Audit report, Hart County Library, Hartwell, Georgia, year ended June 30, 1995

GA
A'ZOO .Rt C. l,~g H-3 i9'1Lf- '15
STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET ATLANTA. GEORGIA 30334

AUDIT REPORT HART COUNTY LIBRARY
HARTWELL, GEORGIA YEAR ENDED JUNE 30, 1995

HART COUNTY LIBRARY - TABLE OF CONTENTS -

SECTION! .

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

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

3

C

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

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

12

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

13

SCHEDULES

1 CASH AND CASH EQUIVALENTS

14

SCHEDULE OF REVENUE

2

STATE

15

3

FEDERAL

16

4

LOCAL AND OTHER

17

5 SCHEDULE OF EXPENDITURES BY OBJECT

GOVERNMENTAL FUND TYPES

18

6 MEMBERSHIP OF LIBRARY BOARD

19

7 SCHEDULE OF SALARIES AND TRAVEL

20

HART COUNTY LIBRARY - TABLE OF CONTENTS -
SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS

SECTION I FINANCIAL

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 20, 1996

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board ofEducation
and Director and Members of the Hart County Library Board
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the general purpose financial statements (Exhibits A through D) of the Hart County Library, as of and for the year ended June 30, 1995, as listed in the table of contents. These financial statements are the responsibility of the Library's management. Our responsibility is to express an opinion on these 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 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 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 effect on the general purpose financial statements of this omission have not been determined, but is believed to be material.
95ARL-42

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 present fairly, in all material respects, the financial position of the Hart County Library as of June 30, 1995, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose offorming an opinion on the general purpose financial statements ofthe Hart County Library taken as a whole. The combining statements (Exhibits E and F) and the financial schedules (Schedules 1 through 7), 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 Hart 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, such information is fairly presented 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 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,
ff~~
Claude L. Vickers State Auditor
CLV:cm 95ARL-42

HART COUNTY LIBRARY - 1-

HART COUNTY LIBRARY COMBINED BALANCE SHEET
ALL FUND TYPES JUNE 30, 1995

EXHIBIT"A"

ASSETS Cash and Cash Equivalents Prepaid Items
Total Assets

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTALS

{Memorandum Onl~}

JUNE 30, 1995

JUNE 30, 1994

$

1,100.00 $

1,100.00 $

4,041.58

$

235.00

235.00

$

235.00 $

1 100.00 $

1,335.00 $

4,041.58

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft . Accounts Payable Salaries Payable Expired Grant Balances Payable

$

5,843.61

1,668.~1

Total Liabilities

$

7,511.82

FUND EQUITY

Fund Balances Reserved For Expired Grant Balance/Questioned Costs Unreserved Undesignated

$

$

-7,276.82

Total Fund Equity

$

-7,276.82 $

Total Liabilities and Fund Equity

$

235.00 $

$
$
1,100.00 $ 0.00
1,100.00 $ 1,100.00 $

5,843.61 1,668.21 $
7,511.82 $
1,100.00 -7,276.82 $ -6,176.82 $
1,335.00 $

2,692.60 154.20 497.63
3,344.43
697.15 697.15
4,041.58

The notes to the general purpose financial statements are an integral part of this statement. -2-

HART COUNTY LIBRARY COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1995

EXHIBIT"B"

REVENUES
State Funds Federal Funds Local and Other Funds
Total Revenues
EXPENDITURES
Current Program Services Technical Services Circulation Administration Maintenance and Operations
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1

GENERAL FUND

SPECIAL REVENUE
FUND

TOTALS

{Memorandum Onl~l YEAR ENDED

JUNE 301 1995

JUNE 301 1994

$ 123.266.43 $
91,151.08
$ 214,417.51 $

$ 4,000.00
4,000.00 $

123.266.43 $ 4.000.00
91 151.08
218 417.51 $

135.370.61 7,840.00
82,802.37
226,012.98

$

80,499.95

$

57,412.34

58,727.75

25,468.07

$ 222,108.11 $

$

-7,690.60 $

$ 4.283.37
4,283.37 $ -283.37 $

80,499.95 $ 4,283.37
57,412.34 58,727.75 25,468.07
226,391.48 $
-7973.97 $

87,786.13 7,840.00
41,899.19 61,531.22 28,055.19
227111.73
-1 098.75

$

$

-283.37

$

-283.37 $

$

-7,973.97 $

697.15

283.37 $ 283.37 $
0.00 $ 0.00

283.37 -283.37
0.00
-7,973.97 $ 697.15

-1,098.75 1 795.90

FUND BALANCE JUNE 30

$

-7,276.82 $

0.00 $

-7,276.82 $ _ _ _ _6,_9_7_.1_5

The notes to the general purpose financial statements are an integral part of this statement. -3-

HART COUNTY LIBRARY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 1995

EXHIBIT"C"

REVENUES
State Funds Federal Funds Local and Other Funds
Total Revenues
EXPENDITURES
Current Program Services Technical Services Circulation Administration Maintenance and Operations
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Other Sources Other Uses
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1, 1994
Adjustments

GENERAL FUND

BUDGET

ACTUAL

$ 136,735.97 $ 91,386.73
$ 228,122.70 $

123,266.43 91,151.08
214,417.51

$

81,075.21 $

56,260.00 55,959.79 33,345.00

$ 226,640.00 $

$

1,482.70 $

80,499.95
57,412.34 58,727.75 25,468.07
222,108.11
-7,690.60

$

-283.37

$

-283.37

$

1,482.70 $

-7,973.97

800.14

697.15

435.76

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$

17,500.00

4,000.00 $

4,000.00

$

21,500.00 $

4;000.00

$

17,500.00

4,000.00 $

4,283.37

$

21,500.00 $

$

0.00 $

4,283.37 -283.37

$

283.37

$

283.37

$

0.00 $

394.64

0.00 0.00

FUND BALANCE JUNE 30, 1995

$

2,718.60 $ = --.7..,.2.-76.-82

$

394.64 $

0.00

===== -----~

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

HART COUNTY LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Hart County 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. With the exception of the departure 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. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles.
The more significant of the Library's accounting policies are described below.
REPORTING ENTITY
In evaluating how to define the government unit for financial reporting purposes, management has considered the criteria set forth in GASB Codification of Governmental Accounting and Financial Reporting Standards, Section 2100, "Defining the Financial Reporting Entity". Based upon the application of the above criteria, the Hart County Library is determined to be a joint venture.
The Library Board consists of 10 members appointed jointly by the Hart County Board of Finance, the City Council ofHartwell, and the Hart County Board of Education. The Board is without authority to determine the amount of its funding, except by submission of budget 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 Board has the power to designate management, the power to retain unreserved fund balances of local funds for continued operations and is the lowest level of oversight responsibility for the Library's operations.
The Hart County Library is located in Hartwell, Georgia, and serves Hart County.
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 of purchase. 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 of assets acquired by governmental fund types.

- 5-

HART COUNTY LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The general purpose financial statements account for all State, Federal, Local and Other funds under control ofthe 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:
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 of proceeds 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 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.
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 of the current period. Those revenues considered susceptible to accrual are intergovernmental grants.
Expenditures are generally recognized when the related fund liability is incurred.

- 6-

HART COUNTY LIBRARY

EXIIlBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUDGET
The Hart 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 of budget 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 of this 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 Georgia Department of Education, Division ofPublic Library Services 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 consists 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.
PREPAID ITEMS
Payments made to vendors for services that will benefit periods subsequent to June 30, 1995, are recorded as prepaid items.
INTERFUND TRANSACTIONS
The Library has the following types 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.
Operating transfers are recorded for all interfund transactions other than reimbursements.

- 7-

HART COUNTY LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 ofthis 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 of the public funds being secured after the deduction of the amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one of or any combination of the 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,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or ofthe State of Georgia,
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations of the counties or municipalities ofthe State of Georgia,
(5) Bonds ofany 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 of development authorities created by the laws of the State of Georgia, and

- 8-

HART COUNTY LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 2: DEPOSITS
(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 and 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, 1995, the bank balances was $4,880.69. The bank balance was entirely covered by Federal depository insurance.
Note 3: RISK MANAGEMENT
The Library is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illnesses or injuries to employees; natural disaster; and unemployment compensation.
Hart County Government provides insurance coverage for the Library for the risk of loss associated with torts, assets, errors and omissions, illness or injuries to employees and natural disaster.
The Library is self-insured with regard to unemployment compensation claims. The Library accounts for claims within the General Fund with expenditures 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 incurred any liabilities for unemployment compensation during the past two fiscal years.
Note 4: CONTINGENT LIABILITIES
Amounts received or receival'.11e principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the granter agency for any expenditures which aie disallowed under grant terms. The Library believes that such disallowances, if any, will be immaterial to its overall financial position.
Note 5: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
TRS PLAN DESCRIPTION All full-time 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 public employee retirement system (PERS).

- 9-

HART COUNTY LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 5: RETIREMENT PLANS
TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. A member is eligible for service retirement after 30 years of service, regardless of age, or after 10 years ofservice and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number ofyears of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement benefits also include disability and death benefits. A disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service retirement allowance or a disability retirement allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of 10 years of service) and compensation up to the time of disability or death.
Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employee contributions occurs, but the member's contributions are refunded with interest.
The Library's payroll for employees covered by TRS for the year ended June 30, 1995, was $84,395.20; total payroll was $125,426.80.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Library who are covered by TRS are required by State statute to pay 5% of their gross earnings to TRS. The Library makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. At June 30, 1995, the TRS Library employer contribution rate was 11.81%. The interest rate assumption (rate of return on investments) was 7.50%.
Total contributions made during fiscal year 1995 amounted to $14,186.92, of which $9,967.16 was made by the Library and $4,219.76 was made by employees. These contributions represented 11.81% (Library) and 5% (employees) of covered payroll.
TRS FUNDING STATUS AND PROGRESS The amount of the total pension benefit obligation is based on a standardized measurement established by Statement No. 5 ofthe Governmental Accounting Standards Board (GASB) that, with some exceptions, must be used by a PERS. The standardized measurement is the actuarial present value of credited projected benefits. This valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date, and is adjusted for the effects of projected salary increases. A standardized measure of the pension benefit obligation was adopted by the GASB to
- 10 -

HART COUNTY LIBRARY

EXIIlBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 5: RETIREMENT PLANS

enable readers of PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among other PERS and among other employers.

Total unfunded pension benefit obligation ofTRS as of June 30, 1994, was as follows:

Total pension benefit obligation

$ 15,313,743,000.00

Net assets available for benefits, at cost

14,254,785,000.00

Unfunded pension benefit obligation

$ 1,058,958,000 00

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as of June 30, 1994. Net assets available to pay pension benefits were valued as of the same date. TRS does not make separate measurements of assets and pension benefit obligation for individual employers.

Total contributions from all employers to TRS for fiscal year ended June 30, 1995, were $565,117,811.00. The Library's contribution for the year ended June 30, 1995, of $9,967.16 was actuarially determined and represented .0017% of total contributions made by all participating employers.

Ten year historical trend information is presented in the 1995 TRS Component Unit Financial Report. This information is useful in assessing TRS's accumulation of sufficient assets to pay pension benefits as they become due.

Note 6: SURETY BONDS

The Library Director, Mr. Arthur J. Bisso, is bonded in the amount of $10,000.00 with the United States Fidelity and Guaranty Company, Baltimore, Maryland, their Bond No. 02-0170-10892-94-8, on which premium is paid through July 17, 1996.

The Library Treasurer, Mr. Phillip Hix, is bonded in the amount of $10,000.00 with the United States Fidelity and Guaranty Company, Baltimore, Maryland, their Bond No. 02-0170-11012-93-4, on which premium is paid through June 23, 1996.

- 11 -

HART COUNTY LIBRARY COMBINING BALANCE SHEET
SPECIAL REVENUE FUND JUNE 30. 1995

EXHIBITE

ASSETS Cash and Cash Equivalents

LOTTERY PROGRAM DISTANT LEARNING

LIBRARY SERVICES AND CONSTRUCTION
ACT TITLEI PUBLIC LIBRARY SERVICES

TOTALS JUNE 30, 1995 JUNE 30, 1994

$

1,100.00 $

0.00 $

1,100.00 $ _ _ _3_94_.64_

LIABILITIES AND FUND EQUITY

LIABILITIES

Expired Grant Balances Payable

FUND EQUITY

Fund Balances

Reserved

For Expired Grant Balance/Questioned Cost

$

1,100.00

$

Unreserved

Undesignated

0.00 $ _ _ _ _ _0._00_

Total Fund Equity

$

1,100.00 $

0.00 $

$ _ _ _..;394;.,;;;_;.;_;;64.;.
1,100.00
0.00 $ - - - - -0.0-0
1,100.00 $ _ _ _ _..;;.o;_;;.oo..;;..

Total Liabilities and Fund Equity

$

1,100.00 $

0.00 $

1,100.00 $ _ _ _ _3_94_.64_

See notes to the general purpose financial statements.

- 12-

HART COUNTY LIBRARY COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30. 1995

EXHIBIT"F"

REVENUES State Funds Federal Funds Total Revenues
EXPENDITURES Current Program Services Technical Services Administration Total Expenditures
Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES
Operating Transfers In Excess of Revenues and Other Financing
Sources over (under) Expenditures FUND BALANCE JULY 1
FUND BALANCE JUNE 30

LOTTERY PROGRAM
DISTANT LEARNING

LIBRARY SERVICES AND CONSTRUCTION
ACT TITLE I PUBLIC LIBRARY SERVICES

TOTALS YEAR ENDED JUNE 30, 1995 JUNE 30, 1994

$

0.00

$

$

0.00 $

$ 4,000.00
4,000.00 $

0.00 $ 4,000.00
4,000.00 $

17.105.36 7,840.00
24,945.36

$

0.00

$

$

0.00 $

$

0.00 $

$

0.00 $

0.00

$

0.00 $

$ 4,283.37
4,283.37 $ -283.37 $

0.00 $ 4,283.37
4,283.37 $ -283.37 $

12,304.36 7,840.00 4,801.00
24,945.36
0.00

283.37 0.00 $ 0.00
0.00 $

283.37
0.00 $ 0.00

0.00
0.00 0.00

0.00 $ _____o_.oo_

See notes to the general purpose financial statements.

-13-

HART COUNTY LIBRARY CASH AND CASH EQUIVALENTS
JUNE 30, 1995
NONINTEREST BEARING ACCOUNT NationsBank of Georgia, Hartwell, Georgia
OTHER Petty Cash

SCHEDULE "1"
$ -4,758.61 15.00
$ -4,743.61

See notes to the general purpose financial statements. - 14 -

HART COUNTY LIBRARY SCHEDULE OF STATE REVENUE
YEAR ENDED JUNE 30. 1995
AGENCY/FUNDING GRANTS Education, Georgia Department of Public Libraries Salaries and Travel Library Materials Maintenance and Operations

SCHEDULE "2"

GOVERNMENTAL FUND TYPE GENERAL FUND

$

99,376.43

11,945.00

11,945.00

$====1=2=3=,2=6=6.=4=3

See notes to the general purpose financial statements. - 15 -

HART COUNTY LIBRARY SCHEDULE OF FEDERAL REVENUE
YEAR ENDED JUNE 30, 1995
AGENCY/FUNDING Education, U.S. Department of Through Georgia Department of Education Library Services and Construction Act Title I - Public Library Services

SCHEDULE "3"
GOVERNMENTAL FUND TYPE GENERAL FUND
$====4:::l::,o=o=o=.o=o

See notes to the general purpose financial statements. - 16 -

HART COUNTY LIBRARY SCHEDULE OF LOCAL AND OTHER REVENUE
YEAR ENDED JUNE 30, 1995

SCHEDULE "4"

LOCAL SOURCES Board of Education Hart County
City Government Hartwell
County Government Hart County
OTHER SOURCES Donations Fines and Fees

GOVERNMENTAL FUND TYPE GENERAL FUND

$

600.00

12,000.00

71,839.96

6,613.72 97.40

$ ===9=1=,1=5=1=0=8

See notes to the general purpose financial statements. - 17 -

HART COUNTY LIBRARY SCHEDULE OF EXPENDITURES BY OBJECT
GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1995

SCHEDULE "5"

EXPENDITURES
Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical Services Property Services Supplies Library Books and Materials Utilities Communications and Insurance Dues and Fees

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

$ 125,426.80 35,829.14 1,245.61 848.00 3,674.08 6,286.58 23,069.87 $ 21,793.99 3,309.42 624.62

$ 4,283.37

125,426.80 35,829.14 1,245.61 848.00 3,674.08 6,286.58 27,353.24 21,793.99 3,309.42 624.62

Total Expenditures

$ 222,108.11 $

4,283.37 $ 226,391.48

See notes to the general purpose financial statements. - 18 -

HART COUNTY LIBRARY MEMBERSHIP OF LIBRARY BOARD
YEAR ENDED JUNE 30, 1995
BOARD MEMBER ADDRESS
Mrs. Katherine Hailey, Chairperson (*) 602 West Howell Street Hartwell, Georgia 30643
Mr. David Brooks(*) Hart County Courthouse Hartwell, Georgia 30643
Mr. John Cleveland (*) 509 Glen Street Hartwell, Georgia 30643
Mr. Randolph Daniel(*) 611 Opal Street Hartwell, Georgia 30643
Mrs. Nancy Grizzle(*) 437 East Franklin Street Hartwell, Georgia 30643
Mr. Phillip Hix (*) Hart County Courthouse Hartwell, Georgia 30643
Mrs. Louise Johnson(*) 101 Brown Street Hartwell, Georgia 30643
Mrs. Joan Saliba (*) 113 Alford Road Hartwell, Georgia 30643
Mrs. Frances Sasser(*) 3850 Old 29 Highway Hartwell, Georgia 30643
Mrs. Eva Stamy (*) 205 Highland Avenue Hartwell, Georgia 30643
Mrs. Beverly Verdery 304 Fairview Avenue Hartwell, Georgia 30643

(*) Denotes Board Members Serving as of June 30, 1995

See notes to the general purpose financial statements.

- 19 -

SCHEDULE "6"

HART COUNTY LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 1995

SCHEDULE '7"

PERSONNEL

Bisso, Chandler, Hazelton, Jones, Madden, Mattox, Suddeth, Ward,

Arthur J. Lucy George Shirley Anita Jane Deborah Robert

Total Cash Basis

Accruals June 30, 1994

POSITION
Director Clerk Assistant Director Clerk Administrative Assistant Clerk Clerk Clerk

SALARIES

TRAVEL

$

42,947.60 $

4,056.96

41,447.60

9,414.00

10,491.00

4,056.96

9,229.92

3,936.96

958.21 287.40

$

125,581.00 $

1,245.61

-154.20

$

125,426.80 $ ====1=,2=45=.61=

See notes to the general purpose financial statements.

- 20 -

SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS

HART COUNTY LIBRARY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1995
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Inadequate Documentation Audit Control Number 6732-93-03 Finding Resolved
The audit report for the year ended June 30, 1994, disclosed that expenditures to outside vendors were not properly approved and sufficiently documented before payments were made. For the year under review, the Library developed procedures to ensure that expenditures to outside vendors are properly approved and sufficiently documented before payments are made.
PRIOR YEAR/CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL) Inadequate Separation ofDuties Audit Control Number 6732-93-01
The audit report for the year ended June 30, 1994, stated that the Library did not provide for adequate separation of employee duties in the performance ofaccounting functions and related procedures for all funds. For the year under review, the Board made some improvements regarding separation of employee's duties but still did not achieve an adequate degree of internal control. This deficiency was a result of management's decision to limit the number of administrative staff made responsible for accounting functions. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree of internal control with existing staff.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Audit Control Number 6732-93-02
The audit report for the year ended June 30, 1994, noted that the management of the Hart 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 of the 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 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 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.

HART COUNTY LIBRARY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1995
PRIOR YEAR/CURRENT YEAR
EMPLOYEE COMPENSATION Payroll Authorization Documentation Audit Control Number 6732-93-04
The audit report for the year ended June 30, 1994, noted that the Library's personnel files did not contain compensation agreements and documentation to support salaries paid. In addition, the Library dicl not maintain adequate leave records for employees. For the year under review, the Library again failed to provide compensation agreements to support salaries paid and failed to maintain adequate leave records. Corrective action should be taken by the Board to ensure that personnel files are complete and updated to include appropriate documentation for salaries paid and appropriate leave records for all employees.
EXPENDITURES/1..IABILITIES/DISBURSEMENTS Lack ofProper Travel Cost Documentation Amount: $329.45 Audit Control Number 6732-93-05
The audit report for the year ended June 30, 1994, disclosed travel expenditures not supported by proper documentation or were in excess of mileage reimbursement limitations in the amount of $257.95. These questioned costs had not been resolved as of the date of this audit.
For the year under review, an examination of the Library's travel expenditures disclosed travel expenditures of $71.50 that were in excess of meal limitations. Additionally, Library personnel did not submit travel expense reports for reimbursement, as required. These improper travel expenditures occurred because management disregarded travel regulations of the Georgia Department of Education as set forth in Chapter 40, Section 5 of the Financial Management for Georgia Local Units of Administration (FMGLUA). The Library should secure reimbursement for all unsupported travel reimbursed or paid in excess of regulations. In addition, Library management should develop and implement internal controls to ensure that all travel expenditures are reviewed for proper documentation and compliance with travel regulations prior to payment.
CURRENT YEAR
CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Audit Control Number 6732-95-01
During the year ended June 30, 1995, the Library's accounting procedures were insufficient to provide for adequate internal control over the bank reconciliation process. The following deficiencies were noted:
(I) The October 1994 bank statement for the general operating account was not reconciled to the general ledger during the year under review, and has not been reconciled as of the date of this report.

HART COUNTY LIBRARY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1995

CURRENT YEAR

CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Audit Control Number 6732-95-01

(2) Bank statements for July 1994 and August 1994 were missing. Copies had to be obtained directly from the bank.

(3) Book errors disclosed through the bank reconciliation process were carried as reconciling items for extended periods oftime. Audit adjustments were necessary to reconcile the accounting records with bank statements.

(4) Bank reconciliations were not prepared in a timely manner for all of fiscal year 1995. A review of bank reconciliation documentation indicates a delay of 33 days to 427 days between month end and reconciliation date.

(5) Bank reconciliations did not indicate that an administrative review was performed to determine that bank reconciliations were correct and that all required adjustments had been made.

These deficiencies were a result of management's disregard of proper internal control procedures over cash and bank reconciliations that are necessary to adequately safeguard and report the cash operations of the Library.

The deficiencies in the accounting procedures were discussed with the Director. In addition, the accounting personnel of the Library were given instructions in the proper accounting procedures which include the necessity of promptly reconciling the bank accounts, recording adjustments to the accounting records, and performing an administrative review of all bank reconciliations. Appropriate controls should be immediately implemented to safeguard the cash operations of the Library.

EXPENDITURES/LIABILITIES/DISBURSEMENTS Grant Completion Reports Not Supported by Accounting Records Audit Control Number 6732-95-02

A comparison of the Library's grant completion report for the 1995 State Materials and State Travel grants to the accounting records revealed that the grant completion report was not supported by expenditures recorded in the accounting records, as indicated below:

Actual Expenditures

Project Completion
Report

1995 Materials Grant 1995 Travel Grant

$ 17,331.47 $ 11,945.00

958.21

1,500.00

HART COUNTY LIBRARY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1995
CURRENT YEAR
EXPENDITURES/LIABILITIES/DISBURSEMENTS Grant Completion Reports Not Supported by Accounting Records Audit Control Number 6732-95-02
This deficiency was a result ofmanagement using budgeted expenditures instead of actual expenditures when completing the grant completion report as required by the Georgia Department of Education. Subsequent to the close of the 1995 fiscal year, the Library refunded unearned 1995 Travel Grants funds in the amount of $541.79 to the Georgia Department of Education. Procedures should be implemented to ensure that grant completion reports are accurate and verifiable to the accounting records.
GENERAL LEDGER Failure to File Completion Report/Unearned Lottery Funds Amount: $1,100.00 Audit Control Number 6732-95-03
An examination of the Library's compliance with regulations for the Lottery Program - Distant Leaming, revealed that the Library failed to file a final completion report for this program as required by guidelines established by the Georgia Department of Education. Accounting procedures applicable to the program revealed unearned lottery funds in the amount of $1,100.00, which were required to be refunded to the Georgia Department of Education. These deficiencies occurred because management neglected the specific limitations imposed-upon the Library by the Georgia Department of Education.
Appropriate procedures should be implemented by the Library to ensure that completion reports are submitted by the required date and that all unearned lottery funds are refunded. The Library should submit the final Lottery Programs Completion Report to the Georgia Department of Education and should include a refund of $1,100.00 for the unearned lottery funds.
Note: The Hart County Library was provided an opportunity to include pertinent comments from the Library's management concerning these audit findings, conclusions and recommendations. The Library has elected not to provide comments for inclusion in this report.