Audit report, Chattahoochee-Flint Regional Educational Service Agency, Ellaville, Georgia, year ended June 30, 1994

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

AUDIT REPORT CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY
ELLAVIlLE, GEORGIA YEAR ENDED JUNE 30, 1994

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY - TABLE OF CONTENTS -

SECTION!

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL ST:A.TEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

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

GOVERNMENTAL FUND TYPES

3

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - ACTUAL AND BUDGET

GOVERNMENTAL FUND TYPES

4

D . NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

5

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

14

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

16

SCHEDULES

1 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

18

2 ANALYSIS OF CASH AND CASH EQUIVALENTS

19

3 ACCOUNTS RECEIVABLE

20

SCHEDULE OF REVENUE

4

STATE FUNDS

21

5

LOCAL AND OTHER FUNDS

22

SCHEDULE OF EXPENDITURES BY OBJECT

6

GOVERNMENTAL FUND TYPES

23

7

LOTTERY PROGRAM

24

8 SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS

25

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY -TABLE OF CONTENTS-
SECTION II SUMMARY AND SCHEDULE OF SALARIES AND TRAVEL
SECTION III COMPLIANCE
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS SINGLE AUDIT OPINION ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS
SECTION IV INTERNAL CONTROL REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
SECTIONV FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS

SECTION! FINANCIAL

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
May 18, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board of Education
and Director and Members of the Chattahoochee-Flint Regional Educational Service Agency Board of Control
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
Ladies and Gentlemen:
We have audited the general purpose financial statements (Exhibits A through D) of the Chattahoochee-Flint Regional Educational Service Agency, as of and for the year ended June 30, 1994, as listed in the table of contents. These financial statements are the responsibility of the Agency'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, Government Auditing Standards, issued by the Comptroller General of the United States, and the provisions of the Office of Management and Budget Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general purpose financial statements, the Agency'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:

94ARL-33

The general purpose financial statements of the Agency did not contain a General Fixed Assets Account Group to account for equipment owned by the Agency which should be included to conform to generally accepted accounting principles.
* The Agency did not recognize as expenditures, in the year ended June 30, 1994, a portion of salaries
and the corresponding employer's cost ofrelated benefits earned for contractual services completed prior to June 30, 1994. Also funds received, subsequent to June 30, 1994, from the Georgia Department ofEducation for the State's share ofthese unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1993, were improperly recorded in the year ended June 30, 1994. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
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 our opinion, except for the effects on the general purpose financial statements ofthe matters referred to in the preceding paragraph, the general purpose financial statements present fairly, in all material respects, the financial position of the Chattahoochee-Flint Regional Educational Service Agency as of June 30, 1994, 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 Chattahoochee-Flint Regional Educational Service Agency taken as a whole. The combining statements (Exhibits E and F), the financial schedules (Schedules l through 8 which includes the Schedule of Federal Financial Assistance) and the Schedule of Salaries and Travel, 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 of the Chattahoochee-Flint Regional Educational Service Agency. Such information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and, in our opinion, except for the effects of the matters referred to 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 ofthe State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:jy 94ARL-33

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY - 1-

CHATTAHOOCHEE-FLINT REGIONAL EOUCATIONAL SERVICE AGENCY COMBINED BALANCE SHEET ALL FUND TYPES JUNE 30 1994

EXHIBIT "A"

ASSETS
Cash and Cash Equivalents Accounts Receivable Inventories

GOVERNMENTAL FUND TYPES

GENERAL FUND

SPECIAL REVENUE
FUND

TOTALS (Memorandum Only)
JUNE 30, 1994 JUNE 30, 1993

154,365.43 8,522.13 $ 114,224.75 26,799.81

154,365.43 $ 158,717.13

122,746.88

89,227.77

26,799.81

23,577.51

Total Assets

1B9,687.37

114,224.75 $ 303,912.12

271,522.41

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Inventories for Resale Unreserved Undesi gnated
Total Fund Equity

69,703.16 $ 7,191.96
34,508.76 2,820.87

69,703.16 $ 7,191.96
34,508.76 2,820.87

50,197.58 7 ,29B.60
34,725.73 509. 79

114,224.75 $ 114,224.75 $ 92,731.70

26,799.81 162,887.56$
189,6B7.37 $

0. 00

26,799.81 $ 23,577.51

162,887.56

155,213.20

0.00 $ 189,687.37$ 178,790.71

Total Liabi 1 ities and Fund Equity

189,687.37$ 114,224.75$ 303,912.12$ 271,522.41

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

CHATTAHOOCHEE-FLINT REGIONAL EOUCAT!ONAL SERVICE AGENCY COMB!NEO STATEMENT OF REVENUES EXPENOITURES ANO CHANGES IN FUND BALANCES
GOVERNMENTAL FUND TYPES YEAR ENDEO JUNE 30 1994

EXHIBIT "B"

GENERAL FUND

SPECIAL REVENUE
FUND

TOTALS (Memorandum Only)
YEAR ENDED ---------------------------JUNE 30, 1994 JUNE 30, 1993

REVENUES
State Funds Federal Funds Loca1 and Other Funds

761,016.00 $ 394,093.58

187,086.00$ 680,285.70
4,267.80

948,102.00 $ 680,285.70 398,361.38

861,990.71 312,427.24 350,779.76

Total Revenues

$1,155,109.58$ 871,639.50$ 2,026,749.08$ 1,525,197.71

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instructional Services General Admi ni strati on Business Administration Maintenance and Operation of Plant Other Support Services

514,770.83

115,363.24 $ 630,134.07

536,917.25

327,720.22 24,252.26 9B,814.21 49,748.82
125,992.69 2,913.89
-------------

261,397.54 151,553.60
97,277.05
21,114.58 224,933.49
-------------

589,117.76 175,805.86 196,091.26
49,748.82 147,107.27 227 ,B47 .38
-------------

538,985.80 156,112.62 114,603.24
39,805.59 139,119.54
-------------

Tota 1 Expenditures

$1,144,212.92$ 871,639.50$ 2,015,852.42$ 1,525,544.04

Excess of Revenues over (under) Expenditures FUND BALANCE JULY 1

10,896.66 $ 178,790.71

0.00 $ 10,896.66 $

-346.33

0.00

178,790.71

179,137.04

FUND BALANCE JUNE 30

189,687.37 $

0.00 $ 189,6B7.37 $ 178,790.71

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

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY COMBINED STATEMENT OF REVENUES EXPENDITURES ANO CHANGES IN FUND BALANCES
ACTUAL ANO BUDGET - GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 1994

EXHIBIT "C"

REVENUES
State Funds Federa 1 Funds local and Other Funds
Tota 1 Revenues
EXPENDITURES
Current Instruction Support Services Pupi 1 Services Improvement of Instructional Services General Administration Business Administration Maintenance and Operation of Plant Other Support Services Food Services Opera ti on
Capital Outlay
Tota 1 Expenditures
Excess of Revenues over ( under) Expenditures FUND BALANCE JULY 1, 1993
ADJUSTMENTS
Prior Year (Net)
FUND BALANCE JUNE 30, 1994

ACTUAL PER
EXHIBIT "B"

BUDGET

VARIANCE FAVORABLE (UNFAVORABLE)

94B,102.00 $ 680,285.70 398,361.38

877,730.00$ 952,315.80 365,170.00

70,372.00 -272, 030 .10
33,191.38

$ 2,026,749.08 $ 2,195,215.80 $ -168,466.72

630,134.07 $ 711,125.80 $ 80,991.73

589,117.76 175,805.86 196,091.26
49,748.82 147,107.27 227,847.38
-------------

655,404.20 174,237.00 224,948.00
48,075.20 150,066.60 354,798.00
850. 00 2,000.00
-------------

66,286.44 -1,568.86 28,856.74 -1,673.62
2";959.33 126,950.62
850. 00 2,000.00
-------------

$ 2,015,852.42 $ 2,321,504.80 $ 305,652.38

10,896.66 $ -126,289.00 $ 137,185.66

178,790.71

170,950.98

7,839.73

-3,104.65

3,104.65

189,687.37 $ 41,557.33 $ 148,130.04

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

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30 1994

EXHIBIT"D'

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Chattahoochee-Flint Regional Educational Service Agency (Agency) was established pursuant to the Official Code ofGeorgia Annotated Sections 20-2-270 through 20-2-274 for the purposes of providing shared services designed to improve the effectiveness of educational programs and services of local school systems and for providing instructional programs directly to selected public school students in the state.
Each regional educational servicie agency is governed by a board. The number of members and terms of office are prescribed by the State Board ofEducation; provided, however, that at least one-third of the membership of each Board shall be individuals who hold no other public office, who are not employees of any local unit ofadministration, and who are not employees of the Georgia Department ofEducation.
With the exception ofthe departures from generally accepted accounting principles disclosed in the following paragraphs, the financial statements of the Agency have been prepared in conformity with generally accepted accounting principles as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles.
The more significant of the Agency's accounting policies are described below.
REPORTING ENTITY
In evaluating how to define the government unit for financial reporting purposes, management has considered the criteria set forth in GASB Codification of Governmental Accounting and Financial Reporting Standards, Section 2100, "Defining the Financial Reporting Entity". Based upon the application of the above criteria, the Chattahoochee Flint Regional Educational Service Agency is determined to be a jointly governed organization.
The members of the Board are elected by an annual caucus ofan equal number of members oflocal boards of education from the respective member local school systems. Each Board appoints and contracts with a director who is the executive officer of the regional educational service agency. The director is responsible for the administration of the programs and services approved by the Board.
Member boards ofeducation in the Chattahoochee-Flint Regional Educational Service Agency are as follows: City ofAmericus, Chattahoochee County, Clay County, Crisp County, Dooly County, Harris County, Macon County, Marion County, Quitman County, Randolph County, Schley County, Stewart County, Sumter County, Talbot County, Taylor County, and Webster County.
FUND ACCOUNTING
The Agency 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.
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CHATTAHOOCHEE-FLINT REGIONAI EDUCATIONAi SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE30 1994

EXHIBIT"D"

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General Fixed Assets 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 Agency. To confonn to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
The general purpose financial statements account for all State, Federal, Local and Other Funds under control ofthe Agency, 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:
GOVERNI\fENTAL FUND TYPES - are used to account for all or most of a regional educational service agency's general activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the Agency except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services traditionally provided by a regional educational service agency.
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. These funds are primarily received from the Georgia Department ofEducation and from the Federal government to accomplish specific objectives and are required to be accounted for separately.
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 generally are 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 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 revenues considered susceptible to accrual are intergovernmental grants, sales and services and investment income.
Expenditures are generally recognized when the related fund liability is incurred.

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CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO TIIB GENERAL PURPOSE FINANCIAi STATEMENTS JUNE30 1994

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A departure from the above definitions is the accounting treatment afforded the final two payments on teachers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1994, a substantial number of personnel of the RESA were employed for a one hundred and ninety day period beginning in late August 1993 and ending in early June 1994. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1993 and ending in August 1994. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department ofEducation to the RESA in the same twelve months. As ofJune 30, 1994, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 1994, had not been made. Payments for these two months were made and recorded as expenditures by the RESA subsequent to June 30, 1994. Also, the State's portion of the compensation paid in July and August 1994 was received and recorded as revenue in the fiscal year subsequent to June 30, 1994. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1993, were recorded in the year ended June 30, 1994. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
BUDGET
The Chattahoochee-Flint Regional Educational Service Agency has a legally authorized nonappropriated budget which is formally approved by the Board at the aggregate level. Budgets are prepared to provide a basis for funding operations and there is no legal prohibition regarding overexpenditure of the aggregate budget. The budget process begins when the Agency's administration prepares a tentative aggregated budget for the Board's approval. After approval ofthis tentative budget by the Board, the budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final budget. This final budget is then submitted to the Georgia Department ofEducation.
The Agency prepares its budget on the modified accrual basis, which is the same basis on which it presents its financial statements. The budget comparison on Exhibit "C" presents actual and budget data for all governmental funds on a combined basis.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits (including certificates of deposit and N.O.W. accounts) in authorized financial institutions. Georgia Laws authorize the Agency to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.

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CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY
NOTES TO THE GENERAL PURPOSE FINANCIAi STATEMENTS
IDNE30 1994

EXI-IlBIT "D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RECEIVABLES
Receivables consist ofgrant reimbursements due from Federal, State or other grantors for expenditures made but not reimbursed 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.
INVENTORJES
GOODS FOR RESALE Inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). The Agency uses the consumption method to account for inventories whereby an asset is recorded when purchased and cost of goods sold are recorded at the time the items are consumed. The inventory reported on the balance sheet is equally offset by a reservation offund balance which indicates that it does not constitute "available spendable resources" even though it is a component of net current assets.
INTERFUND TRANSACTIONS
The Agency has the following type ofinterfund 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. Neither are 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 in an amount of not less than 110 percent of the public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.

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CHATTAHOOCHEE-FLINT REGIONAi EDUCATIONAL SERVICE AGENCY
NOTES TO TIIE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE30 1994

EXHTBIT"D"

Note 2: DEPOSITS
Acceptable security for deposits consists of any one ofor 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 ofthe State ofGeorgia,
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations of the counties or municipalities ofthe State ofGeorgia,
(5) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Fann Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 1994, the bank balances were $293,159.29. 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 Agency or by the Agency's agent in the Agency's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Agency'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 Agency's name.)

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CHATTAHOOCHEE-FLINT REGIONAL EDHCATIONAL SERVICE AGENCY NOTES TO TIIB GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30 1994

EXHIBIT"D"

Note 2: DEPOSITS

The Agency's deposits are classified by risk category at June 30, 1994, as follows:

Risk Category

Bank Balance

1

$ 200,000.00

2

93,159.29

3

0.00

Total

$ 223 l!i2 22

Note 3: OPERATING LEASES

The Chattahoochee-Flint Regional Educational Service Agency has entered into various leases as lessee for office space and copy machine rentals. These leases are considered for accounting purposes to be operating leases. Lease expenditures for the year ended June 30, 1994, amounted to $31,549.00. Future minimum lease payments for these leases are as follows:

Year Ending

Amount

1995 1996 1997 1998 1999

$ 32,452.00 9,792.00 8,064.00 7,200.00 1 800.00

Total

$ !i2 J08 00

Note 4: SIGNIFICANT COMMITMENTS

At June 30, 1994, the Agency had encumbrances in the amount of$3,861.86 for the unperformed portion of purchase orders, contracts and other commitments for goods and services associated with the Lottery Programs. Lottery funds in the amount of$3,819.59 are available to fund these encumbrances. Encumbrances outstanding do not constitute expenditures or liabilities in the current year because these commitments will be honored during the subsequent fiscal year. These encumbrances are identified by Lottery Program as follows:

Computers in Classrooms

$ J 861 86

The amounts described in this note are not reflected in the general purpose financial statements.

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CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30 1994

EXHIBIT"D"

Note 5: CONTINGENT LIABILITIES
Amounts received or receivable principally from the Federal government are subject to audit and review by granter agencies. This could result in requests for reimbursement to the granter agency for any expenditures which are disallowed under grant terms. The Agency believes that such disallowances, if any, will be immaterial to its overall financial position.
The Agency is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine Agency operations. The ultimate disposition of these proceedings is not presently determinable, but are not believed to be material to the general purpose financial statements.
Note 6: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by Agency's 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. A member is eligible for service retirement after 30 years of creditable service, regardless of age, or after 10 years of.service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number of years of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution ofthe member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement benefits also include death and disability 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 employer contributions occurs, but the member's contributions are refunded with interest.
The Agency's payroll for employees covered by TRS for the year ended June 30, 1994, was $1,093,395.46; total payroll was $1,179,931.49.

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CHATTAHOOCHEE-FLINT REGIONAL EDUC ATTONAL SERVICE AGENCY
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30 1994

EXHIBIT"D"

Note 6: RETIREMENT PLANS

TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Agency who are covered by TRS are required to contribute 6% of their gross earnings to TRS. The Agency makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees as advised by their independent actuary. For fiscal year 1994 that rate for employer contributions was 11.81%. The interest rate assumption (rate of return on investments) was 7.50%.

Total contributions made during fiscal year 1994 amounted to $194,733.81, of which $129,130.02 was made by the Agency and $65,603.79 was made by employees. These contributions represented 11.81% (Agency)' and 6% (employees) of covered payroll.

TRS FUNDING STATUS AND PROGRESS The amount of the total pension benefit obligation is based on a standardized measurement established by Statement No. 5 ofthe Governmental Accounting Standards Board (GASB) that, with some exceptions, must be used by a PERS. The standardized measurement is the actuarial present value of credited projected benefits. This valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date, and is adjusted for the effects of projected salary increases. A standardized measure ofthe pension benefit obligation was adopted by the GASB to enable readers of PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among other PERS and among other employers.

Total unfunded pension benefit obligation ofTRS as of June 30, 1993, was as follows:

Total pension benefit obligation

$13,912,014,000.00

Net assets available for benefits, at cost

12 821 722 000.00

Unfunded pension benefit obligation

$ 1 090 292 000 00

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as ofJune 30, 1993. Net assets available to pay pension benefits were valued as of the same date. TRS does not make separate measurements of assets and pension benefit obligation for individual employers.

Total contributions from all employers to TRS for fiscal year ended June 30, 1994 were $521,550,000.00. The Agency's contribution for the year ended June 30, 1994 of$129, 130.02 was actuarially determined and represented .0248% of total contributions made by all participating employers.

Ten year historical trend information is presented in the 1994 TRS Component Unit Financial Report. This information is useful in assessing TRS's accumulation of sufficient assets to pay pension benefits as they become due.

- 12 -

CHATTAHOOCHEE-FUNTREGIONALEDUCATIONALSERVICEAGENCY NOTES TO THE GENERAL PURPOSE FINANCIAi STATEMENTS JUNE30 1994

EXHIBIT"D"

Note 7: SURETY BONDS
Mrs. Margaret Hunt, Director through June 30, 1994, was bonded in the amount of $10,000.00 with the United States Fidelity and Guaranty Company, Baltimore, Maryland, their Bond No. 02-0030-11073-92-6.
The Director, Mr. Meredith Walker, effective July 1, 1994, is bonded in the amount of$10,000.00 with the United States Fidelity and Guaranty Company, Baltimore, Maryland, their Bond No. 02-0030-11073-92-6 on which premium is paid through July 1, 1995.

- 13 -

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAi SFRVICE AGENCY COMBINING BALANCE SHEET SPEC!Al REVENUE FUNO JUNE 30 1994

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities FUND EQUITY
Fund Balances Unreserved Undesi gnated
Total Liabilities and Fund Equity

LOTTERY PROGRAM

ANNUAL EVALUATION COORDINATION
GRANT PROGRAM

SEX EDUCATION
PROGRAM

20,032.28

14,795.46 $

4,199.57

20,032.28 $ 14,795.46 $

4,199.57

20,032.28 $

2,046. B4 10,017.40
2,731.22

20,032.28 $ 14,795.46

698. 00 3,424.3B
77. 19
4,199.57

0. 00

0.00

0.00

20,032.28 $ 14,795.46 $

4,199.57

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

EXHIBIT "E"

DRUG-FREE SCHOOLS AND COMMUNITIES
ACT
-----------

IMMUNODEFICIENCY SYNDROME HEAL TH
EDUCATION PROGRAM
----------------

ELEMENTARY AND SECONDARY
EDUCATION ACT
--------------
CHAPTER I
--------------
MIGRANT
PROGRAM
--------------

INDIVIDUALS WITH
DISABILITIES EDUCATION ACT
TITLE VI, B
-------------
FLOW THROUGH
-------------

--- -- ----- --TO--TA--LS----------- J-U-N-E---3-0-,--1-9-9-4 J-U-N-E---3-0-,--1-9-9-3

11,824.62

0.00 $ 30,819.65$ -50,197.58

13,701.94

1,244.78 $

79,245.75

114,224.75

88,227.77

$ 25,526.56 $

1,244.78$

79,245.75$

0.00 $ 145,044.40 $

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

38,030. I 9

4,447.12 21,066.98
12.46
$ 25,526.56$

1,244.78 $

79,245.75 $

1,244.78$

79,245.75$

$ 0.00

100,522.81 7,191.96$
34,508.76 2,B20.87

6,602.76 31,317.83
109 .60

0.00 $ 145,044.40$ 38,030.19

0.00

0.00

0.00

0.00

0.00

0.00

$ 25,526.56$

1,244.78$

79,245.75$

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

o.oo $ 145,044.40$ 38,030.19

- 15 -

CHATTAHOOCHEE-FLINT REGIONAi EDUCATIONAL SERVICE AGENCY COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30 1994

REVENUES
State Funds Federal Funds
Loca 1 and Other Funds
Tota 1 Revenues
EXPENDITURES
Current Instruction Support Services Pupi 1 Services Improvement of Instructional Services General Admi ni strati on Maintenance and Operation of Plant Other Support Services
Total Expenditures
Excess of Revenues over (under) Expenditures FUND BALANCE JULY 1
FUND BALANCE JUNE 30

LOTTERY PROGRAM

ANNUAL EVALUATION COORDINATION
GRANT PROGRAM

SEX EDUCATION
GRANT

73,180.41 $ 82,982.78 $ 30,922.81

73,lB0.41

B2, 982. 78 $ 30,922. Bl

73, !BO. 41

79,690.78 $ 3,292.00

30,922.81

73,180.41

82,982.78 $ 30,922.81

0.00 $ 0.00

0.00 $ 0.00

0.00 0.00

0.00 $

0.00 $

0.00

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

EXHIBIT "F"

DRUG-FREE SCHOOLS AND COMMUNITIES
ACT

ACQUIRED IMMUNODEFICIENCY
SYNDROME HEAL TH
EDUCATION PROGRAM

ELEMENTARY AND SECONDARY
EDUCATl ON ACT
CHAPTER 1
MIGRANT PROGRAM

INDIVIDUALS WITH
DISABILITIES EDUCATl ON ACT
TITLE VI, B
FLOW THROUGH

TOTALS YEAR ENDED JUNE 30, 1994 JUNE 30, 1993

190,4B6.24 $ 4,267.80
194,754.04 $

4,758.24 $

472,041.22 $

$ 13,000.00

187,086.00$ 680,285.70
4,267.80

89,110.90 312,427.24
4,499.60

4,758.24$ 472,041.22 $ 13,000.00 $ 871,639.50 $ 406,037.74

10,969.41 175,838.15
1,767.76$ 2,669.22 3,509.50
194,754.04 $
0.00 $ 0.00

4,758.24

104,393.83
72,559.39 34,414.01 94,607.83 14,313.08 151,753.08

13,000.00

115,363.24 $ 14,997.53

261,397.54 151,553.60
97,277.05 21,114.58 224,933.49

230,777.12 122,270.34
26,258.31 11,734.44

4,758.24 $ 472,041.22 $ 13,000.00 $ 871,639.50 $ 406,037.74

0.00 $ 0.00

0.00 $ 0.00

0.00 $ 0.00

0.00 0.00

0.00 0.00

0.00 $

0.00 $

0.00 $

0.00 $

0.00 $

0.00

- 17 -

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE YEAR ENDED JUNE 30 1994

SCHEDULE "l"

FUNDING AGENCY PROGRAM/GRANT

CFDA NIJ4BER

AWARDS IN PERIOD

FEDERAL FUNDS RECEIVED IN PERIOO (NET OF REFUNDS)

FEDERAL REVENUE IN PERIOD

EXPENDITlllES IN PERIOD

Education, U. S. Departnent of Through Georgi a Department of Education Drug-Free Schools and Carmunities Act 1992 Carry-Over 1993 Regular 1993 Carry-Over 1994 Regular Elementary and Secondary Education Act Chapter 1 Migratory Education Program 1993 Regular 1993 Carry-Over 1994 Regular Through City of Americus Board of Education Individuals with Disabilities Education Act Title VJ, B Fl ow Through 1993 Carry-Over

B4.1B6 $ 84.186 B4.186 84.186

522.00 $
7,604.00 203,389.00

2,947.97 $ 78,348.B8 6,432.23 169,842.53

522.00 $
7,603.50 182,360.74

522.00
7,603.50 1B2,360.74

*84.011 *84.011 *B4.011

2,165.00 804,236.00

85,060.82 314,974.57

77,820.90 394,220.32

77,820.90 394,220.32

84.027

13,000.00

13,000.00

13,000.00

13,000.00

Total U. S. Department of Education

$ 1,030,916.00 $ 670,607.00 $ 675,527.46 $ 675,527.46

Health and Human Services, U. S. Departrrent of Through Georgia Department of Education Cooperative Agreenents to Support School Health Education to Prevent the Spread of Acquired Jnmunodeficiency Syndrone (AIDS) Teacher Training - Aids Health Education
1993 Contract 1994 Contract

93.938 93. 938 $

6,500.00

3,513.46 $

3,513.46 $ 1,244.78

3,513.46 1,244.78

Total U. S. Oepar-nt of Health and Hl.lniln Services

6,500.00 $ 3,513.46 $ 4,758.24 $ 4,758.24

Total Federal Financial Assistance

$1,037,416.00 $ 674,120.46 $ 680,285.70 $ 680,285.70

The Major Program is identified by an asterisk (*) in front of the CFDA m111ber.

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

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY ANALYSIS OF CASH ANO CASH EQUIVALENTS JUNE 30 1994
INTEREST BEARING ACCOUNTS
Bank of Ellaville, Ell avi 11 e, Georgi a
Certificate of Deposit No. 11399 (4.50%) Sumter Bank and Trust Company, Americus, Georgi a
N.O.W. Account (2.552%)
OTHER
Petty Cash

SCHEDULE "2"
100,000.00 -15,437 .73
100. 00 84,662.27

See notes to the general purpose financial statements. - 19 -

CHATTAHOOCHFF-Fl INT REGIONAL EDUCATIONAi SERVICE AGENCY ACCOUNTS RECEIVABLE JUNE 30 1994

SCHEDULE "3"

Education. Georgi a Department of Federal Programs Drug-Free Schools and Connnunities Act ESEA - Chaptger 1 Migratory Education Program Contract Cooperative Agreements to Support School Health Teacher Training - AIDS Health Education
Lottery Program Education Technology Center
Marion County Board of Education Psychological Services
Sumter County Board of Education Psychological Services

GOVERNMENTAL FUND TYPES

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

13,701.94 $ 79,245.75

13,701.94 79,245.75

1,244.78

1,244.78

20,032.28

20,032.28

2,048.63

2,048.63

6,473.50
------------

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

6,473.50
------------

8,522.13$ 114,224.75$ 122,746.88

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

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF STATE REVENUE YEAR ENOED JUNE 30 1994

SCHEDULE "4"

AGENCY /FUNDING
GRANTS Education, Georgia Department of Other State Programs Regional Educational Service Agency Staff Development Sex Education Grant Supervision and Assessment of Student and Beginning Teachers and Performance-Based Certification Lottery Program Education Techno 1ogy Centers
CONTRACT Education, Georgi a Department of Participation of Local Personnel in Techno 1ogy Training

GOVERNMENTAL FUND TYPES

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

758,016 00

30,922.81

758,016.00 30,922.81

82,982.78 73,180.41

82,982.78 73,180.41

3,000.00

3,000.00

761,016.00

187,086.00$ 948,102.00

============= ============= ===------ -

See notes to the general purpose financial statements. - 21 -

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF LOCAL AND OTHER REVENUE YEAR ENDED JUNF 30 1994

SCHEDULE "5"

Interest Earned Membership Dues
Boards of Education Americus, City of Chattahoochee County Clay County Crisp County
Dao 1y County Harris County Macon County Mari on County
Quitman County Randolph County Sch1ey County Stewart County Sumter County Ta1 bot County Taylor County Webster County Registration Fees Reimbursements For Psychological Services
Boards of Education Americus, City of Chattahoochee County Clay County Ooo1y County Harris County Macon County Marion County Quitman County Randolph County Schley County Stewart County Sumter County Talbot County Taylor County Webster County
Sales and Services Business Machine Repairs Les.s: Cost of Goods Sold Printing and Binding
Shared Service Contribution Macon County Boa rd of Education

-- GOVERNMENTAL FUND TYPES
--------------------- -----

SPECIAL

GENERAL

REVENUE

-----FU-N-D------ -----FU-N-D------

-----TO--TA--L ----

6,712.13

6,712.13

9,276.00 1,116.00 1,104.00 13,458.00 5,280.00 8,691.00 7,734.00 4,635.00
657. 00 5,529.00 1,314.00 2,757.00 7,809.00 2,826.00 4,767.00
894. 00 27,537.20

9,276.00 1,116.00 1,104.00 13,458.00 5,280.00 8,691.00 7,734.00 4,635.00
657. 00 5,529.00 1,314.00 2,757.00 7,809.00 2,826.00 4,767.00
894. 00 27,537.20

42,000.00 5,575.00 5,563.00
20,014.00 41,196.00 27,790.00 16,389.00
5,450.00 20,132.00
5,595.00 12,875.00 25,894.00
9,835.00 16,908.00
5,150.00

42,000.00 5,575.00 5,563.00
20,014.00 41,196.00 27,790.00 16,389.00
5,450.00 20,132.00
5,595.00 12,875.00 25,894.00
9,835.00 16,908.00
5,150.00

32,886.48 -16,808.83
5,553.60

32,886.48 -16,808.83
5,553.60

4,267.80

4,267.80

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

See notes to the general purpose financial statements. - 22 -

394,093.58 $ =============

4,267.80$ 398,361.38

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF EXPENDITURES BY OBJECT GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 1994

SCHEDULE "6"

EXPENDITURES
Operating Costs Salaries Emp 1oyee Benefits Travel of Employees Professional and Technical Services Compensation and Travel of Board Members Water, Sewer and Cleaning Services Repair and Maintenance Services Rents Insurance Communications Tuition Shared Services Supplies Energy Books, Textbooks and Periodicals Other Expenditures
Nonoperati ng Costs Equipment
Tota 1 Expenditures

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

804,848.41 160,188.83
37,760.68 16,911.30
5,302.41
7,548.33 23,466.20
5,236 54 I 7,987 06
38,662.65 13,158.66
5,734.82 6,727.04

375,083.08 $ 1,179,931.49

78,511.29

238,700.12

30,710.65

68,471.33

58,175.16

75,086.46

5,302.41

1,500.00

1,500.00

14 .28

7,562.61

11,060.95

34,527.15

5,236.54

8,787.52

26,774.58

3,353.96

3,353.96

151,001.96

151,001.96

54,894.56

93,557.21

3,647.04

16,805.70

24, 83B. 49

30,573.31

31,193.37

37,920.41

679.99

38,867.19

39,547.18

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

$ 1,144,212.92

871,639.50 $ 2,015,852.42

-============ ============= ===-~--=====:;::

See notes to the general purpose financial statements. - 23 -

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF EXPENDITURES BY OBJECT LOTTERY PROGRAM YEAR ENDED JUNE 30 1994

SCHEDULE "7"

EXPENDITURES
Operating Costs Professional and Technical Services Supplies Books, Textbooks and Periodicals Other Expenditures
Nonoperati ng Costs Equipment
Total Expenditures

EDUCATION TECHNOLOGY
CENTERS
3,100.00 31,219.92
73 .37 478.63
38,308.49
73,180.41

See notes to the genera1 purpose fi nanci a1 statements. - 24 -

CHATTAHOOCHEE FLINT REGIONAL EOUCATIONAL SERVICE AGENCY SCHEOULE OF COMPENSATION ANO TRAVEL OF BOARD MEMBERS YEAR ENOEO JUNE 30 1994

SCHEDULE "8" Page 1

BOARD MEMBER ADDRESS
Mr. John Terry, Chairman (*) Talbot County Board of Education P. 0. Box 515 Talbotton, Georgi a 31827
Mr. Ronnie Burgamy (*) Chattahoochee County Board of Education 26 Merrell Street Cusseta, Georgi a 31805
Mr. George Crawford (*) Route 1, Box 107A Parrott, Georgia 31777
Mrs. Madeline H. Daniels (*) P. 0. Box 386 Buena Vista, Georgia 31803
Mr. Joe Gary, Jr. (*) Quitman County Board of Education P. 0. Box 248 Georgetown, Georgia 31754
Mr. A. B. Haney (*) 518 West Broad Street Lumpkin, Georgia 31815
Dr. Robin Johnson Harben (*) Sumter County Board of Education P. 0. Box 967 Americus, Georgia 31709
Mrs. Kathryn Hardwick (*} Randolph County Board of Education 1208 Andrew Street Cuthbert, Georgia 31740
Mr. George Hartley (*) Clay County Board of Education P. 0. Box 219 Fort Gaines, Georgia 31751
Mr. Michael Hickerson (*) Dooly County Board of Education 202 Cotton Street Vienna, Georgia 31092
Mrs. Lorene Ingram (*) P. O. Box 296 Reynolds, Georgia 31076
Mr. William Johnson (*) Schley County Board of Education P. O. Box 66 Ellaville, Georgia 31806
Dr. Tommy R. Lee (*) Harris County Board of Education P. O. Box 388 Hamilton, Georgia 31811
Mr. Herman Long (*) Marion County Board of Education P.O. Box 391 Buena Vista, Georgia 31803

COMPENSATION

TRAVEL

650. 00 750.00

250. 00

)09 .71 186.30

750. 00

See notes to the general purpose financial statements. - 25 -

CHATTAHOOCHEE FLINT REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS YEAR ENDED JUNE 30 1994

SCHEDULE "8" Page 2

BOARD MEMBER ADDRESS

COMPENSATION

TRAVEL

Mr. Will';e Paschal {*) 310 Vista Ori ve Americus, Georgia 31709
Mrs. Ora lee Peterson (*)
Rt. 6, Box 91 Americus. Georgi a 31709
Dr. Vann Sikes (*) Crisp County Board of Education P. 0. Box 729 Cordele, Georgia 31015
Mr. Wayne Smith (*) Taylor County Board of Education P. 0. Box 1930 Butler, Georgia 31006
Mrs. Mary Thornton (*) Rt. 1, Box 36A Cusseta, Georgia 31805
Mr. Meredith Walker (*) Webster County Board of Education P. 0. Box 149 Preston, Georgi a 31824
Hr. Hosie Waters (*) Macon County Board of Education P. 0. Box 488 Oglethorpe, Georgia 31068
Dr. Napoleon Williams(*) 611 East Union Street Vienna, Georgia 31092
Dr. Ronnie Williams(*) City of Americus Board of Education P. 0. Box 847 Americus, Georgia 31709
Mr. Fountain Wims (*) Stewart County Board of Education P. 0. Box 547 Lumpkin, Georgia 31815

600. 00 700.00 $

37 .80

600. 00

68.60

400. 00

4,700.00 $

602 .41

===='

(*) Denotes Board Members Serving as of June 30, 1994

See notes to the general purpose financial statements. - 26 -

SECTION II SUMMARY AND SCHEDULE OF SALARIES AND TRAVEL

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY SUMMARY OF SALARIES AND TRAVEL YEAR ENDED JUNE 30 1994

SALARIES

TOTAL PER FINANCIAL STATEMENTS (ACCRUAL BASIS)

ADJUSTMENTS FOR ACCRUALS ---------------------------JUNE 30, 1993 JUNE 30, 1994

TOTAL PER SCHEDULE (CASH BASIS)

GENERAL FUND Instruction Support Services Pupi 1 Services General Administration Business Administration Maintenance and Operation of Plant

402,691.17 $
255,460.46 60,639.84 28,894.35 57,162.59

0.00 $

0.00 $ 402,691.17
255,460.46 60,639.84 28,894.35 57,162.59

Total General Fund SPECIAL REVENUE FUND

804,848.41 $ 375,083.08

0.00 $

0.00 $ 804,848.41

34,725.73

-34,508.76

375,300.05

Total Salaries
TRAVEL
GENERAL FUND Instruction Support Services Pupi 1 Services General Administration Business Administration Maintenance and Operation of Plant Other Support Services
Total General Fund SPECIAL REVENUE FUND

1,179,931.49 $

34,725.73

-34,508.76 $1,180,148.46

============= -===~

22,536.21 $
10,963.25 2,637.58 51. 14 1,097.47 475. 03
37,760.68$
30,710.65

0.00 $ 0. 00 $

0. 00 $

22,536.21
10,963.25 2,637.58 51. 14 1,097.47 475. 03

0.00 $

37,760.68 30,710.65

Total Travel

68,471.33 $

0.00 $

0.00 $ 68,471.33

NAME
AFFOLTER ,DIANE W ANDERSON, JAY M BAILEY ,GLORIA N BAILEY ,GLORIA N BALDWIN, ELLA G BALKCOM, DEBORAH H BARNES, DAVI B BOBO.GENE M BOBO, GENE M BURNS, LESLIE A BUTLER, CASSANDRA BUTLER, CASSANDRA CARTER, NORMAN K CARTER, NORMAN K CLINKSCALES ,SUE R COLLINS, EMILY C CURTIS.PHILIP J JR OAVIS,WILLIAM E DAVIS.WILLIAM E DORSEY,JEFF C DUDLEY, M CAROLE EMLY ,FRANCES K EMLY, FRANCES K EXUM,E GAIL GONZALEZ, JAVIER HALL, CHARLOTTE R HALL, CHARLOTTE R HATCHER, AUDRA J HOLLOWAY ,STEPHANIE S HOPSON, PAULA HUNT, LENA MAE
HUNT, MARGARET w HUNT, MARGARET w
KENNEDY, WAYNE R KENNE'DY, WAYNE R KENNON, CAROL W LEE.DONNA W MCCORKLE, BARBARA A MOATES, BARBARA L MOCK, CHRISTOPHER MOCK ,CHRISTOPHER MOORE, ROBERT M MORGAN, GWEN D PICKETT,V GAY PLESS, GRACE P PLESS, GRACE P SMITH.BILLIE SUE SMITH,BILLIE SUE SMITH, LENORA E STREETMAN, REBECCA A STREETMAN, REBECCA A TURNER, MARTHA H TURNER, R INEZ TURNER,R INEZ USREY, CHRIS USREY ,CHRIS VALVERDE-JENSEN, AMY WEBB, BETTY WY LENE WHITTEN, THOMAS M WILLIAMS.PATRICIA L WRIGHT, LEE WRIGHT, LEE

CHA TT AHOOCHEE FLINT R.E.S.A. SCHEDULE OF SALARIES ANO TRAVEL
YEAR ENDED JUNE 30, 1994

TITLE CATEGORY

SALARIES AMOUNT

SUPPORT SERVICES - PUPIL SERVICES

$

MAINTENANCE & PER. OF PLANT SERVICES

INSTRUCT ION
- SPECIAL REVENUE FUN OTHER PROGRAMS

MIGRANT EDUCATION AGENCIES FUND

SPECIAL REVENUE FUND - OTHER PROGRAMS

SUPPORT SERVICES - PUPIL SERVICES

INSTRUCTION

OTHER SUPPORT SERVICES

MIGRANT EDUCATION AGENCIES FUND

INSTRUCTION

SPECIAL REVENUE FUND - OTHER PROGRAMS

INSTRUCTION
- SPECIAL REVENUE FUN OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

INSTRUCTION

INSTRUCTION

MAINTENANCE & PER. OF PLANT SERVICES

MIGRANT EDUCATION AGENCIES FUN

MAINTENANCE & PER. OF PLANT SERVICES

SUPPORT SERVICES - PUPIL SERVICES

INSTRUCTION

SPECIAL REVENUE FUND - OTHER PROGRAMS

SUPPORT SERVICES - PUPIL SERVICES

MIGRANT EDUCATION AGENCIES FUND

SUPPORT SERVICES - PUPIL SERVICES

SPECIAL REVENUE FUND - OTHER PROGRAMS

MIGRANT EDUCATION AGENCIES FUND

SPECIAL REVENUE FUND - OTHER PROGRAMS

MIGRANT EDUCATION AGENCIES FUND

MAINTENANCE & OPER. OF PLANT SERVICES

DIRECTOR

GENERAL ADMINISTRATION

MAINTENANCE & PER. OF PLANT SERVICES

MIGRANT EDUCATION AGENCIES FUND

SUPPORT SERVICES - PUPIL SERVICES

INSTRUCTION

INSTRUCTION

SPECIAL REVENUE FUND - OTHER PROGRAMS

MAINTENANCE & PER. OF PLANT SERVICES

MIGRANT EDUCATION AGENCIES FUND

SUPPORT SERVICES - PUPIL SERVICES

SUPPORT SERVICES - BUSINESS

MIGRANT EDUCATION AGENCIES FUND

SUPPORT SERVICES - BUSINESS

MIGRANT EDUCATION AGENCIES FUND

INSTRUCTION

SPECIAL REVENUE FUND - OTHER PROGRAMS

INSTRUCTION

SUPPORT SERVICES - BUSINESS

MIGRANT EDUCATION AGENCIES FUND

INSTRUCTION

SUPPORT SERVICES - BUSINESS

MIGRANT EDUCATION AGENCIES FUND

MAINTENANCE & PER. OF PLANT SERVICES

MIGRANT EDUCATION AGENCIES FUND

MIGRANT EDUCATION AGENCIES FUND

SPECIAL REVENUE FUND - OTHER PROGRAMS

INSTRUCTION

SUPPORT SERVICES - PUPIL SERVICES

SUPPORT SERVICES - PUPIL SERVICES

SPECIAL REVENUE FUND - OTHER PROGRAMS

36,550.09 $ 286. 88
38,603 58 9,025 90
34,177. 10 44,125 88 54,578 56
12,976 70 4,881 .47 4,881 .46
33,087 31 6,655. 18
40,759 86 53,833 69 43,553 34 25,841 .92
438 08 223. 13 38,125 88 40,059 66 312 50 26,595 32 23,948. 12 7,475 00 299 00 7,394 85 4,821 .95 10,837 00 2,531.13 60,639.84
26,116 27 511 . 71
29,522 50 33,175. 14 15,916.80 32,698.86
697 .00 68.00
23,474.08 9,002.20
54,336.00 18,186.00
3,637.20 24,560.52 17,741.00 34,953.90
263.10 1,928.90 21,404.78 1,443.05 7,119.30 1,466.26
144.50 25,727.58 36,105.72 42,686.00 12,157.31 37,434.40
150.00

TOTALS

$ 1,180,148.46 $

TRAVEL EXPENSE
1,941 .92
183 33 1,812.35 1,720.20 2,012.68 1,959.28 2,720.33
475 .03 3,678.30
2,333 26 736 60
2,504 93 2,611 . 52 1,962.86
375. 95 11.00
924 70 4,344 86
1,026 46 4,910.51
5.67
563. 20
2,637.58 721.52 27 .50
2,019.91 1,936.47
41.58 3,795.59
1,065 42
3,606 OB 51. 14
897. 92
1,552 60
956 27
22 26
22.00 2,394.70 2,892.75 2,995.21
2,019.89
68,471.33

SECTION III COMPLIANCE

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
May 18, 1995

Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe Chattahoochee-Flint Regeional Educational Service Agency Board ofControl
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements ofthe Chattahoochee-Flint Regional Educational Service Agency as of and for the year ended June 30, 1994, and have issued our report thereon dated May 18, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
Compliance with laws, regulations, contracts, and grants applicable to Chattahoochee-Flint Regional Educational Service Agency is the responsibility ofthe Agency's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests ofthe Agency's compliance with certain provisions of laws, regulations, contracts, and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion.
The results of our tests indicate that, with respect to the items tested, the Chattahoochee-Flint Regional Educational Service Agency complied, in all material respects, with the provisions referred to in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Agency had not complied, in all material respects, with those provisions.
94CRL-10

This report is intended for the information of management, the Federal cognizant audit agency and other Federal granter agencies. This restriction is not intended to limit the distribution of this report which is a matter ofpublic record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:jy 94CRL-10

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
May 18, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe Chattahoochee-Flint Regional Educational Service Agency Board of Control

SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Chattahoochee-Flint Regional Educational Service Agency as ofand for the year ended June 30, 1994, and have issued our report thereon dated May 18, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

We have applied procedures to test the Chattahoochee-Flint Regional Educational Service Agency's compliance with the following requirements applicable to each of its Federal financial assistance programs, which are listed in the Schedule of Federal Financial Assistance, for the year ended June 30, 1994:

( 1) Political Activity

(5) Allowable Costs/Cost Principles

(2) Civil Rights

(6) Audit Follow-Up Resolution

(3) Cash Management

(7) Administrative Requirements

(4) Federal Financial Reports

94CRL-70

Our procedures were limited to the applicable procedures described in the Office ofManagement and Budget's "Compliance Supplement for Single Audits of State and Local Governments" and other additional procedures as deemed necessary. Our procedures were substantially less in scope than an audit, the objective of which is the expression ofan opinion on the Chattahoochee-Flint Regional Educational Service Agency's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion.
Material instances of noncompliance consist offailures to follow the general requirements that caused us to conclude that the misstatements resulting from those failures are material to the Federal financial assistance programs. The results of our tests of compliance disclosed a material instance of noncompliance that is described in the Schedule ofFindings and Improper or Questioned Costs.
We considered this material instance ofnoncompliance in forming our opinion on whether the ChattahoocheeFlint Regional Educational Service Agency's general purpose financial statements are presented fairly, in all material respects, in conformity with generally accepted accounting principles, and this report does not affect our report dated May 18, 1995, on those financial statements.
Except as described above, the results of our procedures to determine compliance indicate that, with respect to the items tested, the Chattahoochee-Flint Regional Educational Service Agency, complied, in all material respects, with the requirements listed in the second paragraph of this report, and with respect to items not tested, nothing came to our attention that caused us to believe that the Agency had not complied, in all material respects with those requirements. Additionally, the results of our procedures disclosed an immaterial instance of noncompliance with those requirements which is also described in the Schedule ofFmdings and Improper or Questioned Costs.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:jy 94CRL-70

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
May 18, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe Chattahoochee-Flint Regional Educational Service Agency Board of Control

SINGLE AUDIT OPINION ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Chattahoochee-Flint Regional Educational Service Agency as ofand for the year ended June 30, 1994, and have issued our report thereon dated May 18, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

We have also audited the Chattahoochee-Flint Regional Educational Service Agency's compliance with the requirements governing:

(1) Types of Services Allowed or Unallowed

(4) Applicable Special Tests and Provisions

(2) Eligibility

(5) Monitoring Subrecipients

(3) Reporting

(6) Other Requirement Claims for Advances and Reimbursements

These requirements are applicable to the major Federal financial assistance program, which is identified in the Schedule of Federal Financial Assistance, for the year ended June 30, 1994. The management of the Chattahoochee-Flint Regional Educational Service Agency is responsible for the Agency's compliance with those requirements. Our responsibility is to express an opinion on compliance with those requirements based on our audit.

94CRL-80

We conducted our audit ofcompliance in accordance with generally accepted auditing standards; Government Auditing Standards issued by the Comptroller General ofthe United States; and Office of Management and Budget (0MB) Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether material noncompliance with the requirements referred to above occurred. An audit includes examining, on a test basis, evidence about the Agency's compliance with those requirements. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the Chattahoochee-Flint Regional Educational Service Agency complied, in all material respects, with the requirements as disclosed in the second paragraph that are applicable to its major Federal financial assistance program for the year ended June 30, 1994.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
4L-~
Claude L. Vickers State Auditor
CLV:jy 94CRL-80

CLAUDE L. VICKERS
STATE AUDITOR (404) 6562174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
May 18, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members of the Chattalioochee-Flint Regional Educational Service Agency Board of Control

SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Chattalioochee-Flint Regional Educational Service Agency as ofand for the year ended June 30, 1994, and have issued our report thereon dated May 18, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

In connection with our audit ofthe fiscal year 1994 general purpose financial statements ofthe ChattalioocheeFlint Regional Educational Service Agency and with our consideration of the Agency's internal control structure used to administer Federal financial assistance programs, as required by Office ofManagement and Budget (0MB) Circular A-128, "Audits of State and Local Governments", we selected certain transactions applicable to certain nonmajor Federal financial assistance programs for the year ended June 30, 1994. As required by 0MB Circular A-128, we have performed auditing procedures on the selected transactions to test compliance with the requirements governing:

( 1) Types of Services Allowed or Unallowed

(2) Eligibility

Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Chattalioochee-Flint Regional Educational Service Agency's compliance with these requirements. Accordingly, we do not express such an opinion.

94CRL-120

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Chattahoochee-Flint Regional Educational Service Agency had not complied, in all material respects, with those requirements.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
L~
Claude L. Vickers State Auditor
CLV:jy 94CRL-120

SECTION IV INTERNAL CONTROL

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
May 18, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members of the Chattahoochee-Flint Regional Educational Service Agency Board ofControl
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Chattahoochee-Flint Regional Educational Service Agency as ofand for the year ended June 30, 1994, and have issued our report thereon dated May 18, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards, and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
In planning and performing our audit of the general purpose financial statements ofthe Chattahoochee-Flint Regional Educational Service Agency for the year ended June 30, 1994, we considered the internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide assurance on the internal control structure.
The management of the Chattahoochee-Flint Regional Educational Service Agency is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use

94ICL-3

or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.

For the purposes of this report, we have classified the significant internal control structure policies and procedures in the following categories:

(1) Cash and Cash Equivalents (2) Inventories (3) Revenue/Receivables/Receipts (4) Procurement

(5) Expenditures/Liabilities/ Disbursements
(6) Employee Compensation
(7) General Ledger (8) General Fixed Assets

For all ofthe internal control categories listed above, we obtained an understanding of the design ofrelevant policies and procedures and whether they have been placed in operation, and we assessed control risk.

We noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements.

As described in the Schedule ofFindings and Improper or Questioned Costs, reportable conditions were noted in the following control categories:

(1) Accounting Controls (Overall)

(2) General Fixed Assets

A material weakness is a reportable condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.

Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that all of the reportable conditions disclosed above are also considered to be material weaknesses.

94ICL-3

These conditions were considered in determining the nature, timing, and extent of the procedures to be perfonned in our audit ofthe Chattahoochee-Flint Regional Educational Service Agency's financial statements and this report does not affect our report thereon dated May 18, 1995.
This report is intended for the infonnation of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:jy 94ICL-3

CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
May 18, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe Chattahoochee-Flint Regional Educational Service Agency Board of Control
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTIJRE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Chattahoochee-Flint Regional Educational Service Agency as ofand for the year ended June 30, 1994, and have issued our report thereon dated May 18, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We have also audited the Chattahoochee-Flint Regional Educational Service Agency's compliance with requirements applicable to major Federal financial assistance programs and have issued our opinion thereon dated May 18, 1995.
We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of Office of Management and Budget (0MB) Circular A-128, "Audits ofState and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement and about whether the Chattahoochee-Flint Regional Educational Service Agency complied with laws and regulations, noncompliance with which would be material to a major Federal financial assistance program.
In planning and performing our audit for the year ended June 30, 1994, we considered the Agency's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the Agency's general purpose financial statements and on its compliance with requirements applicable to major Federal financial assistance programs and to report on the internal control structure in accordance with 0MB

94ICL-7

Circular A-128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to Federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated May 18, 1995.

The management of the Chattahoochee-Flint Regional Educational Service Agency is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs ofinternal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that, assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that Federal financial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors, irregularities, or instances of noncompliance may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because ofchanges in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.

For the purpose of this report, we have classified the significant internal control structure policies and procedures used in administering Federal financial assistance programs in the following control categories:

GENERAL REQUIREMENTS

SPECIFIC REQUIREMENTS

(1) Political Activity (2) Civil Rights (3) Cash Management (4) Federal Financial Reports (5) Allowable Costs/Cost Principles

(1) Types of Services Allowed or Unallowed
(2) Eligibility
(3) Reporting
(4) Applicable Special Tests and Provisions

(6) Audit Follow-Up/Resolution

(5) Monitoring Subrecipients

(7) Administrative Requirements

(6) Other Requirement Claims for Advances and Reimbursements

For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and determined whether they have been placed in operation, and we assessed control risk.

94ICL-7

During the year ended June 30, 1994, the Chattahoochee-Flint Regional Educational Service Agency expended 69% ofits total Federal financial assistance under a major Federal financial assistance program.
We performed tests of controls, as required by 0MB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with general requirements and specific requirements, as described above that are applicable to the Agency's major Federal financial assistance program, which is identified in the Schedule ofFederal Financial Assistance. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion.
We noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control structure that, in our judgment, could adversely affect the Agency's ability to administer Federal financial assistance programs in accordance with applicable laws and regulations.
As described in the Schedule ofFindings and Improper or Questioned Costs, reportable conditions were noted in the following control categories:
(1) Allowable Costs/Cost Principles
(2) Administrative Requirements
A material weakness is areportable condition in which the design or operation ofone or more ofthe internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a Federal financial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.
Our consideration of the internal control structure policies and procedures used in administering Federal financial assistance would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that all of the reportable conditions described above are also considered to be material weaknesses.
These conditions were considered in determining the nature, timing, and extent of the procedures to be performed in our audit of the Chattahoochee-Flint Regional Educational Service Agency's compliance with requirements applicable to its major Federal financial assistance program for the year ended June 30, 1994, and this report does not affect our report thereon dated May 18, 1995.
94ICL-7

This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~
Claude L. Vickers State Auditor
CLV:jy 94ICL-7

SECTIONV FINDINGS AND IMPROPER OR QUESTIONED COSTS

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEARENDEDJUNE30 1994
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Employee Overpayment Financial Statements Finding Resolved Audit Control Number 8724-93-03
The audit report for the year ended June 30, 1993, reported an overpayment of $119.75 for an employee who was ineligible for this compensation due to having used all personal leave available. In the year under review, reimbursement of $119.75 was received by the Agency through a payroll deduction.
PRIOR YEAR/CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation ofDuties Reportable Condition - Material Weakness Audit Control Number 8724-93-01
The audit report for the year ended June 30, 1993, stated that the Agency did not provide for adequate separation ofemployee duties in the performance ofaccounting functions and related procedures. For...the year under review, no improvement in separation of employee duties was noted. This deficiency was a result of management's decision to limit the number of administrative staff made responsible for accounting functions. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree of internal control with existing staff.
Note: All Federal financial assistance programs listed in the Schedule of Federal Financial Assistance, Schedule 1 ofthis report are affected by this finding.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 8724-93-02
The audit report for the year ended June 30, 1993, noted that the management of the Chattahoochee-Flint Regional Educational Service Agency 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 Agency did not establish a General Fixed Assets Account Group within the formal accounting records. This condition results in the general purpose financial statements of the Agency being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30 1994
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 8724-93-02
be taken by the Agency 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 equipment owned by the Agency 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 Asset Account Group.
CURRENT YEAR
ALLOWABLE COSTS/COST PRINCIPLES Time and Attendance Records Not Utilized Federal Financial Assistance Major Program Reportable Condition - Material Weakness Material Noncompliance Amount: $13,137.12 Audit Control Number 8724-94-01
A review ofsalaries charged to the Elementary and Secondary Education Act Chapter I, - Migrant Program (CFDA 84.011) revealed that expenditures were.not supported by time and attendance records as required by Financial Management for Georgia Local Units of Administration, Section V, Chapter 41. Salary charges to Federal programs should be based on actual time worked by employees. This condition occurred because management failed to require maintenance of time records for employees paid from both Federal and State funds.
Appropriate internal controls should be established by the Agency to ensure that all salary charges to Federal and/or State projects be based on actual hours worked. The Georgia Department ofEducation should review this matter to determine if a reclaim offunds is appropriate.
AUDIT FOLLOW-UP/RESOLUTION Audit Distribution Requirements Federal Financial Assistance Nonmaterial Noncompliance Audit Control Number 8724-94-02
The Agency failed to submit a copy ofthe 1993 audit report to the Americus City Board ofEducation and the Sumter County Board ofEducation from whom the Agency received Individuals with Disabilities Education Act, Title VI, B Program (CFDA 84.027) funds. Paragraph 13fofOMB Circular A-128 requires that the

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30 1994
CURRENT YEAR
AUDIT FOLLOW-UP/RESOLUTION Audit Distribution Requirements Federal Financial Assistance Nonmaterial Noncompliance Audit Control Number 8724-94-02
recipients of Federal financial assistance submit copies of single audit reports to those agencies providing Federal financial assistance. Even though formally notified in writing of these report distribution responsibilities by the Department of Audits, management claimed it was unaware of this audit distribution requirement. Procedures should be implemented to ensure that reports are submitted to grantor agencies in accordance with distribution requirements.
Note: The Chattahoochee-Flint Regional Educational Service Agency was provided an opportunity to include pertinent comments from the Agency's management concerning these audit findings, conclusions and recommendations. The Agency has elected not to provide comments for inclusion in this report.