FIRST DISTRICT REGIONAL EDUCATIONAL SERVICE AGENCY
BROOKLET, GEORGIA
INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREEDUPON PROCEDURES FOR FISCAL YEAR ENDED JUNE 30, 2013
Georgia Department of Audits and Accounts Greg S. Griffin State Auditor

FIRST DISTRICT REGIONAL EDUCATIONAL SERVICE AGENCY - TABLE OF CONTENTS -
INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES

GREG S. GRIFFIN
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
December 12, 2013

Dr. Whit Myers, Executive Director First District Regional Educational Service Agency
Independent Accountant's Report on Applying Agreed-Upon Procedures
Ladies and Gentlemen:
We have performed the procedures enumerated below, which were agreed to by the Georgia Department of Education, solely to assist you and the Georgia Department of Education in assessing the accuracy of the financial information reported to the Georgia Department of Education for inclusion in the State's Comprehensive Annual Financial Report (CAFR) and Single Audit Report. First District Regional Educational Service Agency's management is responsible for the financial information reported to the Georgia Department of Education. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the users specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.
The procedures and the associated findings are as follows:
1. Review the following balance sheet items reported on the annual financial statement worksheets, as applicable: cash, capital assets, accounts receivable, accounts payable, deferred revenues, lease obligations, and net position. Confirm that these items have adequate supporting documentation and are properly reconciled to the RESA's general ledger.
Net Capital Assets were understated by $15,214.27 on the financial statements and note disclosures presented for review. This was due to recording errors in the capital asset and accumulated depreciation accounts. Additionally, capital assets maintained by the purchasing department with a net value of $39,830.95 were reported as Other Current Assets on the financial statements and were not included in the capital assets note disclosure information. Also, no detailed listing of those capital assets maintained by the purchasing department was provided for review.
One bank account was not recorded on the general ledger, resulting in an understatement of Cash totaling $893.97.
2. Obtain the RESA's worksheets for the Statement of Net Position and Statement of Activities, the Governmental Fund Statements, and the Fiduciary Statements submitted for inclusion in the State's CAFR and Single Audit. Utilizing test scripts, confirm that financial information presented in these worksheets properly supports activity reported in the RESA's accounting records.
We did not note any exceptions as a result of our procedures.

3. Obtain the RESA's worksheets for financial statement note information submitted for inclusion in the State's CAFR and Single Audit. Utilizing notes worksheets and other supporting documentation, confirm that note disclosures related to Cash, Investments, Accounts Receivables, Capital Assets, Long-Term Debt, and Lease Obligations have been properly reported.
Total cash deposits at June 30th were incorrectly reported on the note disclosure information. The reported bank balances totaled $2,129,830.58, however the confirmed cash held at all depositories amounted to $2,142,268.79, resulting in a variance of $12,438.21.
4. Confirm that State Revenue from the Georgia Department of Education has been properly recorded in the RESA's accounting records.
We did not note any exceptions as a result of our procedures.
5. Verify that the listing of salaries and travel reported to the Department of Audits is in accordance with O.C.G.A. 50-6-27 and reconciles to amounts recorded in the RESA's accounting records.
We did not note any exceptions as a result of our procedures.
6. Review the Schedule of Expenditures of Federal Awards. Confirm that the information is properly presented and supported by the RESA's accounting records.
We did not note any exceptions as a result of our procedures.
7. Review the capital asset records to ensure that (1) subsidiary ledgers are appropriately reconciled to the ledgers, (2) capitalization thresholds are being properly followed, and (3) a complete physical equipment inventory is being conducted in accordance with the Georgia Department of Education's Financial Management for Georgia Local Units of Administration (FMGLUA) and that issues noted during the physical inventory are being properly addressed by management.
As described in Item 1 above, a detail listing of capital assets supporting the balance reported on the financial statements was not provided. The RESA does not maintain an approved capital asset policy. Additionally, there was no evidence provided to indicate that a physical count of inventories was performed in accordance with guidance set forth in the FMGLUA.
8. Review bank reconciliations during the year under review to ensure that management is preparing them in accordance with the Georgia Department of Education's Financial Management for Georgia Local Units of Administration (FMGLUA) and that reconciling items are being addressed by management.
The June 30th bank reconciliation for the purchasing account was not correctly reconciled to the June 30th reporting date.

9. Review employee compensation records to ensure the following:
a. all employees reported as the Executive Director and Chief Financial Officer were paid according to approved salary schedules and/or contracts;
b. the highest paid five (5) employees, in addition to those identified in (a), have approved documentation to support the salary amount paid during the fiscal year; and
c. all individual salary increases between the prior and current fiscal years that are greater than 10% are supported with approved documentation of the increase.
We did not note any exceptions as a result of our procedures.
10. Select the ten (10) highest individually significant vendor payments expensed during the fiscal year at each RESA and ensure that the expense was properly recorded on the accounting records, the total amounts paid to the vendor were appropriate, and sufficient supporting documentation was available.
As noted in Item 1 above, a purchase for capitalizable equipment was not properly recorded in the accounting records. As a result, expenditures were overstated and capital assets were understated by $15,738.90. Depreciation expense and accumulated depreciation were also understated by $524.63.
These agreed-upon procedures do not constitute an audit of the financial statements or any part thereof, the objective of which is to express an opinion on the financial statements or a part thereof. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
This report is intended solely for the information and use of the specified users listed above and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully,

GSG:as

Greg S. Griffin State Auditor