Glascock County Board of Education, Gibson, Georgia, report on audit for the financial statements for the fiscal year ended June 30, 2002

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GLASCOCK COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS-OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

8

ADDITIONAL FINANCIAL INFORMATION

COMBINING AND INDIVIDUAL FUND STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

22

G

FIDUCIARY FUND TYPE

STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUND

24

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

25

2 SCHEDULE OF STATE REVENUE

27

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

29

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

30

5

BY SITE

31

GLASCOCK COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133
SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

w. Rll'iSELL

HINTON

STATE AUDITOR

(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Wa,hmgton Street, S W, Suite 214 At)Jnta, Georgia 30334-8400
March 21, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Glascock County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general-purpose financial statements of the Glascock County Board of Education, as of and for the year ended June 30, 2002, as listed in the table of contents. These general-purpose financial statements are the responsibility of the Glascock County Board of Education's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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 op1mon.
As described in the notes to the general-purpose financial statements, the Board of Education's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:

2002ARL-13

* The general-purpose financial statements of the Board of Education did not contain a
General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the
general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements.
* The Board of Education did not recognize as expenditures, in the year ended
June 30, 2002, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2002. Also funds received, subsequent to June 30, 2002, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2001, were improperly recorded in the year ended June 30, 2002. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the Glascock County Board of Education as ofJune 30, 2002, and the results ofits operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated March 21, 2003, on our consideration of the Glascock County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Glascock County Board of Education taken as a whole. The accompanying combining and individual fund statements (Exhibits E through G) and the financial schedules (Schedules 1 through 5), which includes the Schedule ofExpenditures ofFederal Awards as required by U.S. Office of Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a
2002ARL-13

required part ofthe general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general-purpose financial statements and in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,
~-~_$
State Auditor
RWH:gp 2002ARL-13

GLASCOCK COUNTY BOARD OF EDUCATION

GLASCOCK COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30. 2002

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
lnventones Food Donated Commod1t1es Purchased Food
Amount Available rn Debt Service Fund
Amount to be Provided rn Future Years For Payment of Bond Debt

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$

20,794 61 $

49,949.49 $

24114

1,240,406 06

488 21

8,648 65

56,814 68

23,237.70

1,270.21 1,485.61

Total Assets

$ 1,269,849 32 $

109,519 99 $ ====2i=i3=,9""6""'7=05=-

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salanes Payable Expired Grant Balances Payable Deferred Revenue Funds Held for Others General Obhgation Bonds Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Debt Service For Inventories Food Donated Commodrues Purchased Food For SPLOST Pro1ects Unreserved Undes1gnated
Total Fund Equity

$

80 68 $

7,416.74

757.06

40,032.19

50,699.49

$

837 74 $

98,148.42

$
$ 1,269,011.58 $ 1,269,011 58 $

1,270.21 1,485 61
$
8,615.75
11 371.57 $

23,967 05 000
23,967 05

Total Liabilities and Fund Equity

$ 1,269,849 32 $

109,519.99 $ ===2=3=,96====7=05=-

The notes to the general-purpose financial statements are an integral part of thtS statement.

-2-

EXHIBIT"A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPE AGENCY FUND

$

63,675 52 $

7,227 63

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

(Memorandum Only)

JUNE 30, 2002

JUNE 30, 2001

$

141,88839 $

109,690 08

1,240,894 27

1,375,240 25

88,701 03

72,227 65

$

63,600 00

1,270 21 1,485 61
63,600 00

1,942 10 1,478 50 87,246 51
32,753 49

$

63,675 52 $

7 227 63 $

63,600 00 $ 1,537,839 51 $ 1,680,578 58

$

69,317.53

$

7,497 42

3,961 19

40,789 25

20,850 52

23,868 96

50,699 49

100 00

$

7,227 63

7,227 63

11,018 82

$

63,600 00

63,600 00

120,000 00

$

7 227 63 $

63,600 00 $

169,813 79 $

249,117 02

$

63,60000

75 52

$

63,675 52

$

63,600 00 $

87,246.51

1,270 21 1,485 61 23,967 05

1,94210 1,478 50 44,719 58

1,277,702 85

1,296,074 87

$ 1,368,025 72 $ 1 431 461 56

$

63675 52 $

7 227 63 $

63 600 00 $ 1,537,839 51 $ 1,680,578 58

-3-

GLASCOCK COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2002

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation
Capital Outlay Debt Service
Pnnapal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHl;R FINANCING SOURCES (USES}
Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change in Penod Donated Commod1t1es Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 2,673,423 21 $
801.227.22 62,832.90

255.931 98 708.697.75
89,458 22

$ 3,537,483 33 $ 1,054,087.95

$ 2.113.104.46 $
139,243 91 59,237 00 72,458 93 254,134 05 204,229.29
3,339 50 385,868.63 189,350 99
39,423 38

425,674 25 219,310.76 174,333.58
18,264.84 257,045 25

$ 3,460,390 14 $ 1,094,628 68

$

77,093 19 $

-40,540 73

$

-55,000 00

$

-55,000 00

$

22,093 19 $

1,246,918.39

-40,54073 52,577.08
-671 89 7 11

FUND BALANCE JUNE 30

$ 1:269,011 58 $__,,==1=1==3=7=1=57_

The notes to the general-purpose finanaal statements are an integral part of this statement -4-

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$

108,846.11 $

5,051.86

$

113 897.97 $

$
37,351 78 1 82946
39,181.24 $

2,929,355 19 $ 708,697.75 947,425 11 159 172 44
4,744,650 49 $

2,810,722.83 613,415 05 950,449.41 200,373 95
4,574,961.24

$

184,315.62

$

$

184,315 62 $

$

-70 417 65 $

$
60,000.00 7,076 97 1 010 14
68 087 11 $ -28,905 87 $

2,538,778.71 $
358,554.67 233,570 58
72,458 93 254,134 05 204,229.29
3,339.50 385,868 63 207,615.83
39,423 38 257,045 25 184,315.62
60,000 00 7,076 97 1 010 14
4,807,421.55 $
-62,771.06 $

2,623,322.30
147,840.33 217,288 95
78,865 77 267,897 74 115,675 66
81,976 50 290,48618 209,935 00
5,319.00 221,14514 1,026,213.74
55,000 00 10,220 00
1,009 36
5,352,195 67
-777,234 43

$

55,000 00 $

-5,334 88

$

49,665 12 $

5,334 88 $ 5 334 88 $

60,334 88 $ -60,334.88
0.00 $

843,066.00 -843,066 00
0 00

$

-20,752 53 $

-23,570.99 $

-62,771.06 $

-777,234.43

44,719 58

87,246 51

1,431,461.56

2,209,260 08

-671 89 7 11

-710.07 145 98

$

23,967.05 $

63,675 52 $

1,431,461 56

-5-

GLASCOCK COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - {NON-GAAP BASIS} GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2002

EXHIBIT"C"

GENERAL FUND

BUDGET

ACTUAL

REVENUES
State Funds Federal Funds Taxes Other Funds

$ 2,609,590 00 $ 2,673,423.21

2,000 00

774,505 00

801,227.22

72,800 00

62,832 90

Total Revenues EXPENDITURES

$ 3,458,895.00 $ 3,537,483 33

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Adm1mstrat1on Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation

$ 2,145,239.68 $ 2,113,104.46

198,489 00 85,391 00 80,972 00 212,018 00 153,774 00 10,000 00 315,212 00 200,867 00 25,907 00

139,243 91 59,237.00 72,458 93 254,134 05 204,229 29 3,339 50 385,868 63 189,350 99 39,423 38

Total Expenditures Excess of Revenues over (under) Expenditures

$ 3,427,869 68 $ 3,460,390.14 $ 31,025 32 $ 77,093.19

OTHER FINANCING !.,!SES

Other Uses

-55,000 00

Excess of Revenues over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1, 2001

$ 31,025 32 $ 22,093 19

1,234,296.77

1,246,918.39

AdJustments

FUND BALANCE JUNE 30, 2002

$ 1,265,322 09 $ 1,269i11 58

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 193,175 00 $ 255,931.98

617,753.00

708,697 75

79,888.00

89,458 22

$ 890,816 00 $ 1,054,087 95

$ 350,838 00 $ 425,674.25

138,988 00 165,900 00

219,310.76 174,333 58

1,000.00

10,300 00

18,264 84

285,815 00

257,045.25

$ 952,841 00 $ 1,094,628.68

$ -62,025 00 $ -40,540 73

$ -62,025 00 $ 78,07810 -23,036 85

-40,540 73 49,156 48

$ -6,983.75 $====8=6=1=5ai=75==-

The notes to the general-purpose financial statements are an Integral part of this statement. -7 -

GLASCOCK COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Glascock 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 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.
FUND ACCOUNTING
The School District uses funds and an account group 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. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the School District. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor"the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general-purpose financial statements.
The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of the School District's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the School District except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.

-8-

GLASCOCK COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
FIDUCIARY FUND TYPE - the fund used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. This fund includes:
AGENCY FUND - the fund used to account for assets held in a fiduciary capacity for other funds, governments, or individuals.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Agency funds are purely custodial in nature and do not involve measurement ofresults ofoperations.
Governmental funds are accounted for using the modified accrual basis of accounting under which:

-9-

GLASCOCK COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after yearend to be available. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2002, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2001 and ending in early June 2002. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2001 and ending in August 2002. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2002, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2002, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2002. Also, the State's portion ofthe compensation paid in July and August 2002 was received and recorded as revenue in the fiscal year subsequent to June 30, 2002. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2001, were recorded in the year ended June 30, 2002. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
Agency funds are accounted for using the modified accrual basis ofaccounting in recognizing assets and liabilities.
BUDGET
The Glascock County Board of Education's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The _budie_t for ~11 governmental funds is prepared by fund, function and object._ The legal level of budget control was established by the Board at the fund level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.

GLASCOCK COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The budget process begins when the School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA 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.

The Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to fund balance as reflected on Exhibit "B" ofthis report:

Special Revenue
Fund

FUND BALANCE JULY 1, 2001

$ 52,577.08

Adjustments Inventories - July 1, 2001 Food Donated Commodities Purchased Foods

-1,942.10 -1,478.50

Fund Balance July 1, 2001 (Budget Basis)

$ 49,156.48

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses

-40.540.73

FUND BALANCE JUNE 30, 2002 (Budget Basis)

$ 8,615.75

CASH AND CASH EQUIVALENTS

COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash 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. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more _so!vent b_anks or insured federal savings and loan associations.__

- 11 -

GLASCOCK COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia Annotated Section 36-83-4 authorizes the School District to invest its funds and in selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(I) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State ofGeorgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLES
Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general-purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

- 12 -

GLASCOCK COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002 _

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY TAXES

The Glascock County Board of Commissioners fixed the property tax levy for the 2001 tax digest year (calendar year) on September 19, 2001 (levy date). Taxes were due on January 5, 2002 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2001 tax digest are reported as revenue in fiscal year 2002. The Glascock County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance oftaxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2002 for maintenance and operations amounted to $790,802.12.

The tax millage rate levied for the 2001 tax year (calendar year) for the Glascock County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

14.21 mills

SALES TAXES

Special Purpose Local Option Sales Tax revenue during the year amounted to $146,197.89 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.

INVENTORIES

FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time ofpurchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.

GENERAL OBLIGATION BONDS

The School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.

- 13 -

GLASCOCK COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INTERFUND TRANSACTIONS
The School District has the following types of interfund transactions:
Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general-purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results ofoperations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the S~te of Georgia,

- 14 -

GLASCOCK COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS AND INVESTMENTS

(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,

(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,

(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 2002, the bank balances were $538,430.12. The amounts ofthe total bank balances are classified into three categories of credit risk:

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District or by the School District's agent in the School District's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.)

The School District's deposits are classified by risk category at June 30, 2002, as follows:

Risk Category

Bank Balance

1

$ 163,600.00

2

0.00

3

374,830.12

Total

$ 538,43Q.12

- 15 -

.------------------ - -- --

GLASCOCK COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 2: DEPOSITS AND INVESTMENTS
CATEGORIZATION OF INVESTMENTS At June 30, 2002, the carrying value of the School District's total investments was $1,240,894.27 which is materially the same as fair value. This investment consisted entirely of funds invested in the Local Government Investment Pool administered by the State ofGeorgia, Office ofTreasury and Fiscal Services which are not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy ofthe State of Georgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description ofthe Primary Liquidity Portfolio is as follows:
The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not registered with the SEC as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a Rule 2a7 like pool. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value of the shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.
Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2002, was 0.12 years. The average investment duration for Fund 6 on June 30, 2002, was 0. 75 years.
Note 3: NON-MONETARY TRANSACTIONS
The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories
Note 4: RISK MANAGEMENT
The School District is exposed to various risks of loss rela~ed to t~rts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation.
- 16 -

GLASCOCK COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 4: RISK MANAGEMENT

The School District has obtained commercial insurance for risk ofloss associated with torts, assets and job related illness or injuries to employees. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of the past three years.

The School District has elected to self-insure for all losses related to acts of God. In addition, the School District has elected to self-insure for errors or omissions, which includes, among other risks, risks for sexual harassment and discrimination. The School District has not experienced any losses related to these risks in the past three years.

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated. The School District has not incurred any liabilities for unemployment compensation during the past two fiscal years.

The School District has purchased surety bonds to provide additional insurance coverage as follows:

Position Covered

Amount

Superintendent Principal Bookkeeper

$ 10,000.00 $ 5,000.00 $ 10,000.00

Note 5: GENERAL LONG-TERM DEBT

GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows:

Purpose

Interest Rates

Amount

General Government - Series 1992

3.8%-6.0% $ 60,000.00

The changes in General Long-Term Debt during the fiscal year ended June 30, 2002, were as follows:

- 17 -

GLASCOCK COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 5: GENERAL LONG-TERM DEBT

General Obligation
Bonds

Balance July 1, 2001

$ 120,000.00

Deductions Debt Retired

60,000.00

Balance June 30, 2002

$ 60,000.00

At June 30, 2002, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30

General Obligation
Bonds

2003

$ 63,600.00

Note 6: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $50,456.21 for health insurance and retirement contributions paid on the School District's behalfby the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $41,916.21

Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $8,540.00

Note 7: CONTINGENT LIABILITIES

Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are_ disallowed under grat).t terms. The School District believes that such _ disallowances, if any, will be immaterial to its overall financial position.

- 18 -

GLASCOCK COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 8: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. 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.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2002 2001 2000

100% 100% 100%

$ 205,755.19 $ 230,714.86 $ 206,279.35

- 19 -

GLASCOCK COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2002

ASSETS
Cash and Cash Equivalents
Accounts Receivable
lnventones Food Donated Commodities Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

24,212.48 $

13,647.26

1,270.21 1.485.61

Total Assets
LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity

$

26.968.30 $ ar::::::::==1=3=64=7=26=

$

1,923 45 $

1,985.81

13,673.28

10,962.72

698.73

$

15.596.73 $

13.647.26

$

1,270.21

1,485.61

8 1615.75 $

0.00

$

11 371.57 $

0.00

Total Liabilities and Fund Equity

$

26.968.30 $ ===-==1=3'=64=7=.2=6=

See notes to the general-purpose financial statements. - 20-

EXHIBIT"E"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

12,089.75 $

49,949.49 $

76,901.85

56,814.68

56,814.68

21,035.30

1,270.21 1 485.61

1,942.10 1 478.50

$

68,904.43 $

109,519 99 $ ===-=1=0=1=,3=5=7=75=

$

3,507.48 $

7,416 74 $

3,961.19

15,396.19

40,032.19

20,850.52

23,868.96

50,000.76

50,69949

100.00

$

68,904.43 $

98,148.42 $

48 780 67

$

$ _ _ _ _o_._oo_

$

0.00 $

1,270.21 $ 1,485.61

1,942.10 1,478.50

8,615.75

49,156 48

11 371.57 $ _ _ _5_2,-5_77_.0_8_

$

68,904.43 $

109,519 99 $==1=0=1=,3=57=.7=5=

- 21 -

- - - - - - - - - - - - - - - - - - - - - - - - - - ----- - - - - - ---

GLASCOCK COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2002

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Student Transportation Services Food Services Operation
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

16,016.00 $

153,480 03

111,180.30

89,308.22

$

216,504.52 $

153,480.03

$

152,834.20

$

257,045.25

645.83

$

257,045 25 $

153,480.03

$

-40,540.73 $

0.00

52,577.08

0.00

-671 89 7.11

$

11 371.57 $ ========o....o..,o=

See notes to the general-purpose financial statements. - 22-

EXHIBIT"F"

FEDERAL
PROGRAMS

TOTALS

YEAR ENDED

JUNE 301 2002

JUNE 301 2001

$

86,435.95 $

255,931.98 $

272,876.83

597,517.45

708,697.75

613,415.05

150.00

89,458.22

77,684.82

$

684.103.40 $ 1,054,087.95 $

963,976.70

$

272,840.05 $

425,674.25 $

514,439.67

219,310.76 174,333.58
17,619.01

219,310.76 174,333.58
18,264.84 257,045.25

41,835.88 184,637.85
15,120.97 221,145 14

$

684103.40 $ 1,094,628.68 $

977179 51

$

0.00 $

-40,540.73 $

-13,202.81

0.00

52,577.08

66,343.98

-671.89 7 11

-710 07 145.98

$

000 $

11 371.57 $ ====52=,5=77=08=

- 23-

GLASCOCK COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUND YEAR ENDED JUNE 30, 2002

EXHIBIT"G"

GLASCOCK COUNTY LIBRARY ASSETS
Cash and Cash Equivalents
LIABILITIES Funds Held for Others

BALANCE JULY 11 2001

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 2002

$ 11,018 82 $ 25,530 00 $

29,321.19 $===7,=2=27=6==3=

$ 11,018.82 $ 25,530.00 $

29,321.19 $-=====7=,2=27==6=3==

See notes to the general-purpose financial statements - 24 -

GLASCOCK COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2002

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agnculture, U S Department of Child Nutrilion Cluster Pass-Through From Georgia Department of Education Food and Nutnt1on Program Food Services School Breakfast Program National School Lunch Program

10 553 10 555

NIA

$ 17,317 16

NIA

84,545.23 $

(2) 247,727.34 (3)

Total Child Nutnt1on Cluster

$ 101,862 39 $

247,727.34

Other Programs

Pass-Through From Georgia Department of Educahon

Food and Nutnlion Program

Food D1stnbutton Program (1)

10.550

NIA

9,317.91

9,317.91

Total U S Department of Agnculture

$ 111,180 30 $

257,045 25

Education, U S Department of Special Education Cluster Pass-Through From Georgia Department of Education lnd1v1duals with DIsabIlilles Education Act Part B - Special Education Flow Through Preschool Severely Emolionally Disturbed

84 027 84173 84027

NIA

$ 75,391 00 $

N/A

15,228 00

NIA

500.00

75,391.00 15,228.00
500 00

Total Special Educalion Cluster

$ 91,11900 $

91,119.00

Other Programs Pass-Through From Georgia Department of Educalion Comprehensive School Reform Demonstration Project Elementary and Secondary Education Act Tille I Accountab1hty Grants Grants to Local Educalional Agencies TIiie II Eisenhower Professional Development Reading Excellence Local Reading Improvement Tillelll Technology Literacy Challenge Fund Grants TIiie VI lnnovalive Education Program Strategies Class Size Reduction Safe and Drug-Free Schools and Communities Vocational Education - Basic Grants to States High School Program Basic Grant Tech Prep Educallon Pass-Through From Georgia Department of Human Resources Safe and Drug-Free Schools

84.332
. 84 348 84.010 84.281 84.338
. 84 318
84.298 84.340 84.186
84048 84 243
84.186

N/A

50,000.00

NIA

60,945.00

NIA

75,716.24

NIA

17,500.00

NIA

11,778.77

NIA

125,000.00

NIA

2,857.00

N/A

11,040.00

NIA

2,217.00

NIA

14,079.00

NIA

36400

NIA

32,787 00

50,000 00
60,945.00 75,716.24 17,500.00 11.778.77 125,000 00
2,857 00 11,040 00
2,217 00
14,079 00 364.00
32,787.00

Total U. S. Department of Educat10n

$ 495,403.01 $

495,403 01

- 25-

GLASCOCK COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2002

SCHEDULE "1"

FUNDING AGENCY PRO~RAM/GRANT
Health and Human Services, U S Department of Pass-Through From Georgia Department of Human Resources Family Conneclion Program Block Grant for Prevention and Treatment of Substance Abuse
Total U S Department of Health and Human Services
Labor, U S Department of Pass-Through From East Central Georgia Consortium Workforce Investment Act

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

93 778 93 959

NIA

$ 1,51950 $

NIA

36,212 46

$ 37,731 96 $

1,519 50 36,212 46
37,731 96

17 255

N/A

$ 64,382 48 $

64,382 48

Total Federal Financial Assistance

$ 708,697 75 $ ===854====,5=6=2=7=0

NIA= Not Available

Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food D1stnbut1on Program represents the Federally assigned value of nonmonetary assistance for donated commod1t1es received and/or consumed by the system dunng the current fiscal year
(2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 2002 National School Lunch Program
(3) Expenditures for this program include State, and/or Other Funds Expenditures are not maintained by fund source

MaJor Programs are Identified by an astensk (*) in front of the CFDA number

The School D1stnct did not provide Federal Assistance to any Subrecip1ent

The accompanying schedule of expenditures of Federal awards includes the Federal grant act1v1ty of the Glascock County Board of Education and 1s presented on the modified accrual basis of accounting which 1s the basis of accounting used in the presentation of the general-purpose financial statements

See notes to the general-purpose financial statements

- 26-

GLASCOCK COUNTY BOARD OF EDUCATION
SCHEDULE OF STATE REVENUE
YEAR ENDED JUNE 30 2002

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Pnmary Grades (1-3) Program Primary Grades - Early lntervenbon (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades (4-5) Early Intervention Program Middle Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with D1sab11illes Category I Category II Category Ill Category IV Category V Gifted Student - Category VI Remedial Education Program Altemat1ve Education Program Media Center Program Central Admm1strabon Staff and Professional Development Faculty M&O School Admin1strat1on 20 Days Additional Instruction Categoncal Grants Pupil Transportation Regular Bus Replacement Sparsity Nursing Services Pnnc1pal Supplements Vocational Supervisors Education Equalization Funding Grant Food Services Other State Programs Apprent1cesh1p Program Health Insurance Preschool Handicapped Program Lottery Programs Applied Technology Labs Computers m the Classroom
Human Resources. Georgia Department of Family Connection Program
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACTS Community Affairs, Georgia Department of Local Assistant Grant
Education. Georgia Department of Georgia's Reading Challenge Reading First Program

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

109,674 00

9,095 00

292,4B6 00

94,175 00

132,403 00

24,074 00

243,77B 00

146,921 00

120,739 00

5,452 00 58,945 00 162,293 00 14,288 00 28,093 00 111,117 00 17,099 00 19,656 00 48,671 00 211,428 00
9,833 00 145,989 00 103,460 00
13,786 00

$ 109,674 00 9,095 00
292,4B6 00 94,175 00
132,403 00 24,074 00
243,778 00 146,921 00 120,739 00
5,452 00 58,945 00 162,293 00 14,288 00 28,093 00 111,117 00 17,099 00 19,656 00 48,671 00 211,428 00
9,833 00 145,989 00 103,460 00
13,78600

126,441 00 38,268 00 12,000 00 29,923 00 2,315 00 5,391 00
196,10000 $
2,000 00 41,916 21 23,494 00

16,016 00
7,287 50 24,574 00

126,441 00 38,268 00 12,000 00 29,923 00 2,315 00 5,391 00
196,100 00 16,016 00
2,000 00 41,916 21 23,494 00
7,287 50 24,574 00

86,435 95

86,435 95

121,618 53

121,618 53

8,540 00

8,540 00

40,000 00
11,580 00 12 000 00

40,000 00
11,580 00 12,000 00

See notes to the general-purpose financial statements

$ 2,673,423 21 $

255,931 98 $ 2,929,355 19

- 27-

GLASCOCK COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2002

SCHEDULE "3"

PROJECT
Construction of add1t1onal classrooms, instructional and support space at Glascock Consolidated School, as well as remodeling and renovating existing classrooms, recreational fields and grounds and to provide furnishings, equipment and fixtures for such areas
Payment of pnncipal and interest due on 1992 bonds

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS(3)

PROJECT STATUS

$ 695,000 00 $ 1,627,221 75 $ 184,315 62 $ 1,442,906 13 Ongoing

305,000 00

339,862 65

68,087.11

271,775 54 Ongoing

$ 1,000,000 00 $ 1,967,084 40 $ 252,402 73 $ 1,714,681 67

(1) The School D1stnct's ongmal cost estimate as specified In the resolution calling for the ImposItIon of the Local Option Sales Tax
(2) The School DIstnct's current estimate of total cost for the projects Includes all cost from project inception to completion
(3) The voters of Glascock County approved the ImposItIon of a 1% sales tax to fund the above projects Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects

See notes to the general-purpose financial statements

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GLASCOCK COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM {QBE)
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30. 2002

SCHEDULE "4"

DESCRIPTION
Direct Instructional Programs Kindergarten Program Kindergarten Program-Early Intervention Program Pnmary Grades (1-3) Program Pnmary Grades-Early lntervenllon (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 D1sablhties Category II Category Ill Gifted Student - Category VI Remedial Educallon Program Alternative Education Program
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Staff and Professional Development

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

$

122,604.00 $ 86,714 01 $

7,037.91 $

93,751 92

10,167.00

26,834.37

2,427.64

29,262 01

326,968.00

304,552.76

24,600 30

329,153 06

105,277 00

126,924 88

500 82

127,425.70

147,554 00

251,637 30

2,911.58

254,548 88

27,370 00 272,518 00 164,242.00 134,973.00 300,793 00
124,217.00 19,115.00 21,973 00

24,531 90 330,543 36 260,679 81 96,05913
150,138 75 61,178 97 119,691 70 20,967 45 52,484 04

1,063.67 3,645.53 10,870 46 5,601.93
17,808 05 2,84515 4,125 62
39 99

25,595.57 334,188 89 271,550.27 101,661 06
167,946 80 64,02412 123,817 32 20,967 45 52,524 03

$

1,777,771.00 $ 1,912,938 43 $ 83,478 65 $ 1,996,417.08

54,408.00 10,992 00

69,830 91 2,10000

1,558 17 11,598.37

71,389 08 13,698 37

TOTAL QBE FORMULA FUNDS

$

1,843.171 00 $ 1,984,869 34 $ 96,63519 $ 2,081,504 53

(1) Compnsed of State Funds plus Local Five Mill Share.

See notes to the general-purpose finanaal statements.

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GLASCOCK COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM {QBE)
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2002

SCHEDULE "5"

Glascock County Consolidated School Central Office (Alternative Education Program)
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

1,755,798.00 $

1,939,457.14

21,973.00

56,959.94

$

1,777,771.00 $ ==1='9=96=,4=1=7.=0=8

See notes to the general-purpose financial statements. - 31 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

w. Rt1'iSELL

HIN"ION

STATE AUDITOR

(404) 656 2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Wa~hmgton S1rcc1. S W.. Suite 214 Atlanta, Georgia 30334-8400
March 21, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Glascock County Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of Glascock County Board of Education as of and for the year ended June 30, 2002, and have issued our report thereon dated March 21, 2003. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. 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.
Compliance
As part of obtaining reasonable assurance about whether Glascock County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial 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 ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Glascock County Board ofEducation's internal control over financial ~eporting i_n order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal
2002YB-40

control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Glascock County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-6621-02-01 and FS-6621-02-03.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, ofthe reportable conditions described above, we consider item FS-6621-0203 to be a material weakness.
This report is intended solely for the information and use of the management, members of the Glascock County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:gp 2002YB-40

State Auditor

RussELL W. H1N10N
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Wc.1!-hmgton Street, S W., Suite 214 Atlanta, Georgia 30334-8400
March 21, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Glascock County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Glascock County Board of Education with the types of compliance requirements described in the U.S. Office ofManagement and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2002. Glascock County Board ofEducation'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 Glascock County Board of Education's management. Our responsibility is to express an opinion on Glascock County Board of Education's compliance based on our audit.
We conducted our audit ofcompliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards. issued by the Comptroller General of the United States; and 0MB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance 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 Glascock County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. W~ believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Glascock County Board ofEducation's compliance with those requirements.
2002SA-10

In our opinion, the Glascock County Board ofEducation complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 2002.
Internal Control Over Compliance
The management of Glascock County Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered Glascock County Board of Education's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with 0MB Circular A-133.
Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more of the internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use of the management, members of the Glascock County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:gp 2002SA-10

State Auditor

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

GLASCOCK COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6621-00-01 FS-6621-00-03 FS-6621-01-01 FS-6621-01-02

Further Action Not Warranted Further Action Not Warranted Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

CASH AND CASH EQUIVALENTS Inadequate Internal Control Procedures Finding Control Number: FS-6621-01-01

We have changed our procedures so that any cash coming into our office goes through the Secretary and the Bookkeeper. Cash is documented on a log by the Secretary. She then fills out a deposit slip for the cash. This is forwarded to the Bookkeeper. The Bookkeeper then enters the cash receipt on the official receipts log as well as in the computer. The log kept by the Secretary will agree with the receipts log as well as entries on the General Ledger.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6621-01-02

We have employed an individual to track, document and maintain our fixed assets. (This is a shared service with several counties in the CSRA.) We have completed the first phase ofthis process, which accounts for all current assets. The service will provide depreciation on these assets as well as additions of any new assets. The steps in phase one are documented in a manual and available for review.

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-6621-01-01

Previously Reported Corrective Action Implemented

SECTION IV FINDINGS AND QUESTIONED COSTS

GLASCOCK COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002

I SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Glascock County Board ofEducation's financial statements was qualified for various departures from generally accepted accounting principles.

2. Reporta6le Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Glascock County Board of Education disclosed financial statement reportable conditions related to the following control categories.

Cash and Cash Equivalents

General Fixed Assets

Of the reportable conditions described above, General Fixed Assets is considered to be a material weakness.

3. Noncompliance Material to the Financial Statements The audit of the Glascock County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements.

4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Glascock County Board ofEducation did not disclose any reportable conditions in internal control over major programs.

5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Glascock County Board of Education's report on compliance with requirements applicable to major programs was unqualified.

6. Audit Findings Required to be Reported by Section .5 IO(a) of 0MB Circular A-133 The Glascock County Board of Education's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-133.

7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 84.010 Elementary and Secondary Education Act - Title I- Grants to Local Educational Agencies 84.318 Elementary and Secondary Education Act - Title ID - Technology Literacy Challenge Fund Grants

8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.

-l -

GLASCOCK COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002
I SUMMARY OF AUDITOR'S RESULTS
9. Low Risk Auditee The Glascock County Board of Education did not qualify as a low risk auditee as defined by Section .530 of 0MB Circular A-133.
IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS Inadequate Internal Control Procedures Repeated From Prior Year Reportable Condition Finding Control Number: FS-6621-02-01
A review of the School District's internal control policies and procedures noted deficiencies in providing for adequate internal control over Cash and Cash Equivalents as noted below:
The bank reconciliation function is not separated from the record keeping, check preparation and deposit functions.
This condition was a result of management's decision to limit the number of administrative staff made responsible for the accounting functions and their failure to institute proper internal controls. The School District should review the accounting procedures in place, design procedures that would enhance segregation of duties and proper internal controls relative to the above control category and implement those procedures to strengthen the internal control over the accounting functions.
EXPENDITURES/LIABILITIES/DISBURSEMENTS Lottery Equipment and Software Not in Use Nonmaterial Noncompliance Finding Control Number: FS-6621-02-02
A review of equipment and software purchased with lottery funds during the year under review revealed the following:
One computer was found in the box; not in operation. One computer software program was found in a storage bin. The program had not been
installed for use at the facility. Two computer software programs could not be located.
-2-

GLASCOCK COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
EXPENDITURES/LIABILITIES/DISBURSEMENTS Lottery Equipment and Software Not in Use Nonmaterial Noncompliance Finding Control Number: FS-6621-02-02
The Georgia Department of Education requires that all software and equipment purchased with lottery funds be installed, in operation and properly identified. This condition occurred because of management's failure to maintain adequate inventory records for the lottery software and equipment purchased. The School District should implement procedures to ensure that all lottery equipment and software is properly accounted for, installed and in operation.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6621-02-03
The Glascock County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for the maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
-3 -