GA A'300
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Lif 1'i95-cl"b

AUDIT REPORT LEE COUNTY LIBRARY SYSTEM
LEESBURG, GEORGIA YEAR ENDED JUNE 30, 1996

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

LEE COUNTY LIBRARY SYSTEM - TABLE OF CONTENTS -

Page

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

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

3

C

STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL AND SPECIAL REVENUE FUNDS

4

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

5

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

1 CASH AND CASH EQUIVALENTS

13

2 ACCOUNTS RECEIVABLE

14

SCHEDULE OF REVENUE

3

STATE

15

4

FEDERAL

16

5

OTHER

17

6 SCHEDULE OF EXPENDITURES BY OBJECT

GOVERNMENTAL FUND TYPES

18

7 MEMBERSHIP OF LIBRARY BOARD

19

8 SCHEDULE OF SALARIES

20

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 10, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe Lee County Library System Board
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the general purpose financial statements (Exhibits A through D) of the Lee County Library System, 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 ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general purpose financial statements, the Library's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are 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 Library did not report compensated absences within the general purpose financial statements as required by generally accepted accounting principles.
96ARL-42

The aggregate effects on the general purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In ou"r opinion, except for the effects on the general purpose financial statements ofthe matters referred to in the third paragraph, the general purpose financial statements present fairly, in all material respects, the financial position ofthe Lee County Library System as ofJune 30, 1996, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements ofthe Lee County Librwy System taken as a whole. The financial schedules (Schedules 1 through 8), 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 ofthe Lee County Library System. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, except for the effects of the matters discussed in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
L~
Claude L. Vickers State Auditor
CLV:dt 96ARL-42

LEE COUNTY LIBRARY SYSTEM
- 1-

LEE COUNTY LIBRARY SYSTEM COMBINED BALANCE SHEET ALL FUND TYPES JUNE 30, 1996

EXHIBIT"A"

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets
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
Total Liabilities and Fund Equity

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL (Memorandum
Only)

$

42,540.81 $

2,732.42 $

45,273.23

3,440.75

3,440.75

$

45,981.56 $

2,732.42 $ ====4=8,=71=3=.9=8

$

154.75

800.00

$

954.75

$

154.75

800.00

$

954.75

$

$

45,026.81

$

45,026.81 $

$

45,981.56 $

2,732.42 $ 2,732.42 $

2,732.42
45,026.81 47,759.23

2,732.42 $ ====4=8,=71=3=.9=8

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

LEE COUNTY LIBRARY SYSTEM

EXHIBIT "B"

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

YEAR ENDED JUNE 30, 1996

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
Adjustment Residual Balance of Lee County Library System Upon Withdrawal from Kinchafoonee Regional Library (Note 1)

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL (Memorandum
Only)

$

75,121.36

$

114,860.26

$ 189,981.62 $

$ 4,000.00
4,000.00 $

75,121.36 4,000.00
114,860.26
193,981.62

$

25,435.62 $

22,587.64

20,167.26

103,277.26

196.00

$ 171,663.78 $

$

18,317.84 $

0.00

1,267.58 $
1,267.58 $ 2,732.42 $
0.00

26,703.20 22,587.64
20,167.26 103,277.26
196.00
172,931.36
21,050.26
0.00

26,708.97

26,708.97

FUND BALANCE JUNE 30

$

45,026.81 $

2,732.42 $ ==4=7=,7=5=9=.2=3

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

LEE COUNTY LIBRARY SYSTEM 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
Adjustment Residual Balance of Lee County Library System Upon Withdrawal from Kinchafoonee Regional Library (Note 1)

GENERAL FUND

BUDGET

ACTUAL

$ 78,437.00 $ 86,966.00
$ 165,403.00 $

75,121.36 114,860.26 189,981.62

$ 71,266.00 $ 25,435.62

24,748.00

22,587.64

3,100.00

20,167.26

86,289.00

103,277.26

196.00

$ 165,403.00 $ 171,863.78

$

0.00 $

18,317.84

0.00

0.00

26,708.97

FUND BALANCE JUNE 30, 1996

$

----- 0.00 $ 45,026.81

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$

0.00 $

4,000.00

$

0.00 $

4,000.00

$

0.00 $

1,267.58

$

0.00 $

1,267.58

$

0.00 $

2,732.42

0.00

0.00

$

----- 0.00 $

2,732.42

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

LEE COUNTY LIBRARY SYSTEM

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Lee County 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. With the exception of the departures 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 discussed in these notes, the financial statements present all of the fund types and account groups ofthe Library. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles.

Effective July 1, 1995, and pursuant to the Official Code of Georgia Annotated Section 20-5-51, the Georgia Department ofEducation approved the withdrawal of the Lee County Library System from the Kinchafoonee Regional Library and the consequent creation of a single-county public library system. Accordingly, this report reflects the operations of the Lee County Library System as a separate reporting entity.

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 Lee County Library System is determined to be a joint venture.

The Library Board consists of ten members; three members appointed by Lee County Board of Commissioners, three members appointed by Lee County Board of Education, two members appointed by Leesburg City Council and two members appointed by Smithville 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 Lee County Library System is located in Leesburg, Georgia, and serves Lee County with a branch library in Smithville, 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.



- 5-

LEE COUNTY LIBRARY SYSTEM

EXHIBIT "D"

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.
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 FJxed 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 presented in this report are as follows:
GOVERNMENTAL FUND TYPES - used to account for all 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 the Library Services and Construction Act - Title I - Public Library Services Program.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities are generally included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues) and 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 in the governmental funds.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Those revenu~s considered susceptible to accrual are intergovernmental grants.
Expenditures are generally recognized when the related fund liability is incurred.
- 6-

LEE COUNTY LIBRARY SYSTEM

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

" Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUDGET
The Lee 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 prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Library at the aggregate level. The budget for governmental funds was prepared in accordance with generally accepted accounting principles.
The budget process begins when the Library's administration prepares a tentative aggregated budget for the Board's approval. After approval of this tentative budget by the Board, copies are sent to all local funding agencies. After funding approval is received from all local funding agencies, the Board makes revisions as necessary and adopts the budget. The budget is then submitted to the Georgia Department of Education, Division ofPublic Library Services as a part of the Library's annual application for State aid. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofdeposits 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.
RECEIVABLES
Receivables consist of grant reimbursements due from a State grantor for expenditures made but not reimbursed, allotted funds from a participating local government, and other receivables disclosed from information available. 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.

- 7-

LEE COUNTY LIBRARY SYSTEM

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
However, the dollar value of accumulated compensated absences at June 30, which will be payable from futures resources is material to the general purpose financial statements and has not been recorded in the General Long-Term Debt Account Group as required by generally accepted accounting principles.
INTERFUND TRANSACTIONS
The Library has the following type of interfund transactions:
Reimbursements ofexpenditures 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.
MEMORANDUM ONLY -TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles, nor is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities pledged shall be equal to 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,
(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 ofindebtedness or other obligations of the counties or municipalities of the State of Georgia,
- 8-

LEE COUNTY LIBRARY SYSTEM

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 2: DEPOSITS

(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

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation ofthe 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 $101,905.60. The amounts of the 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.)

The Library's deposits are classified by risk category at June 30, 1996, as follows:

Risk Category

Bank Balance

1

$ 100,000.00

2

0.00

3

1,905.60

Total

$ 101,905.60

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; and natural disaster.

- 9-

LEE COUNTY LIBRARY SYSTEM

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 3: RISK MANAGEMENT
The Library has obtained commercial insurance for risk of loss associated with assets at the main library located in Leesburg, Georgia, and job related illness or injuries to employees. The Library has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Library's insurance coverage in the past.
The Library has elected to self-insure for all losses related to torts, assets at the branch library located in Smithville, Georgia, and natural disaster. In addition, 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.
Note 4: ON-BEHALF PAYMENTS
The Library has recognized revenues and expenditures in the amount of $19, 183.09 for salaries and employers contribution paid on the Library's behalf as follows:
Lee County Board of Commissioners For Salary and Employer's Contributions of Library Personnel In the amount of $16,345.58
Grady County Board ofEducation For Salary and Employer's Contributions ofLibrary Personnel In the amount of $1,201. 73
Green Thumb, Inc. For Salary and Employer's Contributions of Library Personnel In the amount of$1,635.78
Note 5: CONTINGENT LIABILITIES
Amounts received principally from the Federal government are subject to audit and review by grantor 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 full-time professional and nonprofessional employees earn vacation leave according to their length of service ranging from 6. 7 to 13.33 hours per month. Vacation leave can be carried over from year
to year up to the amount earned for one year of service. Employees are paid at their current rate of pay for
all unused accumulated vacation leave upon retirement or termination of employment. See Note 1 Compensated Absences
- 10 -

LEE COUNTY LIBRARY SYSTEM

EXIIlBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

"
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 ofservice and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number 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 $86,049.90; total payroll was $108,256.43.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Library who are covered by TRS are required by State statute to pay 5% of their gross earnings to TRS. The Library makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. At June 30, 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 $14,468.14, of which $10,162.44 was made by the Library and $4,305.70 was made by employees. These contributions represented 11.81% (Library) and 5% (employees) of covered payroll.

- 11 -

LEE COUNTY LIBRARY SYSTEM

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 7: RETIREMENT PLANS

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.

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 $10,162.44 was actuarially determined and represented .0017% 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

Ms. Shirley Fischer, Library Director through August 24, 1996, was bonded in the amount of $50,000.00 with the RLI Insurance Company, Peoria, Illinois, their Bond No. F1D0001463.

Ms. Anna M. Davis, Library Interim Manager, effective August 24, 1996, is bonded in the amount of

$50,000.00 with the RLI Insurance Company, Peoria, Illinois, their Bond No. F1D0001463, on which

premium is paid through July 19, 1997.

"

- 12 -

LEE COUNTY LIBRARY SYSTEM CASH AND CASH EQUIVALENTS
JUNE 30, 1996
NONINTEREST BEARING ACCOUNT First State Bank and Trust, Albany, Georgia
OTHER Petty Cash

SCHEDULE "1"
$ 45,213.23
60.00
$ 45,273.23

See notes to the general purpose financial statements.

- 13 -

LEE COUNTY LIBRARY SYSTEM ACCOUNTS RECEIVABLE JUNE 30, 1996
Education, Georgia Department of Public Libraries Maintenance and Operations
Lee County Board of Commissioners Local Support
Various Sources Other

SCHEDULE "2"

GOVERNMENTAL FUND TYPE GENERAL FUND

$

50.00

3,370.75

20.00

$ =====34=40=.7=5

See notes to the general purpose financial statements.

- 14 -

LEE COUNTY LIBRARY SYSTEM SCHEDULE OF STATE REVENUE
YEAR ENDED JUNE 30, 1996
AGENCY/FUNDING GRANTS Education, Georgia Department of Public Libraries Salaries and Travel Library Materials Maintenance and Operations

SCHEDULE "3"

GOVERNMENTAL FUND TYPE GENERAL FUND

$

52,157.36

11,482.00

11,482.00

$ ===7=5=,1=2=1=36=

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

LEE COUNTY LIBRARY SYSTEM SCHEDULE OF FEDERAL REVENUE
YEAR ENDED JUNE 30, 1996
AGENCY/FUNDING Education, U.S. Department of Through Georgia Department of Education Library Services and Construction Act Title I - Public Library Services 1995 Carry-Over

SCHEDULE "4"
GOVERNMENTAL FUND TYPE SPECIAL REVENUE FUND
$====4==,0=0=0.=00=

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

LEE COUNTY LIBRARY SYSTEM SCHEDULE OF OTHER REVENUE
YEAR ENDED JUNE 30, 1996
LOCAL SOURCES Board of Education Lee County City Governments Leesburg Smithville County Government Board of Commissioners Lee
OTHER SOURCES Donations Fines and Fees On-behalf Salaries and Benefits Various Sources Sales and Services Photocopy Sales
. other

SCHEDULE "5"

GOVERNMENTAL FUND TYPE GENERAL FUND

$

38,500.00

4,000.00 5,021.25

40,449.00

310.00 5,530.97
19,183.09
1,835.95 30.00

$ ======1=1=4,=8=60=.=26=

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

LEE COUNTY LIBRARY SYSTEM SCHEDULE OF EXPENDITURES BY OBJECT
GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1996

SCHEDULE "6"

EXPENDITURES
Operating Costs Salaries Employee Benefits Professional and Technical Services Property Services Supplies Library Books and Materials Communications and Insurance Dues and Fees Other Expenditures

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

$ 108,256.43 29,890.31 865.00 196.00 4,388.96 25,435.62 $ 2,308.77 269.00 53.69

$ 1,267.58

108,256.43 29,890.31 865.00 196.00 4,388.96 26,703.20 2,308.77 269.00 53.69

Total Expenditures

$ 171,663.78 $

1,267.58 $ 172,931.36

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

LEE COUNTY LIBRARY SYSTEM MEMBERSHIP OF LIBRARY BOARD
YEAR ENDED JUNE 30, 1996

BO,\RD MEMBER ADDRESS
Ms. Debra Long, Chairperson (*)
P. 0. Box576
Leesburg, Georgia 31763
Ms. Martha Alexander (*) 225 Beauchamp Road Smithville, Georgia 31787
Ms. Tracy Beauchamp Route 2, Box 112H Leesburg, Georgia 31763
Ms. Sybil J. Belcher (*) Route 3, Box 442 Leesburg, Georgia 31763
Ms. Laverne S. Carter (*) 160 Carter Road Leesburg, Georgia 31763
Mr. James A. Cason, Jr. (*) P. 0. Box207
Leesburg, Georgia 31763
Ms. Shirley J. Hopkins(*)
P. 0. Box 129
Smithville, Georgia 31787
Mr. Gary A. Knight (*) P. 0. Box791
Leesburg, Georgia 31763
Mr. Phil Maxfield
P. 0. Box428
Leesburg, Georgia 31763
Ms. Nancy K. Miller (*) P. 0. Box345 Leslie, Georgia 31764
Ms. Eleanor E. Segars (*) P. 0. Box35 Leesburg, Georgia 31763
Ms. Hazel Williams (*)
P. 0. Box 146
Smithville, Georgia 31787
(*) Denotes Board Members Serving as of June 30, 1996

See notes to the general purpose financial statements.

- 19 -

SCHEDULE '7''

LEE COUNTY LIBRARY SYSTEM SCHEDULE OF SALARIES
YEAR ENDED JUNE 30, 1996

PERSONNEL
Davis, Fischer, Hammock, Hayes, Majors,
Peak,

Anna M. Shirley Mattie E.
Stephanie J.
Eva Carol

Adjustment On-behalf Payments for Salaries Various Sources

POSITION
Assistant to the Director Director Circulation Clerk Circulation Clerk Library Assistant Technical Services Assistant

SCHEDULE "8"

SALARIES

$

1,8,720.00

43,286.40

3,445.68

922.96

12,543.00

11,518.50

$

90,436.54

17,819.89

$ ==1=08=,2=5=6=.4=3

See notes to the general purpose financial statements. - 20-

SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS

LEE COUNTY LIBRARY SYSTEM SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1996
CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL) Inadequate Accounting Procedures Audit Control Number 6882-96-01
The Library's accounting procedures were found to be inadequate in several areas. The following deficiencies were noted during our examination:
(1) ACCOUNTING CONTROLS (OVERALL) - The Library did not provide for adequate separation ofemployee duties in the performance of accounting functions and related procedures for all funds.
(2) CASH AND CASH EQUIVALENTS
(a) The monthly bank reconciliations were not performed in a timely manner. (b) Two voided checks for the month of June could not be provided for review. (c) Two petty cash funds found to be in existence at the Library were not recorded on the
accounting records.
(d) Petty cash fund activities were not recorded to the general ledger in a timely manner.
(3) REVENUE/RECEIVABLES/RECEIPTS
(a) A review of the cash receipts system revealed that the Library did not maintain a prenumbered receipt system.
(b) Receipts were not issued for all cash receipts collected by the Library. (c) Revenues were not posted in a timely manner and could not be easily traced to supporting
documentation.
(4) EXPENDITURES/LIABILITIES/DISBURSEMENTS
A sample of twenty expenditure vouchers selected for testing revealed the following:
(a) Two vouchers did not include adequate documentation to support the disbursements.
(b) One voucher did not have a purchase order attached and five vouchers included purchase orders which did not have preparer or authorizing signatures.
- 1-

LEE COUNTY LIBRARY SYSTEM SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1996
CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL) Inadequate Accounting Procedures Audit Control Number 6882-96-01
(5) GENERAL LEDGER
(a) Journal entries were not supported by either adequate documentation or explanation.
(b) Journal entries did not include preparer signatures or proper authorization.
(c) Journal entries were not posted in a logical numerical sequence nor could they be easily traced to the general ledger.
These deficiencies were a result of management's decision to limit the administrative staff made responsible for accounting functions and management's failure to establish adequate internal control and accounting procedures.
Management should periodically review the decision to limit administrative staff made responsible for accounting functions to determine if employee duties can be reassigned to achieve a higher degree of internal control with existing staff. Management should develop and implement appropriate accounting procedures to provide adequate internal controls over the accounting function.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Audit Control Number 6882-96-02
The management ofthe Lee County Library System has chosen not to 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 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.
-2-