Audit report, Chattahoochee-Flint Regional Educational Service Agency, Ellaville, Georgia, year ended June 30, 1996

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AUDIT REPORT CHATTAHOOCHEE-FLINT REGIONAL
EDUCATIONAL SERVICE AGENCY ELLAVILLE, GEORGIA
YEARENDED JUNE 30, 1996

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

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

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS ANDSUPPLEMENTARY 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

ALLGOVERNMENTAL FUND TYPES

3

C

STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

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 CASH AND CASH EQUIVALENTS

19

3 ACCOUNTS RECEIVABLE

20

SCHEDULE OF REVENUE

4

STATE

21

5

OTHER

22

SCHEDULE OF EXPENDITURES BY OBJECT

6

GOVERNMENTAL FUND TYPES

23

7

LOTTERY PROGRAM

24

8 SCHEDULE OF COMPENSAIION AND IRAVELOF 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
SECTION V FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS

SECTION I FINANCIAL

CLAUDE L. VICKERS
STATEAUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
May 14,1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the 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 INFORMATIONSCHEDULE 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, 1996, 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-l28, "Audits of State and Local Governments". Those standards and OMB 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:

96ARL-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, 1996, a portion of salaries
and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 1996. Also funds received, subsequent to June 30, 1996, from the Georgia Department ofEducation for the State's share of these 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, 1995, were improperly recorded in the year ended June 30, 1996. 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 of the 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 asofJune 30, 1996, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated May 14, 1997, on our consideration ofthe Agency's internal control structure and a report dated May 14, 1997, on its compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements of the Chattahoochee-Flint Regional Educational Service Agency taken as a whole. The combining statements (Exhibits E and F), the financial schedules (Schedules 1 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 of the 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 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,

CLV:dt 96ARL-33

Claude L. Vickers State Auditor

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY - 1-

CHATIAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY COMBINED BALANCE SHEET ALL FUND TYPES JUNE 30, 1996

EXHIBIT "A"

ASSETS Cash and Cash Equivalents Accounts Receivable Inventories
Total Assets

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTALS (Memorandum Only) JUNE 30, 1996 JUNE 30,1995

$

168,601.92

$

168,601.92 $

114,089.81

34,355.17 $

70,013.70

104,368.87

50,115.62

26,464.73

26,464.73

25,676.24

$

229,421.82 $

70,013.70 $

299,435.52 $

189,881.67

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable

Total Liabilities

FUND EQUITY

Fund Balances Reserved For Continuation of Federal Program For Expired Grant Balances/Questioned Costs $ For Inventories for Resale

$ Unreserved
Undesignated

Total Fund Equity

$

$
$
$ 19,834.33 26,464.73 46,299.06 $ 183,122.76 229,421.82 $

36,945.42 $ 5,355.53
25,256.60 913.96
68,471.51 $

36,945.42 5,355.53 $
25,256.60 913.96
68,471.51 $

6,343.14 30,603.34
3,014.29
39,960.77

1,542.19 $
1,542.19 $ 0.00
1,542.19 $

1,542.19 19,834.33 26,464.73 $
47,841.25 $
183,122.76
230,964.01 $

25,676.24 25,676.24 124,244.66 149.920.90

Total Liabilities and Fund Equity

$

229,421.82 $

70,013.70 $

299,435.52 $

189,881.67

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

CHATIAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30,1996

EXHIBIT"B"

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Business Administration Maintenance and Operation of Plant Other Support Services
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1

GENERAL FUND

SPECIAL REVENUE
FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30, 1996 JUNE 30, 1995

s

s 946,847.69

s s 174,800.04

1,121,647.73

1,032,520.13

895,542.85

895,542.85

822,677.02

481,783.06

481,783.06

426,537.59

s s s 1,428,630.75

1,070,342.89 $ 2,498,973.64

2,281,734.74

$

508,152.27 $

111,531.14 $

619,683.41 $

695,856.34

365,998.41 169,584.82 131,055.61
43,346.37 129,385.01

195,479.13 232,496.99 118,422.07
28,008.72 384,469.99

561,477.54 402,081.81 249,477.68
43,346.37 157,393.73 384,469.99

568,171.18 315,850.20 251,669.49
48,443.49 154,253.47 287,257.04

s 1,347,522.49 $ 1,070,408.04 $ 2,417,930.53 $ 2,321,501.21

$

81,108.26 $

-65.15 $

81,043.11 $

-39,766.47

$

$

-1,607.34

$

-1,607.34 $

$

79,500.92 $

149,920.90

1,607.34 $ 1,607.34 $

1,607.34 $ -1,607.34
0.00 $

177.31 -177.31
0.00

1,542.19 $ 0.00

81,043.11 $ 149,920.90

-39,766.47 189,687.37

FUND BALANCE JUNE 30

$

229,421.82 $

1,542.19 $

230,964.01 $ ~=";,,1,;4,9.,,9:2,=0=.=9=0=

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

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - (NONGMP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30,1996

EXHIBIT-C

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Business Administration Maintenance and Operation of Plant Other Support Services
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Other Sources Other Uses
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1,1995
Prior Year (Net)

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ n9,354,04 $ 946,847,69

427,546,00

481,783.06

$ 1,206,900,04 $ 1,428,630,75

$ 504,219.23 $ 508,152,27

365,013,12
108,932,41 38,142,21
129,627,15

365,998.41 169,584,82 131,055,61
43,346,37 129,385,01

$ 1,145,934,12 $ 1,347,522.49

$

60,965.92 $

81,108,26

$

-1,607,34

$

-1,607,34

$ 60,965,92 $ 139,966,63

79,500,92 149,920.90

FUND BALANCE JUNE 30, 1996

$ 200,932,55 $ 229,421,82

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 1,072,368,04 $ 120,134.00 429,046,18

174,800,04 895,542,85

$ 1,621,548,22 $ 1,070,342,89

$ 504,219,23 $ 111,531,14

483,897,12 275,344,00 121,682,41
38,142,21 135,797,15

195,479,13 232,496,99 118,422,07
28,008,72 384,469.99

$ 1,559,082,12 $ 1,070,408,04

$ 62,466.10 $

-65.15

$
$ $ 62,466,10 $
111,066.72 -203.63

1,607,34 1,607,34 1,542,19
0.00

$ 173,329.19 $

1,542,19

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

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1996
No"te 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Chattahoochee-Flint Regional Educational Service Agency (Agency) was established pursuant to the Official Code of Georgia 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 oflocal school systems and for providing instructional programs directly to selected public school students in the state.
Each regional educational service 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 of administration, and who are not employees of the Georgia Department of Education.
With the exception of the departures from generally accepted accounting principles disclosed in these notes, the financial statements of the Agency have been prepared in conformity with generally accepted accounting principles as applied to governmental units and unless otherwise disclosed in these notes, the financial statements present all of the fund types and account groups of the Agency. 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 governmental unit for financial reporting purposes, management has considered the criteria set forth in GASB Codification of Governmental Accounting and Financial Reporting Standards, Section 2100, "Definingthe 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 of an equal number of members of local 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 of education in the Chattahoochee-Flint Regional Educational Service Agency are as follows: 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.
- 5-

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "0" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1996
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A fund is a separate accounting entity with a self-balancing set of accounts.
General Fixed Assets 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 conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
The general purpose financial statements account for all State, Federal and Other funds under control of the 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:
GOVERNMENTAL 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 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 other financing sources) and decreases (i.e., expenditures and other financing uses) 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 p-ried 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.
- 6-

CHA TTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1996
Note 1: Sillv1MARY OF SIGNIFICANT ACCOUNTING POLICIES
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teacher's contracts and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1996, a substantial number of personnel of the Agency were employed for a one hundred and ninety day period beginning in late August 1995 and ending in early June 1996. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1995 and ending in August 1996. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department of Education to the Agency in the same twelve months. As of June 30, 1996, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 1996, had not been made. Payments for these two months were made and recorded as expenditures by the Agency subsequent to June 30, 1996. Also, the State's portion ofthe compensation paid in July and August 1996 was received and recorded as revenue in the fiscal year subsequent to June 30, 1996. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1995, were recorded in the year ended June 30, 1996. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather that when funds are received or disbursed.
BUDGET
The Chattahoochee-Flint Regional Educational Service Agency's budget is a complete financial plan for the Agency's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Agency at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the Agency's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general 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, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits (including 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.
- 7-

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1996
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RECEIVABLES
Receivables consist ofgrant reimbursements due from 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.
INVENTORIES
GOODS FOR RESALE Inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). The Agency records inventories on its financial statements as goods for resale when purchased and costs of goods sold are recorded as inventories are sold. The inventory reported on the balance sheet is equally offset by a reservation of fund 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 types of interfund transactions:
Reimbursements of expenditures 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.
Operating transfers are recorded for all interfund transactions other than reimbursements.
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 of.nsurance, or by collateral. The aggregate of the face value of such. surety bond and the market value of the securities pledged shall be equal to not less than 110 percent of the public funds
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CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996

Note 2: DEPOSITS

being secured after the deduction of the amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.

Acceptable security for deposits consists of anyone of or any combination of the following:

(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,

(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,

(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,

(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,

(5) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,

(6) Industrial revenue bonds and bonds 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 and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 1996, the bank balances were $330,305.27. The amounts of the total bank balances are classified into three categories of credit risk:

Category 1 Category 2 Category 3 -

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. Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Agency's name. 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.)

- 9-

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "0" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996

Note 2: DEPOSITS

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

Risk Category

Bank Balance

1

$ 137,267.60

2

193,037.67

3

0.00

Total

$ 330,305.27

Note 3: RISK MANAGEMENT

The Agency is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees and natural disaster.

The Agency has obtained commercial insurance for risk of loss associated with torts, assets and job related illness or injuries to employees. The Agency has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Agency's insurance coverage in any of the past three years.

The Agency has elected to self-insure for all losses related to natural disaster and errors or omissions, which includes, among other risks, risks for sexual harassment and discrimination. The Agency has not experienced any losses related to these risks in the past three years.

Note 4: 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, 1996, amounted to $35,342.00. Future minimum lease payments for these leases are as follows:

Year Ending

Amount

1997 1998 1999

$ 31,989.00 7,200.00 1,200.00

Total

$ 40.389.00
,

- 10 -

CRATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996
Note 5: ON-BEHALF PAYMENTS
The Agency has recognized revenues and expenditures in the amount of $12, 175.69 for health insurance paid on the Agency's behalf by the following State Agency.
Georgia Department ofEducation Paid to the State Merit System of Personnel Administration For Health Insurance ofNon-Certified Personnel In the amount of$12,175.69
Note 6: CONTINGENT LIABILITIES
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Agency believes that such disallowances, if any, will be immaterial to its overall financial position.
Note 7: 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 in accordance with State statute. 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 of the 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.
- 11 -

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THEGENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1996

Note 7: RETIREMENT PLANS

The Agency's payroll for employees covered by TRS for the year ended June 30, 1996, was $1,171,435.12; total payroll was $1,262,224.95.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Agency who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Agency makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. For fiscal year 1996 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 1996 amounted to $196,918.57, of which $138,346.66 was made by the Agency and $58,571.91 was made by employees. These contributions represented 11.81% (Agency) and 5% (employees) of covered payroll.

TRS FUNDING STATUS AND PROGRESS The amount of the total pension benefit obligation is based on a standardized measurement established by Statement No.5 ofthe Governmental Accounting Standards Board (GASB) that, with some exceptions, must be used by a PERS. The standardized measurement is the actuarial present value of credited projected benefits. This valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date, and is adjusted for the effects of projected salary increases. A standardized measure 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 ofJune 30, 1995, was as follows:

Total pension benefit obligation

$ 17,442,607,000.00

Net assets available for benefits, at cost

15,857,066,000.00

Unfunded pension benefit obligation

$ 1 585 541.000.00

The measurement of the total pension benefit obligation is based on an actuarial valuation as of June 30, 1995. Net assets available to pay pension benefits were valued as of the same date. TRS does not make separate measurements of assets and pension benefit obligation for individual employers.

Total contributions from all employers to TRS for fiscal year ended June 30,1996 were $607,275,000.00. The Agency's contribution for the year ended June 30, 1996 of$138,346.66 was actuarially determined and represented .0228% of total contributions made by all participating employers.

- 12 -

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996
Note 7: RETIREMENT PLANS Ten year historical trend information is presented in the 1996 TRS Component Unit Financial Report. This information is useful in assessing TRS's accumulation of sufficient assets to pay pension benefits as they become due. Note 8: SURETY BONDS The Director, Mr. Meredith Walker, is bonded in the amount of$10,000.00 with the United States Fidelity and Guaranty Company, Baltimore, Maryland, their Bond No. CCR14556965500, on which premium was paid through July 1,1997.
- 13 -

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 3D, 1996

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 Reserved For Continuation of Federal Program Unreserved Undesignated Total Fund Equity
Total Liabilities and Fund Equity

LOTTERY PROGRAM

ANNUAL EVALUATION COORDINATION
GRANT PROGRAM

SAFE AND DRUG-FREE SCHOOLS

$

12,781.48

$ - - -661-.2-9 - - - - - - $ 19,697.37

$

661.29 $

12,781.48 $ 19,697.37

$

661.29

$

952.76

$

1,968.02

3,387.51

9,899.50

15,357.10

913.96

$

661.29 $

12,781.48 $ 19,697.37

$

0.00 $

$

0.00 $

0.00 $

0.00

0.00 $

0.00

$

661.29 $

12,781.48 $ 19,697.37

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

EXHIBIT"E"

ACQUIRED IMMUNODEFICIENCY
SYNDROME HEALTH
EDUCATION PROGRAM

ELEMENTARY AND SECONDARY
EDUCATION ACT TITLE I
MIGRANT EDUCATION

TOTALS JUNE 30,1996 JUNE 30,1995

$

12,781.48 $

29,748.10

$

252.00 $

49-=,4-0-_3.0_4

70,013.70

35,098.06

$

252.00 $

49,403.04 $

82,795.18 $

64,846.16

$

252.00 $

47,860.85 $

49,726.90 $

24,885.39

5,355.53

6,343.14

25,256.60

30,603.34

913.96

3,014.29

$

252.00 $

47,860.85 $

81,252.99 $

64,846.16

$

$------~.:..0..0.0

$

0.00 $

$

252.00 $

1,542.19 $ 0.00
1,542.19 $

1,542.19 0.00 $
1,542.19 $

0.0_0 ~ 0.0_ 0

49,403.04 $

82,795.18 $

64,846.16

- 15 -

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 1996

REVENUES
State Funds Federal Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Maintenance and Operation of Plant Other Support Services
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
FUND BALANCE JUNE 30

LOTTERY PROGRAM

ANNUAL EVALUATION COORDINATION
GRANT PROGRAM

SAFE AND DRUG-FREE SCHOOLS

$ 90,000,00 $ $ 90,000,00 $

84,800,04 $
84,800,04 $

160,041,89 160,041,89

$ 90,000,24 $

$
80,130,04 4,670.00

23,514,55
123,799,25 2,172.52 311.45
10,244.12

$ 90,000.24 $

$

-0.24 $

84,800.04 $ 0.00 $

160,041.89 0.00

0.24

$

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"

ACQUIRED IMMUNODEFICIENCY
SYNDROME HEALTH
EDUCATION PROGRAM

ELEMENTARY AND SECONDARY
EDUCATION ACT TITLE I
MIGRANT EDUCATION

TOTALS YEAR ENDED JUNE 30, 1996 JUNE 30, 1995

$ 174,800.04 $ 185,142.95

$

9,136.98 $

~7-2,6,-3-6_3.9_8

895,542.85

822,677.02

$

9,136.98 $

726,363.98 $ 1,070,342.89 $ 1,007,819.97

$

88,016.59 $ 111,531.14 $ 120,100.54

71,679.88

195,479.13

209,752.54

$

9,136.98

51,057.21

232,496.99

231,494.32

118,110.62

118,422.07

140,414.73

13,094.60

28,008.72

18,978.11

384,469.99

384,469.99

287,257.04

$

9,136.98 $

726,428.89 $ 1,070,408.04 $ 1,007,997.28

$

0.00 $

-64.91 $

-65.15 $

-177.31

1,607.10

1,607.34

177.31

$

0.00 $

1,542.19 $

.1,542.19 $

0.00

0.00

0.00

0.00

0.00

$

0.00 $

....,.1;~,,5;;4,;2.,;.,1.;9;.. $

1,542.19 $ =~=~,;0".0,0

- 17 -

CHAITAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
YEAR ENDED JUNE 30, 1996

SCHEDULE -1-

FUNDING AGENCY PROGRAM/GRANT
Education, U. S. Department of Through Georgia Department of Education Elementary and Secondary Education Act Title I Migrant Education
1995 Regular 1996 Grant
Safe and Drug-Free Schools
1996 Grant
Total U. S. Department of Education
Health and Human Services, U. S. Department of Through Georgia Department of Education Cooperative Agreements to Support School Health Education to Prevent the Spread of Acquired Immunodeficiency Syndrome (AIDS) Teacher Training - Aids Health Education
1995 Contract 1996 Contract
Total U. S. Department of Health and Human Services

CFDA NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

* 84.011 $ * 84.011
84.186
$

264,787.52 $ 461,576.46
160,041.89
886,405.87 $

266,394.62 (1) 460,034.27
160,041.89
886,470.78

93.938 $ 93.938
s

5,137.00 $ 3,999.98
9,136.98 $

5,137.00 3,999.98
9,136.98

Total Federal Financial Assistance

$

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

(1) Expenditures for this program include State and/or Other Funds. Expenditures are not maintained by fund source.

895,542.85 $ =======8=9==5=,=6=0:i7::i.::7:::6::::

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

CHATIAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY CASH AND CASH EQUIVALENTS JUNE 30, 1996

SCHEDULE ''2''

INTERESTBEARING ACCOUNTS
Bank of Ellaville, Ellaville, Georgia
Certificate of DepositNo. 13953 (6.00%) N.O.W. Account (2.75%)
Sumter Bank and Trust Company, Americus, Georgia
N.O.W. Account (1.98%)
OTHER
Petty Cash

$ 100,000.00 -5,673.60 $ 94,326.40
37,230.10
100.00
$ 131,656.50

See notesto the general purposefinancial statements.

- 19 -

CHATTAHOOCHEE~FLlNT REGIONAL EDUCATIONAL SERVICE AGENCY ACCOUNTS RECEIVABLE JUNE 30, 1996

SCHEDULE "3"

Education, Georgia Department of Federal Programs ESEA- Title I Migratory Education Safe and Drug-Free Schools Contracts Conducting Technology Training Sessions for School System Employees Teacher Training - AIDS Health Education Lottery Program Education Technology Centers
Jones County Board of Education Repayment of Unobligated Migratory Education Funds
Various Sources Reimbursement for Printing and Binding Fees

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

49,390.46 $

49,390.46

19,697.37

19,697.37

$

29,355.17

252.00 661.29

29,355.17 252.00
661.29

12.58

12.58

5,000.00

5,000.00

$

34,355.17 $

70,013.70 $ =====1=0:4;,,=3=6=8=.8=7=

See notes to the general purpose financial statements.

- 20 -

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1996

SCHEDULE "4"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Other State Programs Health Insurance Regional Educational Service Agency Supervision and Assessment of Student and Beginning Teachers and PerformanceBased Certification Lottery Program Education Technology Centers
CONTRACT Education, Georgia Department of Conducting Technology Training Sessions for School System Employees

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

12,175.69

778,272.00

$

12,175,69

778,272.00

$

84,800.04

90,000.00

84,800,04 90,000.00

156,400.00

156,400.00

$ 946,847.69 $ 174,800.04 $ 1,121,647.73

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

CHATIAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF OTHER REVENUE YEAR ENDED JUNE 30, 1996

SCHEDULE "5"

Interest Earned Membership Dues
Boards of Education 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 Webster County
Registration Fees Reimbursements
For Psychological Services Boards of Education Chattahoochee County Clay County Dooly 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 Less: Cost of Goods Sold Printing and Binding

See notes to the general purpose financial statements.

- 22 -

GOVERNMENTAL FUND TYPE GENERAL FUND

$

8,044,86

1,505.00 1,242.56 15,459.50 6,027.00 10,920.00 8,813.00 5,645.50
829.50 6,279.00 1,470.00 2,961.00 19,558.00 3,090.50 5,768.00 1,060.50 38,050.24

9,011.00 7,762.70 24,992.00 51,423.00 30,955.36 24,210.00 6,825.64 26,610.00 7,686.00 15,271.32 81,776.00 11,082.76 20,326.36 6,098.16
22,638.32 -13,736.29 12,126.63

$

481,783.06

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF EXPENDITURES BY OBJECT GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1996

SCHEDULE "6"

EXPENDITURES
Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical Services Compensation and Travel of Board Members Repair and Maintenance Services Rents Insurance Communications Tuition Shared Services Supplies Energy Books, Textbooks and Periodicals Dues and Fees Other Expenditures
Nonoperating Costs Equipment

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

$ 929,085.59 $ 333,139.36 $ 1,262,224.95

192,543.60

68,394.56

260,938.16

42,645.89

28,941.84

71,587.73

23,271.53

48,637.55

71,909.08

2,534.18

2,534.18

7,080.07

7,080.07

22,493.04

15,478.90

37,971.94

3,806.90

3,806.90

26,928.07

28,247.08

55,175.15

5,494.00

5,494.00

381,150.47

381,150.47

60,150.03

45,345.43

105,495.46

13,227.49

3,535.70

16,763.19

5,928.50

7,901.72

13,830.22

5,471.21

5,253.22

10,724.43

3,209.75

26,515.40

29,725.15

9,146.64

72,372.81

81,519.45

Total Expenditures

$ 1,347,522.49 $ 1,070,408.04 $ 2,417,930.53

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, 1996

SCHEDULE "7"

EXPENDITURES Operating Costs Communications Supplies Nonoperating Costs Equipment
Total Expenditures

EDUCATION TECHNOLOGY
CENTERS

$

15,077.75

2,927.54

71,994.95

90,000.24

See notes to the general purpose financial statements. - 24 -

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERViCE AGENCY SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS yEAR ENDED JUNE 30 1996

SCHEDULE "8"

BOARD MEMBER ADDRESS
Mr. John Terry, Chairman C*) Talbot County Board of Education P. O. Box515 Talbotton, Georgia 31827
Dr. Katie Brochu C*)
Sumter County Board of Education 210lndusbialVVay Americus, Georgia 31709
Mr. Ronnie Burgamy C*) Chattahoochee County Board of Education 26 Merrell Street Cusseta, Georgia 31805
Mr. Joe Gary, Jr. Quitman County Board of Education P. O. Box 248 Georgetown, Georgia 31754
Ms. Edna Gay C*) Route 1 Fort Gaines, Georgia 31751
Ms. Kathryn Hardwick C*) Randolph County Board of Education 1208 Andrew Street Cuthbert, Georgia 31740
Mr. George Hartley C*) Clay County Board of Education P. O. Box 219 Fort Gaines, Georgia 31751
Mr. Jimmy Herring C*) Webster County Board of Education P. O. Box 149 Preston, Georgia 31824
Mr. Michael Hickerson (*) Dooly County Board of Education P. O. Box 277 Vienna, Georgia 31092
Mr. Peter Hidalgo (*) P. O. Box 333 Waverty Hall, Georgia 31831
Ms. Margaret Hunt (*) Quitman County Board of Education P. O. Box 248 Georgetown, Georgia 31754
Mr. William Johnson (*) Schley County Board of Education P. O. Box 66 Ellaville, Georgia 31806
Mr. Tommie Kendrick (*) Route 2, Box 234 Georgetown, Georgia 31754

COMPENSATION

TRAVEL

$

100.00

- 25 -

150.00 450.00

CHATTAHoocHEE-FLINT REGIONAL EPUCATIONAL SERVICE AGENCY SCHEDULE OF COMPENSATION ANp TRAVEL OF BOARD MEMBERS YEAR ENDED JUNE 30 1996

SCHEDULE"S"

BOARD MEMBER ApDRESS
r) 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
Mr. Mike McGeehan (*) 116 Highland Avenue Cuthbert, Georgia 31740
Ms. Ora Lee Peterson (*) Route 6, Box 91 Americus, Georgia 31709
Dr. Vann Sikes (*) Crisp County Board of Education P. O. Box 729 Cordele, Georgia 31015
Mr. Wayne Smith (*) Taylor County Board of Education P. O. Box 1937 Butler, Georgia 31006
Ms. Rosa Thompson (*) P.O. Box 403 Ellaville, Georgia 31806
Ms. Mary Thornton (*) Route 1, Box 36A Cusseta, Georgia 31805
Mr. Hosie Waters (*) Macon County Board of Education P. O. Box 488 Oglethorpe, Georgia 31068
Mr. Fountain Wims (*) Stewart County Board of Education P. O. Box 547 Lumpkin, Georgia 31815
Dr. Wayne Woodward (*) 406 22nd Avenue East Cordele, Georgia 31015
(*) Denotes Board Members Serving as of June 30, 1996

COMPENSATION

TRAVEL

$

250.00

$ 500.00 450.00

234.18

400.00

$

2,300.00 $

,2;,;3;;;4;;,.;1.;.;8;;.

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. 1996

Total Salaries
TRAVEL GENERAL FUND Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Business Administration Maintenance and Operation of Plant Total General Fund
SPECIAL REVENUE FUND
Total Travel

$

1,262,224.95 $

30,603.34 $

-25,256.60 $ 1,267,571.69

$

17,555.43 $

13,669.89 7,340.71 3,365.45 150.00 564.41

$

42,645.89 $

28,941.84

$

71,587.73 $

0.00 $ 0.00 $

0.00 $ 0.00 $

17,555.43
13,669.89 7,340.71 3,365.45 150.00 564.41
42,645.89
28,941.84

0.00 $_~~-=O=.O==O $

71,587.73

CHATTAHOOCHEE FLINT R.E.S.A. SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 1996

NAME

TITLE CATEGORY

SALARIES AMOUNT

TRAVEL EXPENSE

AFFOLTER,DIANE W ANDERSON, JAY M BAILEY,GLORIA N BALDWIN,ELLA G BARNES,DAVID B BYRD, ARLENE W CARTER,NORMAN K CARTER,NORMAN K CLINKSCALES, SUE R COLLINS, EMILY C CORMANY,JAMES R CURTIS,PHILIP J JR CURTIS,PHILIP J JR DAVIS,WILLIAM E EMLY,FRANCES K EXUM,E GAIL FISHER,MARSHA M GONZALEZ,JAVIER HALL, CHARLOTTE R HATCHER,AUDRA J HOLMES, ELIZABETH D HOPSON, PAULA HUNT,LENA MAE KENNEDY,NICK KENNEDY,WAYNE R KENNON,CAROL W KOCHAN,WILLIAM R MCCORKLE,BARBARA A MOATES,BARBARA L MOORE,ROBERT M MORGAN, GWEN D MORGAN,GWEN D MORGAN,GWEN D PEREZ,SAN JUANITA PICKETT,V GAY PLESS,GRACE P PLESS,GRACE P SMITH,BILLIE SUE SMITH,BILLIE SUE SMITH, LENORA E STREETMAN,REBECCA A STREETMAN, REBECCA A TORBERT,MARY R TORBERT,MARY R TURNER,MARTHA H TURNER,MARTHA H USREY,J CHRISTOPHER VALVERDE-JENSEN,AMY VALVERDE-JENSEN,MIGUEL VALVERDE-JENSEN, MIGUEL WALKER,F MEREDITH WALKER,F MEREDITH WALKER,F MEREDITH WEBB,BETTY WYLENE WHITTEN,THOMAS M WILLIAMS,PATRICIA L WRIGHT, LEE

SUPPORT SERVICES - PUPIL SERVICES

$

MAINTENANCE & OPER. OF PLANT SERVICES

SPECIAL REVENUE FUND - OTHER PROGRAMS

MIGRANT EDUCATION AGENCIES FUND

SUPPORT SERVICES - PUPIL SERVICES

SUPPORT SERVICES - PUPIL SERVICES

INSTRUCTION

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

INSTRUCTION

SUPPORT SERVICES - PUPIL SERVICES

INSTRUCTION

SPECIAL REVENUE FUND - OTHER PROGRAMS

MAINTENANCE & OPER. OF PLANT SERVICES

INSTRUCTION

SUPPORT SERVICES - PUPIL SERVICES

INSTRUCTION

MIGRANT EDUCATION AGENCIES FUND

GENERAL ADMINISTRATION

MIGRANT EDUCATION AGENCIES FUND

SUPPORT SERVICES - INSTRUCTIONAL STAFF

MIGRANT EDUCATION AGENCIES FUND

MAINTENANCE & OPER. OF PLANT SERVICES

MAINTENANCE & OPER. OF PLANT SERVICES

MAINTENANCE & OPER. OF PLANT SERVICES

SUPPORT SERVICES - PUPIL SERVICES

SUPPORT SERVICES - PUPIL SERVICES

INSTRUCTION

SPECIAL REVENUE FUND - OTHER PROGRAMS

SUPPORT SERVICES - PUPIL SERVICES

INSTRUCTION

SUPPORT SERVICES - BUSINESS

SPECIAL REVENUE FUND - OTHER PROGRAMS

MIGRANT EDUCATION AGENCIES FUND

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

I NSTRUCTI ON

SUPPORT SERVICES - INSTRUCTIONAL STAFF

INSTRUCTION

SPECIAL REVENUE FUND - OTHER PROGRAMS

SUPPORT SERVICES - INSTRUCTIONAL STAFF

MIGRANT EDUCATION AGENCIES FUND

SUPPORT SERVICES - PUPIL SERVICES

MIGRANT EDUCATION AGENCIES FUND

DIRECTOR

GENERAL ADMINISTRATION

MIGRANT EDUCATION AGENCIES FUND

SPECIAL REVENUE FUND - OTHER PROGRAMS

INSTRUCTION

SUPPORT SERVICES - PUPIL SERVICES

SUPPORT SERVICES - PUPIL SERVICES

39,069.88 $ 1,304.76
46,519.26 1,894.94
48,807.70 9,295.00
35,975.21 7,236.00 7,160.08
59,119.43 2,969.04
48,596.36 300.00
28,425.00 3,973.20
30,774.16 43,739.04 29,311.20 15,000.00
1,828.38 53,040.00
3,421.50 3,400.00 1,100.76 28,740.00 32,938.28 37,005.30 16,608.00 36,897.68 24,381.76
1,560.00 8,255.00 6,811.76 62,001.60 18,675.00 6,225.00 33,225.80 13,855.20 44,190.24 1,748.57 12,823.16 45,381.60
19,838.08 300.00
30,000.00 32,424.00
1,361.64 16,622.64 68,019.60
44,598.70 47,994.62 11,952.94 40,874.62

1,767.67
2,508.10
2,760.14
1,980.50 1,039.75
2,937.85
2,890.77
278.02
3,149.00 2,180.98 6,746.88
31.00 88.75 1,933.23 29.00
286.39 1,711.41 1,145.64
7.75 4,050.47 1,077 .89
24.50
1,507.00 2,461.39
150.00
872.15
2,607.81
804.15
2,818.13 985.19
2,558.35 2,860.19
4,554.91
3,365.45 26.00
2,265.25 3,067.93
2,058.14

TOTALS

$ 1 ,267,571 .69 $ 71,587.73

SECTION III COMPLIANCE

CLAUDE L. VICKERS
STATEAUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
May 14, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Director and Members of the Chattahoochee-Flint Regional Educational Service Agency Board of Control
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 of the Chattahoochee-Flint Regional Educational
Service Agency as of and for the year ended June 30, 1996, and have issued our report thereon dated May 14,
1997. 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.
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 of the 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 disclosed no instances of noncompliance that are required to be reported herein under Government Auditing Standards.

96CRL-I0

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,

CLV:dt 96CRL-IO

Claude L. Vickers
State Auditor

CLAUDE L. VICKERS
STATEAUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
May 14, 1997

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

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, 1996, and have issued our report thereon dated May 14, 1997. 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, 1996:

(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

Our procedures were limited to the applicable procedures described in the Office of Management and Budget's "Compliance Supplement for Single Audits ofState 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 of an 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.

96CRL-40

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 of this report. 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,

CLV:dt 96CRL-40

Claude L. Vickers State Auditor

CLAUDE L. VICKERS
STATEAUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
May 14, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Director and Members of the 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 of and for the year ended June 30, 1996, and have issued our report thereon dated May 14, 1997. 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, 1996. 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.

96CRL-80

We conducted our audit of compliance in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and Office of Management and Budget (OMB) Circular A-128, "Audits of State and Local Governments". Those standards and OMB 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, withthe requirements as disclosed in the second paragraph that are applicable to the major Federal financial assistance program for the year ended June 30, 1996.
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,

CLV:dt 96CRL-80

Claude L. Vickers State Auditor

CLAUDE L. VICKERS
STATEAUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
May 14, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Director and Members of the Chattahoochee-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 Chattahoochee-Flint Regional Educational Service Agency as of and for the year ended June 30, 1996, and have issued our report thereon dated May 14, 1997. 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 1996 general purpose financial statements of the ChattahoocheeFlint Regional Educational Service Agency and with our consideration of the Agency's control structure used to administer Federal financial assistance programs, as required by Office of Management and Budget (OMB) 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, 1996. As required by OMB 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 Chattahoochee-Flint Regional Educational Service Agency's compliance with these requirements. Accordingly, we do not express such an opinion.

96CRL-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 caIlJe 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,

CLV:dt 96CRL-120

Claude L. Vickers State Auditor

SECTION IV INTERNAL CONTROL

CLAUDE L. VICKERS
STATEAUDITOR
(404) 6562174

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
May 14, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Director and Members of the Chattahoochee-Flint Regional Educational Service Agency Board of Control
REPORT ON INTERNAL CONTROL STRUCTURE 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, 1996, and have issued our report thereon dated May 14, 1997. 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.
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 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.
96ICL-3

In planning and performing our audit of the general purpose financial statements of the Chattahoochee-Flint
Regional Educational Service Agency for the year ended June 30, 1996, we obtained an understanding of the internal control structure. With respect to the internal control structure, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide an opinion on the internal control structure. 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 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 the reportable conditions disclosed 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 ofthe Chattahoochee-Flint Regional Educational Service Agency's financial statements and this report does not affect our report thereon dated May 14, 1997.

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,

CLV:dt 96ICL-3

Claude L. Vickers State Auditor

CLAUDE L. VICKERS
STATEAUDITOR
(404) 6562174

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
May 14, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Director and Members of the Chattahoochee-Flint Regional Educational Service Agency Board of Control
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE 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 of and for the year ended June 30, 1996, and have issued our report thereon dated May 14, 1997. 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 its major Federal financial assistance program and have issued our opinion thereon dated May 14, 1997.
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 (OMB) Circular A-128, "Audits of State and Local Governments". Those standards and OMB 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, 1996, we considered the Agency's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinions 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 OMB Circular A-128. This report addresses our consideration of internal control structure policies and

961CL-7

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 14, 1997.

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 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 applicablelaws 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 of changes 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.

During the year ended June 30, 1996, the Chattahoochee-Flint Regional Educational Service Agency expended 81% of its total Federal financial assistance under a major Federal financial assistance program.

96ICL-7

We performed tests of controls, as required by OMB 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 of Federal 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 a certain matter involving the internal control structure and its operation that we consider to be a reportable condition 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, a reportable condition was noted in the following control category:
Administrative Requirements
A material weakness is a reportable condition in which the design or operation of one or more of the 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 the reportable condition described above is also considered to be a material weakness.
This condition was considered in determining the nature, timing, and extent of the procedures to be performed in our audit ofthe Chattahoochee-Flint Regional Educational Service Agency's compliance with requirements applicable to its major Federal financial assistance program for the year ended June 30, 1996, and this report does not affect our report thereon dated May 14, 1997.
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,

CLV:dt 96ICL-7

Claude L. Vickers State Auditor

SECTION V FINDINGS AND IMPROPER OR QUESTIONED COSTS

CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30. 1996
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Time and Attendance Records Not Utilized Federal Financial Assistance Amount: $19,834.33 Audit Control Number 8724-94-01
The audit report for the year ended June 30, 1995, noted that salaries in the amount of $19,834.33 were charged to the Elementary and Secondary Education Act - Chapter I - Migrant Education Program (CFDA 84.011) but were not supported by time and attendance records as required by Chapter 41, of the Financial Management for Georgia Local Units of Administration (FMGLUA). During the year under review, the Agency established internal controls to ensure all salary charges for employees were adequately supported by time and attendance records. The $19,834.33 in questioned cost should be refunded to the Georgia Department of Education.
AUDIT FOLLOW-UP/RESOLUTION Budgeting a Deficit Financial Statements Finding Resolved Audit Control Number 8724-95-01
The audit report for the year ended June 30, 1995, stated that the Chattahoochee-Flint Regional Educational Service Agency failed to approve a balanced budget as required by Chapter 32 of the Financial Management for Georgia Local Units of Administration (FMGLUA). For the year under review, the Agency adopted a balanced budget as required.
AUDIT FOLLOW-UP/RESOLUTION Failure to Monitor Subrecipients Federal Financial Assistance Finding Resolved Audit Control Number 8724-95-02
The audit report for the year ended June 30, 1995, reported that the Agency failed to perform a review of subrecipients as required by the OMB Circular A-128, part 9b, for the Elementary and Secondary Education Act, Chapter I - Migrant Education Program (CFDA 84.011). For the year under review, the Agency established the appropriate policies and procedures to ensure that all subrecipient reviews are performed in accordance with the Federal Regulation as required.
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CHATTAHOOCHEE-FLINT REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30, 1996
PRIQR 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, 1995, stated that the Agency did not provide for adequate separation of employee duties in the performance of accounting functions and related procedures. In the year under review, no improvement in adequate separation of employee duties was noted. This condition 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 controls with existing staff.
Note: All Federal Financial Assistance Programs listed in the Schedule of Federal Financial Assistance, Schedule" 1" of this 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, 1995, noted that the management of the Chattahoochee-Flint Regional Educational Service Agency had chosen not to maintaina 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 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 Assets Account Group.
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 include comments for inclusion in this report.
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