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AUDIT REPORT HENRY COUNTY LIBRARY SYSTEM
A COMPONENT UNIT OF HENRY COUNTY, GEORGIA YEAR ENDED JUNE 30, 1999

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

HENRY COUNTY LffiRARY SYSTEM -TABLEOFCONTENTS-

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 AND ACCOUNT GROUP

2

B

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 FUND

4

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

5

ADDmONAL FINANCIAL INFORMATION

SCHEDULES

SCHEDULE OF REVENUE

1

STATE

14

2

LOCAL

15

3 SCHEDULE OF SALARIES AND TRAVEL

16

SECTION II FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
July 24, 2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe Board ofRegents of the University System of Georgia
and Director and Members of the Henry County 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 Henry County Library System, a component unit of Henry County, Georgia, 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 ofthe Henry County 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 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 effects on the general purpose financial statements ofthis 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 Henry County 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 Henry County Library System taken as a whole. The accompanying financial schedules (Schedules 1 through 3), 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. 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 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,
~s:~~~in~.<tJ~ State Auditor
RWH:gp 99ARL-42A

HENRY COUNTY LIBRARY SYSTEM

HENRY COUNTY LIBRARY SYSTEM COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30,1999

EXHIBIT "A"

ASSETS Cash and Cash Equivalents Investments Amount to be Provided in Future Years
For Payment of Compensated Absences

GOVERNMENTAL FUND TYPE GENERAL FUND

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

(Memorandum Only)

JUNE 30,1999

JUNE 30.1998

$

162,451.95

$

162,451,95 $

91,050.46

20,434,29

20,434,29

19,417,56

_ _ _ _ _ _ $_---:.1.:::J8,~35~9:.:.::,2:::..3

18,359,23

19.234,97

Total Assets

$

182,886,24 $

18,359,23 $

201.245.47 $

12..9..,70:.;;2.,9==9

LIABILITIES AND FUND EQUITY

LIABILITIES

Accounts Payable

$

Compensated Absences

Total Liabilities

$

FUND EQUITY

Fund Balances

Unreserved

Designated for

Local Capital Outlay Projects

$

Undesignated

Total Fund Equity

$

3,488.39 $
3,488,39 $

$ 18.359.23
18.359.23 $

3,488,39 $ 18.359,23
21.847,62 $

7.827,37 19.234,97
27,062.34

3.081.47 176.316,38
179.397.85

$

3.081.47 $

176.316,38

7,393.24 95.247.41

$

179.397,85 $

102,640.65

Total Liabilities and Fund Equity

$

182,886,24 $

18,359,23 $

201,245.47 $ _ _..1..-29=.7.0..2..,9.9..

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

HENRY COUNTY LIBRARY SYSTEM 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 Information Technology
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

GENERAL FUND

TOTALS

(Memorandum Only) YEAR ENDED

JUNE 30, 1999

JUNE 30,1998

$ 243,980.78 $
50,000.00 66,077.12
$ 360,057.90 $

243,980.78 $
50,000.00 66,077.12
360,057.90 $

315,922.31 4,060.57
43,771.00 73,868.87
437,622.75

$ 464,823.63 $
47,376.24
185,144.59 75,207.20
749.00
$ 773,300.66 $
$ -413,242.76 $

464,823.63 $
47,376.24
185,144.59 75,207.20
749.00
773,300.66 $
-413,242.76 $

201,069.63 18,455.34 20,510.78
527,653.55 76,657.17
844,346.47
-406,723.72

489,999.96

489,999.96

429,000.00

$

76,757.20 $

102,640.65

76,757.20 $
102,640.65

22,276.28 80,364.37

FUND BALANCE JUNE 30

$ 179,397.85 $

179,397.85 $ ===1=02=,6:=4=0=.6==5

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

HENRY COUNTY LIBRARY SYSTEM 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
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1, 1998
FUND BALANCE JUNE 30. 1999

BUDGET

ACTUAL

$ 289,723,00 $ 50,000.00 37,000,00
$ 376,723,00 $

243,980,78 50,000,00 66,077.12
360,057.90

$ 461,639.59 $ 51,167,53 234,881.68 70,919.20 48,115,00
$ 866,723.00 $
$ -490,000.00 $

464,823.63 47,376.24 185,144.59 75,207.20 749.00
773,300,66
-413,242.76

490,000.00

$

0.00 $

102,552.29

489,999,96
76,757.20 102,640.65

$ 102,552.29 $......-===17=9=,3=9=7,.8...5..

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

HENRY COUNTY LIBRARY SYSTEM

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Henry County Library System (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 ofthe 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 nine members; six members appointed by Henry County Board of Commissioners and three members appointed by Henry County Board ofEducation. The Library 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 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.
The Henry County Board ofCommissioners appoints a majority ofthe Library's Board members and provides a substantial majority offunding for the operations ofthe Library, consequently, the Library is deemed to have a financial benefit/burden relationship with the Henry County Board of Commissioners as defined by the Governmental Accounting Standards Board. Accordingly, the Henry County Library System is considered to be a component unit of Henry County, Georgia for financial reporting purposes.
FUND ACCOUNTING
The Library uses a fund and an account group 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. 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.
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-

HENRY COUNTY LIBRARY SYSTEM

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The general purpose financial statements account for all State, 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. The fund and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPE - used to account for all or most of the Library's general activities. The Governmental Fund Type includes:
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.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - used to account for compensated absences not appropriately accounted for and recorded in other fund types.
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. 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.
BUDGET
The Henry County Library System'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
-6-

HENRY COUNTY LIBRARY SYSTEM

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
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 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.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Library in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one 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,
(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,
-7-

HENRY COUNTY LIBRARY SYSTEM

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(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.
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 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.
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. Certain reclassifications have been made to the comparative data to conform to the current year classifications.
Note 2: DEPOSITS AND INVESTMENTS
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 of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being
- 8-

HENRY COUNTY LIBRARY SYSTEM

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 2: DEPOSITS AND INVESTMENTS
secured after the deduction ofthe amount of deposit 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 of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone 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 ofthe 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 of development 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, 1999, the bank balances were $192,673.96. The amounts ofthe total bank balances are classified into three categories of credit risk:
Category 1 - Cash that is insured (e,g" Federal depository insurance) or collateralized with securities held by the Library or by the Library's agent in the Library's name.
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.)
- 9-

HENRY COUNTY LIBRARY SYSTEM

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 2: DEPOSITS AND INVESTMENTS

The Library's deposits are classified by risk category at June 30, 1999, as follows:

Risk CategOl)'

Bank Balance

1

$ 103,081.47

2

89,592.49

3

0.00

Total

$ 192.673.96

CATEGORIZATION OF INVESTMENTS At June 30, 1999, the carrying value of the Library's total investments was $20,434.29 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 of the 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 of the 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 maturity of Georgia Fund 1 may not exceed 60 days. Fund 6 maintains a duration of approximately one year. The weighted average maturity for Georgia Fund 1 on June 30, 1999 was 27 days. The average investment duration for Fund 6 on June 30, 1999 was 1.03 years.

- 10-

HENRY COUNTY LIBRARY SYSTEM

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

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 illness or injuries to employees; natural disaster; and unemployment compensation.

The Library has obtained commercial insurance for risk ofloss associated with torts, assets, job related illness or injuries to employees and natural disaster. 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 errors or omissions, which includes, among other risks, risks for sexual harassment and discrimination. The Library has not experienced any losses related to these risks 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.

Changes in the unemployment compensation claims liability during the last two fiscal years are as follows:

1998 1999

Beginning of Year Liability

Claims and Changes in Estimates

$

0.00 $

608.87 $

$

0.00 $

109.31 $

Claims Paid

End ofYear Liability

608.87 $

0.00

109.31 $

0.00

The Library has purchased surety bonds to provide additional insurance coverage as follows:

Position Covered

Amount

Library Director Board Chairperson Board Treasurer All Other Employees

$ 20,000.00 $ 20,000.00 $ 20,000.00 $ 5,000.00

Note 4: OPERATING LEASES

The Library has committed under various leases for rental ofphoto copiers. These leases are considered for accounting purposes to be operating leases. Lease expenditures for the year ended June 30, 1999, amounted to $4,440.42. Future minimum lease payments for these leases are as follows:

- 11 -

HENRY COUNTY LIBRARY SYSTEM

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 4: OPERATING LEASES

Year Ending

Amount

2000 2001 2002 2003

$ 5,045.04 5,045.04 5,045.04 4,624.62

Total

$ 19,759.74

Note 5: GENERAL LONG-TERM DEBT

The changes in General Long-Tenn Debt during the fiscal year ended June 30, 1999, were as follows:

Compensated Absences

Balance July 1, 1998

$ 19,234.97

Deductions Annual Leave Earned and Utilized (Net)

875.74

Balance June 30, 1999

$ 18,359.23

Note 6: ACCUMULATED EMPLOYEES' LEAVB

The Library's regular employees working at least 20 hours per week earn vacation leave according to their length of service ranging from 3.8 to 13.33 hours per month with a maximum accumulation of 240 hours. All unused vacation leave, up to the maximum accumulation, is paid upon retirement or tennination of employment at the current rate of pay. See Note 1- Compensated Absences

Note 7: 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 ofAudits and Accounts.

- 12-

HENRY COUNTY LIBRARY SYSTEM

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1999 .

Note 7: RETIREMENT PLANS

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%

$ 44,802.31 $ 40,392,85 $ 33,778,38

- 13 -

HENRY COUNTY LIBRARY SYSTEM SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30,1999
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

$

128,487.75

2,821.03

56,336.00

56,336.00

$

243,980.78

See notes to the general purpose financial statements.

- 14-

LOCAL SOURCE Board of Education Henry County

HENRY COUNTY LIBRARY SYSTEM SCHEDULE OF LOCAL REVENUE YEAR ENDED JUNE 30,1999

SCHEDULE "2"
GOVERNMENTAL FUND TYPE GENERAL FUND
$ ===,;;,;50~.0;,,;;0~O.~OO=

See notes to the general purpose financial statements.

15 -

HENRY COUNTY LIBRARY SYSTEM SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 1999

SCHEDULE "3"

NAME
Atkins, Brown, Davis, Farber, Guthrie, Hazelton, Hendricks, Hollandsworth, Hussey, Jackson, Mabrey, Miller, Pope, Pillatzki, Renaud, Robertson, Robinson, Smith, Vaughn, Vincent, Wages, Walker, West, White, Wyke, Yacqubian,

Tomeka M. Janice Jeb S. Sue RaeA. George R. Nancy Dianne B. Joan Amanda D. Melissa J. Patricia VeverC. Kathryn E. Constance J. Mary H. Patricia P. Karen E. Wanda D. Rebecca M. Christina L. Flora W. Kaye E. Kathy S. Judy K. Grace J.

Totals Per Report

TITLE CATEGORY
Page Library Supervisor Page Bookkeeper Library Assistant Interim Director Page Children's Program Librarian Library Assistant Library Assistant Page Library Assistant Library Assistant Library Assistant Library Supervisor Assistant Director Library Assistant Page Library Assistant Library Assistant Page Director Headquarters Supervisor Library Assistant Library Assistant Page

SALARIES

TRAVEL

$

2,604.63

20,289.68 $

2,236.39

8,539.26

20,469.72

32,409.68

597.40

13,050.38

16,753.86

14,207.07

2,769.44

16,770.92

8,287.68

17,974.23

21,443.11

52,944.10

7,656.71

427.45

18,930.00

10,595.71

787.95

30,415.21

28,639.00

16,431.01

20,599.34

822.71

21.38 389.75 1,143.14
35.00 7.13
166.27 17.28
526.50
493.47
492.39

$

386,652.64 $==".;3~,2:;;;9~2;,;;,.3.;,.1

See notes to the general purpose financial statements.

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SECTIONll FINDINGS AND QUESTIONED COSTS

HENRY COUNTY LIBRARY SYSTEM SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 1999
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: 6752-93-03
The audit report for the year ended June 30, 1998, noted that the management ofthe Henry County 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 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 ofland, 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.
CURRENT YEAR
EMPLOYEE COMPENSATION Salary Overpayment Amount: $1,977.32 Finding Control Number: 6752-99-01
A sample offive employees were selected to test employee compensation. The results ofthis testing revealed one instance where an employee was overpaid in the amount of$1,977.32. This overpayment was the result of the Library incorrectly calculating the amount of excess leave taken to be deducted from the individual's wages. The Library should seek reimbursement ofthis overpayment for deposit into the Library's General Fund.