Lee County Library System, Leesburg, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2001

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
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LEE COUNTY LIBRARY SYSTEM
LEESBURG, GEORGIA REPORT ON AUDrr
OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2001
Russell W. Hinton State Auditor

LEE COUNTY LIBRARY SYSTEM -TABLE OF CONTENTS-

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

A

BALANCE SHEET

ALL FUND TYPES

2

B

STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

3

C

STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL FUND

4

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

5

ADDffiONAL FINANCIAL INFORMATION

SCHEDULES

SCHEDULE OF REVENUE

1

STATE

12

2

LOCAL

13

3 SCHEDULE OF SALARIES AND TRAVEL

14

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

SECTION I FINANCIAL

RussELL W. H1NTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
July 17, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the Board of Regents of the University System of Georgia
and Director and Members of the 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 accompanying general-purpose financial statements ofthe Lee County Library System, as ofand for the year ended June 30, 2001, as listed in the table ofcontents. These generalpurpose financial statements are the responsibility ofthe Lee County Library System's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general-purpose financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general-purpose financial statements, the Library's financial statements have been prepared using a certain accounting practice and policy which, in our opinion, varies in some respects from generally accepted accounting principles. This variance is described as follows:
* The general-purpose financial statements ofthe 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.
2001ARL-42

The aggregate effects on the general-purpose financial statements ofthis variance or omission have not been determined, but are believed to be material.
In our opinion, except for the effects on the general-purpose financial statements of the matter referred to in the third paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the Lee County Library System as of June 30, 2001, and the results of its operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Lee County Library System taken as a whole. The accompanying financial schedules (Schedules 1 through 3), as listed in the table of contents, are presented for purposes of additional analysis and are not a required part ofthe general-purpose financial statements 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 such information is fairly stated, 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 ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,
w~
RWH:gp 2001ARL-42

LEE COUNTY LIBRARY SYSTEM

LEE COUNTY LIBRARY SYSTEM BALANCE SHEET ALL FUND TYPES JUNE 30, 2001

EXHIBIT"A"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

GOVERNMENTAL FUND TYPE GENERAL FUND

TOTALS

{Memorandum Onl~}

JUNE 30, 2001

JUNE 30, 2000

$

53,715.59 $

53,715.59 $

73,838.00

98,949.64

98,949.64

93,473.40

3,739.71

3 739.71

Total Assets

$

156 404.94 $

156,404.94 $ _ _ _16_1_.3_1_1._4,..o

LIABILITIES AND FUND EQUITY

LIABILITIES

Accounts Payable

$

Deferred Revenue

Total Liabilities

$

FUND EQUITY

Fund Balances

Reserved

For Continuation of State Program

Unreserved

Undesignated

$

Total Fund Equity

$

1,746.33 $ 1 000.00
2 746.33 $

1,746.33 1,000.00
2,746.33

153,658.61 $ 153,658.61 $

$ 153,658.61 153,658.61 $

780.00 166,531.40 167,311.40

Total Liabilities and Fund Equity

$

156404.94 $

156,404.94 $ _ _..,16_7.i,;,3;;.;1_,1_.4_0

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

LEE COUNTY LIBRARY SYSTEM STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2001

EXHIBIT "B"

REVENUES
State Funds Federal Funds Local Funds Other Funds
Total Revenues
EXPENDITURES
Current Public Services Support Services Maintenance and Operations Information Technology
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1
FUND BALANCE JUNE 30

GENERAL FUND

TOTALS

(Memorandum Onl~}

YEAR ENDED

. JUNE 30, 2001

JUNE 30, 2000

$ 157,964.63 $
246,350.70 26,154.33
$ 430,469.66 $

157,964.63 $
246,350.70 26,154.33
430,469.66 $

97,719.65 7,905.00
231,875.12 41146.49
378,646.26

$ 60,803.99 $ 318,841.83 40,889.63 23,587.00
$ 444,122.45 $
$ -13,652.79 $
167,311.40

60,803.99 $ 318,841.83 40,889.63 23,587.00
444122.45 $
-13,652.79 $
167 311.40

335,021.90
335,021.90 43,624.36" 123,687.04

$ 153,658.61 $

153,658.61 $ _ _ _16_1_,3_1_1._40_

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 FUND
YEAR ENDED JUNE 30, 2001

EXHIBIT "C"

REVENUES
State Funds Local Funds Other Funds
Total Revenues EXPENDITURES
Current Public Services Support Services Maintenance and Operations Information Technology
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1. 2000
FUND BALANCE JUNE 30, 2001

BUDGET

ACTUAL

$ 159,971.00 $ 251,459.00 10,000.00
$ 421,430.00 $

157,964.63 246,350.70
26,154.33
430,469.66

$

58,804.00 $

319,494.18

43,131.32

$ 421,429.50 $

$

0.50 $

160,183.67

60,803.99 318,841.83 40,889.63
23,587.00
444,122.45
-13,652.79
167 311.40

$ 160, 184.17 $=====15.,;;;3;;,;;,6=5=8.=61,...

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

LEE COUNfY LIBRARY SYSTEM

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Lee County Library System (Library) operates pursuant to Official Code ofGeorgia 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 ofGeorgia. With the exception ofthe 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 Library Board consists of 11 members; 4 members appointed by Lee County Board of Commissioners, 3 members appointed by Lee County Board ofEducation, 2 members appointed by Leesburg City Council and 2 members appointed by Smithville City Council. The Library Board is without authority to determine the amount ofits funding, except by submission ofbudget 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 ofeach participating governmental agency. The Library Board has the power to designate management, the power to retain unreserved fund balances of local and other funds for continued operations and is the lowest level of oversight responsibility for the Library's operations. The Lee County Library System is therefore determined to be a joint venture.
FUND ACCOUNTING
The Library uses a fund 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 ofpurchase. 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 ofassets acquired by governmental fund types.
The general-purpose financial statements account for all State, Local and Other funds under control of the Library, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. The fund presented in this report is as follows:
GOVERNMENTAL FUND TYPE - used to account for all ofthe Library's general activities. The Governmental Fund Type includes:
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LEE COUN1Y LIBRARY SYSTEM

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE30,2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
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 in the governmental funds.
Governmental funds are accounted for using the modified accrual basis ofaccounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the 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. The Library considers receivables collected within sixtydays after year-end to be available and therefore susceptible to accrual. Nonexchange transactions, in which the Library gives (or receives) value without directly receiving (or giving) equal value in exchange, include intergovernmental grants and donations. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
Expenditures are generally recognized when the related fund liability is incurred.
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 ofbudget control was established by the Library at the aggregate level. The budget for governmental funds was prepared in accordance with generally accepted accounting principles.

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LEE COUN1Y LIBRARY SYSTEM

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The budget process begins when the Library's administration prepares a tentative aggregated budget for the Board's approval. After approval ofthis tentative budget by the Board, copies are sent to all local funding agencies. After funding approval is received from all local funding agencies, the Board makes revisions as necessary and adopts the budget. The budget is then submitted to the Board of Regents of the University System of Georgia as a part of the Library's annual application for State aid. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of cash on hand and demand deposits in authorized financial institutions. Georgia Laws authorize the Library to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Library in nonparticipating interest-earmng contracts (such as certificates of deposit) are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Library to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,

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LEE COUNTY LIBRARY SYSTEM

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLES
Receivables consist ofgrant reimbursements due on State or other grants for expenditures made but not reimbursed, allotted funds from participating local governments, 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 ofthe 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.
Additionally, the dollar value of accumulated compensated absences at June 30, which will be payable from future resources has not been recorded in the General Long-Term Debt Account Group as this liability is also deemed to be immaterial to the fair presentation ofthese financial statements.
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 ofoperations 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 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 11 Opercent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance.
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LEE COUNTY LIBRARY SYSTEM

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 2: DEPOSITS AND INVESTMENTS
Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating 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 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 ofdevelopment authorities created by the laws ofthe State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 2001, the bank balances were $80,384.98. The bank balances were entirely covered by Federal depository insurance or by collateral held by the Library or the Library's agent in the Library's name.
CATEGORIZATION OF INVESTMENTS At June 30, 2001, the carrying value of the Library's total investments was $89,441.26 which is materially the same as fair value. This investment consisted entirely of funds invested in the Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal
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LEE COUNTY LIBRARY SYSTEM

EXHIBIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 2: DEPOSITS AND INVESTMENTS
Services which are not required to be categorized since the Library did not own any specific identifiable securities in the pool. The investment policy ofthe State ofGeorgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description of the Primary Liquidity Portfolio is as follows:
The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not registered with the Securities and Exchange Commission as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a 2a-7 like pool. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value of the shares. Participation in the pool is voluntary and deposits consist offunds from local governments; operating and trust funds ofGeorgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.
Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2001, was 39 days. The average investment duration for Fund 6 on June 30, 2001, was 6 months.
Note 3: RISK MANAGEMENT
The Library is exposed to various risks ofloss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees and natural disaster.
The Library has obtained commercial insurance for risk ofloss associated with torts and 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 any of the past three years.
The Library has elected to self-insure for all losses related to 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 in the past three years.
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LEE COUNTY LIBRARY SYSTEM

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 3: RISK MANAGEMENT

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

Position Covered

Amount

All Employees

$ 50,000.00

Note 4: 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 ofservice. 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

Note 5: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all librarians and clerical personnel employed by regional and county libraries are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Library who are covered by TRS are required by State statute to contribute 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. The required employer contribution rate is 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2001 2000 1999

100% 100% 100%

$ 20,232.07 $ 13,418.69 $ 12,163.37

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LEE COUNTY LIBRARY SYSTEM SCHEDULE OF STATE REVENUE
YEAR ENDED JUNE 30, 2001
AGENCY/FUNDING
GRANTS Board of Regents of the University System of Georgia Office of Public Library Services Salaries Travel Library Materials Maintenance and Operations
Georgia Council for the Arts Through Albany Area Arts Council Grassroots Arts Program

SCHEDULE "1"

GOVERNMENTAL FUND TYPE GENERAL FUND

$

128,624.73

1,500.00

13,578.00

12,672.80

1,589.10

$ ====1,.,.57='=964===.6==3

See notes to the general-purpose financial statements. - 12 -

LEE COUNTY LIBRARY SYSTEM SCHEDULE OF LOCAL REVENUE
YEAR ENDED JUNE 30, 2001
LOCAL SOURCES Board of Education Lee County City Governments Leesburg Smithville County Government Board of Commissioners Lee

SCHEDULE "2"

GOVERNMENTAL FUND TYPE GENERAL FUND

$

52,000.00

6,800.00 6,083.00

181 467.70

$ =======2=46_,,3=5=0=.7=0

See notes to the general-purpose financial statements. - 13 -

LEE COUNlY LIBRARY SYSTEM SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2001

SCHEDULE "3"

NAME
Bailey, Barton, Brush, Dunn, Evans, Haler, Hayes, Kitchens, Kitchens, Leavy, Lindsey, Majors, Peak, Tillman, Toole-Tester, Williams,

Deborah M. Gloria Mary Elsie Lila Alicel. Stephanie J. Clifton Gerald
Claire L
Herbert M. Eva Carol Mark Beth E. Sharon

Totals per Report

TITLE CATEGORY
Library Assistant Librarian Library Assistant Library Assistant Library Assistant Library Assistant Assistant to the Director Page Temporary Library Assistant Director Page Library Assistant Library Assistant Library Assistant Library Associate Library Assistant

SALARIES

TRAVEL

$

181.54

46,920.04 $

5,658.62

5,506.72

5,409.60

11,129.32

21,840.00

643.76

229.18

58,057.84

3,625.63

18,935.04

16,086.16

4,668.50

9,362.25

7,383.50

607.80 617.50
212.74 463.65 789.20
2,237.26
506.87 325.00
31.75
67.00

$ 215,637.70 $======5,=85==8=.7=7

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

SECTION II FINDINGS AND QUESTIONED COSTS

LEE COUNTY LIBRARY SYSTEM SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2001
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Inadequate Accounting Procedures Finding Resolved Finding Control Number: 6882-00-01
The audit report for the year ended June 30, 2000, noted that the Lee County Library System did not provide for adequate internal control over the journal entry process. For the year under review, the Library implemented appropriate procedures to ensure that journal entries are properly documented and adequately reviewed prior to posting to the general ledger.
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: 6882-96-02
The audit report for the year ended June 30, 2000, noted that the management of the Lee County Library System had chosen not to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. In the year under review, the Library did not establish a General Fixed Assets Account Group within the formal accounting records. This condition results in the general-purpose financial statements ofthe 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 ofa General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, buildings, equipment and inexhaustible collections and books owned by the Library and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
CURRENT YEAR
CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Finding Control Number: 6882-01-01
Accounting procedures for the Lee County Library System were found to be insufficient to provide for adequate internal control over cash assets of the Library. Deficiencies noted were as follows:
(1) The June 2001 bank reconciliation for the general operating account did not agree with the general ledger. An unlocated difference of $1,692.02 remained at June 30, 2001.
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LEE COUNTY LIBRARY SYSTEM SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
CURRENT YEAR CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Finding Control Number: 6882-01-01
(2) A check which cleared the bank in September 2000 was included as an outstanding check on the bank reconciliation at June 30, 2001, for the general operating account.
(3) Bank reconciliations did not include documentation ofan administrative review to ensure that bank reconciliations were correct and that all required adjustments had been made.
(4) Numerous posting errors in balance sheet, revenue and expenditure accounts were identified and corrected during the course of cash audit procedures.
These deficiencies were a result of management's failure to adequately manage cash assets of the Library. The Library should establish internal controls to ensure that bank statements are reconciled with the accounting records and administrative review is performed on a monthly basis. GENERAL LEDGER Detail Listing of Accounts Payable not Reconciled with General Ledger Finding Control Number: 6882-01-02 The detail listing of accounts payable presented for audit was not reconciled with the Library's general ledger. This condition occurred because management failed to ensure that the subsidiary ledgers agreed to the general ledger. Procedures should be implemented to ensure that subsidiary records are reconciled to the general ledger.
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