Arooo t< I c~e8 C6 , \em-2tx1) STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS oo 0 0 00 0 00000 1776 I CHATTOOGA COUNTY LIBRARY SUMMERVILLE, GEORGIA REPORT ON AUDIT OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2000 Russell W. Hinton State Auditor CHATIOOGA COUNTY LffiRARY -TABLEOFCONTENTS- .;' Page SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION EXHffiITS GENERAL PURPOSE FINANCIAL STATEMENTS COMBINED STATEMENTS - OVERVIEW A COMBINED BALANCE SHEET ALL FUND TYPES 2 B COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES 3 C COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS 4 D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 5 ADDITIONAL FINANCIAL INFORMATION SCHEDULES SCHEDULE OF REVENUE 1 STATE 10 2 FEDERAL 11 .3 LOCAL 12 4 SCHEDULE OF SALARIES AND TRAVEL 13 SECTIONll FINDINGS AND QUESTIONED COSTS SCHEDULE OF FTh.TDINGS AND QUESTIONED COSTS SECTION I FINANCIAL RUSSELL W. HINTON STATE AUDITOR (404) 6562174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 2J4 Atlanta, Georgia 30334-8400 June 27,2001 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the Board of Regents of the University System of Georgia and Director and Members of the Chattooga County Library Board INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION Ladies and Gentlemen: We have audited the accompanying general purpose financial statements ofthe Chattooga County Library, as ofand for the year ended June 30, 2000, as listed in the table ofcontents. These general purpose financial statements are the responsibility ofthe Chattooga County Library's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose 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 opinion. As described in the notes to the general purpose financial statements, the Library's financial statements have been prepared using a certain accounting practice and policy which, in our opinion, varies in some respects from generally accepted accounting principles. This variance is described as follows: * The general purpose financial statements ofthe Library did not contain a General Fixed Assets Account Group to account for property, equipment and inexhaustible collections and books owned by the Library which should be included to conform to generally accepted accounting principles. 2000ARL-42A The aggregate effects on the general purpose financial statements ofthis variance or omission have not been determined,.but are believed to be material. In our opinion, except for the effects on the general purpose financial statements of the matter referred to in the third paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Chattooga County Library as of June 30, 2000, and the results of its operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Our audit was performed for the purpose of forming an opinion on the general purpose financial statements of the Chattooga County Library taken as a whole. The accompanying financial schedules (Schedules 1 through 4), as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the Chattooga County Library. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and in our opinion is fairly stated, in all material respects, in relation to the general purpose financial statements taken as a whole. A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24. Respectfully submitted, ~. Rus ell W. Hinton State Auditor RWH:gp 2000ARL-42A ~-. CHATIOOGA COUNTY LIDRARY .. ASSETS Cash and Cash Equivalents CHATIOOGA COUNTY LIBRARY COMBINED BALANCE SHEET ALL FUND TYPES JUNE 3D, 2000 EXHIBIT "A" GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND TOTALS (Memorandum Only.t-) _ JUNE 3D, 2000 JUNE 3D, 1999 $ _.......3-.6,765.06 $ 0.00 $ 36,765.06 $ _ _......;6~,4;;;.:;8;:o2;,;;:;.54;;. FUND EQUITY Fund Balances Unreserved Undesignated $ 36,765.06 $ 0.00 $ 36,765.06 $ 6;1,.,4.8;;,;;2,;,;.54,,;.. . The notes to the general purpose financial statements are an integral part of this statement. -2- CHATIOOGA COUNTY LIBRARY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALA~CES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2000 EXHIBIT "B" REVENUES State Funds Federal Funds Local Funds Other Funds Total Revenues EXPENDITURES Current Public Services Technical Services Administration Maintenance and Operation Information Technology Total Expenditures Excess of Revenues over (under) Expenditures FUND BALANCE JULY 1 GENERAL FUND SPECIAL REVENUE FUND TOTALS _ _ _(Memorandum Onlyl"- _ YEAR ENDED JUNE 30, 2000 JUNE 30. 1999 $ 142.469.86 $ 160.009.94 40.185.04 $ 342,664.84 $ $ 2.000.00 2,000.00 $ 142,469.86 $ 2.000.00 160,009.94 40,185.04 135.196.35 149.013.44 17.000.12 344,664.84 $ _ _..:3:,:::0.:,1.:::;20::,:9:.:.:.9:..:.,.1 $ 106.196.11 $ 8.097.86 156.746.40 41,166,36 175.59 $ _--.,;2~.0~0::::0.:.:::,O~0 $ 312,382,32 $ 2,000,00 $ $ 30,282.52 $ 0.00 $ 6,482.54 0.00 106.196,11 $ 8.097.86 156.746.40 41,166.36 2.175.59 104,317.61 6,601.27 146,108.91 41,032.79 2,331.82 314,382,32 $ _ _...::3:.:::.00::.r.,:::.:39::::2:.:;;:.4~0 30,282.52 $ 817.51 6.482.54 5,665.03 FUND BALANCE JUNE 30 $ _ _3.6.,765.06 $ 0.00 $ _ _..:3;;;;;6,765.06 $ ~61~48:;;:2;;,;.54;;,;;, The notes to the general purpose financial statements are an Integral part of this statement. -3- CHAITOOGA COUNTY LIBRARY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2000 EXHIBIT 'C" REVENUES State Funds Federal Funds Local Funds Other Funds Total Revenues EXPENDITURES Current Public Services Technical Services Administration Maintenance and Operation Information Technology Total Expenditures Excess of Revenues over (under) Expenditures FUND BALANCE JULY 1, 1999 GENERAL FUND BUDGET ACTUAL $ 144,626.00 $ 142,469.86 159,110.00 13,985.00 160,009.94 40,185.04 $ 317,721.00 $ 342,664.84 $ 109,233.00 $ 106,196.11 8,229.00 8,097.86 157,859.00 156,746.40 42,400.00 41,166.36 175.59 $ 317,721.00 $ 312,382.32 $ 0.00 $ 30,282.52 0.00 6,482.54 SPECIAL REVENUE FUND BUDGET ACTUAL $ 2,000.00 $ 2,000.00 $ 2,000.00 $ _---=2:z.;,0::.;:0;,::;0;0.:.::.,0 $ 2,000.00 $ _--::.2,~00~0~.0:.:::...0 $ 2!000.00 $ _---.:J2,""'00::.::0c:.:.0:.::.,0 $ 0.00 $ 0.00 0.00 0.00 FUND BALANCE JUNE 30, 2000 $ 0.00 $ 36,765.06 $ 0.00 $ O_.O~O The notes to the general purpose financial statements are an integral part of this statement. -4- CHATTOOGA COUNTY LIBRARY EXHIBIT "D" NOTES TO TE ]~_ GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Chattooga County Library (Library) operates pursuant to Official Code of Georgia Annotated Sections 20-5-40 through 20-5-59 to provide public library services with costs shared by participating local governmental agencies and grants from the State ofGeorgia. With the exception ofthe departures from generally accepted accounting principles disclosed in these notes, the financial statements of the Library have been prepared in conformity with generally accepted accounting principles as applied to governmental units and unless otherwise disclosed in these notes, the financial statements present all fund types and account groups of the Library. The Library Board consists of 17 members; 5 members appointed by Chattooga County Commissioners, 4 members appointed by City ofSummerville, 2 members appointed by Chattooga County Board ofEducation, 1 member appointed by City ofLyerly, 4 members appointed by City of Trion and 1 member appointed by City of Menlo. The Library Board is without authority to determine the amount ofits funding, except by submission ofbudget requests to local governmental units from which the Library receives support and to the State of Georgia for State and Federal funding. Membership in the Library and participation in library services is at the discretion of each participating governmental agency. The Library Board has the power to designate management, the power to retain unreserved fund balances oflocal and other funds for continued operations and is the lowest level ofoversight responsibility for the Library's operations. The Chattooga County Library is therefore determined to be a joint venture. , FUND ACCOUNTING The Library 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. General Fixed Assets, which includes the Library's inexhaustible collections and books, are recorded as expenditures in the various funds at the time ofpurchase. A General Fixed Assets Account Group is not presently maintained by the Library. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost ofassets acquired by governmental fund types. The general purpose financial statements account for all State, Federal, Local and Other funds under control of the Library, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds presented in this report are as follows: -5- CRATIOOGA COUNTY LIDRARY EXHmIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 d' Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES GOVERNMENTAL FUND TYPES - used to account for all or most of the Library's general activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources of the Library except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a Library. SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. The primary type of special revenue fund consists ofproceeds received from State and Federal sources to accomplish specific objectives and are required to be accounted for separately. BASIS OF ACCOUNTING The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities are generally included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources. Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. . Governmental funds are accounted for using the modified accrual basis ofaccounting under which: Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Those revenues considered susceptible to accrual are intergovernmental grants and investment income. Expenditures are generally recognized when the related fund liability is incurred. BUDGET The Chattooga County Library's budget is a complete financial plan for the Library's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level ofbudget control was established by the Library at the aggregate level. The budget for governmental funds was prepared in accordance with generally accepted accounting principles. - 6- CHAITOOGA COUNTY LffiRARY EXHffiIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 ., Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The budget process begins when the Library's administration prepares a tentative aggregated budget for the Board's approval. After approval ofthis tentative budget by the Board, copies are sent to all local funding agencies. After funding approval is received from all local funding agencies, the Board makes revisions as necessary and adopts the budget. The budget is then submitted to the Board of Regents of the University System of Georgia as a part of the Library's annual application for State aid. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year end. CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Library to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations. MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results ofoperations in conformity with generally accepted accounting principles, nor is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Note 2: DEPOSITS COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate of the 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. 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 anyone of or any combination ofthe following: (1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, (2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, -7- CHAITOOGA COUNTY LIDRARY EXHIDIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 " Note 2: DEPOSITS (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 ofthe 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 ofdevelopment authorities created by the laws ofthe 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. CATEGORIZAnON OF DEPOSITS At June 30, 2000, the bank balances were $49,969.92. The bank balances were entirely covered by Federal depository insurance. Note 3: RISKMANAGEMENT The Library is exposed to various risks ofloss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees and natural disaster. The Library has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and job related illness or injuries to employees. The Library has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Library's insurance coverage in any of the past three years. The Library has elected to self-insure for all losses related to natural disaster. The Library has not experienced any losses related to this risk in the past three years. The Library has purchased a surety bond to provide additional insurance coverage as follows: Position Covered Amount All Employees $ 10,000.00 -8- . CRATIOOGA COUNTY LIBRARY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 -,. Note 4: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION Substantially all librarians and clerical personnel employed by regional and county libraries are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Library who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Library 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 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: Fiscal Year 2000 1999 1998 Percentage Contributed 100% 100% 100% Required Contribution $ 19,256.59 $ 19,025.94 $ 15,252.24 - 9- CHATTOOGA COUNTY LIBRARY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2000 AGENCY/FUNDING GRANTS Technical and Adult Education, Georgia Department of Public Libraries Salaries Travel Library Materials Maintenance and Operation SCHEDULE "1" GOVERNMENTAL FUND TYPE GENERAL FUND $ 115,847.86 2,100.00 12,261.00 12,261.00 $ 142,469.86 See notes to the general purpose financial statements. - 10- CHATTOOGA COUNTY LIBRARY SCHEDULE OF FEDERAL REVENUE YEAR ENDED JUNE 30, 2000 ,.." AGENCY/FUNDING GRANT Education, U. S. Department of Through Georgia Department of Technical and Adult Education Library Services and Technology Act LSTA - Technology and Connectivity Grant SCHEDULE "2" GOVERNMENTAL FUND TYPE SPECIAL REVENUE FUND $ ====2=-,0==:0=0,;;;;.0==0 See notes to the general purpose financial statements. - 11 CHATTOOGA COUNTY LIBRARY SCHEDULE OF LOCAL REVENUE YEAR ENDED JUNE 30, 2000 LOCAL SOURCES Board of Education Chattooga County City Governments Lyerly Menlo Summerville Trion County Government Board of Commissioners Chattooga SCHEDULE "3" GOVERNMENTAL FUND TYPE GENERAL FUND $ 5,000.00 1,300.00 1,760.00 44,719.92 48,330.00 58,900.02 See notes to the general purpose financial statements. - 12- NAME Bartlett, Brooks, Bryan, Cesareo, Ellis, Hutsell, Martin, Mikovits, Mikovits, Moore, Simmons, Southerland, Spain, Spain, Stephens, Watson, CHATTOOGA COUNTY LIBRARY SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 2000 SCHEDULE "4" ~ Tammy Stacy Kaye Louise A Alicia Brown Stephen Barbara Pfitzer Rhonda Connie L Mary Joshalyn Elizabeth Louise MaryE Allene C Carol Janet Susan Sandra Marisa TITLE CATEGORY Library Clerk Library Clerk Bookkeeper Library Para-Professional Library Page Director Library Clerk Library Clerk Library Clerk Library Clerk Library Clerk Technical Services Library Clerk Library Clerk Children's Librarian Library Clerk SALARIES TRAVEL $ 1,739.38 5,888.78 21,326.70 $ 10,861.98 1,951.70 51,799.30 2,384.26 12,747.00 3,255.94 1,460.51 15,560.50 5,655.46 10,729.88 713.00 44,357.96 603.22 85.50 42.50 1,533.49 51.50 1,054.75 Totals per Report $ 191,035.57 $ ==...:2:=10,7,;,,;6;;,;,7=.7...;.4 See notes to the general purpose financial statements. - 13- SECTIONll FINDINGS AND QUESTIONED COSTS CHATTOOGA COUNTY LffiRARY SCiLDULE OF FINnJNGS..!\ND QUESTIONED COSTS YEAR .':'DED JUNE 30, 2000 .". PRIOR YL,RlCURRENT YEAR GENERAL FIXED ASSETS Failure 1, \1aintain General Fixed Assets Account Group Finding ... untrol Number: 6272-93-01 The audit report for the year June 30, 1999, noted that the management of the Chattooga County Library had chosen not to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. In the year under review, the Library did not establish a General Fixed Assets Account Group within the formal accounting records. This condition results in the general purpose financial statements ofthe Library being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Library to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings, equipment and inexhaustible collections and books owned by the Library and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.