Audit report, Houston County Public Library System, Perry, Georgia, year ended June 30, 1994

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STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET ATLANTA. GEORGIA 30334

AUDIT REPORT HOUSTON COUNTY PUBLIC LIBRARY SYSTEM
PERRY, GEORGIA YEAR ENDED JUNE 30, 1994

HOUSTON COUNTY PUBLIC LIBRARY SYSTEM - TABLE OF CONTENTS -

SECTION I
FINANCIAL
INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

EXHIBITS

FINANCIAL STATEMENTS

COMBINED STATEMENTS-OVERVIEW

A

COMBINED STATEMENT OF ASSETS, LIABILITIES AND FUND EQUITY

ARISING FROM CASH TRANSACTIONS

ALLFUNDTYPES

3

B

COMBINED STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS

GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUNDS

4

C

COMBINED STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS

ACTUALANDBUDGET-GOVERNMENTALFUNDTYPES

7

D

STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

8

E NOTES TO THE FINANCIAL STATEMENTS

9

ADDITIONAL FINANCIAL INFORMATION

COMBINING AND INDIVIDUAL FUND STATEMENTS

SPECIAL REVENUE FUND

F

COMBINING STATEMENT OF ASSETS AND FUND EQUITY

ARISING FROM CASH TRANSACTIONS

16

G

COMBINING STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS

17

FIDUCIARY FUND TYPES

H

COMBINING STATEMENT OF ASSETS, LIABILITIES AND

FUND EQUITY ARISING FROM CASH TRANSACTIONS

18

I

COMBINING STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS

EXPENDABLE TRUST FUNDS

19

J

STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUND

20

SCHEDULES

1 ANALYSIS OF CASH AND CASH EQUIVALENTS

21

2 MEMBERSHIP OF LIBRARY BOARD

22

3 SCHEDULE OF SALARIES AND TRAVEL

23

HOUSTON COUNTY PUBLIC LIBRARY SYSTEM - 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
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 2, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe Houston County Public Library System Board
INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the financial statements (Exhibits A through E) arising from cash transactions of the Houston County Public Library System as ofJune 30, 1994, 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 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 Note 1 to the Financial Statements, the Library's policy is to prepare its financial statements on the basis of cash receipts and disbursements, which is a comprehensive basis of accounting other than generally accepted accounting principles.
In our opinion, the financial statements referred to above present fairly, in all material respects, the assets and fund equity ofthe various funds arising from cash transactions of the Houston County Public Library System as ofJune 30, 1994, and the revenues collected and expenditures paid during the year then ended, on the basis of accounting described in the Notes to Financial Statements.

94ARL-47

Our audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The combining and individual fund statements (Exhibit F through J) and the financial schedules (Schedules 1 through 3) are presented for purposes of additional analysis and are not a required part of the financial statements ofthe Houston County Public Librmy System. Such information has been subjected to the auditing procedures applied in the audit ofthe financial statements and, in our opinion, is fairly presented in all material respects in relation to the 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 ofthe State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:jy 94ARL-47


HOUSTON COUNTY PUBLIC LIBRARY SYSTEM - 1-

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HOUSTON COUNTY PUBLIC LIBRARY SYSTEM COMBINED STATEMENT OF ASSETS, LIABILITIES AND FUND EQUITY
ARISING FROM CASH TRANSACTIONS ALL FUND TYPES JUNE 30. 1994

EXHIBIT "A"

ASSETS
Cash and Cash Equivalents Investments Held by Trustee

GOVERNMENTAL FUND TYPES

FIDUCIARY

------------------------------------------- FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

TRUST AND

FUND

FUND

FUND

AGENCY FUNDS

TOTAL

$ 73,573.86$ l,738.B5 $

0.00 $

41,538.02 $ 116,850.73

68,115.02

68,115.02

Total Assets

$ 73,573.86$ 1,738.85$

0.00 $ 109,653.04$ 184,965.75

========== ============ ============ ============= ===========

LIABILITIES AND FUND EQUITY

LIABILITIES

Deferred Compensation Plan

FUND EQUITY

Fund Balances Reserved For Purchase of Library Books and Materials For Endowment Corpus For Continuation of Federal Program

$ 27,393.34 $

1,738.85

Unreserved Undesignated

$ 27,393.34 $ 46,180.52

1,738.85 0.00 $

Total Fund Equity

$ 73,573.86 $ 1,738.85 $

$ 68,115.02 $ 68,115.02

$ 27,393.34

$ 26,839.40

26,839.40

1,738.85

------------- -------------

$ 26,839.40$ 55,971.59

0.00

14,698.62

60,879.14

0.00 $ 41,538.02 $ 116,850.73

Total Liabilities and Fund Equity $ 73,573.86$ 1,738.85$

0.00 $ 109,653.04 $ 184,965.75

============= ============= ============= ============= =============

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

HOUSTON COUNTY PUBLIC LIBRARY SYSTEM COMBINED STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS
GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30. 1994
CASH RECEIPTS

EXHIBIT "B" Page 1

GOVERNMENTAL FUND TYPES

----------------------------------------------

SPECIAL CAPITAL

GENERAL REVENUE PROJECTS

FUND

FUND

FUND

TOTAL

FIDUCIARY FUND TYPE
EXPENDABLE TRUST FUNDS

TOTAL

STATE FUNDS Education, Georgia Department of Public Libraries Salaries and Travel Library Materials Maintenance and Operations Lottery Program Media Center and Library Equipment Georgia State Financing and Investment Coomission

$140,065.24
56,223.00 56,223.00

$140,065.24
56,223.00 56,223.00

$ 52,500.00

52,500.00

$ 36,000.00 36,000.00

$140,065.24 56,223.00 56,223.00
52,500.00
36,000.00

Total State Funds

$252,511.24 $52,500.00$ 36,000.00 $341,011.24

$ 341,011.24

FEDERAL FUNDS Education, Georgia Department of Federal Program Library Services and Construction Act Title I - Public Library Services
LOCAL AND OTHER FUNDS Board of Education Houston County Book Fair City Governments Centerville Perry Warner Robins Copier Fees County Government Houston Fines Gifts Interest Received Lost Books
Total Local and Other Funds

$15,000.00

$15,000.00

$ 15,000.00

$ 1,200.00 2,767.73
38,752.40 178,550.72 14,234.44 10,653.34
129,477.00 18,923.89 8,970.82 2,565.97 3,621.92
$409,718.23

$ 1,200.00 2,767.73

$ 1,200.00 2,767.73

38,752.40 178,550.72
14,234.44 10,653.34

38,752.40 178,550.72 14,234.44 10,653.34

129,477.00

129,477.00

18,923.89

18,923.89

8,970.82

8,970.82

$ 144.60 2,710.57 $ 993.82 3,704.39

3,621.92

3,621.92

---------- ---------- ----------- -----------

$ 144.60 $409,862.83 $ 993.82 $ 410,856.65

TRANSFERS IN

$662,229.47 $67,500.00$ 36,144.60 $765,874.07 $

18,810.76

18,810.76

993.82 $ 766,867.89 18,810.76

Total Cash Receipts CASH BALANCE JULY 1

$681,040.23 $67,500.00$ 36,144.60 $784,684.83 $ 993.82 $ 785,678.65

63,852.36

0.00 12,897.59 76,749.95 30,380.05 107,130.00

$744,892.59 $67,500.00$ 49,042.19 $861,434.78 $ 31,373.87 $ 892,808.65
========= ========= ========= ========== ========== =========

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

HOUSTON COUNTY PUBLIC LIBRARY SYSTEM COMBINED STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS
GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30 1 1994
DISBURSEMENTS

EXHIBIT "B" Page 2

Operating Costs Salaries Employee Benefits Travel of Employees Water, Sewer, and Cleaning Services Repair and Hainenance Services Other Purchased Services Supplies Library Books and Materials Energy Property Services Insurance Camunications Other Expendistures
Nonoperating Costs Equipment
TRANSFERS OUT
Total Disbursements
CASH BALANCE JUNE 30

GOVERNMENTAL FUND TYPES

FIDUCIARY

---------------------------------------------- FUND TYPE

SPECIAL CAPITAL

-----------

GENERAL REVENUE PROJECTS

EXPENDABLE

FUND

FUND

FUND

TOTAL TRUST FUNDS TOTAL

---------- ---------- ---------- ---------- ----------- -----------

$348,495.BB

70,955.87

3,234.37

2,409.6B

22,900.94

710.03

$

16,398.50

98,480.14 $ 9,261.15

48,210.59

3,911.00

9,292.77

6,748.65

15,797.59

$348,495.88
70,955.87 3,234.37
2,409.68 22,900.94
865.71 1,575.74 16,398.50 107,741.29 48,210.59 3,911.00 9,292.77 6,748.65 15,797.59

$ 348,495.88 70,955.87 3,234.37
2,409.68
22,900.94
1,575.74 16,398.50
107,741.29 48,210.59 3,911.00 9,292.77 6,748.65 15,797.59

23,772.72 56,500.00 46,040.97 126,313.69
---------- ---------- ---------- ----------
$671,318.73 $65,761.15$ 46,906.68 $783,986.56

126,313.69
-----------
$ 783,986.56

2,135.51 2,135.51 $ 16,675.25 18,810.76
---------- ---------- ---------- ---------- ----------- -----------
$671,318.73 $65,761.15$ 49,042.19 $786,122.07 $ 16,675.25$ 802,797.32

73,573.86 1,738.85

0.00 75,312.71 14,698.62 90,011.33

---------- ---------- ---------- ---------- ----------- -----------

$744,892.59$ 67,500.00$ 49,042.19 $861,434.78$ 31,373.87 $ 892,808.65
========== ========== ========== ========= =========== ========

The notes to the financial statements are an integral part of this statement. - 5-

G

HOUSTON COUNTY PUBLIC LIBRARY COMBINED STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS
ACTUAL AND BUDGET - GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1994

EXHIBIT "C"

CASH RECEIPTS State Funds Federal Funds Local and Other Funds
Transfers In Total Cash Receipts
CASH BALANCE JULY 1, 1993

ACTUAL PER
EXHIBIT "B"

BUDGET

VARIANCE FAVORABLE (UNFAVORABLE)

$ 341,011.24 $ 229,094.00 $ 111,917.24

15,000.00

0.00

15,000.00

409,862.83

373-,614.60

36;248.23

------------- ------------- -------------

$ 765,874.07 $ 602,708.60 $ 163,165.47

18,810.76

0.00

18,810.76

------------- ------------- -------------

$ 784,684.83 $ 602,708.60 $ 181,976.23

76,749.95

26,942.92

49,807.03

------------- ------------- -------------

$ 861,434.78 $ 629,651.52 $ 231,783.26
============= ============= =============

DISBURSEMENTS
Operating Costs Salaries Employee Benefits Travel of Employees Water, Sewer, and Cleaning Services Repair and Maintenance Services Other Purchased Services Supplies Library Books and Materials Energy Property Services Insurance Communications Other Expenditures
Nonoperating Costs Equipment
Transfers Out
Total Disbursements
CASH BALANCE JUNE 30, 1994

$ 348,495.88 $ 347,380.73 $ -1,115.15

70,955.87

47,795.40

-23,160.47

3,234.37

4,650.00

1,415.63

2,409.68

2,032.00

-377. 68

22,900.94

25,300.00

2,399.06

1,575.74

1,000.00

-575.74

16,398.50

15,000.00

-1,398.50

107,741.29

63,866.00

-43,875.29

48,210.59

53,600.00

5,389.41

3,911.00

6,250.00

2,339.00

9,292.77

12,000.00

2,707.23

6,748.65

8,550.00

1,801.35

15,797.59

37,227.39

21,429.80

126,313.69

5,000.00 -121,313.69

------------- ------------- -------------

$ 783,986.56 $ 629,651.52 $ -154,335.04

2,135.51
-------------

0.00
-------------

-2,135.51
-------------

$ 786,122.07 $ 629,651.52 $ -156,470.55

75,312.71
-------------

----------0-.0--0

-75,312.71
-------------

$ 861,434.78 $ 629,651.52 $ -231,783.26
============= -============ =============

The notes to the financial statements are an integral part of this statement. - 7-

HOUSTON COUNTY PUBLIC LIBRARY SYSTEM STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND
YEAR ENDED JUNE 30. 1994
CASH RECEIPTS OTHER FUNDS
Initial Contribution by Benefactor Total Cash Receipts
CASH BALANCE JULY 1
DISBURSEMENTS None Recorded CASH BALANCE JUNE 30

EXHIBIT "D"

NOLA BRANTLEY MEMORIAL
LIBRARY FUND

$ 26,839.40 $ 26,839.40
0.00
$ 26,839.40

$

0.00

26,839.40

$ 26,839.40

The notes to the financial statements are an integral part of this statement.
- 8-

HOUSTON COUNTY PUBLIC LIBRARY SYSTEM NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994

EXHIBIT "E"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Houston County Public Library System 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 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 Houston County Public Library System is determined to be a joint venture.
The Library Board consists of 12 members; three members appointed by the Houston County Board of Commissioners, three members appointed by the Centerville City Council, three members appointed by the Perry City Council and three members appointed by the Wamer Robins City Council. 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 oflocal funds for continued operations and is the lowest level of oversight responsibility for the Library's operations.
The Houston County Public Library System is located in Perry, Georgia, and serves Houston County with the main Library located in Perry, Georgia.
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.
The financial statements account for all State, Federal, Local and Other funds under control of the Library, unless otherwise disclosed in these notes. Funds presented in this report are as follows:

- 9-

HOUSTON COUNTY PUBLIC LIBRARY SYSTEM NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994

EXHIBIT "E"

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GOVERNMENTAL FUND TYPES - used to account for all or most of the Library's general activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the Library except those required to be accounted for in another fund. These transactions relate to resources obtained and ~sed for services traditionally provided by a Library.
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. The primary type of special revenue fund consists of proceeds received from State and Federal Governments to accomplish specific objectives and are required to be accounted for separately.
CAPITAL PROJECTS FUND - the fund used to account for Georgia State Financing and Investment Commission Project Number 6762-92-SB-003 to be used for the acquisition or construction of major capital facilities.
FIDUCIARY FUND TYPES - the trust and agency funds used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. These funds include:
NONEXPENDABLE TRUST FUND Nola Brantley Memorial Library Fund - the fund used to account for an endowment of which the corpus is to be invested and preserved intact with the resultant income to be used for Library operations.
EXPENDABLE TRUST FUNDS Centerville Library Donations Fund - the fund used to account for restricted donations to be expended only for the Centerville Library.
Self-Insured Employee Benefit Fund - the fund used to account for Unemployment Compensation Insurance contributions and expenditures.
AGENCY FUND - the fund used to account for assets held by a third party for employees contributing into an I.RS. 457 Deferred Compensation Plan.
BASIS OF ACCOUNTING
The Houston County Public Library System maintains its financial statements in accordance with a comprehensive basis of accounting called the Cash Receipts and Disbursements basis of accounting, which differs from generally accepted accounting principles applicable to governmental entities. This Cash Receipts and Disbursement basis of accounting is defined as that method of accounting in which certain revenue and the related assets are recognized when received rather than when earned, and certain expenses are recognized when paid rather then when the obligation is incurred.
- 10 -

HOUSTON COUNTY PUBLIC LIBRARY SYSTEM NOTES TO THE FINANCIAL STATE:MENTS JUNE 30, 1994

EXIIlBIT "E"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUDGET
Houston County Public Library System has a legally authorized nonappropriated budget which is formally approved by the Board at the aggregate level. Budgets are prepared to provide a basis for funding operations and there is no legal prohibition regarding overexpenditure of the aggregate budget. The budget process begins when the Library administration prepares and submits a proposed budget to the Board for approval. After approval of the proposed budget by the Board, copies are sent to all local funding agencies. After funding approval is received from all local funding agencies, the Board will make any necessary adjustments and adopt the budget. This final budget is then submitted to the Georgia Department ofEducation, Division ofPublic Library Services, as a part of the Library's Annual Application for State Aid.
The Library prepares its budget on the cash receipts and disbursements basis which is the same basis on which it presents its financial statements.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits (including certificates of deposit and N.O.W. accounts) 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 HELD BY TRUSTEE
Investments held by trustee consist of contributions from employees who have elected to participate in the Library's deferred compensation plan. See Note 5 - Deferred Compensation Plan
Note 2: DEPOSITS AND INVEST:MENTS
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 in an amount of not less than 110 percent of the public funds being secured after the deduction ofthe 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,
- 11 -

HOUSTON COUNTY PUBLIC LIBRARY SYSTEM NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994

EXIIlBIT "E"

Note 2: DEPOSITS AND INVESTMENTS
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates ofindebtedness or other direct obligations ofthe United States or ofthe State of Georgia,
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations ofthe 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 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 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, 1994, the bank balances were $134,730.93. The bank balances were entirely covered by Federal depository insurance.
CATEGORIZATION OF INVESTMENTS At June 30, 1994, the carrying amount of the Library's total investments was $68,115.02 and this entire amount is categorized as Unclassified - Deferred Compensation Plan pooled investments.
Note 3: RISK MANAGEMENT
The Library has established a limited risk management program for Unemployment compensation. Estimated claims are budgeted by management based upon experience. During fiscal year 1994, no claims were paid.
Note 4: OPERATING LEASES
The Library has committed under various leases for copiers. These leases are considered for accounting purposes to be operating leases. Lease expenditures for the year ended June 30, 1994, amounted to $5,212.92. Future minimum lease payments for these leases are as follows:
- 12 -

HOUSTON COUNTY PUBLIC LIBRARY SYSTEM NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994

EXIIlBIT "E"

Note 4: OPERATING LEASES

Year Ending
1995 1996 1997 1998 1999
Total

Amount
$ 6,597.72 6,597.72 5,539.20 5,539.20 1,384.80
$ 25 658 64

Note 5: DEFERRED COMPENSATION PLAN

The Library offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all Library employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency.

All amounts ofcompensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property or rights are (until paid or made available to the employee or other beneficiary) solely the property and rights of the Library (without being restricted to the provisions ofbenefits under the plan), subject only to the claims ofthe Library's general creditors. Participants' rights under the plan are equal to those ofgeneral creditors ofthe Library in an amount equal to the fair market value of the deferred account for each participant.

Investments are managed by the plan's trustee, Lincoln National Sales Corporation of Georgia, under one of the investment options, or a combination thereof The choice of the investment options is made by the participants.

Note 6: ACCUMULATED EMPLOYEES LEAVE

Employees earn annual leave ranging from five-sixths to one and two third days each month depending upon the employees' length ofcontinuous service with maximum accumulation of thirty days. Employees are paid, at their current rate of pay, a maximum often days for unused accumulated annual leave upon retirement or termination of employment.

Note 7: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRY)

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).

- 13 -

HOUSTON COUNTY PUBLIC LIBRARY SYSTEM NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994

EXHIBIT "E"

Note 7: RETIREMENT PLANS
TRS provides service retirement, disability retirement and survivors benefits for its members. A member is eligible for service retirement after 30 years of service, regardless of age, or after 10 years of serviceand 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 of years of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution ofthe 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, 1994, was $312,621.30; total payroll was $348,495.88.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Library who are covered by TRS are required to pay 6% of their gross earnings to TRS. The Library makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees as advised by their independent actuary. At June 30, 1994, 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 1994 amounted to $55,678.24, of which $36,920.89 was made by the Library and $18,757.35 was made by employees. These contributions represented 11.81% (Library) and 6% (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
- 14 -

HOUSTON COUNTY PUBLIC LIBRARY SYSTEM NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994

EXHIBIT "E"

Note 7: RETIREMENT PLANS

salary increases. A standardized measure of the pension benefit obligation was adopted by the GASB to 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, 1993, was as follows:

Total pension benefit obligation Net assets available for benefits, at cost

$ 13,912,014,000.00 12,821,722,000.00

Unfunded pension benefit obligation

$ 1,090 292,000.00

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as of June 30, 1993. 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, 1994, were $521,550,000.00. The Library's contribution for the year ended June 30, 1994, of $36,920.89 was actuarially determined and represented 00.0071% of total contributions made by all participating employers.

Ten year historical trend information is presented in the 1994 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.

TRS RELATED-PARTY INVESTMENTS During fiscal year 1994 and as of June 30, 1994, the TRS held no securities issued by the Library or other related parties.

Note 8: SURETY BONDS

The employees ofthe Houston County Public Library System are bonded under a Public Employees Blanket Bond in the amount of $5,000.00 with The United States Fidelity and Guaranty Company, Baltimore, Maryland, their Bond No. CCR 02-0080-10364-92-7, on which premium was paid to March 7, 1995.

- 15 -

HOUSTON COUNTY PUBLIC LIBRARY SYSTEM COMBINING STATEMENT OF ASSETS AND FUND EQUITY
ARISING FROM CASH TRANSACTIONS SPECIAL REVENUE FUND JUNE 30 1 1994

EXHIBIT "F"

ASSETS Cash and Cash Equivalents

LOTTERY PROGRAM

LIBRARY SERVICES AND .CONSTRUCT I ON
ACT
TITLE I PUBLIC LIBRARY SERVICES

TO_TAL

$

0.00 $

1,738.85$

1,738.85

============= ============= =============

FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs

$

0.00 $

1,738.85$

1,738.85

============= ============= =============

See notes to the financial statements.

- 16 -

HOUSTON COUNTY PUBLIC LIBRARY SYSTEM COMBINING STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS
SPECIAL REVENUE FUND YEAR ENDED JUNE 30. 1994

EXHIBIT "G"

CASH RECEIPTS
STATE FUNDS Education, Georgia Department of Lottery Program Media Center and Library Equipment
FEDERAL FUNDS Education, Georgia Department of Federal Program Library Services and Construction Act Title I - Public Library Services
Total Cash Receipts
CASH BALANCE JULY 1

LOTTERY PROGRAM

LIBRARY SERVICES AND CONSTRUCTION
ACT
TITLE I PUBLIC LIBRARY SERVICES

TOTAL

$ 52,500.00

$ 52,500.00

$ 15,000.00

15,000.00

------------- ------------- -------------

$ 52,500.00 $ 15,000.00 $ 67,500.00

0.00

0.00

0.00

------------- ------------- -------------

$ 52,500.00 $ 15,000.00 $ 67,500.00
============= ============= =============

DISBURSEMENTS
Operating Costs Library Books and Materials
Nonoperating Costs Equipment
Total D\sbursements CASH BALANCE JUNE 30

$

9,261.15 $

9,261.15

$ 52,500.00

4,000.00

56,500.00

------------- ------------- -------------

$ 52,500.00 $ 13,261.15 $ 65,761.15

0.00

1,738.85

1,738.85

------------- ------------- -------------

See notes to the financial statements.

$ 52,500.00 $ 15,000.00 $ 67,500.00
============= ============= =============
- 17 -

HOUSTON COUNTY PUBLIC LIBRARY SYSTEM COMBINING STATEMENT OF ASSETS, LIABILITIES AND FUND EQUITY
ARISING FROM CASH TRANSACTIONS FIDUCIARY FUND TYPES JUNE 30. 1994

EXHIBIT "H"

ASSETS
Cash and Cash Equivalents Investments Held by Trustee

NON EXPENDABLE TRUST FUND

EXPENDABLE TRUST FUNDS

AGENCY FUNDS

NOLA BRANTLEY CENTERVILLE SELF-INSURED DEFERRED

MEMORIAL

LIBRARY

EMPLOYEE COMPENSATION

LIBRARY FUND DONATIONS FUND BENEFIT FUND

PLAN

TOTAL

$ 26,839.40$

0.00 $

14,698.62 $

$ 68,115.02

41,538.02 68,115.02

Total Assets

$ 26,839.40$

0.00 $ 14,698.62 $ 68,115.02 $ 109,653.04

============= =========== ============= ============= ===========

LIABILITIES AND FUND EQUITY
LIABILITIES
Deferred Compensation Plan
FUND EQUITY
Fund Balances Reserved Endowment Corpus Unreserved Undesignated
Total Fund Equity

$ 26,839.40 0.00 $
$ 26,839.40$

$ 68,115.02 $ 68,115.02

0.00 $ 14,698.62 $ 0.00 $ 14,698.62 $

$
0.00

26,839.40 14,698.62

0.00 $ 41,538.02

Total Liabilities and Fund Equity $ 26,839.40$

0.00 $ 14,698.62 $ 68,115.02 $ 109,653.04

============ ============== =========== ============ =============

See notes to the financial statements.

- 18 -

HOUSTON COUNTY PUBLIC LIBRARY SYSTEM COMBINING STATEMENT OF CASH RECEIPTS ANO DISBURSEMENTS
FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30. 1994

EXHIBIT "I"

CASH RECEIPTS OTHER FUNDS
Interest Received Total Cash Receipts
CASH BALANCE JULY 1
DISBURSEMENTS TRANSFERS
To General Fund CASH BALANCE JUNE 30

CENTERVILLE SELF-INSURED

LIBRARY

EMPLOYEE

DONATIONS FUND BENEFIT FUND

TOTAL

$

0.00 $

993.82 $

993.82

$

0.00 $

993.82 $

993.82

3,923.68

26,456.37

30,380.05

$

3,923.68$ 27,450.19 $ 31,373.87

============== ============= =============

$

3,923.68$ 12,751.57 $ 16,675.25

0.00

14,698.62

14,698.62

$

3,923.68$ 27,450.19 $ 31,373.87

============== ============= =============

See notes to the financial statements.

- 19 -

HOUSTON COUNTY PUBLIC LIBRARY SYSTEM STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FUDICIARY FUND TYPE - AGENCY FUND YEAR ENDED JUNE 30 1 1994

EXHIBIT "J"

DEFERRED COMPENSATION PLAN
ASSETS Investments Held by Trustee
LIABILITIES Deferred Compensation Plan

BALANCE JULY 1, 1993

ADDITIONS

BALANCE DEDUCTIONS JUNE 30, 1994

$ 62,330.50 $ 5,784.52 $

0.00 $ 68,115.02

============= ============= ============= =============

$ 62,330.50 $ 5,784.52$

0.00 $ 68,115.02

============= ============= ============= =============

See notes to the financial statements.

- 20 -

HOUSTON COUNTY PUBLIC LIBRARY SYSTEM ANALYSIS OF CASH AND CASH EQUIVALENTS
JUNE 30, 1994
INTEREST BEARING ACCOUNTS
Bank South, Perry, Georgia
N.O.W. Accounts (2.50%)
CB&T Bank of Middle Georgia, Warner Robins, Georgia
Certificate of Deposit No. 11260 (3.90%)
Crossroads Bank of Georgia, Perry, Georgia
Certificate of Deposit No. 3028 (4.20%)

SCHEDULE "1"
$ 75,312.71 26,839.40 14,698.62
$ 116,850.73

See notes to the financial statements.

- 21 -

HOUSTON COUNTY PUBLIC LIBRARY SYSTEM MEMBERSHIP OF LIBRARY BOARD YEAR ENDED JUNE 30, 1994

SCHEDULE "2"

BOARD MEMBER ADDRESS
Mrs. Jane Gramley, Chairperson 322 Clairmont Drive Warner Robins, Georgia 31088
Mrs. Claudine Abbott(*) 264 Valencia Circle Centerville, Georgia 31028
Ms. Vanna Brown(*) P. 0. Box 1623 Perry, Georgia 31069
Mrs. Freeda Chapman 206 Beaver Run Drive Warner Robins, Georgia 31088
Mrs. Francis Coleman 103 Redwood Drive Warner Robins, Georgia 31088
Mrs. Esther Edwards 102 Lee Street Centerville, Georgia 31028
Mr. Dave Ellis(*) 106 Sunset Drive Warner Robins, Georgia 31088
Mr. James Esterbrook, Jr. (*) P. 0. Box 94 Bonaire, Georgia 31005
Mr. Mike Gray(*) P. 0. Box 1234 Perry, Georgia 31069
Mr. Hugh Lawson, Jr. P. 0. Box 391 Perry, Georgia 31069
Mrs. Linda Loewen(*) P. 0. Box 226 Perry, Georgia 31069
Mr. Ray Mims(*) 1604 Marshall Drive Perry, Georgia 31069

Mrs. Olene Murray(*) 236 Valencia Circle Centerville, Georgia 31028
Mrs. Jane Perfect (*) 105 Perfect Road Elko, Georgia 31025
Mrs. Carolyn Robbins(*) 413 Westwood Drive Warner Robins, Georgia 31088
Ms. Dottie Stafford(*) 203 Davis Drive Centerville, Georgia 31208
Mrs. Francis Woelfoel 103 Redwood Drive Warner Robins, Georgia 31088

(*) Denotes Board Members Serving as of June 30, 1994
See notes to the financial statements.

- 22 -

HOUSTON COUNTY PUBLIC LIBRARY SYSTEM SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30. 1994

SCHEDULE "3"

PERSONNEL
---------
Aiken, Bradford, Bruce, Bush, Campbell, Cummins, Drennan, Dwight, Efford, Faircloth, Fleming, Full er, Golden, Granger, Hannon, Hays, Hickey, Hickey, Houston, Howard, Jackson, Kelly, Klee, Kuder, Laster, MacDonald, Merk, Northern, Parker, Powe 11 , Rhodes, Robinson, Sayre, Summers, Thomas, Thomas, Trost, Tucker,
Wallace,
Waterman, Wheeler, Yeatman,

Merrilyn Tatashia T. Dianne E. Isabelle R. L. D. Sheila Y. Sue Ann Sheilah D. Kimberly M. Ruth E. Shelly M. Vivian J. Judith A. Nancy A. Jacqueline F. Judith C. Bridgette L. Nathan A. Clarence, Jr. Terri L. Andrea C. Madeline Dorothy J. Rosemary E. Katharine R. Valrae P. Evelyn Dorothy A. Rebecca E. Rodney N. Wi 11 i am H. Amy Janet C. Joanne B. Shonda Trena L. Jody S. Margaret Haza Mary Ann Alma C. Rebecca

POSITION
--------
Library Clerk Page Library Clerk Branch Manager Maintenance Reference Librarian Library Clerk Library Clerk Page Library Clerk Library Clerk Administrative Assistant Director Head Librarian Library Clerk Library Clerk Page Page Page Library Clerk Library Clerk Library Clerk Library Clerk Children's Specialist Library Clerk Library Clerk Head Librarian Library Cl erk Page Library Clerk Page Page Technical Services Page Library Clerk Page Library Clerk Shelver Maintenance Maintenance Maintenance Children's Specialist

SALARIES

TRAVEL

------------- -------------

$

1,369.10

595.01

5,265.41

13,448.88 $

6.72

4,764.42

99.33

27,559.92

1,292.00

1,066.77

38.25

10,399.92

228.44

19,239.84

266.48

48,063.16

946.02

36,284.41

177. 78

7,345.34

2,470.36

2,017.69

1,333.45

2,552.13

1,578.89

1,177.93

4,031.13

10,234.92

13,207.92

63.96

3,102.50

5,822.50

39,981.36

1,518.53

10,399.92

1,330.25

10,399.92

40.38

4,279.76

12,999.84

10,399.92

754.38

981. 75

703.38

10,399.92

2,557.45

1,734.00

7,073.58

9,969.78

155.55

------------- -------------

$ 348,495.88 $

3,234.37

See notes to the financial statements.

- 23 -

SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS

HOUSTON COUNTY PUBLIC LIBRARY SYSTEM SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1994
PRIOR YEAR/CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL) Inadequate Separation ofDuties Audit Control Number 6762-93-01
The audit report for the year ended June 30, 1993, stated that the Library did not provide for adequate separation ofemployee duties in the performance ofaccounting functions and related procedures. For the year under review, our audit noted no improvement regarding adequate separation of employee duties.
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 6762-93-02
The audit report for the year ended June 30, 1993 , noted that the Library did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles . This condition results in the financial statements of the Houston County Public Library System being incomplete. In the year under review, no action was taken by the Library to establish this account group. Appropriate action should be taken by the Library to establish accounting controls and procedures to implement and maintain a General Fixed Assets Account Group for inclusion in the accounting
records. Subsidiary records should be established for land, buildings, equipment and collections owned by the Library. Detailed records should be maintained ofall additions and deletions for each class of fixed assets that
comprise this account group.
Note: The Houston County Public 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.