GLASCOCK COUNTY BOARD OF EDUCATION 
. GIBSON, GEORGIA REPORT ON AUDIT 
. OF THE FINANCIAL STATEMENTS 
FOR THE FISCAL YEAR ENDED JUNE 30, 2004 
STATE OF GEORGIA 
DEPARTMENT OF AUDITS AND ACCOUNTS 
Russell W. Hinton State Auditor 
 
 GLASCOCK COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - 
 
SECTION I 
 
FINANCIAL 
 
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 
 
REQUIRED SUPPLEMENTARY INFORMATION 
 
MANAGEMENT'S DISCUSSION AND ANALYSIS 
 
EXHIBITS 
 
BASIC FINANCIAL STATEMENTS 
 
DISTRICT-WIDE FINANCIAL STATEMENTS 
 
A 
 
STATEMENT OF NET ASSETS 
 
3 
 
B 
 
STATEMENT OF ACTIVITIES 
 
4 
 
FUND FINANCIAL STATEMENTS 
 
C 
 
BALANCE SHEET 
 
GOVERNMENTAL FUNDS 
 
6 
 
D 
 
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET 
 
TO THE STATEMENT OF NET ASSETS 
 
7 
 
E 
 
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES 
 
IN FUND BALANCES 
 
GOVERNMENTAL FUNDS 
 
8 
 
F 
 
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT 
 
OF REVENUES, EXPENDITURES AND CHANGES IN FUND 
 
BALANCES TO THE STATEMENT OF ACTIVITIES 
 
9 
 
G 
 
STATEMENT OF FIDUCIARY NET ASSETS 
 
FIDUCIARY FUNDS 
 
11 
 
H 
 
NOTES TO THE BASIC FINANCIAL STATEMENTS 
 
12 
 
SCHEDULES 
 
REQUIRED SUPPLEMENTARY INFORMATION 
 
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES 
 
IN FUND BALANCES - BUDGET AND ACTUAL 
 
GENERAL FUND 
 
25 
 
 GLASCOCK COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - 
 
SECTION I 
FINANCIAL 
SCHEDULES 
SUPPLEMENTARY INFORMATION 
2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 3 SCHEDULE OF STATE REVENUE 4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 5 ALLOTMENTS AND EXPENDITURES 
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM 
 
Page 
26 27 28 29 
 
SECTION II 
COMPLIANCE AND INTERNAL CONTROL REPORTS 
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 
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133 
 
SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS 
 
 GLASCOCK COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS- 
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS 
SECTION V MANAGEMENT'S RESPONSES SCHEDULE OF MANAGEMENT'S RESPONSES 
 
 SECTION I FINANCIAL 
 
 Russell W. Hinton 
STATE AUDITOR 
(404) 656-2174 
 
DEPARTMENT OF AUDITS AND ACCOUNTS 
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 
March 24, 2005 
 
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 BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 
Ladies and Gentlemen: 
We have audited the accompanying financial statements ofthe governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through H) ofthe Glascock County Board of Education, as of and for the year ended June 30, 2004, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility ofthe Glascock County Board ofEducation's management. Our responsibility is to express opinions on these financial statements based on our audit. 
We conducted our audit in accordance with auditing standards generally accepted in the United States 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 op1mons. 
In 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 ofthe Glascock County Board ofEducation, as ofJune 30, 2004, 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. 
2004ARL-11 
 
 As discussed in Note 2 to the basic financial statements, during fiscal year 2004, the Board consolidated its individual school activity accounts for inclusion in the basic financial statements. This change is in accordance with generally accepted accounting principles. 
As described in Note 2, the Glascock County Board of Education has implemented a new financial reporting model as required by provisions of Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, as of June 30, 2004. 
In accordance with Government Auditing Standards, we have also issued our report dated March 24, 2005, 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 grant agreements and other matters. The purpose ofthat 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 read in conjunction with this report in considering the results of our audit. 
Management's Discussion and Analysis and the Schedule ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on pages i through viii and page 25 respectively, are not a required part ofthe basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods ofmeasurement and presentation ofthe required supplementary information. However, we did not audit the information and express no opinion on it. 
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Glascock County Board of Education's basic financial statements. The accompanying supplementary information which consist 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 ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements, and in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. 
2004ARL-11 
 
 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 of Georgia Annotated section 506-24. 
Respectfully submitted, 
~t<l.~Js. 
Russell W. Hinton State Auditor 
RWH:as 2004ARL-11 
 
 GLASCOCK COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2004 
The discussion and analysis of the Glascock County Board of Education's financial performance provides an overall review of the Board's financial activities for the fiscal year ended June 30, 2004. The intent of this discussion and analysis is to look at the Board'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 Board's financial performance. 
Financial Highlights 
Key financial highlights for fiscal year 2004 are as follows: 
 The Governmental Accounting Standards Board (GASB) issued GASB Statement 34 on June 30, 1999, requiring governments to comply with a new reporting model for financial statements. Based upon total revenues, the Glascock County Board of Education was a Phase Three implementer, and was required to implement GASB Statement 34 beginning in fiscal year 2004. 
 Due to this being the implementation year for GASB Statement 34, many comparisons are not available that will be available for fiscal year 2005. 
 The Board's financial status remained stable during fiscal year 2004. In total, net assets increased $146,394 due to governmental activities since the Board has no business-type activities. 
 Total revenues were $4.64 million, with program specific revenues in the form of charges for services and sales, grants and contributions accounting for $3.37 million and general revenues accounting for $1.27 million. 
 The Board had $4.49 million in expenses related to governmental activities; only $3.37 million of these expenses were offset by program specific charges for services and grants and contributions. General revenues, primarily taxes, of $1.27 million were adequate to provide for these programs. 
 Among major funds, the general fund had $4.53 million in revenues and other financing sources and $4.44 million in expenditures for an increase in general fund balance of $0.09 million. 
Using the Basic Financial Statements 
This annual report consists of a series of financial statements and notes to those statements. These statements are organized so the reader can understand the Glascock County Board of Education as a financial whole, or as an entire operating entity. 
- 1- 
 
 GLASCOCK COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2004 
The Statement ofNet Assets and Statement ofActivities provide information about the activities of the whole Board, presenting an aggregate view of the Board's finances and a longer-term view of those finances. The fund financial statements provide the next level of detail. For governmental funds, these statements tell how services were financed in the short-term as well as what remains for future spending. The fund financial statements also look at the Board's most significant funds with all other nonmajor funds, if any, presented in total in one column. In the case of the Glascock County Board of Education, the general fund is by far the most significant fund. 
Reporting the Board as a Whole 
Statement ofNet Assets and Statement ofActivities 
While these documents contain the large number of funds used by the Board to provide programs and activities, the view of the Board as a whole looks at all financial transactions and determines how we concluded fiscal year 2004. The Statement ofNet Assets and the Statement of Activities provide this information. These statements include all assets and liabilities using the accrual basis of accounting. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received or paid. 
These two statements report the Board's net assets and changes in those assets. This change in net assets is important because it tells the reader whether, for the Board as a whole, the financial position of the Board has improved or diminished. The causes of this change may be the result of many factors, some financial, some not. Reductions or increases in state or local funding, change in property tax base, additional requirements in educational programs, and facility conditions are just a few of the causes for such change. 
In the Statement of Net Assets and the Statement of Activities, the Board has one distinct type of activity: 
 Governmental Activities - All of the Board's programs and services are reported here including instruction, pupil services, improvement of instructional services, educational media services, administrative services, maintenance and operation of plant, student transportation services, school food services, and various others. 
Reporting the Board's Most Significant Funds 
Fund Financial Statements 
Fund financial reports provide detailed information about the Board's major funds. The Board uses many funds to account for a multitude of financial transactions. However, the fund financial statements focus on the Board's most significant funds. The Board's maJor governmental funds are the general fund and the District-wide capital projects fund. 
- 11 - 
 
 GLASCOCK COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2004 
Governmental Funds - Most of the Board's activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end available for future spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the Board's general government operations and the basic services it provides. Governmental fund information helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The relationship between governmental activities and governmental funds is reconciled in the financial statements. Fiduciary Funds - The Board is the trustee, or fiduciary, for assets that belong to others, such as the Public Library, Family Connection and clubs and organizations within the school activity accounts. The Board is responsible for ensuring that the assets reported in these funds are used only for their intended purposes, and used by those to whom the assets belong. The Board excludes these activities from the District-wide financial statements because it cannot use these assets to finance its operations. The Board as a Whole The perspective of the Statement of Net Assets is of the Board as a whole. Table 1 provides a summary of the Board's net assets for fiscal year 2004. Since this is the first year the Board has been required to prepare financial statements following GASB Statement 34, net asset comparisons to fiscal year 2003 are not available. 
- 111 - 
 
 GLASCOCK COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2004 
 
Table 1 Net Assets 
 
Governmental Activities Fiscal Year 2004 
 
Assets Current and Other Assets Capital Assets, Net 
 
$ 1,516,507 2,410,850 
 
Total Assets 
 
$ 3,927,357 
 
Liabilities Current and Other Liabilities 
 
$ 413,801 
 
Net Assets Invested in Capital Assets, Net of Related Debt Restricted Unrestricted 
 
$ 2,410,850 115,364 987,342 
 
Total Net Assets 
 
$ 3,513,556 
 
Table 2 shows the changes in net assets for fiscal year 2004. Since this is the first year the Board has been required to prepare financial statements following GASB 34, revenue and expense comparisons to fiscal year 2003 are not available. The total net assets increased by $146,934. 
 
- iv - 
 
 GLASCOCK COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2004 
 
Table 2 Change in Net Assets 
Revenues Program Revenues: Charges for Services and Sales Operating Grants and Contributions Capital Grants and Contributions 
Total Program Revenues 
General Revenues: Taxes Property Taxes Sales Taxes Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous 
Total General Revenues 
Total Revenues 
Program 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 Food Services 
Total Expenses 
Increase in Net Assets 
 
Governmental Activities Fiscal Year 2004 
$ 146,048 3,178,351 47 479 
$ 3,371,878 
$ 867,476 150,053 
204,387 8,915 
35,935 
$ 1,266,766 
$ 4,638,644 
$ 2,620,151 
217,962 228,088 
58,843 302,068 138,647 
25,242 381,425 204,847 
1,876 68,855 
244,246 
$ 4,492,250 
$ 146!394 
 
- V- 
 
 GLASCOCK COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2004 
 
Governmental Activities 
 
Instruction comprises 58.32 percent of the governmental program expenses. Additionally, among the revenues, operating grants and contributions comprise 94.26 percent of the program revenues and 68.52 percent of total revenues while property and sales taxes comprise an additional 21.93 percent of total revenues. Although program revenues make up the majority of total revenues, the Board remains dependent upon tax revenue for governmental activities. 
 
The Statement of Activities shows the cost of program services and the charges for services and grants offsetting those services. Table 3 shows, for governmental activities, the total cost of services and the net cost of services. That is, it identifies the cost of these services supported by tax revenue and unrestricted State entitlements. Since this is the first year the Board has been required to prepare financial statements following GASB Statement 34, cost of service comparisons to fiscal year 2003 are not available. 
 
Table 3 Governmental Activities 
 
Total Cost of Services Fiscal Year 2004 
 
Net Cost of Services Fiscal Year 2004 
 
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 Food Services 
 
$ 2,620,151 $ 
217,962 228,088 
58,843 302,068 138,647 25,242 381,425 204,847 
1,876 68,855 
244,246 
 
617,558 
84,603 4,165 10,767 73,420 18,116 25,242 236,166 42,205 1,876 22,863 
-16,609 
 
Total Expenses 
 
$ 4i492!250 $ 1!120!372 
 
- Vl - 
 
 GLASCOCK COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2004 
The Board's Funds 
Highlights in Governmental Funds 
Governmental funds include both the general fund and the District-wide capital projects fund. Total revenues in governmental funds were $4.64 million while total expenditures in governmental funds were $4.51 million leaving excess in revenue of $0.13 million over expenditures. When added to the beginning fund balance of $0.98 million, the excess in revenue increases the ending fund balance to $1.11 million. This positive change in fund balance of governmental funds indicates that the Board was able to meet current costs from current revenues. 
Transfers in and out of $45,000 from capital projects fund to general fund were due to repayment of capital project expenditures. 
Highlights in General Fund Budgeting 
The Board's budget is prepared according to Georgia law. The most significant budgeted fund is the General Fund. 
During fiscal year 2004, the Board amended its general fund budget as needed. The Board uses function-based budgeting, which is designed to tightly control total function budgets while providing flexibility for site management. 
Total revenues in the General Fund for fiscal year 2004 were $4.48 million while total expenditures were $4.43 million leaving an excess of revenue over expenditures in the general fund of $0.05 million. A transfer from capital projects to general fund of $0.05 million increased the fund balance additionally. When added to the beginning year fund balance of $0.94 million, the net increase of $0.09 million placed our ending year general fund balance at $1.03 million. This positive change in fund balance once again indicates that the Board was able to meet current costs from current revenues. 
Capital Assets and Debt Administration 
Capital Assets 
At the end of fiscal year 2004, the Board had $2.41 million invested in capital assets. Table 4, shown below, indicates balances as of June 30, 2004. Since this is the first year the Board has been required to prepare financial statements following GASB Statement 34, capital asset comparisons to fiscal year 2003 are not available. 
- vii - 
 
 GLASCOCK COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2004 
 
Table 4 Capital Assets (Net of Depreciation) 
 
Governmental Activities Fiscal Year 2004 
 
Land Buildings and Improvements Equipment 
 
$ 
 
79,058 
 
1,863,106 
 
468,686 
 
Total 
 
$ 2,410,850 
 
The primary increases occurred in Buildings and Improvements. SPLOST has allowed the Board to continue to maintain and improve its facilities. 
 
Debt 
 
The Board has no Long-Term Debt outstanding. 
 
Current Issues 
 
The Glascock County Board of Education has been no exception in being impacted by the decline in funding due to economic setbacks in the state and national economy over the past few years. As of June 30, 2004, the Board has lost approximately $300,000 in austerity reductions of state funding in the last three fiscal years. To offset this reduction in funds, the Board opted not to rollback the millage rate in a recent property reevaluation, which led to an increase in tax revenue. In spite of the economy, the Board has managed to maintain a healthy financial state as a result of fund reserve from previous years and cautious spending in the present. The Board is optimistic that our system will remain stable in future years. 
 
Contacting the Board's Financial Management 
 
This financial report is designed to provide our citizens, taxpayers, investors and creditors with a general overview of the Board's finances and to reflect the Board's accountability for the money it receives. If you have questions about this report or need additional information, contact Mary Griswell, Financial Director at the Glascock County Board of Education, 738 Railroad Avenue, Gibson, GA 30810. 
 
- vm - 
 
 GLASCOCK COUNTY BOARD OF EDUCATION 
 
 GLASCOCK COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30. 2004 
ASSETS 
Cash and Cash Equivalents Investments Accounts Receivable, Net 
Taxes State Government Federal Government Inventories Capital Assets Land Buildings Equipment Less: Accumulated Depreciation 
Total Assets 
LIABILITIES 
Accounts Payable Salaries Payable Deposits and Deferred Revenues 
Total Liabilities 
NET ASSETS 
Invested in Capital Assets, Net of Related Debt Restricted for 
Bus Replacement Continuation of Federal Programs Capital Projects Unrestricted 
Total Net Assets 
Total Liabilities and Net Assets 
 
EXHIBIT"A" 
 
GOVERNMENTAL ACTIVITIES 
 
$ 
 
204,330 
 
995,215 
 
46,235 262,688 
4,054 3,985 
 
79,058 2,065,622 
786,083 -519 913 
 
$===3=,9=2=7'=35=7= 
 
$ 
 
77,038 
 
334,695 
 
2 068 
 
$ 
 
413 801 
 
$ 
 
2,410,850 
 
10,341 29,382 75,641 987 342 
 
$ 
 
3,513,556 
 
$ =====3=!=,9=2=7=,3=57== 
 
The notes to the basic financial statements are an integral part of this statement. -3- 
 
 GLASCOCK COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES 
FOR THE YEAR ENDED JUNE 30. 2004 
 
GOVERNMENTAL ACTIVITIES 
Instruction Support Services 
Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services Food Services 
Total Governmental Activities 
General Revenues Taxes Property Taxes For Maintenance and Operations Railroad Cars Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Intangible Recording Tax Real Estate Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous 
Total General Revenues 
Change in Net Assets 
Net Assets - Beginning of Year 
Net Assets - End of Year 
 
EXPENSES 
 
CHARGES FOR SERVICES 
 
$ 
 
2,620,151 
 
217,962 228,088 
58,843 302,068 138,647 
25,242 381,425 204,847 
1,876 68,855 $ 
 
244 246 
 
$ 
 
4,492,250 $ 
 
45,992 100 056 146 048 
 
The notes to the basic financial statements are an integral part of this statement. -4- 
 
 EXHIBIT"B" 
 
PROGRAM REVENUES 
 
OPERATING 
 
CAPITAL 
 
GRANTS AND 
 
GRANTS AND 
 
CONTRIBUTIONS CONTRIBUTIONS 
 
NET (EXPENSES) REVENUES 
AND CHANGES IN NET ASSETS 
 
$ 
 
1,986,336 $ 
 
133,359 223,923 47,879 228,648 120,531 
 
145,229 133,216 
 
159,230 
 
$ 
 
3 178 351 $ 
 
16,257 $ 
197 
30 29,426 
1 569 47479 $ 
 
-617,558 
-84,603 -4,165 
-10,767 -73,420 -18,116 -25,242 -236,166 -42,205 
-1,876 -22,863 
16,609 
-1,120,372 
 
$ 
 
864,652 
 
2,824 
 
137,420 9,115 3,518 
204,387 8,915 
35 935 
 
$ 
 
1266766 
 
$ 
 
146,394 
 
3 367,162 
 
$ ===3=5..,1..,3.,.5.5..6= 
 
-5- 
 
 GLASCOCK COUNTY BOARD OF EDUCATION BALANCE SHEET 
GOVERNMENTAL FUNDS JUNE 30. 2004 
 
EXHIBIT"C" 
 
ASSETS 
Cash and Cash Equivalents Investments Accounts Receivable, Net 
Taxes State Government Federal Government Inventories 
Total Assets 
LIABILITIES AND FUND BALANCES 
LIABILITIES 
Accounts Payable Salaries Payable Deposits and Deferred Revenue 
Total Liabilities 
FUND BALANCES 
Reserved for: Bus Replacement Continuation of Federal Programs Inventories Capital Projects 
Unreserved Undesignated Reported in: General Fund 
Total Fund Balances 
Total Liabilities and Fund Balances 
 
GENERAL FUND 
 
DISTRICTWIDE 
CAPITAL PROJECTS 
FUND 
 
TOTAL 
 
$ 
 
159,934 $ 
 
994,715 
 
22,019 262,688 
4,054 3 985 
 
44,396 $ 500 
30,745 
 
204,330 995,215 
52,764 262,688 
4,054 3 985 
 
$ 1,447,395 $ 
 
75641 $===1=,5=2~3,=03=6= 
 
$ 
 
77,038 
 
334,695 
 
2 068 
 
$ 
 
413 801 
 
$ 
 
77,038 
 
334,695 
 
2,068 
 
$ 
 
413 801 
 
$ 
 
10,341 
 
25,397 
 
3,985 
 
$ 
 
993 871 $ 1,033,594 $ 
 
$ 75,641 
75,641 $ 
 
10,341 25,397 
3,985 75,641 
993 871 
1 109 235 
 
$ 1,447,395 $ 
 
75641 $===1~,5=2=3=,0=36= 
 
The notes to the basic financial statements are an integral part of this statement. -6- 
 
 GLASCOCK COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET 
TO THE STATEMENT OF NET ASSETS JUNE 30. 2004 
 
EXHIBIT"D" 
 
Total Fund Balances - Governmental Funds (Exhibit "C") 
Amounts reported for Governmental Activities in the Statement of Net Assets are different because: 
Capital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of: 
Land Buildings Equipment Accumulated Depreciation 
Total Capital Assets 
Some of the School District's property tax revenues will be collected after year-end but are not available soon enough to pay for the current period"s expenditures. 
 
$ 
 
1,109,235 
 
$ 
 
79,058 
 
2,065,622 
 
786,083 
 
-519913 
 
2,410,850 
 
-6 529 
 
Net Assets of Governmental Activities (Exhibit "A") 
 
$ =='3,=51=3=,5=56= 
 
The notes to the basic financial statements are an integral part of this statement. -7 - 
 
 GLASCOCK COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES 
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30. 2004 
 
EXHIBIT "E" 
 
REVENUES 
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous 
Total Revenues 
EXPENDITURES 
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation 
Capital Outlay 
Total Expenditures 
Excess of Revenues over (under) Expenditures 
OTHER FINANCING SOURCES (USES) 
Transfers In Transfers Out 
Total Other Financing Sources (Uses) 
Net Change in Fund Balances 
Fund Balances - Beginning 
Fund Balances - Ending 
 
GENERAL FUND 
 
DISTRICTWIDE 
CAPITAL PROJECTS 
FUND 
 
TOTAL 
 
$ 
 
867,000 
 
12,633 $ 
 
2,686,913 
 
725,251 
 
146,048 
 
8,910 
 
35,935 
 
$ 4,482,690 $ 
 
$ 137,420 
18,053 
5 
155,478 $ 
 
867,000 150,053 2,704,966 725,251 146,048 
8,915 35,935 
4,638,168 
 
$ 2,570,007 
217,962 228,088 
58,236 302,068 138,647 
25,242 379,331 $ 209,886 
1,876 68,855 239,407 
 
$ 4,439,605 $ 
 
$ 
 
43 085 $ 
 
$ 
2,000 67,901 69 901 $ 85 577 $ 
 
2,570,007 
217,962 228,088 
58,236 302,068 138,647 
25,242 381,331 209,886 
1,876 68,855 239,407 67,901 
4,509,506 
128,662 
 
$ 
 
45,000 
 
$ 
 
$ 
 
-45,000 
 
$ 
 
45 000 $ 
 
-45,000 $ 
 
$ 
 
88,085 $ 
 
40,577 $ 
 
945,509 
 
35,064 
 
45,000 -45,000 
0 128,662 980,573 
 
$ 1,033,594 $ 
 
75 641 $ =====1,;,;1, =0=9,=23=5= 
 
The notes to the basic financial statements are an integral part of this statement. -8- 
 
 GLASCOCK COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF 
REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30. 2004 
 
EXHIBIT"F" 
 
Total Net Change in Fund Balances - Governmental Funds (Exhibit "E") 
 
Amounts reported for Governmental Activities in the Statement of Activities are different because: 
 
Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are: 
 
Capital Outlay 
 
$ 
 
Depreciation Expense 
 
Excess of Capital Outlay over Depreciation Expense 
 
Because some property taxes will not be collected for several months after the School District's fiscal year ends, they are not considered "available" revenues. 
 
$ 
105,625 -88 369 
 
128,662 
17,256 476 
 
Change in Net Assets of Governmental Activities (Exhibit "B") 
 
$ ====1=46=3=9=4 
 
The notes to the basic financial statements are an integral part of this statement. -9- 
 
 GLASCOCK COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30, 2004 
ASSETS Accounts Receivable, Net 
Other 
LIABILITIES Cash Overdraft Funds Held for Others 
Total Liabilities 
 
EXHIBIT"G" 
 
AGENCY FUNDS 
$ ===65='=41=9= 
 
$ 
 
22,855 
 
42,564 
 
$ ===65='==41::9= 
 
The notes to the basic financial statements are an integral part of this statement. - 11 - 
 
 GLASCOCK COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2004 
 
EXHIBIT "H" 
 
Note 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY 
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 Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity. 
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
BASIS OF PRESENTATION 
The School District's basic financial statements are collectively comprised of the District-wide financial statements, fund financial statements and notes to the basic financial statements of the Glascock County Board of Education. 
District-wide Statements: The Statement ofNet Assets and the Statement ofActivities display information about the financial activities ofthe overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. 
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities. 
 Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support ofthe School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs. 
 Program revenues include (a) charges paid by the recipients ofgoods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. 
Fund Financial 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 ofinternal activities. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column. 
The School District reports the following major governmental funds: 
- 12 - 
 
 GLASCOCK COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2004 
 
EXHIBIT "H" 
 
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 General Fund is the School District's primary operating fund. It accounts for all financial resources of the School District, except those resources required to be accounted for in another fund. 
 District-wide Capital Projects Fund accounts for financial resources including Special Purpose Local Option Sales Tax proceeds and grants from the Georgia Financing and Investment Commission to be used for the acquisition, construction or renovation ofmajor capital facilities. 
The School District reports the following fiduciary fund type: 
 Agency funds account for assets held by the School District as an agent for various funds, governments or individuals. 
BASIS OF ACCOUNTING 
The basis ofaccounting 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. 
The School District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. 
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred. Capital asset acquisitions are reported as expenditures in governmental funds. 
The School District funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues. 
- 13 - 
 
 GLASCOCK COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2004 
 
EXHIBIT"H" 
 
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 
RESTATEMENT OF PRIOR YEAR FUND BALANCE - GENERAL FUND 
 
In prior years, the financial activities of the School District's School Food Services Fund were reported as Special Revenue Funds. This fund had a fund balance of $9,503 at July 1, 2003. For fiscal year 2004, this fund has been reported as part ofthe General Fund. In addition, governmental fund activity from the various school activity accounts, which were not reported in the prior year's financial statements, have been reported within the General Fund for fiscal year ended June 30, 2004. The governmental fund activity ofthe various school activity accounts had a fund balance of $26,372 at July 1, 2003. This change is in accordance with generally accepted accounting principles. 
 
General Fund Balance July 1, 2003 
 
$ 909,634 
 
Add Funds Consolidated with General Fund: School Food Services Fund School Activity Account - Governmental Activity 
 
9,503 26,372 
 
General Fund Balance July 1, 2003 (Restated) CHANGES IN ACCOUNTING PRINCIPLES 
 
$=====9==45-,5==0==9 
 
The Glascock County Board of Education has implemented a new financial reporting model as required by provisions of Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, as of June 30, 2004. 
 
The provisions of GASB Statement No. 34 require the inclusion of a Statement ofNet Assets. The elements comprising Net Assets - Beginning include the following: 
 
General Fund (Restated) July 1, 2003 Capital Projects Fund 
 
$ 945,509 35,064 
 
Governmental Funds (Restated) July 1, 2003 Capital Assets Accumulated Depreciation Property Tax Revenue Timing Differences 
 
$ 980,573 2,825,138 -431,544 -7 005 
 
Net Assets Beginning (See Exhibit "B") 
 
$ 3,367,162 
 
- 14 - 
 
 GLASCOCK COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2004 
 
EXHIBIT "H" 
 
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
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 solvent banks or insured Federal savings and loan associations. 
INVESTMENTS 
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following: 
(1) Obligations issued by the State of Georgia or by other states, 
(2) Obligations issued by the United States government, 
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency, 
(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 of Georgia, Office of Treasury and Fiscal Services, 
(7) Repurchase agreements, and 
(8) Obligations of other political subdivisions of the State of Georgia. 
 
- 15 - 
 
 GLASCOCK COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2004 
 
EXHIBIT "H" 
 
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 
RECEIVABLES 
 
Receivables consist of amounts due from property and sales taxes, grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. 
 
PROPERTY TAXES 
 
The Glascock County Board of Commissioners fixed the property tax levy for the 2003 tax digest year (calendar year) on September 17, 2003 (levy date). Taxes were due on December 20, 2003 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2003 tax digest are reported as revenue in the governmental funds for fiscal year 2004. 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, at the fund reporting level, during the fiscal year ended June 30, 2004, for maintenance and operations amounted to $864,652. 
 
The tax millage rate levied for the 2003 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, at the fund reporting level, during the year amounted to $137,420 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 On the basic financial statements, inventories of donated food commodities used in the preparation ofmeals 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. 
 
- 16 - 
 
 GLASCOCK COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2004 
 
EXHIBIT"H" 
 
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 
CAPITAL ASSETS 
 
Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time of purchase (including ancillary charges). On the District-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method. The School District does not capitalize book collections or works of art. 
 
Capitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows: 
 
Capitalization Policy 
 
Estimated Useful Life 
 
Land Buildings and Improvements Equipment 
 
All 
 
NIA 
 
All 
 
20 to 90 years 
 
$ 
 
5,000 5 to 16 years 
 
Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives. 
 
Note 3: 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 ofmoney which has not been secured by surety bond, by guarantee of insurance, 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. If a 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: 
 
- 17 - 
 
 GLASCOCK COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2004 
 
EXHIBIT"H" 
 
Note 3: DEPOSITS AND INVESTMENTS 
(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 State of Georgia, 
(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, 2004, the bank balances were $511,429. The amounts of the 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, 2004, as follows: 
 
- 18 - 
 
 GLASCOCK COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2004 
 
EXHIBIT"H" 
 
Note 3: DEPOSITS AND INVESTMENTS 
 
Risk Category 
 
Bank Balance 
 
1 
 
$ 100,000 
 
2 
 
411,429 
 
3 
 
0 
 
Total 
 
$==5==1=='1,==42==9 
 
CATEGORIZATION OF INVESTMENTS At June 30, 2004, the carrying value ofthe School District's total investments was $995,215 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 of Georgia, Office of Treasury and Fiscal Services which are not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy ofthe State of Georgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description of the 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 of the Investment Company Act of 1940. 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 daily and reported to the rating agency weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed at the pool's share price, $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost. 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, 2004, was 24 days. The average investment duration for Fund 6 on June 30, 2004, was 0.22 years. 
 
- 19 - 
 
 GLASCOCK COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2004 
 
EXHIBIT"H" 
 
Note 4: NON-MONETARY TRANSACTIONS 
 
The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 2 - Inventories 
 
Note 5: CAPITAL ASSETS 
 
The following is a summary of changes in the Capital Assets during the fiscal year: 
 
Balances July 1, 2003 (Restated) 
 
Increases 
 
Balances Decreases June 30, 2004 
 
Governmental Activities Capital Assets, Not Being Depreciated: 
Land Construction in Progress 
 
$ 
 
79,058 $ 
 
392,992 
 
Total Capital Assets Not Being Depreciated $ 472,050 $ 
 
Capital Assets Being Depreciated Buildings and Improvements Equipment 
 
$ 1,621,416 $ 731,672 
 
Less Accumulated Depreciation for: Buildings and Improvements Equipment 
 
170,960 260,584 
 
Total Capital Assets, Being Depreciated, Net $ 1,921,544 $ 
 
Governmental Activity Capital Assets - Net $ 2,393,594 $ 
 
0 $ 
0 $ 
444,206 $ 54,411 
31,556 56,813 410,248 $ 410,248 $ 
 
$ 392,992 
392,992 $ 
 
79,058 0 
79 058 
 
0 $ 2,065,622 786,083 
 
202,516 317 397 
0 $ 2,331,792 
392,992 $ 2,410,850 
 
Current year depreciation expense by function is as follows: 
 
Instruction Support Services 
Educational Media Services Maintenance and Operation of Plant Student Transportation Services Food Services 
 
$ 
 
44,732 
 
$ 
 
541 
 
84 
 
38,695 
 
39,320 4 317 
 
Note 6: RESTRICTED ASSETS 
 
$====88=,3~6=9 
 
Special Purpose Local Option Sales Tax (SPLOST) is reported as restricted assets in the Statement ofNet Assets because its use is limited by applicable statutory provisions. Restricted assets at June 30, 2004, were as follows: 
 
- 20 - 
 
 GLASCOCK COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2004 
 
EXHIBIT "H" 
 
Note 6: RESTRICTED ASSETS 
 
District-wide Capital Projects SPLOST 
 
Restricted Cash and Cash Equivalents: Capital Acquisitions 
Restricted Investments: Capital Acquisitions 
 
$ 
 
44,396 
 
$ 
 
500 
 
Note 7: INTERFUND TRANSFERS 
 
Interfund transfers for the year ended June 30, 2004, consisted of the following: 
 
Transfer to 
 
Transfers From District-wide 
Capital Projects 
 
General Fund Transfers are used for the repayment of loans. 
 
$====45=2a,o=o==o 
 
Note 8: RISK MANAGEMENT 
 
The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation. 
 
The School District has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions 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. The School District has not experienced any losses related to this risk in the past three years. 
 
The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the 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. 
 
- 21 - 
 
 GLASCOCK COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2004 
 
EXHIBIT "H" 
 
Note 8: RISK MANAGEMENT 
 
The School District has purchased surety bonds to provide additional insurance coverage as follows: 
 
Position Covered 
 
Amount 
 
Superintendent Principal Bookkeeper 
 
$ 
 
25,000 
 
$ 
 
5,000 
 
$ 
 
10,000 
 
Note 9: ON-BEHALF PAYMENTS 
 
The School District has recognized revenues and costs in the amount of$50,299 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies. 
 
Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $49,690 
 
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 $609 
 
Note 10: SIGNIFICANT CONTINGENT LIABILITIES 
 
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any costs which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position. 
 
Note 11: RETIREMENT PLANS 
 
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) 
 
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems 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. 
 
- 22 - 
 
 GLASCOCK COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS 
JUNE 30, 2004 
 
EXHIBIT"H" 
 
Note 11: RETIREMENT PLANS 
 
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 
 
2004 2003 2002 
 
100% 100% 100% 
 
$ 227,621 $ 231,535 $ 205,755 
 
- 23 - 
 
 GLASCOCK COUNTY BOARD OF EDUCATION GENERAL FUND 
SCHEDULE OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL 
YEAR ENDED JUNE 30, 2004 
 
SCHEDULE "1" 
 
REVENUES 
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous 
Total Revenues 
EXPENDITURES 
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operations Food Services Operation 
Total Expenditures 
Excess of Revenues over (under) Expenditures 
OTHER FINANCING SOURCES 
Other Sources 
Net Change in Fund Balances 
Fund Balances - Beginning 
Inventory - Net Change in Period 
 
NONAPPROPRIATED BUDGETS 
 
ORIGINAL (1) 
 
FINAL (1) 
 
ACTUAL AMOUNTS 
 
$ 
 
772,504 $ 
 
772,504 $ 
 
867,000 
 
27,075 
 
62,075 
 
12,633 
 
2,652,442 
 
2,712,950 
 
2,686,913 
 
850,108 
 
911,493 
 
725,251 
 
91,234 
 
91,334 
 
146,048 
 
12,000 
 
12,000 
 
8,910 
 
35 935 
 
$ 
 
4,405,363 $ 
 
4,562,356 $ 
 
4482 690 
 
$ 
 
2,555,430 $ 
 
2,618,692 $ 
 
2,570,007 
 
359,049 223,758 86,773 309,263 128,042 
64,000 344,100 171,136 
24,756 
329,229 
 
440,301 254,615 
88,772 309,263 128,042 64,000 344,100 171,676 
24,756 100 
329,229 
 
217,962 228,088 
58,236 302,068 138,647 25,242 379,331 209,886 
1,876 68,855 
239,407 
 
$ 
 
4,595,536 $ 
 
4 773 546 $ 
 
4 439 605 
 
$ 
 
-190,173 $ 
 
-211,190 $ 
 
43,085 
 
150 000 
 
150 800 
 
$ 
 
-40,173 $ 
 
-60,390 $ 
 
1,024,827 
 
1,024,827 
 
305 
 
305 
 
45,000 88,085 945,509 
 
Fund Balances - Ending 
 
$ 
 
984 959 $ 
 
964 742 $===1=1=0=3='3=59=4= 
 
Notes to the Schedule of Revenues. Expenditures and Changes in Fund Balances Budget and Actual 
(1) Original and Final Budget amounts do not include budgeted revenues or expenditures of the various principal accounts. 
The 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. 
 
See notes to the basic financial statements. 
 
- 25- 
 
 GLASCOCK COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 
YEAR ENDED JUNE 30 2004 
 
SCHEDULE "2" 
 
FUNDING AGENCY PROGRAM/GRANT 
Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program 
Total Child Nutrition Cluster 
Other Programs Pass-Through From Georgia Department of Education Food Donation (1) 
Total U. S. Department of Agriculture 
Education, U.S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Preschool Grants 
Total Special Education Cluster 
Other Programs Direct Rural Education Pass-Through From Georgia Department of Education Comprehensive School Reform Demonstration Enhancing Education Through Technology Program Improving Teacher Quality State Grants Reading Excellence - Local Reading Improvement Safe and Drug-Free Schools and Communities Title I Grants to Local Educational Agencies State Grants for Innovative Programs Vocational Education - Basic Grants to States 
Total U. S. Department of Education 
 
CFDA NUMBER 
 
PASSTHROUGH 
ENTITY ID 
NUMBER 
 
EXPENDITURES IN PERIOD 
 
10.553 * 10.555 
 
N/A 
 
(2) 
 
N/A 
 
$ _ _ _~2~1~1~6~62~ 
 
$ 
 
211,662 
 
10.550 
 
N/A 
 
12 283 
 
84.027 84.173 
 
N/A $ N/A 
$ 
 
85,036 7 370 
92,406 
 
84.358 
84.332 84.318 
. 84.367 84.338 84.186 84.010 84.298 84.048 
 
N/A N/A N/A NIA N/A N/A N/A N/A 
$ 
 
2,449 
52,100 2,355 
33,460 274,258 
2,925 107,857 
2,942 10 731 
581 483 
 
Total Federal Financial Assistance 
N/A = Not Available 
 
$====80=5=4=2=8 
 
Notes to the Schedule of Expenditures of Federal Awards 
 
(1) The amount shown for the Food Donation Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the School District during the current fiscal year. 
(2) Expenditures for the funds earned on the School Breakfast Program ($32,847) were not maintained separately and are included in the 2004 National School Lunch Program. 
 
Major Programs are identified by an asterisk (*) in front of the CFDA number. 
 
The School District did not provide Federal Assistance to any Subrecipient. 
 
The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Glascock 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. 
 
See notes to the basic financial statements. 
 
- 26 - 
 
 GLASCOCK COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 2004 
 
SCHEDULE "3" 
 
AGENCY/FUNDING 
GRANTS Bright From the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program 
Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category Ill Category IV CategoryV Gifted Student - Category VI Remedial Education Program Alternative Education Program Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Categorical Grants Pupil Transportation Regular Bus Replacement Sparsity Nursing Services Principal Supplements Vocational Supervisors Education Equalization Funding Grant Food Services Vocational Education Austerity Reduction Other State Programs 4-8 Statewide After School Program K-3 Statewide Reading Program Apprenticeship Program Health Insurance Mentor Teachers Preschool Handicapped Program Lottery Program Student Information System 
Georgia State Financing and Investment Commission Reimbursement on Construction Projects 
Office of Treasury and Fiscal Services Public School Employees Retirement 
 
GOVERNMENTAL FUND TYPES 
 
CAPITAL 
 
GENERAL 
 
PROJECTS 
 
FUND 
 
FUND 
 
TOTAL 
 
$ 
 
120,834 
 
$ 
 
120,834 
 
183,330 5,498 
324,479 -2,025 
238,453 -698 
229,977 187,493 
95,785 
12,243 48,823 180,710 10,032 49,282 45,446 
-976 20,480 47,879 14,528 
9,823 
227,985 107,566 145,229 
116,887 29,426 11,700 29,769 2,075 9,008 
154,088 15,462 5,913 
-117,215 
12,000 12,508 
1,900 49,690 
1,009 24,559 
25,349 
$ 
609 
 
18,053 
 
183,330 5,498 
324,479 -2,025 
238,453 -698 
229,977 187,493 
95,785 
12,243 48,823 180,710 10,032 49,282 45,446 
-976 20,480 47,879 14,528 
9,823 
227,985 107,566 145,229 
116,887 29,426 11,700 29,769 2,075 9,008 154,088 15,462 5,913 
-117,215 
12,000 12,508 
1,900 49,690 
1,009 24,559 
25,349 
18,053 
609 
 
See notes to the basic financial statements. 
 
$ 
 
2686913 $ 
 
18 053 $ 
 
2 704 966 
 
-27- 
 
 GLASCOCK COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 
YEAR ENDED JUNE 30. 2004 
 
SCHEDULE "4" 
 
PROJECT 
Construction of additional classrooms, instructional and support space such as, but not limited to, an auditorium and/or gymnasium, recreational fields and grounds, and to provide furnishings, equipment and fixtures for such areas at Glascock County Consolidated School, remodeling and renovation of existing classrooms, recreational fields and grounds at Glascock County Consolidated School 
 
ORIGINAL ESTIMATED 
COST (1) 
 
CURRENT ESTIMATED COSTS (2) 
 
AMOUNT EXPENDED IN CURRENT 
YEAR (3) 
 
AMOUNT EXPENDED 
IN PRIOR YEARS (3) 
 
PROJECT STATUS 
 
$ 1,000,000 $ 1,000,000 $ 
 
69 901 $ 
 
561,979 Ongoing 
 
(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. 
(2) The School District's current estimate of total cost for the project. 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 project. Amounts expended for this project may include sales tax proceeds, state, local property taxes and/or other funds over the life of the project. 
 
See notes to the basic financial statements. 
 
- 28 - 
 
 GLASCOCK COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM /QBE) 
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30. 2004 
 
SCHEDULE "5" 
 
DESCRIPTION 
 
ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION {1) {2) 
 
ELIGIBLE QBE PROGRAM COSTS 
 
SALARIES 
 
OPERATIONS 
 
TOTAL 
 
Direct 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 II 
 
Category Ill 
 
CategoryV 
 
Gifted Student - Category VI 
 
Alternative Education Program 
 
201,138 $ 5,391 
364,048 4,868 
260,422 
264,967 210,557 112,400 350,496 
55,361 23 375 
 
133,392 $ 14,506 
404,084 34,013 
273,711 
23,661 351,633 394,341 
85,108 
99,395 106,878 52,523 82,509 
30664 
 
7,704 $ 936 
12,732 3,796 1,106 
1,529 4,912 6,347 6,230 
7,377 6,192 
7,189 465 
 
141,096 15,442 
416,816 37,809 
274,817 
25,190 356,545 400,688 
91,338 
106,772 113,070 52,523 89,698 
31129 
 
TOTAL DIRECT INSTRUCTIONAL PROGRAMS 
 
$ 
 
1,853,023 $ 2,086,418 $ 
 
66,515 $ 
 
2,152,933 
 
Media Center Program Staff and Professional Development 
 
53,874 11 187 
 
59,520 
 
4,438 7 283 
 
63,958 7 283 
 
TOTAL QBE FORMULA FUNDS 
 
$ 
 
1 918,084 $ 2,145,938 $ 
 
78,236 $ ===i2,=22=4=,1=7=4 
 
(1) Comprised of State Funds plus Local Five Mill Share. (2) Allotments do not include the impact of the State budget austerity reduction. 
 
See notes to the basic financial statements. 
 
- 29 - 
 
 SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS 
 
 Russell W. Hinton 
STATE AUDITOR 
(404) 656-2174 
 
DEPARTMENT OF AUDITS AND ACCOUNTS 
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 
March 24, 2005 
 
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 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 
Ladies and Gentlemen: 
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Glascock County Board ofEducation as ofand for the year ended June 30, 2004, which collectively comprise Glascock County Board of Education's basic financial statements and have issued our report thereon dated March 24, 2005. 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 of the United States. 
Internal Control Over Financial Reporting 
In planning and performing our audit, we considered Glascock County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide an opinion on the internal 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-6621-04-01 and FS-6621-04-02. 
2004YB-30 
 
 A material weakness is a reportable condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud 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, we believe none of the reportable conditions described above is a material weakness. 
Compliance and Other Matters 
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 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. 
This report is intended solely for the information and use of the management and members of the Glascock County Board of Education and is not intended to be and should not be used by anyone other than these specified parties. 
Respectfully submitted, 
~~~ sell W. Hinton State Auditor 
RWH:as 2004YB-30 
 
 Russell W. Hinton 
STATE AUDITOR 
(404) 656-2174 
 
DEPARTMENT OF AUDITS AND ACCOUNTS 
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 
March 24, 2005 
 
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 CIRCULAR A-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 US. 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, 2004. 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 ofthe 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. We 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. 
2004SA-35 
 
 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, 2004. 
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. 
We noted a certain matter involving the internal control over compliance and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over compliance that, in our judgment, could adversely affect Glascock County Board of Education's ability to administer a major Federal program in accordance with applicable requirements oflaws, regulations, contracts and grants. A reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FA-6621-04-01. 
A material weakness is a reportable condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level ofrisk that noncompliance with the applicable requirements of laws, regulations, contracts and grants caused by error or fraud 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. Our consideration ofthe internal control over compliance 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, the reportable condition noted above is considered 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:as 2004SA-35 
 
State Auditor 
 
 SECTION III 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, 2004 
 
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS 
 
FINDING CONTROL NUMBER AND STATUS 
 
FS-6621-02-01 FS-6621-03-01 FS-6621-03-02 
 
Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Further Action Not Warranted 
 
 SECTION IV FINDINGS AND QUESTIONED COSTS 
 
 GLASCOCK COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS 
YEAR ENDED JUNE 30, 2004 
 
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 unqualified. 
 
2. Reportable 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 Revenues/Receivables/Receipts 
 
Expenditures/Liabilities/Disbursements 
 
None ofthe reportable conditions described above are considered to be material weaknesses. 
 
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 of Education disclosed a reportable condition in internal control over major programs for the following compliance requirement. 
 
Allowable Costs/Cost Principles 
 
The reportable condition described above is considered to be a material weakness. 
 
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 .510(a) of 0MB Circular A-133 The Glascock County Board of Education's audit disclosed an audit finding required to be reported by section .510(a) ofOMB Circular A-133. This audit finding is included in section IV of this report. 
 
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food Services - School Breakfast Program 10.555 Food Services - National School Lunch Program 84.338 Reading Excellence - Local Reading Improvement 
 
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000. 
 
- 1- 
 
 GLASCOCK COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS 
YEAR ENDED JUNE 30, 2004 
I SUMMARY OF AUDITOR'S RESULTS 
9. Low Risk Auditee The Glascock County Board ofEducation did not qualify as a low risk auditee as defined by Section .530 of 0MB Circular A-133. 
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS 
CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Internal Control Procedures Reportable Condition Finding Control Number: FS-6621-04-01 
Our examination of the school activity accounts (Principal's Accounts) disclosed weaknesses in internal control as discussed below: 
Cash and Cash Equivalents  The bank reconciliation function is not separated from the record keeping and voucher payment functions.  No administrative review of bank reconciliations was performed to determine that bank reconciliations were correct and all required adjustments had been made. 
Revenues/Receivables/Receipts  The cash receipt function is not separated from deposit preparation and record keeping functions.  A test of twenty-five receipts disclosed that there was no documentation to determine if receipts were written for the correct amount, deposits were made in a timely manner, or if receipts were posted to the appropriate activity. 
Expenditures/Liabilities/Disbursements  The claims processing function is not separated from record keeping and processing of signed checks.  A test oftwenty-five disbursements disclosed that twenty-three expenditures did not include prior approval of purchases, fourteen vouchers did not contain adequate supporting documentation such as invoices or receiving reports, and five expenditures did not indicate the proper fund or function. 
These deficiencies were a result ofmanagement's decision to limit the number of administrative staff made responsible, at the various principals' account sites, for the accounting functions. Management should implement additional procedures to ensure that the key accounting functions of custody, record keeping and authorization are segregated. Additionally, controls should be established to ensure that adequate documentation is maintained for school activity account transactions. 
-2- 
 
 GLASCOCK COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS 
YEAR ENDED JUNE 30, 2004 
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS 
EXPENDITURES/LIABILITIES/DISBURSEMENTS Accounting/Internal Control Deficiencies Reportable Condition Finding Control Number: FS-6621-04-02 
For the year under review, a test of thirty-three operating expenditure vouchers revealed the following deficiencies: 
 Eighteen vouchers did not include purchase orders.  Thirteen vouchers were not approved.  Four vouchers did not include an indication ofreceipt of goods. 
These conditions were the result ofmanagement's failure to implement appropriate internal controls to ensure that operating expenditures are properly documented, processed and approved before disbursement offunds. The School District should implement policies and procedures to ensure that expenditures are approved and properly documented. 
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 
ALLOWABLE COSTS/COST PRINCIPLES Inadequate Internal Control Procedures Reportable Condition - Material Weakness U.S. Department of Agriculture Through Georgia Department of Education Finding Control Number: FA-6621-04-01 
A review of the School District's policies and procedures noted deficiencies in providing for adequate internal control over the Food Services - School Breakfast Program (CFDA 10.553) and the Food Services - National School Lunch Program (CFDA 10.555). Tests of controls over expenditures revealed that the School District official responsible for approving costs of these programs did not properly approve expenditures as required by the Office of Management and Budget Circular A-87 and A-133 Compliance Supplement (See Finding Control Number FS-662104-02). This condition was a result ofmanagement's failure to implement adequate internal controls for monitoring purchases for the programs listed above. The School District should review the control procedures in place, design procedures which would enhance administrative review of Federal expenditures for these programs and implement these procedures to strengthen the internal control over these Federal programs. 
-3 - 
 
 SECTIONV MANAGEMENT'S RESPONSES 
 
 GLASCOCK COUNTY BOARD OF EDUCATION SCHEDULE OF MANAGEMENT'S RESPONSES 
YEAR ENDED JUNE 30, 2004 
Finding Control Number: FS-6621-04-01 
The system bookkeeper, the school secretary, and the principal met to review internal control weaknesses in regards to all school activity accounts. The bookkeeper made recommendations regarding changes in the areas ofcash, receipts, and disbursements to align accounting procedures at the school level with the procedures currently implemented at the system level, and to be in compliance with generally acceptable accounting principles. The principal and school secretary immediately began implementing the recommended changes. 
Finding Control Number: FS-6621-04-02 
The school nutrition bookkeeper and the cafeteria manager met to review the internal control issues regarding the cafeteria management. Procedures have been amended to require an approved signature prior to all purchases. Additionally, the receipt of goods is signed by an authorized cafeteria employee, and the receipts are forwarded to the school nutrition bookkeeper. 
Finding Control Number: FA-6621-04-01 
In response to the internal control issues ofthe food service program, an approved signature is now required prior to any purchase, providing management the opportunity to closely review all cafeteria expenditures. 
Contact Person: Mary Griswell, Financial Officer Phone: (706) 598-2291 Fax Number: (706) 598-2611 E-mail Address: mgriswell@glascock.k12.ga.us