Agricultural Commodity Commission for Peanuts, report on audit of the financial statements for the fiscal year ended June 30, 2001

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS

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AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS
REPORT ON AUDIT OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30. 200 J
Russell W. Hinton State Auditor

,
AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

EXHIBITS

FINANCIAL STATEMENTS

A COMBINED STATEMENT OF ASSETS, LIABILITIES AND FUND EQUITY

ARISING FROM CASH TRANSACTIONS

ALL FUND TYPES AND ACCOUNT GROUPS

STATEMENTS OF CASH RECEIPTS AND DISBURSEMENTS

B

GENERAL FUND

C

ENTERPRISE FUND - SOUTHEASTERN PEANUT FARMER

D STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS

COMPARED TO BUDGET - GENERAL FUND

E NOTES TO THE FINANCIAL STATEMENTS

SUPPLEMENTARY INFORMATION

F STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS FIDUCIARY FUND TYPE - AGENCY FUND

SCHEDULES

1 CASH AND CASH EQUNALENTS 2 INVESTMENTS 3 SCHEDULE OF OTHER INCOME 4 SCHEDULE OF EXPENDITURES/EXPENSES BY OBJECT AND FUNCTION 5 SCHEDULE OF OTHER OPERATING EXPENSES 6 SCHEDULE OF PROMOTION EXPENSES 7 RECONCILIATION OF SALARIES AND TRAVEL 8 RECONCILIATION OF PER DIEM AND FEES

Page

2 4 6 7 8
20
21 22 23 24 26 27 31 32

SECTION II

AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

S

Y SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS - TABLE OF CONTENTS -
SECTIONID CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

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
December 6, 2001

Honorable Roy E. Barnes, Governor Members of the General Assembly of Georgia Members of the Agricultural Commodity Commission for Peanuts
and Honorable Donald E. Koehler, Executive Director
INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying financial statements (Exhibits A through E) ofthe Agricultural Commodity Commission for Peanuts as of and for the year ended June 30, 2001. These financial statements are the responsibility ofthe Commission's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. 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 opinion.
As described in Note 1, these financial statements were prepared on the cash basis, which is a
comprehensive basis ofaccounting other than accounting principles generally accepted in the United States of America.
In our opinion, the financial statements referred to above present fairly, in all material respects, the cash and unencumbered cash balances ofthe Agricultural Commodity Commission for Peanuts as of June 30, 2001, and the revenues it received and expenditures it paid for the year then ended on the basis of accounting described in Note 1.

01ARL-IC

Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplementary information (Exhibit F and Schedules 1 through 8) is presented for purposes ofadditional analysis and is not a required part ofthe financial statements of the Agricultural Commodity Commission for Peanuts. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly presented in all material respects in relation to the financial statements taken as a whole.
Respectfully submitted,

RWH:gp OlARL-IC

R sell W. Hinton State Auditor

,





FINANCIAL STATEMENTS
- 1-

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS COMBINED STATEMENT OF ASSETS, LIABILITIES AND FUND EQUITY ARISING FROM CASH TRANSACTIONS
ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30, 2001

ASSETS Cash and Cash Equivalents
(See Schedule) Investments
(See Schedule) Fixed Assets
Land, Buildings and Equipment Amount to be Provided for Payment of
Accrued Compensated Absences
Total Assets

GOVERNMENTAL FUND TYPE GENERAL

PROPRIETARY FUND TYPE ENTERPRISE

FIDUCIARY FUND TYPE
AGENCY

$

535,910.04 $

700,000.00

1,635.98 $

658.51

$ 1,235,910.04 $

1,635.98 $ ===6~5=8,;,;;;.5=..1

LIABILITIES AND FUND EQUITY
Liabilities Funds Held for Others Compensated Absences
Total Liabilities
Fund Equity Investment in General Fixed Assets Fund Balances Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity



$

1,235,910.04 $

$

1,235,910.04 $

$ 1,235,910.04 $

$

658.51

$

6: :.:5: =;8.: : .5:. .:.,.1

1:.t:,6~3:.::::5.::::.9.::..8 ...:1..r.::,6::=;3::::;5.::::.9~8
1,635.98 $ ====65=8,;,;;;.5=..1

,

The notes to the financial statements are an integral part of this statement.

-2-



EXHIBIT "A"

ACCOUNT GROUPS

GENERAL

GENERAL

FIXED

LONG-TERM

ASSETS

DEBT

TOTALS
(Memorandum OnIYL-)_ _
JUNE 30, 2001 JUNE 30, 2000

$ 538,204.53 $ 996,241.13

$ 354,004.04
- - - - - $ 48,359.34

700,000.00 354,004.04
48,359.34

300,000.00 346,146.65
47,777.17

$ 354,004.04 $ 48,359.34 $ 1,640,567.91 $ 1,690,164.95

$ $ 48,359.34
$ 48,359.34 $

658.51 $
48,359.34

4,004.24 47,777.17

49,017.85 $ _--=5...:..J1,"'-.:78::..;1..:..;.4c.:,..1

$ 354,004.04

$ 354,004.04 $ 346,146.65

$ 354,004.04

1,237,546.02

1,292,236.89

$ 1,591,550.06 $ 1,638,383.54

$ 354,004.04 $ 48,359.34 $ 1,640,567.91 $ 1,690,164.95

-3-

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS GENERAL FUND YEAR ENDED JUNE 30, 2001

EXHIBIT "B"

CASH RECEIPTS
REVENUES
OTHER REVENUES RETAINED Assessments Interest Received Other Income (See Schedule)
Total Cash Receipts
CASH AND CASH EQUIVALENTS/INVESTMENTS - JULY 1

TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000

$ 1,328,746.63 $ 1,394,668.11

93,164.13

85,214.13

121 ,322.58

105,761.10'

$ 1,543,233.34 $ 1.585,643.34

1,279,688.62

1,303,064.41

$ 2,822,921.96 $ 2,888,707.75

DISBURSEMENTS
EXPENDITURES
COST OF OPERATIONS Personal Services Salaries and Wages Employer's Contributions for:
F.I.CA
Retirement Health Insurance
Regular Operating Expenses Motor Vehicle Expenses Supplies and Materials Repairs and Maintenance Utilities Rents (Other than Real Estate) Insurance and Bonding Other Operating Expenses (See Schedule) Publications and Printing

$

318,724.91 $

295,513.16

27,830.36 44,041.06 37,008.23

24,347.56 43,423.94 28,589.82

$

427,604.56 $

391,874.48

$

10,375.57 $

9,376.55

16,779.71

11,427.80

3,075.69

6,039.02

8,156.89

8,470.39

3,133.00

7,765.50

6,425.05

6,301.52

442,915.09

557,578.54

32,403.57

8,523.54

$

523,264.57 $

615,482.86

The notes to the financial statements are an integral part of this statement. -4-

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS GENERAL FUND YEAR ENDED JUNE 30. 2001

EXHIBIT "B"

DISBURSEMENTS EXPENDITURES
COST OF OPERATIONS Travel Motor Vehicle Purchases Equipment Equipment Purchases Computer Charges Software Telecommunications Per Diem, Fees and Contracts Per Diem and Fees Contracts
Total Disbursements CASH AND CASH EQUIVALENTSIINVESTMENTS - JUNE 30

TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000

$

45,376.62 $ _---::4~4,~42::::::4.:.::9::..:.,.1

$.

0.00 $ _ _.:..11:.J.7:'~0~0.:.::.0~0

$

10,638.39 $_---.;2~5~,7:.....:1~8.:.::.3~8

$

1,576.22 $ _ _----:6~9~6.:.::.8:::..6

$

10,602.07 $ _ _~12:J.:7'~2::::l:.4.:.:,.7:::..8

$ 134,213.28 $

96,141.97

433,736.21

410,254.89

$

567,949.49 $ _~50:::.::6:....:,3~9~6.:.::.86~

$ 1,587,011.92 $ 1,609,019.13

1,235,910.04

1,279,688.62

$ 2,822,921.96 $ 2,888,707.75


The notes to the financial statements are an integral part of this statement. -5-

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS ENTERPRISE FUND - SOUTHEASTERN PEANUT FARMER YEAR ENDED JUNE 30, 2001

EXHIBIT "C"

CASH RECEIPTS REVENUES
OTHER REVENUES RETAINED
Advertising Interest Received Sales
Total Cash Receipts
CASH AND CASH EQUIVALENTS - JULY 1
DISBURSEMENTS EXPENSES
COST OF OPERATIONS
Regular Operating Expenses Supplies and Materials Other Operating Expenses (See Schedule) Publications and Printing
Travel Per Diem, Fees and Contracts
Contracts Total Disbursements
CASH AND CASH EQUIVALENTS - JUNE 30

TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000



$

36,103.50 $

25,995.21

237.95

1,319.62

25.00

15.00

$

36,366.45$

27,329.83

12,548.27

53,469.46

$

48,914.72 $ ==8=0;,;,,7;.;;9=9,;;;;.2=.9

$

599.21 $

2,231.48

10,007.43

15,534.46

36,672.10

49,367.98

$

47,278.74 $ _ _6:::.:7~,1.:.::3:.::::3.:.::.9=-2

$

0.00 $ _ _----'9~1'_'_7.:..:.1.::..0

$

0.00 $ _ _---:2::,:0""'0,;;,;:.0.::..0



$

47,278.74 $

68,251.02

1,635.98

12,548.27

$

48,914.72 $ ======8=0,*,7..9.=9;;;;.2=9

The notes to the financial statements are an integral part of this statement.
- 6-

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS COMPARED TO BUDGET - GENERAL FUND YEAR ENDED JUNE 30, 2001

--

--_ . . - - - - _ . _ - ~ ~ -

EXHIBIT nD"

CASH RECEIPTS REVENUES
Other Revenues Retained FUND BALANCE - JULY 1, 2000
DISBURSEMENTS EXPENDITURES
Cost of Operations FUND BALANCE - JUNE 30, 2001

BUDGET

ACTUAL

OVER _(-) UNDER

$ 1,455,000.00 $ 1,543,233.34 $
1,280,631.58 1,279,688.62

88,233.34 -942.96

$ 2,735,631.58 $ 2,822,921.96 $ 87,290.38

$ 1,755,792.82 $ 1,587,011.92 $ -168,780.90

979,838.76 1,235,910.04

256,071.28

$ 2,735,631.58 $ 2,822,921.96 $ 87,290.38

The notes to the financial statements are an integral part of this statement.
- 7-


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

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001

EXHffiIT "E"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The "Georgia Agricultural Commodities Promotion Act" (Ga. L. 1961, p. 301), as amended, was enacted to implement Article VII, Section III, Paragraph II(b) ofthe Constitution of Georgia which provides for the promotion of the production, marketing, sale, use and utilization, processing and improvement ofagricultural products ofthe State. Pursuant to this Act, the Agricultural Commodity Commission for Peanuts (Commission) was established August 1, 1961, and was ratified and confirmed as a public corporation and instrumentality ofthe State ofGeorgia. Statutes governing the operations ofthe Commission are enumerated in the Official Code of Georgia Annotated (OCGA), Title 2, Chapter 8, Article 3.
Membership of the Commission, as set forth in the OCGA Section 2-8-53, consists of five (5) members who are peanut producers within the State of Georgia. The Commission is authorized to accept donations, gifts and other property and to use the same for Commission purposes. Revenue of the Commission is derived primarily from an assessment per ton on Georgia-produced peanuts. The Commission is also empowered to appoint advisory boards, special committees and individuals, including technical and clerical personnel, to advise, aid and assist the Commission in the performance of its duties and to fix the compensation for such services.
The Commission is authorized to exercise supervisory jurisdiction over the administration of the "Georgia Agricultural Commodities Promotion Act, Article 3," applicable to the Agricultural Commodity Commission for Peanuts. It is the duty of the Commission to receive, collect and disburse the funds ofthe Commission. Funds received by the Commission, under provisions ofthe "Georgia Agricultural Commodities Promotion Act, Article 3," are held for the Commission and are not required to be deposited in the State Treasury and appropriated therefrom as other State funds.
The Commission is not included in any other governmental reporting entity because the Commission has decision making authority, the power to designate management, the ability to significantly influence operations and is primarily responsible for its fiscal matters.
FUND ACCOUNTING
The Commission uses funds and account groups 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 government functions or activities.
A fund is a separate accounting entity with a self-balancing set of accounts. An account group, on the other hand, is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect net expendable available financial resources. Funds and account groups presented in the accompanying financial statements are as follows:

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AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001

EXHIBIT "E"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FUND ACCOUNTING
GOVERNMENTAL FUND TYPE
GENERAL FUND - The fund used to account for all activities except those required to be accounted for in some other fund.
PROPRIETARY FUND TYPE
ENTERPRISE FUND - The fund used to account for activities for which the Commission intends that expenses arising as a result of the issuance of a trade magazine are to be financed primarily through proceeds from advertising.
FIDUCIARY FUND TYPE
AGENCY FUND - The fund used to account for assets held for use by other funds, governments, or individuals.
ACCOUNT GROUPS
GENERAL FIXED ASSETS -The account group used by the Commission to account for fixed assets used in governmental fund type and proprietary fund type operations. Fixed assets purchased are recorded as expenditures in the General Fund and expenses in the Enterprise Fund at the time of purchase. All purchased fixed assets are valued at cost or at estimated historical cost if historical cost is not practically determinable. Donated fixed assets are recorded at fair market value on the date donated and disposals are deleted at recorded values. No depreciation has been provided on general fixed assets. This accounting methodology differs from accounting principles generally accepted in the United States of America in that fixed assets utilized in the operations of a Proprietary Fund Type - Enterprise Fund should be recorded as assets of such a fund, rather than in the General Fixed Assets Account Group. To conform to accounting principles generally accepted in the United States of America, the depreciation of such fixed assets should be recorded as an expense of the Enterprise Fund in order to more effectively determine the total cost of providing goods and services to the general public on a continuing basis.
The cost ofnormal maintenance and repairs that do not add to the value ofthe asset or materially extend assets' lives are not included in the General Fixed Assets Account Group. Material improvements adding to the value or useful life of the assets are included in the General Fixed Assets Account Group.

-9-

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001

EXHffiIT "E"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FUND ACCOUNTING
ACCOUNT GROUPS
GENERAL LONG-TERM DEBT - The account group used to report the noncurrent portions of certain governmental long-term liabilities, such as claims,judgments and compensated absences, which will be paid from future resources.
BASIS OF ACCOUNTING
GOVERNMENTAL FUND TYPE AND PROPRIETARY FUND TYPE The Commission maintains its General Fund and Enterprise Fund on the Cash Receipts and Disbursements basis ofaccounting as prescribed or permitted by statutes and regulations ofthe State of Georgia. This basis of accounting is defined as that method of accounting in which certain revenue and the related assets are recognized when received rather than when earned, and certain expenses are recognized when paid rather than when the obligation is incurred. The Cash Receipts and Disbursements basis ofaccounting is a comprehensive basis ofaccounting other than accounting principles generally accepted in the United States of America.
FIDUCIARY FUND TYPE AGENCY FUND
The Agency Fund is maintained on the Cash Receipts and Disbursements basis of accounting as prescribed or permitted by statutes and regulations ofthe State ofGeorgia. This basis ofaccounting, as used by the Agency Fund, is defined as that method of accounting in which the assets and liabilities are increased or decreased based on cash flow. To conform to accounting principles generally accepted in the United States of America, the Agency Fund should be maintained on the modified accrual basis of accounting.
CASH AND CASH EQUIVALENTS
Cash and Cash Equivalents consist of demand deposits with banks and other financial institutions.
INVESTMENTS
Investments are defined as those financial instruments with terms in excess ofthree months from the date ofpurchase and certain other securities held for the production ofrevenue. Investments consist of certificates of deposit and are stated at cost which approximates fair value.
The Commission is authorized to invest in certificates of deposit, repurchase agreements and the State investment pool.
INVENTORIES
No inventories of supplies are reported in these financial statements. Expendable supplies are recorded as expenditures at the time of purchase.
- 10-

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001

EXHffiIT "E"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
COMPENSATED ABSENCES
Compensated absences represent obligations of the Commission relating to employee's rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulating annual and compensatory leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount will not be liquidated with expendable available financial resources.
The liability for compensated absences at year end is reported inthe General Long-Term Debt Account Group for governmental funds.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the Combined Statement ofAssets, Liabilities and Fund Equity Arising from Cash Transactions are captioned "Memorandum Only" because they do not represent consolidated financial information and are presented only to facilitate financial analysis. The columns do not present information that reflects financial position in conformity with accounting principles generally accepted in the United States of America. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
COMPARATIVE DATA
Comparative total data for the prior year have been presented in selected sections of the accompanying financial statements in order to provide an understanding of the changes in the Commission's financial position and operations. Comparative totals have not been included on statements where their inclusion would not provide enhanced understanding of the Commission's financial position and operations or would cause the statements to be unduly complex and difficult to understand.
NOTE 2: BUDGET
A budget for the financial operations of the Commission is approved by the Commission at a selected meeting. The budget is not subject to review or approval by the Legislature ofthe State of Georgia and therefore, is a nonappropriated budget. Budgets are prepared to provide a basis for funding operations and there is no legal prohibition regarding overexpenditure of the aggregate budget.
NOTE 3: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES
Funds of the State of Georgia cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu ofa surety bond, the depository may pledge as collateral anyone or more of the following securities as enumerated in the OCGA Section 50-17-59:
- 11 -

AGRICULTIJRAL COMMODITY COMMISSION FOR PEANUTS NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001

EXHIBIT "E"

NOTE 3: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES
(1) Bonds, bills, certificates of indebtedness, notes, or other direct obligations of the United States or of the State of Georgia.
(2) Bonds, bills, certificates of indebtedness, notes, or other obligations of the counties or municipalities of the State of Georgia.
(3) 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.
(4) Industrial revenue bonds and bonds ofdevelopment authorities created by the laws ofthe State of Georgia.
(5) Bonds, bills, certificates of indebtedness, notes, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest, or debt obligations issued by or securities guaranteed by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Corporation, or the Federal National Mortgage Association.
(6) Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation.
As authorized in the OCGA Section 45-8-11, the Commission has the option ofexempting demand deposits from the collateral requirements.
CATEGORIZATION OF DEPOSITS
For purposes of analysis of custodial credit risk, cash deposits consist of all bank balances which include demand deposits and/or interest bearing accounts. The bank balances as ofJune 30, 2001, are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk.
Category 1 - Amounts covered by depository insurance or collateralized with securities (at market value) held by the Commission or by its agent in the Commission's name.
Category 2 - Amounts collateralized with securities (at market value) held by the pledging financial institution's trust department or agent in the Commission's name.
Category 3 - Amounts collateralized with securities (at market value) held by the pledging financial institution or by its trust department or agent, but not in the Commission's name, and amounts uncollateralized.
- 12-

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT "E"

NOTE 3: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS

CATEGORIZATION OF DEPOSITS

Cash Deposits

Carrying Amount

Bank Balances

Risk Categ""on....,,e",-s_ _-;:--_

I

2

3

$,J ,238,204,53 L1.30B,740,09 $ 5! 3.070,33 $ 3QO.000.00 $ 422.669,79

NOTE 4: CHANGES IN GENERAL FIXED ASSETS

The following is a summary ofchanges in the General Fixed Assets Account Group during the fiscal year:

Balance July 1, 2000
Additions Deductions
Balance June 30, 2001

Land

Buildings Equipment

Total

$ 19,422.82 $ 95,781.61 $ 230,942.22 $ 346,146.65

10,638.39 2,781.00

10,638.39 2,781.00

$ 19,422.8~ $ 95 . 781.61 $ 238.799,61 $ 354.004.04

NOTE 5: GENERAL LONG-TERM DEBT

CHANGES IN GENERAL LONG-TERM DEBT
During the year ended June 30, 2001, the following changes occurred in the compensated absences liability reported in the General Long-Term Debt Account Group:

Balance July 1, 2000
Changes Annual Leave Earned and Utilized (Net) Salaries Salary Related Fringe Benefits
Balance June 30, 2001

$ 47,777.17
540.80 41.37
$ 48,359,.34

NOTE 6: RISK MANAGEMENT

The Department ofAdministrative Services (DOAS) has the responsibility for the State ofGeorgia ofmaking and carrying out decisions that will minimize the adverse effects ofaccidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and

- 13-

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001

EXHffiIT "E"

NOTE 6: RISK MANAGEMENT
automobile liability, fidelity and certain other risks. The Commission is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment.
NOTE?: RETmEMENTPLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Plan Description
The Commission participates in the Employees' Retirement System of Georgia ("ERS"), a singleemployer, defined benefit plan established by the General Assembly of Georgia for the purpose of providing retirement allowances for employees of the State of Georgia.
The benefit structure of ERS is defined by State statute and was significantly modified on July 1, 1982. Unless elected otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July 1, 1982, is an "old plan" member subject to the plan provisions in effect prior to July 1, 1982. All other members are "new plan" members subject to the modified plan provisions.
Under both the old plan and new plan, members become vested after 10 years ofcreditable service. A member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 65. If 10 years of service is completed and age 60 is reached, the member may retire with a reduced benefit. Additionally, there are certain provisions allowing for retirement after 25 years of service regardless of age.
Retirement benefits paid to members are based upon a formula which considers the monthly average ofthe member's highest twenty-four consecutive calendar months of salary, the number ofyears of creditable service, and the member's age at retirement. Postretirement cost-of-living adjustments are also made to member's benefits. The normal retirement pension is payable monthly for life; however, options are available for distribution ofthe member's monthly pension at reduced rates to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS.
In addition, the ERS Board of Trustees created the Supplemental Retirement Benefit Plan (SRBP) effective January 1, 1998. The SRBP was established as a qualified governmental excess benefit plan in accordance with Section 415 ofthe Internal Revenue Code (IRC) as a portion ofERS. The purpose ofSRBP is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC 415.
The ERS issues a financial report each fiscal year which may be obtained through ERS.
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AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 2001


EXHIBIT "E"

NOTE 7: RETIREMENT PLANS

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA

Funding Policy As established by State statute, all full-time employees of the State of Georgia and its political subdivisions, who are not members ofother state retirement systems, are eligible to participate in the ERS. Both employer and employee contributions are established by State statute. The Commission's payroll for the year ended June 30, 2001, for employees covered by ERS was $315,216.57. The Commission's total payroll for all employees was $318,724.91.

Under the old plan, member contributions consist of4% ofannual compensation up to $4,200.00 and 6% of annual compensation in excess of $4,200.00. Ofthese member contributions, the employee pays the first 1.25% and the employer pays the remainder on behalfofthe employee. Under the new plan, member contributions consist solely of 1.25% ofannual compensation paid by employee. The Commission also is required to contribute at a specified percentage of active member payroll determined annually by actuarial valuation. For the year ended June 30, 2001, the ERS employer contribution rate for the Commission amounted to 14.45% of covered payroll and included the amounts contributed on behalf of the employee under the old plan referred to above. Employer contributions are also made on amounts paid for accumulated leave to retiring employees.

Total contributions to the plan made during fiscal year 2001 amounted to $49,478.53, of which $45,538.30 was made by the Commission and $3,940.23 was made by employees. These contributions met the requirements of the plan. There is no net pension obligation for the plan. Employer contributions (annual pension cost) for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Annual Pension Cost (APCt

Percentage ofAPC
Contributed

Net Pension Obligation

2001 2000 1999

$ 45,538.30 $ 42,190.78 $ 42,496.59

100%

N/A

100%

N/A

100%

N/A

"
Actuarial and Trend Information
Actuarial and historical trend information is presented in the ERS June 30, 2001, financial report
which may be obtained through ERS.

NOTE 8: POSTEMPLOYMENT BENEFITS

In addition to the pension benefits described in Note 7, the State ofGeorgia provides postretirement health care benefits through the State Health Benefit Plan to retirees pursuant to OCGA Section 45-
18. An individual eligible for these benefits must have been a full time employee at the time of

- 15 -

"AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001

EXHmIT "E"

NOTE 8: POSTENWLOYMENTBENEFITS
retirement of either the State of Georgia or a county social service agency and must be receiving monthly retirement benefits from either the ERS or a county employees' retirement system. The State Health Benefit Plan (Plan) is a public entity risk pool funded by employee and employer contributions. Employees and retirees subject to the Plan contribute amounts determined by the Department of Community Health for various health insurance plans. The various agencies ofthe State contribute to the health insurance fund based upon amounts recommended by the Department ofCommunity Health and set forth in the State ofGeorgia's Appropriations Act. The plan is funded on a "pay-as-you-go" basis. Expenses of the Plan include provisions for incurred but not reported claims. The portion of employer contributions and expenses attributable to postretirement health care benefits cannot be reasonably estimated.
NOTE 9: LEAVEPOUCrnS
Employees earn ten hours of sick leave each month with a maximum accumulation of ninety days. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination of employment.
Employees earn annual leave ranging from ten to fourteen hours each month depending upon the employees' length of continuous State service with a maximum accumulation of forty five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. See Note 1 - Compensated Absences.
Certain employees who retire with one hundred and twenty days or more offorfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System of Georgia.
NOTE 10: CONTINUED EXISTENCE OF THE COMMISSION
Relative to the Commission established under former law ("Georgia Agricultural Commodities Promotion Act", Georgia Laws 1961, as amended), the OCGA Section 2-8-52 provides that, each three years, balloting shall be conducted in accordance with the OCGA Section 2-8-63 to determine whether the existing commission shall continue to exist and operate under this chapter.
The Commission held a referendum from March 15,2000, to April 15, 2000. Ballots were mailed to 5,219 eligible voters and 1,902 were returned. The results ofthe balloting were as follows:

- 16-

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHffiIT "E"

NOTE 10: CONTINUED EXISTENCE OF THE COMMISSION
In Favor of Continuation ofMarketing Order No. 3 for Peanuts
Against Continuation ofMarketing Order No. 3 for Peanuts

Ballots 1,624 278 1.9Q2

Percent 85.38 14.62
100.00

- 17 -

SUPPLEMENTARY INFORMATION
- 19-

Sales Tax

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS FIDUCIARY FUND TYPE - AGENCY FUND YEAR ENDED JUNE 30, 2001

EXHIBIT "F"

CASH BALANCE JULY 1, 2000

CASH RECEIPTS

CASH DISBURSEMENTS

CASH BALANCE JUNE 30, 2001

$

4,004.24 $ 3,021.83 $

6,367.56 $ ===.;;;,;65~8;,;,;;.5~1



See notes to the financial statements.

- 20-

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS CASH AND CASH EQUIVALENTS JUNE 30, 2001

SCHEDULE "1"

NONINTEREST BEARING ACCOUNT
Bank of America, Tifton, Georgia
INTEREST BEARING ACCOUNTS
Bank of America, Tifton, Georgia
South Georgia Banking Company, Tifton, Georgia

$

530.04

536,038.51 1,635.98
$ 538.204.53



See notes to the financial statements.

- 21 -

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS INVESTMENTS JUNE 30, 2001

,

INVESTMENT TYPE
Certificates of Deposit Citizens Bank, Cairo, Georgia No. 5964
The Citizens Bank of Cochran, Cochran, Georgia
No. 12220 No. 12221
Farmers and Merchants Bank, Dublin, Georgia
No. 80971035677 No. 80971035678 No. 80971035679
Eagle Bank and Trust, Statesboro, Georgia
No. 7172075074

PURCHASE DATE

MATURITY DATE

November 1, 2000

June 29, 2001

December 19, 2000 December 19, 2000

July 18, 2001 August 17, 2001

December 28, 2000 December 28, 2000 December 28, 2000

September 18, 2001 October 19, 2001 November 15, 2001

December 18, 2000

December 18, 2001

SCHEDULE "2"
AMOUNT
$ 100,000.00
100,000.00 100,000.00
100,000.00 100,000.00 100,000.00
100,000.00

$ 700,000.00



See notes to the financial statements.

- 22-

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS SCHEDULE OF OTHER INCOME YEAR ENDED JUNE 30, 2001

SCHEDULE "3"

GENERAL FUND
Reimbursements For Promotion Expense
Sales Promotional Materials

$ 120,496.87 825.71
$ 121,322.58


See notes to the financial statements.

23 -

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS SCHEDULE OF EXPENDITURESfEXPENSES BY OBJECT AND FUNCTION
YEAR ENDED JUNE 30. 2001

OBJECT
GENERAL FUND
COST OF OPERATIONS Personal Services Salaries and Wages Employer's Contributions for:
F.I.CA
Retirement Health Insurance
Regular Operating Expenses Motor Vehides Expenses Supplies and Materials Repairs and Maintenance Utilities Rents (Other than Real Estate) Insurance and Bonding Other Operating Expenses Publications and Printing
Travel

Equipment Equipment Purchases
Computer Charges Software
Telecommunications
Per Diem, Fees and Contracts Per Diem and Fees Contracts
Total Disbursements
ENTERPRISE FUND COST OF OPERATIONS
Regular Operating Expenses Supplies and Materials Other Operating Expenses Publications and Printing
Total Disbursements
See notes to the finandal statements.

PROMOTIONAL

RESEARCH

EDUCATION AND INFORMATION

$

124,098.27 $ 65,880.27 $

9,807.66 18,254.15 13,517.21

5,106.49 7,206.87 9,732.41

$

165,677.29 $ 87,926.04 $

$

$ 370.523.62 $ 5,000.00

$ 370,523.62 $ $ _ _.::;45~,~37~6:.:.::.6=.2

5,000.00 $

49,488.98 3,835.96 7,310.95 5,413.79
~66~,O~4:.::::9::::.6~8
3,862.36
2,958.00 19,177.25
3,798.19
.:29~.7~9~5::::.8~0

$

~78~9:=.2~4

$ $ 235,997.27
$ 235,997.27 $

34,647.85 118,666.66
...!,;15~3:..:,3::...:1.;:.:,4:.:::.5..:..1

$

581,577.53 $ 328,923.31 $ ===-.......=2:;,;;4~9,949.23

24 -

$

599.21

10,007.43

36,672.10

$ ====-......,;;,47.:.1J~27~8,;,;7,';;,4

SCHEDULE "4"

FUNCTION BUILDING AND OFFICE OPERATIONS

ADMINISTRATION

COMMUNICATIONS

TOTAL
EXPENDITURES! EXPENSES

$

22,518.47 $

1,514.83 2,887.11 2,137.92

$

29,058.33 $

$

10,375.57

9,306.00

3,075.69

8,156.89

175.00

6,425.05

17,119.77 $

$

54,633.97 $

41,608.56 $ 6,392.62 6,146.82 4,551.73
58,699.73 $
$
5,513.21 323.78
5,836.99 $

$ _ _..!.1~0,~63~8~.3::::..9

$

9~!~70~8.::::.3~6

$ $ _ _~6,~86~9~.1~4

$

6,869.14 $

$ $
99,565.43 30,000.00 $ 129,565.43 $

$

110,908.19 $

194,102.15 $

15,130.36 $

318,724.91

1,172.80 2,235.16 1,655.17

27,830.36 44,041.06 37,008.23

20,193.49 $ _ _~42:..:7....:,6:.::0~4.~56:::..

.

$

3,611.35

25,581.24 28,281.60

10,375.57 16,779.71 3,075.69 8,156.89 3,133.00 6,425.05 442,915.09 32,403.57

57,474.19 $ _ _~52~3~,2~64::!.:.~57:....

$

45,376.62

$ _ _.....!1~0,~63~8~.3~9

786.98 $ _ _----:1....:,5:..:.7~6.=22=_ 893.71 $ _ _.....!1~0,~60~2::..l:.0::....7

$
..:::42~,~20:.:::3~.14~

134,213.28 433,736.21

42,203.14 $ _ _.::::56~7....:,94=.9:,;:.49:::.

121,551.51 $ 1,587,011.92

$

599.21

10,007.43

36,672.10

$

47,278.74

- 25-

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS SCHEDULE OF OTHER OPERATING EXPENSES YEAR ENDED JUNE 30, 2001

SCHEDULE "5"

GENERAL FUND Advertising Clipping Services Freight, Express and Storage Meeting Expenses Promotion Expenses (See Schedule) Property Appraisal Sponsorship subscriptions, Dues and Registration Fees

$ 3,800.00
988.80 20,137.88
7,161.89 370,618.85
530.00 17,657.45 22,020.22
$ 442,915.09

ENTERPRISE FUND Meeting Expenses Postage Subscriptions, Dues and Registration Fees

$

140.73

9,402.70 464.00

$ 10,007.43

See notes to the financial statements.


- 26-

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS SCHEDULE OF PROMOTION EXPENSES YEAR ENDED JUNE 30, 2001

SCHEDULE "6"

Abraham Baldwin Agricultural College Foundation Other Promotional Items
Alabama Peanut Producers Association Affiliation Dues
American Association of Agriculture Editors Affiliation Dues
American Farm Bureau American Farm Bureau
American Pavilion Company, Incorporated Sunbelt Exposition
American Peanut Council Affiliation Dues
American Peanut Research and Education Society Associational Dues
American Peanut Shellers Association Associational Dues
Aramark Campus Services Youth Support Sponsorship
Ashley's Office World American Farm Bureau
Baell Mercantile Company Sunbelt Exposition
Birdsong Peanuts Sample Boxes
Boy Scouts of America Sample Boxes
Casey's Food Products, Incorporated Sample Boxes
Conagra Grocery Products Company Sample Boxes
Conger LP Gas, Incorporated Agricultural Festivals Sunbelt Exposition
Cottle Flooring American Farm Bureau
Dillon Candy Company Sample Boxes

See notes to the financial statements.

- 27-

$

250.00

100.00

125.00

500.00

2,502.73

44,952.75

50.00

400.00

174.12

398.11

73.54

1,130.14

500.00

8,521.58
,
2,702.96

$

32.10

39.08

71.18

17.11

6,424.88

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS SCHEDULE OF PROMOTION EXPENSES YEAR ENDED JUNE 30, 2001

SCHEDULE "6"

Food Services Test Kitchen

Freeman Decorating Company American Farm Bureau

Funny Farms Clowns and Associates Peanut Circus

General Produce, Incorporated Legislature Relations

Georgia Agribusiness Council Affiliation Dues Legislature Relations

Georgia Association CFSA County Office Employees Agricultural Festivals

Georgia Association of Broadcasters Advertising Associational Dues

Georgia Association of County Agriculture Agents Affiliation Dues

Georgia Building Authority Legislature Relations

Georgia Diabetic Association Affiliation Dues

Georgia Future Farmers of America Foundation Legislature Relations

Georgia 4-H Foundation Youth Support Sponsorship

Georgia National Fair Agricultural Festivals

Georgia Press Association Association Dues

Georgia Spotlight Exhibit Fund Agricultural Festivals

Great Southern Peanuts and Pecans Sample Boxes

GSFSA, Incorporated Agricultural Festivals

J and L Concepts Agricultural Festivals

See notes to the financial statements.

- 28-

$

219.90

127.73

5,499.96

1,043.73

$

125.00

625.00

750.00 400.00

$

210.00

650.00

860.00 5,050.00
275.00

465.00

612.50

400.00

180.00

385.00

1,000.00 6,010.55

850.00

1,319.28

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS SCHEDULE OF PROMOTION EXPENSES YEAR ENDED JUNE 30, 2001

SCHEDULE "6"

John B. Sanfilippo and Son Souvenir Peanuts
Kinney Concepts Advertising Bank Week
Lang Printing Canned Peanuts Reprinting Brochures
March of Dimes National Promotion
Masco Signs Program Development
Market Grocery Company Legislature Relations
MBA Insurance Sunbelt Exposition
Mid-State RV Center Sunbelt Exposition
National Agricultural Marketing Association Affiliation Dues
National Farmers Union Affiliation Dues
National Peanut Buying Points Association Associational Dues
National Peanut Growers Group Affiliation Dues
National Press Club Associational Dues
Naylor Publications Advertising
NewsRadio Advertising
Orange County Convention Center American Farm Bureau
Party Station Other Promotional Items
Peanut Advisory Board National Promotion
See notes to the financial statements.

- 29-

$ 74,130.30

$ 13,758.34 250.95

14,009.29

$

743.65

13,124.53

13,868.18

1,500.00

1,117.88

810.56

60.00

618.46

125.00

450.00

400.00

900.00

499.00

309.50

5,000.00

141.00

40.33

146,143.99

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS SCHEDULE OF PROMOTION EXPENSES YEAR ENDED JUNE 30, 2001

SCHEDULE "6"

Plains Peanut Festival Agricultural Festivals

Ray Lloyd Advertising

Short and Paulk Supply Company Sunbelt Exposition

Southeastern Freight Lines American Farm Bureau

Sunbelt Exposition, Incorporated Sunbelt Exposition

Target Container Sample Boxes

Tifton Sertoma Club Advertising

Ultimate Entertainment Other Promotional Items

United States Senate Restaurants Legislation Relations

Wal-Mart

Agricultural Festivals



General Public Relations

Watkins Motor Lines Sunbelt Exposition

Williston Peanuts, Incorporated Other Promotional Items

Worth County - Sylvester Chamber of Commerce Advertising

WSST - TV Channel 55 Advertising

$

500.00

4,500.00

42.97

144.18

1,465.00

1,483.91

60.00

450.00

3,939.61

$

52.35

18.14

70.49

838.90

1,027.55

790.00

840.00

$ 370,618.85

See notes to the financial statements.

- 30-

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS RECONCILIATION OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 2001

SCHEDULE "7"

Totals per Annual Supplement

Adjustments Evans, Paulk, Underwood, Wilson,

Marcus Erica Joan Alonzo

SALARIES

TRAVEL

$ 319,663.24 $ 45,376.49

-533.34 -999.99 595.00

0.13

$ 318,724.91 $ 45,376.62



See notes to the financial statements.

- 31 -

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS RECONCILIATION OF PER DIEM AND FEES YEAR ENDED JUNE 30, 2001

SCHEDULE "8"

TYPE PAYMENT

Totals per Annual Supplement

Adjustments

Cheney,

Jimmy

English,

Paul F.

Gamble,

Wilbur T.

Georgia Association of County Agriculture Agents

Grimes,

Louie

Morris,

Armond

Rigsby,

Wilton

The Redding Firm

Other Expenses Other Expenses Other Expenses Other Expenses Other Expenses Other Fees Other Expenses Other Expenses

FEE AMOUNT

EXPENSE AMOUNT

TO"FAL

$ 42,155.00 $ 56,521.74 $ 98,676.74

100.00

286.92 289.28 132.09 1,000.00
50.40
30.00 33,647.85

286.92 289.28 132.09 1,000.00
50.40 100.00
30.00 33,647.85

$ 42,255.00 $ 91,958.28 $ 134,213.28

See notes to the financial statements.

- 32-

SECTIONll AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS


AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-936-99-02 FS-936-00-01

Further Action Not Warranted Unresolved - See Corrective Action/Responses

,
CORRECTIVE ACTIONIRESPONSES

CASH AND CASH EQUNALENTS REVENUES/RECEIPTS EXPENDITURESIDISBURSEMENTS Inadequate Separation of Duties Finding Control Number: FS-936-00-01

Due to budget restraints, the Agricultural Commodity Commission for Peanuts is unable to increase the number ofstaffassigned to accounting functions at this time, but will continue to assign duties in order to achieve the greatest separation ofduties possible with existing
staff.

SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS

AGRICULTURAL COMMODITY COMMISSION FOR PEANUTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUNALENTS REVENUES/RECEIPTS EXPENDITURESIDISBURSEMENTS Inadequate Separation of Duties Finding Control Number: FS-936-01-01
An examination of the internal accounting control procedures revealed that the Agricultural Commodity Commission for Peanuts did not provide for adequate separation of duties in the perfonnance of the following accounting functions and related procedures:
(1) General ledger posting was not separated from cash receipt function.
(2) General ledger posting was not separated from check writing function.
These conditions were a result ofmanagement's decision to limit the number ofadministrative staff made responsible for the supervisory review and perfonnance ofaccounting functions. Management should continue to review the accounting procedures in place and design and implement procedures which would enhance segregation of duties associated with the above categories.