GA A~OO .RI Cb88 J3 1995-96 AUDIT REPORT JEFFERSON COUNTY LIBRARY A COMPONENT UNIT OF JEFFERSON COUNTY BOARD OF COMMISSIONERS LOUISVILLE, GEORGIA YEAR ENDED JUNE 30, 1996 STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS 254 WASHINGTON STREET ATLANTA, GEORGIA 30334-8400 JEFFERSON COUNTY LIBRARY - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION EXHIBITS GENERAL PURPOSE FINANCIAL STATEMENTS COMBINED STATEMENTS - OVERVIEW A COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP 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 5 D STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCE FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND 6 E STATEMENT OF CASH FLOWS FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND 7 F NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 9 ADDITIONAL FINANCIAL INFORMATION COMBINING STATEMENTS SPECIAL REVENUE FUND G COMBINING BALANCE SHEET 18 H COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 19 SCHEDULES 1 CASH AND CASH EQUIVALENTS 20 2 INVESTMENTS 21 3 ACCOUNTS RECEIVABLE 22 SCHEDULE OF REVENUE 4 STATE 23 5 FEDERAL 24 6 OTHER 25 SCHEDULE OF EXPENDITURES BY OBJECT 7 GOVERNMENTAL FUND TYPES 26 8 LOTTERY PROGRAM 27 JEFFERSON COUNTY LIBRARY - TABLE OF CONTENTS - SECTION I FINANCIAL ADDITIONAL FINANCIAL INFORMATION SCHEDULES 9 MEMBERSIIlP OF LIBRARY BOARD 28 10 SCHEDULE OF SALARIES AND TRAVEL 29 SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS SECTION ID PERTINENT VIEWS OF RESPONSIBLE OFFICIALS PERTINENT VIEWS OF RESPONSIBLE OFFICIALS 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 July 31, 1997 Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board of Education and Director and Members of the Jefferson 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 F) of the Jefferson County Library, component unit of the Jefferson County Board of Commissioners, as of and for the year ended June 30, 1996, 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 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 of this omission have not been determined, but are believed to be material. 96ARL-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 Jefferson County Library as of June 30, 1996, and the results of its operations and the cash flows of its nonexpendable trust fund for the year then ended, in conformity with generally accepted accounting principles. Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements of the Jefferson County Library taken as a whole. The combining statements (Exhibits G and H) and the financial schedules (Schedules 1 through 10), 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 Jefferson 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, 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, ~~ Claude L. Vickers State Auditor CLV:dt 96ARL-42 JEFFERSON COUNTY LIBRARY -I- JEFFERSON COUNTY LIBRARY COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 1996 EXHIBIT"A" ~ Cash and Cash Equivalents Investments Accounts Receivable Amount to be Provided in Future Years For Payment of Compensated Absences GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND FIDUCIARY FUND TYPE NONEXPENDABLE TRUST FUND $ 31,059.63 $ 4,032.80 $ 2,887.74 225.00 10,614.26 ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS (Memorandum Onl~l JUNE 30, 1996 JUNE 30, 1995 $ 37,980.17 $ 37,094.12 225.00 225.00 10,614.26 10,770.94 $ 9 815.79 9 815.79 5 765.59 Total Assets $ 41 898.89 $ 4 032.80 $ 2 887.74 $ 9 815.79 $ 58,635.22 $ 53,855.65 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable $ Expired Grant Balances Payable Compensated Absences 14,109.60 $ Total Liabilities $ 14 109.60 $ FUND EQUITY Fund Balances Reserved For Continuation of Federal Program $ For Endowment Corpus $ Unreserved Designated for Reference Materials Undesignated $ 2,148.95 25,640.34 Total Fund Equity $ 27,789.29 $ 41.75 41.75 3,991.05 $ 3,991.05 $ 0.00 3 991.05 $ $ 14,109.60 $ 14,131.95 41.75 176.21 $ 9 815.79 9 815.79 5 765.59 $ 9815.79$ 23,967.14 $ 20 073.75 2 500.00 2,500.00 387.74 2 887.74 $ 3,991.05 $ 2,500.00 $ 6,491.05 $ 423.02 2,500.00 2,923.02 2,148.95 26,028.08 $ 34,668.08 $ 2,699.50 28 159.38 33 781.90 Total Liabilities and Fund Equity $ 41 898.89 $ 4 032.80 $ 2 887.74 $ 9 815.79 $ 58,635.22 $ 53 855.65 The notes to the general purpose financial statements are an integral part of this statement. -2- JEFFERSON COUNTY LIBRARY COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 1996 EXHIBIT "B" GENERAL FUND SPECIAL REVENUE FUND TOTALS (Memorandum Only} YEAR ENDED JUNE 30, 1996 JUNE 30, 1995 REVENUES State Funds Federal Funds Other Funds $ 90,020.78 $ 2,000.42 137?49.42 9,958.25 $ 4,000.00 99,979.03 $ 6,000.42 137?49.42 134,090.91 8,000.00 138?47.20 Total Revenues $ 229,770.62 $ 13,958.25 $ 243?28.87 $ 280,838.11 EXPENDITURES Current Program Services Technical Services Circulation Administration Maintenance and Operations Capital Outlay $ 20,139.90 $ 94,937.75 88,865.34 28,567.91 423.02 $ 9,958.25 8.95 20,562.92 $ 9,958.25 94,937.75 88,874.29 28,567.91 64,355.75 2,071.91 90,901.08 107,178.17 16,948.79 393.77 Total Expenditures $ 232,510.90 $ 10,390.22 $ 242,901.12 $ 281,849.47 Excess of Revenues over (under) Expenditures $ -2,740.28 $ 3,568.03 $ 827.75 $ -1 011.36 OTHER FINANCING SOURCES (USES) Operating Transfers In Operating Transfers Out $ 126.41 -126.41 $ 0.00 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ -2,740.28 $ 3,568.03 $ 827.75 $ -1,011.36 FUND BALANCE JULY 1 30,529.57 423.02 30,952.59 31,963.95 FUND BALANCE JUNE 30 $ 27,789.29 $ 3,991.05 $ 31,780.34 $ ====3=0,=95=2=.59= The notes to the general purpose financial statements are an integral part of this statement. -3- THIS PAGE LEFT BLAHK JEFFERSON COUNTY LIBRARY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 1996 EXHIBIT"C" REVENUES State Funds Federal Funds Other Funds Total Revenues EXPENDITURES Current Program Services Technical Services Circulation Administration Maintenance and Operations Total Expenditures Excess of Revenues over (under) Expenditures FUND BALANCE JULY 1. 1995 Adjustments GENERAL FUND BUDGET ACTUAL $ 55,267.93 $ 136,646.00 90,020.78 2,000.42 137,749.42 $ 191,913.93 $ 229,770.62 $ 18,037.00 $ 50.00 96,710.52 52,847.22 24,450.00 20,139.90 94,937.75 88,865.34 28,567.91 $ 192,094.74 $ 232,510.90 $ -180.81 $ -2,740.28 33,796.80 30,529.57 -79.25 SPECIAL REVENUE FUND BUDGET ACTUAL $ 10,000.00 $ 6,000.00 9,958.25 4,000.00 $ 16,000.00 $ 13,958.25 $ 2,000.00 $ 13,991.05 8.95 423.02 9,958.25 8.95 $ 16,000.00 $ 10,390.22 $ 0.00 $ 3,568.03 -23.98 423.02 -72.00 FUND BALANCE JUNE 30. 1996 $ 33,536.74 $==2=7=,7=8=9=.2=9 $ -95.98 $ 3,991.05 ======== The notes to the general purpose financial statements are an integral part of this statement. -5- JEFFERSON COUNTY LIBRARY STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCE FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30, 1996 EXHIBIT"D" OPERATING REVENUES None Recorded OPERATING EXPENSES None Recorded Operating Income NONOPERATING REVENUES Interest Earned Total Income FUND BALANCE JULY 1 ENDOWMENT FUND MARY LOU CAIN BOOK FUND TOTALS {Memorandum Onlt} YEAR ENDED JUNE 30, 1996 JUNE 30, 1995 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 58.43 58.43 83.61 $ 58.43 $ 58.43 $ 83.61 2,829.31 2,829.31 2,745.70 FUND BALANCE JUNE 30 $ 2,887.74 $ 2,887.74 $ ====2=,82=9=.31= The notes to the general purpose financial statements are an integral part of this statement. -6 - JEFFERSON COUNTY LIBRARY STATEMENT OF CASH FLOWS FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30, 1996 EXHIBIT"E" Cash Flows from Investing Activities: Interest Received on Investments Cash and Cash Equivalents - July 1 ENDOWMENT FUND MARY LOU CAIN BOOK FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 1996 JUNE 30, 1995 $ 58.43 $ 58.43 $ 83.61 2,829.31 2,829.31 2,745.70 Cash and Cash Equivalents - June 30 $ 2,887.74 $ 2,887.74 $ ====2,=82=9=.31= The notes to the general purpose financial statements are an integral part of this statement. -7- THIS PAGE LEn BLANK JEFFERSON COUNTY LIBRARY EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Jefferson 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 and unless otherwise disclosed in these notes, the financial statements present all fund types and account groups of the Library. 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 governmental 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 Jefferson County Library is determined to be a component unit of the Jefferson County Board of Commissioners. The Library Board consists of nine members; six members appointed by the Jefferson County Board of Commissioners, one member appointed by the City of Louisville, one member appointed by the City of Wadley, and one member appointed by the City of Wrens. 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 Jefferson County Board of Commissioners appoints a majority of the Library's Board members and provides a majority of funding for the operations of the Library, consequently, the Library is deemed to have a financial benefit/burden relationship with the Jefferson County Library as defined by GASB. The Jefferson County Library is located in Louisville, Georgia, and serves Jefferson County. FUND ACCOUNTING The Library uses funds and an account group to report on its fina_ncial 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. -9 - JEFFERSON COUNTY LIBRARY EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. The general purpose financial statements account for all State, Federal and Other funds under control of the Library, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows: GOVERNMENTAL FUND TYPES - used to account for all or most of the Library's general activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources of the Library except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a Library. 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. FIDUCIARY FUND TYPE - the trust fund 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. This fund includes: NONEXPENDABLETRUSTFUND Mary Lou Cain Book 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 the purchase of children's books for the Jefferson County Library. ACCOUNT GROUP GENERAL LONG-TERM DEBT ACCOUNT GROUP - used to account for material compensated absences. - 10 - JEFFERSON COUNTY LIBRARY EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 decreases (i.e., expenditures) 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 mthe 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. Nonexpendable trust funds are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and liabilities associated with the operation of these funds are included on the balance sheet. Operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets. 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. The accrual basis of accounting, as required by generally accepted accounting principles, is utilized by the nonexpendable trust funds. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. BUDGET The Jefferson 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 made available to all local funding agencies. After funding approval is received from all local funding agencies, the Board makes - 11 - JEFFERSON COUNTY LIBRARY EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES revisions as necessary and adopts the budget. The budget is then submitted to the Georgia Department of Education, Division of Public 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 and cash equivalents consist of deposits (including certificate of deposit and savings 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 COMPOSITION OF INVESTMENTS Donated investments are stated at fair market value as of the date donated. RECEIVABLES Receivables consist of allotted funds from participating local governments. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. COMPENSATED ABSENCES Compensated absences represent obligations of the Library relating to employees' rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount is deemed immaterial to the general purpose financial statements. INTERFUND TRANSACTIONS The Library has the following type of interfund transactions: Reimbursements of expenditures/expenses initially made from a fund that are properly applicable to another fund are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. - 12 - JEFFERSON COUNTY LIBRARY EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 Note 1: 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, results of operations or cash flows 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. 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 of securities pledged shall be equal to not less than 110 percent ofthe 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 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 of the 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 - 13 - JEFFERSON COUNTY LIBRARY EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 Note 2: DEPOSITS AND INVESTMENTS (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, 1996, the bank balances were $39,511.06. The bank balances were entirely covered by Federal depository insurance. CATEGORIZATION OF INVESTMENTS At June 30, 1996, the carrying amount ofthe Library's total investments was $225.00 and this entire amount consisted of common stock which was registered in the Library's name. The market value of these investments was $671.25. Note3: RISKMANAGEMENT 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 of loss associated with job related illness or injuries to employees. The Library has neither significantly reduced coverage for this risk nor incurred losses (settlements) which exceeded the Library's insurance coverage in any of the past three years. The Jefferson County Board of Commissioners and the Cities of Louisville, Wadley and Wrens provide insurance coverage for torts, assets, errors and omissions and natural disaster. The Library is self-insured with regard to unemployment compensation claims. The Library accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. The Library has not experienced any unemployment compensation claims during the last two years. Note 4: GENERAL LONG-TERM DEBT The changes in General Long-Term Debt during the fiscal year ended June 30, 1996, were as follows: - 14 - JEFFERSON COUNTY LIBRARY EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 Note 4: GENERAL LONG-TERM DEBT Balance July 1, 1995 Retroactive Restatement of Prior Year Balances Balance July 1, 1995 - Restated Additions Leave Earned and Utilized (Net) Balance June 30, 1996 Note 5: CONTINGENT LIABILITIES Compensated Absences $ 0.00 5,765.59 $ 5,765.59 4,050.20 $==9,.,,,,,8-15='=.7="=9 Amounts received or receivable principally from the Federal government are subject to audit and review by grantoi.; agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Library believes that such disallowances, if any, will be immaterial to its overall financial position. Note 6: ACCUMULATED EMPLOYEES' LEAVE The Library's regular employees earn up to 22 days per year of vacation leave based on the number of years of service. Vacation leave can be accumulated for an unlimited number of days, and an amount based on unused accumulated vacation leave is paid to employees, at their current rate of pay, upon retirement or termination. See Note 1 - Compensated Absences Note 7: 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). 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 IO years of service 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 - 15 - JEFFERSON COUNTY LIBRARY EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 Note 7: RETIREMENT PLANS number of years 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, 1996, was $126,026.33; total payroll was $133,451.25. 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 of Trustees in accordance with State statute and as advised by their independent actuary. At June 30, 1996, 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 1996 amounted to $21,184.78, of which $14,883.63 was made by the Library and $6,301.15 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 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. - 16 - JEFFERSON COUNTY LIBRARY EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 Note 7: RETIREMENT PLANS Total unfunded pension benefit obligation ofTRS as of June 30, 1995, was as follows: Total pension benefit obligation $ 17,442,607,000.00 Net assets available for benefits, at cost 15,857,066,000.00 Unfunded pension benefit obligation $ 1,585,541.000.00 The measurement ofthe total pension benefit obligation is based on an actuarial valuation as ofJune 30, 1995. 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, 1996, were $607,275,000.00. The Library's contribution for the year ended June 30, 1996, of $14,883.63 was actuarially determined and represented .0025% of total contributions made by all participating employers. Ten year historical trend information is presented in the 1996 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 8: SURETY BONDS The Library Director, Mrs. Charlotte Rogers, is bonded in the amount of $20,000.00 with the United States Fidelity and Guaranty Insurance Company, Baltimore, Maryland, their Bond No. 02-0080-11541-92-0, on which premium is paid through August 26, 1997. - 17 - JEFFERSON COUNTY LIBRARY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1996 EXHIBIT"G" ASSETS Cash and Cash Equivalents LOTTERY PROGRAM LIBRARY SERVICES AND CONSTRUCTION ACT TITLEI PUBLIC LIBRARY SERVICES TOTALS JUNE 30, 1996 JUNE 30, 1995 $ 41.75 $ 3,991.05 $ 4,032.80 $ = = =6=01.=08 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable Expired Grant Balances Payable $ Total Liabilities $ FUND EQUITY Fund Balances Reserved For Continuation of Federal Program Unreserved Undesignated $ Total Fund Equity $ 41.75 41.75 $ 0.00 0.00 $ $ 178.06 $ 41.75 $ 41.75 $ 178.06 3,991.05 $ 0.00 3,991.05 $ 3,991.05 $ 0.00 3;991.05 $ 423.02 0.00 423.02 Total Liabilities and Fund Equity $ 41.75 $ 3,991.05 $ 4,032.80 $ = = =6=01.0=8 See notes to the general purpose financial statements. -18- JEFFERSON COUNTY LIBRARY COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUND YEAR ENDED JUNE 30. 1996 EXHIBIT "H" REVENUES State Funds Federal Funds Total Revenues EXPENDITURES Current Program Services Technical Services Administration Total Expenditures Excess of Revenues over (under) Expenditures FUND BALANCE JULY 1 LOTTERY PROGRAM LIBRARY SERVICES AND CONSTRUCTION ACT TITLE! PUBLIC LIBRARY SERVICES TOTALS YEAR ENDED JUNE 30, 1996 JUNE 30, 1995 $ 9,958.25 $ $ 9,958.25 $ $ 4,000.00 4,000.00 $ 9,958.25 $ 4,000.00 13,958.25 $ 39,332.52 4,000.00 43,332.52 $ $ 9,958.25 $ 9,958.25 $ $ 0.00 $ 0.00 423.02 $ 8.95 431.97 $ 3,568.03 $ 423.02 423.02 $ 9,958.25 8.95 10,390.22 $ 3,568.03 $ 423.02 40,820.35 2,071.91 17.24 42,909.50 423.02 0.00 FUND BALANCE JUNE 30 $ 0.00 $ 3,991.05 $ 3,991.05 $ ===4=2=3.=0=2 See notes to the general purpose financial statements. -19- JEFFERSON COUNTY LIBRARY CASH AND CASH EQUIVALENTS JUNE 30, 1996 INTEREST BEARING ACCOUNTS First National Bank and Trust Company, Louisville, Georgia Certificate of Deposit No. 17202 (4.25%) Demand Deposit Accounts (Variable) Passbook Savings Account (1.74%) OTHER Petty Cash SCHEDULE "1" $ 20,000.00 12,636.88 5,193.29 $ 37,830.17 150.00 $ 37,980.17 See notes to the general purpose financial statements. - 20 - JEFFERSON COUNTY LIBRARY INVESTMENTS JUNE 30, 1996 Common Stock - 15 Shares General Telephone and Telegraph Corporation SCHEDULE 211 11 $ = = = =2=25.=00 See notes to the general purpose financial statements. - 21 - JEFFERSON COUNTY LIBRARY ACCOUNTS RECEIVABLE JUNE 30, 1996 City of Wadley Local Support City of Wrens Local Support Jefferson County Board of Commissioners Local Support SCHEDULE "3" GOVERNMENTAL FUND TYPE GENERAL FUND $ 793.33 1,192.00 8,628.93 $ =====10=,6=14=.2=6 See notes to the general purpose financial statements. - 22 - JEFFERSON COUNTY LIBRARY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1996 SCHEDULE "4" AGENCY/FUNDING GRANTS Education, Georgia Department of Public Libraries Salaries and Travel Library Materials Maintenance and Operations Lottery Program Technology Installation GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND TOTAL $ 70,306.78 9,857.00 9,857.00 $ $ 9,958.25 70,306.78 9,857.00 9,857.00 9,958.25 $ 90,020.78 $ 9,958.25 $ 99,979.03 See notes to the general purpose financial statements. - 23 - JEFFERSON COUNTY LIBRARY SCHEDULE OF FEDERAL REVENUE YEAR ENDED JUNE 30, 1996 SCHEDULE "5" AGENCY/FUNDING SUB-GRANTS Education, U.S. Department of Through Georgia Department of Education Library Services and Construction Act Title I - Public Library Services Through Augusta Technical Institute Adult Education State Administered Basic Grant Program GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND TOTAL $ 4,000.00 $ 4,000.00 $ _ _2....,.0_0_0_.4_2 2,000.42 $ 2,000.42 $ 4,000.00 $ ===6,=00=0.4=2 See notes to the general purpose financial statements. - 24 - JEFFERSON COUNTY LIBRARY SCHEDULE OF OTHER REVENUE YEAR ENDED JUNE 30. 1996 LOCAL SOURCES Board of Education Jefferson County City Governments Louisville Wadley Wrens County Government Board of Commissioners Jefferson OTHER SOURCES Dividends Donations Fines and Fees Interest Earned Sales Books and Promotional Photocopy Other SCHEDULE "6" GOVERNMENTAL FUND TYPE GENERAL FUND $ 3,500.00 11,995.02 8,119.98 13,302.00 93,000.00 56.40 2,108.83 1,244.58 1,160.79 249.31 2,624.01 388.50 $ 137,749.42 See notes to the general purpose financial statements. - 25 - JEFFERSON COUNTY LIBRARY SCHEDULE OF EXPENDITURES BY OBJECT GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1996 SCHEDULE "7" EXPENDITURES Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical Services Property Services Supplies Library Books and Materials Utilities Communications and Insurance Other Expenditures Nonoperating Costs Equipment Total Expenditures GENERAL FUND SPECIAL REVENUE FUND TOTAL $ 133,451.25 31,229.90 2,143.86 $ 6,504.23 10,858.07 19,300.75 21,437.85 5,348.10 2,236.89 $ 8.95 423.02 133,451.25 31,229.90 2,143.86 8.95 6,504.23 10,858.07 19,300.75 21,437.85 5,771.12 2,236.89 9,958.25 9,958.25 $ 232,510.90 $ 10,390.22 $ 242,901.12 See notes to the general purpose financial statements. - 26 - JEFFERSON COUNTY LIBRARY SCHEDULE OF EXPENDITURES BY OBJECT LOTTERY PROGRAM YEAR ENDED JUNE 30, 1996 EXPENDITURES Nonoperating Costs Equipment SCHEDULE 811 11 TECHNOLOGY INSTALLATION $ ===9='=95=8=.2=5 See notes to the general purpose financial statements. - 27 - JEFFERSON COUNTY LIBRARY MEMBERSHIP OF LIBRARY BOARD YEAR ENDED JUNE 30, 1996 BOARD MEMBER ADDRESS Mr. John J. Pilcher 11, Chairman (*) P.O. Box278 Wrens, Georgia 30833 Mr. Ozzie Hannah (*) 1130 Habersham Road Louisville, Georgia 30434 Mr. Donnie Hodges (*) 1004 James Road Louisville, Georgia 30434 Mrs. Mildred McDonald (*) P.O. Box98 Wadley, Georgia 30477 Mrs. Sydney McGahee (*) 602 Phillips Street Wrens, Georgia 30833 Mr. Thomas McKennie (*) 37 Spann Avenue Wadley, Georgia 30477 Mrs. Patsy McMillan (*) 5032 Highway 319 Bartow, Georgia 30413 Mrs. Charlene Stavely (*) 4164 Noah Station Road Keysville, Georgia 30816 Dr. Julian Veatch (*) Waynesboro Road Louisville, Georgia 30434 (*) Denotes Board Members Serving as of June 30, 1996 SCHEDULE "9" See notes to the general purpose financial statements. - 28 - JEFFERSON COUNTY LIBRARY SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 1996 SCHEDULE "10" PERSONNEL Braddy, Brookins, Clark, Collins, Evans, Hadden, Hannah, Jones, Lamb, Maner, McCullough, McGahee, Miller, Pittman, Pitts, Rogers, Thrift, Williford, Mark Malisa D. Pam Cara EvaC. John K. Gail Jeanne E. Angela Lynn Richard P. Ethel P. Wanda P. Jennie C. James Susan B. Charlotte Betty D. Beth A. Total Cash Basis Accruals June 30, 1995 POSITION Outreach Clerk Library Assistant Children's Program Coordinator Library Assistant Head of Circulation Director Children's Program Coordinator Children's Program Coordinator Library Assistant Library Clerk Branch Manager Branch Manager Administrative Assistant Student Technology Assistant Assistant Director Director Library Assistant Library Assistant SALARIES TRAVEL $ 9,375.80 $ 1,321.58 84.00 1,075.26 12,637.20 19.88 1,050.00 2,546.28 17.00 5,061.00 12,083.85 13,572.40 13,239.80 629.76 24,593.08 35,443.10 667.26 34.00 27.30 71.74 50.40 91.98 97.65 12.39 280.43 1,553.97 $ 133,451.25 $ 2,185.86 -42.00 $ 133,451.25 $ =====2,=14=3=.8=6 See notes to the general purpose financial statements. - 29 - SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS JEFFERSON COUNTY LIBRARY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30, 1996 PRIOR YEAR/CURRENT YEAR ACCOUNTING CONTROLS (OVERALL) Inadequate Separation of Duties Audit Control Number 6812-93-01 The audit report for the year ended June 30, 1995, stated that the Library did not provide for adequate separation of employee duties in the performance ofaccounting functions and related procedures for all funds. In the year under review, no improvement in adequate separation of employee duties was noted. This condition was a result ofmanagement'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 6812-93-02 The audit report for the year ended June 30, 1995, noted that the management of the Jefferson 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. SECTION ill PERTINENT VIEWS OF RESPONSIBLE OFFICIALS JEFFERSON COUNTY LIBRARY PERTINENT VIEWS OF RESPONSIBLE OFFICIALS YEAR ENDED JUNE 30, 1996 ACCOUNTING CONTROLS (OVERALL) Inadequate Separation of Duties Audit Control Number 6812-93-01 We concur with this finding, however, due to current budgetary constraints, the Library is unable to hire the additional staff required to clear this finding. The Library feels it has provided for the most appropriate assignment of duties with the number of personnel available to perform the accounting functions. With staff limitations, this finding cannot be totally resolved. GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Audit Control Number 6812-93-02 We concur with this finding, yet feel we have made significant improvements aimed at clearing this finding. A detailed listing of all furniture and equipment has been completed with serial numbers and values placed on each item. There is also a detailed accounting of all books in the three libraries with cost estimates for the replacement of each type of book.