A goo Rt eogg b o,C18~q9 AUDIT REPORT CONYERS-ROCKDALE LIBRARY SYSTEM CONYERS, GEORGIA YEAR ENDED JUNE 30, 1999 ,~ ~..J STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS 254 WASHINGTON STREET ATLANTA, GEORGIA 30334-8400 CONYERS-ROCKDALE LIBRARY SYSTEM - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION EXHIBITS GENERAL PURPOSE FINANCIAL STATEMENTS COMBINED STATEMENTS - OVERVIEW A COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP B COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES C COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS ADDITIONAL FINANCIAL INFORMATION SCHEDULES SCHEDULE OF REVENUE 1 STATE 2 LOCAL 3 SCHEDULE OF SALARIES AND 1RAVEL SECTION II FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS 2 3 5 6 14 15 16 ,. SECTION I FINANCIAL RUSSELL \V. HINTON STATE AUDITOR 1404) 6562174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washinglllll Street, S.W.. Suile 214 Atlant~l. Georgia 30334-X400 May 10, 2000 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 Conyers-Rockdale Library System 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 Conyers-Rockdale Library System, as of and for the year ended June 30, 1999, as listed in the table of contents. These general purpose financial statements are the responsibility of the Conyers-Rockdale Library System'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 generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose 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 fmancial 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 of the 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. The aggregate effects on the general purpose financial statements of this omission have not been determined, but are believed to be material. 99ARL-42A 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 Conyers-Rockdale Library System as of June 30, 1999, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles. Our audit was performed for the purpose of forming an opinion on the general purpose financial statements ofthe Conyers-Rockdale Library System taken as a whole. The accompanying financial schedules (Schedules I through 3), 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. Such information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in our opinion, except for the effects of the matter discussed in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24. Respectfully SUbmitted, ~~'W~i:n' ~L.:k. State Auditor RWH:gp 99ARL-42A CONYERS-ROCKDALE LIDRARY SYSTEM CONYERS-ROCKDALE LIBRARY SYSTEM COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30,1999 EXHIBIT "B" REVENUES State Funds Federal Funds Local Funds Other Funds Total Revenues EXPENDITURES Current Public Services Technical Services Circulation Support Services Maintenance and Operation Total Expenditures Excess of Revenues over (under) Expenditures FUND BALANCE JULY 1 GENERAL FUND CAPITAL PROJECTS FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 1999 JUNE 30, 1998 $ 187,115.84 472,685.96 146,798.52 $ $ 806,600.32 $ $ 18,667.19 18,667.19 $ 187,115.84 $ 472,685.96 165,465.71 825,267.51 $ 297,873.98 15,484.00 466,143.72 159,862.63 939,364.33 $ 439,283.50 $ 105,221.12 63,839.08 $ 135,970.73 110,106.07 $ 790,581.42 $ 63,839.08 $ $ 16,018.90 $ -45,171.89 $ 199,924.96 357,119.20 503,122.58 $ 105,221.12 135,970.73 110,106.07 854,420.50 $ -29,152.99 $ 557,044.16 471,549.85 115,964.65 157,761.80 140,655.11 100,307.81 986,239.22 -46,874.89 603,919.05 FUND BALANCE JUNE 30 $ 215,943.86 $ 311,947.31 $ 527,891.17 $ ....__5.5..7...,..0.=4.4....1...6.=. The notes to the general purpose financial statements are an integral part of this statement. -3- CONYERS-ROCKDALE LIBRARY SYSTEM COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL GENERAL FUND YEAR ENDED JUNE 30,1999 EXHIBIT "C" REVENUES State Funds Local Funds Other Funds Total Revenues EXPENDITURES Current Public Services Technical Services Support Services Maintenance and Operation Information Technology Total Expenditures Excess of Revenues over (under) Expenditures FUND BALANCE JULY 1,1998 BUDGET ACTUAL $ 187,115.84 $ 472,596.00 129,035.00 $ 788,746.84 $ 187,115.84 472,685.96 146,798.52 806,600.32 $ 430,758.14 $ 108,885.95 134,330.17 115,900.10 15,000.00 $ 804,874.36 $ $ -16,127.52 $ 199,924.96 439.283.50 105.221.12 135,970.73 110,106.07 790,581.42 16,018.90 199.924.96 FUND BALANCE JUNE 30, 1999 $ 183,797.44 $ _ ......2...1..5...;0,,9.43.""'.8-=6 The notes to the general purpose financial statements are an integral part of this statement. -5- CONYERS-ROCKDALE LIBRARY SYSTEM EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1999 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 and the account group presented in this report are as follows: 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. CAPITAL PROJECTS FUND - the fund used to account for the acquisition of land, development and construction of and equipping the Conyers-Rockdale Library System. ACCOUNT GROUP GENERAL LONG-TERM DEBT ACCOUNT GROUP - used to account for compensated absences. BASIS OF ACCOUNTING The accounting and fmancial 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 of these 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. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group, Governmental funds are accounted for using the modified accrual basis of accounting under which: Revenues are recognized when susceptible to accrual (i.e" when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe 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. -7- CONYERS-ROCKDALE LIBRARY SYSTEM EXHIBIT liD" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (4) Obligati':ms 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. RECEIVABLES Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed, allotted funds from participating local governments, 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 general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. COMPENSATED ABSENCES Compensated absences represent obligations of the Library relating to employees' rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulating 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 is deemed immaterial to the general purpose financial statements. INTERFUND TRANSACTIONS The Library has the following type of interfund transactions: Reimbursements of expenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed. 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 of operations 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. - 9- CONYERS-ROCKDALE LIBRARY SYSTEM EXHIBIT liD" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1999 Note 2: DEPOSITS AND INVESTMENTS Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Library'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 Library's name.) The Library's deposits are classified by risk category at June 30, 1999, as follows: Risk Category Bank Balance 1 $ 111,497,13 2 11,673.54 3 0.00 Total $ 123.170.67 CATEGORIZATION OF INVESTMENTS At June 30, 1999, the carrying value of the Library's total investments was $375,859,78 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 Library did not own any specific identifiable securities in the pool. The investment policy ofthe State of Georgia, Office of Treasury 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. However, Georgia Fund 1 operates in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a 2a-7 like pool. The pool is not registered with the SEC as an investment company. 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 weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and determines participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value, 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 - 11 - CONYERS-ROCKDALE LIBRARY SYSTEM EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1999 Note 5: ACCUMULATED EMPLOYEES' LEAVE The Library's full-time employees earn annual leave according to their length of service ranging from 12 to 24 days per year with a maximum accumulation of 15 days. Part-time regular employees earn annual leave on a pro rata basis. All unused leave is paid to employees at their current rate of pay upon retirement or termination of employment unless proper notice of resignation is not given by the employee. See Note 1 Compensated Absences Note 6: 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 ofthe Library who are covered by TRS are required by State statute to contribute 5% oftheir 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 11.95% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: Fiscal Year . Percentage Contributed Required Contribution 1999 1998 1997 100% 100% 100% $ 46,107.65 $ 44,831.62 $ 41,940.28 - 13- CONYERS-ROCKDALE LIBRARY SYSTEM SCHEDULE OF LOCAL REVENUE YEAR ENDED JUNE 30,1999 LOCAL SOURCES City Government Conyers County Government Board of Commissioners Rockdale County SCHEDULE "2" GOVERNMENTAL FUND TYPE GENERAL FUND $ 159,426.00 313,259.96 $ ===4=7=2;l,;,6=8=5,=9:=6 See notes to the general purpose financial statements, - 15- NAME Valles, Joseph Vater, Jessica Watson, Brooke Young, Jane Accrual June 30, 1999 Totals per Report CONYERS-ROCKDALE LIBRARY SYSTEM SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 1999 SCHEDULE "3" TITLE CATEGORY Technology Specialist Page Desk Assistant Page SALARIES TRAVEL $ 23,400,00 $ 1,810.23 2,920.20 1,156.30 159,77 $ 468,115.08 $ 3,253.76 506,07 252.69 $ 468,621.15 $ ===3=,5=0:=6.=45= - 17 - SECTION II FINDINGS AND QUESTIONED COSTS CONYERS-ROCKDALE LIBRARY SYSTEM SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1999 PRIOR YEAR CASH AND CASH EQUNALENTS Uncollateralized Deposits Finding Resolved Finding Control Number: 7222-98-01 The audit report for the year ended June 30, 1998, noted that the Library failed to have its bank balances fully collateralized as provided for by the Official Code of Georgia Annotated Section 45-8-12. During the year under review, the Library implemented procedures to monitor the collateralization of bank balances to ensure compliance at all times with State laws governing deposits and investments. PRIORYE~CwumNTYEAR GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: 7222-93-01 The audit report for the year ended June 30, 1998, noted that the management of the Conyers-Rockdale Library System 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 System did not establish a General Fixed Assets Account Group within the formal accounting records. This condition results in the general purpose financial statements of the Library System being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Library System to establish accounting controls and procedures to provide for maintenance of a 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 System 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.