 $ 66,858.63 $ 1,167,909.60 $ \r\n \r\n- $ \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(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. \r\n(3) The voters of Baker 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\nSee notes to the basic financial statements. \r\n \r\n- 41 - \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\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 Baker County Board of Education \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 Baker County Board of Education (School District), as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements, and have issued our report thereon dated October 14, 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 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\nOctober 14, 2020 \r\n \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 BAKER COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2019 \r\n \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\n2014-001 Control Category: Internal Control Impact: Compliance Impact: \r\n \r\nFailure to Adequately Maintain General Ledger General Ledger Material Weakness None \r\n \r\nFinding Status: \r\n \r\nPreviously Reported Corrective Action Implemented \r\n \r\n2014-003 Control Category: \r\nInternal Control Impact: Compliance Impact: \r\n \r\nInadequate Internal Control Procedures Cash and Cash Equivalents Revenues/Receivables/Receipts Material Weakness None \r\n \r\nFinding Status: \r\n \r\nPreviously Reported Corrective Action Implemented \r\n \r\n2015-001 Control Category: Internal Control Impact: Compliance Impact: \r\n \r\nFailure to Adequately Maintain General Ledger General Ledger Material Weakness None \r\n \r\nFinding Status: \r\n \r\nPreviously Reported Corrective Action Implemented \r\n \r\n2015-003 Control Category: \r\nInternal Control Impact: Compliance Impact: \r\n \r\nInadequate Internal Control Procedures Cash and Cash Equivalents Revenues/Receivables/Receipts Material Weakness None \r\n \r\nFinding Status: \r\n \r\nPreviously Reported Corrective Action Implemented \r\n \r\nFS 2018-001 Control Categories: \r\nInternal Control Impact: Compliance Impact: Repeat of Prior Year Finding: \r\n \r\nInternal Control Procedures Cash and Cash Equivalents Expenditures/Liabilities/Disbursements Capital Assets General Ledger Material Weakness None 2015-003, 2014-003 \r\n \r\nFinding Status: \r\n \r\nPreviously Reported Corrective Action Implemented \r\n \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 BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2019 \r\nI SUMMARY OF AUDITOR'S RESULTS Financial Statements \r\nType of auditor's report issued: Governmental Activities; General Fund; Capital Projects 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\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. \r\nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. \r\n \r\nUnmodified \r\nNo None Reported \r\nNo \r\n \r\n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-b2018-belec-p-btext","title":"Baker County Board of Education, Newton, 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":["2018-06-30"],"dcterms_description":["Financial report for the Bacon 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":["Baker County Board of Education (Ga.)--Appropriations and expenditures--Periodicals.","Education--Georgia--Baker County--Auditing--Periodicals.","Education--Georgia--Baker County--Finance--Statistics--Periodicals.","Education--Auditing","Education--Finance","Expenditures, Public","Georgia--Baker County--fast--https://id.oclc.org/worldcat/entity/E39PBJgxqwBrwyH6QgJ7CB3hHC","Georgia Government Documents--Serial"],"dcterms_title":["Baker County Board of Education, Newton, 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-bb16-b2018-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-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 statements","financial records"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":["Education--Auditing--fast","Education--Finance--fast","Expenditures, Public--fast","Georgia--Baker County--fast--https://id.oclc.org/worldcat/entity/E39PBJgxqwBrwyH6QgJ7CB3hHC","Periodicals--fast","Statistics--fast"],"fulltext":"BAKER COUNTY BOARD OF EDUCATION \r\nNEWTON, GEORGIA \r\nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2018 \r\n(Including Independent Auditor's Reports) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION - 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\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 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 PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA \r\n3 SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY SCHOOL OPEB FUND \r\n4 SCHEDULE OF CONTRIBUTIONS  TEACHERS RETIREMENT SYSTEM OF GEORGIA 5 SCHEDULE OF CONTRIBUTIONS  SCHOOL OPEB FUND 6 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION 7 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES \r\nIN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \r\n \r\nPage \r\n1 2 \r\n3 4 5 6 7 8 \r\n29 30 31 32 33 34 35 \r\n \r\n BAKER COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \r\n \r\nSECTION I \r\nFINANCIAL \r\nSCHEDULES \r\nSUPPLEMENTARY INFORMATION \r\n8 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 9 SCHEDULE OF STATE REVENUE 10 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\n \r\nPage \r\n36 37 39 \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\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\nSECTION V MANAGEMENT'S CORRECTIVE ACTION FOR CURRENT YEAR FINDINGS SCHEDULE OF MANAGEMENT'S CORRECTIVE ACTION \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\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 Baker County Board of Education \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 Baker County Board of Education (School District), as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements as listed in the table of contents. \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\nBasis for Qualified Opinion on Governmental Activities and Governmental Funds \r\nDue to the disclaimer of opinion issued in the prior year, the auditor was unable to obtain sufficient appropriate audit evidence regarding beginning balances reported on the Statement of Activities and the Statement of Revenues, Expenditures and Changes in Fund Balances. In addition, we were unable to satisfy ourselves by performing other procedures concerning beginning net position and beginning fund balance. \r\nQualified Opinion \r\nIn our opinion, except for the possible effects of the matter described in the \"Basis for Qualified Opinion on Governmental Activities and Governmental Funds\" paragraph, the financial statements referred to above present fairly, in all material respects, the 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 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 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 effects of GASB Statement No. 75. Our opinions are 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 affected by this missing information. \r\nAccounting principles generally accepted in the United States of America require that the required supplementary information listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. \r\n \r\n Other 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\nOther Reporting Required by Government Auditing Standards \r\nIn accordance with Government Auditing Standards, we have also issued our report dated September 8, 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\nSeptember 8, 2020 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n BAKER COUNTY BOARD OF EDUCATION \r\n \r\n BAKER COUNTY BOARD OF EDUCATION STATEMENT OF NET POSITION JUNE 30, 2018 \r\nASSETS \r\nCash and Cash Equivalents Receivables, Net \r\nTaxes State Government Federal Government 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 Plan Related to OPEB Plan \r\nTotal Deferred Outflows of Resources \r\nLIABILITIES \r\nAccounts Payable Salaries and Benefits Payable Interest 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 Plan 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 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\n3,299,740.86 \r\n \r\n68,240.88 161,428.07 188,606.36 \r\n431.26 4,228.38 988,053.80 6,441,203.47 \r\n \r\n11,151,933.08 \r\n \r\n606,106.00 443,397.00 \r\n1,049,503.00 \r\n \r\n162,356.15 402,212.84 \r\n1,442.99 3,264,695.00 4,581,551.00 \r\n72,456.53 23,928.11 \r\n8,508,642.62 \r\n \r\n92,863.00 348,874.00 \r\n441,737.00 \r\n \r\n7,314,202.81 \r\n25,814.68 70,721.40 (4,159,682.43) \r\n \r\n$ \r\n \r\n3,251,056.46 \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 BAKER COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES \r\nFOR THE YEAR ENDED JUNE 30, 2018 \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\nGeneral Revenues Taxes Property Taxes For Maintenance and Operations Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Other Sales Tax 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\nPROGRAM REVENUES \r\n \r\nOPERATING \r\n \r\nCHARGES FOR \r\n \r\nGRANTS AND \r\n \r\nSERVICES \r\n \r\nCONTRIBUTIONS \r\n \r\nNET (EXPENSES) REVENUES \r\nAND CHANGES IN NET POSITION \r\n \r\n$ 2,832,809.69 $ \r\n158,824.79 33,986.69 \r\n138,876.16 314,036.50 293,904.67 224,392.85 526,614.83 433,004.40 \r\n1,538.94 5,907.69 \r\n48,896.91 220,990.26 \r\n2,391.14 \r\n$ 5,236,175.52 $ \r\n \r\n- $ \r\n- \r\n18,388.04 \r\n- \r\n18,388.04 $ \r\n \r\n1,552,878.34 $ \r\n87,008.80 47,223.67 35,788.27 323,056.00 205,528.00 \r\n1,073.65 82,896.46 116,656.56 \r\n5,489.36 \r\n220,603.33 \r\n- \r\n2,678,202.44 \r\n \r\n(1,279,931.35) \r\n(71,815.99) 13,236.98 (103,087.89) \r\n9,019.50 (88,376.67) (223,319.20) (443,718.37) (316,347.84) \r\n(1,538.94) (418.33) \r\n(48,896.91) 18,001.11 (2,391.14) \r\n(2,539,585.04) \r\n \r\n2,356,356.63 \r\n168,533.87 6,105.77 279.35 \r\n134,617.64 \r\n2,665,893.26 \r\n126,308.22 \r\n3,124,748.24 \r\n \r\nNet Position - End of Year \r\n \r\n$ \r\n \r\n3,251,056.46 \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 BAKER COUNTY BOARD OF EDUCATION BALANCE SHEET \r\nGOVERNMENTAL FUNDS JUNE 30, 2018 \r\n \r\nEXHIBIT \"C\" \r\n \r\nASSETS \r\nCash and Cash Equivalents Receivables, Net \r\nTaxes State Government Federal Government Other Inventories \r\n \r\nGENERAL FUND \r\n \r\nCAPITAL PROJECTS \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ 3,244,775.68 $ \r\n52,484.66 161,428.07 188,606.36 \r\n431.26 4,228.38 \r\n \r\n54,965.18 $ \r\n15,756.22 - \r\n \r\n3,299,740.86 \r\n68,240.88 161,428.07 188,606.36 \r\n431.26 4,228.38 \r\n \r\nTotal Assets \r\nLIABILITIES \r\nAccounts Payable Salaries and Benefits Payable \r\nTotal Liabilities \r\nDEFERRED INFLOWS OF RESOURCES \r\nUnavailable Revenue - Federal Grants Unavailable Revenue - Property Taxes \r\nTotal Deferred Inflows of Resources \r\nFUND BALANCES \r\nNonspendable Restricted Unassigned \r\nTotal Fund Balances \r\n \r\n$ 3,651,954.41 $ 70,721.40 $ 3,722,675.81 \r\n \r\n$ \r\n \r\n162,356.15 $ \r\n \r\n402,212.84 \r\n \r\n564,568.99 \r\n \r\n- $ - \r\n- \r\n \r\n162,356.15 402,212.84 \r\n564,568.99 \r\n \r\n127,261.79 1,162.85 \r\n128,424.64 \r\n \r\n- \r\n \r\n127,261.79 \r\n \r\n- \r\n \r\n1,162.85 \r\n \r\n- \r\n \r\n128,424.64 \r\n \r\n4,228.38 21,586.30 2,933,146.10 \r\n2,958,960.78 \r\n \r\n70,721.40 \r\n- \r\n70,721.40 \r\n \r\n4,228.38 92,307.70 2,933,146.10 \r\n3,029,682.18 \r\n \r\nTotal Liabilities, Deferred Inflows of Resources, and Fund Balances \r\n \r\n$ 3,651,954.41 $ 70,721.40 $ 3,722,675.81 \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 BAKER COUNTY BOARD OF EDUCATION 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 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\nFederal grant funds 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\nAccrued interest payable Capital leases payable \r\n \r\n$ 3,029,682.18 \r\n \r\n$ \r\n \r\n82,372.24 \r\n \r\n905,681.56 \r\n \r\n9,117,734.42 \r\n \r\n1,300,571.54 \r\n \r\n(3,977,102.49) \r\n \r\n7,429,257.27 \r\n \r\n$ (3,264,695.00) (4,581,551.00) \r\n \r\n(7,846,246.00) \r\n \r\n$ \r\n \r\n513,243.00 \r\n \r\n94,523.00 \r\n \r\n607,766.00 1,162.85 \r\n127,261.79 \r\n \r\n$ \r\n \r\n(1,442.99) \r\n \r\n(96,384.64) \r\n \r\n(97,827.63) \r\n \r\nNet position of governmental activities (Exhibit \"A\") \r\n \r\n$ 3,251,056.46 \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 BAKER COUNTY BOARD OF EDUCATION 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 Interest \r\nTotal Expenditures \r\nRevenues over (under) Expenditures \r\nOTHER FINANCING SOURCES \r\nCapital Leases \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\nTOTAL \r\n \r\n$ \r\n \r\n2,361,750.24 $ \r\n \r\n6,105.77 \r\n \r\n2,038,769.40 \r\n \r\n512,007.84 \r\n \r\n18,388.04 \r\n \r\n18.66 \r\n \r\n134,617.64 \r\n \r\n5,071,657.59 \r\n \r\n- $ 168,533.87 \r\n260.69 - \r\n168,794.56 \r\n \r\n2,361,750.24 174,639.64 \r\n2,038,769.40 512,007.84 18,388.04 279.35 134,617.64 \r\n5,240,452.15 \r\n \r\n2,494,834.27 \r\n153,833.05 32,608.27 \r\n133,662.67 312,404.01 262,512.93 217,474.35 485,878.06 399,027.61 \r\n1,538.94 6,033.01 48,896.91 213,289.27 403,100.00 \r\n29,000.00 - \r\n5,194,093.35 \r\n(122,435.76) \r\n60,450.00 \r\n(61,985.76) \r\n3,020,946.54 \r\n \r\n- \r\n27,829.50 - \r\n63,066.03 3,792.60 \r\n94,688.13 \r\n74,106.43 \r\n- \r\n74,106.43 \r\n(3,385.03) \r\n \r\n2,494,834.27 \r\n153,833.05 32,608.27 \r\n133,662.67 312,404.01 262,512.93 217,474.35 513,707.56 399,027.61 \r\n1,538.94 6,033.01 48,896.91 213,289.27 403,100.00 \r\n92,066.03 3,792.60 \r\n5,288,781.48 \r\n(48,329.33) \r\n60,450.00 \r\n12,120.67 \r\n3,017,561.51 \r\n \r\nFund Balances - Ending \r\n \r\n$ \r\n \r\n2,958,960.78 $ \r\n \r\n70,721.40 $ \r\n \r\n3,029,682.18 \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 BAKER COUNTY BOARD OF EDUCATION 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\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\nFederal grant revenues 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 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 capital leases \r\n \r\n$ \r\n \r\n12,120.67 \r\n \r\n$ \r\n \r\n520,663.63 \r\n \r\n(314,840.87) \r\n \r\n205,822.76 (27,650.88) \r\n(5,393.61) 127,261.79 \r\n \r\n$ \r\n \r\n(60,450.00) \r\n \r\n92,066.03 \r\n \r\n31,616.03 \r\n \r\n$ \r\n \r\n(28,948.00) \r\n \r\n(189,922.00) \r\n \r\n(218,870.00) \r\n \r\n1,401.46 \r\n \r\nChange in net position of governmental activities (Exhibit \"B\") \r\n \r\n$ \r\n \r\n126,308.22 \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 BAKER COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET POSITION \r\nFIDUCIARY FUNDS JUNE 30, 2018 \r\nASSETS Cash and Cash Equivalents \r\nLIABILITIES Funds Held for Others \r\n \r\nEXHIBIT \"G\" \r\n \r\nAGENCY FUNDS \r\n \r\n$ \r\n \r\n4,486.50 \r\n \r\n$ \r\n \r\n4,486.50 \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 BAKER BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \r\nREPORTING ENTITY \r\nThe Baker County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity. \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- 8 - \r\n \r\n BAKER BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"H\" \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) that are restricted, committed or assigned for capital outlay expenditures, including the acquisition or construction of capital facilities and other capital assets. \r\nThe School District reports the following fiduciary fund type: \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\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\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 is recognized as expenditure 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\n \r\n- 9 - \r\n \r\n BAKER BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"H\" \r\n \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 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 reporting for prepaid insurance on debt that is extinguished and notes to financial statements for debt that is defeased in substance. The adoption of this statement does not have a significant impact on the School District's financial statements. \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- 10 - \r\n \r\n BAKER BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"H\" \r\n \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\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 \r\n \r\nAll $ 5,000.00 $ 5,000.00 $ 5,000.00 \r\n \r\nN/A 10 to 50 years 15 to 80 years \r\n3 to 50 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\n- 11 - \r\n \r\n BAKER BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"H\" \r\n \r\nLONG-TERM LIABILITIES \r\nIn the School District's government-wide financial statements, outstanding debt is reported as liabilities. \r\nIn the governmental fund financial statements, the School District recognizes the proceeds of debt as other financing sources of the current period. \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\n \r\n- 12 - \r\n \r\n BAKER BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"H\" \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\nPROPERTY TAXES \r\n \r\nThe Baker County Board of Commissioners adopted the property tax levy for the 2017 tax digest year (calendar year) on August 31, 2017 (levy date) based on property values as of January 1, 2017. Taxes were due on December 20, 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 Baker 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, 2018, for maintenance and operations amounted to $2,242,096.86. \r\n \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\n14.147 mills \r\n \r\nAdditionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $119,653.38 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 $168,533.87 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 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 fund 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\nThe Superintendent is authorized by the Board to approve adjustments of no more than 25 percent of the amount budgeted for expenditures in any budget function for any fund. The Superintendent shall report any such adjustments to the Board. If expenditure of funds in any budget function for any fund is anticipated to be more than 25 percent of the budgeted amount, the Superintendent shall request Board approval for the budget amendment. Any position or expenditure not previously approved in the \r\n- 13 - \r\n \r\n BAKER BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"H\" \r\n \r\nannual budget that exceeds $50,000.00 shall require Board approval unless the Superintendent deems the position or purchase an emergency. In such case, the expenditure shall be reported to the Board at its regularly scheduled meeting. Under no circumstance is the Superintendent or other staff person authorized to spend funds that exceed the total budget without approval by the Board. \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 \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\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, 2018, School District had deposits with a carrying amount of $3,304,227.36 and a bank balance of $3,492,816.62. The bank balances insured by Federal depository insurance were $502,753.32 and the bank balances included in the State's Secure Deposit Program (SDP) were $2,990,063.30. \r\nThe School District participates in the State's Secure Deposit Program (SDP), a multi-bank pledging pool. The SDP requires participating banks that accept public deposits in Georgia to operate under the policy and procedures of the program. The Georgia Office of State Treasurer (OST) sets the collateral requirements and pledging level for each covered depository. There are four tiers of collateralization levels specifying percentages of eligible securities to secure covered \r\n- 14 - \r\n \r\n BAKER BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"H\" \r\n \r\ndeposits: 25%, 50%, 75%, and 110%. The SDP also provides for collateral levels to be increased to an amount of up to 125% if economic or financial conditions warrant. The program lists the type of eligible collateral. The OST approved authorized custodians. \r\n \r\nIn accordance with the SDP, if a covered depository defaults, losses to public depositors are first satisfied with any applicable insurance, followed by demands of payment under any letters of credit or sale of the covered depository's collateral. If necessary, any remaining losses are to be satisfied by assessments made against the other participating covered depositories. \r\nNOTE 5: CAPITAL ASSETS \r\n \r\nThe following is a summary of changes in the capital assets for governmental activities during the fiscal year: \r\n \r\nBalances July 1, 2017 \r\n \r\nIncreases \r\n \r\nDecreases \r\n \r\nBalances June 30, 2018 \r\n \r\nGovernmental Activities Capital Assets, Not Being Depreciated: \r\nLand Construction in Progress \r\n \r\n$ \r\n \r\n82,372.24 $ \r\n \r\n- $ \r\n \r\n489,502.75 \r\n \r\n416,178.81 \r\n \r\n- $ \r\n \r\n82,372.24 \r\n \r\n- \r\n \r\n905,681.56 \r\n \r\nTotal Capital Assets Not Being Depreciated \r\n \r\n571,874.99 \r\n \r\n416,178.81 \r\n \r\n- \r\n \r\n988,053.80 \r\n \r\nCapital Assets Being Depreciated Buildings and Improvements Equipment \r\n \r\n9,099,064.60 1,246,357.54 \r\n \r\n18,669.82 85,815.00 \r\n \r\n31,601.00 \r\n \r\n9,117,734.42 1,300,571.54 \r\n \r\nLess Accumulated Depreciation for: Buildings and Improvements Equipment \r\n \r\n2,991,651.78 674,559.96 \r\n \r\n228,869.03 85,971.84 \r\n \r\n3,950.12 \r\n \r\n3,220,520.81 756,581.68 \r\n \r\nTotal Capital Assets, Being Depreciated, Net \r\n \r\n6,679,210.40 \r\n \r\n(210,356.05) \r\n \r\n27,650.88 \r\n \r\n6,441,203.47 \r\n \r\nGovernmental Activity Capital Assets - Net \r\n \r\n$ 7,251,085.39 $ 205,822.76 $ 27,650.88 $ 7,429,257.27 \r\n \r\nCurrent year depreciation expense by function is as follows: \r\n \r\nInstruction Support Services \r\nSchool Administration Maintenance and Operation of Plant Student Transportation Services \r\n \r\n$ \r\n \r\n18,022.90 \r\n \r\n3,462.70 \r\n \r\n79,613.64 \r\n \r\n$ \r\n \r\n213,741.63 \r\n \r\n101,099.24 \r\n \r\n$ \r\n \r\n314,840.87 \r\n \r\nNOTE 6: 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, 2017 \r\n \r\nGovernmental Activities \r\n \r\nBalance \r\n \r\nAdditions \r\n \r\nDeductions \r\n \r\nJune 30, 2018 \r\n \r\nDue Within One Year \r\n \r\nCapital Leases \r\n \r\n$ 128,000.67 $ 60,450.00 $ 92,066.03 $ 96,384.64 $ 72,456.53 \r\n \r\n- 15 - \r\n \r\n BAKER BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"H\" \r\n \r\nCAPITAL LEASES \r\nThe School District has acquired 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\nThe following assets were acquired through capital leases and are reflected in the capital asset note at fiscal year-end: \r\nGovernmental Activities \r\n \r\nEquipment \r\n \r\n$ \r\n \r\nLess: Accumulated Depreciation \r\n \r\n314,304.00 73,156.39 \r\n \r\n$ 241,147.61 \r\n \r\nDuring the current fiscal year, the School District entered into a lease agreement as lessee for financing the acquisition of a bus at a cost of $60,450.00 with a down payment of $29,000.00. 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\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\nSchool Buses School Bus \r\n \r\n2.96% 2.96% \r\n \r\n6/15/2015 1/19/2018 \r\n \r\n10/1/2018 $ 1/19/2022 \r\n \r\n253,854.00 $ 60,450.00 \r\n \r\n64,934.64 31,450.00 \r\n \r\n$ \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\n314,304.00 $ Interest \r\n \r\n96,384.64 \r\n \r\n2019 2020 2021 2022 \r\n \r\n$ \r\n \r\n72,456.53 $ \r\n \r\n7,744.54 \r\n \r\n7,973.78 \r\n \r\n8,209.79 \r\n \r\n2,854.91 708.27 479.03 243.02 \r\n \r\nTotal Principal and Interest \r\n \r\n$ \r\n \r\n96,384.64 $ \r\n \r\n4,285.23 \r\n \r\nNOTE 7: RISK MANAGEMENT INSURANCE Commercial 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 describe 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 \r\n- 16 - \r\n \r\n BAKER BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"H\" \r\n \r\nWORKERS' COMPENSATION Georgia Education Workers' Compensation Trust \r\n \r\nThe School District participates in the Georgia Education Workers' Compensation Trust (the Trust), a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general workers' compensation insurance coverage. Specific excess of loss insurance coverage is provided through an agreement by the Trust with the Safety National Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $1.0 million loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided with limits of $2.0 million. The Trust covers the first $1.0 million of each Employers Liability claim with Safety National providing additional Employers Liability limits up to a $2.0 million per occurrence maximum. Safety National Casualty Company also provides $2.0 million in aggregate coverage to the Trust, attaching at 110% of the loss fund and based on the Fund's annual normal premium. \r\nUNEMPLOYMENT COMPENSATION \r\n \r\nThe School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the general fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. The School District has not incurred any liabilities for unemployment compensation during the past two years. \r\nSURETY BOND \r\n \r\nThe School District purchased surety bonds to provide additional insurance coverage as follows: \r\n \r\nPosition Covered \r\n \r\nAmount \r\n \r\nSuperintendent \r\n \r\n$ \r\n \r\nPrincipal \r\n \r\n$ \r\n \r\nNOTE 8: FUND BALANCE CLASSIFICATION DETAILS \r\n \r\n25,000.00 10,000.00 \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 \r\nUnassigned \r\n \r\n$ \r\n \r\n4,228.38 \r\n \r\n$ 21,586.30 70,721.40 \r\n \r\n92,307.70 2,933,146.10 \r\n \r\nFund Balance, June 30, 2018 \r\n \r\n$ 3,029,682.18 \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- 17 - \r\n \r\n BAKER BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNOTE 9: 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\nTrack and Field Construction \r\n \r\n$ \r\n \r\n10,332.25 $ \r\n \r\n892,602.75 \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 10: 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 11: 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- 18 - \r\n \r\n BAKER BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"H\" \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 $132,175.00 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 $4,581,551.00 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 0.032609% which was an increase of 0.002467% 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 $322,097.00. At June 30, 2018, the School District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: \r\n \r\nOPEB \r\n \r\nDeferred \r\n \r\nDeferred \r\n \r\nOutflows of \r\n \r\nInflows of \r\n \r\nResources \r\n \r\nResources \r\n \r\nChanges of assumptions \r\n \r\n$ \r\n \r\n- $ 348,874.00 \r\n \r\nNet difference between projected and actual \r\n \r\nearnings on OPEB plan investments \r\n \r\n1,340.00 \r\n \r\n- \r\n \r\nChanges in proportion and differences \r\n \r\nbetween School District contributions and \r\n \r\nproportionate share of contributions \r\n \r\n309,882.00 \r\n \r\n- \r\n \r\nSchool District contributions subsequent to \r\n \r\nthe measurement date \r\n \r\n132,175.00 \r\n \r\n- \r\n \r\nTotal \r\n \r\n$ 443,397.00 $ 348,874.00 \r\n \r\nSchool District contributions subsequent to the measurement date of $132,175.00 are reported as deferred outflows of resources and will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: \r\n \r\nYear Ended June 30: \r\n \r\nOPEB \r\n \r\n2019 2020 2021 2022 2023 2024 \r\n \r\n$ (6,678.00) $ (6,678.00) $ (6,678.00) $ (6,678.00) $ (7,013.00) $ (3,927.00) \r\n \r\n- 19 - \r\n \r\n BAKER BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"H\" \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%, average, 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\nPre-Medicare Eligible \r\n \r\n3.88%, compounded annually, net of investment expense, and including inflation \r\n7.75% \r\n \r\nMedicare Eligible \r\n \r\n5.75% \r\n \r\nUltimate trend rate Pre-Medicare Eligible \r\n \r\n5.00% \r\n \r\nMedicare Eligible Year of Ultimate trend rate \r\n \r\n5.00% 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 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 for 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 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\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\n- 20 - \r\n \r\n BAKER BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"H\" \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 assumption 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\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 is 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\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 3.58%, 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$ 5,439,771.00 $ \r\n \r\n4,581,551.00 $ 3,904,242.00 \r\n \r\n- 21 - \r\n \r\n BAKER BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"H\" \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\nNet OPEB Liability \r\n \r\n$ 3,797,584.00 $ \r\n \r\n4,581,551.00 $ 5,602,275.00 \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\nNOTE 12: 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 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% of their annual pay during fiscal year 2018. The School District's contractually required contribution rate for the year ended June 30, 2018 was 16.81% of annual School District payroll, of which 16.54% of payroll was required from the School District and 0.27% of payroll was required from the State. For the current fiscal year, employer contributions to the pension plan were $322,609.00 and $5,599.59 from the School District and the State, respectively. \r\n \r\n- 22 - \r\n \r\n BAKER BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"H\" \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\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 $10,152.00. \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 $3,264,695.00 for its proportionate share of the net pension liability for TRS. \r\n \r\nThe TRS net pension liability reflected a reduction for support provided to the School District by the State of Georgia for certain public school support personnel. The amount recognized by the School District as its proportionate share of the net pension liability, the related State of Georgia support, and the total portion of the net pension liability that was associated with the School District were as follows: \r\n \r\nSchool District's proportionate share of the net pension liability \r\n \r\n$ 3,264,695.00 \r\n \r\nState of Georgia's proportionate share of the net pension liability associated with the School District \r\n \r\n13,753.00 \r\n \r\nTotal \r\n \r\n$ 3,278,448.00 \r\n \r\nThe net pension liability for TRS 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 during the fiscal year ended June 30, 2017. \r\n \r\n- 23 - \r\n \r\n BAKER BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"H\" \r\n \r\nAt June 30, 2017, the School District's TRS proportion was 0.017566% which was a decrease of 0.000007% from its proportion measured as of June 30, 2016. \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 $61,265.00. \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 $355,125.00 for TRS and $12,347.00 for PSERS and revenue of $3,568.00 for TRS and $12,347.00 for PSERS. The revenue is support provided by the State of Georgia. For TRS the State of Georgia support is provided only for certain support personnel. \r\n \r\nAt June 30, 2018, the School District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: \r\n \r\nDifferences between expected and actual experience \r\n \r\nTRS \r\n \r\nDeferred \r\n \r\nDeferred \r\n \r\nOutflows of \r\n \r\nInflows of \r\n \r\nResources \r\n \r\nResources \r\n \r\n$ 122,120.00 $ 12,321.00 \r\n \r\nChanges of assumptions \r\n \r\n71,566.00 \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\n22,467.00 \r\n \r\nChanges in proportion and differences between School District contributions and proportionate share of contributions \r\n \r\n89,811.00 58,075.00 \r\n \r\nSchool District contributions subsequent to \r\n \r\nthe measurement date \r\n \r\n322,609.00 \r\n \r\n- \r\n \r\nTotal \r\n \r\n$ 606,106.00 $ 92,863.00 \r\n \r\n- 24 - \r\n \r\n BAKER BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"H\" \r\n \r\nThe School District contributions subsequent to the measurement date of $322,609.00 for TRS are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: \r\n \r\nYear Ended June 30: \r\n \r\nTRS \r\n \r\n2019 \r\n \r\n$ (27,225.00) \r\n \r\n2020 \r\n \r\n$ 190,664.00 \r\n \r\n2021 \r\n \r\n$ 106,147.00 \r\n \r\n2022 \r\n \r\n$ (80,903.00) \r\n \r\n2023 \r\n \r\n$ 1,951.00 \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\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\n7.50%, 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 \r\nto 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 \r\nto 2025 with projection scale BB (set forward 5 years for both males and females) was used for death \r\nafter disability retirement. There is a margin for future mortality improvement in the tables used by the \r\nSystem. 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 \r\nunder 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\n \r\n- 25 - \r\n \r\n BAKER BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"H\" \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\nThe long-term expected rate of return on TRS and PSERS pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target 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\nPSERS Target allocation \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 and PSERS pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and nonemployer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS and PSERS pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. \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 \r\n \r\nnet pension liability \r\n \r\n$ 5,439,771.00 $ \r\n \r\n4,581,551.00 $ 3,904,242.00 \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 and PSERS financial report which is publicly available at www.trsga.com/publications and www.ers.ga.gov/formspubs/formspubs.html. \r\n \r\n- 26 - \r\n \r\n BAKER BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2018 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNOTE 13: 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 $4,297,106.00. This change is in accordance with generally accepted accounting procedures. \r\n \r\nNet Position, July 1, 2017 as previously reported \r\n \r\n$ \r\n \r\n7,421,854.24 \r\n \r\nPrior Period Adjustment - Implementation of GASB No. 75: Net OPEB Liability (measurement date) \r\n \r\n(4,467,131.00) \r\n \r\nDeferred Outflows - School District's Contributions made during fiscal year 2017 \r\n \r\n170,025.00 \r\n \r\nNet Position, July 1, 2017, as restated \r\n \r\n$ \r\n \r\n3,124,748.24 \r\n \r\nNOTE 14: SUBSEQUENT EVENTS \r\n \r\nDuring October 2018, Hurricane Michael occurred causing damage to buildings and equipment. \r\n \r\nIn December 2019, a strain of coronavirus (COVID-19) began to spread worldwide, resulting in a severe impact on 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\n- 27 - \r\n \r\n (This page left intentionally blank) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION 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\n2018 \r\n \r\n0.017566% $ \r\n \r\n3,264,695.00 $ \r\n \r\n13,753.00 $ 3,278,448.00 $ 2,024,988.28 \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\n161.22% \r\n \r\n79.33% \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- 29 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION 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 \"2\" \r\n \r\nYear Ended 2018 \r\n \r\nSchool District's proportion of the net pension liability \r\n \r\nSchool District's proportionate share of \r\nthe net pension liability \r\n \r\nState of Georgia's proportionate share of the \r\nnet pension liability associated with the School \r\nDistrict \r\n \r\n0.00% $ \r\n \r\n- \r\n \r\n$ \r\n \r\n61,265.00 $ \r\n \r\nTotal 61,265.00 \r\n \r\nSchool District's covered payroll \r\n$ 212,907.67 \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\n85.69% \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- 30 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION 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 \"3\" \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 \r\n \r\nState of Georgia's proportionate share of the net OPEB liability \r\nassociated with the School District \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\n0.032609% $ 4,581,551.00 $ \r\n \r\n- \r\n \r\n$ 4,581,551.00 $ 1,725,372.62 \r\n \r\n265.54% \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- 31 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION 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\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\n2018 \r\n \r\n$ \r\n \r\n322,609.00 $ \r\n \r\n322,609.00 $ \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$ 1,950,535.80 \r\n \r\n16.54% \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- 32 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION \r\nSCHEDULE OF CONTRIBUTIONS SCHOOL OPEB FUND \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\nSchool District's covered-employee \r\npayroll \r\n \r\nContribution as a percentage of covered- \r\nemployee payroll \r\n \r\n2018 \r\n \r\n$ \r\n \r\n132,175.00 $ \r\n \r\n132,175.00 $ \r\n \r\n- \r\n \r\n$ 1,761,002.40 \r\n \r\n7.51% \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- 33 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION \r\nFOR THE YEAR ENDED JUNE 30, 2018 \r\n \r\nSCHEDULE \"6\" \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 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\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\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\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 the 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\n \r\n- 34 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION 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 \"7\" \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 \r\nOther Sources \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\n2,237,486.37 $ \r\n \r\n2,237,486.37 $ \r\n \r\n- \r\n \r\n- \r\n \r\n1,693,229.00 \r\n \r\n1,693,229.00 \r\n \r\n726,057.00 \r\n \r\n726,057.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n109,520.00 \r\n \r\n109,520.00 \r\n \r\n4,766,292.37 \r\n \r\n4,766,292.37 \r\n \r\n2,361,750.24 $ 6,105.77 \r\n2,038,769.40 512,007.84 18,388.04 18.66 134,617.64 \r\n5,071,657.59 \r\n \r\n124,263.87 6,105.77 \r\n345,540.40 (214,049.16) \r\n18,388.04 18.66 \r\n25,097.64 \r\n305,365.22 \r\n \r\n2,393,833.88 \r\n195,294.34 57,193.92 \r\n108,152.36 497,924.28 244,420.35 165,579.04 550,535.47 282,303.85 \r\n285,841.24 - \r\n4,781,078.73 \r\n(14,786.36) \r\n \r\n2,500,994.56 \r\n218,954.34 64,945.20 \r\n108,152.36 505,765.28 244,420.35 165,579.04 550,535.47 282,303.85 \r\n285,841.24 - \r\n4,927,491.69 \r\n(161,199.32) \r\n \r\n2,494,834.27 \r\n153,833.05 32,608.27 \r\n133,662.67 312,404.01 262,512.93 217,474.35 485,878.06 399,027.61 \r\n1,538.94 6,033.01 48,896.91 213,289.27 403,100.00 29,000.00 \r\n5,194,093.35 \r\n(122,435.76) \r\n \r\n6,160.29 \r\n65,121.29 32,336.93 (25,510.31) 193,361.27 (18,092.58) (51,895.31) 64,657.41 (116,723.76) (1,538.94) (6,033.01) (48,896.91) 72,551.97 (403,100.00) (29,000.00) \r\n(266,601.66) \r\n38,763.56 \r\n \r\n(14,786.36) 2,960,371.79 \r\n \r\n(161,199.32) 2,960,371.79 \r\n \r\n60,450.00 (61,985.76) 3,020,946.54 \r\n \r\n60,450.00 99,213.56 60,574.75 \r\n \r\n$ \r\n \r\n2,945,585.43 $ \r\n \r\n2,799,172.47 $ \r\n \r\n2,958,960.78 $ \r\n \r\n159,788.31 \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 $50,774.06 and $48,896.91, 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- 35 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \r\nYEAR ENDED JUNE 30, 2018 \r\n \r\nSCHEDULE \"8\" \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 \r\nTotal Special Education Cluster \r\nOther Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States Supporting Effective Instruction State Grant 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\n18185GA324N1099 $ 18185GA324N1100 \r\n \r\n67,651.21 146,826.20 \r\n214,477.41 \r\n \r\n84.027 84.027 \r\n \r\nH027A160073 H027A170073 \r\n \r\n84.048 84.367 84.367 84.010 84.010 \r\n \r\nV048A170010 S367A160001 S367A170001 S010A160010 S010A170010 \r\n \r\n21,884.37 113,089.74 \r\n134,974.11 \r\n8,028.78 6,761.07 43,923.22 95,634.98 170,976.54 \r\n325,324.59 \r\n460,298.70 \r\n \r\nTotal Expenditures of Federal Awards \r\n \r\n$ \r\n \r\n674,776.11 \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 Baker County Board of Education (the \"Board\") under programs of the federal government for the year ended June 30, 2018. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Board, it is not intended to and does not present the financial position or changes in net position of the Board. \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- 36 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2018 \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 Remedial Education Program Alternative Education Program Media Center Program 20 Days Additional Instruction Staff and Professional Development Principal Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Mid-term Adjustment Hold-Harmless Amended Formula Adjustment Categorical Grants Pupil Transportation Regular Nursing Services Sparsity Other State Programs Food Services Teachers Retirement Vocational Education \r\nOffice of the State Treasurer Public School Employees Retirement \r\n \r\nSCHEDULE \"9\" \r\n \r\nGOVERNMENTAL FUND TYPE GENERAL FUND \r\n \r\n$ \r\n \r\n104,191.55 \r\n \r\n75,908.00 14,739.00 165,376.00 32,629.00 62,262.00 36,096.00 146,750.00 127,768.00 37,084.00 230,549.00 17,796.00 10,363.00 25,023.00 \r\n7,787.00 4,384.00 \r\n431.00 \r\n227,056.00 144,473.00 \r\n56,436.00 7,097.00 \r\n(23,675.00) \r\n112,758.00 45,000.00 \r\n333,878.00 \r\n6,000.00 5,599.59 14,858.26 \r\n10,152.00 \r\n \r\n$ \r\n \r\n2,038,769.40 \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 BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\nYEAR ENDED JUNE 30, 2018 \r\n \r\nSCHEDULE \"10\" \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 \r\nYEAR (3) \r\n \r\nAMOUNT EXPENDED IN PRIOR YEARS (3) \r\n \r\nTOTAL COMPLETION \r\nCOST \r\n \r\nEXCESS PROCEEDS NOT \r\nEXPENDED \r\n \r\n(i) Repairing, Improving, Adding to, renovating, extending, \r\n \r\nupgrading, and equipping school buildings, support \r\n \r\nfacilities and athletic facilities in the Baker County \r\n \r\nSchool District useful or desirable in connection \r\n \r\ntherewith, including acquiring any necessary property \r\n \r\ntherefore, both real and personal; \r\n \r\n$ 910,000.00 $ \r\n \r\n962,641.38 $ 442,841.13 $ 519,800.25 $ \r\n \r\n- $ \r\n \r\n- \r\n \r\n(ii) Adding Classrooms; \r\n \r\n15,000.00 \r\n \r\n15,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n(iii) Acquiring transportation vehicles and maintenance \r\n \r\nvehicles and equipment; \r\n \r\n45,000.00 \r\n \r\n45,000.00 \r\n \r\n4,506.06 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n(iv) Acquiring and upgrading buses; \r\n \r\n50,000.00 \r\n \r\n200,575.89 \r\n \r\n66,858.63 \r\n \r\n133,717.26 \r\n \r\n- \r\n \r\n- \r\n \r\n(v) Acquiring technology, safety, and security equipment; \r\n \r\n15,000.00 \r\n \r\n15,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n(vi) Improving transportation facilities; \r\n \r\n10,000.00 \r\n \r\n10,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n(vii) And paying expenses incidental to accomplish the foregoing; \r\n \r\n5,000.00 \r\n \r\n5,000.00 \r\n \r\n- \r\n \r\n186.27 \r\n \r\n- \r\n \r\n- \r\n \r\n(viii) Debt Principal and interest payments. \r\n \r\n350,000.00 \r\n \r\n350,000.00 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\nESTIMATED COMPLETION \r\nDATE \r\nJune 2021 June 2021 \r\nJune 2021 June 2021 June 2021 June 2021 June 2021 June 2021 \r\n \r\n$ 1,400,000.00 $ 1,603,217.27 $ 514,205.82 $ 653,703.78 $ \r\n \r\n- $ \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(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. \r\n(3) The voters of Baker 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\nSee notes to the basic financial statements. \r\n \r\n- 39 - \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\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 Baker County Board of Education \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 Baker County Board of Education (School District), as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements, and have issued our report thereon dated September 8, 2020. The report on governmental activities and governmental funds was qualified because the auditor was unable to obtain sufficient appropriate audit evidence regarding beginning net position and beginning fund balance. \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 and therefore, material weaknesses or significant deficiencies may exist that have not been identified. We did identify a certain deficiency in internal control, described in the accompanying Schedule of Findings and Questioned Costs as item FS 2018-001, that we consider to be a material weakness. \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\nSchool District's Response to Findings \r\nThe School District's response to the findings identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. The School District's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. \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\nSeptember 8, 2020 \r\n \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 BAKER COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2018 \r\n \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\n2014-001 Control Category: Internal Control Impact: Compliance Impact: \r\n \r\nFailure to Adequately Maintain General Ledger General Ledger Material Weakness None \r\n \r\nFinding Status: \r\n \r\nPartially Resolved \r\n \r\nThe Finance Director will ensure that all transactions are recorded on the ledger and documentation will be maintained to support these transactions. The Finance Director will also complete a review of the financial statements and complete the Final Analytical Checksheet to ensure transactions are recorded correctly starting with the fiscal year 2020 financial statements. \r\n \r\n2014-002 Control Category: \r\nInternal Control Impact: Compliance Impact: \r\nFinding Status: \r\n \r\nInadequate Segregation of Duties - School Activity Accounts Cash and Cash Equivalents Revenues/Receivables/Receipts Expenditures/Liabilities/Disbursements Significant Deficiency None \r\nFurther Action Not Warranted \r\n \r\n2014-003 Control Category: \r\nInternal Control Impact: Compliance Impact: \r\n \r\nInadequate Internal Control Procedures Cash and Cash Equivalents Revenues/Receivables/Receipts Material Weakness None \r\n \r\nFinding Status: \r\n \r\nUnresolved \r\n \r\nWe will implement new policies and procedures to segregate the duties for the cash reconciliation process. The Finance Director will ensure that cash and receivable reconciliations are performed accurately and in a timely manner. These new procedures will be implemented during fiscal year 2020. \r\n \r\n2015-001 Control Category: Internal Control Impact: Compliance Impact: \r\n \r\nFailure to Adequately Maintain General Ledger General Ledger Material Weakness None \r\n \r\nFinding Status: \r\n \r\nPartially Resolved \r\n \r\nThe Finance Director will ensure that all transactions are recorded on the ledger and documentation will be maintained to support these transactions. The Finance Director will also complete a review of the financial statements and complete the Final Analytical Checksheet to ensure transactions are recorded correctly starting with the fiscal year 2020 financial statements. \r\n \r\n- 1 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2018 \r\n \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\n2015-002 Control Category: \r\nInternal Control Impact: Compliance Impact: \r\n \r\nInadequate Segregation of Duties - School Activity Accounts Cash and Cash Equivalents Revenues/Receivables/Receipts Expenditures/Liabilities/Disbursements Significant Deficiency None \r\n \r\nFinding Status: \r\n \r\nFurther Action Not Warranted \r\n \r\n2015-003 Control Category: \r\nInternal Control Impact: Compliance Impact: \r\n \r\nInadequate Internal Control Procedures Cash and Cash Equivalents Revenues/Receivables/Receipts Material Weakness None \r\n \r\nFinding Status: \r\n \r\nUnresolved \r\n \r\nWe will implement new policies and procedures to segregate the duties for the cash reconciliation process. The Finance Director will ensure that cash and receivable reconciliations are performed accurately and in a timely manner. These new procedures will be implemented during fiscal year 2020. \r\n \r\nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\n \r\n2015-004 Compliance Requirement: \r\nInternal Control Impact: Compliance Impact: Federal Awarding Agency: Pass-Through Entity: CFDA Number and Title: \r\nFederal Award Numbers: \r\n \r\nFailure to Adequately Maintain Records Related to Federal Awards Cash Management Reporting Material Weakness Material Noncompliance U.S. Department of Agriculture Georgia Department of Education 10.553 and 10.555 Child Nutrition Cluster 84.027 and 84.173 Special Education Cluster N/A \r\n \r\nFinding Status: \r\n \r\nFurther Action Not Warranted. \r\n \r\n- 2 - \r\n \r\n SECTION IV FINDINGS AND QUESTIONED COSTS \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2018 \r\n \r\nI SUMMARY OF AUDITOR'S RESULTS \r\nFinancial Statements \r\nType of auditor's report issued: Aggregate Remaining Fund Information Governmental Activities; General Fund; Capital Projects Fund; \r\nInternal control over financial reporting:  Material weakness identified?  Significant deficiency identified? \r\nNoncompliance material to financial statements noted: \r\n \r\nUnmodified Qualified \r\nYes None Reported \r\nNo \r\n \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nFS 2018-001 Control Categories: \r\nInternal Control Impact: Compliance Impact: Repeat of Prior Year Finding: \r\n \r\nInternal Control Procedures Cash and Cash Equivalents Expenditures/Liabilities/Disbursements Capital Assets General Ledger Material Weakness None 2015-003, 2014-003 \r\n \r\nDescription: The accounting procedures of the School District were insufficient to provide adequate internal controls over several control categories. \r\n \r\nCriteria: The School District's management is responsible for designing and maintaining internal controls that provide reasonable assurance that transactions are processed according to established procedures. \r\n \r\nCondition: Cash and Cash Equivalents \r\n The timeliness of bank reconciliations could not be determined because they were not dated by the preparer. \r\n None of the seven bank reconciliations reflected evidence of supervisory review or approval.  Reconciling items reflected on the general operating account and school food service bank \r\nreconciliations were not investigated and recorded in a timely manner. Reconciling items noted dating back to July 2017.  Two bank reconciliations had reconciling items in the amount of $16,178.05 that are undocumented. \r\n \r\n- 1 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2018 \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nExpenditures/Liabilities/Disbursements  Our examination of thirty-three expenditures revealed the following deficiencies: o Two expenditures were not charged to the correct fiscal year. These errors resulted in a material adjustment to expense in the amount of $16,417.69. \r\nCapital Assets  Our examination of capital assets revealed the following deficiencies: o The capital asset listing incorrectly included an asset that was sold in a previous year. o The School District was unable to provide documentation supporting the existence of five vehicles on the capital asset listing. o The School District is not consistent in the way depreciation is calculated from one year to the next. \r\nGeneral Ledger  The School District could not provide documentation for ten of the eighteen journal entries tested. \r\nCause: These deficiencies were a result of management's failure to ensure that accounting and internal controls were established, implemented, and functioning. \r\nEffect or Potential Effect: Without satisfactory accounting controls and procedures in place, the School District could place itself in a position where potential misappropriation of assets could occur. In addition, the lack of controls impacted its reporting of financial position and results of operations. \r\nRecommendation: The School District should review accounting procedures in place and design and implement procedures relative to the above control categories to strengthen the internal controls over the accounting functions. \r\nViews of Responsible Officials: We concur with this finding. \r\nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\nNo matters were reported. \r\n- 2 - \r\n \r\n SECTION V MANAGEMENT'S CORRECTIVE ACTION \r\n \r\n  "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-b2017-belec-p-btext","title":"Baker County Board of Education, Newton, 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":["2017-06-30"],"dcterms_description":["Financial report for the Bacon 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":["Baker County Board of Education (Ga.)--Appropriations and expenditures--Periodicals.","Education--Georgia--Baker County--Auditing--Periodicals.","Education--Georgia--Baker County--Finance--Statistics--Periodicals.","Education--Auditing","Education--Finance","Expenditures, Public","Georgia--Baker County--fast--https://id.oclc.org/worldcat/entity/E39PBJgxqwBrwyH6QgJ7CB3hHC","Georgia Government Documents--Serial"],"dcterms_title":["Baker County Board of Education, Newton, 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-bb16-b2017-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-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 statements","financial records"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":["Education--Auditing--fast","Education--Finance--fast","Expenditures, Public--fast","Georgia--Baker County--fast--https://id.oclc.org/worldcat/entity/E39PBJgxqwBrwyH6QgJ7CB3hHC","Periodicals--fast","Statistics--fast"],"fulltext":"BAKER COUNTY BOARD OF EDUCATION \r\nNEWTON, GEORGIA \r\nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 \r\n(Including Independent Auditor's Reports) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION - 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\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\nNOTES 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 CONTRIBUTIONS  TEACHERS RETIREMENT SYSTEM OF GEORGIA 3 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION 4 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES \r\nIN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \r\n \r\nPage \r\n1 2 3 4 5 6 7 8 \r\n29 30 31 32 \r\n \r\n (This page left intentionally blank) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \r\n \r\nSECTION I \r\nFINANCIAL \r\nSCHEDULES \r\nSUPPLEMENTARY INFORMATION \r\n5 SCHEDULE OF STATE REVENUE 6 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 7 ALLOTMENTS AND EXPENDITURES \r\nGENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM \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\n \r\nPage \r\n33 34 35 \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\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 Baker County Board of Education \r\nReport on the Financial Statements \r\nWe were engaged to audit the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Baker County Board of Education (School District), as of and for the year ended June 30, 2017, and the related notes to the 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 an opinion on these financial statements based on conducting the 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. Because of the matter described in the \"Basis for Disclaimer of Opinion\" paragraph, however, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. \r\nBasis for Disclaimer of Opinion \r\nThe School District was unable to provide adequate documentation to support the reported assets, liabilities, revenues and expenditures. We were unable to determine by other audit procedures whether these balances were materially correct. In addition, changes in management personnel precluded us from making the appropriate inquiries of these matters. \r\nDisclaimer of Opinion \r\nBecause of the significance of the matter described in the \"Basis for Disclaimer of Opinion\" paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on the financial statements referred to in the first paragraph. \r\n \r\n (This page left intentionally blank) \r\n \r\n Other 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 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. \r\nAccounting principles generally accepted in the United States of America require that the required supplementary information listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Because of the significance of the matter disclosed in the \"Basis for Disclaimer of Opinion\" paragraph, it is inappropriate to, and the auditor does not express an opinion on the required supplementary information. \r\nOther Information \r\nWe were engaged to audit 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. \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. Because of the significance of the matter disclosed in the \"Basis for Disclaimer of Opinion\" paragraph, it is inappropriate to, and the auditor does not, express an opinion on the supplementary information. \r\nOther Reporting Required by Government Auditing Standards \r\nIn accordance with Government Auditing Standards, we have also issued our report dated September 4, 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\nSeptember 4, 2020 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n (This page left intentionally blank) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION \r\n \r\n (This page left intentionally blank) \r\n \r\n Baker County Board of Education Statement of Net Position June 30, 2017 \r\nASSETS \r\nCash and Cash Equivalents Taxes State Grants Federal Grants \r\nInventory, at cost Land and construction in progress Other capital assets, net of depreciation \r\nTotal Assets \r\nDEFERRED OUTFLOWS OF RESOURCES \r\nRelated to Defined Benefit Pension Plan \r\nLIABILITIES \r\nAccounts payable and accrued expenses Salaries and Benefits Payable Long-term liabilities: \r\nPortion due and payable within one year: Capital leases, notes and bonds payable \r\nPortion due and payable after one year: Capital leases, notes and bonds payable \r\nCurrent Portion of Revenue Bonds Net Pension Liability \r\nTotal Liabilities \r\nDEFERRED INFLOWS OF RESOURCES \r\nRelated to Defined Benefit Pension Plan \r\nNET POSITION \r\nNet investment in capital assets Restricted for: \r\nContinuation of Federal Programs Debt Service Unrestricted \r\nTotal Net Position \r\n \r\nEXHIBIT \"A \r\nGovernmental Activities \r\n$ 3,178,692 421,919 161,003 46,387 4,929 571,875 \r\n6,681,427 11,066,232 \r\n853,573 \r\n48,760 425,295 \r\n63,066 \r\n64,935 3,625,506 4,227,562 \r\n115,818 \r\n7,125,301 4,929 67 \r\n446,128 $ 7,576,425 \r\n \r\nPage 1 The notes to the basic financial statements are an intregral part of this statement. \r\n \r\n Baker County Board of Education Statement of Activities For the Fiscal Year Ended June 30, 2017 \r\n \r\nEXHIBIT \"B\" \r\n \r\nFunctions/Programs \r\nGovernmental: \r\nInstructions 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 Service Other Support Services Operations of Non-instructional Services Food Services Operation Enterprise Operations Interest on short-term \u0026 long-term debt \r\nTotal governmental activities \r\n \r\nExpenses \r\n \r\nProgram Revenues \r\n \r\nFees and Charges for \r\nServices \r\n \r\nOperating Grants and Contributions \r\n \r\nNet (Expenses) Revenues and Changes in Net \r\nAssets \r\n \r\n$ 2,788,037 $ \r\n \r\n- $ 1,790,489 $ \r\n \r\n119,486 \r\n45,453 118,144 361,980 342,028 124,377 419,958 561,340 \r\n670 \r\n \r\n- \r\n \r\n93,250 \r\n \r\n- \r\n \r\n52,425 \r\n \r\n- \r\n \r\n40,855 \r\n \r\n- \r\n \r\n313,381 \r\n \r\n- \r\n \r\n122,880 \r\n \r\n- \r\n \r\n1,170 \r\n \r\n- \r\n \r\n84,987 \r\n \r\n- \r\n \r\n3,981 \r\n \r\n- \r\n \r\n1,691 \r\n \r\n310,622 26,900 5,607 \r\n$ 5,224,602 $ \r\n \r\n8,314 - \r\n8,314 \r\n \r\n214,060 - \r\n$ 2,719,169 \r\n \r\nGeneral revenues: Taxes Property taxes, levied for general purposes Sales Taxes for Capital Projects Other Sales Taxes \r\nInvestment earnings Miscellaneous Special item - disposal of capital assets \r\n \r\nTotal general revenues and special items \r\n \r\nChange in net position \r\n \r\nNet position - beginning \r\n \r\nNet position - ending \r\n \r\n$ \r\n \r\n(997,548) \r\n(26,236) 6,972 \r\n(77,289) (48,599) (219,148) (123,207) (334,971) (557,359) \r\n1,021 \r\n(88,248) (26,900) \r\n(5,607) \r\n(2,497,119) \r\n2,616,953 172,616 36,119 110 105,698 6,715 \r\n2,938,211 \r\n441,092 \r\n7,135,333 \r\n7,576,425 \r\n \r\nPage 2 The notes to the basic financial statements are an intregral part of this statement. \r\n \r\n Baker County Board of Education Balance Sheet Governmental Funds June 30, 2017 \r\n \r\nEXHIBIT \"C\" \r\n \r\nASSETS Cash and cash equivalents Taxes receivable, net Accounts Receivable - State Accounts Receibable - Federal Inventories \r\nTotal assets \r\n \r\nGeneral Fund \r\n \r\nDistrictWide Capital \r\nProjects Fund \r\n \r\nDebt Service Fund \r\n \r\nTotal Governmental \r\nFunds \r\n \r\n$ 3,473,177 $ \r\n \r\n-$ \r\n \r\n396,075 \r\n \r\n- \r\n \r\n161,013 \r\n \r\n25,844 \r\n \r\n46,377 \r\n \r\n- \r\n \r\n4,929 \r\n \r\n- \r\n \r\n$ 4,081,571 $ 25,844 $ \r\n \r\n67 $ - \r\n67 $ \r\n \r\n3,473,244 396,075 186,857 46,377 4,929 \r\n4,107,482 \r\n \r\nLIABILITIES AND FUND BALANCES \r\n \r\nLiabilities: \r\n \r\nAccounts payable \r\n \r\n$ \r\n \r\nBank Overdraft \r\n \r\nDeferred revenue \r\n \r\nSalary and Benefits Payable \r\n \r\nTotal liabilities \r\n \r\n48,760 $ \r\n \r\n-$ \r\n \r\n- \r\n \r\n294,553 \r\n \r\n386,616 \r\n \r\n- \r\n \r\n425,295 \r\n \r\n- \r\n \r\n860,671 \r\n \r\n294,553 \r\n \r\n-$ - \r\n- \r\n \r\n48,760 294,553 386,616 425,295 \r\n1,155,224 \r\n \r\nFund balances: Nonspendable: Inventories Other Purposes Unassigned \r\nTotal fund balances (deficit) \r\nTotal liabilities and fund balances $ \r\n \r\n4,929 - \r\n3,215,971 \r\n3,220,900 \r\n4,081,571 \r\n \r\n(268,709) \r\n(268,709) \r\n$ 25,844 $ \r\n \r\n67 \r\n- \r\n67 \r\n67 $ \r\n \r\n4,929 67 \r\n2,947,262 \r\n2,952,258 \r\n4,107,482 \r\n \r\nPage 3 The notes to the basic financial statements are an intregral part of this statement. \r\n \r\n Baker County Board of Education Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position June 30, 2017 \r\n \r\nEXHIBIT \"D\" \r\n \r\nTotal fund balance, governmental funds \r\nAmounts reported for governmental activities in the Statement of Net Position are different because: \r\nCapital assets used in governmental activities are not current financial resources and therefore are not reported in the fund financial statement, but are reported in the governmental activities of the Statement of Net Position. \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\nSome of the School Districts property tax revenues will be collected after year end but are not available soon enough to pay for the current periods expenditures \r\nSome liabilities, (such as Notes Payable, Capital Lease Contracts Payable, Longterm Compensated Absences, and Bonds Payable ), are not due and payable in the current period and are not included in the fund financial statement, but are included in the governmental activities of the Statement of Net Position. \r\nNet Position of Governmental Activities in the Statement of Net Position \r\n \r\n$ \r\n \r\n2,952,258 \r\n \r\n7,253,302 \r\n(3,625,506) 737,755 386,617 \r\n \r\n(128,001) \r\n \r\n$ \r\n \r\n7,576,425 \r\n \r\nPage 4 The notes to the basic financial statements are an intregral part of this statement. \r\n \r\n Baker County Board of Education Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds For the Fiscal 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\n \r\nGeneral Fund \r\n \r\nDistrict Wide Capital Projects Fund \r\n \r\nDebt Service Fund \r\n \r\n$ 2,597,948 $ \r\n \r\n-$ \r\n \r\n- \r\n \r\n36,119 \r\n \r\n172,616 \r\n \r\n- \r\n \r\n2,102,400 \r\n \r\n- \r\n \r\n- \r\n \r\n603,473 \r\n \r\n- \r\n \r\n- \r\n \r\n8,314 \r\n \r\n- \r\n \r\n- \r\n \r\n14 \r\n \r\n96 \r\n \r\n- \r\n \r\n108,998 \r\n \r\n- \r\n \r\n- \r\n \r\n5,457,266 \r\n \r\n172,712 \r\n \r\n- \r\n \r\nEXPENDITURES \r\n \r\nCurrent: \r\n \r\nInstruction \r\n \r\n2,479,548 \r\n \r\n- \r\n \r\n- \r\n \r\nSupport Services \r\n \r\nPupil Services \r\n \r\n118,452 \r\n \r\n- \r\n \r\nImprovement of Instructional Services \r\n \r\n54,249 \r\n \r\n- \r\n \r\n- \r\n \r\nEducational Media Services \r\n \r\n104,950 \r\n \r\n- \r\n \r\n- \r\n \r\nGeneral Administration \r\n \r\n357,870 \r\n \r\n7,806 \r\n \r\n- \r\n \r\nSchool Administration \r\n \r\n330,692 \r\n \r\n- \r\n \r\n- \r\n \r\nBusiness Administration \r\n \r\n123,237 \r\n \r\n- \r\n \r\n- \r\n \r\nMaintenance and Operation of Plant \r\n \r\n415,977 \r\n \r\n- \r\n \r\n- \r\n \r\nStudent Transportation Service \r\n \r\n274,606 \r\n \r\n- \r\n \r\n- \r\n \r\nOther Support Services \r\n \r\n210,583 \r\n \r\n- \r\n \r\n- \r\n \r\nFood Services Operation \r\n \r\n293,814 \r\n \r\n- \r\n \r\n- \r\n \r\nEnterprise Operations \r\n \r\n26,900 \r\n \r\n- \r\n \r\n- \r\n \r\nCapital Outlay \r\n \r\nGeneral Government \r\n \r\n233,799 \r\n \r\n501,414 \r\n \r\n- \r\n \r\nDebt Service: \r\n \r\nPrincipal \r\n \r\n- \r\n \r\n61,251 \r\n \r\n- \r\n \r\nInterest and other charges \r\n \r\n- \r\n \r\n5,607 \r\n \r\n- \r\n \r\nTotal Expenditures \r\n \r\n5,024,677 \r\n \r\n576,078 \r\n \r\n- \r\n \r\nExcess (deficiency) of revenues over \r\n \r\nexpenditures \r\n \r\n432,589 \r\n \r\n(403,366) \r\n \r\n- \r\n \r\nOTHER FINANCING SOURCES (USES) \r\n \r\nTransfers in \r\n \r\n94,086 \r\n \r\n35,402 \r\n \r\n- \r\n \r\nTransfers out \r\n \r\n(129,488) \r\n \r\n- \r\n \r\n- \r\n \r\nTotal other financing sources (uses) \r\n \r\n(35,402) \r\n \r\n35,402 \r\n \r\n- \r\n \r\nSPECIAL ITEM Sale of general capital assets \r\n \r\n6,715 \r\n \r\n- \r\n \r\n- \r\n \r\nNet change in fund balances \r\n \r\n403,902 \r\n \r\n(367,964) \r\n \r\n- \r\n \r\nFund balances (deficit) - beginning \r\n \r\n2,816,998 \r\n \r\n99,255 \r\n \r\n67 \r\n \r\nFund balances (deficit) - ending \r\n \r\n$ 3,220,900 $ (268,709) $ \r\n \r\n67 \r\n \r\nPage 5 \r\n \r\nTotal Governmental \r\nFunds \r\n$ 2,597,948 208,735 \r\n2,102,400 603,473 8,314 110 108,998 \r\n5,629,978 \r\n2,479,548 \r\n118,452 54,249 \r\n104,950 365,676 330,692 123,237 415,977 274,606 210,583 293,814 \r\n26,900 \r\n735,213 \r\n61,251 5,607 \r\n5,600,755 \r\n29,223 \r\n129,488 (129,488) \r\n- \r\n6,715 35,938 2,916,320 $ 2,952,258 \r\n \r\nThe notes to the basic financial statements are an intregral part of this statement. \r\n \r\n Baker County Board of Education Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Net Activities For the Fiscal Year Ended June 30, 2017 \r\nNet change in fund balances - total governmental funds: \r\nAmounts reported for governmental activities in the Statement of Activities are different because: \r\nGovernmental funds report outlays for capital assets as expenditures because such outlays use current financial resources. In contrast, the Statement of Activities reports only a portion of the outlay as an expense. The outlay is allocated over the assets useful life. This is the amount by which capital outlays of $735,213 exceeded depreciation of $308,179 the current period. \r\nGovernmental funds do not present revenues that are not available to pay current obligations. In contrast, such revenues are reported in the Statement of Activities when earned. \r\nGovernmental funds report capital lease proceeds as current financial resources. In contrast, the Statement of Activities treats such issuance of debt as a liability. Governmental funds report repayment of capital lease principal as an expenditure. In contrast, the Statement of Activities reports this as a reduction of liabilities on the Statement of Net Position. \r\nSome expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore are not reported as expenditures in governmental funds. \r\nPension Expenses \r\nChange in net position of governmental activities \r\n \r\nEXHIBIT \"F\" \r\n \r\n$ \r\n \r\n35,938 \r\n \r\n427,034 19,005 \r\n \r\n61,251 \r\n \r\n(102,136) \r\n \r\n$ \r\n \r\n441,092 \r\n \r\nPage 6 The notes to the basic financial statements are an intregral part of this statement. \r\n \r\n Baker County Board of Education Statement of Fiduciary Net Assets Fiduciary Funds June 30, 2017 \r\nASSETS Cash \r\nTotal Assets \r\nLIABILITIES \r\nDue to others Total Liabilities \r\n \r\nEXHIBIT \"G\" \r\n \r\n$ \r\n \r\n22,531 \r\n \r\n$ \r\n \r\n22,531 \r\n \r\n$ \r\n \r\n22,531 \r\n \r\n$ \r\n \r\n22,531 \r\n \r\nPage 7 The notes to the basic financial statements are an intregral part of this statement. \r\n \r\n NOTES TO THE FINANCIAL STATEMENTS \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2017 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNote 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \r\n \r\nREPORTING ENTITY \r\n \r\nThe Baker County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity. \r\n \r\nNote 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \r\n \r\nBASIS OF PRESENTATION \r\n \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 Baker County Board of Education. \r\n \r\nDistrict-wide Statements: \r\n \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\n \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 \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 \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\n \r\nFund Financial Statements: \r\n \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 \r\nPage |8 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2017 \r\n \r\nEXHIBIT \"H\" \r\n \r\nseparate column. \r\n \r\nThe School District reports the following major governmental funds: \r\n \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 \r\n District-wide Capital Projects Fund accounts for and reports financial resources including Special Purpose Local Option Sales Tax (SPLOST) that are restricted, committed or assigned to the expenditure for capital outlays, including the acquisition or construction of capital facilities. \r\n \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 \r\nlong-term principal and interest. \r\n \r\nThe School District reports the following fiduciary fund type: \r\n \r\n Agency funds account for assets held by the School District as an agent for various funds or individuals. \r\n \r\nBASIS OF ACCOUNTING \r\n \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, 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\n \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\nGovernmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Property taxes, sales taxes, and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt and compensated absences, which are recognized as \r\nPage |9 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2017 \r\n \r\nEXHIBIT \"H\" \r\n \r\nexpenditures 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\n \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 position available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by costreimbursement grants, then general revenues. \r\n \r\nNEW ACCOUNTING PRONOUNCEMENTS \r\n \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\n \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. In fiscal year 2015, the School District adopted Governmental Accounting Standards Board (GASB) Statement 71, Pension Transition for Contributions Made Subsequent to the Measurement Date  an amendment of GASB No. 68. The objective of this statement is to improve accounting and financial reporting by addressing an issue in Statement No. 68, Accounting and Financial Reporting for Pensions, concerning transition provisions related to certain pension contributions made to defined benefit pension plans prior to implementation of statement. This statement amends paragraph 137 of Statement No. 68 which limited recognition of pension-related deferred inflows of resources at the transition to circumstances in which it is practical to determine the amounts of all deferred outflows of resources and deferred inflows of resources related to pensions. The adoption of this statement has a significant impact on the School District's financial statements. As noted above the School District restated beginning Net Position for the cumulative effect of this accounting change. \r\n \r\nCASH AND CASH EQUIVALENTS \r\n \r\nComposition of Deposits \r\n \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 \r\n \r\nP a g e | 10 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2017 \r\n \r\nEXHIBIT \"H\" \r\n \r\nthe 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\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\n \r\nPROPERTY TAXES \r\n \r\nThe Baker County Board of Commissioners fixed the property tax levy for the 2016 tax digest year (calendar year) on September 18, 2016 (levy date). Taxes were due on December 20, 2016 (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 2017. The Baker 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, 2017, for maintenance and operations amounted to $2,597,948. \r\n \r\nTax millage rate levied for the 2017 tax year (calendar year) for the Baker County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value): \r\n \r\nSchool Operations \r\n \r\n14.834 mills \r\n \r\nSALES TAXES \r\n \r\nSpecial Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $172,616 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\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 (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\nP a g e | 11 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2017 \r\n \r\nEXHIBIT \"H\" \r\n \r\nCAPITAL ASSETS \r\n \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 Districtwide 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- \r\n \r\nwide statements are as follows: \r\n \r\nCapitalization Estimated \r\n \r\nPolicy \r\n \r\nUseful Life \r\n \r\nLand Buildings and Improvements Equipment \r\n \r\nAll $ 5,000 $ 5,000 \r\n \r\nN/A 15 to 80 years \r\n3 to 50 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\n \r\nDEFERRED OUTFLOWS/INFLOWS OF RESOURCES \r\n \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 a defined benefit pension plan, as discussed in Note 12  Retirement Plans. \r\n \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 a defined benefit pension plan, as discussed in Note 12  Retirement Plans. This item is reported only in the District-wide Statement of Net Position. Additionally, the School District has only one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported 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\n \r\nP a g e | 12 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2017 \r\n \r\nEXHIBIT \"H\" \r\n \r\nCOMPENSATED ABSENCES \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\nVacation leave of 15 days is awarded on a fiscal year basis to certain full time personnel employed on a twelve month basis. No other employees are eligible to earn vacation leave. Vacation leave not utilized during the fiscal year may be carried over to the next fiscal year, providing such vacation leave does not exceed 60 days. \r\n \r\nBeginning \r\n \r\nEnd \r\n \r\nof Year \r\n \r\nof Year \r\n \r\nYear \r\n \r\nLiability \r\n \r\nIncreases \r\n \r\nDecreases \r\n \r\nLiability \r\n \r\nPENSIONS \r\n \r\n2012 2013 2014 2015 2016 2017 \r\n \r\n$ \r\n \r\n8,848 $ \r\n \r\n5,439 $ \r\n \r\n4,393 $ \r\n \r\n9,894 \r\n \r\n$ 9,894 $ 16,430 $ 13,584 $ 12,740 \r\n \r\n$ 12,740 $ \r\n \r\n- $ 12,740 $ \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\nFor purposes of measuring the Net Pension Liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Teachers' Retirement System of Georgia (TRS) and the Public School Employees Retirement System (PSERS) and additions to/ deductions from TRS/PSERS's fiduciary net position have been determined on the same basis as they are reported by TRS/PSERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. See Note 12  Retirement Plans. \r\n \r\nNET POSITION \r\n \r\nThe School District's net position in the District-wide Statements is classified as follows: \r\n \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\n \r\nRestricted net position - These represent resources for which the School District is legally or contractually obligated to spend resources for bus replacement, continuation of Federal programs, debt service and capital projects in accordance with restrictions imposed by external \r\n \r\nP a g e | 13 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2017 \r\n \r\nEXHIBIT \"H\" \r\n \r\nthird parties. \r\n \r\nUnrestricted net position - Unrestricted net position represents resources derived from property taxes, sales taxes, grants and contributions not restricted to specific programs, charges for services, and miscellaneous revenues. These resources are used for transactions relating to the educational and general operations of the School District, and may be used at the discretion of the Board to meet current expenses for those purposes. \r\n \r\nFUND BALANCES \r\n \r\nThe School District's fund balances are classified as follows: \r\n \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 \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. \r\n \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\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 General Fund at June 30, 2017, are as follows: \r\n \r\nFUND BALANCES \r\n \r\nNonspendable Inventories \r\nUnassigned \r\n \r\n$ \r\n \r\n4,929 \r\n \r\n3,215,971 \r\n \r\nFund Balance, June 30, 2017 \r\n \r\n$ \r\n \r\n3,220,900 \r\n \r\nIt is the goal of the School District to achieve and maintain a committed, assigned, and \r\nP a g e | 14 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2017 \r\n \r\nEXHIBIT \"H\" \r\n \r\nunassigned fund balance in the general fund at fiscal year-end of not less than 11.5% of total annual revenues, not to exceed 15% of the total budget of the subsequent fiscal year, in compliance with Official Code of Georgia Annotated Section 20-2-167(a)5. If the unassigned fund balance at fiscal year-end falls below the goal, the School District shall develop a restoration plan to achieve and maintain the minimum fund balance. \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\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\nNote 3: BUDGETARY DATA \r\n \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 fund level. The budget for the General Fund was prepared in accordance with accounting principles generally accepted in the United States of America. \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\n \r\nThe Superintendent is authorized by the Board to approve adjustments of no more than 25 percent of the amount budgeted for expenditures in any budget function for any fund. The Superintendent shall report any such adjustments to the Board. If expenditure of funds in any budget function for any fund is anticipated to be more than 25 percent of the budgeted amount, the Superintendent shall request Board approval for the budget amendment. Any position or expenditure not previously approved in the annual budget that exceeds $50,000 shall require Board approval unless the Superintendent deems the position or purchase an emergency. In such case, the expenditure shall be reported to the Board at its regularly scheduled meeting. \r\n \r\nP a g e | 15 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2017 \r\n \r\nEXHIBIT \"H\" \r\n \r\nUnder no circumstance is the Superintendent or other staff person authorized to spend funds that exceed the total budget without approval by the Board. \r\n \r\nSee Schedule 1  General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances  Budget to Actual for a detail of any over/under expenditures during the fiscal year under review. \r\n \r\nNote 4: DEPOSITS AND INVESTMENTS \r\n \r\nCOLLATERALIZATION OF DEPOSITS \r\n \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 458-13.1) 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\n(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, \r\n \r\n(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, (3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United \r\nStates or of the State of Georgia, \r\n \r\n(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, \r\n \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 \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(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\nP a g e | 16 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2017 \r\n \r\nEXHIBIT \"H\" \r\n \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, 2017, the bank balances were $3,387,919. The amounts exposed to custodial credit risk are classified into three categories as follows: \r\n \r\nCategory 1 - Uncollateralized, Category 2 - Cash collateralized with securities held by the pledging financial institution, \r\nor Category 3 - Cash collateralized with securities held by the pledging financial institution's \r\ntrust department or agent but not in the School District's name. \r\n \r\nThe School District's deposits by custodial credit risk category at June 30, 2017, are as follows: \r\n \r\nCustodial Credit Risk Category \r\n1 2 3 Total \r\n \r\nBank Balance \r\n \r\n$ \r\n \r\n- \r\n \r\n- \r\n \r\n3,387,919 \r\n \r\n$ 3,387,919 \r\n \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\nThis space intentionally left blank. P a g e | 17 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2017 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNote 6: CAPITAL ASSETS \r\n \r\nThe following is a summary of changes in the Capital Assets during the fiscal year: \r\n \r\nBalances June 30, 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$ \r\n \r\n82,372 $ \r\n \r\n- $ \r\n \r\n- \r\n \r\n489,503 \r\n \r\n- $ \r\n \r\n82,372 \r\n \r\n- \r\n \r\n489,503 \r\n \r\nCapital Assets Being Depreciated: Buildings and Improvements Equipment \r\n \r\n9,087,115 1,113,206 \r\n \r\n11,912 233,799 \r\n \r\n(98,606) \r\n \r\n9,099,027 1,248,399 \r\n \r\nLess: Accumulated Depreciation: Buildings and Improvements Equipment \r\n \r\n(2,763,204) (693,223) \r\n \r\n(228,051) (80,127) \r\n \r\n98,606 \r\n \r\n(2,991,255) (674,744) \r\n \r\nTotal Capital Assets, Being Depreciated, Net \r\n \r\n6,743,894 \r\n \r\n(62,467) \r\n \r\n- \r\n \r\n6,681,427 \r\n \r\nGovernmental Activity Capital Assets - Net $ \r\n \r\n6,826,266 $ \r\n \r\n427,036 $ \r\n \r\n- $ 7,253,302 \r\n \r\nCurrent year depreciation expense by function is as follows: \r\nInstruction Support Services: \r\nMaintenance and Operation of Plant Student Transportation Services Food Services \r\n \r\n$ \r\n \r\n230,289 \r\n \r\n714 76,335 \r\n840 \r\n \r\n$ \r\n \r\n308,178 \r\n \r\nNote 7: 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 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\nThe School District is self-insured with regard to unemployment compensation claims. The \r\nP a g e | 18 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2017 \r\n \r\nEXHIBIT \"H\" \r\n \r\nSchool 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 three fiscal years are as follows: \r\n \r\nYear 2014 2015 2016 \r\n \r\nBeginning \r\n \r\nof Year \r\n \r\nLiability \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\nClaims and \r\n \r\nChanges in \r\n \r\nEstimates \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\nClaims \r\n \r\nPaid \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\nEnd of Year \r\n \r\nLiability \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\nThe School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general workers' compensation insurance coverage. Specific excess of loss insurance coverage is provided through an agreement by the Trust with the Safety National Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $1 million loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided with limits of $2 million. The Trust covers the first $1 million of each Employers Liability claim with Safety National providing additional Employers Liability limits up to a $2 million per occurrence maximum. Safety National Casualty Company also provides aggregate cover to the Trust with a loss fund percentage of 100%, based on the Fund's annual normal premium, up to a maximum limit of indemnity of aggregate limit of $2 million. \r\n \r\nThe School District has purchased surety bonds to provide additional insurance coverage as follows: \r\n \r\nPosition Covered Amount \r\n \r\nSuperintendent Principal \r\n \r\n$ 25,000.00 $ 10,000.00 \r\n \r\nNote 8: LONG-TERM DEBT \r\n \r\nCAPITAL LEASES \r\n \r\nThe Baker County Board of Education entered into a lease agreement with DeLage Landen Public Finance LLC for the purchase of 3 new buses. 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 their inception. As of June 30, 2017, the balance was $128,001. \r\n \r\nP a g e | 19 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2017 \r\n \r\nCapital Lease debt service requirements to maturity are as follows: \r\n \r\nYear Ending June 30 2018 2019 \r\n \r\nPrincipal \r\n \r\n$ \r\n \r\n63,066 \r\n \r\n64,935 \r\n \r\n$ \r\n \r\n128,001 \r\n \r\nEXHIBIT \"H\" \r\nInterest $ 3,793 \r\n1,924 $ 5,717 \r\n \r\nLong-term debt activity for the fiscal year is as follows: \r\n \r\nDescription \r\n \r\nBeginning Balance \r\n \r\nIssued \r\n \r\nRedeemed \r\n \r\nEnding Balance \r\n \r\nDeLage Landen \r\n \r\n$ 189,252 $ \r\n \r\n- $ 61,251 $ 128,001 \r\n \r\nNote 9: ON-BEHALF PAYMENTS \r\nThe School District has recognized revenues and costs in the amount of $163,008 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies. \r\nGeorgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Certified Personnel In the amount of $149,712 \r\nOffice of State Treasurer Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $13,296 \r\nNote 10: 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\nP a g e | 20 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2017 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNote 11: POST-EMPLOYMENT BENEFITS \r\n \r\nGeorgia School Personnel Post-employment Health Benefit Fund \r\n \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\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 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\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 \"pay-as-you-go\" financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. \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\nP a g e | 21 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2017 \r\n \r\nPeriod \r\n \r\nContribution Rate \r\n \r\nJuly 2016  June 2017 \r\n \r\n$945 per member per month \r\n \r\nFor non-certificated school personnel: \r\n \r\nPeriod \r\n \r\nContribution Rate \r\n \r\nJuly 2016  June 2017 \r\n \r\n$596.20 per member per month \r\n \r\nEXHIBIT \"H\" \r\n \r\nNo additional contribution was required by the Board for fiscal year 2012 nor contributed to the School OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the School plan for other postemployment 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\n2014 2013 2012 \r\n \r\n100% 100% 100% \r\n \r\n$379,860 $360,199 $342,676 \r\n \r\nNote 12: RETIREMENT PLANS \r\n \r\nTEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) \r\n \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\n \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 SRBPTRS whenever their benefits under TRS exceed the IRC Section 415 imposed limitation on benefits. \r\n \r\nP a g e | 22 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2017 \r\n \r\nEXHIBIT \"H\" \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. \r\n \r\nNormal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. Early retirement benefits are reduced by the lesser of onetwelfth 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 lumpsum distribution in addition to a reduced monthly retirement benefit. Death, disability and spousal benefits are also available. \r\n \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, 2017, were 6% of annual salary. Employer contributions required for fiscal year 2015 were 12.28% of annual salary as required by the June 30, 2011, actuarial valuation. \r\n \r\nEmployer contributions for the current fiscal year and the preceding two fiscal years are as \r\n \r\nfollows: \r\n \r\nPercentage \r\n \r\nRequired \r\n \r\nFiscal Year \r\n \r\nContributed \r\n \r\nContribution \r\n \r\n2015 2016 2017 \r\n \r\n100% 100% 100% \r\n \r\n$206,819 $237,955 $275,066 \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/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\nP a g e | 23 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2017 \r\n \r\nEXHIBIT \"H\" \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\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\nPension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension \r\nAt June 30, 2017, the School District reported a liability of $3,625,506 for its proportionate share of the Net Pension Liability for TRS. \r\nThe 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 School District's proportion of the Net Pension Liability was based on contributions to TRS during the fiscal year ended June 30, 2016. \r\n \r\nAt June 30, 2016, the School District's TRS proportion was 0.017573%, which was an increase of 0.000430% from its proportion measured as of June 30, 2015. \r\nThe PSERS Net Pension Liability was measure 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 $381,150 for TRS and $13,296 for PSERS and revenue of $13,296 for PSERS was recognized. The revenue is support provided by the State of Georgia. \r\n \r\nThis space intentionally left blank. \r\n \r\nP a g e | 24 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2017 \r\n \r\nEXHIBIT \"H\" \r\n \r\nAt June 30, 2017, the School District reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources: \r\n \r\nDeferred Outflows of Resources \r\n \r\nTRS \r\nDeferred Inflows of Resources \r\n \r\nDifferences between expected and actual \r\n \r\nexperience \r\n \r\n$ \r\n \r\n54,010 \r\n \r\n$ \r\n \r\nChanges of assumptions \r\n \r\n93,968 \r\n \r\nNet difference between projected and actual earnings on pension plan investments \r\n \r\n458,641 \r\n \r\n17,928 - \r\n \r\nChanges in proportion and differences between School District contributions and proportionate share of contributions \r\n \r\n124,379 \r\n \r\n97,890 \r\n \r\nSchool District contributions subsequent to the measurement date \r\n \r\n122,575 \r\n \r\n$ \r\n \r\n853,573 \r\n \r\n$ \r\n \r\n115,818 \r\n \r\nBaker County Board of Education contributions subsequent to the measurement date of June 30, 2016 for TRS are reported as deferred outflows of resources and will be recognized as a reduction of the Net Pension Liability in the year ended June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: \r\n \r\nYear Ended June 30: \r\n2018 2019 2020 2021 2022 Thereafter \r\n \r\nTRS \r\n63,500 63,500 281,466 196,916 \r\n9,798 - \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\nP a g e | 25 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2017 \r\n \r\nEXHIBIT \"H\" \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\n \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, 2005  June 30, 2010. \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\n7.5%, net of pension plan investment expenses, including \r\n \r\ninflation \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, 2015 valuation were based on the results of an actuarial experience study for the period July 1, 2005  June 30, 2010. \r\nThe long-term expected rate of return on TRS and PSERS pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: \r\n \r\nP a g e | 26 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2017 \r\n \r\nEXHIBIT \"H\" \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 large stocks Domestic mid stocks Domestic small stocks International developed market stocks International emerging market stocks \r\n \r\n30.00% 39.70% \r\n3.70% 1.60% 18.90% 6.10% \r\n \r\n3.00% 6.50% 10.00% 13.00% 6.50% 11.00% \r\n \r\nTotal \r\n \r\n100.00% \r\n \r\n* Rates shown are net of the 3.00% assumed rate of inflation. \r\n \r\nDiscount rate: The discount rate used to measure the total TRS and PSERS pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and non-employer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS and PSERS pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. \r\nSensitivity of the Baker County Board of Education's proportionate share of the Net Pension Liability to changes in the discount rate: The following presents the School District's proportionate share of the Net Pension Liability calculated using the discount rate of 7.50%, as well as what the School District's proportionate share of the Net Pension Liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50%) or 1-percentage-point higher (8.50%) than the current rate: \r\nPension plan fiduciary net position: Detailed information about the pension plan's fiduciary net position is available in the separately issued TRS and PSERS financial report which is publically available at www.trsga.com/publications and www.ers.ga.gov/formspubs/formspubs. \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\nNote 13: NEW ACCOUNTING PRONOUNCEMENT \r\nIn fiscal year 2015, the School District adopted Governmental Account Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions. The provisions of \r\nP a g e | 27 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2017 \r\n \r\nEXHIBIT \"H\" \r\n \r\nthis Statement establish accounting and financial reporting standards for pensions that are provided to the employees of state and local governmental employers through pension plans that are administered through trusts. Implementation of this statement will require the School District to record a liability for its proportionate share of the Net Pension Liability of pension plans in which it is a member. The School District's Net Pension Liability as of June 30, 2017, was $3,625,506. \r\n \r\nNote 14: SPECIAL ITEM- SALES OF CAPITAL ASSETS \r\n \r\nDuring the fiscal year ended June 30, 2017, the School District sold capital assets which were transactions the School District considers infrequent in occurrence. The School District has reported these transactions as special items in the government-wide financial statements as required by GASB 34, paragraph 56. In governmental funds, these transactions consisted of a disposition of two school buses for $6,715. \r\n \r\nP a g e | 28 \r\n \r\n REQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n Baker County Board of Education Required Supplementary Information Schedule of Proportionate Share of the Net Pension Liability Teachers' Retirement System of Georgia For the Year Ended June 30, 2017 \r\nSchool District's proportion of the Net Pension Liability \r\nSchool District's proportionate share of the Net Pension Liability \r\nSchool District's covered-employee payroll \r\nSchool District's proportionate share of the Net Pension Liability as a percentage of its covered employee payroll \r\nPlan fiduciary net position as a percentage of the total pension liability \r\n \r\nSCHEDULE \"1\" \r\n2017 0.017573% $ 3,625,506 $ 2,237,896 \r\n162.01% 76.0600% \r\n \r\nPage 29 \r\n \r\n Baker County Board of Education Required Supplementary Information Schedule of Contributions Teachers' Retirement System of Georgia For the Year Ended June 30, 2017 \r\nContractually required contribution Contributions in relation to the contractually required contribution Contribution deficiency (excess) \r\nSchool District's covered-employee payroll Contributions as a percentage of covered-employee payroll \r\n \r\nSCHEDULE \"2\" \r\n \r\n2017 \r\n \r\n2016 \r\n \r\n2015 \r\n \r\n2014 \r\n \r\n2013 \r\n \r\n$ 122,575 $ 118,627 $ 110,774 $ 105,987 $ 96,913 \r\n \r\n122,575 \r\n \r\n118,627 \r\n \r\n110,774 \r\n \r\n105,987 \r\n \r\n96,913 \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$ 2,237,896 $ 2,145,595 $ 1,825,338 $ 1,806,775 $ 1,806,772 \r\n \r\n5.48% \r\n \r\n5.53% \r\n \r\n6.07% \r\n \r\n5.87% \r\n \r\n5.36% \r\n \r\nPage 30 \r\n \r\n Baker County Board of Education Notes to Required Supplementary Information For the Year Ended June 30, 2017 \r\n \r\nSCHEDULE \"3\" \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\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, 2017 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\n \r\nJune 30, 2014 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 expense, including \r\n \r\nPage 31 \r\n \r\n Baker County Board of Education Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual Year Ended June 30, 2017 \r\n \r\nSCHEDULE \"4\" \r\n \r\nREVENUES Property taxes Sales taxes State funds Federal funds Charges for services Investment earnings Miscellaneous \r\nTOTAL REVENUES \r\nEXPENDITURES Current \r\nInstruction Support Services \r\nPupil Services \r\nImprovement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Service Other Support Services Food Services Operation Enterprise Operations Capital Outlay General Government \r\nTotal Expenditures Excess of Revenues over (under) Expenditures \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$ 1,946,132 $ 7,081 \r\n2,122,054 733,584 13,000 20 94,610 \r\n4,916,481 \r\n \r\n1,946,132 $ 7,081 \r\n2,122,054 733,584 13,000 20 94,610 \r\n4,916,481 \r\n \r\n2,597,948 $ 36,119 \r\n2,102,400 603,473 8,314 14 108,998 \r\n5,457,266 \r\n \r\n651,816 29,038 (19,654) \r\n(130,111) (4,686) (6) 14,388 \r\n540,785 \r\n \r\n2,453,798 \r\n80,996 \r\n81,195 109,152 441,682 333,348 123,527 512,922 291,495 \r\n42,401 283,493 \r\n- \r\n- \r\n4,754,009 \r\n162,472 \r\n \r\n2,438,691 \r\n125,764 \r\n68,797 109,152 441,909 333,348 123,527 512,922 291,495 \r\n11,151 283,493 \r\n- \r\n- \r\n4,740,249 \r\n176,232 \r\n \r\n2,479,548 \r\n118,452 \r\n54,249 104,950 357,870 330,692 123,237 415,977 274,606 210,583 293,814 \r\n26,900 \r\n233,799 \r\n5,024,677 \r\n432,589 \r\n \r\n(40,857) \r\n7,312 \r\n14,548 4,202 \r\n84,039 2,656 290 \r\n96,945 16,889 (199,432) (10,321) (26,900) \r\n(233,799) \r\n(284,428) \r\n256,357 \r\n \r\nOTHER FINANCING SOURCES (USES) Operating Transfers From Other Funds Operating Transfers To Other funds Proceeds from disposition of capital assets \r\nTotal Other Financing Sources (Uses) \r\nNet Change in Fund Balances \r\nFund Balances - Beginning \r\nFund Balances - Ending \r\n \r\n- \r\n- \r\n162,472 \r\n1,187,437 $ 1,349,909 $ \r\n \r\n- \r\n- \r\n176,232 \r\n1,083,978 1,260,210 $ \r\n \r\n94,086 (129,488) \r\n6,715 \r\n(28,687) \r\n403,902 \r\n2,816,998 3,220,900 $ \r\n \r\n94,086 (129,488) \r\n6,715 \r\n(28,687) \r\n227,670 \r\n1,733,020 1,960,690 \r\n \r\nPage 32 See note to basic financial statements. \r\n \r\n Baker County Board of Education Schedule of State Revenue Year Ended June 30, 2017 \r\nAgency/Funding \r\nEducation, Georgia Department of Quailty Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Progarm Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Progarm Upper Elementary Grades (4-5) Progarm Upper Elementary Grades - Early Intervention (4-5) Program Middle Grades (6-8) Program High School General Education (9-12) Program Career Technical and Agricultural Education Program (9-12) Students with Disabilities Remedial Education Program Alternative Education Program Media Center Program 20 Days Additional Instruction Staff and Professional Development Principal Staff \u0026 Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Categorical Grants Pupil Transportation Sparsity Nursing Services Mid-term Adjustment Hold-Harmless Vocational Supervisors Food Services Amended Formula Adjustment Other State Programs Teacher Retirement Total \r\nOffice of the State Treasurer Public School Employees' Retirement \r\nTotal \r\nGrants From Pre-K Lottery Georgia Prekindergarten Program Total \r\nOther Grants From Georgia Department Of Education Georgia Prekindergarten Program Total \r\nGrand Total \r\nPage 33 \r\nSee note to basic financial statements. \r\n \r\nSCHEDULE \"5\" \r\n \r\nGeneral Fund \r\n \r\n$ \r\n \r\n49,742 \r\n \r\n23,450 \r\n \r\n178,767 \r\n \r\n86,760 \r\n \r\n86,441 \r\n \r\n59,524 \r\n \r\n148,007 \r\n \r\n138,305 \r\n \r\n38,125 \r\n \r\n300,771 \r\n \r\n45,342 \r\n \r\n11,731 \r\n \r\n29,539 \r\n \r\n9,083 \r\n \r\n4,794 \r\n \r\n220 \r\n \r\n228,494 89,506 60,546 \r\n \r\n111,275 347,313 \r\n45,000 106,245 \r\n5,094 7,298 (36,240) \r\n \r\n1,619 2,176,751 \r\n \r\n8,008 8,008 \r\n \r\n94,300 94,300 \r\n \r\n1,944 \r\n1,944 $ 2,281,003 \r\n \r\n Baker County Board of Education Schedule of Special Purpose Local Option Sales Tax For the Fiscal Year Ended June 30, 2017 \r\n \r\nSCHEDULE \"6\" \r\n \r\nProject \r\nAdding to, renovating, improving and equipping existing facilities Upgrading Instructional and Administrative Technology Purchasing school buses and transportation equipment Purchasing textbooks and vocational, fine arts, instructional and athletic equipment Purchasing safety and security equipment Acquiring any property necessary or desirable therefor, both real and personal \r\nDebt principal and interest payments \r\nTotal \r\n \r\nOriginal Estimated \r\nCost (1) \r\n \r\nCurrent Estimated \r\nCost (2) \r\n \r\nCurrent Year (3) \r\n \r\nExpenditure \r\n \r\nEstimated Estimated \r\n \r\nPrior \r\n \r\nTotal \r\n \r\nProceeds Not Completion \r\n \r\nYear \r\n \r\nCompleted Cost Expended \r\n \r\nDate \r\n \r\n$ 1,176,000 $ 1,176,000 $ 489,503 $ 27,184 $ \r\n \r\n516,687 $ \r\n \r\n- \r\n \r\n42,000 \r\n \r\n42,000 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n70,000 \r\n \r\n70,000 \r\n \r\n- \r\n \r\n253,854 \r\n \r\n253,854 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n15,211 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n4,506 \r\n \r\n- \r\n \r\n4,506 \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\n112,000 \r\n \r\n112,000 \r\n \r\n66,858 \r\n \r\n66,858 \r\n \r\n133,716 \r\n \r\n- \r\n \r\n$ 1,400,000 $ 1,400,000 $ 576,078 $ 347,896 $ \r\n \r\n908,763 $ \r\n \r\n- \r\n \r\nThe School District's original cost estimate as specified in the resolution calling for the imposition of the Local \r\n \r\n(1) \r\n \r\nOption Sales Tax. \r\n \r\nThe School District's current estimate of total cost for the projects. Includes all cost from project inception to \r\n \r\n(2) \r\n \r\ncompletion. \r\n \r\nThe voters of Baker County approved the imposition of a 1% sales tax to fund the above projects and retire \r\n \r\nassociated debt. Amounts expended for these projects may include sales tax proceeds, state, local property \r\n \r\n(3) \r\n \r\ntaxes and/or other funds over the life of the projects. \r\n \r\nPage 34 See note to basic financial statements. \r\n \r\n Baker County Board of Education General Fund - Quality Based Education Program (QBE) Allotments and Expenditures by Program For the Fiscal Year Ended June 30, 2017 \r\n \r\nSCHEDULE \"7\" \r\n \r\nDescription \r\n \r\nAllotments from Georgia Department of Education \r\n(1) (2) \r\n \r\nEligible QBE Program Costs \r\n \r\nSalaries Operations \r\n \r\nTotal \r\n \r\nDirect Instructional Programs \r\n \r\nKindergarten Programs \r\n \r\n$ \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 Upper Elementary Grades-Early Intervention (45) Program Middle School (6-8) Program \r\n \r\nMiddle Grades (6-8) Program \r\n \r\nHigh School General Education (9-12) Program \r\n \r\nVocational Laboratory (9-12) Program Students With Disabilities \r\nCATEGORY I CATEGORY III CATEGORY IV Gifted Student -CATERGORY VI Remedial Education Program Alternative Education Program \r\n \r\nTOTAL DIRECT INSTRUCTIONAL PROGRAMS $ \r\n \r\nMedia Center Program Staff and Professional Development \r\n \r\nTOTAL QBE FORMULA FUNDS \r\n \r\n$ \r\n \r\n59,149 $ 27,873 \r\n212,725 103,152 \r\n102,881 70,748 \r\n176,098 - \r\n164,928 \r\n45,771 358,225 \r\n53,905 13,951 \r\n1,389,406 $ \r\n35,574 6,559 \r\n1,431,539 $ \r\n \r\n107,154 $ 28,458 \r\n380,977 90,320 \r\n166,744 68,545 \r\n320,325 62 \r\n309,214 \r\n111,820 - \r\n401,860 47,139 73,061 - \r\n2,105,679 $ \r\n102,130 - \r\n2,207,809 $ \r\n \r\n5,293 $ 2,315 \r\n6,462 3,579 \r\n6,970 3,182 \r\n12,871 22,354 23,751 \r\n10,773 - \r\n8,666 19,153 \r\n- \r\n125,369 $ \r\n18,013 - \r\n143,382 $ \r\n \r\n112,447 \r\n30,773 387,439 \r\n93,899 173,714 \r\n71,727 333,196 \r\n22,416 \r\n332,965 122,593 \r\n8,666 421,013 47,139 \r\n73,061 \r\n- \r\n2,231,048 \r\n120,143 1,699 \r\n2,352,890 \r\n \r\nPage 35 See note to basic financial statements. \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 COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL \r\nSTATEMENTS 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 Baker County Board of Education \r\nWe were engaged to 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, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Baker County Board of Education (School District), as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements, and have issued our report thereon dated September 4, 2020. The report on the financial statements was disclaimed because we were unable to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. \r\nInternal Control Over Financial Reporting \r\nIn connection with our engagement to audit the financial statements of the School District, 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\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. If documentation provided by management had been sufficient to enable us to express an opinion on the basic financial statements, material weaknesses or significant deficiencies may have been identified and reported herein. \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. \r\nA significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. \r\n \r\n (This page left intentionally blank) \r\n \r\n Compliance and Other Matters \r\nIn connection with our engagement to audit the financial statements of the School District, we were engaged to perform 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. If the documentation provided by management had been sufficient to enable us to express an opinion on the basic financial statement's, instances of noncompliance or other matters may have been identified and reported herein. \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 engagement to perform 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\nSeptember 4, 2020 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n (This page left intentionally blank) \r\n \r\n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-b2016-belec-p-btext","title":"Baker County Board of Education, Newton, 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":["2016-06-30"],"dcterms_description":["Financial report for the Bacon 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":["Baker County Board of Education (Ga.)--Appropriations and expenditures--Periodicals.","Education--Georgia--Baker County--Auditing--Periodicals.","Education--Georgia--Baker County--Finance--Statistics--Periodicals.","Education--Auditing","Education--Finance","Expenditures, Public","Georgia--Baker County--fast--https://id.oclc.org/worldcat/entity/E39PBJgxqwBrwyH6QgJ7CB3hHC","Georgia Government Documents--Serial"],"dcterms_title":["Baker County Board of Education, Newton, 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-bb16-b2016-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-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 statements","financial records"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":["Education--Auditing--fast","Education--Finance--fast","Expenditures, Public--fast","Georgia--Baker County--fast--https://id.oclc.org/worldcat/entity/E39PBJgxqwBrwyH6QgJ7CB3hHC","Periodicals--fast","Statistics--fast"],"fulltext":"BAKER COUNTY BOARD OF EDUCATION \r\nNEWTON, GEORGIA \r\nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2016 \r\n(Including Independent Auditor's Reports) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION - 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\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 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 CONTRIBUTIONS  TEACHERS RETIREMENT SYSTEM OF GEORGIA 3 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION 4 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES \r\nIN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \r\n \r\nPage \r\n1 2 3 4 5 6 7 8 \r\n29 30 31 32 \r\n \r\n BAKER COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \r\n \r\nSECTION I \r\nFINANCIAL \r\nSCHEDULES \r\nSUPPLEMENTARY INFORMATION \r\n5 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 6 SCHEDULE OF STATE REVENUE 7 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 8 ALLOTMENTS AND EXPENDITURES \r\nGENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM \r\n \r\nPage \r\n33 34 35 36 \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\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\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 Baker County Board of Education \r\nReport on the Financial Statements \r\nWe were engaged to audit the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Baker County Board of Education (School District), as of and for the year ended June 30, 2016, and the related notes to the 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 an opinion on these financial statements based on conducting the 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. Because of the matter described in the \"Basis for Disclaimer of Opinion\" paragraph, however, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. \r\nBasis for Disclaimer of Opinion \r\nThe School District was unable to provide documentation to support the reported assets, liabilities, revenues and expenditures. We were unable to determine by other audit procedures whether these balances were materially correct. In addition, changes in management personnel precluded us from making the appropriate inquiries of these matters. \r\n \r\n Disclaimer of Opinion \r\nBecause of the significance of the matter described in the \"Basis for Disclaimer of Opinion\" paragraph, we were unable to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on the financial statements referred to in the first paragraph. \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 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. \r\nAccounting principles generally accepted in the United States of America require that the required supplementary information listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Because of the significance of the matter disclosed in the \"Basis for Disclaimer Opinion\" paragraph, it is inappropriate to, and the auditor does not express an opinion on the required supplementary information. \r\nOther Information \r\nWe were engaged to audit for the purpose of forming an opinion 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. Because of the significance of the matter disclosed in the \"Basis for Disclaimer of Opinion\" paragraph, it is inappropriate to, and the auditor does not, express an opinion on the supplementary information. \r\nOther Reporting Required by Government Auditing Standards \r\nIn accordance with Government Auditing Standards, we have also issued our report dated September 8, 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\n \r\n A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated section 50-6-24. \r\nRespectfully submitted, \r\n \r\nSeptember 8, 2020 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n BAKER COUNTY BOARD OF EDUCATION \r\n \r\n Baker County Board of Education Statement of Net Position June 30, 2016 \r\nASSETS \r\nCash and Cash Equivalents Taxes State Grants Federal Grants \r\nInventory, at cost Land and construction in progress Other capital assets, net of depreciation \r\nTotal Assets \r\nDEFERRED OUTFLOWS OF RESOURCES \r\nRelated to Defined Benefit Pension Plan \r\nLIABILITIES \r\nAccounts payable and accrued expenses Salaries and Benefits Payable Long-term liabilities: \r\nPortion due and payable within one year: Capital leases, notes and bonds payable \r\nPortion due and payable after one year: Capital leases, notes and bonds payable \r\nCurrent Portion of Revenue Bonds Net Pension Liability \r\nTotal Liabilities \r\nDEFERRED INFLOWS OF RESOURCES \r\nRelated to Defined Benefit Pension Plan \r\nNET POSITION \r\nNet investment in capital assets Restricted for: \r\nContinuation of Federal Programs Debt Service Unrestricted \r\nTotal Net Position \r\n \r\nEXHIBIT \"A\" \r\nGovernmental Activities \r\n$ 3,034,299 418,464 179,162 76,645 4,929 82,372 \r\n6,743,894 10,539,765 \r\n206,013 \r\n152 429,413 \r\n61,251 \r\n128,001 2,609,852 3,228,669 \r\n381,776 \r\n6,637,014 4,929 67 \r\n493,323 $ 7,135,333 \r\n \r\nPage 1 The notes to the basic financial statements are an intregral part of this statement. \r\n \r\n Baker County Board of Education Statement of Activities For the Fiscal Year Ended June 30, 2016 \r\n \r\nEXHIBIT \"B\" \r\n \r\nFunctions/Programs \r\nGovernmental: \r\nInstructions 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 Service Other Support Services Operations of Non-instructional Services Food Services Operation Enterprise Operations Interest on short-term \u0026 long-term debt \r\nTotal governmental activities \r\n \r\nExpenses \r\n \r\nProgram Revenues \r\n \r\nFees and Charges for \r\nServices \r\n \r\nOperating Grants and Contributions \r\n \r\nNet (Expenses) Revenues and Changes in Net \r\nAssets \r\n \r\n$ 2,687,489 $ \r\n \r\n- $ 2,057,689 $ \r\n \r\n86,604 \r\n79,783 92,318 348,517 340,204 118,922 370,276 372,365 29,152 \r\n \r\n- \r\n \r\n74,199 \r\n \r\n- \r\n \r\n53,393 \r\n \r\n- \r\n \r\n37,164 \r\n \r\n- \r\n \r\n300,888 \r\n \r\n- \r\n \r\n117,795 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n93,274 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n15,178 \r\n \r\n281,363 67,133 2,256 \r\n$ 4,876,382 $ \r\n \r\n9,741 - \r\n9,741 \r\n \r\n223,295 - \r\n$ 2,972,875 \r\n \r\nGeneral revenues: Taxes Property taxes, levied for general purposes Sales Taxes for Capital Projects Other Sales Taxes \r\nInvestment earnings Miscellaneous \r\nTotal general revenues and special items \r\nChange in net position \r\n \r\nNet position - beginning \r\n \r\nNet position - ending \r\n \r\n$ \r\n \r\n(629,800) \r\n(12,405) (26,390) (55,154) (47,629) (222,409) (118,922) (277,002) (372,365) (13,974) \r\n(48,327) (67,133) \r\n(2,256) \r\n(1,893,766) \r\n2,287,664 193,260 15,347 38 197,361 \r\n2,693,670 799,904 \r\n6,335,429 \r\n7,135,333 \r\n \r\nPage 2 The notes to the basic financial statements are an intregral part of this statement. \r\n \r\n Baker County Board of Education Balance Sheet Governmental Funds June 30, 2016 \r\n \r\nEXHIBIT \"C\" \r\n \r\nASSETS Cash and cash equivalents Taxes receivable, net Accounts Receivable - State Accounts Receibable - Federal Inventories \r\nTotal assets \r\n \r\nGeneral Fund \r\n \r\nDistrictWide Capital \r\nProjects Fund \r\n \r\nDebt Service Fund \r\n \r\nTotal Governmental \r\nFunds \r\n \r\n$ 2,963,833 $ 70,396 $ \r\n \r\n389,606 \r\n \r\n- \r\n \r\n179,162 \r\n \r\n28,859 \r\n \r\n76,645 \r\n \r\n- \r\n \r\n4,929 \r\n \r\n- \r\n \r\n$ 3,614,175 $ 99,255 $ \r\n \r\n67 $ - \r\n67 $ \r\n \r\n3,034,296 389,606 208,021 76,645 4,929 \r\n3,713,497 \r\n \r\nLIABILITIES AND FUND BALANCES \r\n \r\nLiabilities: \r\n \r\nAccounts payable \r\n \r\n$ \r\n \r\nDeferred revenue \r\n \r\nSalary and Benefits Payable \r\n \r\nTotal liabilities \r\n \r\n152 $ 367,612 429,413 \r\n797,177 \r\n \r\n-$ - \r\n- \r\n \r\n-$ - \r\n- \r\n \r\n152 367,612 429,413 \r\n797,177 \r\n \r\nFund balances: Nonspendable: Inventories Other Purposes Unassigned \r\n \r\n4,929 - \r\n2,812,069 \r\n \r\n99,255 \r\n \r\nTotal fund balances (deficit) \r\n \r\n2,816,998 \r\n \r\n99,255 \r\n \r\nTotal liabilities and fund balances $ 3,614,175 $ 99,255 $ \r\n \r\n67 \r\n- \r\n67 \r\n67 $ \r\n \r\n4,929 67 \r\n2,911,324 \r\n2,916,320 \r\n3,713,497 \r\n \r\nPage 3 The notes to the basic financial statements are an intregral part of this statement. \r\n \r\n Baker County Board of Education Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position June 30, 2016 \r\n \r\nEXHIBIT \"D\" \r\n \r\nTotal fund balance, governmental funds \r\nAmounts reported for governmental activities in the Statement of Net Position are different because: \r\nCapital assets used in governmental activities are not current financial resources and therefore are not reported in the fund financial statement, but are reported in the governmental activities of the Statement of Net Position. \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 areapplicable to future periods and, therefore, are not reported in the governmental funds. \r\nSome of the School Districts property tax revenues will be collected after year end but are not available soon enough to pay for the current periods expenditures \r\nSome liabilities, (such as Notes Payable, Capital Lease Contracts Payable, Longterm Compensated Absences, and Bonds Payable ), are not due and payable in the current period and are not included in the fund financial statement, but are included in the governmental activities of the Statement of Net Position. \r\nNet Position of Governmental Activities in the Statement of Net Position \r\n \r\n$ \r\n \r\n2,916,320 \r\n \r\n6,826,266 \r\n(2,609,852) (175,763) 367,614 \r\n \r\n(189,252) \r\n \r\n$ \r\n \r\n7,135,333 \r\n \r\nPage 4 The notes to the basic financial statements are an intregral part of this statement. \r\n \r\n Baker County Board of Education Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds For the Fiscal Year Ended June 30, 2016 \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\n \r\nGeneral Fund \r\n \r\nDistrict Wide Capital Projects Fund \r\n \r\nDebt Service Fund \r\n \r\n$ 1,938,304 $ \r\n \r\n-$ \r\n \r\n- \r\n \r\n15,347 \r\n \r\n193,260 \r\n \r\n- \r\n \r\n2,163,637 \r\n \r\n- \r\n \r\n- \r\n \r\n809,238 \r\n \r\n- \r\n \r\n- \r\n \r\n9,741 \r\n \r\n- \r\n \r\n- \r\n \r\n17 \r\n \r\n21 \r\n \r\n- \r\n \r\n208,201 \r\n \r\n- \r\n \r\n- \r\n \r\nTotal Revenues \r\n \r\n5,144,485 \r\n \r\n193,281 \r\n \r\n- \r\n \r\nEXPENDITURES \r\n \r\nCurrent: \r\n \r\nInstruction \r\n \r\n2,542,522 \r\n \r\n- \r\n \r\n- \r\n \r\nSupport Services \r\n \r\nPupil Services \r\n \r\n87,593 \r\n \r\n- \r\n \r\nImprovement of Instructional Services \r\n \r\n85,625 \r\n \r\n- \r\n \r\n- \r\n \r\nEducational Media Services \r\n \r\n95,042 \r\n \r\n- \r\n \r\n- \r\n \r\nGeneral Administration \r\n \r\n352,522 \r\n \r\n6,684 \r\n \r\n- \r\n \r\nSchool Administration \r\n \r\n355,116 \r\n \r\n- \r\n \r\n- \r\n \r\nBusiness Administration \r\n \r\n120,608 \r\n \r\n- \r\n \r\n- \r\n \r\nMaintenance and Operation of Plant \r\n \r\n370,276 \r\n \r\n- \r\n \r\n- \r\n \r\nStudent Transportation Service \r\n \r\n314,099 \r\n \r\n- \r\n \r\n- \r\n \r\nOther Support Services \r\n \r\n29,152 \r\n \r\n- \r\n \r\n- \r\n \r\nFood Services Operation \r\n \r\n279,682 \r\n \r\n- \r\n \r\n- \r\n \r\nEnterprise Operations \r\n \r\n67,133 \r\n \r\n- \r\n \r\n- \r\n \r\nCapital Outlay \r\n \r\nGeneral Government \r\n \r\n159,729 \r\n \r\n274,354 \r\n \r\n- \r\n \r\nDebt Service: \r\n \r\nPrincipal \r\n \r\n- \r\n \r\n64,602 \r\n \r\n- \r\n \r\nInterest and other charges \r\n \r\n- \r\n \r\n2,256 \r\n \r\n- \r\n \r\nTotal Expenditures \r\n \r\n4,859,099 \r\n \r\n347,896 \r\n \r\n- \r\n \r\nExcess (deficiency) of revenues over \r\n \r\nexpenditures \r\n \r\n285,386 \r\n \r\n(154,615) \r\n \r\n- \r\n \r\nOTHER FINANCING SOURCES (USES) Proceeds from sale of capital assets \r\n \r\n- \r\n \r\n253,854 \r\n \r\nTotal other financing sources (uses) \r\n \r\n- \r\n \r\n253,854 \r\n \r\n- \r\n \r\nNet change in fund balances \r\n \r\n285,386 \r\n \r\n99,239 \r\n \r\n- \r\n \r\nFund balances (deficit) - beginning \r\n \r\n2,531,612 \r\n \r\n16 \r\n \r\n67 \r\n \r\nFund balances (deficit) - ending \r\n \r\n$ 2,816,998 $ 99,255 $ \r\n \r\n67 \r\n \r\nTotal Governmental \r\nFunds \r\n$ 1,938,304 208,607 \r\n2,163,637 809,238 9,741 38 208,201 \r\n5,337,766 \r\n2,542,522 \r\n87,593 85,625 95,042 359,206 355,116 120,608 370,276 314,099 29,152 279,682 67,133 \r\n434,083 \r\n64,602 2,256 \r\n5,206,995 \r\n130,771 \r\n253,854 \r\n253,854 \r\n384,625 \r\n2,531,695 $ 2,916,320 \r\n \r\nPage 5 The notes to the basic financial statements are an intregral part of this statement. \r\n \r\n Baker County Board of Education Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Net Activities For the Fiscal Year Ended June 30, 2016 \r\nNet change in fund balances - total governmental funds: \r\nAmounts reported for governmental activities in the Statement of Activities are different because: \r\nGovernmental funds report outlays for capital assets as expenditures because such outlays use current financial resources. In contrast, the Statement of Activities reports only a portion of the outlay as an expense. The outlay is allocated over the assets useful life. This is the amount by which capital outlays of $434,082 exceeded depreciation of $274,628 the current period. \r\nGovernmental funds do not present revenues that are not available to pay current obligations. In contrast, such revenues are reported in the Statement of Activities when earned. \r\nGovernmental funds report capital lease proceeds as current financial resources. In contrast, the Statement of Activities treats such issuance of debt as a liability. Governmental funds report repayment of capital lease principal as an expenditure. In contrast, the Statement of Activities reports this as a reduction of liabilities on the Statement of Net Position. \r\nSome expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore are not reported as expenditures in governmental funds. \r\nPension Expenses \r\nChange in net position of governmental activities \r\n \r\nEXHIBIT \"F\" \r\n \r\n$ \r\n \r\n384,625 \r\n \r\n159,454 349,361 \r\n \r\n(189,252) \r\n \r\n95,716 \r\n \r\n$ \r\n \r\n799,904 \r\n \r\nPage 6 The notes to the basic financial statements are an intregral part of this statement. \r\n \r\n Baker County Board of Education Statement of Fiduciary Net Assets Fiduciary Funds June 30, 2016 \r\nASSETS Cash \r\nTotal Assets \r\nLIABILITIES \r\nDue to others Total Liabilities \r\n \r\nEXHIBIT \"G\" \r\n \r\n$ \r\n \r\n13,253 \r\n \r\n$ \r\n \r\n13,253 \r\n \r\n$ \r\n \r\n13,253 \r\n \r\n$ \r\n \r\n13,253 \r\n \r\nPage 7 The notes to the basic financial statements are an intregral part of this statement. \r\n \r\n NOTES TO THE FINANCIAL STATEMENTS \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2016 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNote 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY REPORTING ENTITY \r\n \r\nThe Baker County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity. \r\nNote 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \r\n \r\nBASIS OF PRESENTATION \r\n \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 Baker County Board of Education. \r\n \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\n \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 \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 \r\nprograms, such as office and maintenance personnel and accounting) are not allocated to programs. \r\n \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 \r\noperational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. \r\n \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 \r\nPage |8 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2016 \r\n \r\nEXHIBIT \"H\" \r\n \r\nseparate column. The School District reports the following major governmental funds: \r\n \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 \r\n District-wide Capital Projects Fund accounts for and reports financial resources including Special Purpose Local Option Sales Tax (SPLOST) that are restricted, committed or assigned to the expenditure for capital outlays, including the acquisition or construction of \r\ncapital facilities. \r\n \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\nThe School District reports the following fiduciary fund type: \r\n \r\n Agency funds account for assets held by the School District as an agent for various funds or individuals. \r\n \r\nBASIS OF ACCOUNTING \r\n \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, 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\n \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 \r\nby 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\nGovernmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Property taxes, sales taxes, and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt and compensated absences, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as \r\nPage |9 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2016 \r\n \r\nEXHIBIT \"H\" \r\n \r\nexpenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources. \r\n \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 position available to finance the program. It is the \r\nSchool District's policy to first apply grant resources to such programs, followed by costreimbursement grants, then general revenues. \r\n \r\nNEW ACCOUNTING PRONOUNCEMENTS \r\n \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 \r\nthis 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 \r\nthe School District's financial statements. As noted above the School District restated beginning Net Position for the cumulative effect of this accounting change. \r\n \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. In fiscal year 2015, the School District adopted Governmental Accounting Standards Board (GASB) Statement 71, Pension Transition for Contributions Made Subsequent to the Measurement Date  an amendment of GASB No. 68. The objective of this statement is to improve accounting and financial reporting by addressing an issue in Statement No. 68, Accounting and Financial Reporting for Pensions, concerning transition provisions related to certain pension contributions made to defined benefit pension plans prior to implementation of statement. This statement amends paragraph 137 of Statement No. 68 which limited recognition of pension-related deferred inflows of resources at the transition to circumstances in which it is practical to determine the amounts of all deferred outflows of resources and deferred inflows of resources related to pensions. The adoption of this statement has a significant impact on the School District's financial statements. As noted above the School District restated beginning Net Position for the cumulative effect of this accounting change. \r\n \r\nCASH AND CASH EQUIVALENTS \r\n \r\nComposition of Deposits \r\n \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 \r\nauthorized 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 \r\n \r\nP a g e | 10 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2016 \r\n \r\nEXHIBIT \"H\" \r\n \r\nand loan associations or insured chartered building and loan associations. \r\n \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\n \r\nPROPERTY TAXES \r\n \r\nThe Baker County Board of Commissioners fixed the property tax levy for the 2015 tax digest year (calendar year) on September 18, 2015 (levy date). Taxes were due on December 20, 2015 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end \r\non the 2014 tax digest are reported as revenue in the governmental funds for fiscal year 2016. The Baker County Tax Commissioner bills and collects the property taxes for the School \r\nDistrict, 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 $2,556,558. \r\n \r\nTax millage rate levied for the 2016 tax year (calendar year) for the Baker County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value): \r\n \r\nSchool Operations \r\n \r\n14.834 mills \r\n \r\nSALES TAXES \r\n \r\nSpecial Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted \r\nto $164,401 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\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 \r\ninventories 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 \r\nare used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used. \r\n \r\nP a g e | 11 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2016 \r\n \r\nEXHIBIT \"H\" \r\n \r\nCAPITAL ASSETS \r\n \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 Districtwide 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- \r\n \r\nwide statements are as follows: \r\n \r\nCapitalization \r\n \r\nEstimated \r\n \r\nPolicy \r\n \r\nUseful Life \r\n \r\nLand Buildings and Improvements Equipment \r\n \r\nAll $ 5,000 $ 5,000 \r\n \r\nN/A 15 to 80 years \r\n3 to 50 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\n \r\nDEFERRED OUTFLOWS/INFLOWS OF RESOURCES \r\n \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 a defined benefit pension plan, as discussed in Note 12  Retirement Plans. \r\n \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 a defined benefit pension plan, as discussed in Note 12  Retirement Plans. This item is reported only in the District-wide Statement of Net Position. Additionally, the School District has only one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported 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\n \r\nP a g e | 12 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2016 \r\n \r\nEXHIBIT \"H\" \r\n \r\nCOMPENSATED ABSENCES \r\n \r\nMembers of the Teachers Retirement System of Georgia (TRS) may apply unused sick leave \r\ntoward 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\nVacation leave of 15 days is awarded on a fiscal year basis to certain full time personnel \r\nemployed on a twelve month basis. No other employees are eligible to earn vacation leave. Vacation leave not utilized during the fiscal year may be carried over to the next fiscal year, providing such vacation leave does not exceed 60 days. \r\n \r\nBeginning \r\n \r\nEnd \r\n \r\nof Year \r\n \r\nof Year \r\n \r\nYear \r\n \r\nLiability \r\n \r\nIncreases \r\n \r\nDecreases \r\n \r\nLiability \r\n \r\n2012 2013 2014 2015 2016 \r\n \r\n$ \r\n \r\n8,848 $ \r\n \r\n5,439 $ \r\n \r\n4,393 $ \r\n \r\n9,894 \r\n \r\n$ \r\n \r\n9,894 $ 16,430 $ 13,584 $ 12,740 \r\n \r\n$ 12,740 $ \r\n \r\n- $ 12,740 $ \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\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) and the Public School Employees Retirement System (PSERS) and additions to/ deductions from TRS/PSERS's fiduciary net position have been determined on the same basis as they are reported by TRS/PSERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. See Note 12  Retirement Plans. \r\n \r\nNET POSITION \r\n \r\nThe School District's net position in the District-wide Statements is classified as follows: \r\n \r\nNet investment in capital assets - This represents the School District's total investment in \r\ncapital 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\n \r\nRestricted net position - These represent resources for which the School District is legally or contractually obligated to spend resources for bus replacement, continuation of Federal programs, debt service and capital projects in accordance with restrictions imposed by external third parties. \r\nP a g e | 13 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2016 \r\n \r\nEXHIBIT \"H\" \r\n \r\nUnrestricted net position - Unrestricted net position represents resources derived from \r\nproperty 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\n \r\nFUND BALANCES \r\n \r\nThe School District's fund balances are classified as follows: \r\n \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 \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 \r\nimposed 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\n \r\nAssigned  Amounts that are constrained by the School District's intent to be used for specific \r\npurposes, 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 General Fund at June 30, 2016, are as follows: \r\n \r\nFUND BALANCES \r\n \r\nNonspendable Inventories \r\nUnassigned \r\n \r\n$ \r\n \r\n4,929 \r\n \r\n2,812,069 \r\n \r\nFund Balance, June 30, 2016 \r\n \r\n$ \r\n \r\n2,816,998 \r\n \r\nIt is the goal of the School District to achieve and maintain a committed, assigned, and \r\nP a g e | 14 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2016 \r\n \r\nEXHIBIT \"H\" \r\n \r\nunassigned fund balance in the general fund at fiscal year-end of not less than 11.5% of total annual revenues, not to exceed 15% of the total budget of the subsequent fiscal year, in compliance with Official Code of Georgia Annotated Section 20-2-167(a)5. If the unassigned fund balance at fiscal year-end falls below the goal, the School District shall develop a restoration plan to achieve and maintain the minimum fund balance. \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\nUSE OF ESTIMATES \r\n \r\nThe preparation of the financial statements in conformity with accounting principles generally \r\naccepted 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\nNote 3: BUDGETARY DATA \r\n \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 fund level. The budget for the General Fund was prepared in accordance with accounting principles generally accepted in the United States of America. \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 \r\nBoard'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 \r\nBoard 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 \r\naccordance 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\n \r\nThe Superintendent is authorized by the Board to approve adjustments of no more than 25 percent of the amount budgeted for expenditures in any budget function for any fund. The Superintendent shall report any such adjustments to the Board. If expenditure of funds in any budget function for any fund is anticipated to be more than 25 percent of the budgeted amount, the Superintendent shall request Board approval for the budget amendment. Any position or expenditure not previously approved in the annual budget that exceeds $50,000 shall require Board approval unless the Superintendent deems the position or purchase an emergency. In such case, the expenditure shall be reported to the Board at its regularly scheduled meeting. \r\n \r\nP a g e | 15 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2016 \r\n \r\nEXHIBIT \"H\" \r\n \r\nUnder no circumstance is the Superintendent or other staff person authorized to spend funds that exceed the total budget without approval by the Board. \r\n \r\nSee Schedule 1  General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances  Budget to Actual for a detail of any over/under expenditures during the fiscal year under review. \r\n \r\nNote 4: DEPOSITS AND INVESTMENTS \r\n \r\nCOLLATERALIZATION OF DEPOSITS \r\n \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 458-13.1) 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\n(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, \r\n \r\n(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, (3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United \r\nStates or of the State of Georgia, \r\n \r\n(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, \r\n \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 \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(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\nP a g e | 16 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2016 \r\n \r\nEXHIBIT \"H\" \r\n \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 \r\nmay not be returned to it. The School District does not have a deposit policy for custodial credit risk. At June 30, 2016, the bank balances were $3,212,123. The amounts exposed to custodial credit risk are classified into three categories as follows: \r\n \r\nCategory 1 - Uncollateralized, Category 2 - Cash collateralized with securities held by the pledging financial institution, \r\nor Category 3 - Cash collateralized with securities held by the pledging financial institution's \r\ntrust department or agent but not in the School District's name. \r\n \r\nThe School District's deposits by custodial credit risk category at June 30, 2016, are as follows: \r\n \r\nCustodial Credit Risk Category \r\n1 2 3 Total \r\n \r\nBank Balance \r\n \r\n$ \r\n \r\n- \r\n \r\n- \r\n \r\n3,212,123 \r\n \r\n$ 3,212,123 \r\n \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\nThis space intentionally left blank. P a g e | 17 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2016 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNote 6: CAPITAL ASSETS \r\n \r\nThe following is a summary of changes in the Capital Assets during the fiscal year: \r\n \r\nBalances June 30, 2015 \r\n \r\nIncreases \r\n \r\nDecreases \r\n \r\nBalances June 30, 2016 \r\n \r\nGovernmental Activities \r\n \r\nCapital Assets, Not Being Depreciated: \r\n \r\nLand \r\n \r\n$ \r\n \r\n82,372 $ \r\n \r\n- $ \r\n \r\n- $ \r\n \r\n82,372 \r\n \r\nCapital Assets Being Depreciated: Buildings and Improvements Equipment \r\n \r\n8,927,386 978,611 \r\n \r\n159,729 274,353 \r\n \r\n(139,758) \r\n \r\n9,087,115 1,113,206 \r\n \r\nLess: Accumulated Depreciation: Buildings and Improvements Equipment \r\n \r\n(2,549,406) (772,151) \r\n \r\n(213,798) (60,830) \r\n \r\n139,758 \r\n \r\n(2,763,204) (693,223) \r\n \r\nTotal Capital Assets, Being Depreciated, Net \r\n \r\n6,584,440 \r\n \r\n159,454 \r\n \r\n- \r\n \r\n6,743,894 \r\n \r\nGovernmental Activity Capital Assets - Net $ \r\n \r\n6,666,812 $ \r\n \r\n159,454 $ \r\n \r\n- $ 6,826,266 \r\n \r\nCurrent year depreciation expense by function is as follows: \r\nInstruction Support Services: \r\nMaintenance and Operation of Plant Student Transportation Services Food Services \r\n \r\n$ \r\n \r\n213,967 \r\n \r\n714 58,266 \r\n1,681 \r\n \r\n$ \r\n \r\n274,628 \r\n \r\nNote 7: 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 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\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 \r\nP a g e | 18 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2016 \r\n \r\nEXHIBIT \"H\" \r\n \r\nliability 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 three fiscal years are as follows: \r\n \r\nBeginning \r\n \r\nof Year \r\n \r\nYear \r\n \r\nLiability \r\n \r\nClaims and Changes in Estimates \r\n \r\nClaims Paid \r\n \r\nEnd of Year Liability \r\n \r\n2012 $ 2013 $ 2014 $ \r\n \r\n-$ \r\n \r\n22,757 $ 22,757 $ \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\nThe School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general workers' compensation insurance coverage. Specific excess of loss insurance coverage is provided through an agreement by the Trust with the Safety National Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $1 million loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided with limits of $2 million. The Trust covers the first $1 million of each Employers Liability claim with Safety National providing additional Employers Liability limits up to a $2 million per occurrence maximum. Safety National Casualty Company also provides aggregate cover to the Trust with a loss fund percentage of 100%, based on the Fund's annual normal premium, up to a maximum limit of indemnity of aggregate limit of $2 million. \r\n \r\nThe School District has purchased surety bonds to provide additional insurance coverage as follows: \r\n \r\nPosition Covered Amount \r\n \r\nSuperintendent Principal \r\n \r\n$ 25,000.00 $ 10,000.00 \r\n \r\nNote 8: LONG-TERM DEBT \r\n \r\nCAPITAL LEASES \r\n \r\nThe Baker County Board of Education entered into a lease agreement with DeLage Landen Public Finance LLC for the purchase of 3 new buses. This lease agreement qualifies as a capital lease for accounting purposes, and, therefore, has been recorded at the present value of \r\n \r\nP a g e | 19 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2016 \r\n \r\nEXHIBIT \"H\" \r\n \r\nthe future minimum lease payments as of the date of their inception. As of June 30, 2016, the balance was $189,252. \r\n \r\nLong-term debt activity for the fiscal year is as follows: \r\n \r\nDescription \r\n \r\nBeginning Balance \r\n \r\nIssued \r\n \r\nRedeemed \r\n \r\nEnding Balance \r\n \r\nDeLage Landen \r\n \r\n$ \r\n \r\n- $ 253,854 $ 64,602 $ 189,252 \r\n \r\nNote 9: ON-BEHALF PAYMENTS \r\nThe School District has recognized revenues and costs in the amount of $152,400 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies. \r\nGeorgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Certified Personnel In the amount of $149,712 \r\nOffice of State Treasurer Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $2,688 \r\nNote 10: 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 11: 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 \r\nP a g e | 20 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2016 \r\n \r\nEXHIBIT \"H\" \r\n \r\nEmployees 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\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 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\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 \"pay-as-you-go\" financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. \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 \r\n \r\neligible participants: \r\n \r\nPeriod \r\n \r\nContribution Rate \r\n \r\nJuly 2015  June 2016 \r\n \r\n$945 per member per month \r\n \r\nP a g e | 21 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2016 \r\n \r\nEXHIBIT \"H\" \r\n \r\nFor non-certificated school personnel: \r\n \r\nPeriod \r\n \r\nContribution Rate \r\n \r\nJuly 2015 - 2016 \r\n \r\n$596.20 per member per month \r\n \r\nNo additional contribution was required by the Board for fiscal year 2012 nor contributed to the School OPEB Fund to prefund retiree benefits. Such additional contribution amounts are \r\ndetermined annually by the Board in accordance with the School plan for other postemployment 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\n2014 2013 2012 \r\n \r\n100% 100% 100% \r\n \r\n$379,860 $360,199 $342,676 \r\n \r\nNote 12: RETIREMENT PLANS \r\n \r\nTEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) \r\n \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\n \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 SRBPTRS 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. \r\n \r\nP a g e | 22 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2016 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNormal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. Early retirement benefits are reduced by the lesser of onetwelfth 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 lumpsum distribution in addition to a reduced monthly retirement benefit. Death, disability and spousal benefits are also available. \r\n \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, 2015, were 6% of annual salary. Employer contributions required for fiscal year 2013 were 12.28% of annual salary as required by the June 30, 2011, actuarial valuation. \r\n \r\nEmployer contributions for the current fiscal year and the preceding two fiscal years are as \r\n \r\nfollows: \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$232,962 $206,183 $207,375 \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/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 \r\n \r\nP a g e | 23 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2016 \r\n \r\nEXHIBIT \"H\" \r\n \r\nterminates 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. \r\nPension Liabilities, Pension Expense, and Deferred Outflows of Resources and \r\nDeferred Inflows of Resources Related to Pension \r\nAt June 30, 2016, the School District reported a liability of $2,609,852 for its proportionate share of the Net Pension Liability for TRS. \r\nThe 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 School District's proportion of the Net Pension Liability was based on contributions to TRS during the fiscal year ended June 30, 2015. \r\n \r\nAt June 30, 2015, the School District's TRS proportion was 0.017143%, which was an increase of 0.000635% from its proportion measured as of June 30, 2014. \r\nThe PSERS Net Pension Liability was measure 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 $150,092.00 for TRS and $2,688.00 for PSERS and revenue of $2,688.00 for PSERS was recognized. The revenue is support provided by the State of Georgia. \r\nAt June 30, 2016, the School District reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources: \r\n \r\nP a g e | 24 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2016 \r\n \r\nEXHIBIT \"H\" \r\n \r\nDeferred Outflows of Resources \r\n \r\nTRS \r\nDeferred Inflows of Resources \r\n \r\nDifferences between expected and actual \r\n \r\nexperience \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n22,955 \r\n \r\nNet difference between projected and actual earnings on pension plan investments \r\n \r\n- \r\n \r\n220,144 \r\n \r\nChanges in proportion and differences between School District contributions and proportionate share of contributions \r\n \r\n87,386 \r\n \r\n138,677 \r\n \r\nSchool District contributions subsequent \r\n \r\nto the measurement date \r\n \r\n118,627 \r\n \r\n- \r\n \r\n$ 206,013 \r\n \r\n$ \r\n \r\n381,776 \r\n \r\nBaker County Board of Education contributions subsequent to the measurement date of June 30, 2015 for TRS are reported as deferred outflows of resources and will be recognized as a reduction of the Net Pension Liability in the year ended June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: \r\n \r\nYear Ended June 30: \r\n \r\nTRS \r\n \r\nThereafter \r\n \r\n2017 2018 2019 2020 2021 \r\n \r\n(127,672) (127,672) (127,673) \r\n85,559 3,068 - \r\n \r\nP a g e | 25 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2016 \r\n \r\nEXHIBIT \"H\" \r\n \r\nActuarial assumptions: 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% 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\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, 2005  June 30, 2010. \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\n7.5%, net of pension plan investment expenses, including \r\n \r\ninflation \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, 2005  June 30, 2010. \r\nThe long-term expected rate of return on TRS and PSERS pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: \r\n \r\nP a g e | 26 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2016 \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 \r\nEXHIBIT \"H\" \r\n \r\nTarget allocation \r\n \r\nLong-term expected real rate of return* \r\n \r\n30.00% 39.70% \r\n3.70% 1.60% 18.90% 6.10% \r\n \r\n3.00% 6.50% 10.00% 13.00% 6.50% 11.00% \r\n \r\n100.00% \r\n \r\n* Rates shown are net of the 3.00% assumed rate of inflation. \r\n \r\nDiscount rate: The discount rate used to measure the total TRS and PSERS pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and non-employer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS and PSERS pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. \r\n \r\nSensitivity of the Baker County Board of Education's proportionate share of the Net \r\n \r\nPension Liability to changes in the discount rate: The following presents the School \r\n \r\nDistrict's proportionate share of the Net Pension Liability calculated using the discount rate of \r\n \r\n7.50%, as well as what the School District's proportionate share of the Net Pension Liability \r\n \r\nwould be if it were calculated using a discount rate that is 1-percentage-point lower (6.50%) \r\n \r\nor 1-percentage-point higher (8.50%) than the current rate: \r\n \r\nTeachers' Retirement System: \r\n \r\nCurrent \r\n \r\n1% Decrease \r\n \r\nDiscount Rate \r\n \r\n1% Increase \r\n \r\n(6.50%) \r\n \r\n(7.50) \r\n \r\n(8.50%) \r\n \r\nSchool District's proportionate share of the Net Pension Liability \r\n \r\n$ \r\n \r\n4,484,833 $ 2,609,852 $ 1,064,421 \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 and PSERS financial report which is publically available at www.trsga.com/publications and www.ers.ga.gov/formspubs/formspubs. \r\nBus drivers, lunchroom personnel, and maintenance and custodial personnel are members of \r\nP a g e | 27 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2016 \r\n \r\nEXHIBIT \"H\" \r\n \r\nthe 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\nNote 13: NEW ACCOUNTING PRONOUNCEMENT \r\n \r\nIn fiscal year 2015, the School District adopted 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 will require the School District to record a liability for its proportionate share of the Net Pension Liability of pension plans in which it is a member. The School District's Net Pension Liability as of June 30, 2016, is $2,609,852. \r\n \r\nP a g e | 28 \r\n \r\n REQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n Baker County Board of Education Required Supplementary Information Schedule of Proportionate Share of the Net Pension Liability Teachers' Retirement System of Georgia For the Year Ended June 30, 2016 \r\nSchool District's proportion of the Net Pension Liability \r\nSchool District's proportionate share of the Net Pension Liability \r\nSchool District's covered-employee payroll \r\nSchool District's proportionate share of the Net Pension Liability as a percentage of its covered employee payroll \r\nPlan fiduciary net position as a percentage of the total pension liability \r\n \r\nSCHEDULE \"1\" \r\n2016 0.017143% $ 2,609,852 $ 2,145,595 \r\n121.64% 81.4400% \r\n \r\nPage 29 \r\n \r\n Baker County Board of Education Required Supplementary Information Schedule of Contributions Teachers' Retirement System of Georgia For the Year Ended June 30, 2016 \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\nSCHEDULE \"2\" \r\n \r\n2016 \r\n \r\n2015 \r\n \r\n2014 \r\n \r\n2013 \r\n \r\n118,627 \r\n \r\n110,774 \r\n \r\n105,987 \r\n \r\n96,913 \r\n \r\n118,627 \r\n \r\n110,774 \r\n \r\n105,987 \r\n \r\n96,913 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n2,145,595 1,825,338 1,806,775 1,806,772 \r\n \r\n5.53% \r\n \r\n6.07% \r\n \r\n5.87% \r\n \r\n5.36% \r\n \r\nPage 30 \r\n \r\n Baker County Board of Education Notes to Required Supplementary Information For the Year Ended June 30, 2016 \r\n \r\nSCHEDULE \"3\" \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\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, 2016 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\n \r\nJune 30, 2013 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 expense, including \r\n \r\nPage 31 \r\n \r\n Baker County Board of Education Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual Year Ended June 30, 2016 \r\n \r\nSCHEDULE \"4\" \r\n \r\nNonappropriated Budgets \r\n \r\nREVENUES Property taxes Sales taxes State funds Federal funds Charges for services Investment earnings Miscellaneous \r\n \r\nOriginal (1) \r\n$ 1,940,000 7,000 \r\n1,908,151 802,227 18,000 \r\n \r\nTOTAL REVENUES \r\n \r\n4,675,378 \r\n \r\nEXPENDITURES Current \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 Service Other Support Services Food Services Operation Enterprise Operations Capital Outlay General Government \r\n \r\n2,265,885 \r\n855,444 \r\n133,487 49,096 \r\n269,962 349,938 114,191 399,893 386,562 \r\n37,500 294,021 \r\n- \r\n- \r\n \r\nFinal (1) \r\n$ 1,940,000 7,000 \r\n1,908,151 805,627 11,700 18,000 \r\n4,690,478 \r\n2,330,250 \r\n81,203 \r\n82,376 44,596 264,421 349,938 114,191 399,893 386,562 31,550 294,021 \r\n- \r\n- \r\n \r\nTotal Expenditures \r\nExcess of Revenues over (under) Expenditures \r\n \r\n5,155,979 (480,601) \r\n \r\n4,379,001 311,477 \r\n \r\nActual Amounts \r\n \r\n$ \r\n \r\n1,938,304 \r\n \r\n15,347 \r\n \r\n2,163,637 \r\n \r\n809,238 \r\n \r\n9,741 \r\n \r\n17 \r\n \r\n208,201 \r\n \r\n5,144,485 \r\n \r\n2,542,522 \r\n87,593 \r\n85,625 95,042 352,522 355,116 120,608 370,276 314,099 29,152 279,682 67,133 \r\n159,729 \r\n4,859,099 \r\n285,386 \r\n \r\nVariance Over/Under \r\n \r\n$ \r\n \r\n(1,696) \r\n \r\n8,347 \r\n \r\n255,486 \r\n \r\n3,611 \r\n \r\n(1,959) \r\n \r\n17 \r\n \r\n190,201 \r\n \r\n454,007 \r\n \r\n(212,272) \r\n(6,390) \r\n(3,249) (50,446) (88,101) \r\n(5,178) (6,417) 29,617 72,463 2,398 14,339 (67,133) \r\n(159,729) \r\n(480,098) \r\n(26,091) \r\n \r\nOTHER FINANCING SOURCES (USES) Operating Transfers From Other Funds Operating Transfers To Other funds \r\n \r\nTotal Other Financing Sources (Uses) \r\n \r\nNet Change in Fund Balances \r\n \r\nFund Balances - Beginning \r\n \r\nFund Balances - Ending \r\n \r\n$ \r\n \r\n(40,000) (40,000) (520,601) 1,187,437 666,836 $ \r\n \r\n40,000 (40,000) \r\n311,477 1,083,978 1,395,455 $ \r\n \r\n285,386 2,531,612 2,816,998 $ \r\n \r\n(40,000) 40,000 \r\n(26,091) 1,447,634 1,421,543 \r\n \r\nPage 32 See note to basic financial statements. \r\n \r\n Baker County Board of Education Schedule of Expenditures of Federal Awards Year Ended June 30, 2016 \r\n \r\nSCHEDULE \"5\" \r\n \r\nFunding Agency \r\nProgarm/Grant \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\nTitle I, Part A Cluster Pass-Through From Georgia Department of Education Title I Grants to Local Educational Agencies \r\nOther Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States Education Jobs Fund Improving Teacher Quality State Grants Migrant Education - State Grand Program \r\nTotal Other Programs \r\nTotal U.S. Department of Education \r\nTotal Expenditures of Federal Awards \r\n \r\nCFDA Number \r\n \r\nPassThrough Entity ID Number \r\n \r\n84.027 \r\n \r\nn/a \r\n \r\n84.173 \r\n \r\nn/a \r\n \r\n84.010 \r\n \r\nn/a \r\n \r\n84.048 \r\n \r\nn/a \r\n \r\n84.410 \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\nExpenditures in Period \r\n$ 106,511 27,232 \r\n133,743 \r\n371,104 \r\n11,048 - \r\n43,126 7,950 \r\n62,124 566,971 $ 566,971 \r\n \r\nPage 33 See note to basic financial statements. \r\n \r\n Baker County Board of Education Schedule of State Revenue Year Ended June 30, 2016 \r\nAgency/Funding \r\nGrants Education, Georgia Department of \r\nQuailty Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Progarm Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Progarm Upper Elementary Grades (4-5) Progarm Upper Elementary Grades - Early Intervention (4-5) Program Middle Grades (6-8) Program High School General Education (9-12) Program Career Technical and Agricultural Education Program (9-12) Students with Disabilities Gifted Students- Category VI Remedial Education Program Alternative Education Program Media Center Program 20 Days Additional Instruction Staff and Professional Development Principal Staff \u0026 Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Mid-term Adjustment Hold-Harmless Amended Formula Adjustment \r\nCategorical Grants Pupil Transportation Sparsity \r\nFood Services Nursing Services Other State Programs \r\nPreschool Handicapped Program Vocational Supervisors Total Grants from Georgia Department of Education \r\nGrants From Pre-K Lottery Georgia Prekindergarten Program Total \r\nOther Grants From Georgia Department Of Education Math And Science Supplement Total \r\nGrand Total \r\nPage 34 \r\nSee note to basic financial statements. \r\n \r\nSCHEDULE \"6\" General Fund \r\n \r\n$ \r\n \r\n51,666 \r\n \r\n21,536 \r\n \r\n160,527 \r\n \r\n84,152 \r\n \r\n70,311 \r\n \r\n71,194 \r\n \r\n103,823 \r\n \r\n106,466 \r\n \r\n46,511 \r\n \r\n249,983 \r\n \r\n7,206 \r\n \r\n37,797 \r\n \r\n8,925 \r\n \r\n26,277 \r\n \r\n7,751 \r\n \r\n5,517 \r\n \r\n221 \r\n \r\n221,734 87,102 68,625 3,839 (95,006) \r\n \r\n108,777 347,313 \r\n7,144 45,000 \r\n \r\n662 6,792 1,861,845 \r\n \r\n79,655 79,655 \r\n1,691 1,691 $ 1,943,191 \r\n \r\n Baker County Board of Education Schedule of Special Purpose Local Option Sales Tax For the Fiscal Year Ended June 30, 2016 \r\n \r\nSCHEDULE \"7\" \r\n \r\nProject \r\nAdding to, renovating, improving and equipping existing facilities Upgrading Instructional and Administrative Technology Purchasing school buses and transportation equipment Purchasing textbooks and vocational, fine arts, instructional and athletic equipment Purchasing safety and security equipment Acquiring any property necessary or desirable therefor, both real and personal \r\nDebt principal and interest payments \r\nTotal \r\n \r\nOriginal Estimated \r\nCost (1) \r\n \r\nCurrent Estimated \r\nCost (2) \r\n \r\nCurrent Year (3) \r\n \r\nExpenditure \r\n \r\nEstimated Estimated \r\n \r\nPrior \r\n \r\nTotal \r\n \r\nProceeds Not Completion \r\n \r\nYear \r\n \r\nCompleted Cost Expended \r\n \r\nDate \r\n \r\n$ 1,176,000 $ 1,176,000 $ 27,184 $ \r\n \r\n-$ \r\n \r\n27,184 $ \r\n \r\n- \r\n \r\n42,000 \r\n \r\n42,000 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n70,000 \r\n \r\n70,000 \r\n \r\n253,854 \r\n \r\n- \r\n \r\n253,854 \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\n112,000 \r\n \r\n112,000 \r\n \r\n66,858 \r\n \r\n- \r\n \r\n66,858 \r\n \r\n- \r\n \r\n$ 1,400,000 $ 1,400,000 $ 347,896 $ \r\n \r\n-$ \r\n \r\n347,896 $ \r\n \r\n- \r\n \r\nThe School District's original cost estimate as specified in the resolution calling for the imposition of the Local \r\n \r\n(1) \r\n \r\nOption Sales Tax. \r\n \r\nThe School District's current estimate of total cost for the projects. Includes all cost from project inception to \r\n \r\n(2) \r\n \r\ncompletion. \r\n \r\nThe voters of Baker County approved the imposition of a 1% sales tax to fund the above projects and retire \r\n \r\nassociated debt. Amounts expended for these projects may include sales tax proceeds, state, local property \r\n \r\n(3) \r\n \r\ntaxes and/or other funds over the life of the projects. \r\n \r\nPage 35 \r\n \r\nSee note to basic financial statements. \r\n \r\n Baker County Board of Education General Fund - Quality Based Education Program (QBE) Allotments and Expenditures by Program For the Fiscal Year Ended June 30, 2016 \r\n \r\nSCHEDULE \"8\" \r\n \r\nDescription \r\n \r\nAllotment from Georgia Department of Education \r\n(1) (2) \r\n \r\nEligible QBE Program Cost Salary Operations Totals \r\n \r\nDirect Instructional Programs \r\n \r\nKindergarten Programs \r\n \r\n$ \r\n \r\nKindergarten Program - Early Intervention \r\n \r\nProgram \r\n \r\nPrimary Grades (1-3) Program \r\n \r\nPrimary Grades Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early Intervention (4-5) Program \r\n \r\nMiddle School (6-8) Program \r\n \r\nMiddle Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students With Disabilities \r\n \r\nCATEGORY I \r\nCATEGORY III \r\nCATEGORY IV Gifted Student -CATERGORY VI Remedial Education Program Alternative Education Program \r\n \r\nTOTAL DIRECT INSTRUCTIONAL \r\n \r\nPROGRAMS \r\n \r\n$ \r\n \r\nMedia Center Program Staff and Professional Development \r\n \r\nTOTAL QBE FORMULA FUNDS \r\n \r\n$ \r\n \r\n86,430 $ \r\n \r\n63,470 $ \r\n \r\n35,008 257,498 \r\n \r\n11,793 325,105 \r\n \r\n123,149 106,763 \r\n \r\n69,967 126,289 \r\n \r\n109,922 169,501 \r\n- \r\n \r\n39,381 260,892 \r\n62 \r\n \r\n165,790 72,831 \r\n390,787 - \r\n11,319 58,710 14,025 \r\n \r\n199,461 70,322 - \r\n247,053 28,667 51,400 - \r\n \r\n1,601,733 $ 1,493,862 $ \r\n \r\n40,744 7,498 \r\n \r\n70,008 - \r\n \r\n1,649,975 $ 1,563,870 $ \r\n \r\n1,304 $ \r\n \r\n64,774 \r\n \r\n1,939 \r\n \r\n11,793 327,044 \r\n \r\n1,921 \r\n \r\n69,967 128,210 \r\n \r\n38 1,502 3,608 \r\n \r\n39,419 262,394 \r\n3,670 \r\n \r\n10,983 5,560 5,569 \r\n20,297 - \r\n \r\n210,444 75,882 5,569 \r\n267,350 28,667 51,400 - \r\n \r\n52,721 $ 1,546,583 \r\n \r\n9,839 - \r\n \r\n79,847 7,153 \r\n \r\n62,560 $ 1,633,583 \r\n \r\nPage 36 See note to basic financial statements. \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\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 Baker County Board of Education \r\nWe were engaged to 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, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Baker County Board of Education (School District), as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements, and have issued our report thereon dated September 8, 2020. The report on the financial statements was disclaimed because we were unable to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. \r\nInternal Control Over Financial Reporting \r\nIn connection with our engagement to audit the financial statements of the School District, 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\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. If documentation provided by management had been sufficient to enable us to express an opinion on the basic financial statements, material weaknesses or significant deficiencies may have been identified and reported herein. \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. \r\n \r\n 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\nCompliance and Other Matters \r\nIn connection with our engagement to audit the financial statements of the School District, we were engaged to perform 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. If the documentation provided by management had been sufficient to enable us to express an opinion on the basic financial statements, instances of noncompliance or other matters may have been identified and reported herein. \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 engagement to perform 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\nSeptember 8, 2020 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-b2015-belec-p-btext","title":"Baker County Board of Education, Newton, 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":["2015-06-30"],"dcterms_description":["Financial report for the Bacon 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":["Baker County Board of Education (Ga.)--Appropriations and expenditures--Periodicals.","Education--Georgia--Baker County--Auditing--Periodicals.","Education--Georgia--Baker County--Finance--Statistics--Periodicals.","Education--Auditing","Education--Finance","Expenditures, Public","Georgia--Baker County--fast--https://id.oclc.org/worldcat/entity/E39PBJgxqwBrwyH6QgJ7CB3hHC","Georgia Government Documents--Serial"],"dcterms_title":["Baker County Board of Education, Newton, 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-bb16-b2015-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-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 statements","financial records"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":["Education--Auditing--fast","Education--Finance--fast","Expenditures, Public--fast","Georgia--Baker County--fast--https://id.oclc.org/worldcat/entity/E39PBJgxqwBrwyH6QgJ7CB3hHC","Periodicals--fast","Statistics--fast"],"fulltext":"BAKER COUNTY BOARD OF EDUCATION \r\nREPORT ON EXAMINATION OF \r\nFINANCIAL STATEMENTS \r\nFor the Fiscal Year Ended June 30, 2015 \r\n \r\n BAKER COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS- \r\n \r\nSECTION I \r\n \r\nFINANCIAL \r\n \r\nIndependent Auditor's Combined Report on Basic Financial Statements and Supplementary Information Schedule of Expenditures of Federal Awards \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\nNotes to the Basic Financial Statements \r\n \r\nSchedules \r\n \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n1 \r\n \r\nSchedule of Revenues, Expenditures and Changes \r\n \r\nIn Fund Balances - Budget and Actual \r\n \r\nGeneral Fund \r\n \r\n2 \r\n \r\nSchedule of Proportionate Share of Net Pension Liability - \r\n \r\nTeachers Retirement System \r\n \r\n3 \r\n \r\nSchedule of Contributions - Teachers Retirement System \r\n \r\n4 \r\n \r\nSchedule of Proportionate Share of Net Pension Liabilty - \r\n \r\nPublic School Employees Retirement System \r\n \r\nNotes to Required Supplementary Information \r\n \r\nSUPPLEMENTARY INFORMATION \r\n \r\n6 \r\n \r\nSchedule of State Revenue \r\n \r\n7 \r\n \r\nSchedule of Approved Local Option Sales Tax Projects \r\n \r\n8 \r\n \r\nAllotments and Expenditures \r\n \r\nGeneral Fund - Quality Basic Education Programs (QBE) \r\n \r\nBy Program \r\n \r\nPage \r\ni-iii \r\n1 2 \r\n3 4 5 6 7 8 \r\n29 30 31 32 33 \r\n34 35 36 \r\n \r\n BAKER COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS- \r\n \r\nSECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS Independent 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 Independent Auditor's Report on Compliance For Each Major Program and on Internal Control Over Compliance Required by OMB Circular A-133 Schedule of Expenditures of Federal Awards Notes to Schedule of Expenditures of Federal Awards \r\nSECTION III FINDINGS AND QUESTIONED COSTS Schedule of Findings and Questioned Costs \r\nSECTION IV AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS Schedule of Prior Year Findings \r\n \r\n37-38 39-41 \r\n42 43 \r\n44-48 \r\n49 \r\n \r\n INDEPENDENT AUDITOR'S REPORT \r\nTo the Superintendent and Members of the Baker County Board of Education \r\nNewton, Georgia \r\nReport on the Financial Statements We were engaged to audit the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Baker County Board of Education as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the Baker County Board of Education's basic financial statements as listed in the table of contents. \r\nManagement's Responsibility for the Financial Statements Management is responsible for the preparation and the 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 Our responsibility is to express opinions on these financial statements based on conducting the 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. Because of the matter described in the Basis for Disclaimer of Opinions paragraph, however, we were not able to obtain sufficient appropriate evidence to provide a basis for audit opinions. \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\n300 MULBERRY STREET, SUITE 300  POST OFFICE BOX 1877  MACON, GEORGIA 31202-1877  478-464-8000  FAX 478-464-8051  www.mjcpa.com MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS \r\n \r\n Basis for Disclaimer of Opinions The internal control procedures of the Baker County Board of Education are deficient in regards to financial reporting and cannot be relied upon. Furthermore, the Baker County Board of Education was unable to provide adequate documentation to support the reported assets, liabilities, revenues and expenditures and, therefore, we were unable to apply the auditing procedures necessary to form a conclusion about whether the financial statements are fairly presented in accordance with accounting principles generally accepted in the United States of America. In addition, changes in management personnel precluded us from making the appropriate inquiries of these matters. \r\nDisclaimer of Opinions Because of the significance of the matter described in the \"Basis for Disclaimer of Opinions\" paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for audit opinions on the financial statements of the governmental activities, each major fund and the aggregate remaining fund information of the Baker County Board of Education as of June 30, 2015, and the respective changes in financial position for the year then ended. Accordingly, we do not express opinions on these financial statements. \r\nOther Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the General Fund  Schedule of Revenues, Expenditures, and Changes in Fund Balances  Budget and Actual, Schedule of Proportionate Share of the Net Pension Liability, and the Schedule of Contributions 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\nii \r\n \r\n Management has omitted the Management's Discussion and Analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. \r\nOther Information We were engaged to conduct an audit for the purpose of forming opinions on the financial statements that collectively comprise the Baker County Board of Education's basic financial statements. The schedule of expenditures of federal awards, as required by the U.S Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, the schedule of state revenue, the schedule of approved local option sales tax projects, as required by the Official Code of Georgia 48-8-121, and the schedule of Quality Basic Education programs  allotments and expenditures by program  General Fund, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. \r\nBecause of the significance of the matter described in the \"Basis for Disclaimer of Opinions\" paragraph above, it is inappropriate to and we do not express an opinion on the supplementary information referred to above. \r\nOther Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated April 8, 2019, on our consideration of the Baker County Board of Education's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Baker County Board of Education's internal control over financial reporting and compliance. \r\nMacon, Georgia April 8, 2019 \r\niii \r\n \r\n SECTION I Financial \r\n \r\n Baker County Board of Education Statement of Net Position June 30, 2015 \r\nASSETS \r\nCash and Cash Equivalents Receivable (net, where applicable, of allowances for uncollectible): \r\nTaxes State Grants Federal Grants Other Inventory, at cost Land and construction in progress Other capital assets, net of depreciation \r\nTotal Assets \r\nDEFERRED OUTFLOWS OF RESOURCES \r\nRelated to Defined Benefit Pension Plan \r\nLIABILITIES \r\nAccounts payable and accrued expenses Salaries and Benefits Payable Net Pension Liability \r\nTotal Liabilities \r\nDEFERRED INFLOWS OF RESOURCES \r\nRelated to Defined Benefit Pension Plan \r\nNET POSITION \r\nNet investment in capital assets Restricted for: \r\nContinuation of Federal Programs Debt Service Unrestricted \r\nTotal Net Position \r\n \r\nGovernmental Activities \r\n$ 2,660,799 \r\n66,312 150,722 \r\n46,427 74 \r\n4,929 82,372 6,584,440 9,596,075 \r\n110,774 \r\n24,242 356,074 2,085,568 2,465,884 \r\n906,537 \r\n6,666,812 4,929 67 \r\n(337,380) $ 6,334,428 \r\n \r\nPage 1 The notes to the basic financial statements are an intregral part of this statement. \r\n \r\n Baker County Board of Education Statement of Activities For the Fiscal Year Ended June 30, 2015 \r\n \r\nFunctions/Programs \r\n \r\nExpenses \r\n \r\nProgram Revenues \r\n \r\nFees and Charges for \r\nServices \r\n \r\nOperating Grants and Contributions \r\n \r\nNet (Expenses) Revenues and Changes in Net \r\nAssets \r\n \r\nGovernmental: \r\n \r\nInstructions Support Services: \r\nPupil Services \r\n \r\n$ 2,340,183 $ 58,295 \r\n \r\nImprovement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Service Other Support Services Operations of Non-instructional Services \r\n \r\n80,076 33,263 280,864 296,738 70,556 331,716 365,379 31,761 \r\n \r\nFood Services Operation Interest on short-term \u0026 long-term debt \r\n \r\n254,250 1,293 \r\n \r\nTotal governmental activities \r\n \r\n$ 4,144,374 $ \r\n \r\n- $ 1,290,062 $ \r\n \r\n- \r\n1,230 - \r\n \r\n60,556 \r\n129,572 45,074 \r\n299,771 119,555 \r\n92,413 100,638 97,737 \r\n \r\n10,877 - \r\n12,107 $ \r\n \r\n238,079 - \r\n2,473,458 \r\n \r\n(1,050,121) \r\n2,261 49,496 11,811 18,907 (177,183) (70,556) (239,303) (263,511) 65,976 \r\n(5,294) (1,293) \r\n(1,658,809) \r\n \r\nGeneral revenues: Taxes Property taxes, levied for general purposes Sales Taxes for Capital Projects Other Sales Taxes Investment earnings Miscellaneous Total general revenues and special items \r\nChange in net position \r\n \r\nNet assets - beginning - as previously reported \r\n \r\nPrior period adjustment \r\n \r\nNet position - beginning \r\n \r\nNet position - ending \r\n \r\n$ \r\n \r\n2,553,652 9 \r\n16,907 31 \r\n119,749 2,690,348 \r\n1,031,539 \r\n8,192,819 (2,889,930) 5,302,889 6,334,428 \r\n \r\nPage 2 The notes to the basic financial statements are an intregral part of this statement. \r\n \r\n Baker County Board of Education Balance Sheet Governmental Funds June 30, 2015 \r\n \r\nASSETS \r\nCash and cash equivalents Taxes receivable, net Accounts Receivable - State Accounts Receibable - Federal Other receivables Inventories \r\nTotal assets \r\n \r\nGeneral Fund \r\n$ 2,660,716 66,312 \r\n150,722 46,427 74 4,929 \r\n$ 2,929,180 \r\n \r\nDistrictWide Capital \r\nProjects Fund \r\n \r\n$ \r\n \r\n16 \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\n16 \r\n \r\nDebt Service Fund \r\n \r\n$ \r\n \r\n67 \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\n67 \r\n \r\nTotal Governmental \r\nFunds \r\n$ 2,660,799 66,312 \r\n150,722 46,427 74 4,929 \r\n$ 2,929,263 \r\n \r\nLIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES \r\n \r\nLiabilities: \r\nAccounts payable Salary and Benefits Payable \r\nTotal liabilities \r\n \r\n$ \r\n \r\n24,242 $ \r\n \r\n356,074 \r\n \r\n380,316 \r\n \r\nDeferred inflows of resources: \r\n \r\nUnavailable revenue \r\nTotal deferred inflows of resources \r\n \r\n17,251 17,251 \r\n \r\nFund balances: \r\nNonspendable: Inventories \r\nRestricted for: Other Purposes \r\nUnassigned \r\nTotal fund balances (deficit) \r\n \r\n4,929 \r\n2,526,684 2,531,613 \r\n \r\nTotal liabilities, deferred inflows or resources, and fund balances $ 2,929,180 $ \r\n \r\n-$ - \r\n- \r\n16 16 \r\n16 $ \r\n \r\n-$ - \r\n- \r\n \r\n24,242 356,074 \r\n380,316 \r\n \r\n- \r\n \r\n17,251 \r\n \r\n- \r\n \r\n17,251 \r\n \r\n- \r\n \r\n4,929 \r\n \r\n67 \r\n \r\n67 \r\n \r\n- \r\n \r\n2,526,700 \r\n \r\n67 \r\n \r\n2,531,696 \r\n \r\n67 $ 2,929,263 \r\n \r\nPage 3 The notes to the basic financial statements are an intregral part of this statement. \r\n \r\n Baker County Board of Education Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position June 30, 2015 \r\n \r\nTotal fund balance, governmental funds \r\nAmounts reported for governmental activities in the Statement of Net Position are different because: \r\nCapital assets used in governmental activities are not current financial resources and therefore are not reported in the fund financial statement, but are reported in the governmental activities of the Statement of Net Position. \r\nSome liabilities, including the net pension liability, 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\nSome of the School Districts property tax revenues will be collected after year end but are not available soon enough to pay for the current periods expenditures \r\nNet Position of Governmental Activities in the Statement of Net Position \r\n \r\n$ \r\n \r\n2,531,696 \r\n \r\n6,666,812 \r\n \r\n(2,085,568) (795,763) 17,251 \r\n \r\n$ \r\n \r\n6,334,428 \r\n \r\nPage 4 The notes to the basic financial statements are an intregral part of this statement. \r\n \r\n Baker County Board of Education Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds For the Fiscal Year Ended June 30, 2015 \r\n \r\nREVENUES \r\n \r\nGeneral Fund \r\n \r\nProperty taxes Sales taxes State Funds Federal Funds Charges for services Investment earnings Miscellaneous \r\n \r\n$ 2,556,558 16,907 \r\n1,912,739 557,858 12,107 24 119,749 \r\n \r\nTotal Revenues \r\n \r\n5,175,942 \r\n \r\nEXPENDITURES Current: \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 Service \r\nOther Support Services Food Services Operation Debt Service: Interest and other charges \r\n \r\n2,129,314 \r\n58,383 80,164 33,546 281,633 297,385 70,635 331,716 324,419 31,767 252,638 \r\n1,293 \r\n \r\nTotal Expenditures \r\n \r\n3,892,893 \r\n \r\nDistrict Wide Capital Projects Fund \r\n \r\n$ \r\n \r\n- \r\n \r\n9 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n7 \r\n \r\n- \r\n \r\n16 \r\n \r\n- \r\n- \r\n- \r\n- \r\n \r\nDebt Service Fund \r\n \r\nTotal Governmental \r\nFunds \r\n \r\n$ \r\n \r\n- $ 2,556,558 \r\n \r\n- \r\n \r\n16,916 \r\n \r\n- \r\n \r\n1,912,739 \r\n \r\n- \r\n \r\n557,858 \r\n \r\n- \r\n \r\n12,107 \r\n \r\n- \r\n \r\n31 \r\n \r\n- \r\n \r\n119,749 \r\n \r\n- \r\n \r\n5,175,958 \r\n \r\n- \r\n \r\n2,129,314 \r\n \r\n58,383 \r\n \r\n- \r\n \r\n80,164 \r\n \r\n- \r\n \r\n33,546 \r\n \r\n- \r\n \r\n281,633 \r\n \r\n- \r\n \r\n297,385 \r\n \r\n- \r\n \r\n70,635 \r\n \r\n- \r\n \r\n331,716 \r\n \r\n- \r\n \r\n324,419 \r\n \r\n- \r\n \r\n31,767 \r\n \r\n- \r\n \r\n252,638 \r\n \r\n- \r\n \r\n1,293 \r\n \r\n- \r\n \r\n3,892,893 \r\n \r\nExcess (deficiency) of revenues over expenditures \r\nOTHER FINANCING SOURCES (USES) Transfers in Transfers out \r\nTotal other financing sources (uses) \r\n \r\n1,283,049 \r\n4,081 - \r\n4,081 \r\n \r\n16 \r\n \r\n- \r\n \r\n1,283,065 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n(4,081) \r\n \r\n- \r\n \r\n(4,081) \r\n \r\n4,081 (4,081) \r\n- \r\n \r\nNet change in fund balances Fund balances (deficit) - beginning Fund balances (deficit) - ending \r\n \r\n1,287,130 1,244,483 $ 2,531,613 $ \r\n \r\n16 - \r\n16 $ \r\n \r\n(4,081) 4,148 \r\n67 $ \r\n \r\n1,283,065 1,248,631 2,531,696 \r\n \r\nPage 5 The notes to the basic financial statements are an intregral part of this statement. \r\n \r\n Baker County Board of Education Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Net Activities For the Fiscal Year Ended June 30, 2015 \r\nNet change in fund balances - total governmental funds: \r\nAmounts reported for governmental activities in the Statement of Activities are different because: \r\nGovernmental funds report outlays for capital assets as expenditures because such outlays use current financial resources. In contrast, the Statement of Activities reports only a portion of the outlay as an expense. The outlay is allocated over the assets useful life. This is the amount by which depreciation $257,220 exceeded capital outlays of $0 the current period. \r\nGovernmental funds do not present revenues that are not available to pay current obligations. In contrast, such revenues are reported in the Statement of Activities when earned. \r\nSome expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore are not reported as expenditures in governmental funds. \r\nPension Expenses \r\nChange in net position of governmental activities \r\n \r\n$ 1,283,065 \r\n(257,220) (2,906) 8,600 \r\n$ 1,031,539 \r\n \r\nPage 6 The notes to the basic financial statements are an intregral part of this statement. \r\n \r\n Baker County Board of Education Statement of Fiduciary Net Assets Fiduciary Funds June 30, 2015 \r\nASSETS Cash Total Assets \r\nLIABILITIES \r\nDue to others Total Liabilities \r\n \r\n$ \r\n \r\n17,105 \r\n \r\n$ \r\n \r\n17,105 \r\n \r\n$ \r\n \r\n17,105 \r\n \r\n$ \r\n \r\n17,105 \r\n \r\nPage 7 The notes to the basic financial statements are an intregral part of this statement. \r\n \r\n NOTES TO THE FINANCIAL STATEMENTS \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2015 \r\nNote 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \r\nREPORTING ENTITY \r\nThe Baker County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity. \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 Baker County Board of Education. \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\nPage |8 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2015 \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 Special Purpose Local Option Sales Tax (SPLOST) that are restricted, committed or assigned to the expenditure for capital outlays, including the acquisition or construction of capital facilities. \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\nThe School District reports the following fiduciary fund type: \r\n Agency funds account for assets held by the School District as an agent for various funds or individuals. \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, 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. 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 \r\nPage |9 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2015 \r\n \r\nunder capital leases are reported as other financing sources. \r\n \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 position available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by costreimbursement grants, then general revenues. \r\n \r\nRESTATEMENT OF PRIOR YEAR NET POSITION \r\n \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 $2,889,930. \r\n \r\nThis change is in accordance with generally accepted accounting principles. \r\n \r\nNet Position, July 1, 2014, as previously reported \r\nPrior Period adjustment - Implementation of GASB 68: Net Pension Liability (measurement date) \r\nTRS Deferred Outflows - School District's contribution made during fiscal year 2014 \r\nTRS \r\nNet Position, July 1, 2014, as restated \r\n \r\n$ 8,192,819 \r\n(3,096,750) 206,820 \r\n$ 5,302,889 \r\n \r\nNEW ACCOUNTING PRONOUNCEMENTS In 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. In fiscal year 2015, the School District adopted Governmental \r\nP a g e | 10 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2015 \r\n \r\nAccounting Standards Board (GASB) Statement 71, Pension Transition for Contributions Made Subsequent to the Measurement Date  an amendment of GASB No. 68. The objective of this statement is to improve accounting and financial reporting by addressing an issue in Statement No. 68, Accounting and Financial Reporting for Pensions, concerning transition provisions related to certain pension contributions made to defined benefit pension plans prior to implementation of statement. This statement amends paragraph 137 of Statement No. 68 which limited recognition of pension-related deferred inflows of resources at the transition to circumstances in which it is practical to determine the amounts of all deferred outflows of resources and deferred inflows of resources related to pensions. The adoption of this statement has a significant impact on the School District's financial statements. As noted above the School District restated beginning Net Position for the cumulative effect of this accounting change. \r\n \r\nCASH AND CASH EQUIVALENTS \r\n \r\nComposition of Deposits \r\n \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\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\n \r\nPROPERTY TAXES \r\n \r\nThe Baker County Board of Commissioners fixed the property tax levy for the 2014 tax digest year (calendar year) on September 18, 2014 (levy date). Taxes were due on December 20, 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 Baker 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 $2,556,558. \r\n \r\nTax millage rate levied for the 2014 tax year (calendar year) for the Baker County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value): \r\n \r\nSchool Operations \r\n \r\n14.856 mills \r\n \r\nP a g e | 11 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2015 \r\n \r\nSALES TAXES \r\n \r\nSpecial Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $9 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\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 (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\n \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 Districtwide 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- \r\n \r\nwide statements are as follows: \r\n \r\nCapitalization Estimated \r\n \r\nPolicy \r\n \r\nUseful Life \r\n \r\nLand Buildings and Improvements Equipment \r\n \r\nAll \r\n \r\nN/A \r\n \r\n$ 5,000 15 to 80 years \r\n \r\n$ 5,000 3 to 50 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\n \r\nP a g e | 12 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2015 \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 a defined benefit pension plan, 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 a defined benefit pension plan, as discussed in Note 11  Retirement Plans. This item is reported only in the District-wide Statement of Net Position. Additionally, the School District has only one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported 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\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 15 days is awarded on a fiscal year basis to certain full time personnel employed on a twelve month basis. No other employees are eligible to earn vacation leave. Vacation leave not utilized during the fiscal year may be carried over to the next fiscal year, providing such vacation leave does not exceed 60 days. \r\n \r\nBeginning \r\n \r\nEnd \r\n \r\nof Year \r\n \r\nof Year \r\n \r\nYear \r\n \r\nLiability \r\n \r\nIncreases \r\n \r\nDecreases \r\n \r\nLiability \r\n \r\n2013 2014 2015 \r\n \r\n$ 9,894 $ 16,430 $ 13,584 $ 12,740 \r\n \r\n$ 12,740 $ \r\n \r\n- $ 12,740 $ \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\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 \r\nP a g e | 13 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2015 \r\nthe fiduciary net position of the Teachers' Retirement System of Georgia (TRS) and the Public School Employees Retirement System (PSERS) and additions to/deductions from TRS/PSERS's fiduciary net position have been determined on the same basis as they are reported by TRS/PSERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. See Note 11  Retirement Plans. \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 - These represent resources for which the School District is legally or contractually obligated to spend resources for bus replacement, continuation of Federal programs, debt service and capital projects in accordance with restrictions imposed by external third parties. \r\nUnrestricted net position - Unrestricted net position represents resources derived from property taxes, sales taxes, grants and contributions not restricted to specific programs, charges for services, and miscellaneous revenues. These resources are used for transactions relating to the educational and general operations of the School District, and may be used at the discretion of the Board to meet current expenses for those purposes. \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\nP a g e | 14 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2015 \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 has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General Fund. \r\nFund Balances of the Governmental Funds at June 30, 2015, are as follows: \r\nFUND BALANCES \r\n \r\nNonspendable Inventories \r\nRestricted Unassigned \r\n \r\n$ \r\n \r\n4,929 \r\n \r\n67 \r\n \r\n2,526,700 \r\n \r\nFund Balance, June 30, 2015 \r\n \r\n$ \r\n \r\n2,531,696 \r\n \r\nIt is the goal of the School District to achieve and maintain a committed, assigned, and unassigned fund balance in the general fund at fiscal year-end of not less than 11.5% of total annual revenues, not to exceed 15% of the total budget of the subsequent fiscal year, in compliance with Official Code of Georgia Annotated Section 20-2-167(a)5. If the unassigned fund balance at fiscal year-end falls below the goal, the School District shall develop a restoration plan to achieve and maintain the minimum fund balance. When 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 fund level. The budget for the General Fund was prepared in \r\nP a g e | 15 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2015 \r\naccordance 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 year-end. \r\nThe Superintendent is authorized by the Board to approve adjustments of no more than 25 percent of the amount budgeted for expenditures in any budget function for any fund. The Superintendent shall report any such adjustments to the Board. If expenditure of funds in any budget function for any fund is anticipated to be more than 25 percent of the budgeted amount, the Superintendent shall request Board approval for the budget amendment. Any position or expenditure not previously approved in the annual budget that exceeds $50,000 shall require Board approval unless the Superintendent deems the position or purchase an emergency. In such case, the expenditure shall be reported to the Board at its regularly scheduled meeting. Under no circumstance is the Superintendent or other staff person authorized to spend funds that exceed the total budget without approval by the Board. \r\nSee Schedule 1  General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances  Budget to Actual for a detail of any over/under expenditures during the fiscal year under review. \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 458-13.1) 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\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\nP a g e | 16 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2015 \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, 2014, the bank balances were $2,833,134. The amounts exposed to custodial credit risk are classified into three categories as follows: \r\nCategory 1 - Uncollateralized, Category 2 - Cash collateralized with securities held by the pledging financial institution, \r\nor Category 3 - Cash collateralized with securities held by the pledging financial institution's \r\ntrust department or agent but not in the School District's name. \r\nThe School District's deposits by custodial credit risk category at June 30, 2015, are as follows: \r\n \r\nCustodial Credit Risk Category \r\n1 2 3 Total \r\n \r\nBank Balance \r\n \r\n$ \r\n \r\n- \r\n \r\n- \r\n \r\n2,580,381 \r\n \r\n$ 2,580,381 \r\n \r\nP a g e | 17 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2015 \r\n \r\nNote 4: NON-MONETARY TRANSACTIONS \r\n \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\nNote 5: CAPITAL ASSETS \r\n \r\nThe following is a summary of changes in the Capital Assets during the fiscal year: \r\n \r\nBalances 7/1/2014 \r\n \r\nIncreases \r\n \r\nDecreases \r\n \r\nBalances June 30, 2015 \r\n \r\nGovernmental Activities \r\n \r\nCapital Assets, Not Being Depreciated: \r\n \r\nLand \r\n \r\n$ \r\n \r\n82,372 $ \r\n \r\n- $ \r\n \r\n- $ \r\n \r\n82,372 \r\n \r\nCapital Assets Being Depreciated: Buildings and Improvements Equipment \r\n \r\n8,927,386 \r\n \r\n- \r\n \r\n- \r\n \r\n8,927,386 \r\n \r\n978,611 \r\n \r\n- \r\n \r\n- \r\n \r\n978,611 \r\n \r\nLess: Accumulated Depreciation: Buildings and Improvements Equipment \r\n \r\n2,335,540 728,796 \r\n \r\n213,866 43,355 \r\n \r\n- \r\n \r\n2,549,406 \r\n \r\n- \r\n \r\n772,151 \r\n \r\nTotal Capital Assets, Being Depreciated, Net \r\n \r\n6,841,661 \r\n \r\n(257,220) \r\n \r\n- \r\n \r\n6,584,441 \r\n \r\nGovernmental Activity Capital Assets - Net \r\n \r\n$ 6,924,033 $ (257,220) $ \r\n \r\n- $ 6,666,813 \r\n \r\nCurrent year depreciation expense by function is as follows: \r\n \r\nInstruction Support Services: \r\nMaintenance and Operation of Plant Student Transportation Services Food Services \r\n \r\n$ \r\n714 40,960 \r\n \r\n$ \r\n \r\n213,866 \r\n41,674 1,681 \r\n257,220 \r\n \r\nP a g e | 18 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2015 \r\n \r\nNote 6: RISK MANAGEMENT \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; 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 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 three fiscal years are as follows: \r\n \r\nBeginning \r\n \r\nof Year \r\n \r\nYear \r\n \r\nLiability \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 $ 2015 $ \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\n7,246 $ 7,246 $ \r\n \r\n- \r\n \r\nThe School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general workers' compensation insurance coverage. Specific excess of loss insurance coverage is provided through an agreement by the Trust with the Safety National Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $1 million loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided with limits of $2 million. The Trust covers the first $1 million of each Employers Liability claim with Safety National providing additional Employers Liability limits up to a $2 million per occurrence maximum. Safety National Casualty Company also provides aggregate cover to the Trust with a loss fund percentage of 100%, based on the Fund's annual normal premium, up to a maximum limit of indemnity of aggregate limit of $2 million. \r\n \r\nP a g e | 19 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2015 \r\n \r\nThe School District has purchased surety bonds to provide additional insurance coverage as follows: \r\n \r\nPosition Covered Amount \r\n \r\nSuperintendent Principal \r\n \r\n$ 25,000.00 $ 10,000.00 \r\n \r\nNote 7: SHORT-TERM DEBT \r\nThe School District 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 percent of the total gross income from taxes collected in the preceding year and requires all short-term debt to be repaid no later than December 31 of the calendar year in which the debt was incurred. \r\nShort-term debt activity for the fiscal year is as follows: \r\n \r\nDescription \r\n \r\nBeginning Balance \r\n \r\nIssued \r\n \r\nRedeemed \r\n \r\nEnding Balance \r\n \r\nTemporary Loans \r\n \r\n$ 86,118 $ \r\n \r\n- $ 86,118 $ \r\n \r\n- \r\n \r\nThe loan was paid in full on December 19, 2014. \r\nNote 8: ON-BEHALF PAYMENTS \r\nThe School District has recognized revenues and costs in the amount of $9,578 for retirement contributions paid on the School District's behalf by the following State Agencies. \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 $8,099 \r\nOffice of the State Treasurer Paid to the Teachers Retirement System For Teachers Retirement System (TRS) Employer's Cost In the amount of $1,479 \r\n \r\nP a g e | 20 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2015 \r\nNote 9: 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 10: 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\nP a g e | 21 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2015 \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 \"pay-as-you-go\" financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. \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\nPeriod \r\n \r\nContribution Rate \r\n \r\nJuly 2014  June 2015 \r\n \r\n$945 per member per month \r\n \r\nFor non-certificated school personnel: \r\n \r\nPeriod \r\n \r\nContribution Rate \r\n \r\nJuly 2014 - 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 postemployment 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\n2015 2014 2013 \r\n \r\nPercentage Contributed \r\n100% 100% 100% \r\n \r\nRequired Contribution \r\n499,151 379,860 360,199 \r\n \r\nThis space intentionally left blank. \r\nP a g e | 22 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2015 \r\n \r\nNote 11: RETIREMENT PLANS \r\n \r\nTEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) \r\n \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 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\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\n \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\n \r\nEmployer contributions for the current fiscal year and the preceding two fiscal years are as \r\n \r\nfollows: \r\n \r\nPercentage \r\n \r\nRequired \r\n \r\nFiscal Year \r\n \r\nContributed \r\n \r\nContribution \r\n \r\n2015 2014 2013 \r\n \r\n100% 100% 100% \r\n \r\n$237,955 $206,820 $203,947 \r\n \r\nP a g e | 23 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2015 \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 t h e b e n e f i t p r o v i s i o n s t o t h e 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. 47-429(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. \r\nPension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension \r\nEffective July 1, 2014, the School System implemented the provisions of 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, which significantly changed the School System's accounting for pension amounts. The information disclosed below is presented in accordance with the new standard. \r\nAt June 30, 2015, the School District reported a liability of $2,085,568 for its proportionate share of the Net Pension Liability for TRS. \r\nThe Net Pension Liability was measured as of June 30, 2014. The total pension liability used to calculate the Net Pension Liability was based on an actuarial valuation as of June 30, 2013. An expected total pension liability as of June 30, 2014 was determined using standard \r\nP a g e | 24 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2015 \r\n \r\nroll-forward techniques. The School District's proportion of the Net Pension Liability was based on contributions to TRS during the fiscal year ended June 30, 2014. \r\n \r\nAt June 30, 2014, the School District's TRS proportion was 0.016508%, which was a decrease of 0.001264% from its proportion measured as of June 30, 2013. \r\n \r\nThe PSERS Net Pension Liability was measured as of June 30, 2014. The total pension liability used to calculate the Net Pension Liability was based on an actuarial valuation as of June 30, 2013. An expected total pension liability as of June 30, 2014 was determined using standard roll-forward techniques. The State's proportion of the Net Pension Liability associated with the School District was based on actuarially determined contributions paid by the State during the fiscal year ended June 30, 2014. \r\n \r\nSchool District's proportionate share of net pension liability State of Georgia's proportionate share of the net pension \r\nliability associated with the School District Total \r\n \r\n$ \r\n \r\n- \r\n \r\n32,949 \r\n \r\n$ 32,949 \r\n \r\nFor the year ended June 30, 2015, the School District recognized pension expense of $102,174 for TRS and $2,861 for PSERS and revenue of $2,861 for PSERS was recognized. The revenue is support provided by the State of Georgia. \r\n \r\nAt June 30, 2015, the School District reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources: \r\nTRS \r\n \r\nDeferred Outflows of Resources \r\n \r\nDeferred Inflows of Resources \r\n \r\nNet difference between projected and actual \r\n \r\nearnings on pension plan investments \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\nChanges in proportion and differences between \r\n \r\nSchool District contributions and proportionate \r\n \r\nshare of contributions \r\n \r\n- \r\n \r\nSchool District contributions subsequent to the measurement date \r\n \r\n237,955 \r\n \r\n$ \r\n \r\n237,955 \r\n \r\n$ \r\n \r\n727,073 \r\n179,464 - \r\n906,537 \r\n \r\nBaker County Board of Education contributions subsequent to the measurement date of June 30, 2014 for TRS are reported as deferred outflows of resources and will be recognized as a reduction of the Net Pension Liability in the year ended June 30, 2016. Other amounts reported \r\nP a g e | 25 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2015 \r\n \r\nas deferred outflows of resources and deferred inflows of resources related to pensions will be \r\n \r\nrecognized in pension expense as follows: \r\n \r\nYear Ended June 30: \r\n \r\nTRS \r\n \r\nThereafter \r\n \r\n2016 2017 2018 2019 2020 \r\n \r\n(222,555) (222,555) (222,555) (222,556) \r\n(16,316) - \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 Syestem: \r\n \r\nInflation \r\n \r\n3.00% \r\n \r\nSalary Increases \r\n \r\n3.75-7.00%. Average, including inflation \r\n \r\nInvestment Rate of Return 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\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\n7.5%, net of pension plan investment expenses, 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, 2013 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 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 \r\nP a g e | 26 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2015 \r\n \r\nthe 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\nTarget allocation \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 \r\n \r\n30.00% 39.70% \r\n3.70% 1.60% 18.90% 6.10% \r\n \r\n3.00% 6.50% 10.00% 13.00% 6.50% 11.00% \r\n \r\nTotal \r\n \r\n100.00% \r\n \r\n* Rates shown are net of the 3.00% assumed rate of inflation. \r\n \r\nDiscount rate: The discount rate used to measure the total TRS and PSERS pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and non-employer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS and PSERS pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. \r\n \r\nThis space intentionally left blank. \r\nP a g e | 27 \r\n \r\n Baker County Board of Education Notes to the Basic Financial Statements June 30, 2015 \r\nSensitivity of the Baker County Board of Education's proportionate share of the Net Pension Liability to changes in the discount rate: The following presents the School District's proportionate share of the Net Pension Liability calculated using the discount rate of 7.50%, as well as what the School District's proportionate share of the Net Pension Liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50%) or 1-percentage-point higher (8.50%) than the current rate: \r\n \r\nTeachers' Retirement System: \r\n \r\n1% Decrease (6.50%) \r\n \r\nCurrent Discount Rate \r\n(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$ \r\n \r\n3,843,422 $ 2,085,568 $ \r\n \r\n638,012 \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 and PSERS financial report which is publically available at www.trsga.com/publications and www.ers.ga.gov/formspubs/formspubs. \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\nNote 12: INTERFUND TRANSFERS \r\nInterfund transfers for the year ended June 30, 2015, consisted of the following: \r\n \r\nTransfer From \r\n \r\nTransfer To General Fund Totals \r\n \r\nDebt Service Fund \r\n \r\n$ \r\n \r\n4,081 \r\n \r\n$ \r\n \r\n4,081 \r\n \r\nFunds moved to the Debt Service fund in prior years are no longer needed as all debt has been repaid. $4,081 is now being transferred back to the general fund. \r\n \r\nP a g e | 28 \r\n \r\n REQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n Baker County Board of Education Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual Year Ended June 30, 2015 \r\n \r\nREVENUES \r\nProperty taxes Sales taxes State funds Federal funds Charges for services Investment earnings Miscellaneous \r\nTOTAL REVENUES \r\nEXPENDITURES \r\nCurrent \r\n \r\nNonappropriated Budgets \r\n \r\nOriginal (1) \r\n \r\nFinal (1) \r\n \r\nActual Amounts \r\n \r\nVariance Over/Under \r\n \r\n$ 1,741,500 $ - \r\n1,915,717 716,825 9,800 18,000 \r\n4,401,842 \r\n \r\n1,741,500 $ - \r\n1,920,480 716,825 9,800 18,000 \r\n4,406,605 \r\n \r\n2,556,558 $ 16,907 \r\n1,912,739 557,858 12,107 24 119,749 \r\n5,175,942 \r\n \r\n815,058 16,907 (7,741) \r\n(158,967) 2,307 24 \r\n101,749 \r\n769,337 \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 Service Other Support Services Food Services Operation Debt Services Interest Redemption of Principal \r\n \r\n2,670,655 \r\n85,595 \r\n137,747 54,583 \r\n282,779 309,618 \r\n80,906 258,331 348,959 \r\n38,145 301,445 \r\n86,118 1,360 \r\n \r\n2,784,477 \r\n106,765 \r\n130,044 59,083 \r\n275,528 309,618 \r\n80,906 258,331 348,959 \r\n39,755 306,445 \r\n86,118 1,360 \r\n \r\n2,129,314 \r\n58,383 \r\n80,164 33,546 281,633 297,385 70,635 331,716 324,419 31,767 252,638 \r\n1,293 - \r\n \r\n655,163 \r\n48,382 \r\n49,880 25,537 (6,105) 12,233 10,271 (73,385) 24,540 \r\n7,988 53,807 \r\n84,825 1,360 \r\n \r\nTotal Expenditures \r\nExcess of Revenues over (under) Expenditures \r\n \r\n4,656,241 (254,399) \r\n \r\n4,787,388 (380,783) \r\n \r\n3,892,893 1,283,049 \r\n \r\n894,495 1,663,832 \r\n \r\nOTHER FINANCING SOURCES (USES) \r\n \r\nOperating Transfers To Other funds \r\n \r\n(40,000) \r\n \r\n(40,000) \r\n \r\n4,081 \r\n \r\n44,081 \r\n \r\nTotal Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances - Beginning \r\nGrand Total Fund Balances - Ending \r\n \r\n(40,000) (294,399) 1,475,486 \r\n6,350 $ 1,187,437 $ \r\n \r\n(40,000) (420,783) 1,506,880 \r\n(2,119) 1,083,978 $ \r\n \r\n4,081 1,287,130 1,244,483 \r\n2,531,613 $ \r\n \r\n44,081 1,707,913 \r\n(262,397) 2,119 \r\n1,447,635 \r\n \r\nPage 29 See note to basic financial statements. \r\n \r\n Baker County Board of Education Required Supplementary Information Schedule of Proportionate Share of the Net Pension Liability Teachers' Retirement System of Georgia For the Year Ended June 30, 2015 \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 0.016508% $ 2,085,568.00 $ 1,806,775.05 \r\n115.43% 84.0300% \r\n \r\n30 See notes to the basic financial statements. \r\n \r\n Baker County Board of Education Required Supplementary Information Schedule of Contributions Teachers' Retirement of the Net Pension Liability For the Year Ended June 30, 2015 \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 237,955 237,955 - \r\n1,825,338 13.04% \r\n \r\n2014 206,820 206,820 - \r\n1,806,775 11.45% \r\n \r\n2013 203,947 203,947 - \r\n1,806,772 11.29% \r\n \r\n31 See notes to the basic financial statements. \r\n \r\n Baker County Board of Education Required Supplementary Information Schedule of Proportionate Share of the Net Pension Liability Public School Employees' Retirement System For the Year Ended June 30, 2015 \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 \r\nLiability associated 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\n0.00% \r\n \r\n$ \r\n \r\n- \r\n \r\n$ \r\n \r\n32,949 \r\n \r\n$ \r\n \r\n32,949 \r\n \r\n$ \r\n \r\n102,904 \r\n \r\nN/A 88.29% \r\n \r\nNote: Schedule is intended to show information for the last 10 fiscal years. Additional years will be displayed as they become available. \r\n \r\n32 See notes to the basic financial statements. \r\n \r\n Baker County Board of Education Notes to Required Supplementary Information For the Year Ended June 30, 2015 \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\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\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 expense, including \r\n \r\n33 See notes to the basic financial statements. \r\n \r\n Baker County Board of Education Schedule of State Revenue Year Ended June 30, 2015 \r\nAgency/Funding \r\nGrants Education, Georgia Department of \r\nQuailty Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Progarm Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Progarm Upper Elementary Grades (4-5) Progarm Upper Elementary Grades - Early Intervention (4-5) Program Middle Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Catefory Vi, QBE Remedial Education Program Alternative Education Program Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Mid-term Adjustment Hold-Harmless Amended Formula Adjustment \r\nCategorical Grants Pupil Transportation Regular Sparsity \r\nFood Services Nursing Services Other State Programs \r\nPreschool Handicapped Program Teacher Retirement Vocational Supervisors \r\nTotal Grants from Georgia Department of Education \r\nOffice Of Treasury And Fiscal Services Public School Employees Retirement \r\nTotal \r\nTotal Quality Basic Education Formula Earnings (State And Local Funds) Principal Staff \u0026 Professional Development Special Education Programs Total \r\nQbe Contra Account (Debit) Principal Staff \u0026 Professional Development Special Education Programs Total \r\nGrants From Pre-K Lottery Georgia Prekindergarten Program Total \r\nOther Grants From Georgia Department Of Education Math And Science Supplement Total \r\nGrand Total \r\nPage 34 \r\nSee note to basic financial statements. \r\n \r\nGeneral Fund \r\n \r\n$ \r\n \r\n90,971 \r\n \r\n32,100 \r\n \r\n221,785 \r\n \r\n49,180 \r\n \r\n63,256 \r\n \r\n73,606 \r\n \r\n159,997 \r\n \r\n120,782 \r\n \r\n57,894 \r\n \r\n8,586 \r\n \r\n41,122 \r\n \r\n10,641 \r\n \r\n31,010 \r\n \r\n9,509 \r\n \r\n5,319 \r\n \r\n211,285 85,340 67,014 17,696 \r\n(143,352) \r\n \r\n109,791 324,949 \r\n6,835 45,000 \r\n(3,008) 1,479 4,560 1,703,347 \r\n \r\n8,099 8,099 \r\n \r\n334 412,759 413,093 \r\n(97) (123,247) (123,344) \r\n71,551 71,551 \r\n(31,081) (31,081) \r\n$ 2,041,665 \r\n \r\n Baker County Board of Education Schedule of Special Purpose Local Option Sales Tax For the Fiscal Year Ended June 30, 2015 \r\n \r\nProject \r\nAdding to, renovating, improving and equipping existing facilities Upgrading Instructional and Administrative Technology Purchasing school buses and transportation equipment Purchasing textbooks and vocational, fine arts, instructional and athletic equipment Purchasing safety and security equipment \r\nAcquiring any property necessary or desirable therefor, both real and personal Bond interest payments and bank fees \r\n \r\nOriginal Estimated \r\nCost (1) \r\n \r\nCurrent Estimated \r\nCost (2) \r\n \r\nCurrent Year (3) \r\n \r\nExpenditure \r\n \r\nEstimated Estimated \r\n \r\nPrior \r\n \r\nTotal \r\n \r\nProceeds Not Completion \r\n \r\nYear \r\n \r\nCompleted Cost Expended \r\n \r\nDate \r\n \r\n$ 1,176,000 $ 2,646,539 $ \r\n \r\n42,000 \r\n \r\n1,444 \r\n \r\n70,000 \r\n \r\n26,193 \r\n \r\n- $ 2,646,539 $ 2,646,539 $ \r\n \r\n- \r\n \r\n1,444 \r\n \r\n1,444 \r\n \r\n- \r\n \r\n26,193 \r\n \r\n26,193 \r\n \r\n- Completed - Completed - Completed \r\n \r\n- \r\n \r\n182,365 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n182,365 \r\n \r\n- \r\n \r\n- \r\n \r\n182,365 - \r\n \r\n- Completed - Completed \r\n \r\n112,000 \r\n \r\n144,788 \r\n \r\n- \r\n \r\n- \r\n \r\n- \r\n \r\n145,341 \r\n \r\n145,341 \r\n \r\n- Completed - Completed \r\n \r\nTotal \r\n \r\n$ 1,400,000 $ 3,001,329 $ \r\n \r\n- $ 3,001,882 $ 3,001,882 $ \r\n \r\n- \r\n \r\n(1) \r\n \r\nThe School District's original cost estimate as specified in the resolution calling for the imposition of the Local \r\n \r\nOption Sales Tax. \r\n \r\nThe School District's current estimate of total cost for the projects. Includes all cost from project inception to \r\n(2) \r\ncompletion. \r\n \r\nThe voters of Baker County approved the imposition of a 1% sales tax to fund the above projects and retire \r\n \r\n(3) \r\n \r\nassociated debt. Amounts expended for these projects may include sales tax proceeds, state, local property \r\n \r\ntaxes and/or other funds over the life of the projects. \r\n \r\nPage 35 \r\n \r\nSee note to basic financial statements. \r\n \r\n Baker County Board of Education General Fund - Quality Based Education Program (QBE) Allotments and Expenditures by Program For the Fiscal Year Ended June 30, 2015 \r\n \r\nDescription \r\n \r\nAllotment from Georgia Department of Education \r\n(1) (2) \r\n \r\nEligible QBE Program Cost Salary Operations Totals \r\n \r\nDirect Instructional Programs \r\n \r\nKindergarten Programs \r\n \r\n$ \r\n \r\nKindergarten Program - Early Intervention \r\n \r\nProgram \r\n \r\nPrimary Grades (1-3) Program \r\n \r\nPrimary Grades Early Intervention (1-3) \r\n \r\nProgram Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early \r\n \r\nIntervention (4-5) Program \r\n \r\nMiddle Grades (6-8) Program \r\n \r\nMiddle Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program \r\n \r\nStudents With Disabilities \r\n \r\nCATEGORY III \r\n \r\nCATEGORY IV Gifted Student -CATERGORY VI Remedial Education Program Alternative Education Program \r\n \r\nTOTAL DIRECT INSTRUCTIONAL \r\n \r\nPROGRAMS \r\n \r\n$ \r\n \r\nMedia Center Program Staff and Professional Development \r\n \r\nTOTAL QBE FORMULA FUNDS \r\n \r\n$ \r\n \r\n111,429 $ \r\n39,300 271,867 \r\n60,231 77,556 \r\n90,114 \r\n196,100 \r\n148,395 71,640 \r\n355,202 \r\n10,522 50,358 13,035 \r\n1,495,749 $ \r\n38,495 7,498 \r\n1,541,742 $ \r\n \r\n67,341 $ \r\n217 175,110 \r\n43,268 51,414 \r\n35,720 (76,017) 312,609 \r\n108,624 55,878 \r\n166,226 2,146 - \r\n44,986 - \r\n987,522 $ \r\n4,258 - \r\n991,780 $ \r\n \r\n4,055 $ \r\n \r\n71,395 \r\n \r\n355 14,571 \r\n \r\n572 189,681 \r\n \r\n1,082 4,882 \r\n \r\n44,350 56,296 \r\n \r\n728 3,773 6,732 \r\n \r\n36,448 (72,244) 319,341 \r\n \r\n12,636 6,253 \r\n \r\n121,260 62,131 \r\n \r\n11,475 \r\n- \r\n \r\n177,701 2,146 - \r\n44,986 - \r\n \r\n66,539 $ 1,054,063 \r\n \r\n1,762 - \r\n \r\n6,020 8,076 \r\n \r\n68,301 $ 1,068,159 \r\n \r\nPage 36 See note to basic financial statements. \r\n \r\n COMPLIANCE SECTION \r\n \r\n INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT \r\nOF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS \r\nTo the Superintendent and Members of the Baker County Board of Education \r\nNewton, Georgia \r\nWe were engaged to 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, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Baker County Board of Education as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the Baker County Board of Education's basic financial statements and have issued our report thereon dated March 29, 2019. Because of the significance of the matter described in the \"Basis for Disclaimer of Opinions\" paragraph of our report on the financial statements, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for audit opinions on the financial statements of the governmental activities, each major fund and the aggregate remaining fund information of the Baker County Board of Education as of June 30, 2015, and the respective changes in financial position for the year then ended. Accordingly, we do not express an opinion on these financial statements. \r\nInternal Control Over Financial Reporting In connection with our engagement to audit the financial statements of the Baker County Board of Education, we considered the Baker County Board of Education's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Baker County Board of Education's internal control. Accordingly, we do not express an opinion on the effectiveness of the Baker County Board of Education's internal control. \r\nOur consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and, therefore, material weaknesses or significant deficiencies may exist that have not been identified. However, as described in the accompanying schedule of findings and questioned costs, we identified certain deficiencies in internal control that we consider to be material weaknesses and significant deficiencies. \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 \r\n300 MULBERRY STREET, SUITE 300  POST OFFICE BOX 1877  MACON, GEORGIA 31202-1877  478-464-8000  FAX 478-464-8051  www.mjcpa.com MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS \r\n \r\n control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis. We consider the deficiencies described in the accompanying schedule of findings and questioned costs as items 2015-001 and 2015-003 to be material weaknesses. \r\nA significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiency described in the accompanying schedule of findings and questioned costs as item 2015-002 to be a significant deficiency. \r\nCompliance and Other Matters In connection with our engagement to audit the financial statements of the Baker County Board of Education, 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. If the documentation provided by management had been sufficient to enable us to express opinions on the basic financial statement, instances of noncompliance or other matters may have been identified and reported herein. \r\nBaker County Board of Education's Response to Findings Baker County Board of Education's responses to the findings identified in our engagement are described in the accompanying schedule of findings and questioned costs. Baker County Board of Education's responses were not subjected to the auditing procedures applied in the engagement to audit the financial statements and, accordingly, we express no opinion on them. \r\nPurpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an engagement to perform an audit 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\nMacon, Georgia April 8, 2019 \r\n38 \r\n \r\n INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY \r\nOMB CIRCULAR A-133 \r\nTo the Superintendent and Members of the Baker County Board of Education \r\nNewton, Georgia \r\nReport on Compliance for Each Major Federal Program We were engaged to audit the Baker County Board of Education's compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the Baker County Board of Education's major federal programs for the year ended June 30, 2015. The Baker County Board of Education's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. \r\nManagement's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. \r\nAuditor's Responsibility Our responsibility is to express an opinion on compliance for each of the Baker County Board of Education's major federal programs based on conducting an audit of the types of compliance requirements referred to above. We were engaged to conduct 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 Baker County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. \r\nBasis for Disclaimer of Opinion on Child Nutrition Cluster and Special Education Cluster As described in the accompanying schedule of findings and questioned costs, the Baker County Board of Education was unable to provide sufficient appropriate evidence that they had complied with the requirements regarding the Child Nutrition Cluster and the Special Education Cluster as described in finding 2015-004. As a result of this lack of appropriate evidence, we were unable to apply the auditing procedures necessary for a conclusion about whether the Baker County Board of Education complied with the requirements applicable to those programs. \r\n300 MULBERRY STREET, SUITE 300  POST OFFICE BOX 1877  MACON, GEORGIA 31202-1877  478-464-8000  FAX 478-464-8051  www.mjcpa.com MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS \r\n \r\n Disclaimer of Opinion on Child Nutrition Cluster and Special Education Cluster Because of the significance of the matter described in the \"Basis for Disclaimer of Opinion on the Child Nutrition Cluster and Special Education Cluster\" paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion of the types of compliance requirements that could have a direct and material effect on the Child Nutrition Cluster and Special Education Cluster programs. Accordingly, we do not express an opinion on such compliance of the Child Nutrition Cluster or Special Education Cluster programs for the Baker County Board of Education for the year ended June 30, 2015. \r\nOther Matters Baker County Board of Education's response to the noncompliance finding identified in our audit is described in the accompanying schedule of findings and questioned costs. Baker County Board of Education's response was not subjected to the engagement to audit of compliance and, accordingly, we express no opinion on the response. \r\nReport on Internal Control Over Compliance Management of the Baker County Board of Education is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In connection with our engagement to audit compliance, we considered the Baker County Board of Education's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Baker County Board of Education'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\n40 \r\n \r\n Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies and, therefore, material weaknesses or significant deficiencies may exist that were not identified. We identified a deficiency in internal control over compliance as described in the accompanying schedule of findings and questioned costs as item 2015-004 that we consider to be a material weakness. The Baker County Board of Education's response to the internal control over compliance finding identified in our audit is described in the accompanying schedule of findings and questioned costs. The Baker County Board of Education's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on it. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. \r\nMacon, Georgia April 8, 2019 \r\n41 \r\n \r\n Baker County Board of Education Schedule of Expenditures of Federal Awards Year Ended June 30, 2015 \r\n \r\nFunding Agency \r\nProgarm/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\nTitle I, Part A Cluster Pass-Through From Georgia Department of Education Title I Grants to Local Educational Agencies \r\nOther Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States Improving Teacher Quality State Grants Migrant Education - State Grand Program \r\nTotal Other Programs \r\nTotal U.S. Department of Education \r\nTotal Expenditures of Federal Awards \r\n \r\nCFDA Number \r\n \r\nPassThrough Entity ID Number \r\n \r\n10.553 \r\n \r\n10.555 \r\n \r\nn/a \r\n \r\n84.027 \r\n \r\nn/a \r\n \r\n84.173 \r\n \r\nn/a \r\n \r\n84.010 \r\n \r\nn/a \r\n \r\n84.048 \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\nExpenditures in Period \r\n$ 140,890 70,788 \r\n211,678 \r\n$ 104,216 188 \r\n104,404 \r\n168,513 \r\n8,796 54,605 12,892 76,294 560,888 $ 560,888 \r\n \r\nPage 42 See note to basic financial statements. \r\n \r\n BAKER COUNTY BOARD OF EDUCATION \r\nNOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \r\n \r\nNOTE 1. \r\n \r\nBASIS OF PRESENTATION \r\nThe Schedule of Expenditures of Federal Awards includes the federal grant activity of the Baker County Board of Education and is presented on the accrual basis of accounting. \r\nThe information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in or used in the preparation of the financial statements. \r\n \r\n43 \r\n \r\n BAKER COUNTY BOARD OF EDUCATION \r\nSCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nFOR THE FISCAL YEAR ENDED JUNE 30, 2015 \r\n \r\nSECTION I SUMMARY OF AUDITOR'S RESULTS \r\n \r\nFinancial Statements Type of auditor's report issued \r\n \r\nDisclaimer \r\n \r\nInternal control over financial reporting: Material weaknesses identified? \r\nSignificant deficiencies identified not considered to be material weaknesses? \r\nNoncompliance material to financial statements noted? \r\n \r\nX Yes \r\n \r\nNo \r\n \r\nX Yes Yes \r\n \r\nNone Reported X No \r\n \r\nFederal Awards \r\n \r\nInternal control over major programs: Material weaknesses identified? \r\nSignificant deficiencies identified not considered to be material weaknesses? \r\nType of auditor's report issued on compliance for major programs \r\n \r\nX Yes \r\n \r\nNo \r\n \r\nYes X None Reported \r\n \r\nDisclaimer  both major programs \r\n \r\nAny audit findings disclosed that are required to be reported in accordance with OMB Circular A-133, Section 510(a) \r\nIdentification of major programs: \r\nCFDA Number \r\n10.553, 10.555 84.027, 84.173 \r\nDollar threshold used to distinguish between Type A and Type B programs \r\nAuditee qualify as low risk auditee? \r\n \r\nX Yes \r\n \r\nNo \r\n \r\nName of Federal Program of Cluster \r\nChild Nutrition Cluster Special Education Cluster \r\n \r\n$300,000 Yes \r\n \r\nX No \r\n \r\n44 \r\n \r\n BAKER COUNTY BOARD OF EDUCATION \r\nSCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \r\nSECTION II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n2015-001. Failure to Adequately Maintain General Ledger (Repeat Finding) \r\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). Additionally, Chapter 22A Annual Financial Reporting of the Financial Management for Georgia Local Units of Administration provides that School Districts must prepare their financial statements in accordance with GAAP. \r\nCondition/Context: The School District engaged an outside consultant to assist with year-end closeout and preparation of the financial statements to present for audit. The consultant made numerous, significant corrections, including adjusting, correcting, and closing entries, in order to adjust the general ledger to accurately reflect the activities of the School District in accordance with GAAP. Despite the efforts of the outside consultant, we were unable to obtain the documentation necessary to support various account balances of the School District's funds, including cash, accounts receivable and revenue, accounts payable, salaries payable and salary expenditures. Additionally, we were unable to obtain the necessary records to perform testing of disbursements and testing of information provided to TRS to use in calculating the net pension liability. Finally, due to the continued turnover of personnel, we were unable to obtain answers to various questions raised in analytical procedures. \r\nCause: In discussing this deficiency with the School District, management indicated the cause was a direct result of turnover in personnel both during and after year-end, which put a strain on resources dedicated to the accounting function. \r\nEffect or Potential Effect: The School District did not comply with the requirements of GAAP and the Department of Education regarding financial reporting. Due to the nature of the significant year-end adjustments made by the consultant, and the lack of information available to perform the annual audit, a disclaimer on the School District financial statements for the fiscal year ended June 30, 2015 has been issued by the external auditors. \r\nRecommendation: Management should take appropriate steps to ensure the time and resources are made available to immediately correct the deficiencies related to maintenance of the general ledger, financial reporting and maintenance of records and documents related to financial transactions of the School District. \r\nViews of Responsible Officials and Corrective Action Plans: We concur with this finding. Management has implemented control over the maintenance of the general ledger and preparation of financial statements in accordance with generally accepted accounting principles and the Financial Management for Georgia Local Units of Administration. Furthermore, a consultant, with over 20 years of school finance experience and a successful track record of school accounting, has been hired to assist the finance director with this and other matters. \r\n45 \r\n \r\n BAKER COUNTY BOARD OF EDUCATION \r\nSCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \r\nSECTION II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS (CONTINUED) \r\n2015-002. Inadequate Segregation of Duties  School Activity Accounts (Repeat Finding) \r\nCriteria: The School District's management is responsible for designing and maintaining internal controls that provide proper separation of duties and reasonable assurance that transactions are processed according to established procedures. Such internal controls would limit any one individual's access to both physical assets and the related accounting records. \r\nCondition: Appropriate segregation of duties was not maintained in the areas of cash reconciliation and recording, revenue/receipts/receivables, and expenditures/payables for the school activity accounts. \r\nContext: Internal controls were not in place for school activity accounts to ensure the safeguarding of assets. \r\nCause: Staff turnover and the limited number of individuals available to perform each of these duties. \r\nEffect: Lack of proper segregation of duties could result in irregularities and/or misappropriation of assets. \r\nRecommendation: We recommend the School District implement segregation of duties in order to strengthen internal controls over school activity accounts. \r\nViews of Responsible Officials and Planned Corrective Action: We concur with this finding. Management has implemented a plan to strengthen internal controls and segregation of duties over school activity accounts. Furthermore, a consultant, with over 20 years of school finance experience and a successful track record of school accounting, has been hired to assist the finance director with this and other matters. \r\n2015-003. Inadequate Internal Control Procedures  Cash and Cash Equivalents and Revenues/ Receivables/Receipts (Repeat Finding) \r\nCriteria: The School District's management is responsible for designing and maintaining controls that provide reasonable assurance that transactions are processed according to established procedures. Such internal controls would limit any one individual's access to both physical assets and the related accounting records. \r\nCondition: Appropriate segregation of duties was not maintained in the areas of cash reconciliation and revenue/receipts/receivables. Additionally, timely and accurate reconciliations of cash and receivables were not being performed. \r\nContext: Internal controls were not in place to ensure the safeguarding of assets. \r\nCause: Staff turnover and the limited number of individuals available to perform each of these duties. \r\n46 \r\n \r\n BAKER COUNTY BOARD OF EDUCATION \r\nSCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \r\nSECTION II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS (CONTINUED) \r\n2015-003. Inadequate Internal Control Procedures  Cash and Cash Equivalents and Revenues/ Receivables/Receipts (Repeat Finding) (Continued) \r\nEffect: Lack of adequate controls over cash increases the risk for theft, fraud, or misuse of School District resources that may result in errors and/or irregularities which would not be detected in a timely manner. \r\nRecommendation: We recommend the School District strengthen internal controls and segregation of duties in the areas of cash and cash equivalents and revenues/receivables/receipts. \r\nViews of Responsible Officials and Planned Corrective Action: We concur with this finding. Management has implemented a plan to strengthen internal controls over cash and cash equivalents and revenues/receivables/receipts. Furthermore, a consultant, with over 20 years of school finance experience and a successful track record of school accounting, has been hired to assist the finance director with this and other matters. \r\nSECTION III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\n2015-004. Failure to Adequately Maintain Records Related to Federal Awards \r\nU.S Department of Education Passed through Georgia Department of Education Program Names: Child Nutrition Cluster (CFDA #10.553, 10.555) \r\nSpecial Education Cluster (CFDA #84.027, 84.173 \r\nCriteria: Amounts reported on the Schedule of Expenditures of Federal Awards (SEFA) should reconcile to the general ledger of the School District. Additionally, documentation related to expenditures of federal programs should be maintained in order to support compliance, but also to be available to external auditors for performance of a Single Audit in accordance with the Uniform Guidance. \r\nCondition: We were unable to reconcile the amounts listed in the SEFA to the School District's general ledger, nor were we able to test or verify the amounts included as expenditures in the SEFA. Additionally, we were unable to obtain documentation necessary to perform a Single Audit. Specifically: \r\n Management was unable to provide a reconciliation between the amounts reported on the SEFA, the trial balances (and thus the financial statements), the grant completion reports, and the grant drawdown requests. \r\n No payment advice was provided to substantiate the amounts recorded as School Nutrition revenue and no meal counts/participation reports were provided so that we could analytically estimate/predict revenue based on the reimbursement rates in effect at the time. 47 \r\n \r\n BAKER COUNTY BOARD OF EDUCATION \r\nSCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \r\nSECTION III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (CONTINUED) \r\n2015-004. Failure to Adequately Maintain Records Related to Federal Awards (Continued) U.S Department of Education Passed through Georgia Department of Education Program Names: Child Nutrition Cluster (CFDA #10.553, 10.555 \r\nSpecial Education Cluster (CFDA #84.027, 84.173 Context: We were unable to reconcile the majority of expenditures included in the SEFA to supporting documentation, including the general ledger. Cause: Staff turnover and lack of internal controls surrounding the maintenance of financial information. Questioned Costs: Unknown Effect: We were unable to complete a Single Audit for the fiscal year ended June 30, 2015 and unable to opine on compliance related to the major program, nor determine if the major programs selected are the correct major programs under A-133 audit requirements. Recommendation: We recommend the School District immediately take the steps necessary to strengthen controls surrounding the recording of financial transactions and maintenance of financial records. Views of Responsible Officials and Planned Corrective Action: We concur with this finding. Management has implemented a plan to strengthen internal controls over the reporting of grant revenues, financial transactions and financial records. Furthermore, a consultant, with over 20 years of school finance experience and a successful track record of school accounting, has been hired to assist the finance director with this and other matters. \r\n48 \r\n \r\n BAKER COUNTY BOARD OF EDUCATION \r\nSCHEDULE OF PRIOR YEAR FINDINGS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 \r\n2014-001. Failure to Adequately Maintain General Ledger \r\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). Additionally, Chapter 22A Annual Financial Reporting of the Financial Management for Georgia Local Units of Administration provides that School Districts must prepare their financial statements in accordance with GAAP. \r\nCondition: The School District engaged an outside consultant to assist with year-end closeout and preparation of the financial statements to present for audit. The consultant made numerous, significant corrections, including adjusting, correcting, and closing entries, in order to adjust the general ledger to accurately reflect the activities of the School District in accordance with GAAP. \r\nAuditee Reponse/Status: Unresolved. See current year finding 2015-001. \r\n2014-002. Inadequate Segregation of Duties  School Activity Accounts (Repeat Finding) \r\nCriteria: The School District's management is responsible for designing and maintaining internal controls that provide proper separation of duties and reasonable assurance that transactions are processed according to established procedures. Such internal controls would limit any one individual's access to both physical assets and the related accounting records. \r\nCondition: Appropriate segregation of duties was not maintained in the areas of cash reconciliation and recording, revenue/receipts/receivables, and expenditures/payables. \r\nAuditee Reponse/Status: Unresolved. See current year finding 2015-002. \r\n2014-003. Inadequate Internal Control Procedures  Cash and Cash Equivalents and Revenues/Receivables/Receipts (Repeat Finding) \r\nCriteria: The School District's management is responsible for designing and maintaining controls that provide reasonable assurance that transactions are processed according to established procedures. Such internal controls would limit any one individual's access to both physical assets and the related accounting records. Condition: Appropriate segregation of duties was not maintained in the areas of cash reconciliation and revenue/receipts/receivables. \r\nAuditee Reponse/Status: Unresolved. See current year finding 2015-003. \r\n49 \r\n \r\n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-b2012-h2013-belec-p-btext","title":"Baker County Board of Education, Newton, Georgia, report on audit for fiscal year ended June 30, 2013 (including independent auditor's reports)","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts, issuing body."],"dcterms_spatial":["United States, Georgia, 32.75042, -83.50018"],"dcterms_creator":["Georgia. 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Map and Government Information Library"],"edm_is_shown_by":["https://dlg.galileo.usg.edu/do:dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-b2012-h2013-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-b2012-h2013-belec-p-btext"],"dcterms_temporal":null,"dcterms_rights_holder":["\u0026copy; Georgia Department of Audits"],"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["state government records","audits","financial statements","financial records"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":["Education--Auditing--fast","Education--Finance--fast","Expenditures, Public--fast","Georgia--Baker County--fast--https://id.oclc.org/worldcat/entity/E39PBJgxqwBrwyH6QgJ7CB3hHC","Periodicals--fast","Statistics--fast"],"fulltext":"BAKER COUNTY BOARD OF EDUCATION \r\nNEWTON, GEORGIA \r\nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2013 \r\n(Including Independent Auditor's Reports) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION - 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\nNOTES TO THE BASIC FINANCIAL STATEMENTS \r\n \r\nSCHEDULES \r\n \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \r\n \r\nSUPPLEMENTARY INFORMATION \r\n \r\n2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 3 SCHEDULE OF STATE REVENUE 4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 5 ALLOTMENTS AND EXPENDITURES \r\nGENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM \r\n \r\nPage \r\n1 2 3 4 5 6 7 8 \r\n25 26 27 28 29 \r\n \r\n  BAKER COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \r\nSECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS INDEPENDENT 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 INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 \r\nSECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \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\nOctober 1, 2014 \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 Baker County Board of Education \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 (Exhibits A through H) of the Baker County Board of Education, as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the Board's basic financial statements as listed in the table of contents. \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 \r\n2013ARL-11 \r\n \r\n  no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. \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 previously present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the Baker County Board of Education, as of June 30, 2013, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. \r\nEmphasis of Matter \r\nAs described in Note 2 to the financial statements, in 2013, the Baker County Board of Education adopted new accounting guidance, Governmental Accounting Standards Board (GASB) Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. Our opinion is not modified with respect to this matter. \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 affected by this missing information. Accounting principles generally accepted in the United States of America require that the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual, as presented on page 25, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management 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 Baker County Board of Education's basic financial statements. The accompanying supplementary information, consisting of Schedules 2 through 5, is presented for the purposes of additional analysis and is not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the basic financial statements. \r\n2013ARL-11 \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 as a whole. \r\nOther Reporting Required by Governm ent Auditing Standards \r\nIn accordance with Government Auditing Standards, we have also issued our report dated October 1, 2014, on our consideration of the Baker County Board of Education's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Baker County Board of Education'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:as 2013ARL-11 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n  BAKER COUNTY BOARD OF EDUCATION \r\n \r\n  BAKER COUNTY BOARD OF EDUCATION STATEMENT OF NET POSITION JUNE 30, 2013 \r\nASSETS \r\nCash and Cash Equivalents Taxes State Government Federal Government Other \r\nInventories Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation) \r\nTotal Assets \r\nLIABILITIES \r\nAccounts Payable Salaries and Benefits Payable 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 Unrestricted \r\nTotal Net Position \r\n \r\nEXHIBIT \"A\" \r\n \r\nGOVERNMENTAL ACTIVITIES \r\n \r\n$ \r\n \r\n985,770 \r\n \r\n96,653 \r\n \r\n135,151 \r\n \r\n138,157 \r\n \r\n16,859 \r\n \r\n5,872 \r\n \r\n82,372 \r\n \r\n7,108,561 \r\n \r\n$ \r\n \r\n8,569,395 \r\n \r\n$ \r\n \r\n33,031 \r\n \r\n383,472 \r\n \r\n292,646 12,740 \r\n \r\n$ \r\n \r\n721,889 \r\n \r\n$ \r\n \r\n6,898,287 \r\n \r\n5,872 66 \r\n943,281 \r\n \r\n$ \r\n \r\n7,847,506 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 1 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES \r\nFOR THE YEAR ENDED JUNE 30, 2013 \r\n \r\nEXHIBIT \"B\" \r\n \r\nEXPENSES \r\n \r\nPROGRAM REVENUES \r\n \r\nOPERATING \r\n \r\nCHARGES FOR \r\n \r\nGRANTS AND \r\n \r\nSERVICES \r\n \r\nCONTRIBUTIONS \r\n \r\nNET (EXPENSES) REVENUES \r\nAND CHANGES IN NET POSITION \r\n \r\nGOVERNMENTAL ACTIVITIES \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 Other Support Services Operations of Non-Instructional Services Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt \r\n \r\n$ 2,371,977 \r\n67,188 39,728 76,976 289,886 267,507 128,892 223,082 365,895 $ \r\n1,673 \r\n27,643 229,525 \r\n15,961 \r\n \r\n$ \r\n5,161 6,155 12,939 \r\n \r\n1,266,013 $ \r\n75,965 41,185 44,594 315,659 141,134 \r\n8,479 93,034 132,352 \r\n1,673 \r\n192,375 \r\n \r\n-1,105,964 \r\n8,777 1,457 -32,382 25,773 -126,373 -120,413 -130,048 -228,382 \r\n0 \r\n-21,488 -24,211 -15,961 \r\n \r\nTotal Governmental Activities \r\n \r\n$ 4,105,933 $ \r\n \r\n24,255 $ \r\n \r\n2,312,463 $ \r\n \r\n-1,769,215 \r\n \r\nGeneral Revenues Taxes Property Taxes For Maintenance and Operations Sales Taxes Special Purpose Local Option Sales Tax For Debt Services Other Sales Tax Investment Earnings Miscellaneous \r\n \r\n$ \r\n \r\n2,141,988 \r\n \r\n236,623 16,204 147 66,432 \r\n \r\nTotal General Revenues \r\n \r\n$ \r\n \r\n2,461,394 \r\n \r\nChange in Net Position \r\n \r\n$ \r\n \r\n692,179 \r\n \r\nNet Position - Beginning of Year \r\n \r\n7,155,327 \r\n \r\nNet Position - End of Year \r\n \r\n$ \r\n \r\n7,847,506 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 2 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION BALANCE SHEET \r\nGOVERNMENTAL FUNDS JUNE 30, 2013 \r\n \r\nEXHIBIT \"C\" \r\n \r\nASSETS \r\nCash and Cash Equivalents Accounts Receivable, Net \r\nTaxes State Government Federal Government Other Inventories \r\nTotal Assets \r\n \r\nGENERAL FUND \r\n \r\nDISTRICTWIDE \r\nCAPITAL PROJECTS \r\nFUND \r\n \r\nDEBT SERVICE \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ \r\n \r\n1,263,838 \r\n \r\n79,358 $ 135,151 138,157 \r\n16,859 5,872 \r\n \r\n$ 17,295 \r\n \r\n66 $ \r\n \r\n1,263,904 \r\n96,653 135,151 138,157 \r\n16,859 5,872 \r\n \r\n$ \r\n \r\n1,639,235 $ \r\n \r\n17,295 $ \r\n \r\n66 $ \r\n \r\n1,656,596 \r\n \r\nLIABILITIES AND FUND BALANCES \r\nLIABILITIES \r\nCash Overdraft Accounts Payable Salaries and Benefits Payable Deposits and Deferred Revenue \r\nTotal Liabilities \r\nFUND BALANCES \r\nNonspendable Restricted Unassigned \r\nTotal Fund Balances \r\nTotal Liabilities and Fund Balances \r\n \r\n$ \r\n \r\n278,134 $ \r\n \r\n$ \r\n \r\n33,031 \r\n \r\n383,472 \r\n \r\n27,246 \r\n \r\n$ \r\n \r\n443,749 $ \r\n \r\n278,134 $ \r\n \r\n$ \r\n \r\n5,872 \r\n \r\n$ \r\n \r\n1,189,614 $ \r\n \r\n-260,839 \r\n \r\n$ \r\n \r\n1,195,486 $ \r\n \r\n-260,839 $ \r\n \r\n$ \r\n \r\n1,639,235 $ \r\n \r\n17,295 $ \r\n \r\n0 $ 0 $ \r\n \r\n278,134 33,031 \r\n383,472 27,246 \r\n721,883 \r\n \r\n$ 66 \r\n66 $ \r\n \r\n5,872 66 \r\n928,775 \r\n934,713 \r\n \r\n66 $ \r\n \r\n1,656,596 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 3 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \r\nTO THE STATEMENT OF NET POSITION JUNE 30, 2013 \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 Buildings and Improvements 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\nLong-Term Liabilities, including Bonds Payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-Term Liabilities at year-end consist of: \r\nBonds Payable Capital Leases Payable Compensated Absences Payable \r\nTotal Long-Term Liabilities \r\nNet Position of Governmental Activities (Exhibit \"A\") \r\n \r\n$ \r\n \r\n934,713 \r\n \r\n$ \r\n \r\n82,372 \r\n \r\n8,927,386 \r\n \r\n978,611 \r\n \r\n-2,797,436 \r\n \r\n7,190,933 \r\n \r\n27,246 \r\n \r\n$ -290,000 -2,646 \r\n-12,740 \r\n \r\n-305,386 \r\n \r\n$ \r\n \r\n7,847,506 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 4 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES \r\nGOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2013 \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 Other Support Services Enterprise Operations Food Services Operation \r\nDebt Services Principal 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\nNet Change in Fund Balances \r\nFund Balances - Beginning \r\nFund Balances - Ending \r\n \r\nGENERAL FUND \r\n \r\nDISTRICTWIDE \r\nCAPITAL PROJECTS \r\nFUND \r\n \r\nDEBT SERVICE \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ 2,140,947 16,204 \r\n1,592,905 719,558 24,255 73 $ 76,674 \r\n$ 4,570,616 $ \r\n \r\n$ 72 72 $ \r\n \r\n$ 236,623 \r\n3 236,626 $ \r\n \r\n2,140,947 252,827 \r\n1,592,905 719,558 24,255 148 76,674 \r\n4,807,314 \r\n \r\n$ 2,124,144 $ \r\n \r\n67,188 39,728 76,976 289,869 264,661 128,892 229,151 314,940 \r\n1,673 27,643 227,845 \r\n \r\n15,461 505 \r\n \r\n$ 3,808,676 $ \r\n \r\n$ \r\n \r\n761,940 $ \r\n \r\n21,128 17 \r\n$ 21,145 $ -21,073 $ \r\n \r\n$ \r\n260,000 15,456 \r\n275,456 $ -38,830 $ \r\n \r\n2,145,272 \r\n67,188 39,728 76,976 289,886 264,661 128,892 229,151 314,940 \r\n1,673 27,643 227,845 \r\n275,461 15,961 \r\n4,105,277 \r\n702,037 \r\n \r\n$ \r\n \r\n5,500 $ \r\n \r\n$ \r\n \r\n-5,500 \r\n \r\n-38,833 \r\n \r\n$ \r\n \r\n-5,500 $ \r\n \r\n-33,333 $ \r\n \r\n$ \r\n \r\n756,440 $ \r\n \r\n-54,406 $ \r\n \r\n439,046 \r\n \r\n-206,433 \r\n \r\n38,833 $ \r\n38,833 $ 3 $ \r\n63 \r\n \r\n44,333 -44,333 \r\n0 702,037 232,676 \r\n \r\n$ 1,195,486 $ \r\n \r\n-260,839 $ \r\n \r\n66 $ \r\n \r\n934,713 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 5 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF \r\nREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2013 \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 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 Compensated Absences \r\nChange in Net Position of Governmental Activities (Exhibit \"B\") \r\n \r\n$ \r\n \r\n702,037 \r\n \r\n$ \r\n \r\n7,140 \r\n \r\n-280,411 \r\n \r\n-273,271 -10,242 1,041 \r\n \r\n$ \r\n \r\n260,000 \r\n \r\n15,461 \r\n \r\n275,461 \r\n \r\n-2,847 \r\n \r\n$ \r\n \r\n692,179 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 6 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET POSITION \r\nFIDUCIARY FUNDS JUNE 30, 2013 \r\nASSETS Cash and Cash Equivalents \r\nLIABILITIES Funds Held for Others \r\n \r\nEXHIBIT \"G\" \r\n \r\nAGENCY FUNDS \r\n \r\n$ \r\n \r\n15,971 \r\n \r\n$ \r\n \r\n15,971 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 7 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNote 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \r\nREPORTING ENTITY \r\nThe Baker County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity. \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 Baker County Board of Education. \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 \r\n- 8 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"H\" \r\n \r\n District-wide Capital Projects Fund accounts for and reports financial resources including Special Purpose Local Option Sales Tax (SPLOST) that are restricted, committed or assigned to the expenditure for capital outlays, including the acquisition or construction of capital facilities. \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\nThe School District reports the following fiduciary fund type: \r\n Agency funds account for assets held by the School District as an agent for various funds or individuals. \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, 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 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 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\n \r\n- 9 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNEW ACCOUNTING PRONOUNCEMENTS \r\nIn fiscal year 2013, the School District adopted the Governmental Accounting Standards Board (GASB) Statement No. 60, Accounting and Financial Reporting for Service Concession Arrangements. The provisions of this Statement establish accounting and financial reporting standards for governments who enter into Service Concession Arrangements (SCA) with other governmental or nongovernmental entities. As of June 30, 2013, the School District has not entered into any arrangements that meet the qualifications to be reported as a SCA in accordance with this standard. \r\nIn fiscal year 2013, the School District adopted the Governmental Accounting Standards Board (GASB) Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. The provisions of this Statement incorporate certain accounting and financial reporting guidance into authoritative GASB literature. \r\nIn fiscal year 2013, the School District adopted the Governmental Accounting Standards Board (GASB) Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources and Net Position. The provisions of this Statement establish financial reporting standards for the presentation of deferred outflows of resources and deferred inflows of resources and their effects on a government's net position. The School District changed its presentation of net assets to net position for fiscal year 2013. There were no other applicable reporting changes for the School District. \r\nCASH AND CASH EQUIVALENTS \r\nComposition of Deposits Cash and cash equivalents consist of cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Official Code of Georgia Annotated Section 45-8-14 authorizes the School District to deposit its funds in one or more solvent banks, insured Federal savings and loan associations or insured chartered building and loan associations. \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\nPROPERTY TAXES \r\nThe Baker County Board of Commissioners fixed the property tax levy for the 2012 tax digest year (calendar year) on September 5, 2012 (levy date). Taxes were due on December 20, 2012 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2012 tax digest are reported as revenue in the governmental funds for fiscal year 2013. The Baker County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2013, for maintenance and operations amounted to $2,115,800. \r\n \r\n- 10 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"H\" \r\n \r\nThe tax millage rate levied for the 2012 tax year (calendar year) for the Baker County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value): \r\n \r\nSchool Operations \r\n \r\n14.875 mills \r\n \r\nAdditionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $25,147 during fiscal year ended June 30, 2013. \r\n \r\nSALES TAXES \r\n \r\nSpecial Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $236,623 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\nINVENTORIES \r\n \r\nFood Inventories On the basic financial statements, inventories of donated food commodities used in the preparation of meals are reported at their Federally assigned value and purchased foods inventories are reported at cost (first-in, first-out). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used. \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\nLand Buildings and Improvements Equipment \r\n \r\nAll \r\n \r\nN/A \r\n \r\n$ \r\n \r\n5,000 \r\n \r\n15 to 80 years \r\n \r\n$ \r\n \r\n5,000 \r\n \r\n3 to 50 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\n \r\n- 11 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"H\" \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 15 days is awarded on a fiscal year basis to all full time personnel employed on a twelve month basis. No other employees are eligible to earn vacation leave. Vacation leave not utilized during the fiscal year may be carried over to the next fiscal year, providing such vacation leave does not exceed 60 days. \r\n \r\nBeginning of Year Liability \r\n \r\nIncreases \r\n \r\nDecreases \r\n \r\nEnd of Year Liability \r\n \r\n2011 $ 2012 $ 2013 $ \r\n \r\n20,356 $ 8,848 $ 9,894 $ \r\n \r\n3,028 $ 5,439 $ 16,430 $ \r\n \r\n14,536 $ 4,393 $ \r\n13,584 $ \r\n \r\n8,848 9,894 12,740 \r\n \r\nGENERAL OBLIGATION BONDS \r\n \r\nThe School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. In the District-wide and fund financial statements, the School District recognizes bond premiums and discounts, as well as bond issuance costs during the fiscal year bonds are issued. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. To conform to generally accepted accounting principles, bond premiums and discounts, as well as bond issuance costs should be amortized over the life of the bonds on the District-wide statements. The effect of this deviation is deemed to be immaterial to the fair presentation of the basic financial statements. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement of Net Position. \r\n \r\nNET POSITION \r\n \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 bus replacement, continuation of Federal programs, debt service and capital projects in accordance with restrictions imposed by external third parties. \r\n \r\nUnrestricted net position - Unrestricted net position represents resources derived from property taxes, sales taxes, grants and contributions not restricted to specific programs, charges for services, and miscellaneous revenues. These resources are used for transactions relating to the educational and general operations of the School District, and may be used at the discretion of the Board to meet current expenses for those purposes. \r\n- 12 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"H\" \r\n \r\nFUND BALANCES The School District's fund balances are classified as follows: \r\n \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 \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. \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 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, 2013, are as follows: \r\n \r\nNonspendable Inventories \r\nRestricted Debt Service \r\nUnassigned \r\n \r\n$ \r\n \r\n5,872 \r\n \r\n66 928,775 \r\n \r\nFund Balance, June 30, 2013 \r\n \r\n$ \r\n \r\n934,713 \r\n \r\nIt is the goal of the School District to achieve and maintain a committed, assigned, and unassigned fund balance in the general fund at fiscal year end of not less than 11.5% of total annual revenues, not to exceed 15% of the total budget of the subsequent fiscal year, in compliance with Official Code of Georgia Annotated Section 20-2-167(a)5. If the unassigned fund balance at fiscal year end falls below the goal, the School District shall develop a restoration plan to achieve and maintain the minimum fund balance. \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- 13 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"H\" \r\n \r\nDEFICIT FUND BALANCES The fund reporting a deficit fund balance at June 30, 2013, is as follows: \r\n \r\nFund Type/Fund Name \r\n \r\nDeficit Balance \r\n \r\nGovernmental Fund Type District-wide Capital Projects Fund \r\n \r\n$ \r\n \r\n260,839 \r\n \r\nThe School District has a 5 year plan to reduce the deficit in the Capital Projects Fund. There will be $40,000 in additional funds budgeted in the General Fund budget annually to reduce the outstanding deficit in the Capital Projects Fund. \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\nNote 3: BUDGETARY DATA \r\n \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 fund level. The budget for the General Fund was prepared in accordance with accounting principles generally accepted in the United States of America. \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\n \r\nThe Superintendent is authorized by the Board to approve adjustments of no more than 25 percent of the amount budgeted for expenditures in any budget function for any fund. The Superintendent shall report any such adjustments to the Board. If expenditure of funds in any budget function for any fund is anticipated to be more than 25 percent of the budgeted amount, the Superintendent shall request Board approval for the budget amendment. Any position or expenditure not previously approved in the annual budget that exceeds $50,000 shall require Board approval unless the Superintendent deems the position or purchase an emergency. In such case, the expenditure shall be reported to the Board at its regularly scheduled meeting. Under no circumstance is the Superintendent or other staff person authorized to spend funds that exceed the total budget without approval by the Board. \r\n \r\n- 14 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"H\" \r\n \r\nSee Schedule 1  General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances  Budget to Actual for a detail of any over/under expenditures during the fiscal year under review. \r\nNote 4: DEPOSITS \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\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, 2013, the bank balances were $1,224,399. The amounts exposed to custodial credit risk are classified into three categories as follows: \r\n \r\n- 15 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"H\" \r\n \r\nCategory 1 Category 2 - \r\nCategory 3 - \r\n \r\nUncollateralized, Cash collateralized with securities held by the pledging financial institution, or Cash collateralized with securities held by the pledging financial institution's trust department or agent but not in the School District's name. \r\n \r\nThe School District's deposits by custodial credit risk category at June 30, 2013, are as follows: \r\n \r\nCustodial Credit Risk Category \r\n \r\nBank Balance \r\n \r\n1 \r\n \r\n$ \r\n \r\n0 \r\n \r\n2 \r\n \r\n0 \r\n \r\n3 \r\n \r\n971,646 \r\n \r\nTotal \r\nNote 4: NON-MONETARY TRANSACTIONS \r\n \r\n$ \r\n \r\n971,646 \r\n \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\nNote 5: CAPITAL ASSETS \r\n \r\nThe following is a summary of changes in the Capital Assets during the fiscal year: \r\n \r\nGovernmental Activities Capital Assets, Not Being Depreciated: \r\nLand \r\n \r\nBalances July 1, 2012 \r\n \r\nIncreases \r\n \r\nDecreases \r\n \r\nBalances June 30, 2013 \r\n \r\n$ \r\n \r\n82,372 $ \r\n \r\n0$ \r\n \r\n0$ \r\n \r\n82,372 \r\n \r\nCapital Assets, Being Depreciated: Buildings and Improvements Equipment \r\n \r\n$ \r\n \r\n8,927,386 \r\n \r\n1,103,373 $ \r\n \r\n7,140 $ \r\n \r\n$ 131,902 \r\n \r\n8,927,386 978,611 \r\n \r\nLess: Accumulated Depreciation: Buildings and Improvements Equipment \r\n \r\n1,905,008 733,677 \r\n \r\n215,266 65,145 \r\n \r\n121,660 \r\n \r\n2,120,274 677,162 \r\n \r\nTotal Capital Assets, Being Depreciated, Net $ \r\n \r\n7,392,074 $ \r\n \r\n-273,271 $ \r\n \r\n10,242 $ \r\n \r\n7,108,561 \r\n \r\nGovernmental Activity Capital Assets - Net $ \r\n \r\n7,474,446 $ \r\n \r\n-273,271 $ \r\n \r\n10,242 $ \r\n \r\n7,190,933 \r\n \r\n- 16 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"H\" \r\n \r\nCapital assets being acquired under capital leases as of June 30, 2013, are as follows: \r\n \r\nGovernmental Activities \r\n \r\nBuildings and Improvements Equipment Less: Accumulated Depreciation \r\n \r\n$ \r\n \r\n899,432 \r\n \r\n70,996 \r\n \r\n290,537 \r\n \r\nCurrent year depreciation expense by function is as follows: \r\n \r\n$ \r\n \r\n679,891 \r\n \r\nInstruction Support Services \r\nMaintenance and Operation of Plant Student Transportation Services Food Services \r\n \r\n$ \r\n \r\n$ \r\n \r\n1,071 \r\n \r\n50,955 \r\n \r\n226,704 \r\n52,026 1,681 \r\n \r\n$ \r\nNote 6: INTERFUND TRANSFERS Interfund transfers for the year ended June 30, 2013, consisted of the following: \r\n \r\n280,411 \r\n \r\nTransfer to \r\n \r\nTransfers From \r\n \r\nDistrict-wide \r\n \r\nGeneral \r\n \r\nCapital \r\n \r\nFund \r\n \r\nProjects \r\n \r\nDebt Service Fund \r\n \r\nDistrict-wide Capital Projects \r\n \r\n$ \r\n \r\n$ 5,500 \r\n \r\n38,833 \r\n \r\nTotal \r\n \r\n$ \r\n \r\n5,500 $ \r\n \r\n38,833 \r\n \r\nTransfers between the District-wide Capital Projects Fund and the Debt Service Fund are used to move sales tax revenues collected by the District-wide Capital Projects Fund to Debt Service Fund to pay bond principal and interest payments. \r\nThe transfer between the General Fund and the District-wide Capital Project Fund was to repay the District-wide Capital Projects Fund for unqualified Special Purpose Local Option Sales Tax expenditures spent in the year ending June 30, 2011. \r\nNote 7: 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\n- 17 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"H\" \r\n \r\nThe School District has obtained commercial insurance for risk of loss associated with torts, assets, errors or omissions 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\nClaims and \r\n \r\nBeginning of Year \r\n \r\nChanges in \r\n \r\nClaims \r\n \r\nEnd of Year \r\n \r\nLiability \r\n \r\nEstimates \r\n \r\nPaid \r\n \r\nLiability \r\n \r\n2012 $ \r\n \r\n0$ \r\n \r\n22,757 $ \r\n \r\n22,757 $ \r\n \r\n0 \r\n \r\n2013 $ \r\n \r\n0$ \r\n \r\n0$ \r\n \r\n0$ \r\n \r\n0 \r\n \r\nThe School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general workers' compensation insurance coverage. Specific excess of loss insurance coverage is provided through an agreement by the Trust with the Safety National Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $1 million loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided with limits of $2 million. The Trust covers the first $1 million of each Employers Liability claim with Safety National providing additional Employers Liability limits up to a $2 million per occurrence maximum. Safety National Casualty Company also provides aggregate cover to the Trust with a loss fund percentage of 100%, based on the Fund's annual normal premium, up to a maximum limit of indemnity of aggregate limit of $2 million. \r\n \r\nThe School District has purchased surety bonds to provide additional insurance coverage as follows: \r\n \r\nPosition Covered \r\n \r\nAmount \r\n \r\nSuperintendent Principal \r\nNote 8: SHORT-TERM DEBT \r\n \r\n$ \r\n \r\n25,000 \r\n \r\n$ \r\n \r\n10,000 \r\n \r\nThe School District 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 percent of the total gross income from taxes collected in the preceding year and requires all short-term debt to be repaid no later than December 31 of the calendar year in which the debt was incurred. \r\n \r\n- 18 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"H\" \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\nEnding Balance \r\n \r\nTemporary Loans \r\n \r\n$ \r\n \r\n200,000 $ \r\n \r\n400,000 $ \r\n \r\n600,000 $ \r\n \r\n0 \r\n \r\nNote 9: LONG-TERM DEBT \r\n \r\nCAPITAL LEASES \r\n \r\nThe Baker County Board of Education entered into a lease agreement for buses. 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\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\n \r\nGENERAL OBLIGATION DEBT OUTSTANDING \r\n \r\nGeneral Obligation Bonds currently outstanding are as follows: \r\n \r\nPurpose \r\n \r\nInterest Rate \r\n \r\nAmount \r\n \r\nGeneral Government - Series 2008 \r\n \r\n2.817% \r\n \r\n$ \r\n \r\n290,000 \r\n \r\nThe changes in Long-Term Debt during the fiscal year ended June 30, 2013, were as follows: \r\n \r\nBalance July 1, 2012 \r\n \r\nAdditions \r\n \r\nGovernmental Activities \r\n \r\nBalance \r\n \r\nDeductions \r\n \r\nJune 30, 2013 \r\n \r\nDue Within One Year \r\n \r\nG. O. Bonds \r\n \r\n$ \r\n \r\nCapital Leases \r\n \r\nCompensated Absences (1) \r\n \r\n550,000 18,107 9,894 $ \r\n \r\n$ 16,430 \r\n \r\n260,000 $ 15,461 13,584 \r\n \r\n290,000 $ 2,646 \r\n12,740 \r\n \r\n290,000 2,646 \r\n \r\n$ \r\n \r\n578,001 $ \r\n \r\n16,430 $ \r\n \r\n289,045 $ \r\n \r\n305,386 $ \r\n \r\n292,646 \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- 19 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"H\" \r\n \r\nAt June 30, 2013, payments due by fiscal year which includes principal and interest for these items are as follows: \r\n \r\nCapital Leases \r\n \r\nPrincipal \r\n \r\nInterest \r\n \r\nFiscal Year Ended June 30: \r\n \r\n2014 \r\n \r\n$ \r\n \r\n2,646 $ \r\n \r\n15 \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\n2014 \r\n \r\n$ \r\n \r\n290,000 $ \r\n \r\n8,169 \r\n \r\nNote 10: ON-BEHALF PAYMENTS \r\n \r\nThe School District has recognized revenues and costs in the amount of $156,500 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 Certified Personnel In the amount of $147,180 \r\n \r\nOffice of State Treasurer Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $9,320 \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 CONTINGENT LIABILITIES \r\n \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\n \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 12: POST-EMPLOYMENT BENEFITS \r\n \r\nGeorgia School Personnel Post-employment Health Benefit Fund \r\n \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 \r\n \r\n- 20 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"H\" \r\n \r\nand 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, 2013, contributions also vary based on years of service. On average, members with five years or more of service as of January 1, 2013, 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 \"pay-as-you-go\" financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. \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, 2013: \r\nFor certificated teachers, librarians and regional educational service agencies and certain other eligible participants: \r\n \r\nFor certificated teachers, librarians and regional educational service agencies and certain other eligible participants: \r\n \r\nJuly 2012 - February 2013 March 2013 - June 2013 \r\n \r\n$912.34 per member per month $937.34 per member per month \r\n \r\nFor non-certificated school personnel: \r\n \r\nJuly 2012 - June 2013 \r\n \r\n$446.20 per member per month \r\n \r\n- 21 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNo additional contribution was required by the Board for fiscal year 2013 nor contributed to the School OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the School plan for other post-employment benefits and are subject to appropriation. \r\n \r\nThe School District's combined active and retiree contributions to the health insurance plans, which equaled the required contribution, for the current fiscal year and the preceding two fiscal years were as follows: \r\n \r\nPercentage \r\n \r\nRequired \r\n \r\nFiscal Year \r\n \r\nContributed \r\n \r\nContribution \r\n \r\n2013 2012 2011 \r\n \r\n100% \r\n \r\n$ \r\n \r\n100% \r\n \r\n$ \r\n \r\n100% \r\n \r\n$ \r\n \r\n360,199 342,676 219,096 \r\n \r\nNote 13: RETIREMENT PLANS \r\n \r\nTEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) \r\n \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\n \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. \r\n \r\nNormal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 60 or by 7% for each year or fraction thereof by which the member has less than 30 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lump-sum distribution in addition to a reduced monthly retirement benefit. Death, disability and spousal benefits are also available. \r\n \r\n- 22 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2013 \r\n \r\nEXHIBIT \"H\" \r\n \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, 2013, were 6% of annual salary. Employer contributions required for fiscal year 2013 were 11.41% of annual salary as required by the June 30, 2010, actuarial valuation. The employer contribution rate will increase to 12.28% effective July 1, 2013. \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\n2013 2012 2011 \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\n206,183 207,375 185,093 \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\n- 23 - \r\n \r\n (This page left intentionally blank) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION GENERAL FUND \r\nSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL \r\nYEAR ENDED JUNE 30, 2013 \r\n \r\nSCHEDULE \"1\" \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 Other Support Services Enterprise Operations Food Services Operation \r\nDebt Service \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\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$ 2,223,646 $ 2,223,646 $ 2,140,947 $ \r\n \r\n16,204 \r\n \r\n1,461,909 \r\n \r\n1,433,512 \r\n \r\n1,592,905 \r\n \r\n701,082 \r\n \r\n834,632 \r\n \r\n719,558 \r\n \r\n11,600 \r\n \r\n11,600 \r\n \r\n24,255 \r\n \r\n15 \r\n \r\n15 \r\n \r\n73 \r\n \r\n300 \r\n \r\n300 \r\n \r\n76,674 \r\n \r\n$ 4,398,552 $ 4,503,705 $ 4,570,616 $ \r\n \r\n-82,699 16,204 159,393 -115,074 12,655 \r\n58 76,374 \r\n66,911 \r\n \r\n$ 2,263,008 $ 2,384,109 $ 2,124,144 $ \r\n \r\n82,743 64,225 79,912 542,859 229,377 141,427 300,057 299,862 \r\n5,767 \r\n242,857 \r\n \r\n67,247 61,160 79,912 555,321 229,973 141,427 300,057 295,223 \r\n2,713 \r\n242,857 \r\n \r\n67,188 39,728 76,976 289,869 264,661 128,892 229,151 314,940 \r\n1,673 27,643 227,845 15,966 \r\n \r\n$ 4,252,094 $ 4,359,999 $ 3,808,676 $ \r\n \r\n$ \r\n \r\n146,458 $ 143,706 $ \r\n \r\n761,940 $ \r\n \r\n259,965 \r\n59 21,432 \r\n2,936 265,452 -34,688 \r\n12,535 70,906 -19,717 \r\n1,040 -27,643 15,012 -15,966 \r\n551,323 \r\n618,234 \r\n \r\n-20,000 \r\n \r\n-20,000 \r\n \r\n-5,500 \r\n \r\n$ \r\n \r\n126,458 $ 123,706 $ \r\n \r\n756,440 $ \r\n \r\n445,686 \r\n \r\n445,685 \r\n \r\n439,046 \r\n \r\n3,365 \r\n \r\n-7,160 \r\n \r\n14,500 632,734 \r\n-6,639 7,160 \r\n \r\nFund Balances - Ending \r\n \r\n$ \r\n \r\n575,509 $ 562,231 $ 1,195,486 $ \r\n \r\n633,255 \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 $29,513 and $29,940, respectively. \r\nThe accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 25 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \r\nYEAR ENDED JUNE 30, 2013 \r\n \r\nSCHEDULE \"2\" \r\n \r\nFUNDING AGENCY PROGRAM/GRANT \r\nAgriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program \r\nTotal U. S. Department of Agriculture \r\nEducation, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Preschool Grants \r\nTotal Special Education Cluster \r\nTitle I, Part A Cluster Pass-Through From Georgia Department of Education Title I Grants to Local Educational Agencies \r\nOther Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States Education Jobs Fund Improving Teacher Quality State Grants Migrant Education - State Grant Program \r\nTotal Other Programs \r\nTotal U. S. Department of Education \r\n \r\nCFDA NUMBER \r\n \r\nPASSTHROUGH \r\nENTITY ID \r\nNUMBER \r\n \r\nEXPENDITURES IN PERIOD \r\n \r\n* 10.553 * 10.555 \r\n \r\nN/A \r\n \r\nN/A \r\n \r\n$ \r\n \r\n$ \r\n \r\n(2) 202,342 (1) \r\n202,342 \r\n \r\n84.027 84.173 \r\n* 84.010 \r\n84.048 84.410 84.367 84.011 \r\n \r\nN/A \r\n \r\n$ \r\n \r\nN/A \r\n \r\n$ \r\n \r\nN/A \r\n \r\n$ \r\n \r\nN/A \r\n \r\n$ \r\n \r\nN/A \r\n \r\nN/A \r\n \r\nN/A \r\n \r\n$ \r\n \r\n$ \r\n \r\n102,890 7,264 \r\n110,154 \r\n341,969 \r\n15,688 148 \r\n51,920 13,984 81,740 533,863 \r\n \r\nTotal Expenditures of Federal Awards \r\n \r\n$ \r\n \r\n736,205 \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 $19. (2) Expenditures for the funds earned on the School Breakfast Program ($53,896) were not maintained separately \r\nand are included in the 2013 National School Lunch Program. \r\n \r\nMajor Programs are identified by an asterisk (*) in front of the CFDA number. \r\n \r\nThe School District did not provide Federal Assistance to any Subrecipient. \r\n \r\nThe accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Baker County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 26 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2013 \r\n \r\nSCHEDULE \"3\" \r\n \r\nAGENCY/FUNDING \r\nGRANTS Bright From the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program Classroom Technology Enhancement \r\nEducation, Georgia Department of Quality Basic Education (1) Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Remedial Education Program Alternative Education Program Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Mid-term Adjustment Hold-Harmless Amended Formula Adjustment Categorical Grants Pupil Transportation Regular Nursing Services Sparsity Other State Programs Food Services Preschool Handicapped Program Vocational Education \r\nOffice of the State Treasurer Public School Employees' Retirement \r\n \r\nGOVERNMENTAL FUND TYPE GENERAL FUND \r\n \r\n$ \r\n \r\n76,646 \r\n \r\n500 \r\n \r\n90,531 13,091 185,692 25,188 105,125 33,849 128,267 99,144 46,910 260,394 50,733 11,208 28,879 \r\n8,646 5,567 \r\n221,120 87,502 66,426 51,223 \r\n-284,313 \r\n108,306 45,000 95,920 \r\n6,680 8,323 7,028 \r\n9,320 \r\n \r\n$ \r\n \r\n1,592,905 \r\n \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 $147,180 are included as part of the Quality Basic Education revenue allotments above. \r\nSee notes to the basic financial statements. \r\n- 27 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\nYEAR ENDED JUNE 30, 2013 \r\n \r\nSCHEDULE \"4\" \r\n \r\nPROJECT \r\n \r\nORIGINAL ESTIMATED \r\nCOST (1) \r\n \r\nCURRENT ESTIMATED COSTS (2) \r\n \r\nAMOUNT EXPENDED IN CURRENT YEAR (3) \r\n \r\nAMOUNT EXPENDED IN PRIOR YEARS (3) \r\n \r\nTOTAL COMPLETION \r\nCOST \r\n \r\nEXCESS PROCEEDS NOT \r\nEXPENDED \r\n \r\nAdding to, renovating, improving and equipping existing facilities \r\n \r\n$ 1,176,000 $ 2,646,539 \r\n \r\n$ 2,646,539 $ 2,646,539 $ \r\n \r\n0 \r\n \r\nUpgrading Instructional and Administrative Technology \r\n \r\n42,000 \r\n \r\n1,444 \r\n \r\n1,444 \r\n \r\n1,444 \r\n \r\nPurchasing school buses and transportation equipment \r\n \r\n70,000 \r\n \r\n26,193 \r\n \r\n26,193 \r\n \r\n26,193 \r\n \r\nESTIMATED COMPLETION \r\nDATE \r\nCompleted \r\nCompleted \r\nCompleted \r\n \r\nPurchasing textbooks and vocational, fine arts, instructional and athletic equipment \r\n \r\n184,713 $ \r\n \r\n21,128 \r\n \r\n161,237 \r\n \r\nJune 30, 2014 \r\n \r\nPurchasing safety and security equipment \r\nAcquiring any property necessary or desirable therefor, both real and personal \r\nBond interest payments and bank fees \r\n \r\n112,000 \r\n \r\n144,788 \r\n \r\n15,456 \r\n \r\n121,134 \r\n \r\nCompleted \r\nCompleted April 1, 2014 \r\n \r\nTotal \r\n \r\n$ 1,400,000 $ 3,003,677 $ \r\n \r\n36,584 $ 2,956,547 $ 2,674,176 $ \r\n \r\n0 \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(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. \r\n(3) The voters of Baker 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\nSee notes to the basic financial statements \r\n \r\n- 28 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) \r\nALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2013 \r\n \r\nSCHEDULE \"5\" \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 Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category III Category IV Remedial Education Program Alternative Education Program \r\nTOTAL DIRECT INSTRUCTIONAL PROGRAMS \r\nMedia Center Program Staff and Professional Development \r\n \r\nALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) (2) (3) \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\n124,589 $ \r\n \r\n48,381 $ \r\n \r\n3,360 $ \r\n \r\n51,741 \r\n \r\n20,984 \r\n \r\n22,132 \r\n \r\n1,129 \r\n \r\n23,261 \r\n \r\n248,636 \r\n \r\n235,755 \r\n \r\n2,834 \r\n \r\n238,589 \r\n \r\n44,626 \r\n \r\n2,399 \r\n \r\n2,399 \r\n \r\n140,724 \r\n \r\n155,890 \r\n \r\n2,834 \r\n \r\n158,724 \r\n \r\n50,876 \r\n \r\n2,399 \r\n \r\n2,399 \r\n \r\n177,992 \r\n \r\n144,375 \r\n \r\n6,002 \r\n \r\n150,377 \r\n \r\n138,553 \r\n \r\n277,122 \r\n \r\n5,800 \r\n \r\n282,922 \r\n \r\n68,184 \r\n \r\n84,445 \r\n \r\n8,031 \r\n \r\n92,476 \r\n \r\n354,769 \r\n \r\n279,913 \r\n \r\n9,578 \r\n \r\n289,491 \r\n \r\n57,974 \r\n \r\n57,974 \r\n \r\n62,157 \r\n \r\n55,802 \r\n \r\n230 \r\n \r\n56,032 \r\n \r\n15,304 \r\n \r\n$ \r\n \r\n1,447,394 $ \r\n \r\n1,361,789 $ \r\n \r\n44,596 $ \r\n \r\n1,406,385 \r\n \r\n39,526 7,642 \r\n \r\n74,424 6,582 \r\n \r\n2,260 \r\n \r\n76,684 6,582 \r\n \r\nTOTAL QBE FORMULA FUNDS \r\n \r\n$ \r\n \r\n1,494,562 $ \r\n \r\n1,442,795 $ \r\n \r\n46,856 $ \r\n \r\n1,489,651 \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. (3) Allotments do not include the State Health payments made by GDOE to the Department of Community Health for the certified employees. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 29 - \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\nOctober 1, 2014 \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 Baker County Board of Education \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 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 Baker County Board of Education as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise Baker County Board of Education's basic financial statements and have issued our report thereon dated October 1, 2014. \r\nIn planning and performing our audit of the financial statements, we considered Baker County Board of Education's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Baker County Board of Education's internal control. Accordingly, we do not express an opinion on the effectiveness of the Baker County Board of Education's internal control. \r\nOur consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying Schedule of Findings and Questioned Costs, we identified a certain deficiency in internal control that we consider to be a material weakness and others identified as significant deficiencies. \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. We consider the deficiency described in the accompanying Schedule of Findings and Questioned Costs as item FS-6041-13-04 to be a material weakness. \r\n2013YB-40 \r\n \r\n  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. We consider the deficiencies described in the accompanying Schedule of Findings and Questioned Costs as items FS-6041-13-01, FS-6041-13-02, and FS-6041-13-03 to be significant deficiencies. \r\nCompliance and Other Matters \r\nAs part of obtaining reasonable assurance about whether Baker County Board of Education's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. \r\nWe noted certain matters that we have reported to management of Baker County Board of Education in a separate letter dated October 1, 2014. \r\nBaker County Board of Education's Response to Findings \r\nBaker County Board of Education's response to the findings identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. Baker County Board of Education's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. \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 entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. \r\nRespectfully submitted, \r\n \r\nGSG:as 2013YB-40 \r\n \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\nOctober 1, 2014 \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 Baker County Board of Education \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 Baker County Board of Education's compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of its major Federal programs for the year ended June 30, 2013. Baker County Board of Education's major Federal programs are identified in the Summary of Auditor's Results section of the accompanying Schedule of Findings and Questioned Costs. \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 Baker County Board of Education's major Federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Baker County Board of Education'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 Baker County Board of Education's compliance. \r\n2013SA-30 \r\n \r\n  Opinion on Each Major Federal Program \r\nIn our opinion, the Baker County Board of Education complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major Federal programs for the year ended June 30, 2013. \r\nReport on Internal Control over Compliance \r\nManagement of Baker County Board of Education is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Baker County Board of Education's internal control over compliance with the types of requirements that could have a direct and material effect on each major Federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major Federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Baker County Board of Education'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 and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, we identified a certain deficiency in internal control over compliance, as described in the accompanying Schedule of Findings and Questioned Costs as item FA-6041-13-01 that we consider to be a significant deficiency. \r\nBaker County Board of Education's response to the internal control over the compliance finding identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. Baker County Board of Education's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. \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:as 2013SA-30 \r\n \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  BAKER COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2013 \r\n \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nFINDING CONTROL NUMBER AND STATUS \r\n \r\nFS-6041-11-01 FS-6041-11-02 FS-6041-11-03 FS-6041-11-04 FS-6041-12-01 FS-6041-12-02 FS-6041-12-03 FS-6041-12-04 \r\n \r\nFurther Action Not Warranted \r\n \r\n(1) \r\n \r\nFurther Action Not Warranted \r\n \r\n(1) \r\n \r\nFurther Action Not Warranted \r\n \r\n(1) \r\n \r\nFurther Action Not Warranted \r\n \r\n(1) \r\n \r\nPartially Resolved - See Corrective Action/Responses \r\n \r\nUnresolved - See Corrective Action/Responses \r\n \r\nUnresolved - See Corrective Action/Responses \r\n \r\nUnresolved - See Corrective Action/Responses \r\n \r\n(1) Findings have been repeated in fiscal year 2012 and fiscal year 2013. \r\n \r\nCORRECTIVE ACTION/RESPONSES \r\n \r\nINVENTORIES REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Separation of Duties Finding Control Number: FS-6041-12-01 \r\n \r\nThe School Administration and Board of Education are working to improve separation of duties by hiring additional personnel to the extent that it is financially feasible. The School Nutrition Supervisor is a relatively new employee and has implemented and will be implementing more controls on separation of duties. In an effort to separate some of the duties, the Board office as of February 2014 is balancing the bank reconciliations for the school nutrition/lunchroom. The Superintendent and Board of Education are reviewing the School's financial controls in an effort to determine where improvements can be made. \r\n \r\nCASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Accounting Procedures over School Activity Accounts Finding Control Number: FS-6041-12-02 \r\n \r\nWe have changed staffing and provided additional training and guidance to the new personnel. The School Board is also working on implementing a system to monitor this area on a more timely basis and to take corrective action during the year as is deemed necessary. This process is already underway and better overall financial procedures for this area should be in place during the fiscal year ended June 30, 2015. \r\n \r\n- 1 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2013 \r\n \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nCORRECTIVE ACTION/RESPONSES \r\n \r\nEXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Accounting Procedures Finding Control Number: FS-6041-12-03 \r\n \r\nDuring the 2014 fiscal year, the School District replaced many financial staff and began a process to review, improve and/or replace all existing financial policies and procedures. Significant improvements have already been implemented subsequent to the 2013 fiscal year and improvements will continue to be implemented during the 2015 fiscal year. We anticipate this process to be completed during the 2015 fiscal year and this finding to be completely resolved at that time. \r\n \r\nBUDGET PREPARATION/EXECUTION Deficit Fund Balance Finding Control Number: FS-6041-12-04 \r\n \r\nThis is a timing difference that should be resolved over a period of time. It is anticipated that these deficits will be alleviated by additional revenues and/or transfers from the General Fund. The Board is unsure when this process can be completed. \r\n \r\nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\n \r\nFINDING CONTROL NUMBER AND STATUS \r\n \r\nFA-6041-11-01 FA-6041-12-01 \r\n \r\nFurther Action Not Warranted \r\n \r\n(1) \r\n \r\nUnresolved - See Corrective Action/Responses \r\n \r\n(1) Similar findings have been repeated in fiscal year 2012 and fiscal year 2013. \r\n \r\nCORRECTIVE ACTION/RESPONSES \r\n \r\nALLOWABLE COSTS/COST PRINCIPLES PROCUREMENT AND SUSPENSION AND DEBARMENT Inadequate Accounting Procedures over Expenditures U. S. Department of Agriculture Through Georgia Department of Education Finding Control Number: FA-6041-12-01 \r\n \r\nThe School District is currently working to implement written internal control procedures to ensure expenditures are properly documented, authorized, allowable, and charged according to bid documents. These internal control procedures will ensure that all expenditures are allowable under OMB Circular A-87, approved by appropriate management and have proper documentation. \r\n \r\n- 2 - \r\n \r\n SECTION IV FINDINGS AND QUESTIONED COSTS \r\n \r\n  BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2013 \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\nInternal control over financial reporting:  Material weakness identified?  Significant deficiencies identified? \r\n \r\nNoncompliance material to financial statements noted: \r\n \r\nFederal 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 OMB Circular A-133, Section 510(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 84.010 \r\n \r\nChild Nutrition Cluster Title I, Part A 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\nUnmodified Yes Yes No \r\nNo Yes Unmodified Yes \r\n$300,000 No \r\n \r\n- 1 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2013 \r\n \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nFinding Control Number: Control Category: \r\nInternal Control Impact: \r\n \r\nFS-6041-13-01 Inadequate Separation of Duties - School Food Services INVENTORIES REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Significant Deficiency \r\n \r\nDescription: This is a repeat finding (FS-6041-12-01, FS-6041-11-01 and FS-6041-10-01) from the years ended June 30, 2012, June 30, 2011, and June 30, 2010, respectively. The accounting procedures of the School District were insufficient to provide for adequate separation of duties over the School Food Services. \r\n \r\nCriteria: The School District's management is responsible for designing and maintaining internal controls that provide reasonable assurance that transactions are processed according to established procedures. Such internal controls would limit any one individual's access to both physical assets and the related accounting records. \r\n \r\nCondition: Our audit revealed the following deficiencies related to internal controls over the School Food Services: \r\n \r\nInventories  Custodianship of inventory was not separated from the receiving function. \r\n \r\nRevenues/Receivables/Receipts  Deposit preparation was not separated from the record keeping and cash custody functions. \r\n \r\nExpenditures/Liabilities/Disbursements  The duty of approving vouchers for payment was not adequately separated from the duty of writing checks; and  There was no independent review to determine that the expenditures were appropriate, accurate and properly documented prior to payment. \r\n \r\nCause: In discussing this condition with management, it was determined that these deficiencies were the result of management's decision to limit the number of administrative staff made responsible for accounting functions applicable to the School Food Services. \r\n \r\nEffect or Potential Effect: Errors and/or irregularities may not be detected in a timely manner. \r\n \r\nRecommendation: The School District should implement procedures to ensure that the key accounting functions of custody, record keeping and authorization are separated and/or utilize management oversight of these incompatible activities. Management should also revise and monitor controls to provide reasonable assurance that transactions are processed according to established procedures. \r\n \r\n- 2 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2013 \r\n \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nViews of Responsible Officials and Corrective Action Plans: We concur with this finding. In an effort to separate some of the duties, the new Food Service Manager has put new controls in by appointing different staff members to: 1. Check in deliveries and keep a log. 2. Count and verify all cash received, he then re-verifies and makes deposits. 3. Due to short staff, he has to check his vouchers and enter his invoices. The Board office writes all checks including those of the Food Services. Personnel of the Board office are now balancing and reconciling the Food Service bank statements, as well as the DE106 report. \r\n \r\nContact Person: Telephone: Fax: Email: \r\n \r\nDianne Sheffield, Finance Manager (229) 734-5274 ext. 3401 (229) 734-6123 dsheffield@baker.k12.ga.us \r\n \r\nFinding Control Number: Control Category: \r\nInternal Control Impact: \r\n \r\nFS-6041-13-02 Inadequate Internal Control Procedures over School Activity Accounts CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Significant Deficiency \r\n \r\nDescription: This is a repeat finding (FS-6041-12-02, FS-6041-11-02 and FS-6041-10-02) from the years ended June 30, 2012, June 30, 2011 and June 30, 2010, respectively. The accounting procedures of the School District were insufficient to provide for adequate internal controls over the school activity accounts. \r\n \r\nCriteria: The School District's management is responsible for designing and maintaining internal controls that provide proper separation of duties and reasonable assurance that transactions are processed according to established procedures. Such internal controls would limit any one individual's access to both physical assets and the related accounting records. \r\n \r\nCondition: Our audit revealed the following deficiencies related to School Activity Accounts: \r\n \r\nCash and Cash Equivalents  The bank reconciliation function was not separate from the record keeping and voucher payment functions; and  The school activity bank account was not properly reconciled to the general ledger. \r\n \r\nRevenues/Receipts/Receivables \r\n Deposit preparation was not separated from the record keeping and cash custody functions. \r\n The following deficiencies were noted during a test of twenty receipt transactions: o One receipt lacked any type of supporting documentation; o Two receipt's documentation did not agree to amount recorded in the accounting system; and o Three cash receipt count sheets did not contain the signature of two employees as required by board policy. \r\n \r\n- 3 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2013 \r\n \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nExpenditures/Liabilities/Disbursements \r\n The check writing function was not separated from the record keeping or processing of signed checks. \r\n The following deficiencies were noted during our test of forty disbursement transactions: o One voucher lacked any type of supporting documentation; o Four vouchers did not have sufficient documentation to determine whether expenditure was charged to the correct account code; o Three vouchers lacked evidence of supervisory approval prior to payment; and o Six disbursements were made directly to the Principal with no other approval or indication of review. \r\n \r\nCause: In discussing this condition with management, it was determined that the school did not have adequate personnel in order to be able to separate the duties adequately nor was the staff properly trained. \r\n \r\nEffect or Potential Effect: Errors and/or irregularities may not be detected in a timely manner. \r\n \r\nRecommendation: The School District should implement necessary procedures to ensure that the key accounting functions of custody and record keeping are separated. In addition, the School District should implement procedures to ensure that disbursements and receipts of funds within the school activity accounts are adequately documented and recorded in the financial records. The School District should also enhance training of personnel and establish a monitoring process to provide reasonable assurance that transactions are processed according to established procedures. \r\n \r\nViews of Responsible Officials and Corrective Action Plans: We concur with this finding. Due to the short staff, day to day transactions are being recorded by the Front Desk Secretary. The Board of Education administrative office personnel are now reconciling the school activity bank account to the general ledger and a new Front Desk Secretary was hired and provided special training as to how to keep better records and make sure all transactions have all the necessary signatures and supporting documents. This corrective action was implemented over a period of time but was completed by fiscal year ended 2014. \r\n \r\nContact Person: Telephone: Fax: Email: \r\n \r\nDianne Sheffield, Finance Manager (229) 734-5274 ext. 3401 (229) 734-6123 dsheffield@baker.k12.ga.us \r\n \r\n- 4 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2013 \r\n \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nFinding Control Number: Control Category: \r\nInternal Control Impact: \r\n \r\nFS-6041-13-03 Inadequate Internal Control Procedures CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS EMPLOYEE COMPENSATION Significant Deficiency \r\n \r\nDescription: This is a repeat finding (FS-6041-12-03, FS-6041-11-03, and FS-6041-10-03) from the years ended June 30, 2012, June 30, 2011, and June 30, 2010, respectively. The accounting procedures of the School District were insufficient to provide adequate controls over Cash and Cash Equivalents, Revenues/Receivables/Receipts, Expenditures/Liabilities/Disbursements, and Employee Compensation. \r\n \r\nCriteria: The School District's management is responsible for designing and maintaining controls that provide reasonable assurance that transactions are processed according to established procedures. Such internal controls would limit any one individual's access to both physical assets and the related accounting records. \r\n \r\nCondition: Cash and Cash Equivalents \r\n The bank reconciliation function was not separate from the record keeping and voucher payment functions; and \r\n Bank reconciliations were not always approved by supervisory personnel. \r\n \r\nRevenues/Receivables/Receipt  Deposit preparation was not separated from the record keeping and cash custody functions. \r\n \r\nExpenditures/Liabilities/Disbursements  The following deficiencies were noted during our test of sixty-six disbursement transactions: o Two vouchers lacked any type of supporting documentation; o Seven vouchers did not contain evidence of approval prior to the commitment of funds; o Three checks did not contain dual signatures as required by Board policy; and o Three disbursements were determined to be expensed outside of the current fiscal year. \r\nEmployee Compensation  The salary of a financial consultant paid through the payroll system was not adequately documented to support the amount paid. \r\nCause: In discussing this condition with management, it was determined that these deficiencies were a result of management's decision to limit the number of administrative staff made responsible for accounting functions. \r\nEffect or Potential Effect: Errors and/or irregularities may not be detected in a timely manner. \r\n \r\n- 5 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2013 \r\n \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nRecommendation: The School District should implement procedures to ensure that key accounting functions of custody and record keeping are separated and/or utilize management oversight of these incompatible activities. In addition, procedures should be implemented to ensure that (1) expenditures are charged to the correct accounting period; (2) expenditure transactions reflect proper approval, and documentation, prior to authorization for payment; and (3) employee compensation expenditures are properly documented and approved before disbursement of funds. Management should also revise and monitor controls to provide reasonable assurance that transactions are processed according to established procedures. \r\n \r\nViews of Responsible Officials and Corrective Action Plans: We concur with this finding. Due to various events, the entire staff (Finance manager, Finance assistant, Federal Funds personnel, Accountant and Superintendent) of the Baker County Board of Education finance office was replaced. This all took place in many instances rather suddenly with little or no notice. The new staff is aware of the importance of being very pro-active in keeping better supporting documents, evidence of approvals and making sure checks contain dual signatures which has been repeatedly stressed. The learning curve was challenging but, the new staff has attended as much training as possible and obtained expert input from other professionals as needed. They have shown diligence, dedication and excellent leadership in the positions they have assumed. Overall record keeping has significantly improved and is in accordance with school policies. In addition, the new Board of Education discovered the previous financial consultant was being paid as an employee through payroll, as well as submitting bills under his company name. After discovery of this fact, all business relations were terminated. Implemented September 2013. \r\n \r\nContact Person: Telephone: Fax: Email: \r\n \r\nDianne Sheffield, Finance Manager (229) 734-5274 ext. 3401 (229) 734-6123 dsheffield@baker.k12.ga.us \r\n \r\nFinding Control Number: \r\nControl Category: Internal Control Impact: \r\n \r\nFS-6041-13-04 Deficit Fund Balance BUDGET PREPARATION/EXECUTION Material Weakness \r\n \r\nDescription: This is a repeat finding (FS-0641-12-04, FS-6041-11-04 and FS-6041-10-04) from the years ended June 30, 2012, June 30, 2011 and June 30, 2010, respectively. At June 30, 2012, the Capital Projects Fund of the Baker County Board of Education reported a deficit fund balance. \r\n \r\nCriteria: Chapter 25, Governmental Fund Deficits of the Financial Management for Georgia Local Units of Administration states in part: \"The seriousness of fund balance deficits cannot be overstated. The Georgia Department of Education requires those LUAs with deficit governmental fund balances to meet certain reporting requirements.\" \r\n \r\n- 6 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2013 \r\n \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nCondition: The School District's Capital Projects Fund reported a deficit fund balance in the amount of $260,839. \r\n \r\nCause: The School District did not monitor expenditures to ensure that the School District did not exceed available resources. \r\n \r\nEffect or Potential Effect: A financial statement irregularity in accordance with Official Code of Georgia Annotated 20-2-67. \r\n \r\nRecommendation: The School District should establish policies and procedures designed to ensure that expenditures do not exceed availability of resources, so that in future periods the School District does not report deficit fund balances. \r\n \r\nViews of Responsible Officials and Corrective Action Plans: We concur with this finding. The new School Board and new staff were rather surprised because the Capital Projects Fund has a positive reconciled cash balance. The deficit balance was apparently the result of Capital Projects Fund expenditures being paid with General Fund resources and being recorded in the Capital Projects Fund by use of pooled cash. This negative Capital Projects Fund portion of the pooled cash balance netted with the positive Capital Projects Fund reconciled cash balance created an overall net negative cash balance as is reflected in the audited statements. All financial resources of this fund have now been used and no additional sales taxes will be received. This deficit balance can only be eliminated by an adjusting entry to record a transfer from the General Fund to the Capital Projects Fund. \r\n \r\nThe new staff will strive to ensure that all financial budgets, policies, procedures, revenues, expenditures and fund balances are closely monitored. If the Capital Projects Fund is without adequate financial resources to fund a project, a budget resolution will be required before using general fund resources. If the general fund is to be repaid for such an expenditure, due to/from line items will be utilized to clearly reflect these as temporary loans between funds. Proper note disclosures will also be presented in the annual statements to explain the purpose and balance of such loans as required by the Governmental Accounting Standards Board (GASB). Any use of general fund proceeds to fund a project beyond the amount the Capital Projects Fund can reasonably be expected to repay will be considered a transfer with proper disclosure in the annual financial report as required by GASB. \r\n \r\nThese changes are expected to be implemented 2014. \r\n \r\nContact Person: Telephone: Fax: Email: \r\n \r\nDianne Sheffield, Finance Manager (229) 734-5274 ext. 3401 (229) 734-6123 dsheffield@baker.k12.ga.us \r\n \r\n- 7 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2013 \r\n \r\nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\n \r\nFinding Control Number: \r\nCompliance Requirements: \r\nInternal Control Impact: Compliance Impact: Federal Awarding Agency: Pass-Through Entity: CFDA Number and Title: \r\n \r\nFA-6041-13-01 Inadequate Internal Control Procedures ALLOWABLE COSTS/COST PRINCIPLES PROCUREMENT AND SUSPENSION AND DEBARMENT Significant Deficiency Nonmaterial Noncompliance U. S. Department of Agriculture Georgia Department of Education CFDA 10.553 and 10.555 Child Nutrition Cluster \r\n \r\nDescription: This is a repeat finding (FA-0641-12-01) from the year ended June 30, 2012. A review of expenditures charged to the Child Nutrition Cluster (CFDA 10.553 and 10.555) program revealed that the School District did not implement internal control procedures to ensure that expenditures were properly documented, authorized, allowable, and charged according to bid documents. \r\n \r\nCriteria: Provisions of OMB Circular A-87 Cost Principles for State, Local and Indian Tribal Governments, require that \"to be allowable under Federal awards, costs must be... authorized or not prohibited under state or local laws or regulations\" and \"be adequately documented\". \r\n \r\nCondition: A review of eighteen expenditure vouchers for the Child Nutrition Cluster revealed the following deficiencies: \r\n \r\n One voucher had no evidence of approval;  Two vouchers lacked any type of supporting documentation;  Eight vouchers had no evidence of receipt of goods; and  One voucher had charges higher than the amounts quoted in the procurement agreements. \r\nIn addition, food items were noted on invoices that were not included in the bid package. \r\n \r\nQuestioned Cost: $993.66 \r\n \r\nCause: In discussing this condition with management, it was determined that management did not monitor compliance with Federal guidelines to ensure that expenditures charged to the Federal program were approved, properly documented, and charged for the correct amount. \r\n \r\nEffect or Potential Effect: Failure to ensure that expenditures are allowable, approved and properly documented resulted in noncompliance with the requirements of the Federal grant. \r\n \r\nRecommendation: The School District should implement procedures to ensure that all expenditures are allowable under OMB Circular A-87, approved by appropriate management, and properly documented. The Georgia Department of Education should review this matter to determine if a reclaim of funds is appropriate. \r\n \r\n- 8 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2013 \r\n \r\nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\n \r\nViews of Responsible Officials and Corrective Action Plans: We concur with this finding. Compliance with all federal and state requirements has been stressed as a priority for the new Food Service Manager. He is taking special care to make sure all supporting documentation, approvals, and receipts are being maintained in compliance with federal and state guidelines. Implemented 2014. \r\n \r\nContact Person: Telephone: Fax: Email: \r\n \r\nDianne Sheffield, Finance Manager (229) 734-5274 ext. 3401 (229) 734-6123 dsheffield@baker.k12.ga.us \r\n \r\n- 9 - \r\n \r\n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-b2011-h2012-belec-p-btext","title":"Baker County Board of Education, Newton, Georgia, report on audit for fiscal year ended June 30, 2012 (including independent auditor's reports)","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts, issuing body."],"dcterms_spatial":["United States, Georgia, 32.75042, -83.50018"],"dcterms_creator":["Georgia. 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Map and Government Information Library"],"edm_is_shown_by":["https://dlg.galileo.usg.edu/do:dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-b2011-h2012-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-b2011-h2012-belec-p-btext"],"dcterms_temporal":null,"dcterms_rights_holder":["\u0026copy; Georgia Department of Audits"],"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["state government records","audits","financial statements","financial records"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":["Education--Auditing--fast","Education--Finance--fast","Expenditures, Public--fast","Georgia--Baker County--fast--https://id.oclc.org/worldcat/entity/E39PBJgxqwBrwyH6QgJ7CB3hHC","Periodicals--fast","Statistics--fast"],"fulltext":"BAKER COUNTY BOARD OF EDUCATION \r\nNEWTON, GEORGIA \r\nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2012 \r\n(Including Independent Auditor's Reports) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \r\n \r\nSECTION I \r\n \r\nFINANCIAL \r\n \r\nINDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \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 ASSETS \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 ASSETS \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 ASSETS \r\n \r\nFIDUCIARY FUNDS \r\n \r\nH \r\n \r\nNOTES TO THE BASIC FINANCIAL STATEMENTS \r\n \r\nSCHEDULES \r\n \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \r\n \r\nSUPPLEMENTARY INFORMATION \r\n \r\n2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 3 SCHEDULE OF STATE REVENUE \r\n \r\nPage \r\n1 2 4 5 6 7 8 9 \r\n25 26 27 \r\n \r\n  BAKER COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \r\n \r\nSECTION I \r\nFINANCIAL \r\nSCHEDULES \r\nSUPPLEMENTARY INFORMATION \r\n4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 5 ALLOTMENTS AND EXPENDITURES \r\nGENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM \r\n \r\nPage \r\n28 29 \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 WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 \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  BAKER COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \r\nSECTION V MANAGEMENT'S RESPONSES SCHEDULE OF MANAGEMENT'S RESPONSES \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\nJune 25, 2013 \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 Baker County Board of Education \r\nINDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \r\nLadies and Gentlemen: \r\nWe have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through H) of the Baker County Board of Education, as of and for the year ended June 30, 2012, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Baker County Board of Education's management. Our responsibility is to express opinions on these financial statements based on our audit. \r\nWe conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Board's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. \r\nIn our opinion, the financial statements referred to previously present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the Baker County Board of Education, as of June 30, 2012, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. \r\nManagement has omitted Management's Discussion and Analysis that accounting principles generally accepted in the United States of America requires to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial \r\n2012ARL-11 \r\n \r\n  statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. \r\nIn accordance with Government Auditing Standards, we have also issued our report dated June 25, 2013, on our consideration of the Baker County Board of Education's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. \r\nThe Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on page 25, is not a required part of the basic financial statements but is supplementary information required by accounting principles generally accepted in the United States of America. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. \r\nOur audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Baker County Board of Education's financial statements as a whole. The accompanying supplementary information consists of Schedules 2 through 5, which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the financial statements. The accompanying supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. \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:as 2012ARL-11 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n  BAKER COUNTY BOARD OF EDUCATION \r\n \r\n  BAKER COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30, 2012 \r\nASSETS \r\nCash and Cash Equivalents Accounts Receivable, Net \r\nTaxes State Government Federal Government 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 Payroll Withholdings Payable Short-Term Debt Long-Term Liabilities \r\nDue Within One Year Due in More Than One Year \r\nTotal Liabilities \r\nNET ASSETS \r\nInvested in Capital Assets, Net of Related Debt Restricted for \r\nContinuation of Federal Programs Debt Service Unrestricted \r\nTotal Net Assets \r\nTotal Liabilities and Net Assets \r\n \r\nEXHIBIT \"A\" \r\n \r\nGOVERNMENTAL ACTIVITIES \r\n \r\n$ \r\n \r\n445,705.16 \r\n \r\n117,423.80 144,772.11 \r\n92,573.93 46,209.42 \r\n7,532.09 82,372.00 7,392,073.78 \r\n \r\n$ \r\n \r\n8,328,662.29 \r\n \r\n$ \r\n \r\n22,928.87 \r\n \r\n364,719.50 \r\n \r\n7,686.01 \r\n \r\n200,000.00 \r\n \r\n275,461.25 302,540.11 \r\n \r\n$ \r\n \r\n1,173,335.74 \r\n \r\n$ \r\n \r\n6,906,338.56 \r\n \r\n7,532.09 63.45 \r\n241,392.45 \r\n \r\n$ \r\n \r\n7,155,326.55 \r\n \r\n$ \r\n \r\n8,328,662.29 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 1 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES \r\nFOR THE YEAR ENDED JUNE 30, 2012 \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 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 Sales Taxes Special Purpose Local Option Sales Tax For Debt Services Other Sales Tax Investment Earnings Miscellaneous \r\nTotal General Revenues \r\nChange in Net Assets \r\nNet Assets - Beginning of Year \r\nNet Assets - End of Year \r\n \r\nEXPENSES \r\n \r\nCHARGES FOR SERVICES \r\n \r\n$ \r\n \r\n2,429,165.10 \r\n \r\n64,966.85 50,432.88 75,788.42 358,218.91 214,924.79 135,209.26 309,570.07 349,252.93 \r\n4,642.74 \r\n \r\n28,193.71 $ 219,392.38 \r\n23,498.88 \r\n \r\n$ \r\n \r\n4,263,256.92 $ \r\n \r\n14,389.18 12,201.45 \r\n26,590.63 \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 ASSETS \r\n \r\n$ \r\n \r\n1,154,877.41 \r\n \r\n57,064.36 51,055.56 41,142.66 268,656.90 133,085.82 15,360.07 98,416.06 152,984.75 $ \r\n3,822.97 \r\n \r\n191,336.11 \r\n \r\n$ \r\n \r\n2,167,802.67 $ \r\n \r\n$ 228,803.50 228,803.50 $ \r\n \r\n-1,274,287.69 \r\n-7,902.49 622.68 \r\n-34,645.76 -89,562.01 -81,838.97 -119,849.19 -211,154.01 32,535.32 \r\n-819.77 \r\n-13,804.53 -15,854.82 -23,498.88 \r\n-1,840,060.12 \r\n \r\n$ \r\n \r\n2,098,117.41 \r\n \r\n239,225.71 11,849.07 316.11 60,422.56 \r\n \r\n$ \r\n \r\n2,409,930.86 \r\n \r\n$ \r\n \r\n569,870.74 \r\n \r\n6,585,455.81 \r\n \r\n$ \r\n \r\n7,155,326.55 \r\n \r\n- 3 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION BALANCE SHEET \r\nGOVERNMENTAL FUNDS JUNE 30, 2012 \r\n \r\nEXHIBIT \"C\" \r\n \r\nASSETS \r\nCash and Cash Equivalents Accounts Receivable, Net \r\nTaxes State Government Federal Government Other Inventories \r\nTotal Assets \r\n \r\nGENERAL FUND \r\n \r\nDISTRICTWIDE \r\nCAPITAL PROJECTS \r\nFUND \r\n \r\nDEBT SERVICE \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ \r\n \r\n673,220.22 \r\n \r\n$ \r\n \r\n96,277.99 $ 144,772.11 \r\n92,573.93 46,209.42 \r\n7,532.09 \r\n \r\n21,145.81 \r\n \r\n63.45 $ \r\n \r\n673,283.67 \r\n117,423.80 144,772.11 \r\n92,573.93 46,209.42 \r\n7,532.09 \r\n \r\n$ \r\n \r\n1,060,585.76 $ 21,145.81 $ \r\n \r\n63.45 $ 1,081,795.02 \r\n \r\nLIABILITIES AND FUND BALANCES \r\nLIABILITIES \r\nCash Overdraft Accounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Short-Term Debt Deposits and Deferred Revenue \r\nTotal Liabilities \r\nFUND BALANCES \r\nNonspendable Restricted Assigned Unassigned \r\nTotal Fund Balances \r\nTotal Liabilities and Fund Balances \r\n \r\n$ 227,578.51 \r\n \r\n$ \r\n \r\n22,928.87 \r\n \r\n364,719.50 \r\n \r\n7,686.01 \r\n \r\n200,000.00 \r\n \r\n26,205.37 \r\n \r\n$ \r\n \r\n621,539.75 $ 227,578.51 \r\n \r\n$ 227,578.51 22,928.87 \r\n364,719.50 7,686.01 \r\n200,000.00 26,205.37 \r\n$ 849,118.26 \r\n \r\n$ \r\n \r\n7,532.09 \r\n \r\n$ \r\n \r\n3,633.42 \r\n \r\n427,880.50 $ -206,432.70 \r\n \r\n$ \r\n \r\n439,046.01 $ -206,432.70 $ \r\n \r\n$ 63.45 \r\n63.45 $ \r\n \r\n7,532.09 63.45 \r\n3,633.42 221,447.80 \r\n232,676.76 \r\n \r\n$ \r\n \r\n1,060,585.76 $ 21,145.81 $ \r\n \r\n63.45 $ 1,081,795.02 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 4 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \r\nTO THE STATEMENT OF NET ASSETS JUNE 30, 2012 \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 Assets 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 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\nLong-Term Liabilities, including Bonds Payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-Term Liabilities at year-end consist of: \r\nBonds Payable Capital Leases Payable Compensated Absences Payable \r\nTotal Long-Term Liabilities \r\nNet Assets of Governmental Activities (Exhibit \"A\") \r\n \r\n$ \r\n \r\n232,676.76 \r\n \r\n$ \r\n \r\n82,372.00 \r\n \r\n8,927,385.65 \r\n \r\n1,103,373.49 \r\n \r\n-2,638,685.36 \r\n \r\n7,474,445.78 \r\n \r\n26,205.37 \r\n \r\n$ -550,000.00 -18,107.22 -9,894.14 \r\n \r\n-578,001.36 \r\n \r\n$ 7,155,326.55 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 5 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES \r\nGOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2012 \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 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\nNet Change in Fund Balances \r\nFund Balances - Beginning \r\nFund Balances - Ending \r\n \r\nGENERAL FUND \r\n \r\nDISTRICTWIDE \r\nCAPITAL PROJECTS \r\nFUND \r\n \r\nDEBT SERVICE \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ 2,091,582.29 11,849.07 \r\n1,758,510.39 638,095.78 26,590.63 205.78 $ 60,422.56 \r\n$ 4,587,256.50 $ \r\n \r\n$ $ 239,225.71 \r\n \r\n109.22 \r\n \r\n1.11 \r\n \r\n109.22 $ 239,226.82 $ \r\n \r\n2,091,582.29 251,074.78 \r\n1,758,510.39 638,095.78 26,590.63 316.11 60,422.56 \r\n4,826,592.54 \r\n \r\n$ 2,156,877.94 $ \r\n64,966.85 50,432.88 75,788.42 356,741.80 214,924.79 134,164.27 316,709.98 531,226.45 \r\n4,642.74 28,193.71 217,667.67 \r\n \r\n14,773.42 1,192.94 \r\n \r\n$ 4,168,303.86 $ \r\n \r\n$ \r\n \r\n418,952.64 $ \r\n \r\n39,993.05 \r\n \r\n$ \r\n \r\n1,477.11 \r\n26,193.50 \r\n25,260.00 $ 240,000.00 22,305.94 \r\n92,923.66 $ 262,305.94 $ -92,814.44 $ -23,079.12 $ \r\n \r\n2,196,870.99 \r\n64,966.85 50,432.88 75,788.42 358,218.91 214,924.79 134,164.27 316,709.98 557,419.95 \r\n4,642.74 28,193.71 217,667.67 25,260.00 \r\n254,773.42 23,498.88 \r\n4,523,533.46 \r\n303,059.08 \r\n \r\n$ \r\n \r\n23,080.23 $ \r\n \r\n$ \r\n \r\n-23,080.23 \r\n \r\n$ \r\n \r\n-23,080.23 $ \r\n \r\n23,080.23 $ \r\n \r\n$ \r\n \r\n418,952.64 $ -115,894.67 $ \r\n \r\n1.11 $ \r\n \r\n20,093.37 \r\n \r\n-90,538.03 \r\n \r\n62.34 \r\n \r\n23,080.23 -23,080.23 \r\n0.00 303,059.08 -70,382.32 \r\n \r\n$ \r\n \r\n439,046.01 $ -206,432.70 $ \r\n \r\n63.45 $ \r\n \r\n232,676.76 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 6 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF \r\nREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2012 \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\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 Assets. In the current year, these amounts consist of: \r\nBond Principal Retirements 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 Compensated Absences \r\n \r\n$ \r\n \r\n303,059.08 \r\n \r\n$ 280,257.00 -273,708.89 \r\n \r\n6,548.11 6,535.12 \r\n \r\n$ 240,000.00 14,773.42 \r\n \r\n254,773.42 \r\n \r\n-1,044.99 \r\n \r\nChange in Net Assets of Governmental Activities (Exhibit \"B\") \r\n \r\n$ \r\n \r\n569,870.74 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 7 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS \r\nFIDUCIARY FUNDS JUNE 30, 2012 \r\nASSETS Cash and Cash Equivalents \r\nLIABILITIES Funds Held for Others \r\n \r\nEXHIBIT \"G\" \r\n \r\nAGENCY FUNDS \r\n \r\n$ \r\n \r\n11,521.93 \r\n \r\n$ \r\n \r\n11,521.93 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 8 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNote 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \r\nREPORTING ENTITY \r\nThe Baker County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity. \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 Baker County Board of Education. \r\nDistrict-wide Statements: The Statement of Net Assets and the Statement of Activities display information about the financial activities of the overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. \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: The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting of internal activities. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental fund, 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 Special Purpose Local Option Sales Tax (SPLOST) that are restricted, committed or assigned to the expenditure for capital outlays, including the acquisition or construction of capital facilities. \r\n \r\n- 9 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"H\" \r\n \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\nThe School District reports the following fiduciary fund type: \r\n Agency funds account for assets held by the School District as an agent for various funds or individuals. \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, 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. 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 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\nCASH AND CASH EQUIVALENTS \r\nComposition of Deposits Cash and cash equivalents consist of cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Official Code of Georgia Annotated Section 45-8-14 authorizes the School District to deposit its funds in one or more solvent banks, insured Federal savings and loan associations or insured chartered building and loan associations. \r\n \r\n- 10 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"H\" \r\n \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\n \r\nPROPERTY TAXES \r\n \r\nThe Baker County Board of Commissioners fixed the property tax levy for the 2011 tax digest year (calendar year) on August 31, 2011 (levy date). Taxes were due on December 20, 2011 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2011 tax digest are reported as revenue in the governmental funds for fiscal year 2012. The Baker County County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2012, for maintenance and operations amounted to $2,091,582.29. \r\n \r\nThe tax millage rate levied for the 2011 tax year (calendar year) for the Baker County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value): \r\n \r\nSchool Operations \r\n \r\n14.88 mills \r\n \r\nSALES TAXES \r\n \r\nSpecial Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $239,225.71 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years. \r\n \r\nINVENTORIES \r\n \r\nFood Inventories On the basic financial statements, inventories of donated food commodities used in the preparation of meals are reported at their Federally assigned value and purchased foods inventories are reported at cost (first-in, first-out). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used. \r\n \r\nCAPITAL ASSETS \r\n \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 \r\n \r\n- 11 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"H\" \r\n \r\nmaintenance 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 \r\n \r\nstatements are as follows: \r\n \r\nCapitalization \r\n \r\nEstimated \r\n \r\nPolicy \r\n \r\nUseful Life \r\n \r\nLand Buildings and Improvements Equipment \r\n \r\nAll $ 5,000.00 $ 5,000.00 \r\n \r\nN/A 15 to 80 years \r\n3 to 50 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\n \r\nCOMPENSATED ABSENCES \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\nVacation leave of 15 days is awarded on a fiscal year basis to all full time personnel employed on a twelve month basis. No other employees are eligible to earn vacation leave. Vacation leave not utilized during the fiscal year may be carried over to the next fiscal year, providing such vacation leave does not exceed 60 days. \r\n \r\nBeginning of Year Liability \r\n \r\nIncreases \r\n \r\nDecreases \r\n \r\nEnd of Year Liability \r\n \r\n2010 $ 2011 $ 2012 $ \r\n \r\n34,587.13 $ 20,356.62 $ \r\n8,849.15 $ \r\n \r\nGENERAL OBLIGATION BONDS \r\n \r\n754.37 $ 3,028.44 $ 5,437.94 $ \r\n \r\n14,984.88 $ 14,535.91 $ \r\n4,392.95 $ \r\n \r\n20,356.62 8,849.15 9,894.14 \r\n \r\nThe School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. In the District-wide and fund financial statements, the School District recognizes bond premiums and discounts, as well as bond issuance costs during the fiscal year bonds are issued. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. To conform to generally accepted accounting principles, bond premiums and discounts, as well as bond issuance costs should be amortized over the life of the bonds on the District-wide statements. The effect of this deviation is deemed to be immaterial to the fair presentation of the basic financial statements. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement of Net Assets. \r\n \r\n- 12 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNET ASSETS \r\nThe School District's net assets in the District-wide Statements are classified as follows: \r\nInvested in capital assets, net of related debt - This represents the School District's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt. \r\nRestricted net assets - These represent resources for which the School District is legally or contractually obligated to spend resources for bus replacement, continuation of Federal programs, debt service and capital projects in accordance with restrictions imposed by external third parties. \r\nUnrestricted net assets - Unrestricted net assets represent resources derived from property taxes, sales taxes, grants and contributions not restricted to specific programs, charges for services, and miscellaneous revenues. These resources are used for transactions relating to the educational and general operations of the School District, and may be used at the discretion of the Board to meet current expenses for those purposes. \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 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\n- 13 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"H\" \r\n \r\nFund Balances of the Governmental Funds at June 30, 2012, are as follows: \r\n \r\nNonspendable Inventories \r\nRestricted Debt Service \r\nAssigned School Activity Accounts \r\nUnassigned \r\n \r\n$ \r\n \r\n7,532.09 \r\n \r\n63.45 \r\n \r\n3,633.42 221,447.80 \r\n \r\nFund Balance, June 30, 2012 \r\n \r\n$ \r\n \r\n232,676.76 \r\n \r\nIt is the goal of the School District to achieve and maintain a committed, assigned, and unassigned fund balance in the general fund at fiscal year end of not less than 11.5% of total annual revenues, not to exceed 15% of the total budget of the subsequent fiscal year, in compliance with Official Code of Georgia Annotated Section 20-2-167(a)5. If the unassigned fund balance at fiscal year end falls below the goal, the School District shall develop a restoration plan to achieve and maintain the minimum fund balance. \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\nDEFICIT FUND BALANCES \r\n \r\nFunds reporting a deficit fund balance at June 30, 2012, are as follows: \r\n \r\nFund Type/Fund Name \r\n \r\nDeficit Balances \r\n \r\nGovernmental Fund Type District-wide Capital Projects Fund School Food Service Fund \r\n \r\n$ 206,432.70 \r\n \r\n$ \r\n \r\n2,177.45 \r\n \r\nThe School District has a 5 year plan to reduce the deficit in the Capital Projects Fund. There will be $40,000.00 in additional funds budgeted in the General Fund budget annually to reduce the outstanding deficit in the Capital Projects fund. The School District plans to eliminate the deficit in the School Food Service Fund through a reduction in spending. \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\nNote 3: BUDGETARY DATA \r\n \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 \r\n \r\n- 14 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"H\" \r\n \r\nthe 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 fund 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 year-end. \r\nThe Superintendent is authorized by the Board to approve adjustments of no more than 25 percent of the amount budgeted for expenditures in any budget function for any fund. The Superintendent shall report any such adjustments to the Board. If expenditure of funds in any budget function for any fund is anticipated to be more than 25 percent of the budgeted amount, the Superintendent shall request Board approval for the budget amendment. Any position or expenditure not previously approved in the annual budget that exceeds $50,000.00 shall require Board approval unless the Superintendent deems the position or purchase an emergency. In such case, the expenditure shall be reported to the Board at its regularly scheduled meeting. Under no circumstance is the Superintendent or other staff person authorized to spend funds that exceed the total budget without approval by the Board. \r\nSee Schedule 1  General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances  Budget to Actual for a detail of any over/under expenditures during the fiscal year under review. \r\nNote 4: DEPOSITS \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\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 \r\n- 15 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"H\" \r\n \r\n(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, \r\n \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 \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(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\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, 2012, the bank balances were $649,183.68. The amounts exposed to custodial credit risk are classified into three categories as follows: \r\n \r\nCategory 1 Category 2 - \r\nCategory 3 - \r\n \r\nUncollateralized, Cash collateralized with securities held by the pledging financial institution, or Cash collateralized with securities held by the pledging financial institution's trust department or agent but not in the School District's name. \r\n \r\nThe School District's deposits by custodial credit risk category at June 30, 2012, are as follows: \r\n \r\nCustodial Credit Risk Category \r\n \r\nBank Balance \r\n \r\n1 \r\n \r\n$ \r\n \r\n0.00 \r\n \r\n2 \r\n \r\n0.00 \r\n \r\n3 \r\n \r\n396,440.96 \r\n \r\nTotal \r\n \r\n$ 396,440.96 \r\n \r\nNote 4: NON-MONETARY TRANSACTIONS \r\n \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- 16 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNote 5: CAPITAL ASSETS The following is a summary of changes in the Capital Assets during the fiscal year: \r\n \r\nGovernmental Activities Capital Assets, Not Being Depreciated: \r\nLand \r\n \r\nBalances July 1, 2011 \r\n \r\nIncreases \r\n \r\nDecreases \r\n \r\nBalances June 30, 2012 \r\n \r\n$ \r\n \r\n82,372.00 $ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\n82,372.00 \r\n \r\nCapital Assets, Being Depreciated: Buildings and Improvements Equipment \r\n \r\n$ 8,902,125.65 $ 1,271,531.00 \r\n \r\n25,260.00 254,997.00 $ \r\n \r\n$ 423,154.51 \r\n \r\n8,927,385.65 1,103,373.49 \r\n \r\nLess: Accumulated Depreciation: Buildings and Improvements Equipment \r\n \r\n1,690,058.63 1,098,072.35 \r\n \r\n214,949.79 58,759.10 \r\n \r\n423,154.51 \r\n \r\n1,905,008.42 733,676.94 \r\n \r\nTotal Capital Assets, Being Depreciated, Net $ 7,385,525.67 $ \r\n \r\n6,548.11 $ \r\n \r\n0.00 $ 7,392,073.78 \r\n \r\nGovernmental Activity Capital Assets - Net $ 7,467,897.67 $ \r\n \r\n6,548.11 $ \r\n \r\n0.00 $ 7,474,445.78 \r\n \r\nCapital assets being acquired under capital leases as of June 30, 2012, are as follows: \r\n \r\nGovernmental Funds \r\n \r\nBuildings and Improvements Equipment Less: Accumulated Depreciation \r\n \r\n$ \r\n \r\n899,432.00 \r\n \r\n70,996.00 \r\n \r\n260,952.35 \r\n \r\n$ \r\n \r\n709,475.65 \r\n \r\nCurrent year depreciation expense by function is as follows: \r\n \r\nInstruction Support Services \r\nStudent Transportation Services Food Services \r\n \r\n$ \r\n \r\n226,388.59 \r\n \r\n45,639.44 1,680.86 \r\n \r\n$ \r\n \r\n273,708.89 \r\n \r\n- 17 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNote 6: INTERFUND TRANSFERS \r\n \r\nInterfund transfers for the year ended June 30, 2012, consisted of the following: \r\n \r\nTransfer to \r\n \r\nTransfers From \r\nDistrict-wide Capital Projects \r\n \r\nDebt Service Fund \r\n \r\n$ \r\n \r\n23,080.23 \r\n \r\nTransfers are used to move sales tax revenues collected by the District-wide Capital Projects Fund to Debt Service Fund to pay bond principal and interest payments. \r\n \r\nNote 7: RISK MANAGEMENT \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; 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 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\nClaims and \r\n \r\nBeginning of Year \r\n \r\nChanges in \r\n \r\nClaims \r\n \r\nEnd of Year \r\n \r\nLiability \r\n \r\nEstimates \r\n \r\nPaid \r\n \r\nLiability \r\n \r\n2011 $ 2012 $ \r\n \r\n0.00 $ 0.00 $ \r\n \r\n67,708.09 $ 22,757.25 $ \r\n \r\n67,708.09 $ 22,757.25 $ \r\n \r\n0.00 0.00 \r\n \r\nThe School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general workers' compensation insurance coverage. Specific excess of loss insurance coverage is provided through an agreement by the Trust with the Safety National Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $1 million loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided with limits of $2 million. The Trust covers the first $1 million of each Employers Liability claim with Safety National providing additional Employers Liability limits up to a $2 million per occurrence maximum. Safety National Casualty Company also provides aggregate cover to the Trust with a loss fund percentage of 100%, based on the Fund's annual normal premium, up to a maximum limit of indemnity of aggregate limit of $2 million. \r\n \r\n- 18 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"H\" \r\n \r\nThe School District has purchased surety bonds to provide additional insurance coverage as follows: \r\n \r\nPosition Covered \r\n \r\nAmount \r\n \r\nSuperintendent Principal \r\nNote 8: SHORT-TERM DEBT \r\n \r\n$ \r\n \r\n25,000.00 \r\n \r\n$ \r\n \r\n10,000.00 \r\n \r\nThe School District 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 percent of the total gross income from taxes collected in the preceding year and requires all short-term debt to be repaid no later than December 31 of the calendar year in which the debt was incurred. \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\nEnding Balance \r\n \r\nTemporary Loans \r\n \r\n$ 500,150.00 $ 500,000.00 $ 800,150.00 $ 200,000.00 \r\n \r\nNote 9: LONG-TERM DEBT \r\n \r\nCAPITAL LEASES \r\n \r\nThe Baker County Board of Education entered into various lease agreements for buses and energy 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\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\nGENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows: \r\n \r\nPurpose \r\n \r\nInterest Rate \r\n \r\nAmount \r\n \r\nGeneral Government - Series 2008 \r\n \r\n2.817% \r\n \r\n$ \r\n \r\n550,000.00 \r\n \r\n- 19 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"H\" \r\n \r\nThe changes in Long-Term Debt during the fiscal year ended June 30, 2012, were as follows: \r\n \r\nBalance July 1, 2011 \r\n \r\nAdditions \r\n \r\nGovernmental Funds Deductions \r\n \r\nBalance June 30, 2012 \r\n \r\nDue Within One Year \r\n \r\nG. O. Bonds Capital Leases Compensated Absences (1) \r\n \r\n$ 790,000.00 32,880.64 8,849.15 $ \r\n \r\n$ 5,437.94 \r\n \r\n240,000.00 $ 14,773.42 4,392.95 \r\n \r\n550,000.00 $ 18,107.22 9,894.14 \r\n \r\n260,000.00 15,461.25 \r\n \r\n$ 831,729.79 $ \r\n \r\n5,437.94 $ 259,166.37 $ 578,001.36 $ 275,461.25 \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\nAt June 30, 2012, payments due by fiscal year which includes principal and interest for these items are as follows: \r\n \r\nCapital Leases \r\n \r\nPrincipal \r\n \r\nInterest \r\n \r\nFiscal Year Ended June 30: \r\n \r\n2013 2014 \r\n \r\n$ \r\n \r\n15,461.25 $ \r\n \r\n2,645.97 \r\n \r\n505.11 15.09 \r\n \r\nTotal Principal and Interest Fiscal Year Ended June 30: \r\n \r\n$ \r\n \r\n18,107.22 $ \r\n \r\n520.20 \r\n \r\nGeneral Obligation Debt \r\n \r\nPrincipal \r\n \r\nInterest \r\n \r\n2013 2014 \r\n \r\n$ \r\n \r\n260,000.00 $ \r\n \r\n290,000.00 \r\n \r\n15,493.50 8,169.30 \r\n \r\nTotal Principal and Interest \r\n \r\n$ \r\n \r\n550,000.00 $ \r\n \r\n23,662.80 \r\n \r\nNote 10: ON-BEHALF PAYMENTS \r\nThe School District has recognized revenues and costs in the amount of $247,254.00 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies. \r\nGeorgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Certified Personnel In the amount of $242,166.00 \r\nOffice of State Treasurer Paid to the Public School Employees' Retirement System For Public School Employees' Retirement (PSERS) Employer's Cost In the amount of $5,088.00 \r\n \r\n- 20 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNote 11: 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 12: 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 \"pay-as-you-go\" financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. \r\n \r\n- 21 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"H\" \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, 2012: \r\n \r\nFor certificated teachers, librarians and regional educational service agencies and certain other eligible participants: \r\n \r\nJune 2011 July 2011 August 2011 - March 2012 April 2012 - June 2012 \r\n \r\n1.429% of covered payroll for July coverage 18.534% of covered payroll for August coverage 24.000% of covered payroll for September - April coverage \r\n3.958% of covered payroll for May - July coverage \r\n \r\nFor non-certificated school personnel: \r\n \r\nJuly 2011 - August 2011 \r\n \r\n$246.20 per member per month \r\n \r\nSeptember 2011 - June 2012 $296.20 per member per month \r\n \r\nNo additional contribution was required by the Board for fiscal year 2012 nor contributed to the School OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the School plan for other post-employment benefits and are subject to appropriation. \r\n \r\nThe School District's combined active and retiree contributions to the health insurance plans, which \r\n \r\nequaled the required contribution, for the current fiscal year and the preceding two fiscal years were \r\n \r\nas follows: \r\n \r\nPercentage \r\n \r\nRequired \r\n \r\nFiscal Year \r\n \r\nContributed \r\n \r\nContribution \r\n \r\n2012 2011 2010 \r\n \r\n100% \r\n \r\n$ \r\n \r\n100% \r\n \r\n$ \r\n \r\n100% \r\n \r\n$ \r\n \r\n342,675.91 219,095.79 536,128.25 \r\n \r\nNote 13: 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\n \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\n- 22 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2012 \r\n \r\nEXHIBIT \"H\" \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. \r\nNormal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 60 or by 7% for each year or fraction thereof by which the member has less than 30 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lump-sum distribution in addition to a reduced monthly retirement benefit. Death, disability and spousal benefits are also available. \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, 2012, were 5.53% of annual salary. The member contribution rate will increase to 6.00% effective July 1, 2012. Employer contributions required for fiscal year 2012 were 10.28% of annual salary as required by the June 30, 2009, actuarial valuation. The employer contribution rate will increase to 11.41% effective July 1, 2012. \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\n2012 2011 2010 \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\n207,375.35 185,092.81 250,177.33 \r\n \r\nPUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM (PSERS) \r\n \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\n- 23 - \r\n \r\n (This page left intentionally blank) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION GENERAL FUND \r\nSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL \r\nYEAR ENDED JUNE 30, 2012 \r\n \r\nSCHEDULE \"1\" \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 Other Support Services Enterprise Operations Food Services Operation \r\nDebt Service \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\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$ 2,134,949.00 $ 2,134,949.00 $ 2,091,582.29 $ \r\n \r\n11,849.07 \r\n \r\n1,312,194.00 \r\n \r\n1,325,945.00 \r\n \r\n1,758,510.39 \r\n \r\n704,157.00 \r\n \r\n829,532.00 \r\n \r\n638,095.78 \r\n \r\n8,300.00 \r\n \r\n8,300.00 \r\n \r\n26,590.63 \r\n \r\n15.00 \r\n \r\n15.00 \r\n \r\n205.78 \r\n \r\n400.00 \r\n \r\n400.00 \r\n \r\n60,422.56 \r\n \r\n$ 4,160,015.00 $ 4,299,141.00 $ 4,587,256.50 $ \r\n \r\n-43,366.71 11,849.07 432,565.39 -191,436.22 18,290.63 \r\n190.78 60,022.56 \r\n288,115.50 \r\n \r\n$ 2,381,003.32 $ 2,435,784.32 $ 2,156,877.94 $ \r\n \r\n40,307.09 83,371.00 81,548.57 566,422.00 201,030.47 117,714.45 295,415.51 278,999.27 \r\n6,376.00 \r\n233,800.00 \r\n \r\n112,599.54 117,467.00 \r\n81,548.57 566,397.00 207,429.93 117,714.45 295,415.51 278,999.27 \r\n6,796.00 \r\n233,800.00 \r\n \r\n64,966.85 50,432.88 75,788.42 356,741.80 214,924.79 134,164.27 316,709.98 531,226.45 \r\n4,642.74 28,193.71 217,667.67 15,966.36 \r\n \r\n$ 4,285,987.68 $ 4,453,951.59 $ 4,168,303.86 $ \r\n \r\n$ \r\n \r\n-125,972.68 $ -154,810.59 $ 418,952.64 $ \r\n \r\n278,906.38 \r\n47,632.69 67,034.12 \r\n5,760.15 209,655.20 \r\n-7,494.86 -16,449.82 -21,294.47 -252,227.18 \r\n2,153.26 -28,193.71 16,132.33 -15,966.36 \r\n285,647.73 \r\n573,763.23 \r\n \r\n-40,000.00 \r\n \r\n-40,000.00 \r\n \r\n40,000.00 \r\n \r\n$ \r\n \r\n-165,972.68 $ -194,810.59 $ 418,952.64 $ \r\n \r\n613,763.23 \r\n \r\n104,155.53 \r\n \r\n104,155.53 \r\n \r\n20,093.37 \r\n \r\n-84,062.16 \r\n \r\n4,935.03 \r\n \r\n288.36 \r\n \r\n-288.36 \r\n \r\n$ \r\n \r\n-56,882.12 $ -90,366.70 $ 439,046.01 $ \r\n \r\n529,412.71 \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 $31,226.50 and $31,477.80, respectively. \r\nThe accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 25 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \r\nYEAR ENDED JUNE 30, 2012 \r\n \r\nSCHEDULE \"2\" \r\n \r\nFUNDING AGENCY PROGRAM/GRANT \r\nAgriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program \r\nTotal U. S. Department of Agriculture \r\nEducation, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Preschool Grants \r\nTotal Special Education Cluster \r\nTitle I, Part A Cluster Pass-Through From Georgia Department of Education Title I Grants to Local Educational Agencies \r\nOther Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States Education Jobs Fund Improving Teacher Quality State Grants Migrant Education - State Grant Program \r\nTotal Other Programs \r\nTotal U. S. Department of Education \r\nHealth and Human Services, U. S. Department of Child Care and Development Fund Cluster Pass-Through From Bright From the Start Georgia Department of Early Care and Learning ARRA - Child Care and Development Block Grant \r\n \r\nCFDA NUMBER \r\n \r\nPASSTHROUGH \r\nENTITY ID \r\nNUMBER \r\n \r\nEXPENDITURES IN PERIOD \r\n \r\n* 10.553 * 10.555 \r\n \r\nN/A \r\n \r\n(2) \r\n \r\nN/A \r\n \r\n$ 212,001.96 (1) \r\n \r\n$ 212,001.96 \r\n \r\n84.027 84.173 \r\n \r\nN/A \r\n \r\n$ \r\n \r\n95,440.23 \r\n \r\nN/A \r\n \r\n5,489.97 \r\n \r\n$ 100,930.20 \r\n \r\n* 84.010 \r\n \r\nN/A \r\n \r\n$ 275,306.37 \r\n \r\n84.048 84.410 84.367 84.011 \r\n \r\nN/A \r\n \r\n$ \r\n \r\n19,579.00 \r\n \r\nN/A \r\n \r\n914.00 \r\n \r\nN/A \r\n \r\n52,592.04 \r\n \r\nN/A \r\n \r\n8,315.56 \r\n \r\n$ \r\n \r\n81,400.60 \r\n \r\n$ 457,637.17 \r\n \r\n93.575 \r\n \r\nN/A \r\n \r\n$ \r\n \r\n100.00 \r\n \r\nTotal Expenditures of Federal Awards \r\n \r\n$ 669,739.13 \r\n \r\nN/A = Not Available \r\n \r\nNotes to the Schedule of Expenditures of Federal Awards \r\n \r\n(1) Commodities valued in the amount of $1,627.76 were received during the current fiscal year and were not recorded in the School District's financial statements. \r\n(2) Expenditures for the funds earned on the School Breakfast Program ($55,956.54) were not maintained separately and are included in the 2012 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 Baker County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 26 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2012 \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 Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Remedial Education Program Alternative Education Program Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Mid-term Adjustment Hold-Harmless Amended Formula Adjustment Categorical Grants Pupil Transportation Regular Sparsity Food Services Nursing Services State Health Reimbursement Other State Programs Dual Enrollment Funding Math and Science Supplements Preschool Handicapped Program Pupil Transportation - State Bonds Vocational Education \r\nOffice of the State Treasurer Public School Employees' Retirement \r\nOther State Agency \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 27 - \r\n \r\nSCHEDULE \"3\" \r\n \r\nGOVERNMENTAL FUND TYPE GENERAL FUND \r\n \r\n$ \r\n \r\n68,362.99 \r\n \r\n76,040.00 22,267.00 110,761.00 64,304.00 69,140.00 38,653.00 104,334.00 85,462.00 57,064.00 192,231.00 \r\n8,968.00 7,713.00 22,659.00 6,789.00 5,592.00 \r\n175,983.00 69,672.00 65,715.00 27,515.00 \r\n-297,251.00 \r\n134,240.00 95,920.00 6,752.00 24,466.00 \r\n242,166.00 \r\n908.00 -2,970.67 32,010.39 228,803.50 7,045.18 \r\n5,088.00 \r\n2,108.00 \r\n$ 1,758,510.39 \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\nYEAR ENDED JUNE 30, 2012 \r\n \r\nSCHEDULE \"4\" \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) \r\n \r\nAMOUNT EXPENDED IN PRIOR YEARS (3) \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\nAdding to, renovating, improving and \r\n \r\nequipping existing facilities \r\n \r\n$ 1,176,000.00 $ 2,646,538.67 $ 31,720.00 $ 2,614,818.67 $ 2,646,538.67 $ \r\n \r\nUpgrading Instructional and Administrative Technology \r\n \r\n42,000.00 \r\n \r\n1,444.00 \r\n \r\n1,444.00 \r\n \r\n1,444.00 \r\n \r\nPurchasing school buses and transportation equipment \r\nPurchasing textbooks and vocational, fine arts, instructional and athletic equipment \r\n \r\n70,000.00 \r\n \r\n26,193.50 \r\n \r\n26,193.50 \r\n \r\n184,713.49 \r\n \r\n33,533.05 \r\n \r\n127,703.98 \r\n \r\n26,193.50 \r\n \r\nPurchasing safety and security equipment \r\nAcquiring any property necessary or desirable therefor, both real and personal \r\n \r\nBond interest payments and bank fees \r\n \r\n112,000.00 \r\n \r\n144,787.77 \r\n \r\n22,339.05 \r\n \r\n98,794.80 \r\n \r\n0.00 \r\n \r\nCompleted \r\n \r\nCompleted \r\n \r\nCompleted June 30, 2013 \r\nCompleted \r\n \r\nCompleted April 1, 2014 \r\n \r\n$ 1,400,000.00 $ 3,003,677.43 $ 115,229.60 $ 2,841,317.45 $ 2,674,176.17 $ \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(2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. \r\n(3) The voters of Baker 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\nSee notes to the basic financial statements. \r\n \r\n- 28 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) \r\nALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2012 \r\n \r\nSCHEDULE \"5\" \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 Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category III Category IV Remedial Education Program Alternative Education Program \r\nTOTAL DIRECT INSTRUCTIONAL PROGRAMS \r\nMedia Center Program Staff and Professional Development \r\nTOTAL QBE FORMULA FUNDS \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\n107,429.00 $ \r\n \r\n65,972.06 $ \r\n \r\n5,222.29 $ \r\n \r\n71,194.35 \r\n \r\n34,597.00 \r\n \r\n1,998.12 \r\n \r\n1,998.12 \r\n \r\n175,871.00 \r\n \r\n255,112.90 \r\n \r\n5,579.15 \r\n \r\n260,692.05 \r\n \r\n94,042.00 \r\n \r\n1,998.12 \r\n \r\n1,998.12 \r\n \r\n99,362.00 \r\n \r\n168,764.78 \r\n \r\n6,922.09 \r\n \r\n175,686.87 \r\n \r\n67,718.00 161,997.00 132,203.00 \r\n81,999.00 287,121.00 \r\n10,912.00 12,541.00 \r\n \r\n172,907.92 208,796.52 \r\n80,757.85 \r\n288,872.75 54,202.61 66,127.18 \r\n \r\n1,998.12 7,682.89 84,066.34 5,270.62 \r\n13,652.50 \r\n \r\n1,998.12 180,590.81 292,862.86 \r\n86,028.47 \r\n302,525.25 54,202.61 66,127.18 \r\n \r\n$ \r\n \r\n1,265,792.00 $ 1,361,514.57 $ 134,390.24 $ \r\n \r\n1,495,904.81 \r\n \r\n34,114.00 8,090.00 \r\n \r\n72,829.84 1,096.89 \r\n \r\n2,789.95 5,671.75 \r\n \r\n75,619.79 6,768.64 \r\n \r\n$ \r\n \r\n1,307,996.00 $ 1,435,441.30 $ 142,851.94 $ \r\n \r\n1,578,293.24 \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- 29 - \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\nJune 25, 2013 \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 Baker County Board of Education \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 the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Baker County Board of Education as of and for the year ended June 30, 2012, which collectively comprise Baker County Board of Education's basic financial statements and have issued our report thereon dated June 25, 2013. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. \r\nInternal Control Over Financial Reporting \r\nManagement of Baker County Board of Education is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered Baker County Board of Education's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Baker County Board of Education's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Baker County Board of Education's internal control over financial reporting. \r\nOur consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses and therefore, there can be no assurances that all deficiencies, significant deficiencies or material weaknesses have been identified. However, as described in the accompanying Schedule of Findings and Questioned Costs, we identified a certain deficiency in internal control over financial reporting that we consider to be a material weakness and other deficiencies that we consider to be significant deficiencies. \r\n \r\n2012YB-40 \r\n \r\n  A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. We consider item FS-6041-12-04 to be a material weakness. \r\nA significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider items FS-6041-12-01, FS-6041-12-02, and FS-6041-12-03 in the accompanying Schedule of Findings and Questioned Costs to be significant deficiencies in internal control over financial reporting. \r\nCompliance and Other Matters \r\nAs part of obtaining reasonable assurance about whether Baker County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. \r\nWe noted certain matters that we have reported to management of Baker County Board of Education in a separate letter dated June 25, 2013. \r\nBaker County Board of Education's response to the findings identified in our audit is described in the accompanying Schedule of Management's Responses. We did not audit Baker County Board of Education's response and, accordingly, we express no opinion on the response. \r\nThis report is intended solely for the information and use of management, members of the Baker County Board of Education, others within the entity, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. \r\nRespectfully submitted, \r\n \r\nGSG:as 2012YB-40 \r\n \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\nJune 25, 2013 \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 Baker County Board of Education \r\nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 \r\nLadies and Gentlemen: \r\nCompliance \r\nWe have audited Baker County Board of Education's compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of its major Federal programs for the year ended June 30, 2012. Baker County Board of Education's major Federal programs are identified in the Summary of Auditor's Results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major Federal programs is the responsibility of Baker County Board of Education's management. Our responsibility is to express an opinion on Baker County Board of Education's compliance based on our audit. \r\nWe conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Baker County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Baker County Board of Education's compliance with those requirements. \r\nIn our opinion, the Baker County Board of Education complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major Federal programs for the year ended June 30, 2012. \r\n \r\n2012SA-30 \r\n \r\n  Internal Control Over Compliance \r\nManagement of Baker County Board of Education is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to Federal programs. In planning and performing our audit, we considered Baker County Board of Education's internal control over compliance with the requirements that could have a direct and material effect on a major Federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Baker County Board of Education'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. \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 deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, we identified a certain deficiency in internal control over compliance that we consider to be a significant deficiency as described in the accompanying Schedule of Findings and Questioned Costs as item FA-6041-12-01. 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\nBaker County Board of Education's response to the finding identified in our audit is described in the accompanying Schedule of Management's Responses. We did not audit Baker County Board of Education's response and, accordingly, we express no opinion on the response. \r\nThis report is intended solely for the information and use of management, members of the Baker County Board of Education, others within the entity, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. \r\nRespectfully submitted, \r\n \r\nGSG:as 2012SA-30 \r\n \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  BAKER COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2012 \r\n \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nFINDING CONTROL NUMBER AND STATUS \r\n \r\nFS-6041-10-01 FS-6041-10-02 FS-6041-10-03 FS-6041-10-04 FS-6041-11-01 FS-6041-11-02 FS-6041-11-03 FS-6041-11-04 FS-6041-11-05 FS-6041-11-06 \r\n \r\nFurther Action Not Warranted Further Action Not Warranted Further Action Not Warranted Further Action Not Warranted Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Partially Resolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented \r\n \r\nCORRECTIVE ACTION/RESPONSES \r\n \r\nINVENTORIES REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Separation of Duties Finding Control Number: FS-6041-11-01 \r\n \r\nThe School District in conjunction with the Lunchroom Manager devised strategic procedures to ensure adequate separation of duties. The Lunchroom Manager designated lunchroom staff members to assist in receiving, inventorying and reviewing of inventory records. All non-bid items purchased by School Nutrition are now being issued purchase orders with prior approval to ensure that expenditures are appropriate, accurate and properly documented. We are currently awaiting the conclusion of the fiscal year 2012 annual audit to determine whether the corrective action taken meet the Generally Accepted Accounting and Financial Reporting Procedures. This strategy will be continued in fiscal year 2013. \r\n \r\nCASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Accounting Procedures over School Activity Accounts Finding Control Number: FS-6041-11-02 \r\n \r\nThe School District in conjunction with the school administration devised strategic procedures to ensure that the school activity account has adequate separation of duties. The principal reviews and approves all bank reconciliations, reviews all deposit preparation, and ensures all supporting check documentation is present. The School District purchased computerized accounting software for use with the school activity accounts to ensure all receipts, checks and other pertinent accounting records could be easily traced. We are currently awaiting the conclusion of the fiscal year 2012 annual audit to determine whether the corrective action taken meet the Generally Accepted Accounting and Financial Reporting Procedures. This strategy will be continued in fiscal year 2013. \r\n \r\n- 1 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2012 \r\n \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nCORRECTIVE ACTION/RESPONSES \r\n \r\nEXPENDITURES/LIABILITIES/DISBURSEMENTS EMPLOYEE COMPENSATION GENERAL LEDGER Inadequate Accounting Procedures Finding Control Number: FS-6041-11-03 \r\n \r\nThe School District has implemented procedures to ensure expenditure transactions, employee compensation, leave records, authorization for payroll deductions and journal entries are properly documented, calculated, maintained and approved before changes and/or disbursements are made. Forms have been created and supporting documentation is attached to ensure that calculations are accurate and the required approval is gained prior to changes being made in the accounting system. We are currently awaiting the conclusion of the fiscal year 2012 annual audit to determine whether the corrective action taken meet the Generally Accepted Accounting and Financial Reporting Procedures. This strategy will be continued in fiscal year 2013. \r\n \r\nBUDGET PREPARATION/EXECUTION Deficit Fund Balance Finding Control Number: FS-6041-11-04 \r\n \r\nThe School District implemented procedures to ensure that expenditures do not exceed availability of resources. The School District currently monitors the DE0396 report on a monthly basis to ensure that the expenditures are not exceeding the amounts budgeted. The School District also has placed more safeguards in the budgeting process to ensure that the adopted budgeted fund is balanced as required. We are currently awaiting the conclusion of the fiscal year 2012 annual audit to determine whether the corrective action taken meet the Generally Accepted Accounting and Financial Reporting Procedures. This strategy will be continued in fiscal year 2013. \r\n \r\nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\n \r\nFINDING CONTROL NUMBER AND STATUS \r\n \r\nFA-6041-11-01 FA-6041-11-02 \r\n \r\nUnresolved - See Corrective Action/Responses Previously Reported Corrective Action Implemented \r\n \r\n- 2 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2012 \r\nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS CORRECTIVE ACTION/RESPONSES ALLOWABLE COSTS/COST PRINCIPLES PROCUREMENT AND SUSPENSION AND DEBARMENT Inadequate Accounting Procedures over Expenditures U. S. Department of Agriculture Through Georgia Department of Education Questioned Cost: $11,765.60 Finding Control Number: FA-6041-11-01 The School District in conjunction with the Lunchroom Manager has devised and implemented strategic procedures to ensure that all expenditures are allowable under OMB Circular A-87. All expenditures are reviewed and billed according to approved bid documentation and that all expenditures have adequate documentation and all expenditures contain approval prior to disbursement. We are currently awaiting the conclusion of the fiscal year 2012 annual audit to determine whether the corrective actions taken meet the Generally Accepted Accounting and Financial Reporting Procedures. This strategy will be continued in fiscal year 2013. \r\n- 3 - \r\n \r\n  SECTION IV FINDINGS AND QUESTIONED COSTS \r\n \r\n  BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2012 \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\nUnqualified \r\n \r\nInternal control over financial reporting: \r\n \r\n Material weakness identified? \r\n \r\nYes \r\n \r\n Significant deficiencies identified? \r\n \r\nYes \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: \r\n \r\n Material weakness identified? \r\n \r\nNo \r\n \r\n Significant deficiency identified? \r\n \r\nYes \r\n \r\nType of auditor's report issued on compliance for major programs: All major programs \r\n \r\nUnqualified \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\nYes \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 \r\n \r\nChild Nutrition Cluster Title I, Part A 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 \r\n \r\nINVENTORIES REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Separation of Duties Significant Deficiency Finding Control Number: FS-6041-12-01 \r\n \r\nCondition: This is a repeat finding (FS-6041-11-01, FS-6041-10-01 and FS-6041-09-01) from the years ended June 30, 2011, June 30, 2010, and June 30, 2009, respectively. The accounting procedures of the School District were insufficient to provide for adequate separation of duties over the School Food Service Fund. \r\n \r\n- 1 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2012 \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nCriteria: The School District's management is responsible for designing and maintaining internal controls that provide reasonable assurance that transactions are processed according to established procedures. Such internal controls would limit any one individual's access to both physical assets and the related accounting records. \r\nQuestioned Cost: N/A \r\nInformation: Inventories \r\n Ordering of goods was not separated from the maintenance of inventory records.  Custodianship of inventory was not separated from the receiving function.  Review of inventory records was not performed by someone independent of the receiving \r\nfunction. \r\nRevenues/Receivables/Receipts  Deposit preparation was not separated from the record keeping and cash custody functions. \r\nExpenditures/Liabilities/Disbursements  The duty of approving vouchers for payment was not adequately separated from the duty of writing checks.  There was no independent review to determine that the expenditures were appropriate, accurate and properly documented prior to payment.  None of the twenty-five voucher packages tested had evidence of approval.  Six vouchers had no evidence of receipt of goods. \r\nCause: The School District has not assigned responsibilities to achieve appropriate separation of duties nor utilized management oversight of the incompatible activities to properly safeguard assets. These deficiencies were also a result of management's decision to limit the number of administrative staff made responsible for accounting functions applicable to the School Food Service Fund. \r\nEffect: Errors and/or irregularities may not be detected in a timely manner. \r\nRecommendation: The School District should implement procedures to ensure the key accounting functions of custody, record keeping and authorization are separated and/or utilize management oversight of these incompatible activities. Management should also revise and monitor controls to provide reasonable assurance transactions are processed according to established procedures. \r\n- 2 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2012 \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nCASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Accounting Procedures over School Activity Accounts Significant Deficiency Finding Control Number: FS-6041-12-02 \r\nCondition: This is a repeat finding (FS-6041-11-02, FS-6041-10-02, and FS-6041-09-02) from the years ended June 30, 2011, June 30, 2010, and June 30, 2009, respectively. The accounting procedures of the School District were insufficient to provide for adequate separation of duties over the school activities accounts. \r\nCriteria: The School District's management is responsible for designing and maintaining internal controls that provide reasonable assurance that transactions are processed according to established procedures. Such internal controls would limit any one individual's access to both physical assets and the related accounting records. \r\nQuestioned Cost: N/A \r\nInformation: Cash and Cash Equivalents \r\n The bank reconciliation function was not separated from the record keeping and voucher payment function. \r\nRevenues/Receivables/Receipts  Deposit preparation was not separated from the record keeping and cash custody functions.  The following deficiencies were noted during a test of twenty receipt transactions: 1) Two receipts did not have sufficient documentation for the auditor to determine if deposited timely or to determine if recorded to the correct revenue code. 2) Two gate receipts were not properly reconciled. \r\nExpenditures/Liabilities/Disbursements  The check writing function was not separated from the record keeping or processing of signed checks.  The following deficiencies were noted during a test of twenty disbursement transactions: 1) One voucher was paid from a statement. 2) One voucher did not have sufficient documentation for the auditor to determine whether expenditure was charged to the correct account code. 3) One voucher lacked evidence of supervisory approval prior to payment. \r\nCause: The School District has not assigned responsibilities to achieve appropriate separation of duties nor utilized management oversight of the incompatible activities to properly safeguard assets. These deficiencies were also a result of management's failure to ensure internal controls were established, implemented and functioning at the school level. \r\n- 3 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2012 \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nEffect: Errors and/or irregularities may not be detected in a timely manner. \r\nRecommendation: The School District should implement procedures to ensure the key accounting functions of custody, record keeping and authorization are separated and/or utilize management oversight of these incompatible activities. Management should also revise and monitor controls to provide reasonable assurance transactions are processed according to established procedures. \r\nCASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Accounting Procedures Significant Deficiency Finding Control Number: FS-6041-12-03 \r\nCondition: This is a repeat finding (FS-6041-11-03, FS-6041-10-03, and FS-6041-09-03) from the years ended June 30, 2011, June 30, 2010, and June 30, 2009, respectively. The accounting procedures of the School District were insufficient to provide adequate controls over Cash and Cash Equivalents, Revenues/Receivables/Receipts, Expenditures/Liabilities/Disbursements, and Employee Compensation. \r\nCriteria: The School District's management is responsible for designing and maintaining controls that provide reasonable assurance that transactions are processed according to established procedures. \r\nQuestioned Cost: N/A \r\nInformation: Cash and Cash Equivalents \r\n The bank reconciliation function was not separated from the record keeping and voucher payment functions. \r\nRevenues/Receivables/Receipts  Deposit preparation was not separated from the record keeping and cash custody functions. \r\nExpenditures/Liabilities/Disbursements  The School District did not have procedures in place to ensure all expenditure documentation was checked for accuracy, properly approved, charged to the correct period or contained evidence of receipt of goods or services prior to disbursement of funds. Of the seventy-one expenditures tested, sixty-nine of the voucher packages lacked evidence of prior approval and seven lacked evidence of receipt of goods. \r\nCause: These deficiencies were a result of management's failure to ensure internal controls were established, implemented and functioning. \r\n- 4 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2012 \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nEffect: Errors and/or irregularities may not be detected in a timely manner. \r\nRecommendation: The School District should implement procedures to ensure that key accounting functions of custody and record keeping are separated and/or utilize management oversight of these incompatible activities. In addition, procedures should be implemented to ensure (1) expenditures are charged to the correct accounting period; and (2) expenditure transactions reflect proper approval, documentation, and receipt of goods or services prior to authorization for payment. Management should also revise and monitor controls to provide reasonable assurance transactions are processed according to established procedures. \r\nBUDGET PREPARATION/EXECUTION Deficit Fund Balance Material Weakness Finding Control Number: FS-6041-12-04 \r\nCondition: This is a repeat finding (FS-6041-11-04, FS-6041-10-04 and FS-6041-09-06) from the years ended June 30, 2011, June 30, 2010 and June 30, 2009, respectively. At June 30, 2012, the Capital Projects Fund and the School Food Service Fund of the Baker County Board of Education reported deficit fund balances. In addition, the School District failed to adopt a balanced budget for the General Fund. \r\nCriteria: Chapter 25, Governmental Fund Deficits of the Financial Management for Georgia Local Units of Administration states in part: \"The seriousness of fund balance deficits cannot be overstated. The Georgia Department of Education requires those LUAs with deficit governmental fund balances to meet certain reporting requirements.\" \r\nChapter 32, Preparing Operating Budgets, of the Financial Management for Georgia Local Units of Administration (FMGLUA) states in part: \"The budget must be balanced for all budgeted funds. Total anticipated revenues should equal total estimated expenditures. In the event anticipated revenues are insufficient to fund anticipated essential expenditures, a portion of unreserved fund balance from the previous years must be used to fund the shortfall. In the event there is insufficient unreserved fund balance from previous years to fund anticipated expenditures, then such expenditures must be reduced to equal anticipated revenues plus available unreserved fund balance\". \r\nQuestioned Cost: N/A \r\nInformation: The School District's Capital Projects Fund and School Food Service Fund, included in the General Fund on the School District's financial statements, reported deficit fund balances in the amounts of $206,432.70 and $2,177.45, respectively. \r\n- 5 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2012 \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nCause: The School District failed to monitor expenditures to ensure the School District did not exceed available resources. Additionally, the School District adopted an unbalanced budget for the General Fund. \r\nEffect: A financial statement irregularity in accordance with the Official Code of Georgia Annotated 20-2-67. \r\nRecommendation: The School District should establish policies and procedures designed to ensure expenditures do not exceed availability of resources, so that in future periods the School District does not report deficit fund balances. In addition, appropriate procedures should be implemented to ensure the adopted budget for each budgeted fund is balanced as required. \r\nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\nALLOWABLE COSTS/COSTS PRINCIPLES PROCUREMENT AND SUSPENSION AND DEBARMENT Inadequate Accounting Procedures over Expenditures Significant Deficiency U. S. Department of Agriculture Through Georgia Department of Education Child Nutrition Cluster (CFDA 10.553 and 10.555) Finding Control Number: FA-6041-12-01 \r\nCondition: A review of expenditures charged to the Child Nutrition Cluster (CFDA 10.553 and 10.555) program revealed the School District failed to implement internal control procedures to ensure expenditures were properly documented, authorized, allowable, and charged according to bid documents. \r\nCriteria: Provisions of OMB Circular A-87 Cost Principles for State, Local and Indian Tribal Governments, require that \"to be allowable under Federal awards, costs must be... authorized or not prohibited under state or local laws or regulations\" and \"be adequately documented\" . \r\nQuestioned Cost: N/A \r\nInformation: A review of twenty-five expenditure vouchers for the Child Nutrition Cluster revealed the following deficiencies: \r\n1) Twenty-five vouchers had no evidence of approval. 2) Six vouchers had no evidence of receipt of goods. 3) Two vouchers had charges higher than the amounts quoted in the procurement agreements. \r\n- 6 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2012 III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Cause: Management failed to monitor compliance with Federal guidelines to ensure expenditures charged to the Federal Program were allowable, approved, properly documented, and charged for the correct amount. Effect: Failure to ensure expenditures are allowable, approved and properly documented can result in noncompliance with the requirements of the Federal grant. Recommendation: The School District should implement procedures to ensure all expenditures are allowable under OMB Circular A-87, approved by appropriate management, and properly documented. \r\n- 7 - \r\n \r\n  SECTION V MANAGEMENT'S RESPONSES \r\n \r\n  BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF MANAGEMENT'S RESPONSES \r\nYEAR ENDED JUNE 30, 2012 \r\nFinding Control Number: FS-6041-12-01 \r\nWe concur with this finding. The School District in conjunction with the Lunchroom Manager will devise strategic procedures to ensure that School Food Service Fund will have adequate separation of duties. The Lunchroom Manager will designate an existing lunchroom staff member to assist in the receiving, inventorying and reviewing of inventory records to ensure separation of duties. The Lunchroom Manager will also issue Purchase Orders for prior approval by the Superintendent before inventory is ordered to ensure expenditures are appropriate, accurate and properly documented. These procedures will ensure that internal controls for both access to physical assets and the related accounting records are adequately separated. These procedures will be implemented in the 2013 fiscal year. \r\nFinding Control Number: FS-6041-12-02 \r\nWe concur with this finding. The School District in conjunction with school administration will devise strategic procedures to ensure that the school activity account will have adequate separation of duties. The Principal will designate a school level administrator to review and approve all bank reconciliations; review deposit preparations and ensure all documentation for written checks are present. The School District has also implemented the use of computerized accounting records for the School Activity Accounts to ensure receipts and checks contain adequate descriptions and account/object information so that the accounting records could be easily traced. These procedures will ensure that internal controls for both access to physical assets and the related accounting records are adequately separated. These procedures will be implemented in the 2013 fiscal year. \r\nFinding Control Number: FS-6041-12-03 \r\nWe concur with this finding. The School District will implement procedures to ensure that expenditure transactions, employee compensation, leave records, authorization for payroll deductions and journal entries are properly documented, calculated, maintained and approved before changes and/or disbursements are made. These procedures will be implemented in the 2013 fiscal year. \r\nFinding Control Number: FS-6041-12-04 \r\nWe concur with this finding. The School District will implement policies and procedures to ensure that expenditures do not exceed availability of resources. The School District monitors the DE Form 0396 for the General Fund monthly and implemented a 5 year debt reduction plan for the Capital Projects Fund to ensure that the expenditures are not exceeding the amounts budgeted. The expenditures for the School Nutrition Program will also be monitored to ensure expenditures do not exceed availability of resources. The School District will also implement procedures to ensure that the adopted budget for each budgeted fund is balanced as required. This will be implemented in the 2013 fiscal year. \r\n- 1 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF MANAGEMENT'S RESPONSES \r\nYEAR ENDED JUNE 30, 2012 \r\n \r\nFinding Control Number: FA-6041-12-01 \r\n \r\nWe concur with this finding. The School District will implement policies and procedures to ensure all expenditures are allowable under OMB Circular A-87, approved by appropriate management, and properly documented. The School Nutrition Manager will be responsible for attaining the proper approval prior and ensuring invoice, purchase orders and receiving documents are attached prior to funds are disbursed. The School Nutrition Manager will maintain the approved procurement agreement and all invoiced items will be compared to ensure charges are not higher than amounts quoted. This will be implemented in the 2013 fiscal year. \r\n \r\nContact Person: Title: Telephone: Fax: Email: \r\n \r\nFreddie Thompson Superintendent (229) 734-5346 (229) 734-3064 freddie.thompson@baker.k12.ga.us \r\n \r\n- 2 - \r\n \r\n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-b2010-h2011-belec-p-btext","title":"Baker County Board of Education, Newton, Georgia, report on audit for fiscal year ended June 30, 2011 (including independent auditor's reports)","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts, issuing body."],"dcterms_spatial":["United States, Georgia, 32.75042, -83.50018"],"dcterms_creator":["Georgia. Department of Audits"],"dc_date":["2011-06-30"],"dcterms_description":["Began with: Fiscal year ended June 30, 2009.","Some issues may lack publication statement.","Report year covers fiscal year.","Fiscal year ended June 30, 2009 (online surrogate); title from PDF cover (Georgia Government Publications database, viewed September 2, 2022).","Fiscal year ended June 30, 2020 (online surrogate); (Georgia Government Publications database, viewed September 2, 2022)."],"dc_format":["application/pdf"],"dcterms_identifier":null,"dcterms_language":["eng"],"dcterms_publisher":["Atlanta, Ga. : Dept. of Audits and Accounts"],"dc_relation":null,"dc_right":["http://rightsstatements.org/vocab/InC/1.0/"],"dcterms_is_part_of":null,"dcterms_subject":["Baker County Board of Education (Ga.)--Appropriations and expenditures--Periodicals.","Education--Georgia--Baker County--Auditing--Periodicals.","Education--Georgia--Baker County--Finance--Statistics--Periodicals.","Education--Auditing","Education--Finance","Expenditures, Public","Georgia--Baker County--fast--https://id.oclc.org/worldcat/entity/E39PBJgxqwBrwyH6QgJ7CB3hHC","Georgia Government Documents--Serial"],"dcterms_title":["Baker County Board of Education, Newton, Georgia, report on audit for fiscal year ended June 30, 2011 (including independent auditor's reports)"],"dcterms_type":["Text"],"dcterms_provenance":["University of Georgia. Map and Government Information Library"],"edm_is_shown_by":["https://dlg.galileo.usg.edu/do:dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-b2010-h2011-belec-p-btext"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-b2010-h2011-belec-p-btext"],"dcterms_temporal":null,"dcterms_rights_holder":["\u0026copy; Georgia Department of Audits"],"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["state government records","audits","financial statements","financial records"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":["Education--Auditing--fast","Education--Finance--fast","Expenditures, Public--fast","Georgia--Baker County--fast--https://id.oclc.org/worldcat/entity/E39PBJgxqwBrwyH6QgJ7CB3hHC","Periodicals--fast","Statistics--fast"],"fulltext":"BAKER COUNTY BOARD OF EDUCATION \r\nNEWTON, GEORGIA \r\nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2011 \r\n(Including Independent Auditor's Reports) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \r\n \r\nSECTION I \r\n \r\nFINANCIAL \r\n \r\nINDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \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 ASSETS \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 ASSETS \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 ASSETS \r\n \r\nFIDUCIARY FUNDS \r\n \r\nH \r\n \r\nNOTES TO THE BASIC FINANCIAL STATEMENTS \r\n \r\nSCHEDULES \r\n \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND \r\n \r\nSUPPLEMENTARY INFORMATION \r\n \r\n2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 3 SCHEDULE OF STATE REVENUE \r\n \r\nPage \r\n1 2 3 4 5 6 7 8 \r\n23 24 25 \r\n \r\n  BAKER COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \r\n \r\nSECTION I \r\nFINANCIAL \r\nSCHEDULES \r\nSUPPLEMENTARY INFORMATION \r\n4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 5 ALLOTMENTS AND EXPENDITURES \r\nGENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM \r\n \r\nPage \r\n26 27 \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 WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 \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  BAKER COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \r\nSECTION V MANAGEMENT'S RESPONSES SCHEDULE OF MANAGEMENT'S RESPONSES \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\nAugust 24, 2012 \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 Baker County Board of Education \r\nINDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \r\nLadies and Gentlemen: \r\nWe have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through H) of the Baker County Board of Education, as of and for the year ended June 30, 2011, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Baker County Board of Education's management. Our responsibility is to express opinions on these financial statements based on our audit. \r\nWe conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Board's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. \r\nIn our opinion, the financial statements referred to previously present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the Baker County Board of Education, as of June 30, 2011, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. \r\n \r\n2011ARL-11 \r\n \r\n  The Baker County Board of Education has not presented Management's Discussion and Analysis that accounting principles generally accepted in the United States of America has determined is necessary to supplement, although not to be part of, the basic financial statements. \r\nIn accordance with Government Auditing Standards, we have also issued our report dated August 24, 2012, on our consideration of the Baker County Board of Education's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. \r\nThe Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on page 23, is not a required part of the basic financial statements but is supplementary information required by accounting principles generally accepted in the United States of America. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. \r\nOur audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Baker County Board of Education's financial statements as a whole. The accompanying supplementary information consists of Schedules 2 through 5, which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole. \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:as 2011ARL-11 \r\n \r\nGreg S. Griffin State Auditor \r\n \r\n  BAKER COUNTY BOARD OF EDUCATION \r\n \r\n  BAKER COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30, 2011 \r\nASSETS \r\nCash and Cash Equivalents Accounts Receivable, Net \r\nTaxes State Government Federal Government 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 Payroll Withholdings Payable Short-Term Debt Long-Term Liabilities \r\nDue Within One Year Due in More Than One Year \r\nTotal Liabilities \r\nNET ASSETS \r\nInvested in Capital Assets, Net of Related Debt Restricted for \r\nContinuation of Federal Programs Debt Service Unrestricted (Deficit) \r\nTotal Net Assets \r\nTotal Liabilities and Net Assets \r\n \r\nEXHIBIT \"A\" \r\n \r\nGOVERNMENTAL ACTIVITIES \r\n \r\n$ \r\n \r\n355,489.74 \r\n \r\n129,288.94 256,627.65 \r\n85,090.43 38,130.63 \r\n6,443.73 82,372.00 7,385,525.67 \r\n \r\n$ \r\n \r\n8,338,968.79 \r\n \r\n$ \r\n \r\n88,189.45 \r\n \r\n325,776.91 \r\n \r\n7,666.83 \r\n \r\n500,150.00 \r\n \r\n254,773.42 576,956.37 \r\n \r\n$ \r\n \r\n1,753,512.98 \r\n \r\n$ \r\n \r\n6,645,017.03 \r\n \r\n63,476.54 62.34 \r\n-123,100.10 \r\n \r\n$ \r\n \r\n6,585,455.81 \r\n \r\n$ \r\n \r\n8,338,968.79 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 1 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES \r\nFOR THE YEAR ENDED JUNE 30, 2011 \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 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 For Capital Projects Other Sales Tax Investment Earnings Miscellaneous \r\nTotal General Revenues \r\nChange in Net Assets \r\nNet Assets - Beginning of Year \r\n \r\nEXPENSES \r\n \r\nPROGRAM REVENUES \r\n \r\nOPERATING \r\n \r\nCHARGES FOR \r\n \r\nGRANTS AND \r\n \r\nSERVICES \r\n \r\nCONTRIBUTIONS \r\n \r\nNET (EXPENSES) REVENUES \r\nAND CHANGES IN NET ASSETS \r\n \r\n$ 2,400,310.18 \r\n65,488.18 49,538.44 74,116.15 394,746.77 121,548.37 156,822.04 362,893.92 289,782.33 22,567.47 \r\n21,415.28 $ 200,843.67 \r\n30,784.80 \r\n$ 4,190,857.60 $ \r\n \r\n$ \r\n21,415.28 6,119.90 \r\n \r\n1,691,299.68 $ \r\n62,846.97 85,756.24 45,510.87 328,857.17 159,307.75 \r\n530.27 99,159.39 137,854.78 17,756.37 \r\n207,117.55 \r\n \r\n27,535.18 $ 2,835,997.04 $ \r\n \r\n-709,010.50 \r\n-2,641.21 36,217.80 -28,605.28 -65,889.60 37,759.38 -156,291.77 -263,734.53 -151,927.55 -4,811.10 \r\n0.00 12,393.78 -30,784.80 \r\n-1,327,325.38 \r\n \r\n$ \r\n \r\n2,083,977.03 \r\n \r\n1,697.72 \r\n \r\n211,150.83 49,722.20 491.76 251.68 72,955.21 \r\n \r\n$ \r\n \r\n2,420,246.43 \r\n \r\n$ \r\n \r\n1,092,921.05 \r\n \r\n5,492,534.76 \r\n \r\nNet Assets - End of Year \r\n \r\n$ \r\n \r\n6,585,455.81 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 2 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION BALANCE SHEET \r\nGOVERNMENTAL FUNDS JUNE 30, 2011 \r\n \r\nEXHIBIT \"C\" \r\n \r\nASSETS \r\nCash and Cash Equivalents Accounts Receivable, Net \r\nTaxes State Government Federal Government Other Inventories \r\nTotal Assets \r\n \r\nGENERAL FUND \r\n \r\nDISTRICTWIDE \r\nCAPITAL PROJECTS \r\nFUND \r\n \r\nDEBT SERVICE \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ 473,923.09 \r\n101,331.28 $ 256,627.65 \r\n85,090.43 38,130.63 \r\n6,443.73 \r\n \r\n$ 27,957.66 \r\n \r\n62.34 $ \r\n \r\n473,985.43 \r\n129,288.94 256,627.65 \r\n85,090.43 38,130.63 \r\n6,443.73 \r\n \r\n$ 961,546.81 $ \r\n \r\n27,957.66 $ \r\n \r\n62.34 $ \r\n \r\n989,566.81 \r\n \r\nLIABILITIES AND FUND BALANCES \r\nLIABILITIES \r\nCash Overdraft Accounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Short-Term Debt Deposits and Deferred Revenue \r\nTotal Liabilities \r\nFUND BALANCES \r\nNonspendable Restricted Unassigned \r\nTotal Fund Balances \r\nTotal Liabilities and Fund Balances \r\n \r\n$ $ 88,189.45 \r\n325,776.91 7,666.83 \r\n500,150.00 19,670.25 \r\n$ 941,453.44 $ \r\n \r\n118,495.69 118,495.69 \r\n \r\n$ 6,443.73 57,032.81 -43,383.17 $ \r\n$ 20,093.37 $ \r\n \r\n$ -90,538.03 \r\n-90,538.03 $ \r\n \r\n$ 961,546.81 $ \r\n \r\n27,957.66 $ \r\n \r\n$ \r\n \r\n118,495.69 \r\n \r\n88,189.45 \r\n \r\n325,776.91 \r\n \r\n7,666.83 \r\n \r\n500,150.00 \r\n \r\n19,670.25 \r\n \r\n$ \r\n \r\n1,059,949.13 \r\n \r\n$ 62.34 \r\n62.34 $ \r\n \r\n6,443.73 57,095.15 -133,921.20 \r\n-70,382.32 \r\n \r\n62.34 $ \r\n \r\n989,566.81 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 3 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \r\nTO THE STATEMENT OF NET ASSETS JUNE 30, 2011 \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 Assets are different because: \r\nCapital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of: \r\nLand Buildings Equipment Accumulated Depreciation \r\nTotal Capital Assets \r\nTaxes that are not available to pay for current period expenditures are deferred in the funds. \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. Long-Term Liabilities at year-end consist of: \r\nBonds Payable Capital Leases Payable Compensated Absences Payable \r\nTotal Long-Term Liabilities \r\n \r\n$ \r\n \r\n-70,382.32 \r\n \r\n$ \r\n \r\n82,372.00 \r\n \r\n8,902,125.65 \r\n \r\n1,271,531.00 \r\n \r\n-2,788,130.98 \r\n \r\n7,467,897.67 \r\n \r\n19,670.25 \r\n \r\n$ -790,000.00 -32,880.64 -8,849.15 \r\n \r\n-831,729.79 \r\n \r\nNet Assets of Governmental Activities (Exhibit \"A\") \r\n \r\n$ 6,585,455.81 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 4 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES \r\nGOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2011 \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 Other Support Services Enterprise Operations Food Services Operation \r\nDebt Services Principal 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\nNet Change in Fund Balances \r\nFund Balances - Beginning \r\n \r\nGENERAL FUND \r\n \r\nDISTRICTWIDE \r\nCAPITAL PROJECTS \r\nFUND \r\n \r\nDEBT SERVICE \r\nFUND \r\n \r\nTOTAL \r\n \r\n$ 2,072,778.54 491.76 $ \r\n1,943,836.57 892,160.47 27,535.18 156.97 72,955.21 \r\n$ 5,009,914.70 $ \r\n \r\n49,722.20 $ \r\n \r\n$ 211,150.83 \r\n \r\n92.64 49,814.84 $ \r\n \r\n2.07 211,152.90 $ \r\n \r\n2,072,778.54 261,364.79 \r\n1,943,836.57 892,160.47 27,535.18 251.68 72,955.21 \r\n5,270,882.44 \r\n \r\n$ 2,142,797.02 $ \r\n65,488.18 49,538.44 74,116.15 394,695.46 121,548.37 167,397.51 351,988.31 256,892.74 22,567.47 21,415.28 194,786.11 \r\n53,376.98 2,333.10 \r\n$ 3,918,941.12 $ \r\n$ 1,090,973.58 $ \r\n \r\n29,847.87 \r\n \r\n$ \r\n \r\n51.31 10,905.61 \r\n \r\n$ \r\n40,804.79 $ 9,010.05 $ \r\n \r\n220,000.00 28,451.70 \r\n248,451.70 $ \r\n-37,298.80 $ \r\n \r\n2,172,644.89 \r\n65,488.18 49,538.44 74,116.15 394,746.77 121,548.37 167,397.51 362,893.92 256,892.74 22,567.47 21,415.28 194,786.11 \r\n273,376.98 30,784.80 \r\n4,208,197.61 \r\n1,062,684.83 \r\n \r\n$ \r\n \r\n-37,300.87 \r\n \r\n$ \r\n \r\n-37,300.87 \r\n \r\n$ 1,053,672.71 $ \r\n \r\n-1,033,579.34 \r\n \r\n$ \r\n$ 9,010.05 $ -99,548.08 \r\n \r\n37,300.87 $ \r\n37,300.87 $ 2.07 $ \r\n60.27 \r\n \r\n37,300.87 -37,300.87 \r\n0.00 1,062,684.83 -1,133,067.15 \r\n \r\nFund Balances - Ending \r\n \r\n$ \r\n \r\n20,093.37 $ \r\n \r\n-90,538.03 $ \r\n \r\n62.34 $ \r\n \r\n-70,382.32 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 5 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF \r\nREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2011 \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\nDepreciation 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\nRepayment of Long-Term Debt is reported as an expenditure in Governmental Funds, but the repayment reduces Long-Term Liabilities in the Statement of Net Assets. In the current year, these amounts consist of: \r\nBond Principal Retirements 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\nDecrease in Compensated Absences \r\n \r\n$ 1,062,684.83 \r\n \r\n-267,544.44 12,896.21 \r\n \r\n$ 220,000.00 53,376.98 \r\n \r\n273,376.98 \r\n \r\n11,507.47 \r\n \r\nChange in Net Assets of Governmental Activities (Exhibit \"B\") \r\n \r\n$ 1,092,921.05 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 6 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS \r\nFIDUCIARY FUNDS JUNE 30, 2011 \r\nASSETS Cash and Cash Equivalents \r\nLIABILITIES Funds Held for Others \r\n \r\nEXHIBIT \"G\" \r\n \r\nAGENCY FUNDS \r\n \r\n$ \r\n \r\n9,007.26 \r\n \r\n$ \r\n \r\n9,007.26 \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. - 7 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNote 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY \r\nREPORTING ENTITY \r\nThe Baker County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity. \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 Baker Board of Education. \r\nDistrict-wide Statements: The Statement of Net Assets and the Statement of Activities display information about the financial activities of the overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. \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: The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting of internal activities. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column. \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 \r\n- 8 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBIT \"H\" \r\n \r\n District-wide Capital Projects Fund accounts for and reports financial resources including Special Purpose Local Option Sales Tax (SPLOST) that are restricted, committed or assigned to the expenditure for capital outlays, including the acquisition or construction of capital facilities. \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\nThe School District reports the following fiduciary fund type: \r\n Agency funds account for assets held by the School District as an agent for various funds or individuals. \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, 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. 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 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\nThe State of Georgia reimburses the School System for teachers' salaries and operating costs through the Quality Basic Education Formula Earnings program (QBE). Generally teachers are contracted for the school year (July 1  June 30) and paid over a twelve month contract period, \r\n- 9 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBIT \"H\" \r\n \r\ngenerally September 1 through August 31. In accordance with the respective rules and regulations of the QBE program, the State of Georgia reimburses the School System over the same twelve month period in which teachers are paid. At June 30, the amount of teachers' salaries incurred but not paid until July and August of the subsequent year are accrued. Since the State of Georgia recognizes its QBE liability for the July and August salaries at June 30, the School System recognizes the same QBE as a receivable and revenue, consistent with symmetrical recognition. \r\n \r\nNEW ACCOUNTING PRONOUNCEMENTS \r\n \r\nIn fiscal year 2011, the School District adopted the Governmental Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. The provisions of this Statement establish accounting and financial reporting standards for all governments that report governmental funds. It establishes criteria for classifying fund balances into specifically defined classifications and clarifies definitions for governmental funds. \r\n \r\nCASH AND CASH EQUIVALENTS \r\n \r\nComposition of Deposits Cash and cash equivalents consist of cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Official Code of Georgia Annotated Section 45-8-14 authorizes the School District to deposit its funds in one or more solvent banks, insured Federal savings and loan associations or insured chartered building and loan associations. \r\n \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\n \r\nPROPERTY TAXES \r\n \r\nThe Baker County Board of Commissioners fixed the property tax levy for the 2010 tax digest year (calendar year) on September 29, 2010 (levy date). Taxes were due on December 20, 2010 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2010 tax digest are reported as revenue in the governmental funds for fiscal year 2011. The Baker County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2011, for maintenance and operations amounted to $2,071,080.82. \r\n \r\nThe tax millage rate levied for the 2010 tax year (calendar year) for the Baker Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value): \r\n \r\nSchool Operations \r\n \r\n14.88 mills \r\n \r\n- 10 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBIT \"H\" \r\n \r\nSALES TAXES \r\n \r\nSpecial Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $260,873.03 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 On the basic financial statements, inventories of donated food commodities used in the preparation of meals are reported at their Federally assigned value and purchased foods inventories are reported at cost (first-in, first-out). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used. \r\n \r\nCAPITAL ASSETS \r\n \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 \r\n \r\nstatements are as follows: \r\n \r\nCapitalization \r\n \r\nEstimated \r\n \r\nPolicy \r\n \r\nUseful Life \r\n \r\nLand Buildings and Improvements Equipment \r\n \r\nAll $ 5,000.00 $ 5,000.00 \r\n \r\nN/A 15 to 80 years \r\n3 to 50 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\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\n- 11 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBIT \"H\" \r\n \r\nVacation leave of 15 days is awarded on a fiscal year basis to all full time personnel employed on a twelve month basis. No other employees are eligible to earn vacation leave. Vacation leave not utilized during the fiscal year may be carried over to the next fiscal year, providing such vacation leave does not exceed 60 days. \r\n \r\nBeginning of Year Liability \r\n \r\nIncreases \r\n \r\nDecreases \r\n \r\nEnd of Year Liability \r\n \r\n2009 $ 2010 $ 2011 $ \r\n \r\n54,633.43 $ 34,587.13 $ 20,356.62 $ \r\n \r\n2,889.31 $ 754.37 $ \r\n3,028.44 $ \r\n \r\n22,935.61 $ 14,984.88 $ 14,535.91 $ \r\n \r\n34,587.13 20,356.62 \r\n8,849.15 \r\n \r\nGENERAL OBLIGATION BONDS \r\n \r\nThe School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. In the District-wide and fund financial statements, the School District recognizes bond premiums and discounts, as well as bond issuance costs during the fiscal year bonds are issued. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. To conform to generally accepted accounting principles, bond premiums and discounts, as well as bond issuance costs should be amortized over the life of the bonds on the District-wide statements. The effect of this deviation is deemed to be immaterial to the fair presentation of the basic financial statements. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement of Net Assets. \r\n \r\nNET ASSETS \r\n \r\nThe School District's net assets in the District-wide Statements are classified as follows: \r\n \r\nInvested in capital assets, net of related debt - This represents the School District's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt. \r\n \r\nRestricted net assets - These represent resources for which the School District is legally or contractually obligated to spend resources for bus replacement, continuation of Federal programs, debt service and capital projects in accordance with restrictions imposed by external third parties. \r\n \r\nUnrestricted net assets - Unrestricted net assets represent resources derived from property taxes, sales taxes, grants and contributions not restricted to specific programs, charges for services, and miscellaneous revenues. These resources are used for transactions relating to the educational and general operations of the School District, and may be used at the discretion of the Board to meet current expenses for those purposes. \r\n \r\nFUND BALANCES \r\n \r\nThe School District's fund balances are classified as follows: \r\n \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 \r\n- 12 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBIT \"H\" \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\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 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, 2011, are as follows: \r\n \r\nNonspendable Inventories \r\nRestricted Continuation of Federal Programs Debt Service \r\nUnassigned \r\n \r\n$ \r\n \r\n6,443.73 \r\n \r\n$ \r\n \r\n57,032.81 \r\n \r\n62.34 \r\n \r\n57,095.15 -133,921.20 \r\n \r\nFund Balance, June 30, 2011 \r\n \r\n$ \r\n \r\n-70,382.32 \r\n \r\nIt is the goal of the School District to achieve and maintain a committed, assigned, and unassigned fund balance in the general fund at fiscal year end of not less than 11.5% of total annual revenues, not to exceed 15% of the total budget of the subsequent fiscal year, in compliance with Official Code of Georgia Annotated Section 20-2-167(a)5. If the unassigned fund balance at fiscal year end falls below the goal, the School District shall develop a restoration plan to achieve and maintain the minimum fund balance. \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\nDEFICIT FUND BALANCES \r\n \r\nFunds reporting a deficit fund balance at June 30, 2011, are as follows: \r\n \r\nFund Type/Fund Name \r\n \r\nDeficit Balances \r\n \r\nGovernmental Fund Type General Fund District-wide Capital Projects Fund \r\n \r\n$ \r\n \r\n43,383.17 \r\n \r\n$ \r\n \r\n90,538.03 \r\n \r\nThe School District has reduced expenditures in order to eliminate the fiscal year 2011 deficit. \r\n \r\n- 13 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBIT \"H\" \r\n \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: DEPOSITS \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\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\n \r\n- 14 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBIT \"H\" \r\n \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, 2011, the bank balances were $629,505.52. The amounts exposed to custodial credit risk are classified into three categories as follows: \r\n \r\nCategory 1 Category 2 - \r\nCategory 3 - \r\n \r\nUncollateralized, Cash collateralized with securities held by the pledging financial institution, or Cash collateralized with securities held by the pledging financial institution's trust department or agent but not in the School District's name. \r\n \r\nThe School District's deposits by custodial credit risk category at June 30, 2011, are as follows: \r\n \r\nCustodial Credit Risk Category \r\n \r\nBank Balance \r\n \r\n1 \r\n \r\n$ \r\n \r\n0.00 \r\n \r\n2 \r\n \r\n0.00 \r\n \r\n3 \r\n \r\n376,775.58 \r\n \r\nTotal \r\nNote 4: NON-MONETARY TRANSACTIONS \r\n \r\n$ 376,775.58 \r\n \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\nNote 5: CAPITAL ASSETS \r\n \r\nThe following is a summary of changes in the Capital Assets during the fiscal year: \r\n \r\nBalances \r\n \r\nJuly 1, 2010 \r\n \r\nIncreases \r\n \r\nDecreases \r\n \r\nGovernmental Activities \r\n \r\nCapital Assets, Not Being Depreciated: \r\n \r\nLand \r\n \r\n$ \r\n \r\n82,372.00 $ \r\n \r\n0.00 $ \r\n \r\n0.00 $ \r\n \r\nBalances June 30, 2011 \r\n82,372.00 \r\n \r\nCapital Assets, Being Depreciated: Buildings and Improvements Equipment \r\n \r\n$ 8,902,125.65 1,271,531.00 \r\n \r\n$ \r\n \r\n0.00 $ 8,902,125.65 \r\n \r\n1,271,531.00 \r\n \r\nLess: Accumulated Depreciation: Buildings and Improvements Equipment \r\n \r\n1,473,832.14 $ 1,046,754.40 \r\n \r\n216,226.49 51,317.95 \r\n \r\n1,690,058.63 1,098,072.35 \r\n \r\nTotal Capital Assets, Being Depreciated, Net $ 7,653,070.11 $ -267,544.44 $ \r\n \r\n0.00 $ 7,385,525.67 \r\n \r\nGovernmental Activity Capital Assets - Net $ 7,735,442.11 $ -267,544.44 $ \r\n \r\n0.00 $ 7,467,897.67 \r\n \r\n- 15 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBIT \"H\" \r\n \r\nCapital assets being acquired under capital leases as of June 30, 2011, are as follows: \r\nGovernmental Funds \r\n \r\nBuildings and Improvements Equipment Less: Accumulated Depreciation \r\n \r\n$ \r\n \r\n899,432.00 \r\n \r\n70,996.00 \r\n \r\n231,366.75 \r\n \r\n$ \r\n \r\n739,061.25 \r\n \r\nCurrent year depreciation expense by function is as follows: \r\n \r\nInstruction \r\n \r\nSupport Services \r\n \r\nBusiness Administration \r\n \r\n$ \r\n \r\nStudent Transportation Services \r\n \r\nFood Services \r\n \r\n$ 932.00 32,889.59 \r\n$ \r\n \r\n227,665.29 \r\n33,821.59 6,057.56 \r\n267,544.44 \r\n \r\nNote 6: INTERFUND TRANSFERS \r\n \r\nInterfund transfers for the year ended June 30, 2011, consisted of the following: \r\n \r\nTransfer to \r\n \r\nTransfers From \r\nGeneral Fund \r\n \r\nDebt Service Fund \r\n \r\n$ \r\n \r\n37,300.87 \r\n \r\nTransfers are used to move property tax revenues collected by the General Fund to the Debt Service Fund to meet debt service requirements. \r\n \r\nNote 7: RISK MANAGEMENT \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; 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 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\n- 16 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBIT \"H\" \r\n \r\nChanges in the unemployment compensation claims liability during the last two fiscal years are as \r\n \r\nfollows: \r\n \r\nClaims and \r\n \r\nBeginning of Year \r\n \r\nChanges in \r\n \r\nClaims \r\n \r\nEnd of Year \r\n \r\nLiability \r\n \r\nEstimates \r\n \r\nPaid \r\n \r\nLiability \r\n \r\n2010 $ 2011 $ \r\n \r\n0.00 $ 0.00 $ \r\n \r\n13,128.55 $ 67,708.09 $ \r\n \r\n13,128.55 $ 67,708.09 $ \r\n \r\n0.00 0.00 \r\n \r\nThe School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the Safety National Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $1,000,000.00 loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided by Safety National Casualty Company with a loss fund percentage of 100%, based on the Fund's annual normal premium, up to a maximum limit of indemnity of aggregate limit of $2,000,000.00. \r\n \r\nThe School District has purchased surety bonds to provide additional insurance coverage as follows: \r\n \r\nPosition Covered \r\n \r\nAmount \r\n \r\nSuperintendent Principal \r\nNote 8: SHORT-TERM DEBT \r\n \r\n$ \r\n \r\n25,000.00 \r\n \r\n$ \r\n \r\n10,000.00 \r\n \r\nThe School District 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 percent of the total gross income from taxes collected in the preceding year and requires all short-term debt to be repaid no later than December 31 of the calendar year in which the debt was incurred. \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\nEnding Balance \r\n \r\nTemporary Loans \r\n \r\n$ \r\n \r\n1,294,103.50 $ \r\n \r\n611,236.75 $ \r\n \r\n1,405,190.25 $ \r\n \r\n500,150.00 \r\n \r\nNote 9: LONG-TERM DEBT \r\n \r\nCAPITAL LEASES \r\n \r\nThe Baker Board of Education entered into various lease agreements for the purchase of buses and energy 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\n- 17 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBIT \"H\" \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\n \r\nGENERAL OBLIGATION DEBT OUTSTANDING \r\n \r\nGeneral Obligation Bonds currently outstanding are as follows: \r\n \r\nPurpose \r\n \r\nInterest Rate \r\n \r\nAmount \r\n \r\nGeneral Government - Series 2008 \r\n \r\n2.817% \r\n \r\n$ \r\n \r\n790,000.00 \r\n \r\nThe changes in Long-Term Debt during the fiscal year ended June 30, 2011, were as follows: \r\n \r\nBalance July 1, 2010 \r\n \r\nAdditions \r\n \r\nGovernmental Funds \r\n \r\nBalance \r\n \r\nDeductions \r\n \r\nJune 30, 2011 \r\n \r\nDue Within One Year \r\n \r\nG. O. Bonds Capital Leases Compensated Absences (1) \r\n \r\n$ 1,010,000.00 86,257.62 20,356.62 $ \r\n \r\n$ 3,028.44 \r\n \r\n220,000.00 $ 53,376.98 14,535.91 \r\n \r\n790,000.00 $ 32,880.64 8,849.15 \r\n \r\n240,000.00 14,773.42 \r\n \r\n$ 1,116,614.24 $ \r\n \r\n3,028.44 $ 287,912.89 $ 831,729.79 $ 254,773.42 \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\nAt June 30, 2011, payments due by fiscal year which includes principal and interest for these items are as follows: \r\n \r\nCapital Leases \r\n \r\nPrincipal \r\n \r\nInterest \r\n \r\nFiscal Year Ended June 30: \r\n \r\n2012 2013 2014 \r\n \r\n$ \r\n \r\n14,773.42 $ \r\n \r\n15,461.25 \r\n \r\n2,645.97 \r\n \r\n1,192.94 505.11 15.09 \r\n \r\nTotal Principal and Interest \r\nFiscal Year Ended June 30: 2012 2013 2014 \r\n \r\n$ \r\n \r\n32,880.64 $ \r\n \r\n1,713.14 \r\n \r\nGeneral Obligation Debt \r\n \r\nPrincipal \r\n \r\nInterest \r\n \r\n$ \r\n \r\n240,000.00 $ \r\n \r\n260,000.00 \r\n \r\n290,000.00 \r\n \r\n22,254.30 15,493.50 \r\n8,169.30 \r\n \r\nTotal Principal and Interest \r\n \r\n$ \r\n \r\n790,000.00 $ \r\n \r\n45,917.10 \r\n \r\n- 18 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNote 10: ON-BEHALF PAYMENTS \r\nThe School District has recognized revenues and costs in the amount of $9,532.41 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies. \r\nGeorgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certificated Personnel In the amount of $5,602.41 \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 $3,930.00 \r\nNote 11: 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 12: 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. On average, plan members pay approximately 25 percent of the cost of the health insurance coverage. \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 \r\n \r\n- 19 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBIT \"H\" \r\n \r\nprojected \"pay-as-you-go\" financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. \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, 2011: \r\nFor certificated teachers, librarians and regional educational service agencies: \r\n \r\nJuly 2010 - April 2011 May 2011 - June 2011 \r\n \r\n21.955% of covered payroll for August - May Coverage 1.429% of covered payroll for June - July Coverage \r\n \r\nFor non-certificated school personnel: \r\n \r\nJuly 2010 - December 2010 January 2011 - May 2011 June 2011 \r\n \r\n$162.72 per member per month $218.20 per member per month $246.20 per member per month \r\n \r\nThe Department of Education was appropriated an additional $25,081,633 for non-certificated personnel health insurance payments. The amount attributable to the School District is reflected in the On-behalf note disclosure. \r\n \r\nNo additional contribution was required by the Board for fiscal year 2011 nor contributed to the School OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the School plan for other post-employment benefits and are subject to appropriation. \r\n \r\nThe School District's combined active and retiree contributions to the health insurance plans, which \r\n \r\nequaled the required contribution, for the current fiscal year and the preceding two fiscal years were \r\n \r\nas follows: \r\n \r\nPercentage \r\n \r\nRequired \r\n \r\nFiscal Year \r\n \r\nContributed \r\n \r\nContribution \r\n \r\n2011 2010 2009 \r\n \r\n100% \r\n \r\n$ \r\n \r\n100% \r\n \r\n$ \r\n \r\n100% \r\n \r\n$ \r\n \r\n219,095.79 536,128.25 343,749.54 \r\n \r\nNote 13: 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\n \r\n- 20 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30, 2011 \r\n \r\nEXHIBIT \"H\" \r\n \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\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. \r\nNormal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 60 or by 7% for each year or fraction thereof by which the member has less than 30 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lump-sum distribution in addition to a reduced monthly retirement benefit. Death, disability and spousal benefits are also available. \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, 2011, were 5.53% of annual salary. The member contribution rate will increase to 6.00% effective July 1, 2012. Employer contributions required for fiscal year 2011 were 10.28% of annual salary as required by the June 30, 2008, actuarial valuation. The employer contribution rate will increase to 11.41% effective July 1, 2012. \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\n2011 2010 2009 \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\nPUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM (PSERS) \r\n \r\n185,092.81 250,177.33 283,642.27 \r\n \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\n- 21 - \r\n \r\n (This page left intentionally blank) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION GENERAL FUND \r\nSCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL \r\nYEAR ENDED JUNE 30, 2011 \r\n \r\nSCHEDULE \"1\" \r\n \r\nREVENUES \r\nProperty Taxes Sales Tax 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 Other Support Services Enterprise Operations Food Services Operation Debt Service \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\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\n$ \r\n \r\n2,031,336.00 $ \r\n \r\n2,031,336.00 $ 2,072,778.54 \r\n \r\n491.76 \r\n \r\n1,973,801.00 \r\n \r\n2,057,077.00 \r\n \r\n1,943,836.57 \r\n \r\n1,096,515.00 \r\n \r\n907,350.00 \r\n \r\n892,160.47 \r\n \r\n8,000.00 \r\n \r\n8,000.00 \r\n \r\n27,535.18 \r\n \r\n1,000.00 \r\n \r\n1,000.00 \r\n \r\n156.97 \r\n \r\n108,000.00 \r\n \r\n108,000.00 \r\n \r\n72,955.21 \r\n \r\n$ \r\n \r\n5,218,652.00 $ \r\n \r\n5,112,763.00 $ 5,009,914.70 \r\n \r\n$ \r\n \r\n2,311,079.32 $ \r\n \r\n2,402,951.32 $ 2,142,797.02 \r\n \r\n59,643.42 184,397.56 \r\n75,556.88 377,156.00 212,370.76 145,569.28 293,165.52 300,816.08 \r\n11,121.00 26,000.00 241,000.00 \r\n \r\n70,291.48 200,377.00 \r\n75,556.88 374,897.00 219,688.76 145,569.28 293,165.52 301,416.08 \r\n24,530.00 26,000.00 241,000.00 \r\n \r\n65,488.18 49,538.44 74,116.15 394,695.46 121,548.37 167,397.51 351,988.31 256,892.74 22,567.47 21,415.28 194,786.11 55,710.08 \r\n \r\n$ \r\n \r\n4,237,875.82 $ \r\n \r\n4,375,443.32 $ 3,918,941.12 \r\n \r\n$ \r\n \r\n980,776.18 $ \r\n \r\n737,319.68 $ 1,090,973.58 \r\n \r\n$ \r\n \r\n-37,300.87 \r\n \r\n$ \r\n \r\n-37,300.87 \r\n \r\n$ \r\n \r\n980,776.18 $ \r\n \r\n737,319.68 $ 1,053,672.71 \r\n \r\n-1,086,046.17 \r\n \r\n-1,086,046.17 \r\n \r\n-1,033,579.34 \r\n \r\n4,743.77 \r\n \r\n-738.78 \r\n \r\nFund Balances - Ending \r\n \r\n$ \r\n \r\n-100,526.22 $ \r\n \r\n-349,465.27 $ \r\n \r\n20,093.37 \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. \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- 23 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \r\nYEAR ENDED JUNE 30, 2011 \r\n \r\nSCHEDULE \"2\" \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\nTitle I, Part A Cluster Pass-Through From Georgia Department of Education ARRA - Title I Grants to Local Educational Agencies Title I Grants to Local Educational Agencies \r\nTotal Title I, Part A Cluster \r\nOther Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States Education Jobs Fund Improving Teacher Quality State Grants Migrant Education - State Grant Program \r\nTotal Other Programs \r\nTotal U. S. Department of Education \r\nHealth and Human Services, U. S. Department of Other Programs Pass-Through From Georgia Department of Human Resources Block Grants for Prevention and Treatment of Substance Abuse \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$ \r\n \r\n(2) 184,530.87 (1) \r\n184,530.87 \r\n \r\n84.027 84.173 \r\n \r\nN/A \r\n \r\n$ \r\n \r\nN/A \r\n \r\n$ \r\n \r\n120,230.31 11,234.88 \r\n131,465.19 \r\n \r\n* 84.389 * 84.010 \r\n \r\nN/A \r\n \r\n$ \r\n \r\nN/A \r\n \r\n$ \r\n \r\n32,389.04 348,272.63 \r\n380,661.67 \r\n \r\n84.048 84.410 84.367 84.011 \r\n \r\nN/A \r\n \r\n$ \r\n \r\nN/A \r\n \r\nN/A \r\n \r\nN/A \r\n \r\n$ \r\n \r\n$ \r\n \r\n6,544.16 88,804.00 68,266.68 \r\n6,033.98 \r\n169,648.82 \r\n681,775.68 \r\n \r\n93.959 \r\n \r\nN/A \r\n \r\n$ \r\n \r\n16,856.00 \r\n \r\nTotal Expenditures of Federal Awards \r\n \r\n$ \r\n \r\n883,162.55 \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 $851.52. \r\n(2) Expenditures for the funds earned on the School Breakfast Program ($67,276.60) were not maintained separately and are included in the 2011 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 Baker County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 24 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2011 \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 Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I - V Alternative Education Program Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Charter System Adjustment Categorical Grants Pupil Transportation Regular Sparsity Nursing Services Food Services Vocational Education Mid-term Adjustment Hold-Harmless Amended Formula Adjustment Other State Programs Health Insurance Math and Science Supplements Preschool Handicapped Program \r\nOffice of the State Treasurer Public School Employees Retirement \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 25 - \r\n \r\nSCHEDULE \"3\" \r\n \r\nGOVERNMENTAL FUND TYPE GENERAL FUND \r\n \r\n$ \r\n \r\n89,836.85 \r\n \r\n73,050.00 42,421.00 209,327.00 81,261.00 76,404.00 116,900.00 174,669.00 143,612.00 64,024.00 \r\n261,015.00 16,256.00 33,264.00 10,470.00 6,259.00 \r\n240,631.00 98,956.00 73,441.00 -54,681.00 \r\n137,257.00 104,403.00 \r\n24,558.00 8,762.00 \r\n104,814.96 58,064.00 \r\n-284,272.00 \r\n5,602.41 2,970.67 20,630.68 \r\n3,930.00 \r\n \r\n$ \r\n \r\n1,943,836.57 \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\nYEAR ENDED JUNE 30, 2011 \r\n \r\nSCHEDULE \"4\" \r\n \r\nPROJECT \r\n \r\nORIGINAL ESTIMATED \r\nCOST (1) \r\n \r\nCURRENT ESTIMATED COST (2) \r\n \r\nAMOUNT EXPENDED IN CURRENT YEAR (3) \r\n \r\nAMOUNT EXPENDED IN PRIOR YEARS (3) \r\n \r\nPROJECT STATUS \r\n \r\nAdding to, renovating, improving, and equipping existing \r\n \r\nschool facilities, including a new gymnasium and \r\n \r\nclassrooms, upgrading instructional and administrative \r\n \r\ntechnology, purchasing school buses and transportation \r\n \r\nequipment, purchasing textbooks and vocational, fine \r\n \r\narts, instructional and athletic equipment, purchasing \r\n \r\nsafety and security equipment and acquiring any \r\n \r\nproperty necessary or desirable therefore, both real and \r\n \r\npersonal. \r\n \r\n$ \r\n \r\n1,400,000.00 $ \r\n \r\n2,860,225.31 $ \r\n \r\n63,756.49 $ 2,777,560.96 Ongoing \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(2) The School District's current estimate of total cost for the project. Includes all cost from project inception to completion. \r\n(3) The voters of Baker County approved the imposition of a 1% sales tax to fund the above project and retire associated debt. Amounts expended for this project may include sales tax proceeds, state, local property taxes and/or other funds over the life of the project. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n- 26 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) \r\nALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2011 \r\n \r\nSCHEDULE \"5\" \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 Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category III Category IV Alternative Education Program \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\n104,547.00 $ \r\n \r\n49,249.40 $ \r\n \r\n52,670.00 \r\n \r\n288,721.00 \r\n \r\n208,980.22 \r\n \r\n110,851.00 \r\n \r\n6,372.08 \r\n \r\n106,650.00 \r\n \r\n1,959.68 \r\n \r\n145,167.00 246,073.00 198,165.00 \r\n85,951.00 372,252.00 \r\n22,176.00 \r\n \r\n124,839.61 231,681.44 113,119.78 \r\n380,763.39 30,655.64 22,854.15 \r\n \r\n$ \r\n \r\n1,733,223.00 $ 1,170,475.39 $ \r\n \r\n45,758.00 8,432.00 \r\n \r\n71,235.08 682.21 \r\n \r\n6,300.31 $ 5,522.64 5,393.21 \r\n \r\n55,549.71 \r\n214,502.86 6,372.08 7,352.89 \r\n \r\n5,783.49 28,582.96 \r\n \r\n130,623.10 260,264.40 113,119.78 \r\n \r\n6,592.00 \r\n \r\n387,355.39 30,655.64 22,854.15 \r\n \r\n58,174.61 $ 1,228,650.00 \r\n \r\n2,573.20 5,034.90 \r\n \r\n73,808.28 5,717.11 \r\n \r\nTOTAL QBE FORMULA FUNDS \r\n \r\n$ \r\n \r\n1,787,413.00 $ 1,242,392.68 $ \r\n \r\n65,782.71 $ 1,308,175.39 \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- 27 - \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\nAugust 24, 2012 \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 Baker County Board of Education \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 the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Baker County Board of Education as of and for the year ended June 30, 2011, which collectively comprise Baker County Board of Education's basic financial statements and have issued our report thereon dated August 24, 2012. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. \r\nInternal Control Over Financial Reporting \r\nManagement of Baker County Board of Education is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered Baker County Board of Education's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Baker County Board of Education's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Baker County Board of Education's internal control over financial reporting. \r\nOur consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses and therefore, there can be no assurances that all deficiencies, significant deficiencies or material weaknesses have been identified. However, as described in the accompanying Schedule of Findings and Questioned Costs, we identified a certain deficiency in internal control over financial reporting that we consider to be a material weakness and other deficiencies that we consider to be significant deficiencies. \r\n \r\n2011YB-60 \r\n \r\n  A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. We consider item FS-6041-11-04, in the accompanying Schedule of Findings and Questioned Costs to be a material weakness. \r\nA significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider items FS-6041-11-01, FS-6041-11-02, FS-6041-11-03, and FS-6041-1106 in the accompanying Schedule of Findings and Questioned Costs to be significant deficiencies in internal control over financial reporting. \r\nCompliance and Other Matters \r\nAs part of obtaining reasonable assurance about whether Baker County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed an instance of noncompliance or other matter that is required to be reported under Government Auditing Standards and which is described in the accompanying Schedule of Findings and Questioned Costs as item FS-6041-11-05. \r\nWe also noted certain matters that we have reported to management of Baker County Board of Education in a separate letter dated August 24, 2012. \r\nBaker County Board of Education's response to the findings identified in our audit is described in the accompanying Schedule of Management's Responses. We did not audit Baker County Board of Education's response and, accordingly, we express no opinion on it. \r\nThis report is intended solely for the information and use of management, members of the Baker County Board of Education, others within the entity, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. \r\nRespectfully submitted, \r\n \r\nGSG:as 2011YB-60 \r\n \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\nAugust 24, 2012 \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 Baker County Board of Education \r\nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 \r\nLadies and Gentlemen: \r\nCompliance \r\nWe have audited Baker County Board of Education's compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of its major Federal programs for the year ended June 30, 2011. Baker County Board of Education's major Federal programs are identified in the Summary of Auditor's Results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major Federal programs is the responsibility of Baker County Board of Education's management. Our responsibility is to express an opinion on Baker County Board of Education's compliance based on our audit. \r\nWe conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Baker County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Baker County Board of Education's compliance with those requirements. \r\nAs described in item FA-6041-11-01 in the accompanying Schedule of Findings and Questioned Costs, Baker County Board of Education did not comply with requirements regarding Allowable Costs/Cost Principles, and Procurement and Suspension and Debarment that are applicable to its Child Nutrition Cluster. Compliance with such requirements is necessary, in our opinion, for Baker County Board of Education to comply with requirements applicable to that program. \r\n2011SA-55 \r\n \r\n  In our opinion, except for the noncompliance described in the preceding paragraph, the Baker County Board of Education complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major Federal programs for the year ended June 30, 2011. The results of our auditing procedures also disclosed another instance of noncompliance with those requirements which is described in the accompanying Schedule of Findings and Questioned Costs as item FA-6041-11-02. \r\nInternal Control Over Compliance \r\nManagement of Baker County Board of Education is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to Federal programs. In planning and performing our audit, we considered Baker County Board of Education's internal control over compliance with the requirements that could have a direct and material effect on a major Federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Baker County Board of Education's internal control over compliance. \r\nOur consideration of internal control over compliance was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over compliance that might be significant deficiencies or material weaknesses and therefore, there can be no assurance that all deficiencies, significant deficiencies, or material weaknesses have been identified. However, as discussed below, we identified certain deficiencies in internal control over compliance that we consider to be material weaknesses and other deficiencies that we consider to be significant deficiencies. \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. We consider the deficiency in internal control over compliance described in the accompanying Schedule of Findings and Questioned Costs as item FA-6041-11-01 to be a material weakness. \r\nA 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 as item FA-6041-11-02 to be a significant deficiency. \r\nBaker County Board of Education's responses to the findings identified in our audit are described in the accompanying Schedule of Management's Responses. We did not audit Baker County Board of Education's responses and, accordingly, we express no opinion on the responses. \r\n \r\n  This report is intended solely for the information and use of management, members of the Baker County Board of Education, others within the entity, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. \r\nRespectfully submitted, \r\n \r\nGSG:as 2011SA-55 \r\n \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  BAKER COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2011 \r\n \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\n \r\nFINDING CONTROL NUMBER AND STATUS \r\n \r\nFS-6041-09-01 FS-6041-09-02 FS-6041-09-03 FS-6041-09-06 FS-6041-10-01 FS-6041-10-02 FS-6041-10-03 FS-6041-10-04 \r\n \r\nFurther Action Not Warranted Further Action Not Warranted Further Action Not Warranted Further Action Not Warranted Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses \r\n \r\nCORRECTIVE ACTION/RESPONSES \r\n \r\nINVENTORIES REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Separation of Duties Finding Control Number: FS-6041-10-01 \r\n \r\nWe concur with this finding. The School District in conjunction with the Lunchroom Manager has devised strategic procedures to ensure that School Food Service Fund will have adequate separation of duties. The Lunchroom Manager will designate an existing lunchroom staff member to assist in the receiving, inventorying, and reviewing of inventory records to ensure separation of duties. The Lunchroom Manager will also issue Purchase Orders for prior approval by the Superintendent before inventory is ordered to ensure expenditures are appropriate, accurate, and properly documented. These procedures will ensure that internal controls for both access to physical assets and the related accounting records are adequately separated. These procedures will be fully implemented in the 2012 fiscal year. \r\n \r\nCASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Accounting Procedures over School Activity Accounts Finding Control Number: FS-6041-10-02 \r\n \r\nWe concur with this finding. The School District in conjunction with the school administration has devised strategic procedures to ensure that the school activity account will have adequate separation of duties. The principal will designate a school level administrator to review and approve all bank reconciliations, review deposit preparations and ensure all documentation for written checks are present. The School District has also implemented the use of computerized accounting records for the School Activity Accounts to ensure receipts and checks contain adequate descriptions and account/object information so that the accounting records could be easily traced. These procedures will ensure that internal controls for both access to physical assets and the related accounting records are adequately separated. These procedures will be fully implemented in the 2012 fiscal year. \r\n \r\n- 1 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2011 \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CORRECTIVE ACTION/RESPONSES EXPENDITURES/LIABILITIES/DISBURSEMENTS EMPLOYEE COMPENSATION GENERAL LEDGER Inadequate Accounting Procedures Finding Control Number: FS-6041-10-03 We concur with this finding. The School District has implemented procedures to ensure that expenditure transactions, employee compensation, leave records, authorization for payroll deductions and journal entries are properly documented, calculated, maintained and approved before changes and/or disbursements are made. These procedures will be fully implemented in the 2012 fiscal year. BUDGET PREPARATION/EXECUTION Deficit Fund Balance Finding Control Number: FS-6041-10-04 We concur with this finding. The School District has implemented policies and procedures to ensure that expenditures do not exceed availability of resources. The School District monitors the DE Form 0396 monthly to ensure that the expenditures are not exceeding the amounts budgeted. The School District will also implement procedures to ensure that the adopted budget for each budgeted fund is balanced as required. This will be fully implemented in the 2012 fiscal year. \r\nPRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. \r\n- 2 - \r\n \r\n SECTION IV FINDINGS AND QUESTIONED COSTS \r\n \r\n  BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2011 \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\nUnqualified \r\n \r\nInternal control over financial reporting: \r\n \r\n Material weakness identified? \r\n \r\nYes \r\n \r\n Significant deficiencies identified? \r\n \r\nYes \r\n \r\nNoncompliance material to financial statements noted: \r\n \r\nYes \r\n \r\nFederal Awards \r\n \r\nInternal Control over major programs: \r\n \r\n Material weakness identified? \r\n \r\nYes \r\n \r\n Significant deficiency identified? \r\n \r\nYes \r\n \r\nType of auditor's report issued on compliance for major programs: Unqualified for Title I, Part A Cluster Qualified for Child Nutrition Cluster \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\nYes \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, 84.389 \r\n \r\nChild Nutrition Cluster Title I, Part A 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 \r\n \r\nINVENTORIES REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Separation of Duties Significant Deficiency Finding Control Number: FS-6041-11-01 \r\n \r\nCondition: This is a repeat finding (FS-6041-10-01, FS-6041-09-01 and FS-6041-08-01) from the years ended June 30, 2010, June 30, 2009, and June 30, 2008, respectively. The accounting procedures of the School District were insufficient to provide for adequate separation of duties over the School Food Service Fund. \r\n \r\n- 1 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2011 \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nCriteria: The School District's management is responsible for designing and maintaining internal controls that provide reasonable assurance that transactions are processed according to established procedures. Such internal controls would limit any one individual's access to both physical assets and the related accounting records. \r\nQuestioned Cost: N/A \r\nInformation: Inventories \r\n Ordering of goods was not separated from the maintenance of inventory records.  Custodianship of inventory was not separated from the receiving function.  Review of inventory records was not performed by someone independent of the receiving \r\nfunction. \r\nRevenues/Receivables/Receipts  Deposit preparation was not separated from the record keeping and cash custody functions. \r\nExpenditures/Liabilities/Disbursements  The duty of approving vouchers for payment was not adequately separated from the duty of writing checks.  There was no independent review to determine that the expenditures were appropriate, accurate and properly documented prior to payment.  Numerous voucher packages revealed no approval.  Numerous voucher packages could not be provided for auditor review. \r\nCause: The School District has not assigned responsibilities to achieve appropriate separation of duties nor utilized management oversight of the incompatible activities to properly safeguard assets. These deficiencies were also a result of management's decision to limit the number of administrative staff made responsible for accounting functions applicable to the School Food Service Fund. \r\nEffect: Errors and/or irregularities may not be detected in a timely manner. \r\nRecommendation: The School District should implement procedures to ensure that the key accounting functions of custody, record keeping and authorization are separated and/or utilize management oversight of these incompatible activities. Management should also revise and monitor controls to provide reasonable assurance that transactions are processed according to established procedures. \r\n- 2 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2011 \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nCASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Accounting Procedures over School Activity Accounts Significant Deficiency Finding Control Number: FS-6041-11-02 \r\nCondition: This is a repeat finding (FS-6041-10-02, FS-6041-09-02, and FS-6041-08-02) from the years ended June 30, 2010, June 30, 2009, and June 30, 2008, respectively. The accounting procedures of the School District were insufficient to provide for adequate separation of duties over the school activities accounts. \r\nCriteria: The School District's management is responsible for designing and maintaining internal controls that provide reasonable assurance that transactions are processed according to established procedures. Such internal controls would limit any one individual's access to both physical assets and the related accounting records. \r\nQuestioned Cost: N/A \r\nInformation: Cash and Cash Equivalents \r\n The bank reconciliation function was not separated from the record keeping and voucher payment function. \r\n The bank reconciliation did not include evidence of approval by someone other than the person performing the bank reconciliation. \r\nRevenues/Receivables/Receipts  Deposit preparation was not separated from the record keeping and cash custody functions.  Adequate receipt documentation was not maintained for deposits recorded on the general ledger.  Auditor could not determine if receipts were deposited in a timely manner.  Reconciliation of gate receipts was not being performed. \r\nExpenditures/Liabilities/Disbursements  The check writing function was not separated from the record keeping or processing of signed checks.  Several vouchers had inadequate supporting documentation.  Several voucher packages were not charged to the correct account code on the general ledger.  Several vouchers were for salary and travel payments made to employees. \r\n- 3 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2011 \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nCause: The School District has not assigned responsibilities to achieve appropriate separation of duties nor utilized management oversight of the incompatible activities to properly safeguard assets. These deficiencies were also a result of management's failure to ensure that internal controls were established, implemented and functioning at the school level. \r\nEffect: Errors and/or irregularities may not be detected in a timely manner. \r\nRecommendation: The School District should implement procedures to ensure that the key accounting functions of custody, record keeping and authorization are separated and/or utilize management oversight of these incompatible activities. Management should also revise and monitor controls to provide reasonable assurance that transactions are processed according to established procedures. \r\nEXPENDITURES/LIABILITIES/DISBURSEMENTS EMPLOYEE COMPENSATION GENERAL LEDGER Inadequate Accounting Procedures Significant Deficiency Finding Control Number: FS-6041-11-03 \r\nCondition: This is a repeat finding (FS-6041-10-03, FS-6041-09-03, and FS-6041-08-03) from the years ended June 30, 2010, June 30, 2009, and June 30, 2008, respectively. The accounting procedures of the School District were insufficient to provide adequate controls over Expenditures/Liabilities/Disbursements, Employee Compensation and General Ledger. \r\nCriteria: The School District's management is responsible for designing and maintaining controls that provide reasonable assurance that transactions are processed according to established procedures. \r\nQuestioned Cost: N/A \r\nInformation: Expenditures/Liabilities/Disbursements \r\nThe School District did not have procedures in place to ensure all expenditure documentation was checked for accuracy, properly approved, charged to the correct period or contained evidence of receipt of goods or services prior to disbursement of funds. \r\nEmployee Compensation The School District did not have adequate procedures in place to ensure that employee compensation expenditures were properly documented and calculated before disbursement of funds. \r\n- 4 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2011 \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nGeneral Ledger Journal entry documentation and descriptions were not adequate to support all journal entries. Also, evidence that journal entries were reviewed and approved by someone independent of the general ledger process was not maintained. \r\nCause: These deficiencies were a result of management's failure to ensure that internal controls were established, implemented and functioning. \r\nEffect: Errors and/or irregularities may not be detected in a timely manner. \r\nRecommendation: The School District should implement procedures to ensure that (1) expenditures are charged to the correct accounting period; (2) expenditure transactions reflect proper approval, documentation, and receipt of goods or services prior to authorization for payment; (3) employee compensation expenditures are properly documented, calculated and approved before disbursement of funds; and (4) journal entries are properly approved, documented and posted in the accounting records. Management should also revise and monitor controls to provide reasonable assurance that transactions are processed according to established procedures. \r\nBUDGET PREPARATION/EXECUTION Deficit Fund Balance Material Weakness Finding Control Number: FS-6041-11-04 \r\nCondition: This is a repeat finding (FS-6041-10-04 and FS-6041-09-06) from the years ended June 30, 2010, and June 30, 2009. At June 30, 2011, the General Fund and Capital Projects Fund of the Baker County Board of Education reported deficit fund balances. In addition, the School District failed to adopt a balanced budget for the General Fund. \r\nCriteria: Chapter 25, Governmental Fund Deficits of the Financial Management for Georgia Local Units of Administration states in part: \"The seriousness of fund balance deficits cannot be overstated. The Georgia Department of Education requires those LUAs with deficit governmental fund balances to meet certain reporting requirements.\" \r\nChapter 32, Preparing Operating Budgets, of the Financial Management for Georgia Local Units of Administration states (FMGLUA) states in part: \"The budget must be balanced for all budgeted funds. Total anticipated revenues should equal total estimated expenditures. In the event anticipated revenues are insufficient to fund anticipated essential expenditures, a portion of unreserved fund balance from the previous years must be used to fund the shortfall. In the event there is insufficient unreserved fund balance from previous years to fund anticipated expenditures, then such expenditures must be reduced to equal anticipated revenues plus available unreserved fund balance\". \r\n- 5 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2011 \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nQuestioned Cost: N/A \r\nInformation: The School District's General Fund and Capital Projects Fund reported deficit fund balances in the amounts of $43,383.17 and $90,538.03, respectively. \r\nCause: The School District's original and final budgets for the General Fund budgeted deficit fund balances in the amounts of $100,526.22 and $349,465.27, respectively. \r\nEffect: A financial statement irregularity in accordance with the Official Code of Georgia Annotated 20-267. \r\nRecommendation: The School District should establish policies and procedures designed to ensure that expenditures do not exceed availability of resources, so that in future periods the School District does not report deficit fund balances. In addition, appropriate procedures should be implemented to ensure that the adopted budget for each budgeted fund is balanced as required. \r\nCASH AND CASH EQUIVALENTS Noncompliance with SPLOST Law Material Noncompliance Finding Control Number: FS-6041-11-05 \r\nCondition: The School District did not comply with provisions of Official Code of Georgia Annotated (O.C.G.A.) 48-8-121. \r\nCriteria: O.C.G.A. 48-8-121 indicates that Special Purpose Local Option Sales Tax (SPLOST) funds may only be used for capital outlay projects approved by the voters in a SPLOST referendum. In addition, SPLOST funds must be held in a separate account from other funds of the county or municipality and cannot in any manner be commingled with any other funds until spent on approved projects. Furthermore, in the Official Opinion of the Attorney General No. 2007-05, a county may not borrow from county SPLOST proceeds to fund expenditures other than voter-approved capital projects authorized in the SPLOST statutes. \r\nQuestioned Cost: N/A \r\nInformation: During fiscal year 2011, the School District transferred SPLOST proceeds in the amount of $98,000.00 from the District-wide Capital Projects Fund to the General Fund as an inter-fund loan to be used for general operations. The General Fund repaid this inter-fund loan before the end of the fiscal year. \r\n- 6 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2011 \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nCause: Management of the School District created this inter-fund loan in an effort to reduce the overall financing related costs incurred by the School District during a period of reduced operating cash flow. \r\nEffect: Noncompliance with provisions of Official Code of Georgia Annotated (O.C.G.A.) 48-8-121. A financial statement irregularity in accordance with the O.C.G.A. 20-2-67. \r\nRecommendation: Management of the School District should implement policies that require compliance with SPLOST laws. Any interest earned on the borrowed SPLOST proceeds should be transferred to the Districtwide Capital Projects Fund. \r\nEXPENDITURES/LIABILITIES/DISBURSEMENTS Improper Use of Special Purpose Local Option Sales Tax (SPLOST) Proceeds Significant Deficiency Finding Control Number: FS-6041-11-06 \r\nCondition: The School District expended Special Purpose Local Option Sales Tax (SPLOST) proceeds on items which were not specifically identified in the SPLOST project referendum and do not appear to meet the definition of \"capital outlay projects for educational purposes\" in State laws regarding imposition and use of sales taxes for educational purposes. \r\nCriteria: According to Paragraph IV, Section VI, Article VIII of the Constitution of the State of Georgia, \"the purpose or purposes for which the proceeds of the tax are to be used and may be expended include: (1) Capital outlay projects for educational purposes; (2) the retirement of previously incurred general obligation debt with respect only to capital projects of the school system...\" Official Code of Georgia Annotated 48-8-121 states, \"The proceeds received from the tax authorized by this part shall be used ... exclusively for the purpose or purposes specified in the resolution or ordinance calling for imposition of the tax\". \r\nThe Attorney General's Official Opinion 1997-7 for O.C.G.A. 20-2-260(b)(5), states, \"capital outlay projects as used in the educational sales tax purposes amendment should be read as well to refer to major, permanent, or long-lived improvements or betterments, such as would be properly chargeable to a capital asset account and as distinguished from current expenditures and ordinary maintenance expenses\". \r\nQuestioned Cost: $5,500.00 \r\nInformation: During the year under review, the School District expended $5,500.00 to settle a lawsuit with a company whose tools were stolen while performing work for the School District. \r\n- 7 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2011 \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nCause: The School District believed these expenditures were covered by the SPLOST referendum; however, there is no reference concerning the settlement of lawsuits. \r\nEffect: Expenditures of SPLOST funds for the settlement of lawsuits appear to be in conflict with State laws regarding imposition and use of SPLOST funds. \r\nRecommendation: The School District should research this issue, consult with legal counsel and verify if expenditures of this nature are an appropriate use of SPLOST funds in accordance with State law and the SPLOST referendum as approved by the voters of Baker County. \r\nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\nALLOWABLE COSTS/COST PRINCIPLES PROCUREMENT AND SUSPENSION AND DEBARMENT Inadequate Accounting Procedures over Expenditures Material Weakness Material Noncompliance U. S. Department of Agriculture Through Georgia Department of Education Child Nutrition Cluster (CFDA 10.553 and 10.555) Finding Control Number: FA-6041-11-01 \r\nCondition: A review of expenditures charged to the Child Nutrition Cluster (CFDA 10.553 and 10.555) program revealed that the School District failed to implement internal control procedures to ensure that expenditures were properly documented, authorized, allowable, and charged according to bid documents. \r\nCriteria: Provisions of OMB Circular A-87 Cost Principles for State, Local and Indian Tribal Governments, require that \"to be allowable under Federal awards, costs must be...authorized or not prohibited under state or local laws or regulations\" and \"be adequately documented\" . \r\nQuestioned Cost: $11,765.60 \r\nInformation: A review of expenditure vouchers for the Child Nutrition Cluster (CFDA 10.553 and 10.555) revealed the following deficiencies: \r\n- 8 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2011 \r\nIII FEDERAL AWARD FINDINGS AND QUESTIONED COSTS \r\n1) Several vouchers could not be located. 2) Several vouchers had no evidence of approval. 3) Several vouchers had charges higher than the amounts quoted in the procurement \r\nagreements. \r\nCause: Management failed to monitor compliance with Federal guidelines to ensure that expenditures charged to the Federal program were allowable, approved, properly documented, and charged the correct amount. \r\nEffect: Failure to ensure that expenditures are allowable, approved and properly documented can result in noncompliance with the requirements of the Federal grant. \r\nRecommendation: The School District should implement procedures to ensure that all expenditures are allowable under OMB Circular A-87, approved by appropriate management, and properly documented. The Georgia Department of Education should review this matter to determine if a reclaim of funds is appropriate. \r\nEQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequate Internal Control Procedures Significant Deficiency U. S. Department of Agriculture Through Georgia Department of Education Child Nutrition Cluster (CFDA 10.553 and 10.555) Finding Control Number: FA-6041-11-02 \r\nCondition: The policies and procedures of the School District were insufficient to provide adequate internal controls over equipment and real property management as it relates to the Child Nutrition Cluster. \r\nCriteria: 7 CFR 3016.32 states, \"Property records must be maintained that include a description of the property, a serial number or other identification number, the source of the property, who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the cost of the property, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property.\" \r\nQuestioned Cost: N/A \r\nInformation: The School District failed to maintain an adequate equipment listing for the Child Nutrition Cluster including information about the equipment's acquisition date, percentage of Federal participation in regards to cost, who holds title, use and condition of the property, and ultimate disposition data. \r\n- 9 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30, 2011 III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Cause: Management failed to effectively implement Federal guidelines as they pertain to equipment and real property management. Effect: Failure to maintain a proper equipment listing could lead to noncompliance of the Federal grant. Recommendation: The School District should develop and maintain an equipment listing including information on each piece of equipment's cost, acquisition date, location date, serial number, percentage of Federal participation, who holds title, use and condition of the property, and ultimate disposal date. In addition, an inventory of equipment items on this listing should be conducted at least once every two fiscal years in order to ensure that information on the listing remains valid. \r\n- 10 - \r\n \r\n SECTION V MANAGEMENT'S RESPONSES \r\n \r\n  BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF MANAGEMENT'S RESPONSES \r\nYEAR ENDED JUNE 30, 2011 \r\nFinding Control Number: FS-6041-11-01 \r\nWe concur with this finding. The School District in conjunction with the Lunchroom Manager will devise strategic procedures to ensure that School Food Service Fund will have adequate separation of duties. The Lunchroom Manager will designate an existing lunchroom staff member to assist in the receiving, inventorying and reviewing of inventory records to ensure separation of duties. The Lunchroom Manager will also issue Purchase Orders for prior approval by the Principal and also the Superintendent before inventory is ordered to ensure expenditures are appropriate, accurate and properly documented. These procedures will ensure that internal controls for both access to physical assets and the related accounting records are adequately separated. These procedures will be implemented in the 2012 fiscal year. \r\nFinding Control Number: FS-6041-11-02 \r\nWe concur with this finding. The School District in conjunction with school administration will devise strategic procedures to ensure that the school activity account will have adequate separation of duties. The Principal will designate a school level administrator to review and approve all bank reconciliations; review deposit preparations and ensure all documentation for written checks are present. The School District has also implemented the use of computerized accounting records for the School Activity Accounts to ensure receipts and checks contain adequate descriptions and account/object information so that the accounting records could be easily traced. These procedures will ensure that internal controls for both access to physical assets and the related accounting records are adequately separated. These procedures will be implemented in the 2012 fiscal year. \r\nFinding Control Number: FS-6041-11-03 \r\nWe concur with this finding. The School District will implement procedures to ensure that expenditure transactions, employee compensation, leave records, authorization for payroll deductions and journal entries are properly documented, calculated, maintained and approved before changes and/or disbursements are made. These procedures will be implemented in the 2012 fiscal year. \r\nFinding Control Number: FS-6041-11-04 \r\nWe concur with this finding. The School District will implement policies and procedures to ensure that expenditures do not exceed availability of resources. The School District monitors the DE Form 0396 monthly to ensure that the expenditures are not exceeding the amounts budgeted. The School District will also implement procedures to ensure that the adopted budget for each budgeted fund is balanced as required. This will be implemented in the 2012 fiscal year. \r\nFinding Control Number: FS-6041-11-05 \r\nWe concur with this finding. The School District will implement policies to ensure compliance with all SPLOST laws. \r\nFinding Control Number: FS-6041-11-06 \r\nWe concur with this finding. The School District will implement procedures that will ensure compliance with State law and the SPLOST referendum. Prior to SPLOST funds being expended the SPLOST referendum will be reviewed to ensure that all expenditures are appropriate and listed in the referendum as allowable expenditures. \r\n- 1 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF MANAGEMENT'S RESPONSES \r\nYEAR ENDED JUNE 30, 2011 \r\n \r\nFinding Control Number: FA-6041-11-01 \r\n \r\nWe concur with this finding. The School District will implement procedures to ensure that all expenditures are allowable under OMB Circular A-87. The Lunchroom Manager will devise a procedure that ensures that all expenditures are reviewed and billed according to the approved bid documentation and also that all expenditures have adequate documentation and approval prior to disbursement. This will be implemented in the 2012 fiscal year. \r\n \r\nFinding Control Number: FA-6041-11-02 \r\n \r\nWe concur with this finding. The School District will implement procedures to ensure that an equipment listing is developed and maintained as outlined in the Federal guidelines. This equipment listing will be reviewed and revised as needed every two years to ensure accuracy. This will be implemented in the 2012 fiscal year. \r\n \r\nContact Person: Title: Telephone: Fax: E-mail: \r\n \r\nFreddie Thompson Superintendent (229) 734-5346 (229) 734-3064 fthompson@baker.k12.ga.us \r\n \r\n- 2 - \r\n \r\n "},{"id":"dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-b2009-h2010","title":"Baker County Board of Education, Newton, Georgia, report on audit for fiscal year ended June 30, 2010 (including independent auditor's reports)","collection_id":"dlg_ggpd","collection_title":"Georgia Government Publications","dcterms_contributor":["Georgia. Department of Audits and Accounts, issuing body."],"dcterms_spatial":["United States, Georgia, 32.75042, -83.50018"],"dcterms_creator":["Georgia. 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Map and Government Information Library"],"edm_is_shown_by":["https://dlg.galileo.usg.edu/do:dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-b2009-h2010"],"edm_is_shown_at":["https://dlg.galileo.usg.edu/id:dlg_ggpd_y-ga-ba800-b-pr1-be26-bb16-b2009-h2010"],"dcterms_temporal":null,"dcterms_rights_holder":["\u0026copy; Georgia Department of Audits"],"dcterms_bibliographic_citation":null,"dlg_local_right":null,"dcterms_medium":["state government records","audits","financial statements","financial records"],"dcterms_extent":null,"dlg_subject_personal":null,"iiif_manifest_url_ss":null,"dcterms_subject_fast":["Education--Auditing--fast","Education--Finance--fast","Expenditures, Public--fast","Georgia--Baker County--fast--https://id.oclc.org/worldcat/entity/E39PBJgxqwBrwyH6QgJ7CB3hHC","Periodicals--fast","Statistics--fast"],"fulltext":"BAKER COUNTY BOARD OF EDUCATION \r\nNEWTON, GEORGIA \r\nANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED \r\nJUNE 30,2010 \r\n(Including Independent Auditor's Reports) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - \r\n \r\nSECTION I \r\n \r\nFINANCIAL \r\n \r\nINDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \r\n \r\nEXHl BITS \r\n \r\nBASIC FINANClAL STATEMENTS \r\n \r\nDISTRICT-WIDE FINANCIAL STATEMENTS \r\n \r\nA \r\n \r\nSTATEMENT OF NET ASSETS \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 ASSETS \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 ASSETS \r\n \r\nFIDUCIARY FUNDS \r\n \r\nH \r\n \r\nNOTES TO THE BASIC FINANCIAL STATEMENTS \r\n \r\nSCHEDULES \r\n \r\nREQUIRED SUPPLEMENTARY INFORMATION \r\n \r\n1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL \r\nGENERAL FUND \r\n \r\nSUPPLEMENTARY INFORMATION \r\n \r\n2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 3 SCHEDULE OF STATE REVENUE \r\n \r\nPage \r\n \r\n BAKER COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS - \r\nSECTION I FINANCIAL SCHEDULES SUPPLEMENTARY INFORMATION 4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 5 ALLOTMENTS AND EXPENDITURES GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM \r\nSECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MAlTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WlTH GOVERNMENT AUDITING STANDARDS INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WlTH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MNOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WlTH OMB CIRCULAR A-133 \r\nSECTION Ill AUDITEE'S RESPONSETO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\nSECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\n \r\n BAKER COUNTY BOARD OF EDUCATION \r\n-TABLE OF CONTENTS - \r\nSECTION V MANAGEMENT'S RESPONSES SCHEDULE OF MANAGEMENT'S RESPONSES \r\n \r\n SECTION I \r\nFI NANClAL \r\n \r\n Russell W. Hinton \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENOTF AUDITSAND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\nOctober 20, 2 0 1 1 \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 Baker County Board of Education \r\nINDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \r\nLadies and Gentlemen: \r\nWe have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remainingfund information (ExhibitsA through H) of the Baker County Board of Education, as of and for the year ended June 30, 2010, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Baker County Board of Education's management. Our responsibility is to express opinions on these financial statements based on our audit. \r\nWe conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. \r\nIn our opinion, the financial statements referred to previously present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the Baker County Board of Education, as of June 30, 2010, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. \r\nThe Baker County Board of Education has not presented Management's Discussion and Analysis that accounting principles generally accepted in the United States of America has determined is necessaryto supplement, although not to be part of, the basic financial statements. \r\n \r\n In accordance with GovernmentAuditing Standards, we have also issued our report dated October 20, 2011, on our consideration of the Baker County Board of Education's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Audting Standards and should be considered in assessing the results of our audit. \r\n \r\nAccounting principles generally accepted in the United States of America require that the Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on page 23, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures, to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during the audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. \r\n \r\nOur audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Baker County Board of Education's financial statements as a whole. The accompanying supplementary information consists of Schedules 2 through 5, which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organkations/ are presented for purposes of additional analysis and are not a required part of the financial statements. Such information is the responsibility of management and was derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used t o prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole. \r\n \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\n \r\nRespectfully submitted, \r\n \r\nr \r\n \r\nR1ussell W. Hinton, CPA, CGFM \r\nState Auditor \r\n \r\n BAKER COUNTY BOARD OF EDUCATION \r\n \r\n BAKER COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30,2010 \r\nASSETS \r\nCash and Cash Equivalents Accounts Receivable, Net \r\nTaxes State Government Federal Government 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 Short-Term Debt Long-Term Liabilities \r\nDue Within One Year Due in More Than One Year \r\nTotal Liabilities \r\nNET ASSETS \r\nInvested in Capital Assets, Net of Related Debt Restricted for \r\nBus Replacement Debt Service Capital Projects Unrestricted (Deficit) \r\nTotal Net Assets \r\nTotal Liabilities and Net Assets \r\n \r\nEXHIBIT \"A\" \r\nGOVERNMENTAL ACTIVITIES \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. -1- \r\n \r\n BAKER COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES \r\nFOR THE YEAR ENDED JUNE 30,2010 \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 Other Support Services Operations of Non-Instructional Services Enterprise Operations Food Services Interest on Short-Termand Long-TermDebt \r\nTotal Governmental Act~v~ties \r\nGeneral Revenues Taxes Property Taxes For Maintenance and Operations Other Taxes Sales Taxes Special Purpose Local Opt~onSales Tax For Debt Services For Capltal Projects Investment Earnlngs M~scellaneous \r\nTotal General Revenues \r\nChanges in Net Assets \r\nNet Assets - Beginningof Year \r\n \r\nEXPENSES \r\n \r\nPROGRAM REVENUES \r\n \r\nOPERATING \r\n \r\nCHARGES FOR \r\n \r\nGRANTS AND \r\n \r\nSERVICES \r\n \r\nCONTRIBUTIONS \r\n \r\nNET (EXPENSES) REVENUES \r\nAND CHANGES IN NET ASSETS \r\n \r\nNet Assets - End of Year \r\n \r\nThe notes to the bas~cfinancial statements are an integral part of this statement. -2- \r\n \r\n BAKER COUNTY BOARD OF EDUCATION BALANCE SHEET \r\nGOVERNMENTAL FUNDS JUNE 30,2010 \r\n \r\nASSETS \r\nCash and Cash Equivalents Accounts Receivable, Net \r\nTaxes State Government Federal Government Other Inventories \r\nTotal Assets \r\n \r\nGENERAL FUND \r\n \r\nDISTRICTWIDE \r\nCAPITAL PROJECTS \r\nFUND \r\n \r\nDEBT SERVICE \r\nFUND \r\n \r\nLIABILITIES AND FUND BALANCES \r\nLIABILITIES \r\nCash Overdraft Accounts Payable Salaries and Benefits Payable Short-Term Debt Deposits and Deferred Revenue \r\nTotal Liabilities \r\nFUND BALANCES \r\nReserved for: Bus Replacement Debt Service Capital Projects \r\nUnreserved Designatedfor Student Activities UndesignatedReported in: General Fund Capital Projects \r\nTotal Fund Balances \r\nTotal Liab~litiesand Fund Balances \r\n \r\nEXHIBIT \"C\" TOTAL \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. -3- \r\n \r\n BAKER COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET \r\nTO THE STATEMENT OF NET ASSETS JUNE 30.2010 \r\nTotal Fund Balances - Governmental Funds (Exhibit \"C\") \r\nAmounts reported for Governmental Activlt~esIn the Statement of Net Assets are different because: \r\nCapital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of: \r\nLand Buildings Equipment Accumulated Deprec~at~on \r\nTotal Capital Assets \r\nTaxes that are not available to pay for current period expenditures are deferred in the funds. \r\nLong-Term Liabilities, including Bonds Payable, are not due and payable in the current period and therefore are not reported as l i a b ~ l ~ t ~inetshe funds. Long-Term Liab~l~tiaetsyear-end consist of: \r\nBonds Payable Capital Leases Payable Compensated Absences \r\nTotal Long-Term Liabilities \r\nNet Assets of Governmental Activit~es(Exhibit \"A\") \r\n \r\nEXHIBIT \"D\" \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n- 4 - \r\n \r\n BAKER COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES \r\nGOVERNMENTAL FUNDS YEAR ENDED JUNE 30.2010 \r\n \r\nREVENUES \r\nProperty Taxes Sales Taxes State Funds Federal Funds Charges for Serv~ces 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 Other Support Services Enterprise Operations F w d ServicesOperation \r\nCapital Outlay Debt Services \r\nPrincipal Interest \r\nTotal Expenditures \r\nNet Change in Fund Baiances \r\nFund Balances - Beginning \r\nFund Balances- Ending \r\n \r\nGENERAL FUND \r\n \r\nDISTRICTWIDE \r\nCAPITAL PROJECTS \r\nFUND \r\n \r\nDEBT SERVICE \r\nFUND \r\n \r\nTOTAL \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. \r\n- 5- \r\n \r\n BAKER COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF \r\nREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENTOF ACTIVITIES JUNE 30,2010 \r\nTotal Net Change in Fund Baiances Governmental Funds (Exhibit\"E\") Amounts 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: Capital Outlay Depreciation Expense Excess of Capital Outlay over Depreciaton Expense \r\nTaxes reported in the Statement of Activities that do not provlde 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 Assets. In the current year, these amounts consist of: Bond Princlpai Retirements Capital Lease Payments Total Long-Term Debt Repayments \r\nSome items reported in the Statement of Activities do not requlre the use of current financial resourcesand therefore are not reported as expenditures in Governmental Funds. These activities consist of: Decreasein CompensatedAbsences \r\nChange in Net Assets of GovernmentalActivities (Exhibit \"6\") \r\nThe notes to the basicfinancial statements are an integral part of this Statement. -6- \r\n \r\n BAKER COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS \r\nFIDUCIARY FUNDS JUNE 30,2010 \r\nASSETS Cash and Cash Equivalents \r\nLIABILITIES Funds Held for Others \r\n \r\nEXHIBIT \"G\" \r\nAGENCY FUNDS \r\n \r\nThe notes to the basic financial statements are an integral part of this statement. -7- \r\n \r\n (This page left intentionally blank) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30,2010 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNote 1: DESCRIPTION OF SCHOOL DISTRICTAND REPORTING ENTITY \r\nREPORTING ENTITY \r\nThe Baker County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity. \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 Baker County Board of Education. \r\nDisfrct-wide Statements: \r\nThe Statement of Net Assets and the Statement of Activities display information about the financial activities of the overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. \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\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 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\nGeneral Fund is the School District's primary operating fund. It accounts for all financial resources of the School District, except those resources required to be accounted for in another fund. \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30,2010 \r\n \r\nEXHIBIT \"H\" \r\n \r\nDistrict-wide Capital Projects Fund accounts for financial resources including Special Purpose Local Option Sales Tax (SPLOST), and Bond Proceeds to be used for the acquisition, construction or renovation of major capital facilities. \r\nDebt Service Fund accounts for taxes (sales) legally restricted for the payment of general longterm principal, interest and paying agent's fees. \r\nThe School District reports the following fiduciary fund type: \r\nAgency funds account for assets held by the School District as an agent for various funds or individuals. \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, 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. 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 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\nThe State of Georgia reimburses the School District for teachers' salaries and operating costs through the Quality Basic Education Formula Earnings program (QBE). Generally teachers are contracted for the school year (July 1- June 30) and paid over a twelve month contract period, \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30,2010 \r\n \r\nEXHIBIT \"H\" \r\n \r\ngenerally September 1through August 31. In accordance with the respective rules and regulations of the QBE program, the State of Georgia reimburses the School District over the same twelve month period in which teachers are paid. At June 30, the amount of teachers' salaries incurred but not paid until July and August of the subsequent year are accrued. Since the State of Georgia recognizes its QBE liability for the July and August salaries at June 30, the School District recognizes the same QBE as a receivable and revenue, consistent with symmetrical recognition. \r\n \r\nNEW ACCOUNTING PRONOUNCEMENTS \r\n \r\nThe School District adopted GASB Statement No. 53, Accounting and Financial Reporting for Derivative Instruments. The provisions of this Statement impacts disclosure regarding derivative instruments entered into by the state and local governments. Derivative disclosures, if any, will be identified in Note 3. \r\n \r\nCASH AND CASH EQUIVALENTS \r\n \r\nComposition of Deposits Cash and cash equivalents consist of cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Official Code of Georgia Annotated Section 45-8-14 authorizes the School District to deposit its funds in one or more solvent banks, insured Federal savings and loan associations or insured chartered building and loan associations. \r\n \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\n \r\nPROPERTY TAXES \r\n \r\nThe Baker County Board of Commissioners fixed the property tax levy for the 2009 tax digest year (calendar year) on November 19, 2009 (levy date). Taxes were due on January 20, 2010 (lien date). Taxes collected within the current fiscal year or within 6 0 days after year-end on the 2009 tax digest are reported as revenue in the governmental funds for fiscal year 2010. The Baker County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5%of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2010, for maintenance and operations amounted to $1,620,602.21. \r\n \r\nThe tax millage rate levied for the 2009 tax year (calendar year) for the Baker County Board of Educationwas as follows (a mill equals $1per thousand dollars of assessed value): \r\n \r\nSchool Operations \r\n \r\n12.88 mills \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30,2010 \r\n \r\nEXHIBIT \"H\" \r\n \r\nSALES TAXES \r\n \r\nSpecial Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $257,634.34 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\nINVENTORIES \r\nFood Inventories On the basic financial statements, inventories of donated food commodities used in the preparation of meals are reported at their Federally assigned value and purchased foods inventories are reported at cost (first-in, first-out). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used. \r\nCAPITAL ASSETS \r\n \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 \r\n \r\nstatements are as follows: \r\n \r\nCapitalization \r\n \r\nEstimated \r\n \r\nPolicy \r\n \r\nUseful Life \r\n \r\nLand Buildingsand Improvements Equipment \r\n \r\nAll \r\n \r\n$ \r\n \r\n5,000.00 \r\n \r\n$ \r\n \r\n5,000.00 \r\n \r\nN/A 15 to 80 years \r\n3 to 50 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\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\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30,2010 \r\n \r\nEXHIBIT \"H\" \r\n \r\nVacation leave of 15 days is awarded on a fiscal year basis to all full time personnel employed on a twelve month basis. No other employees are eligible to earn vacation leave. Vacation leave not utilized during the fiscal year may be carried over to the next fiscal year, providing such vacation leave does not exceed 60 days. \r\n \r\nBeginningof Year Liability \r\n \r\nIncrease \r\n \r\nDecrease \r\n \r\nEnd of Year Liability \r\n \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 and fund financial statements, the School District recognizes bond premiums and discounts, as well as bond issuance costs during the fiscal year bonds are issued. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. To conform to generally accepted accounting principles, bond premiums and discounts, as well as bond issuance costs should be amortized over the life of the bonds on the District-wide statements. The effect of this deviation is deemed to be immaterial to the fair presentation of the basic financial statements. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement of Net Assets. \r\nNET ASSETS \r\nThe School District's net assets in the District-wide Statements are classified as follows: \r\nInvested in capital assets, net of related debt - This represents the School District's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt. \r\nRestricted net assets-These represent resources for which the School District is legally or contractually obligated to spend resources for bus replacement, debt service and capital projects in accordance with restrictions imposed by external third parties. \r\nUnrestricted net assets - Unrestricted net assets represent resources derived from property taxes, sales taxes, grants and contributions not restricted to specific programs, charges for services, and miscellaneous revenues. These resources are used for transactions relating to the educational and general operations of the School District, and may be used at the discretion of the Board to meet current expenses for those purposes. \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30.2010 \r\n \r\nEXHIBIT \"H\" \r\n \r\nDEFICIT FUND BALANCES \r\n \r\nFunds reporting a deficit fund balance at June 30, 2010, are as follows: \r\n \r\nFund Tv~e/FundName \r\n \r\nDeficit Balances \r\n \r\nGovernmental Fund Type General Fund District-wide Capital Projects Fund \r\nThe School District has reduced expenditures in order to eliminate the fiscal year 2010 deficit. \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\nNote 3: DEPOSITS \r\n \r\nCOLLATERALIZATION OF DEPOSITS \r\n \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 1 1 0 percent of the public funds being secured after the deduction of the amount of deposit insurance. If a depository elects the pooled method (O.C.G.A. Section 45-8-13.1) the aggregate of the market value of the securities pledged to secure a pool of public funds shall be not less than 1 1 0 percent of the daily pool balance. \r\n \r\nAcceptable security for deposits consists of any one of or any combination of the following: \r\n \r\n(1)Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, \r\n \r\n(2) lnsurance on accounts provided by the Federal Deposit lnsurance Corporation, \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 \r\n(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, \r\n \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 \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 BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30.2010 \r\n \r\nEXHIBIT \"H\" \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 MortgageAssociation, 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, 2010, the bank balances were $789,932.03. The bank balances were entirely covered by Federal depository insurance. \r\nNote 4: NON-MONETARY TRANSACTIONS \r\nThe School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 2 - Inventories \r\nNote 5: CAPITAL ASSETS \r\nThe following is a summary of changes in the Capital Assets during the fiscal year: \r\n \r\nGovernmental Activities Capital Assets, Not Being Depreciated: \r\nLand Construction Work In Progress \r\n \r\nBalances \r\nJuly 1,2009 \r\n \r\nIncreases \r\n \r\nDecreases \r\n \r\nBalances June 30, 2010 \r\n \r\n$ \r\n \r\n82,372.00 $ \r\n \r\n2,389,995.80 \r\n \r\n0.00 \r\n \r\n$ \r\n \r\n$ 2,389,995.80 \r\n \r\n82,372.00 0.00 \r\n \r\nTotal Capital Assets, Not Being Depreciated $ 2,472,367.80 $ \r\n \r\n0.00 $ 2,389,995.80 $ \r\n \r\n82,372.00 \r\n \r\nCapital Assets, Belng Depreciated: Buildings and Improvements E q u p~ment \r\n \r\n$ 6,384,734.06 $ 2,517,391.59 $ 1,271,531.00 \r\n \r\n0.00 $ \r\n \r\n8,902,125.65 1,271,531.00 \r\n \r\nLess: Accumulated Depreciation: Buildings and lmprovements \r\n \r\nTotal Capital Assets, Being Depreciated, Net $ 5,373,879.36 $ 2,279,190.75 $ \r\n \r\n0.00 $ 7,653,070.11 \r\n \r\nGovernmental Activity Capital Assets - Net $ 7,846,247.16 $ 2.279.190.75 $ 2.389.995.80 $ 7,735,442.11 \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30,2010 \r\n \r\nEXHIBIT \"H\" \r\n \r\nCapital assets being acquired under capital leases as of June 30, 2010, are as follows: \r\nGovernmental Funds \r\nBuildingsand Improvements Equipment Less: Accumulated Depreciation \r\n \r\nCurrent year depreciation expense by function is as follows: \r\nInstruction Support Services \r\nBusiness Administration Student Transportation Services Food Services \r\n \r\nNote 6: RISK MANAGEMENT \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; acts of God and unemployment compensation. \r\n \r\nThe School District has obtained commercial insurance for risk of loss associated with torts, assets and errors or omissions. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of the past three years. \r\n \r\nThe School District has elected to self-insure for all losses related to acts of God. The School District has not experienced any losses related to this risk in the past three years. \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 \r\n \r\nfollows: \r\n \r\nClaims and \r\n \r\nBeginningof Year \r\n \r\nChanges in \r\n \r\nClaims \r\n \r\nEnd of Year \r\n \r\nLiability \r\n \r\nEstimates \r\n \r\nPaid \r\n \r\nLiability \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30,2010 \r\n \r\nEXHIBIT \"H\" \r\n \r\nThe School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the Midwest Employers Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $700,000.00 loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided by Midwest Employers Casualty Company to provide coverage for potential losses sustained by the Fund in excess of $700,000.00 loss per occurrence, up to $1,000,000.00, with an aggregate limit of $2,000,000.00. \r\nThe School District has purchased surety bonds to provide additional insurance coverage as follows: \r\n \r\nPosition Covered \r\n \r\nAmount \r\n \r\nSuperintendent Principal \r\n \r\nNote 7: SHORT-TERM DEBT \r\n \r\nThe School District obtains temporary loans in advance of property tax collections, depositing the proceeds in its General Fund. This short-term debt was to provide cash for operations until property tax collections were received by the School District. Article IX, Section V, Paragraph V of the Constitution of the State of Georgia limits the aggregate amount of short-term debt to 75 percent of the total gross income from taxes collected in the preceding year and requires all short-term debt to be repaid no later than December 3 1of the calendar year in which the debt was incurred. \r\n \r\nShort-term debt activity for the fiscal year is as follows: \r\n \r\nBeginning Balance \r\n \r\nIssued \r\n \r\nRedeemed \r\n \r\nEnding Balance \r\n \r\nTemporary Loans \r\n \r\n$ \r\n \r\nNote 8: LONG-TERM DEBT \r\n \r\n664,350.00 $ \r\n \r\n1,325,000.00 $ \r\n \r\n695,246.50 $ \r\n \r\n1,294,103.50 \r\n \r\nCAPITAL LEASES \r\n \r\nThe Baker County Board of Education entered into various lease agreements for the purchase of buses and energy 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\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\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30,2010 \r\n \r\nEXHIBIT \"H\" \r\n \r\nGENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows: \r\n \r\nPurpose \r\n \r\nInterest Rate \r\n \r\nGeneral Government -Series 2008 \r\n \r\n2.817% \r\n \r\nAmount \r\n$ 1,010,000.00 \r\n \r\nThe changes in Long-Term Debt during the fiscal year ended June 30,2010, were as follows: \r\n \r\nBalance July 1, 2009 \r\n \r\nAdditions \r\n \r\nG..o.v.ernm.en.t.al Fu. nd. s. Deductions \r\n \r\nBalance June 30,2010 \r\n \r\nDue Within One Year \r\n \r\nG. 0. Bonds Capital Leases Compensated Absences (1) \r\n \r\n$ 1,200,000.00 213,018.25 34,587.13 $ \r\n \r\n$ 754.37 \r\n \r\n190,000.00 $ 126.760.63 \r\n14,984.88 \r\n \r\n1,010,000.00 $ 86,257.62 20,356.62 \r\n \r\n220,000.00 53,376.98 \r\n \r\n(1) The portion of Compensated Absences due w~thinone year has been determined to be immaterial to the basic financial statements. \r\n \r\nAt June 30, 2010, payments due by fiscal year which includes principal and interest for these items are as follows: \r\n \r\nCapital Leases \r\n \r\nPrinc~pal \r\n \r\nInterest \r\n \r\nFiscal Year Ended June 30: \r\n \r\nTotal Principal and Interest Fiscal Year Ended June 30: \r\n \r\n$ \r\n \r\n86,257.62 $ \r\n \r\n4.046.24 \r\n \r\nGeneral Obligation Debt \r\n \r\nPrincipal \r\n \r\nInterest \r\n \r\nTotal Principal and lnterest \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30,2010 \r\n \r\nEXHIBIT \"H\" \r\n \r\nNote 9: ON-BEHALF PAYMENTS \r\nThe School District has recognized revenues and costs in the amount of $12,990.53 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies. \r\nGeorgia Department of Education Paid to the Georgia Department of Community Health For Health lnsurance of Non-Certified Personnel In the amount of $8,500.06 \r\nPaid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $1,596.75 \r\nOffice of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $2,893.72 \r\nNote 10: 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 petformance 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 11: POST-EMPLOYMENT BENEFITS \r\nGEORGIA SCHOOL PERSONNEL EMPLOYEES 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 lnsurance Plan administered by the Department of Community Health. The Official Code of Georgia Annotated (OCGA) assigns the authority to establish and amend the benefit provisions of the group health plans, including benefits for retirees, to the Board of Community Health (Board). \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. On average, plan members pay approximately 25 percent of the cost of the health insurance coverage. \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30,2010 \r\n \r\nEXHIBIT \"H\" \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 \"pay-as-you-go\" financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. \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, 2010: \r\nFor certificated teachers, librarians and regional educational service agencies: \r\n \r\nJuly 2009 August 2009 - October 2009 November 2 0 0 9 -June 2010 \r\n \r\n18.534% of covered payrollfor August Coverage 14.492% of covered payrollfor September - November Coverage 18.534% of covered payroll for December - July Coverage \r\n \r\nFor non-certificated school personnel: \r\n \r\nJuly 2009 -June 2010 \r\n \r\n$162.72 per member per month plus Department of Education contribution of $22,838,311.00 \r\n \r\nNo additional contribution was required by the Board for fiscal year 2010 nor contributed to the State OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the State plan for other post-employment benefits and are subject to appropriation. \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\nNote 12: RETIREMENT PLANS \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 \r\n \r\n BAKER COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS \r\nJUNE 30,2010 \r\n \r\nEXHIBIT \"H\" \r\n \r\npurpose 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 3 0 years of creditable service, regardless of age, or after 1 0 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service. \r\n \r\nNormal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 6 0 or by 7% for each year or fraction thereof by which the member has less than 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\n \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 1 0 years of service. If a member terminates with less than 1 0 years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest. Member contributions are limited by State law to not less than 5% or more than 6% of a member's earnable compensation. Member contributions as adopted by the Board of Trustees for the fiscal year ended June 30, 2010, were 5.25% of annual salary. The member contribution rate will increase to 5.53% effective July 1,2010. Employer contributions required for fiscal year 2010 were 9.74%of annual salary as required by the June 30, 2007, actuarial valuation. The employer contribution rate will increase to 10.28% effective July 1,2010. \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\n (This page left intentionally blank) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION GENERAL FUND \r\nSCHEDULE OF REVENUES. EXPENDITURESAND CHANGES IN FUND BAMNCES BUDGET AND ACTUAL \r\nYEAR ENDED JUNE 30.2010 \r\n \r\nSCHEDULE \"l\" \r\n \r\nREVENUES \r\nProperty Taxes State Funds Federal Funds Chargesfor Services investment Earnlngs Miscellaneous \r\nTotal Revenues \r\nEXPENDITURES \r\nCurrent Instruction Support Services Pupil Services Improvement of Instructional Services Educational Medla Services General Administratlon School Administration Business Administratlon Maintenance and Operation of Plant Student Transportation Services Other Suppon Services Enterprise Operations Food Services Operation \r\nDebt Service \r\nTotal Expenditures \r\nExcess of Revenues over (under) Expenditures \r\nOTHER FINANCING SOURCES/(USESl \r\nTransfers In Transfers Out \r\nTotal Other Financing Sources/Uses \r\nNet Change in Fund Balances \r\nFund Balances - Beginning \r\nAdjustments \r\nFund Balances - Endlng \r\n \r\nNONAPPROPRIATED BUDGETS \r\n \r\nORIGINAL (1) \r\n \r\nFINAL (1) \r\n \r\nACTUAL AMOUNTS \r\n \r\nNotes to the Schedule of Revenues. Exoenditures and Chanees in Fund Balances Budget and Actual \r\n(1) Original and Final Budget amounts do not include budgeted revenues or expend~turesof the various principal accounts. \r\nThe accompanyingschedule of revenues, expenditures and changes in fund balances budget and actual IS presented on the modified accrual basis of aCcOuntlngwhich 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 BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \r\nYEAR ENDED JUNE 3 0 , 2 0 1 0 \r\n \r\nSCHEDULE \"2\" \r\n \r\nFUNDING AGENCY PROGRAM/GRANT \r\nAgriculture. U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Educat~on Food Services School Breakfast Program National School Lunch Program \r\nTotal Chlld Nutrition Cluster \r\nOther Programs Pass-Through From Bright From the Start: Georgia Department of Early Care and Learning Summer Food Service Program For Children \r\nTotal U. S. Department of Agriculture \r\nEducat~on,U. S. Department of Educat~onTechnology State Grants Cluster Pass-Through From Georgia Department o f Education Education Technology State Grants \r\nSpecial Education Cluster Pass-Through From Georgia Department of Education Special Education \r\nARRA - Grants t o States ARRA - Preschool Grants \r\nGrants to States Preschool Grants \r\nTotal Special Education Cluster \r\nState Flscal Stabilization Fund Cluster Pass-Through From Georgia Department o f Education \r\nARRA - Education State Grants \r\nTitle I, Part A Cluster Pass-Through From Georg~aDepartment of Educat~on \r\nARRA - Title I Grants t o Local Educational Agencies \r\nTitle I Grants to Local Educational Agencies \r\nTotal T~tleI. Part A Cluster \r\nOther Programs Pass-Through From Georgia Department of Education \r\nCareer and Techn~caEl ducation - Basic Grants to States \r\nImproving Teacher Quality State Grants Migrant Education -State Grant Program \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 BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS \r\nYEAR ENDED JUNE 30,2010 \r\n \r\nSCHEDULE \"2\" \r\n \r\nFUNDING AGENCY PROGRAM/GRANT \r\nHealth and Human Serv~ces,U. S. Department of Child Care and Development Fund Cluster Pass-Through From Bright From the Start: Georgia Department of Early Care and Learning ARRA- Child Care and Development Block Grant \r\nOther Programs Pass-Through From Georgia Department of Human Resources Block Grants for Prevention and Treatment of Substance Abuse \r\nTotal U. S. Department of Health and Human Serv~ces \r\n \r\nCFDA NUMBER \r\n \r\nPASSTHROUGH \r\nENTITY ID \r\nNUMBER \r\n \r\nEXPENDITURES IN PERIOD \r\n \r\nTotal Federal Financial Assistance \r\n-N/A Not Available \r\nNotes to the Schedule of Exoenditures of Federal Awards \r\n(1) Includes the Federally assigned value of donated comrnod~tiesfor the Food Donation Program in the amount of $17,937.09. \r\n(2) Expenditures for the funds earned on the School Breakfast Program ($66,003.24) were not maintained separately and are included In the 2 0 1 0 Nat~onaSl chool Lunch Program. \r\nMajor Programs are identified by an asterisk (*) in front of the CFDA number. \r\nThe School D~strlcdt id not provide Federal Assistance to any Subreclplent. \r\nThe accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Baker County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation o f the fund financial statements. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30,2010 \r\nGRANTS Bright From the Start: Georgla Department of Early Care and Learning Pre-Kindergarten Program \r\nEducation, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program \r\nKindergarten Program - Early lnterventlon Program \r\nPrimaryGrades (1-3) Program Pr~maryGrades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program \r\nUpper Elementary Grades - Early Intervention (4-5) Program \r\nMiddle Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory(9-12) Program Students with Disabilities Alternative Education Program Media Center Program 2 0 Days Additional Instruction Staff and Professional Development lndirect Cost Central Administration School Administration Facllity Maintenance and Operations Categorical Grants Pupil Transportation Regular Sparsity Nursing Services Vocational Supervisors Mid-term Adjustment Hold-Harmless F w d Services Amended Formula Adjustment Other State Programs Graduat~onCoaches Health Insurance Preschool Handicapped Program Teachers' Retirement Virtual Schools Grant \r\nOffice of Treasury and Fiscal Services Public School Employees Retirement \r\n \r\nSCHEDULE \"3\" \r\nGOVERNMENTAL FUND TYPE GENERAL FUND \r\n \r\nSee notes to the basic financial statements. \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS \r\nYEAR ENDEDJUNE 30,2010 \r\n \r\nSCHEDULE \"4\" \r\n \r\nPROJECT \r\n \r\nORIGINAL ESTIMATED \r\nCOST (1) \r\n \r\nCURRENT ESTIMATED \r\nCOST (2) \r\n \r\nAMOUNT EXPENDED IN CURRENT YEAR (3) \r\n \r\nAMOUNT EXPENDED IN PRIOR YEARS (3) \r\n \r\nPROJECT STATUS \r\n \r\nAdding to, renovating, improving, and equipping existing \r\n \r\nschool facilities, including a new gymnasium and classrooms, \r\n \r\nupgrading instructional and admlnlstratlve technology, \r\n \r\npurchasingschooi buses and transportation equlprnent, \r\n \r\npurchasing textbooks and vocational, fine arts, instructional \r\n \r\nand athletic equipment, purchasing safety and security \r\n \r\nequipment and acquiring any property necessary or desirable \r\n \r\ntherefore, bath real and personai. \r\n \r\n$ 1,400,000.00 $ 2,777,560.96 $ 182,739.01 $ 2,594.821.95 \r\n \r\nOngo~ng \r\n \r\n(1) The School D~strict'soriginal cost estimate as specified in the resolution callingfor the imposition of the Local Option Saies Tax. \r\n(2) The School District's current estimate of total cost for the project. Includes all cost from project incept~onto completion. \r\n(3) The voters of Baker County approved the imposition of a 1%sales tax to fund the above project and retire associated debt. Amounts expendedfor this project may include sales tax proceeds, state, local property taxes and/or other funds over the life of the project. \r\n \r\nSee notes to the basic financial statements. \r\n \r\n (This page left intentionally blank) \r\n \r\n BAKER COUNTY BOARD OF EDUCATION GENERAL FUND -QUALITY'BASIC EDUCATION PROGRAM (QBE) \r\nALLOTMENTS AND EXPENDITURES - BY PROGRAM \r\nYEAR ENDED JUNE 30.2010 \r\n \r\nSCHEDULE \"5\" \r\n \r\nDESCRIPTION \r\nDirect Instructional Programs Kindergarten Program Kindergarten Program-Early Intervention Program Primary Grades (1-3P)rogram PrimatyGrades-EarlyIntervention (1-3) Program Upper Elementaty Grades (4-5) Program Upper ElementaryGrades-Early lnte~entlon(4-5) Program Middle Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category Ill Category IV Alternat~veEducation Program \r\nTOTAL DIRECT INSTRUCTIONALPROGRAMS \r\nMed~aCenter Program Staff and Professional Development \r\nTOTAL QBE FORMULA FUNDS \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( I ) 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 SECTION II COMPLIANCEAND INTERNAL CONTROL REPORTS \r\n \r\n Russell W. Hinton \r\nSTATE AUDITOR \r\n(404)656-2174 \r\n \r\nDEPARTMENOTF AUDITSAND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\nOctober 20, 2 0 1 1 \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 Baker County Board of Education \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 the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Baker County Board of Education as of and for the year ended June 30, 2010, which collectively comprise Baker County Board of Education's basic financial statements and have issued our report thereon dated October 20,2011. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. \r\nInternal Control Over Financial Re~orting \r\nIn planning and performing our audit, we considered Baker County Board of Education's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressingour opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Baker County Board of Education's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Baker County Board of Education's internal control over financial reporting. \r\nOur consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses and therefore, there can be no assurances that all deficiencies, significant deficiencies or material weaknesses have been identified. However, as described in the accompanying Schedule of Findings and Questioned Costs, we identified a certain deficiency in internal control over financial reporting that we consider to be a material weakness and other deficiencies that we consider to be significant deficiencies. \r\n \r\n A deficlncy in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. We consider item FS-6041-10-04 t o be a material weakness. \r\n \r\nA s@nificantdeficiencyis a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider items FS-6041-10-01, FS-6041-10-02 and FS-6041-10-03 in the accompanying Schedule of Findings and Questioned Costs to be significant deficiencies in internal control over financial reporting. \r\n \r\nCom~lianceand Other Matters \r\n \r\nAs part of obtaining reasonable assurance about whether Baker County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. \r\n \r\nWe noted certain matters that we have reported to management of Baker County Board of Education in a separate letter dated October 20, 2011. \r\n \r\nBaker County Board of Education's response to the findings identified in our audit is described in the accompanying Schedule of Management's Responses. We did not audit Baker County Board of Education's response and, accordingly, we express no opinion on it. \r\n \r\nThis report is intended solely for the information and use of management, members of the Baker County Board of Education, others within the entity, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. \r\n \r\nRespectfully submitted, \r\n \r\n \r\n \r\nCPA, CGFM \r\n \r\n Russell W. Hinton \r\nSTATE AUDITOR \r\n(404) 656-2174 \r\n \r\nDEPARTMENOTF AUDITSAND ACCOUNTS \r\n270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 \r\nOctober 20, 2 0 1 1 \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 Baker County Board of Education \r\nINDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WlTH REOUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WlTH OM6 CIRCULAR A-133 \r\nLadies and Gentlemen: \r\n \r\nWe have audited Baker County Board of Education's compliance with the types of compliance requirements described in the OM6 Circular A-133 Compliance Supplement that could have a direct and material effect on each of its major Federal programs for the year ended June 30, 2010. Baker County Board of Education's major Federal programs are identified in the Summary of Auditor's Results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major Federal programs is the responsibility of Baker County Board of Education's management. Our responsibility is to express an opinion on Baker County Board of Education's compliance based on our audit. \r\nWe conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audi' of States, Low1Governmenls, 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 Baker County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Baker County Board of Education's compliance with those requirements. \r\nIn our opinion, the Baker County Board of Education complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major Federal programs for the year ended June 30, 2010. \r\n \r\n Internal Control Over Com~liance \r\nManagement of Baker County Board of Education is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to Federal programs. In planning and performing our audit, we considered Baker County Board of Education's internal control over compliance with the requirements that could have a direct and material effect on a major Federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressingan opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Baker County Board of Education's internal control over compliance. \r\nA deficienncy 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 materlbl 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. \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 deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses,as defined above. \r\nThis report is intended solely for the information and use of management, members of the Baker County Board of Education, others within the entity, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. \r\nRespectfully submitted, c \r\nsell W. Hinton, CPA. CGFM \r\nState Auditor \r\n \r\n SECTION 111 AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS \r\n \r\n BAKER COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30,2010 \r\nPRIOR YEAR FINANCIALSTATEMENT FINDINGSAND QUESTIONED COSTS \r\nFINDING CONTROL NUMBER AND STATUS \r\nFurther Action Not Warranted Further Action Not Warranted Further Action Not Warranted Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Unresolved - See Corrective Action/Responses \r\nCORRECTIVE ACTION/RESPONSES \r\nl NVENTORI ES REVENUES/RECEIVABLES/RECEIPTS EXPENDlTURES/LlABlLlTlES/DlSBURSEMENTS Inadequate Separation of Duties Finding Control Number: FS-6041-09-01 \r\nWe concur with this finding. The School District in conjunction with the Lunchroom Manager will devise strategic procedures to ensure that School Food Service Fund will have adequate separation of duties. These procedures will ensure that internal controls for both access to physical assets and the related accounting records are adequately separated. These procedures will be implemented in the 2012 fiscal year. \r\nCASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDlTURES/LIABILlTlES/DISBURSEMENTS Inadequate Accounting Procedures over School Activity Accounts Finding Control Number: FS-6041-09-02 \r\nWe concur with this finding. The School District in conjunction with the school administration will devise strategic procedures to ensure that the school activity account will have adequate separation of duties. These procedures will ensure that internal controls for both access to physical assets and the related accounting records are adequately separated. These procedures will be implemented in the 2012 fiscal year. \r\n \r\n BAKER COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE \r\nSUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30,2010 \r\nPRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS \r\nCORRECTIVE ACTION/RESPONSES \r\nCASH AND CASH EQUIVALENTS EXPENDITURES/LIABILlTlES/DISBURSEMENTS EMPLOYEE COMPENSATION GENERAL LEDGER Inadequate Accounting Procedures Finding Control Number: FS-6041-09-03 \r\nWe concur with this finding. The School District will implement procedures to ensure that transactions are recorded in the proper accounting period and that expenditures, employee compensation and journal entries are documented and properly approved before disbursements and/or postings occur. These procedures will be implemented in fiscal year 2012. \r\nBUDGET PREPARATION/EXECUTION Deficit Fund Balance Failure to Adopt a Balanced Budget Finding Control Number: FS-6041-09-06 \r\nWe concur with this finding. The School District will implement policies and procedures to ensure that expenditures do not exceed availability of resources. The School District monitors the DE form 0396 monthly to ensure that the expenditures are not exceedingthe amount budgeted. The School District will also implement procedures to ensure that the adopted budget for each budgeted fund is balanced as required. This will be implemented in the 2012 fiscal year. \r\nPRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS \r\nNo matters were reported. \r\n \r\n SECTION IV FINDINGS AND QUESTIONED COSTS \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONEDCOSTS \r\nYEAR ENDED JUNE 30,2010 \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\nUnqualified \r\n \r\nInternal control over financial reporting: \r\n \r\nMaterial weakness identified? \r\n \r\nYes \r\n \r\nSignificant deficiencies identified? \r\n \r\nYes \r\n \r\nNoncompliance material to financial statements noted: \r\n \r\nFederal Awards \r\n \r\nInternal Control over major programs: Material weakness identified? Significant deficiency identified? \r\n \r\nN 0 None Reported \r\n \r\nType of auditor's report issued on compliance for major programs: All major programs \r\n \r\nUnqualified \r\n \r\nAny audit findings disclosed that are required to be reported in accordance with OMB Circular A-133, Section 510(a)? \r\n \r\nIdentification of major programs: \r\n \r\nCFDA Number(s1 \r\n \r\nName of Federal Program or Cluster \r\nTitle I, Part A Cluster State Fiscal Stabilization Fund 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 \r\n \r\nINVENTORIES REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LlABILlTlES/DISBURSEMENTS Inadequate Separation of Duties Significant Deficiency Finding Control Number: FS-6041-10-01 \r\n \r\nCondition: This is a repeat finding (FS-6041-09-01, FS-6041-08-01, and FS-6041-07-01) from the years ended June 30, 2009, June 30, 2008, and June 30, 2007, respectively. The accounting procedures of the School District were insufficient to provide for adequate separation of duties over the School Food Service Fund. \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGSAND QUESTIONEDCOSTS \r\nYEAR ENDED JUNE 30,2010 \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nl NVENTORI ES REVENUES/RECEIVABLES/RECEIPTS EXPENDlTURES/LIABILlTlES/DISBURSEMENTS Inadequate Separation of Duties Significant Deficiency Finding Control Number: FS-6041-10-01 \r\nCriteria: The School District's management is responsible for designing and maintaining internal controls that provide reasonable assurance that transactions are processed according to established procedures. Such internal controls would limit any one individual's access to both physical assets and the related accounting records. \r\nQuestioned Cost: N/A \r\nInformation: Inventories \r\nOrdering of goods was not separated from the maintenance of inventory records. \r\nCustodianship of inventory was not separated from the receivingfunction. \r\nReview of inventory records was not performed by someone independent of the receiving function. \r\nRevenues/Receiva bles/Receipts Deposit preparation was not separated from the record keeping and cash custody functions. \r\nExpenditures/Liabilities/Disbursements The duty of approving vouchers for payment was not adequately separated from the duty of writing checks. \r\nThere was no independent review to determine that the expenditures were appropriate, accurate and properly documented prior to payment. \r\nNumerous voucher packages revealed no approval. \r\nNumerous voucher packages could not be provided for auditor review. \r\nCause: The School District has not assigned responsibilities to achieve appropriate separation of duties nor utilized management oversight of the incompatible activities to properly safeguard assets. These deficiencies were also a result of management's decision to limit the number of administrative staff made responsible for accountingfunctions applicable to the School Food Service Fund. \r\nEffect: Errors and/or irregularities may not be detected in a timely manner. \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30,2010 \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nINVENTORIES REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILlTlES/DISBURSEMENTS Inadequate Separation of Duties Significant Deficiency Finding Control Number: FS-6041-10-01 \r\nRecommendation: The School District should implement procedures to ensure that the key accounting functions of custody, record keeping and authorization are separated and/or utilize management oversight of these incompatible activities. Management should also revise and monitor controls to provide reasonable assurance that transactions are processed according to established procedures. \r\nCASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDlTURES/LIABILlTlES/DlSBURSEMENTS Inadequate Accounting Procedures over School Activity Accounts Significant Deficiency Finding Control Number: FS-6041-10-02 \r\nCondition: This is a repeat finding (FS-6041-09-02, FS-6041-08-02 and FS-6041-07-02) from the years ended June 30, 2009, June 30, 2008, and June 30, 2007, respectively. The accounting procedures of the School District were insufficient to provide for adequate separation of duties over the school activities accounts. \r\nCriteria: The School District's management is responsiblefor designing and maintaining internal controls that provide reasonable assurance that transactions are processed according to established procedures. Such internal controls would limit any one individual's access to both physical assets and the related accounting records. \r\nQuestioned Cost: N/A \r\nInformation: Cash and Cash Equivalents \r\nThe bank reconciliation function was not separated from the record keeping and voucher payment function. \r\nThe bank reconciliation did not include evidence of approval by someone other than the person performingthe bank reconciliation. \r\nRevenues/Receivables/Receipts Deposit preparation was not separated from the record keeping and cash custody functions. \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30,2010 \r\nII FINANCIAL STATEMENT FINDINGSAND QUESTIONEDCOSTS \r\nCASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILlTlES/DISBURSEMENTS Inadequate Accounting Procedures over School Activity Accounts Significant Deficiency Finding Control Number: FS-6041-10-02 \r\nReceipts recorded in the schools' manually maintained accounting records could not be easily traced to receipt documentation. The receipt documentation provided were deposit slips which did not contain adequate descriptions or account/object information indicating where the funds should be posted. As a result, there was no method of tracing deposits to the financial records. \r\nExpenditures/Liabilities/Disbursements The check writing function was not separated from the record keeping or processing of signed checks. \r\nDocumentation was not found for several checks written. As a result, there was no adequate method of tracing expenditures recorded in the check register to the supporting documentation. \r\nCause: The School District has not assigned responsibilities to achieve appropriate separation of duties nor utilized management oversight of the incompatible activities to properly safeguard assets. These deficiencies were also a result of management's failure to ensure that internal controls were established, implemented and functioning at the school level. \r\nEffect: Errors and/or irregularities may not be detected in a timely manner. \r\nRecommendation: The School District should implement procedures to ensure that the key accounting functions of custody, record keeping and authorization are separated and/or utilize management oversight of these incompatible activities. Management should also revise and monitor controls to provide reasonable assurance that transactions are processed according to established procedures. \r\nEXPENDITURES/LIABILlTlES/DISBURSEMENTS EMPLOYEE COMPENSATION GENERAL LEDGER Inadequate Accounting Procedures Significant Deficiency Finding Control Number: FS-6041-10-03 \r\nCondition: This is a repeat finding (FS-6041-09-03, FS-6041-08-03 and FS-6041-07-03) from the years ended June 30, 2009, June 30, 2008, and June 30, 2007, respectively. The accounting procedures of the School District were insufficient to provide adequate controls over Expenditures/Liabilities/Disbursements, Employee Compensation and General Ledger. \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGSAND QUESTIONEDCOSTS \r\nYEAR ENDED JUNE 30,2010 \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONEDCOSTS \r\nEXPENDITURES/LlABILlTlES/DlSBURSEMENTS EMPLOYEE COMPENSATION GENERAL LEDGER Inadequate Accounting Procedures Significant Deficiency Finding Control Number: FS-6041-10-03 \r\nCriteria: The School District's management is responsible for designing and maintaining controls that provide reasonable assurance that transactions are processed according to established procedures. \r\nQuestioned Cost: N/A \r\nInformation: Expenditures/Lia bilities/Disbursements The School District did not have procedures in place to ensure all expenditure documentation was checked for accuracy, properly approved or contained evidence of receipt of goods or services prior to disbursement of funds. \r\nEmployee Compensation The School District did not have adequate procedures in place to ensure that employee compensation expenditures were properly documented and calculated before disbursement of funds. \r\nGeneral Ledger Journal entry documentation and descriptions were not adequate to support all journal entries. Also, evidence that journal entries were reviewed and approved by someone independent of the general ledger process was not maintained. \r\nCause: These deficiencies were a result of management's failure to ensure that internal controls were established, implemented and functioning. \r\nEffect: Errors and/or irregularities may not be detected in a timely manner. \r\nRecommendation: The School District should implement procedures to ensure that (1)expenditure transactions reflect proper approval, documentation, and receipt of goods or services prior to authorization for payment; (2) employee compensation expenditures are properly documented, calculated and approved before disbursement of funds; and (3)journal entries are properly approved, documented and posted in the accounting records. Management should also revise and monitor controls to provide reasonable assurance that transactions are processed according to established procedures. \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS \r\nYEAR ENDED JUNE 30.2010 \r\nII FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS \r\nBUDGET PREPARATION/EXECUTION Deficit Fund Balance Material Weakness Finding Control Number: FS-6041-10-04 \r\nCondition: This is a repeat finding (FS-6041-09-06) from the year ended June 30, 2009. At June 30, 2010, the General Fund and Capital Projects Fund of the Baker County Board of Education reported deficit fund balances. In addition, the School District failed to adopt a balanced budget for the General Fund. \r\nCriteria: Chapter 25, Governmental Fund Deficits of the Financial Management for Georgia Local Units of Administration states in part: \"The seriousness of fund balance deficits cannot be overstated. The Georgia Department of Education requires those LUAs with deficit governmental fund balances to meet certain reporting requirements.\" \r\nChapter 32, Preparing Opating Budgets of the Financial Management for Georgia Local Units of Administration (FMGLUA)states in part: \"The budget must be balanced for all budgeted funds. Total anticipated revenues should equal total estimated expenditures. In the event anticipated revenues are insufficient to fund anticipated essential expenditures, a portion of unreserved fund balance from the previous years must be used to fund the shortfall. In the event there is insufficient unreserved fund balance from previous years to fund anticipated expenditures, then such expenditures must be reduced to equal anticipated revenues plus available unreserved fund balance\". \r\nQuestioned Cost: N/A \r\nInformation: The School District's General Fund and Capital Projects Fund reported deficit fund balances in the amounts of $1,055,611.12 and $199,490.47, respectively. \r\nCause: The School District's original and final budgets for the General Fund budgeted deficit fund balances in the amounts of $137,567.36 and $179,405.92, respectively. \r\nEffect: A financial statement irregularity in accordance with the Official Code of Georgia Annotated 520-267. \r\nRecommendation: The School District should establish policies and procedures designed to ensure that expenditures do not exceed availability of resources, so that in future periods the School District does not report deficit fund balances. In addition, appropriate procedures should be implemented to ensure that the adopted budget for each budgeted fund is balanced as required. \r\nIll FEDERALAWARDFINDINGSANDQUESTIONEDCOSTS \r\nNo matters were reported. \r\n \r\n SECTION V MANAGEMENT'S RESPONSES \r\n \r\n BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF MANAGEMENT'S RESPONSES \r\nYEAR ENDED JUNE 30,2010 \r\n \r\nFinding Control Number: FS-6041-10-01 \r\n \r\nWe concur with this finding. The School District in conjunction with the Lunchroom Manager will devise strategic procedures to ensure that School Food Service Fund will have adequate separation of duties. The Lunchroom Manager will designate an existing lunchroom staff member to assist in the receiving, inventorying and reviewing of inventory records to ensure separation of duties. The Lunchroom Manager will also issue Purchase Orders for prior approval by the Principal and also the Superintendent before inventory is ordered to ensure expenditures are appropriate, accurate and properly documented. These procedures will ensure that internal controls for both access to physical assets and the related accounting records are adequately separated. These procedures will be implemented in the 2012 fiscal year. \r\n \r\nFinding Control Number: FS-6041-10-02 \r\n \r\nWe concur with this finding. The School District in conjunction with school administration will devise strategic procedures to ensure that the school activity account will have adequate separation of duties. The Principal will designate a school level administrator to review and approve all bank reconciliations; review deposit preparations and ensure all documentation for written checks are present. The School District has also implemented the use of computerized accounting records for the School Activity Accounts to ensure receipts and checks contain adequate descriptions and account/object information so that the accounting records could be easily traced. These procedures will ensure that internal controls for both access to physical assets and the related accounting records are adequately separated. These procedures will be implemented in the 2012 fiscal year. \r\n \r\nFinding Control Number: FS-6041-10-03 \r\n \r\nWe concur with this finding. The School District will implement procedures to ensure that expenditure transactions, employee compensation, leave records, authorization for payroll deductions and journal entries are properly documented, calculated, maintained and approved before changes and/or disbursements are made. These procedures will be implemented in the 2012 fiscal year. \r\n \r\nFinding Control Number: FS-6041-10-04 \r\n \r\nWe concur with this finding. The School District will implement policies and procedures to ensure that expenditures do not exceed availability of resources. The School District monitors the DE Form 0396 monthly to ensure that the expenditures are not exceeding the amounts budgeted. The School District will also implement procedures to ensure that the adopted budget for each budgeted fund is balanced as required. This will be implemented in the 2012 fiscal year. \r\n \r\nContact Person: Telephone: Fax: E-mail: \r\n \r\nFreddie Thompson, Superintendent (229) 734-5346 (229) 734-3064 fthompson@baker.kl2.ga.u~ \r\n \r\n "}],"pages":{"current_page":1,"next_page":2,"prev_page":null,"total_pages":2,"limit_value":10,"offset_value":0,"total_count":11,"first_page?":true,"last_page?":false},"facets":[{"name":"type_facet","items":[{"value":"Text","hits":11}],"options":{"sort":"count","limit":16,"offset":0,"prefix":null}},{"name":"creator_facet","items":[{"value":"Georgia. 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