STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS r;~ A~oo . R( Clo~~ E4 .;JC;CD-dOOI ELBERT COUNTY LIBRARY ELBERTON, GEORGIA REPORT ON AUDIT . OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2001 Russell W. Hinton State Auditor ELBERT COUNTY LIBRARY - TABLE OF CONTENTS - 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 2 B COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES 4 C COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS 5 D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS 7 ADDIDONAL FINANCIAL INFORMATION SCHEDULES SCHEDULE OF REVENUE 1 STATE 14 2 FEDERAL 15 3 LOCAL 16 4 SCHEDULE OF SALARIES AND TRAVEL 17 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 July 10, 2002 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the Board ofRegents ofthe University System of Georgia and Director and Members of the Elbert 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 of the Elbert County Library, as of and for the year ended June 30, 2001, as listed in the table of contents. These generalpurpose financial statements are the responsibility ofthe Elbert 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 ofAmerica. 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. In our opinion, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the Elbert County Library as of June 30, 2001, 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 Elbert 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 ofthe general-purpose financial statements ofthe Elbert County 2001ARL-40 Library. Such information has been subjected to the auditing procedures applied in the audit ofthe 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 OfficialCode ofGeorgia Annotated Section 506-24. Respectfully submitted, RWH:as 2001ARL-40 State Auditor ELBERT COUNTY LIBRARY ELBERT COUNTY LIBRARY COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 2001 ASSETS Cash and Cash Equivalents Investments General Fixed Assets Equipment Inexhaustible Collections and Books GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND $ 58,814.14 $ 0.00 17,295.04 Total Assets $ 76,109.18 $=====0=.0=0 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable FUND EQUITY Investment in General Fixed Assets Fund Balances Unreserved Designated for Bookmobile Replacement Equipment Purchases Undesignated Total Fund Equity $ 17,295.04 58,814.14 $ _ _ _ _...;;0=.0~0 $ 76,109.18 $ _ _ _ _.=_0-:;0.=..0 Total Liabilities and Fund Equity $ 76,109.18 $=====0..0..0= The notes to the general-purpose financial statements are an integral part of this statement. -2 - EXHIBIT"A" ACCOUNT GROUP GENERAL FIXED ASSETS TOTALS {Memorandum Onl~ JUNE 30, 2001 JUNE30, 2000 $ 58,814.14 $ 85,555.14 17,295.04 17,295.04 $ 116,432.54 116,432.54 68,661.54 0.00 0.00 0.00 $ 116,432.54 $ 192,541.72 $-==-11..1...,.5...1.=1..1...2_ $ _ _ _1.._,6_04_._57_ $ 116,432.54 $ 116,432.54 $ 68,661.54 17,295.04 58,814.14 17,295.04 32,526.00 51,424.57 $ 116,432.54 $ 192,541.72 $ _ _ _16_9.._,9_0_7._15_ $ 116,432.54 $ 192,541.72 $ ====1=71=,5=1=1.=72= -3- ELBERT COUNTY LIBRARY COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 2001 EXHIBIT "B" GENERAL FUND SPECIAL REVENUE FUND TOTALS (Memorandum On~l YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 REVENUES State Funds Federal Funds Local Funds Other Funds Total Revenues EXPENDITURES $ 162,693.41 $ 103,500.00 8,695.51 $ 274,888.92 $ $ 550.00 550.00 $ 162,693.41 $ 550.00 103,500.00 8,695.51 275,438.92 $ 152,347.62 97,000.08 42,071.38 291A19.08 Current Public Services Technical Services Support Services Maintenance and Operations Information Technology Total Expenditures Excess of Revenues over (under) Expenditures FUND BALANCE JULY 1 $ 46,565.74 29,038.46 168,893.47 $ 21,511.78 34,015.90 $ 300,025.35 $ $ -25,136.43 $ 101,245.61 $ 550.00 550.00 $ 0.00 $ 0.00 46,565.74 $ 29,038.46 169,443.47 21,511.78 34,015.90 300,575.35 $ -25,136.43 $ 101,245.61 46,547.16 26,229.13 156,350.82 19,764.54 3151.60 252,043.25 39,375.83 61 869.78 FUND BALANCE JUNE 30 $ 76,109.18 $ 0.00 $ 76109.18 $===1=0=1!:2..,45==61= The notes to the general-purpose financial statements are an integral part of this statement. -4- ELBERT COUNTY LIBRARY COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2001 EXHIBIT c REVENUES State Funds Federal Funds Local Funds Other Funds Total Revenues EXPENDITURES Current Public Services Technical Services Support Services Maintenance and Operations Information Technology Total Expenditures Excess of Revenues over (under) Expenditures FUND BALANCE JULY 1, 2000 FUND BALANCE JUNE 30. 2001 GENERAL FUND BUDGET ACTUAL $ 162,693.39 $ 103,500.00 9,620.00 $ 275,813.39 $ 162,693.41 103,500.00 8,695.51 274,888.92 $ 49,096.87 $ 29,147.57 172,885.94 22,626.16 2,056.85 $ 275,813.39 $ $ 0.00 $ 0.00 46,565.74 29,038.46 168,893.47 21,511.78 34,015.90 300,025.35 -25,136.43 101,245.61 $ o.oo s_....;.1_e,.1.o_s_.1~a SPECIAL REVENUE FUND BUDGET ACTUAL $ 0.00 $ 550.00 $ 0.00 $ 550.00 $ 0.00 $ 550.00 $ 0.00 $ 550.00 $ 0.00 $ 0.00 0.00 0.00 $ o.oo s____o.;.o.o. The notes to the general-purpose financial statements are an integral part of this statement. -5- ELBERT COUNTY LIBRARY EXHIBIT "D" NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Elbert 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 of Georgia. 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 ofseven members; three members appointed by Elbert County Board of Commissioners and four members appointed by the Elberton City Council. 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 ofeach participating governmental agency. The Library Board has the power to designate management, the power to retain unreserved fund balances of local and other funds for continued operations and is the lowest level of oversight responsibility for the Library's operations. While the Elberton City Council appoints a majority ofthe Elbert County Library's Board, the City Council is neither able to impose its will upon the Library nor is there a financial benefit/burden relationship between the two boards as defined by Governmental Accounting Standards Board. The Elbert County Library is therefore considered to be a related organization of the City of Elberton, Georgia. FUND ACCOUNTING The Library uses funds and an account group to report on its financial position and the results ofits 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. An account group 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 expendable available financial resources. 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: -7- ELBERT COUNTY LIBRARY EXHIBIT "D" NOTES TO TIIB GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 1: 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. ACCOUNT GROUP GENERAL FIXED ASSETS ACCOUNT GROUP - used to account for all general fixed assets acquired by the Library which includes equipment and inexhaustible collections and books. The Elbert County Board ofCommissioners owns the land and buildings utilized in the operations of the Library. 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. The Library considers receivables collected within sixty days after year-end to be available and therefore susceptible to accrual. Nonexchange transactions, in which the Library gives (or receives) value without directly receiving (or giving) equal value in exchange, include intergovernmental grants and donations. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. -8- ELBERT COUNIY LIBRARY EXHIBIT "D" NOTES TO TI1E GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures are generally recognized when the related fund liability is incurred. BUDGET The Elbert County Library's budget is a complete financial plan for the Library's fiscal year and is based upon estimates ofexpenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe 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. 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 ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws authorize the Library to deposit its funds in one or more solvent banks or insured Federal savings and loan associations. INVESTMENTS COMPOSITION OF INVESTMENTS Investments made by the Library in nonparticipating interest-earning contracts {such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Library to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following: (1) Obligations issued by the State of Georgia or by other states, (2) Obligations issued by the United States government, -9- ELBERT COUNfY LIBRARY EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE30,2001 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (3) Obligations fully insured or guaranteed by the United States government or a United States government agency, (4) Obligations of any corporation ofthe United States government, (5) Prime banker's acceptances, (6) The Local Government Investment Pool administered by the State ofGeorgia, Office of Treasury and Fiscal Services, (7) Repurchase agreements, and (8) Obligations ofother political subdivisions of the State of Georgia. GENERAL FIXED ASSETS General fixed assets purchased, including capital outlay costs, are recorded as expenditures in the various funds at the time ofpurchase. All purchased general fixed assets are valued at cost where historical records are available and at estimated historical cost where no historical records exist. Donated general fixed assets are recorded at fair market value as ofthe date donated. Disposals are deleted at recorded cost. No depreciation has been provided on General Fixed Assets. The cost of normal maintenance and repairs that do not add to the value of the assets or materially extend the useful lives ofthe assets is not capitalized. The values ofinexhaustible collections and books at the Library are not readily determinable, therefore, the Library has not capitalized them. 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. 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 ofmoney which has not been secured by surety bond, by guarantee of insurance, 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. - 10 - ELBERT COUNTY LIBRARY EXHIBIT "D" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2001 Note 2: DEPOSITS Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. 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 any one ofor any combination ofthe following: (1) Suretybond signed by a surety companyduly qualified and authorized to transact business within the State of Georgia, (2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, (3) Bonds, bills, notes, certificates of indebtedness or other direct obligations ofthe United States or of the State of Georgia, (4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities ofthe State ofGeorgia, (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 ofthe 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. CATEGORIZATION OF DEPOSITS At June 30, 2001, the bank balances were $84,204.90. The bank balances were entirely covered by Federal depository insurance. Note 3: GENERAL FIXED ASSETS A summary of changes in the General Fixed Assets Account Group during the fiscal year are as follows: - 11 - ELBERT COUNTY LIBRARY EXHIBIT "D" NOTES TO TIIB GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 3: GENERAL FIXED ASSETS Equipment Balance July 1, 2000 $ 68,661.54 Additions 47,771.00 Balance June 30, 2001 $ 116,432.54 Note 4: RISK MANAGEMENT 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; natural disaster; and unemployment compensation. 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 ofthe 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 is self-insured with regard to unemployment compensation claims. The Library accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. The Library has not experienced any unemployment compensation claims during the last two years. The Library has purchased surety bonds to provide additional insurance coverage as follows: Position Covered Amount Director Assistant Director Treasurer $ 100,000.00 $ I 00,000.00 $ I00,000.00 Note 5: 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 - 12 - ELBERT COUNTY LIBRARY EXHIBIT "D" NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2001 Note 5: RETIREMENT PLANS 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% 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 Percentage Contributed Required Contribution 2001 2000 1999 100% 100% 100% $ 15,747.80 $ 15,263.68 $ 15,573.44 - 13 - ELBERT COUNTY LIBRARY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 2001 AGENCY/FUNDING GRANTS Board of Regents of the University System of Georgia Office of Public Library Services Salaries Travel Library Materials Maintenance and Operations SCHEDULE "1" GOVERNMENTAL FUND TYPE GENERAL FUND $ 138,783.37 1,500.00 11,591.40 10,818.64 $ ===--==-=-1_e2_.a=93-4...,1 See notes to the general-purpose financial statements. -14- ELBERT COUNTY LIBRARY SCHEDULE OF FEDERAL REVENUE YEAR ENDED JUNE 30, 2001 AGENCY/FUNDING GRANT Museum and Library Services, Institute of Through Board of Regents of the University System of Georgia Library Services and Technology Act State Library Program SCHEDULE "2" GOVERNMENTAL FUNDlYPE SPECIAL REVENUE FUND $===-==s_s_o_.oo... See notes to the general-purpose financial statements. -15- ELBERT COUNTY LIBRARY SCHEDULE OF LOCAL REVENUE YEAR ENDED JUNE 30, 2001 LOCAL SOURCES City Government Elberton County Government Board of Commissioners Elbert SCHEDULE "3"" GOVERNMENTAL FUND TYPE GENERAL FUND $ 50,000.04 53,499.96 $ ==-===.1..o...3...,,,.s.o...o...o...o.. See notes to the general-purpose financial statements. - 16 - NAME Allen, Bailey, Bullock, Dean, Johnson, Maxwell, McCall, Thornton, Linda Camilla Paula Vaquasha Peggy Sara Nancy Valencia Totals per Report ELBERT COUNTY LIBRARY SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 2001 SCHEDULE "4" TITLE CATEGORY Library Aide Secretary Director Library Aide Assistant Director/Bookkeeper Technical Service Bookmobile Driver Public Service/Shelver SALARIES TRAVEL $ 1,542.00 18,531.37 58,226.80 $ 993.00 57,926.80 3,024.00 7,062.00 41173.00 2,756.05 689.72 $ 151,478.97 $-==-=3_,4_4_5._77_ See notes to the general.purpose financial statements.