GLASGOW — The board of education of the Glasgow Independent Schools District earned a clean slate on their district and school audit for fiscal year ending June 30, 2009.

Cindy Greer, partner in Campbell, Myers and Rutledge, PLLC, Certified Public Accountants, delivered the good news in her report to board members Monday night at the central office.

“This is a clean opinion, the best you can get,” she told the board.

A management discussion analysis written by district finance officer Sue Furlong and superintendent Kathy Goff gave an overview of the district’s finances.

The beginning cash balance was $3.7 million, which consisted of $2.7 million in the General Fund, $802,600 in the Building Fund and $175,900 in Food Service.

The General Fund received $12.3 million in revenue. Of that, $4.5 million was from local sources such as taxes and interest. A total of $7.7 million was from state SEEK (Support Education Excellence in Kentucky) funds and $94,562 was from other funding. This did not include on-behalf payments of $2.5 million made by the state.

Property taxes increased by approximately $150,000 above fiscal year 2008. Motor vehicle taxes decreased by $9,600. There was a decrease in interest of $111,500 due to declining interest rates and a decrease in revenue in lieu of taxes of $21,365. Other General Fund revenues were comparable to prior years.

Food service revenue increased slightly from last year from $1.3 million to $1.4 million.

The largest expense was salaries and employee benefits and was 82.3 percent of all expenditures in General Fund and 77.9 percent of all expenditures in Fund 2. A goal last fiscal year was to reduce the percentage of General Fund salary and benefit expenses to 80 percent. In fiscal 2007-08 that percentage was 89 percent.

Kentucky Department of Education mandated a minimum salary increase in 2008-09 of 1 percent, which the board adopted.

The Capital Outlay Fund received $182,000, which is expended as a portion of bond principal and interest payments. Building Fund expenses were for bond and interest payments only. The ending balance was $1.3 million.

Food Service expenses were also approximately $1.4 million of which 47.7 percent was spent for salaries and 46 percent for food and supplies with the remaining 6.3 percent spent on equipment and repair.

There were no construction expenses during the fiscal year.

The financial situation of the board of education continues to improve with revenue increases in SEEK funds and property taxes, according to the district report.

Greer said the biggest thing she wanted to point out in the analysis was that the largest expense for the district was salaries.

“So you know where most of your money goes,” she said.

Goff pointed out that the board had decreased the total salary amount from the previous year.

“That was a recommendation that you made last year,” board member Elaine Richardson said to Greer.

In the statement of net assets, Greer pointed out a cash flow increase compared to last year and commended board members for their diligence.

“The biggest thing, you had an increase in cash of about $1.3 million. That’s great,” she said. “I know you all have done a lot of thought and maneuvering and everything else to get that cash and in spite of all the tough economic times, you’ve done a very good job.”

District assets increased by $738,000. Bonds decreased by $860,000, according to Greer.

“Your liabilities totally decreased by $975,000, which means your net assets increased by $1.7 million and most of this is cash, which is great,” she said.

In a breakdown of cash, the district had $3.5 million in the General Fund and $1.2 million in Building Fund on June 30. The board also voted earlier in the year to set aside more than $2 million for future construction, primarily for Glasgow High School, according to board chairman Jerry Ream.

“You all have reserved $2.7 million in the capital projects fund and that’s what you’re saying you want to use that for building,” Greer said. “Normally those would have just been up in General Fund undesignated and you have designated that to capital projects.”

The Glasgow district, like so many others across the state has seen revenues shrink during the past year.

“Your income only increased $238,000,” Greer said. “So you all really had a tough year. Of that amount, 26.35 percent is taxes and 72.63 percent is state and federal government money.”

The board received $2.7 million in on-behalf payments, which comes from the state and pays for retirement insurance among other things.

The Food Service Fund had $192,000 in cash at the end of the fiscal year and finished with net income of $15,841. There was also $25,000 worth of depreciation, a non-cash item that could be added in as well, Greer said.

The district has three bond series 1998, 2001 and 2004 with a remaining balance of $8.4 million in principal at the end of June 30. The district’s portion of bond payments will average between $679,000 and $724,000 for the next five years and then will drop to $16,000 or less each year beginning in 2014-15.

“There are no funds of the district that currently have a deficit fund balance. There are no funds that have operations that resulted in a current year deficit of revenues over expenditures,” Greer read from the report. “This is a very good note. Give yourselves a pat on the back,” she told board members.

The district paid off more than $1 million in debt in the fiscal year.

“SEEK instruction is in your debt service. I just wanted to show you did pay out $1.2 million for debt over the year. That’s principal and interest,” Greer said. ”All your building fund and capital outlay are used to meet debt service for departments.”

In individual school funds, Glasgow High School had a balance of $201,000 on receipts of $406,000, mostly cash and checks.

“I always think it’s interesting to see how much cash goes through these schools,” Greer said.

Glasgow Middle School, South Green and Highland elementaries had combined receipts of $235,000.

“Your secretaries do an excellent job. Please pat them on the back. They work hard. There’s a lot of money there. They do a good job,” she said.

Greer found no deficiencies to report in the district’s audit.

“There were no prior audit findings and there are no current audit findings,” she said. “We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. Again, a clean report. In our opinion, Glasgow Independent School District, complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs.”

“This is a very, very good report and it shows in your report that you all have been very diligent in trying to save money,” Greer told the board. “I know you all have construction on your mind and it looks like you’ve worked very hard to get it.”