Thomas County Public Library System, a component unit of Thomas County, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2006

THOMAS COUNTY PUBLIC LIBRARY SYSTEM
A COMPONENT UNIT OF THOMAS COUNTY, GEORGIA REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2006
STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
Russell W. Hinton State Auditor

THOMAS COUNTY PUBLIC LIBRARY SYSTEM - TABLE OF CONTENTS -

FINANCIAL

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

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

EXHIBITS

BASIC FINANCIAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET ASSETS

1

B

STATEMENT OF ACTIVITIES

2

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUND

3

D

RECONCILIATION OF THE GOVERNMENTAL FUND BALANCE SHEET

TO THE STATEMENT OF NET ASSETS

4

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCE

GOVERNMENTAL FUND

5

F

RECONCILIATION OF THE GOVERNMENTAL FUND STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCE TO THE STATEMENT OF ACTIVITIES

7

G

NOTES TO THE BASIC FINANCIAL STATEMENTS

8

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL

GENERAL FUND

17

SUPPLEMENTARY INFORMATION

SCHEDULES OF REVENUE

2

STATE

18

3

FEDERAL

19

4

LOCAL

20

5 SCHEDULE OF SALARIES AND TRAVEL

21

FINANCIAL

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
July 5, 2007

Honorable Sonny Perdue, Governor Members ofthe General Assembly Members of the Board of Regents of the University System of Georgia
and Director and Members of the Thomas County Public Library System Board
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying financial statements ofthe governmental activities and the major fund (Exhibits A through G) of the Thomas County Public Library System a component unit of Thomas County, Georgia as of and for the year ended June 30, 2006, which collectively comprise the Library's basic financial statements as listed in the table ofcontents. These financial statements are the responsibility of the Thomas County Public Library System's management. Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the 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 opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and the major fund of the Thomas County Public Library System, as ofJune 30, 2006, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.

2006ARL-41

Management's Discussion and Analysis and the Schedule ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on pages i through vi and page 17 are not a required part of the basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States ofAmerica. We have applied certain limited procedures, which consisted principally ofinquiries ofmanagement regarding the methods ofmeasurement and presentation ofthe required supplementary information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Thomas County Public Library System's basic financial statements. The accompanying supplementary information which consist ofSchedules 2 through 5, are presented for purposes of additional analysis and are not a required part ofthe basic financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe basic financial statements, and in our opinion, is fairly stated in all material respects in relation to the basic 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,
~~~ '
Russell W. Hinton, CPA, CGFM State Auditor
RWH:as 2006ARL-41

THOMAS COUNTY PUBLIC LIBRARY SYSTEM MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006
This document is management's discussion and analysis of the Thomas County Public Library System (TCPLS) financial activities for the year ended June 30, 2006.
Overview of Financial Statements
TCPLS statements are presented in three parts: governmental-wide financial statements, fund financial statements and notes to the basic financial statements.
Government-wide Statements
The government-wide financial statements are presented using the accrual basis of accounting. These statements provide a financial view of the Library as a result of all economic transactions. The accrual basis of accounting reports results of activities based on the occurrence of an economic event, regardless of the timing of revenue collections or payment of expenses. Thus, revenues and expenses are reported in the statement for some items that will only result in cash flows in future fiscal periods. Government-wide financial statements include the Statement of Net Assets and the Statement of Activities.
The Statement of Net Assets presents the total assets and liabilities of the Library with the difference reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Library is improving or deteriorating.
The Statement ofActivities presents information showing how the Library's net assets changed during the most recent fiscal year. The Statement of Activities presents governmental activity expenditures in the following categories: Public Services, Technical Services, Support Services, Maintenance and Operations and Information Technology.
Program revenues include Charges for Services and Operating Grants and Contributions.
General revenues include the contribution for Library operations from Thomas County funds, interest revenue and miscellaneous revenue from donations.
As is evident from the Statement of Activities, the majority of Library expenditures are paid from revenue provided by Thomas County.
Please see Exhibits "A" and "B" to review the governmental-wide financial statements.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been separated for specific activities or objectives. TCPLS, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance related requirements.
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THOMAS COUNTY PUBLIC LIBRARY SYSTEM MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006
The Library uses only one governmental fund: the general fund. This fund is accounted for using the modified accrual basis of accounting. Under this basis of accounting, revenue is posted when amounts are both measurable and available to fund current operations. Expenditures are posted when amounts will be disbursed in the near future (typically within sixty days).
Because the focus of the fund financial statements is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions.
The fund balance of $574,174 reported in Exhibit "C" in the Balance Sheet, Governmental Fund is reconciled to the total ending net assets of $1,282,172 reported in Exhibit "A" in the Statement of Net Assets. The difference in these is due to capital assets are not financial resources and are not reported in the funds. See Exhibit "D" Reconciliation of the Governmental Fund Balance Sheet for the difference.
In addition, the net change in fund balance of $194,094 reported in Exhibit "E" of the Statement of Revenues, Expenditures and Changes in Fund Balance is reconciled to the change in net assets of $203,336 reported in Exhibit "B" in the Statement of Activities. See Exhibit "F", Reconciliation of the Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balance to the Statement of Activities for the differences.
Notes to the Basic Financial Statements
The notes to the basic financial statements presented on pages 8 - 15 provide additional information that is essential to the full understanding of data provided in the government-wide and fund financial statements.
Additional Information
Following the notes to the basic financial statements section is the Schedule of Revenues,
Expenditures and Changes in Fund Balance Budget and Actual Schedule "l ". This schedule is
required supplementary information to the basic financial statements. The format used is similar to the Combined Statement of Revenues, Expenditures and Changes in Fund Balances. This schedule shows the original budget adopted at the beginning of the fiscal year and final adjusted budget, which includes any changes to the budget during the fiscal year.
Financial Analysis of the Thomas County Public Library System
Net assets may serve over time as a useful indicator of the Library's financial position. At the close of fiscal year 2006, the Library's net assets totaled $1,282,172.
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THOMAS COUNTY PUBLIC LIBRARY SYSTEM MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006

Net Assets

Governmental Activities Fiscal Year2006

Assets Cash and Cash Equivalents Investments Capital Assets Building and Building Improvements Equipment Library Collections Less: Accumulated Depreciation

$ 531,827 42,347
79,450 280,255 2,231,265 1,882,972

Total Assets

$ 1,282.172

Net Assets Invested in Capital Assets, Net of Related Debt Unrestricted

$ 707,998 574,174

Total Net Assets

$ 1,282.172

The capital assets reported consist of the Library facilities, furniture, general office equipment, computers and related equipment, durable supplies and the collection of materials that comprises the circulating and non-circulating collection of books magazines, microfilm, video, CD's, DVD's, cassette tapes, etc. There is no outstanding debt. Capital assets are reported net of depreciation.

The total fund balance has been designated for future use in future annual operating budgets, and profound repair or replacements of capital assets due to conditions not reimbursed by insurance claims.

Government-wide (accrual basis)

The Library's overall financial position and operations at the government-wide level for the past two years is summarized as follows:

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THOMAS COUNTY PUBLIC LIBRARY SYSTEM MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006

Current Assets Net Capital Assets

Fiscal Year2006
$ 574,174 707,998

Fiscal Year 2005
$ 381,663 575,670

Net Change
$ 192,511 132,328

Total Assets

$1,282,172 $ 957,333 $ 324,839

Current Liabilities

$

0 $ 1,583 $ -1,583

Investment in Capital Assets Unrestricted Net Assets

$ 707,998 574,174

$ 575,670 380,080

$ 132,328 194,094

Total Net Assets

$1,282,172 $ 955,750 $ 326,422

General Revenues Charges for Services Operating Grants Local Funds Other General Revenues

$ 53,254 165,505 742,500 282,038

$ 40,907 131,636 725,000 57,819

$ 12,347 33,869 17,500
224,219

Total Revenues

$1,243,297 $ 955,362 $ 287,935

Program Expenses Public Services Technical Services Support Services Maintenance and Operations Information Technology

$ 532,904 54,195
211,810 161,430 79,622

$ 505,820 39,865 172,238
211,948 64,063

$ 27,084 14,330 39,572 -50,518 15,559

Total Expenses

$1,039,961 $ 993,934 $ 46,027

Change in Net Assets

$ 2031336 $ -38,572 $ 241,208

At June 30, 2006, the assets of Thomas County Public Library System exceeded its liabilities by $1,282,172. The most significant portion of net assets is the Library's investment in capital assets totaling $707,998. The Library uses the assets (furniture equipment, books and collections) to provide services to Library customers, so they are not available to fund current operations. The remaining $574,174 represents unrestricted net assets available to fund Library operations.

For fiscal year 2006, the Library restated Net Assets due to a change in its Capital Asset Policy regarding the Estimated Useful Lives of Assets and to correctly reflect Construction in Progress at June 30, 2006. These restatements resulted in an increase in Net Assets at July 1, 2005 of $123,086. These changes are in accordance with generally accepted accounting principles.

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THOMAS COUNTY PUBLIC LIBRARY SYSTEM MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006

Total revenues increased $287,935 due to increased funding from Board of Regents of the University System of Georgia, Thomas County and bequests of donors. Total expenses increased by $46,027, primarily as a result of increased salary and benefit expenses and added personnel.

Fund Level (Modified accrual basis)

The Library's overall financial position and operations at the fund level for the past two years is summarized as follows from Exhibit "C11 and Exhibit "E":

Exhibit "C" Total Assets Total Liabilities
Total Fund Balance
Exhibit "E" Total Revenues
Total Expenditures

Fiscal Year2006

Fiscal Year2005

Net Change

$ 574,174 $ 574.174

$ 381,663 1,583
$ 380.080

$ 192,511 -1.583
$ 194.094

$1,246.608 $ 1,052.514

$ 955.362 $ 988,167

$ 291.246 $ 64.347

Total assets had a net increase of $192,511 due primarily to increased funding.

General Fund Budgetary Variances

The budget for the Library's operation is presented on Schedule 111 11 The actual revenue amounts increased over the final revenue budget as a result of an increase in revenues, due to bequests from two estates and increased county funding.

The expenditure budget did not change between original and final budget amounts.

Capital Asset and Long-Term Debt Activity

The Library's capital assets consist of building and building improvements, furniture, equipment and Library materials. During the year improvements on the Boston Library building was completed; a digital scanner was added, increases were added to the Library collections. Deletions were primarily copiers, one acquired in 1993 and one in 2000 and portions of the Library collections that were outdated.

Other Potentially Significant Matters

Construction/renovation plans are in progress for the use of SPLOST funding for all libraries, beginning in 2007 until completed.

-v-

THOMAS COUNTY PUBLIC LIBRARY SYSTEM MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006 Requests for Additional Information This financial report is designed to provide a general overview of Thomas County Public Library System's finances for our citizens, taxpayers and governmental entities to which we are accountable. If you have any additional questions about this report, please contact the Accounting Department at 229-225-5252.
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THOMAS COUNTY PUBLIC LIBRARY SYSTEM

THOMAS COUNTY PUBLIC LIBRARY SYSTEM STATEMENT OF NET ASSETS JUNE 30, 2006
ASSETS Cash and Cash Equivalents Investments Capital Assets
Buildings and Building Improvements Equipment Library Collections Less: Accumulated Depreciation
Total Assets
NET ASSETS Invested in Capital Assets, Net of Related Debt Unrestricted
Total Net Assets

EXHIBIT"A"

GOVERNMENTAL ACTIVITIES

$

531,827

42,347

79,450 280,255 2,231,265 -1,882,972

$ ===1=,2=8=2,=17=2=

$

707,998

574174

$ ===1=,2=8=2,=17=2=

The notes to the basic financial statements are an integral part of this statement.
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THOMAS COUNTY PUBLIC LIBRARY SYSTEM STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2006

EXHIBIT"B"

EXPENSES

PROGRAM REVENUES

OPERATING

CHARGES FOR

GRANTS AND

SERVICES

CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS

GOVERNMENTAL ACTIVITIES

Current Services Public Services Technical Services Support Services Maintenance and Operations Information Technology

$

532,904 $

54,195

211,810

161,430

79,622

53,254 $

140,829 $ 24,676

-338,821 -54,195
-211,810 -136,754
-79 622

Total Governmental Activities

1,039,961 $

53254 $

165 505 $ _ _ _..;-8c;;2;.;,_1,""20.;.c2c..

General Revenues Allotments from Participating Governments Investment Earnings Miscellaneous

$

742,500

8,702

273 336

Total General Revenues Change in Net Assets

$ -----'1=,0=2~4,=53~8~

$

203,336

Net Assets - Beginning of Year (Restated)

1,078,836

Net Assets - End of Year

$ ======1,..,2..,8..,2,..,11.,.2._

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

THOMAS COUNTY PUBLIC LIBRARY SYSTEM BALANCE SHEET
GOVERNMENTAL FUND JUNE 30, 2006
ASSETS Cash and Cash Equivalents Investments
Total Assets
FUND BALANCE Unreserved
Undesignated Reported in: General Fund

EXHIBIT"C"

GENERAL FUND

$

531,827

42 347

$ ==5=7=4=17=4=

$ ===57=4=1.,..74=

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

THOMAS COUNTY PUBLIC LIBRARY SYSTEM RECONCILIATION OF THE GOVERNMENTAL FUND BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30, 2006

EXHIBIT"D"

Total Fund Balance - Governmental Fund (Exhibit "C")

Amounts reported for Governmental Activities in the Statement of Net Assets are different because:

Capital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of:

Buildings and Building Improvements

$

Equipment

Library Collections

Accumulated Depreciation

Total Capital Assets

$
79,450 280,255 2,231,265 -1,882,972

574,174 707,998

Net Assets of Governmental Activities (Exhibit "A")

$ ======1='2=82='1=7=2

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

THOMAS COUNTY PUBLIC LIBRARY SYSTEM

EXHIBIT "E"

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE

GOVERNMENTAL FUND

YEAR ENDED JUNE 30, 2006

REVENUES
Local Funds State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Public Services Technical Services Support Services Maintenance and Operations Information Technology Facilities Acquisition and Construction
Total Expenditures
Net Change in Fund Balance
Fund Balance - Beginning
Fund Balance - Ending

GENERAL FUND

$

742,500

161,605

3,900

53,254

8,702

2761647

$ 112461608

$

522,430

54,195

211,810

171,701

76,633

15 745

$ 1,052,514

$

194,094

380,080

$ ======57..4.=1=74.,..

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

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THOMAS COUNTY PUBLIC LIBRARY SYSTEM RECONCILIATION OF THE GOVERNMENTAL FUND STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE TO THE STATEMENT OF ACTIVITIES JUNE 30, 2006

EXHIBIT"F"

Total Net Change in Fund Balance - Governmental Fund (Exhibit "E")

$

Amounts reported for Governmental Activities in the Statement of Activities are different because:

Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:

Capital Outlay Depreciation Expense
Excess of Depreciation Expense over Capital Outlay

$ 124,361 -111,808

In the Statement of Activities, only the gain on the sale of the equipment is reported, whereas in the Governmental Funds, the entire proceeds from the sale increase financial resources. Thus, the change in net assets differs from the change in fund balances by the carrying value of the equipment sold.

194,094
12,553 -3 311

Change in Net Assets of Governmental Activities (Exhibit "B")

$ ===20=3=,3=36=

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

THOMAS COUNTY PUBLIC LIBRARY SYSTEM NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT"G"

Note 1: DESCRIPTION OF LIBRARY AND REPORTING ENTITY
REPORTING ENTITY
The Thomas County Public 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 of Georgia.
The Library Board consists of nine members appointed by the Thomas County Board of Commissioners. The Library Board is without authority to determine the amount of its funding, except by submission ofbudget requests to local governmental units from which the Library receives support and to the State ofGeorgia for State and Federal flow through funding. 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 Thomas County Board of Commissioners appoints all of the Library's Board members and provides a substantial majority of funding for the operations of the Library, consequently, the Library is deemed to have a financial benefit/burden relationship with Thomas County, Georgia as defined by the Governmental Accounting Standards Board. Accordingly, the Thomas County Public Library System is considered to be a component unit of Thomas County, Georgia for financial reporting purposes.
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The Library's basic financial statements are collectively comprised of the Library-wide financial statements, fund financial statements and notes to the basic financial statements of the Thomas County Public Library System.
Library-wide Statements: The Statement ofNet Assets and the Statement ofActivities display information about the financial activities ofthe overall Library. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through intergovernmental revenues and other nonexchange transactions.
The Statement ofActivities presents a comparison between direct expenses and program revenues for each function of the Library's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the Library related to the administration and support ofthe Library's programs, such as office and maintenance personnel and accounting) are not allocated to programs.

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THOMAS COUNTY PUBLIC LIBRARY SYSTEM NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "G"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Program revenues include (a) charges paid by the recipients ofgoods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues are presented as general revenues.
Fund Financial Statements: The fund financial statements provide information about the Library's funds. Eliminations have been made to minimize the double counting of internal activities. The emphasis of fund financial statements is on major governmental funds.
The Library reports the following major governmental fund:
General Fund is the Library's primary operating fund. It accounts for all financial resources of the Library.
BASIS OF ACCOUNTING
The basis ofaccounting determines when transactions are reported on the financial statements. The Library-wide governmental financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the Library gives (or receives) value without directly receiving (or giving) equal value in exchange, include grants and donations. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
The Library uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis ofaccounting. Under this method, revenues are recognized when measurable and available. The Library considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Interest is considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred. Capital asset acquisitions are reported as expenditures in governmental funds.
The Library funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the Library's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
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THOMAS COUNTY PUBLIC LIBRARY SYSTEM NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "G"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RESTATEMENT OF PRIOR YEAR NET ASSETS
For fiscal year 2006, the Library restated various Capital Assets due to a change in the capitalization policy and errors and omissions. The Library increased construction in progress by $53,434. Additionally, the Library increased, net of accumulated depreciation, equipment by $69,652. The result is an increase in Net Assets at July I, 2005, of$123,086. This change is in accordance with generally accepted accounting principles.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 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-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Library to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn 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,
(7) Repurchase agreements, and
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THOMAS COUNTY PUBLIC LIBRARY SYSTEM NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT"G"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(8) Obligations of other political subdivisions of the State of Georgia.

CAPITAL ASSETS

Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time ofpurchase. On the Library-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives ofthe assets is not capitalized. Depreciation is computed using the straight-line method.

Capitalization thresholds and estimated useful lives of capital assets reported in the Library-wide statements are as follows:

Capitalization Policy

Estimated Useful Life

Buildings and Improvements Equipment Library Collections

$

5,000 25 to 60 years

$

5,000 5 to 25 years

All

10 years

Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives.

Note 3: 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 ofthe 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 ofthe amount ofdeposit insurance. 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.

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,

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THOMAS COUNTY PUBLIC LIBRARY SYSTEM NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "G"

Note 3: DEPOSITS AND INVESTMENTS

(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

(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, 2006, the bank balances were $570,066. The amounts of the total bank balances are classified into four categories of custodial credit risk:

Category 1 - Cash that is insured (e.g., Federal Deposit 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 - Cash collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Library's name.
Category 4 - Uncollateralized.

The Library's deposits are classified by custodial credit risk category at June 30, 2006, as follows:

Custodial Credit Risk Category

Bank Balance

1

$ 158,623

2

411,443

3

0

4

0

Total

$=====5==70-,0=6==6

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THOMAS COUNTY PUBLIC LIBRARY SYSTEM NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT"G"

Note 3: DEPOSITS AND INVESTMENTS
CATEGORIZATION OF INVESTMENTS At June 30, 2006, the carrying value of the Library's total investments was $37,335 which is materially the same as fair value. The investment consisted entirely of funds invested in two Investment Pools administered by the Community Foundation of Southwest Georgia, Incorporated, which are not required to be categorized since the Library did not own any specific identifiable securities in the pools. The investment policy ofthe Community Foundation ofSouthwest Georgia, Incorporated for the two Investment Pools (Fixed Income Investment Portfolio and Balanced Growth/Income Investment Portfolio) does not provide for investment in derivatives or similar investments. A description ofthe Fixed Income Investment Portfolio and Balanced Growth/Income Investment Portfolio is as follows:
The Fixed Income Investment Pool consists of cash equivalents and money market investments at FDIC insured banks. The Balanced Growth/Income Investment Portfolio consists of cash equivalents, bonds, mutual funds and other equity type investments. The pool distributes earnings on a monthly basis. For its services, the Community Foundation of Southwest Georgia, Incorporated, charges a management fee of 1.25% annually.
The Community Foundation of Southwest Georgia, Incorporated, is established as a public charity that is exempt from Federal and state income tax as described in the Internal Revenue Code Section 501(3)c. The Community Foundation of Southwest Georgia, Incorporated is not registered with the Securities and Exchange Commission because it is not an investment company. Participation in the Community Foundation of Southwest Georgia, Incorporated, is voluntary and deposits consist of funds from nonprofit organizations, individuals, businesses, civic clubs and other donors who wish to contribute funds to a charitable organization.
Note 4: CAPITAL ASSETS
The following is a summary of changes in the Capital Assets during the fiscal year:

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THOMAS COUNTY PUBLIC LIBRARY SYSTEM NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "G"

Note 4: CAPITAL ASSETS

Balances July 1, 2005 (Restated)

Increases

Decreases

Balances June 30, 2006

Governmental Activities

Capital Assets, Not Being Depreciated:

Construction in Progress

$

53 434 $

0 $

53 434 $

0

Capital Assets Being Depreciated Buildings and Improvements Equipment Library Collections

$

0 $

283,350

2,294,875

79,450 9,795 $ 88,550

$ 12,890 152,160

79,450 280,255 2,231,265

Less Accumulated Depreciation for: Buildings and Improvements Equipment Library Collections

0 183,697 1,749,206

3,178 11,765 96,865

9,579 152,160

3,178 185,883 1,693,911

Total Capital Assets, Being Depreciated, Net $ 645,322 $

65 987 $

3 311 $ 707,998

Governmental Activity Capital Assets - Net $ 698/Z56 $

65,982 $

56,145 $ 707,998

Current year depreciation expense by function is as follows:

Public Services Information Technology

$ 108,819 2,989

Note 5: 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 acts of God.
The Library has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and acts of God. However, the errors or omissions policy excludes coverage for discrimination. The Library has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Library's insurance coverage in any ofthe past three years.
The Library participates in the Association County Commissioners ofGeorgia-Selflnsured Workers' Compensation Fund, a public entity risk pool organized on July 1, 1982, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The Library pays an annual premium to the Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Fund with Safety National Casualty Corporation to provide coverage for potential losses by the Fund in excess of $600,000 loss per occurrence, up to $2,000,000.
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THOMAS COUNTY PUBLIC LIBRARY SYSTEM NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT"G"

Note 5: RISK MANAGEMENT

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

Position Covered

Amount

All Employees

$

50,000

Note 6: 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 ofthe 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 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2006 2005 2004

100% 100% 100%

$ 34,231 $ 30,745 $ 27,960

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THOMAS COUNTY PUBLIC LIBRARY SYSTEM GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2006

SCHEDULE "1"

REVENUES
Local Funds State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Public Services Technical Services Support Services Maintenance and Operations Information Technology Facilities Acquisition and Construction
Total Expenditures
Net Change in Fund Balance
Fund Balance - Beginning

NONAPPROPRIATED BUDGETS

ORIGINAL

FINAL

ACTUAL AMOUNTS

$

798,372 $

798,372 $

742,500

179,050

179,050

161,605

3,900

42,408

42,408

53,254

4,000

4,000

8,702

56 379

56 379

276,647

$

1,080,209 $

1,080,209 $

1,246,608

$

595,863 $

595,863 $

522,430

66,446

66,446

54,195

227,023

227,023

211,810

130,441

130,441

171,701

75,205

75,205

76,633

15745

$

1,094,978 $

1,094,978 $

1,052,514

$

-14,769 $

-14,769 $

194,094

380,080

380,080

380,080

Fund Balance - Ending

$

365,311 $

365,311 $=======57=4=1=74...

Notes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual
The accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.

See notes to the basic financial statements.

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THOMAS COUNTY PUBLIC LIBRARY SYSTEM SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2006

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Board of Regents of the University System of Georgia Office of Public Library Services Salaries Library Materials Maintenance and Operations

GOVERNMENTAL FUND TYPE GENERAL FUND

$

121,953

14,976

24676

$ ====1=6==1=60=5=

See notes to the basic financial statements.

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THOMAS COUNTY PUBLIC LIBRARY SYSTEM SCHEDULE OF FEDERAL REVENUE YEAR ENDED JUNE 30, 2006

SCHEDULE "3"

AGENCY/FUNDING
GRANT Museum and Library Services, Institute of Through Board of Regents of the University System of Georgia Library Services and Technology Act State Library Program

GOVERNMENTAL FUND TYPE GENERAL FUND
$ =====3=9=00.....

See notes to the basic financial statements.

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THOMAS COUNTY PUBLIC LIBRARY SYSTEM SCHEDULE OF LOCAL REVENUE YEAR ENDED JUNE 30, 2006
LOCAL SOURCES County Government Board of Commissioners Thomas County

SCHEDULE "4"
GOVERNMENTAL FUND TYPE GENERAL FUND
$====74=2=,5=00==

See notes to the basic financial statements.

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THOMAS COUNTY PUBLIC LIBRARY SYSTEM SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 2006

SCHEDULE "5"

NAME
Beckwith, Bishop, Brooks, Cook, Crawford, Currie, Depew, Depew, Dewell, Floyd, Godwin, Goodin, Gross, Hagan, Hardman, Hemphill, Johnson, Jones, Kelly, Krier, Lewis, Love, McCollough, McCoy, McCoy, McGuire, Mitchell, Monroe, Moore, Ramsey, Smith, Summers, Tillinghast, Vainer, Walker, Wynn,

Betty L. Amanda I. DollyM. Joanita F. Robert L. Staci D. Betty L. Ralph L. Charles H. Rebecca A. Connie B. Hilda$. MaryJ. Samantha L. Barbara M. Revonda M. Patricia L. Donna S. Joseph E. Dolores S. Gloria J. Stacey L. Kristy B. Latasha N. Trish A. Angela B. PeridaA. Janet Joseph Deanna P. Patricia E. Keesha C. Nancy Charles E. Sharon M. Shannon L.

Totals per Report

TITLE CATEGORY
Branch Assistant Children's Assistant Branch Manager Branch Manager Circulation Assistant Reference Assistant Mending Assistant Security/Maint. Assistant AV/Maintenance Assistant Circulation Assistant Circulation Assistant Bookkeeper Library Assistant Branch Assistant Processing Assistant Branch Manager Branch Assistant Processing Manager Children's Assistant Library Assistant Bookkeeping Assistant Childrens Manager Branch Assistant Reference Assistant Branch Manager ILL Manager Reference Manager Library Assistant Systems Administrator Outreach Coordinator Branch Assistant Senior Librarian Director Circulation Assistant Circulation Manager Branch Assistant

SALARIES

TRAVEL

$

5,989

16,328 $

202

12,962

75

16,287

60

9,862

36

5,390

2,032

6,411

16

5,004

3,826

29,275

55

1,585

2,867

15,171

5

7,823

92

975

5

18,980

5,013

1,585

17,867

69

20,769

60

14,744

15,756

20,821

121

24,825

26,967

21

2,562

28,340

66

26,301

4,790

54

41,646

67,353

543

2,102

19,806

1,175

3,283

$

505,313 $ ====2=16..3...,9

See notes to the basic financial statements.

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