G,I\ A~oO .R \ E ;),61 c: fa " lqq5 -96 AUDIT REPORT COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY VALDOSTA, GEORGIA YEAR ENDED JUNE 30, 1996 STATE OF GEORGIA DEPARTMENT OF AUDITS 254 WASHINGTON STREET ATLANTA. GEORGIA 30334 COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE EXillBITS GENERAL PURPOSE FINANCIAL STATEMENTS COMBINED STATEMENTS - OVERVIEW A COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUPS 2 B COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES 4 C STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS 5 D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 7 ADDITIONAL FINANCIAL INFORMATION COMBINING AND INDIVIDUAL FUND STATEMENTS SPECIAL REVENUE FUND E COMBINING BALANCE SHEET 18 F COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 19 G FIDUCIARY FUND TYPE STA TEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND 20 SCHEDULES 1 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE 21 2 CASH AND CASH EQUIVALENTS 22 3 ACCOUNTS RECEIVABLE 23 SCHEDULE OF REVENUE 4 STATE 24 5 OTHER 25 6 SCHEDULE OF EXPENDITURES BY OBJECT GOVERNMENTAL FUND TYPES 26 7 SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS 27 COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY - TABLE OF CONTENTS - SECTIONll SUMMARY AND SCHEDULE OF SALARIES AND TRAVEL SECTION ill 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 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 COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY - TABLE OF CONTENTS - ~mCTIONVI PERTINENT VIEWS OF RESPONSIBLE OFFICIALS PERTINENT VIEWS OF RESPONSIBLE OFFICIALS 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 15, 1997 Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education and Director and Members of the Coastal Plains 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 Coastal Plains 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. Except as discussed in the following paragraph, 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 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. The Agency did not perform an inventory count at June 30, 1996, nor could we satisfy ourselves as to the accuracy ofthe amounts stated as inventories for resale through alternative procedures. 96ARL-33 As described in the notes to the general purpose financial statements, the Agency's financial statements have been prepared using certain accounting practices and policieswhich, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows: The Agency did not report compensated absences within the general purpose financial statements as required by 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 effect of adjustments, if any, on the Special Revenue Fund as might have been determined to be necessary had we been able to satisfyourselves as to the accuracy of the inventories for resale as discussed in the third paragraph, and 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 Coastal Plains Regional Educational Service Agency as of June 30, 1996, and the results ofits 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 15, 1997, on our consideration of the Agency's internal control structure and a report dated May 15, 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 ofthe Coastal Plains Regional Educational Service Agency taken as a whole. The combining and individual fund statements (Exhibits E through G), the financial schedules (Schedules 1 through 7 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 Coastal Plains Regional Educational Service Agency. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, except for the effect of adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy ofthe inventories for resale as discussed in the third paragraph, and except for the effects ofthe matters referred to in the fourth paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. 96ARL-33 A copyof thisreport has beenfiled 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 GeorgiaAnnotated Section 50-6-24. Respectfully submitted, CLV:gp 96ARL-33 Claude L. Vickers State Auditor COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY - 1- COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30, 1996 ASSETS Cash and Cash Equivalents Accounts Receivable Inventories for Resale General Fixed Assets Equipment Amount to be Provided in Future Years For Payment of Capital Lease Agreements GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND FIDUCIARY FUND TYPE AGENCY FUND $ 49,020.24 $ 15,897.30 $ 2,475.27 1,130.58 94,081.19 Total Assets $ 50,150.82 $ 109,978.49 $ -======2=,=47=5=.2=7= LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable Salaries Payable Funds Held for others Capital Lease Agreements Total Liabilities FUND EQUITY Investment in General Fixed Assets Fund Balances Reserved For Continuation of Federal Programs For Inventories for Resale Unreserved Undesignated Total Fund Balances Total Fund Equity $ 2,104.06 7,911.24 $ 2,475.27 $ 10,015.30 $ _ _----::2J.,.4.7:.5.:.~2:.7:... $ 5,513.27 $ 5,882.00 94,081.19 $ 5,513.27 $ 99,963.19 44,637.55 0.00 $ 0.00 $ 50,150.82 $ 99,963.19 $ 0.00 $ 50,150.82 $ 99,963.19 $ 0.00 Total Liabilities and Fund Equity $ 50,150.82 $ 109,978.49 $ =========2=,4=7=5=.=2=7= The notes to the general purpose financial statements are an integral part of this statement. -2- EXHIBIT "A" $ 301,995.22 $ 10,620.02 $ 475,219.82 $ 484,987.79 $ 2,104.06 $ 2,702.41 7,911.24 10,412.80 2,475.27 3,322.27 $ 10,620.02 10,620.02 16,160.90 $ 10,620.02 $ 23,110.59 $ 32,598.38 $ _ _--=3-0::.1..,:9..z9.5;=.=2=2_ s 301,995.22 $ 273,730.84 $ 301,995.22 $ 11,395.27 $ 122.94 94,081.19 84,317.30 s 105,476.46 $ 84,440.24 44,637.55 94,218.33 $ 150,114.01 $ 178,658.57 $ 452,109.23 $ 452,389.41 $ 301,995.22 $ 10,620.02 $ 475,219.82 $ 484,987.79 -3- COASTAL PLAINS 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- FUND BALANCE JUNE 30 $ 50,150,82 $ 99,963.19 $ 150,114.01 $ 178,658,57 The notes to the general purpose financial statements are an integral part of this statement. -4- COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30,1996 EXHIBITC REVENUES State Funds Federal Funds OtherFunds Total Revenues EXPENDITURES Current Instruction Support Services PupUServices Improvement of Instructional Services Educational Media Services General Administration Business Administration Maintenance and Operation of Plant Other Support Services Other Operations of Non-Instructional Services Debt Service 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 Adjustments Inventories for Resale - Net Change in Period GENERAL FUND BUDGET ACTUAL $ 523,162.00 $ 536,426.81 17,329.16 143,261.93 152,517.00 $ 666,423.93 $ 706,272.97 $ 396,416.79 $ 155,n1.oo 21,394.46 21,265.00 7,060.49 $ 601,907.74 $ $ 64,516.19 $ 408,722.47 169,337.27 21,678.48 22,737.58 13,791.06 5,540.88 641,807.74 64,465.23 $ -108,532.74 $ -108,532.74 $ 64,516.19 $ -44,067.51 91,851.09 94,218.33 SPECIAL REVENUE FUND BUDGET ACTUAL $ 168,733.12 $ 167,644.00 150,175.16 141,813.00 91,075.00 94,137.23 $ 409,983.28 $ 403,594.23 $ 19,599.95 $ 19,604.48 151,n9.04 81,285.85 16,144.47 41,304.79 4,000.00 8,317.12 151,545.88 64,1n.21 15,357.95 41,270.25 3,996.42 7,745.75 219,469.26 202,669.97 $ 541,900.48 $ 506,367.91 $ -131,917.20 $ -102,773.68 $ 108,532.74 $ 108,532.74 $ -131,917.20 $ 86,807.48 100.40 9,763.89 5,759.06 84,440.24 9,763.89 FUND BALANCE JUNE 30,1996 $ 156,367.28 $ 50,150.82 $ -35,245.43 $ 99,963.19 The notes to the general purpose financial statements are an integral part of this statement. -5- THIS PAGE LEFT BLANK COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 EXHffiIT"D" Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Coastal Plains 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 of local 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 ofmembers 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 FinancialReporting Entity". Based upon the application of the above criteria, the Coastal Plains 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 Coastal Plains Regional Educational Service Agency are as follows: Ben Hill County, Berrien County, Brooks County, Cook County, Echols County, Irwin County, Lanier County, Lowndes County, Tift County, Turner County and the City of Valdosta. FUND ACCOUNTING The Agency uses funds and account groups 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. - 7- COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30.1996 EXHIBIT"D" Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources. The general purpose financial statements account for all State, Federal and Other funds under control ofthe Agency, in compliancewith generallyaccepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and account groups 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. FIDUCIARY FUND TYPE - the agency fund used to account for assets held by a government unit as an agent for individuals, private organizations, other government units and/or other funds. This fund includes: AGENCY FUND - the fund used to account for assets held for other individuals. ACCOUNT GROUPS GENERAL FIXED ASSETS ACCOUNT GROUP - used to account for all general fixed assets acquired or constructed for use by the Agency. GENERAL LONG-TERM DEBT ACCOUNT GROUP - used to account for material capital lease obligations. 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. - 8- COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1996 EXHIBIT"D" Note 1: SlJ1\illARY OF SIGNIFICANT ACCOUNTING POLICIES Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group. Agency funds are purely custodial in nature and do not involve measurement of results of operations. 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" meansthe amountofthe transaction can be determined and "available" means collectiblewithin the currentperiod or soon enoughthereafter 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. A departurefrom the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' contracts, and the resources available fromthe Georgia Department of Education for the State's share of these contracts. During fiscal year 1996, six employees 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 specifythat 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 of these contractswere disbursed from the GeorgiaDepartment of Education to the Agency in the same twelve months. As ofJune 30, 1996, compensation under these employment contracts had been earned, but two of the 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 of the 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 endedJune 30, 1996. 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. Agency funds are accounted for using the modified accrual basis of accounting in recognizing assets and liabilities. BUDGET The Coastal Plains 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 aggregatelevel. The budget for governmental funds was prepared in accordance with generally accepted accounting principles. - 9- COASTAL PLAINS REGIONAL EDUCATIONALSERVICE AGENCY NOTES TO THEGENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1996 EXHIBIT liD" Note 1: SUM11ARY OF SIGNIFICANT ACCOUNTING POLICIES 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 ofgeneral circulationin the locality. At the next regular meeting ofthe 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 ofEducation. 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 equivalentsconsist ofdeposits (including savings 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. RECEIVABLES Receivables consist of grant reimbursements due from State grantors for expenditures made but not reimbursed. 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 uses the purchases method to account for inventories whereby purchases for resale are recorded at the time of purchase. 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. GENERAL FIXED ASSETS General fixed assets purchased, including capital outlay costs, are recorded as expenditures in the various funds at the time of purchase. All purchased general fixed assets are valued at cost where historical records are available and at estimated historical cost where no historical records exist. Donated general fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded cost. No depreciation has been provided on General Fixed Assets. Land and buildings used in the operation of the Agency are owned by the Lowndes County Board of Education. " - 10 - COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE30. 1996 EXHIBIT"D" Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES It isthe policy ofthe Agency to record assets acquired through capital lease agreements as additions to general fixed assets when received at the total acquisition cost, including interest. This presentation differs from generally accepted accounting principles in that assets acquired through capital lease agreements should be recorded in the General Fixed Assets Account Group at the inception ofthe agreement at the net present value ofthe minimumlease payments, not to exceed the fair market value of the leased property. The effect of this deviation is deemed to be immaterial to the fair presentation of the general purpose financial statements. CAPITAL LEASES It is the policy ofthe Agency to record the balance due resulting from capital lease agreements in the General Long-Term Debt Account Group for the amount due at fiscal year end, including interest. This presentation differsfrom generally accepted accounting principles in that the future obligations relating to assets acquired through capital lease agreements should be recorded in the General Long-Term Debt Account Group at the net present value of the future minimum lease payments. The effect of this deviation is deemed to be immaterial to the fair presentation of the general purpose financial statements. COMPENSATED ABSENCES Compensated absences represent obligations of the Agency relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individualfunds for the current portion of this obligation as this amount is deemed immaterial to the general purpose financial statements. However, the dollar value ofaccumulated compensated absences at June 30, which will be payable from future resources is material to the general purpose financial statements and has not been recorded in the General Long-Term Debt Account Group as required by generally accepted accounting principles. INTERFUND TRANSACTIONS The 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 - 11 - COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THEGENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30.1996 EXHIBIT"DIf Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. Certain reclassifications have been made to the comparative data to conform to the current year classifications. Note 2: DEPOSITS COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate of the face value of such surety bond and the market value of the securities pledged shall be equal to not less than 110 percent of the public funds 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 ofindebtedness 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 principaland interest and debt obligationsissued 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.. - 12 - COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1996 EXHIBIT"D" Note 2: DEPOSITS CATEGORIZATION OF DEPOSITS At June 30, 1996, the bank balances were $136,059.86. The bank balances were entirely covered by Federal depository insurance. Note 3: GENERAL FIXED ASSETS The following is a summary of changes in the General Fixed Assets Account Group during the fiscal year: Equipment Balance July 1, 1995 $ 272,577.40 Retroactive Restatement ofPrior Year Balances 1.153.44 Balance July 1, 1995 Restated $ 273,730.84 Additions 33,328.56 Deductions 5,064.18 Balance June 30, 1996 $ 301,995.22 Note 4: RISK MANAGEMENT The Agency is exposed to various risks ofloss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; natural disaster; and unemployment compensation. The Agency has obtained commercial insurance for risk of loss associated with torts, assets, errors or omissions and job related illness or injuries to employees. However, the errors or omissions policy excludes coverage for sexual harassment and discrimination. 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-insurefor alllosses related to natural disaster. The Agency has not experienced any losses related to this risk in the past three years. - 13 - COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1996 EXHIBIT"DtI Note 4: RISK MANAGEMENT The Agency is self-insured with regard to unemployment compensation claims. The Agency accounts for claimswithin the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. No claims have been paid during the last two fiscal years. Note 5: GENERAL LONG-TERM DEBT CAPITAL LEASES The Coastal Plains Regional Educational Service Agency has entered into two lease agreements as lessee for copiers. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the balance due including interest as of the date of their inception. The following is an analysis of the carrying value of general fixed assets acquired under capital leases as of June 30, 1996: General Fixed Assets Equipment $ 16,62264 The changes in General Long-Term Debt during the fiscal year ended June 30, 1996, were as follows: Capital Leases Balance July 1, 1995 $ 16,160.90 Deductions 5.540.88 Balance June 30, 1996 $ 10,620.02 At June 30, 1996, payments due, by fiscal year which includes principal and interest for these items are as follows: Fiscal Year Ended June 30 Capital Leases 1997 1998 Total Principal and Interest $ 5,540.88 5,079.14 "- $ 10,62002 - 14 - COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1996 EXHIBIT"D" Note 6: ON-BEHALF PAYMENTS The Agency has recognized revenues and expenditures in the amount of $12,175.69 for health insurance contributions paid on the Agency's behalf by the following State Agency. Georgia Department ofEducation Paid to the State Merit System ofPersonnel Administration For Health Insurance ofNon-Certified Personnel In the amount of$12,175.69 Note 7: 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 8: ACCUMULATED EMPLOYEES' LEAVE Twelve-month employees ofthe Coastal PlainsRegional Educational Service Agency earn annual leave at the rate of ten days per year with an unlimited accumulation. Employee leave policies of the Coastal Plains Regional Educational Service Agency provide for payments to employees for all accumulated leave at retirement or termination of employment at their current rate of pay. See Note 1- Compensated Absences Note 9: 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 payablemonthlyfor 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. - 15 - COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THEGENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1996 EXHIBIT"D" Note 9: RETIREMENT PLANS Retirement benefits also include death and disability benefits. A disabled member or surviving spouse is entitled to receive annuallyan 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 ofemployer 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, 1996, was $701,273.47; total payroll was $701,273.47. 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 $118,176.62, of which $83,025.94 was made by the Agency and $35,150.68 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 obligationwas adopted by the GASB to enable readers of PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among other PERS and among other employers. Total unfunded pension benefit obligation ofTRS as of June 30, 1995, was as follows: Total pension benefit obligation $17,442,607,000.00 Net assets available for benefits, at cost 15,857,066,000.00 Unfunded pension benefit obligation $ 1.585,541.000.00 - 16 - COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1996 EXHIBIT"D" Note 9: RETIREMENT PLANS The measurement ofthe 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 $83,025.94 was actuarially determined and represented .0137% of total contributions made by all participating employers. Ten year historical trend information is presented in the 1996 TRS Component Unit Financial Report. This information is useful in assessing TRS's accumulation of sufficient assets to pay pension benefits as they become due. Note 10: SURETY BONDS The Director, Mr. Cary Moore, is bonded in the amount of$lO,OOO.OO with the Western Surety Company, Sioux Falls, South Dakota, their Bond No. 68472996, on which premium was paid through February 20, 1997. - 17 - COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30 1996 EXHIBIT"E" ~ Cash and Cash Equivalents Inventories for Resale EQUIPMENT REPAIR FUND ANNUAl EVAlUATION CONTINUATION GRANT GEORGIA LEARNING RESOURCES SYSTEM SAFE AND DRUG-FREE SCHOOLS TOTAlS JUNE 30, 1996 JUNE 30, 1995 $ 10,015.30 $ 5,882.00 $ 0.00 $ 15,897.30 $ 13,238.15 $ 94,081.19 94,081.19 84,317.30 Total Assets $ 94,081.19 $ 10,015.30 $ 5,882.00 $ 0.00 $ 109,978.49 $ 97,555.45 LIABILIT!ES AND FUND EQUITY LlABlLmES Accounts Payable Salaries Payable Total Liabilities FUND EQUITY Fund Balances Reserved For Continuation of Federal Programs For Inventories for Resale Unreserved Undesignated Total Fund Equity $ $ $ 94,081.19 $ 94,081.19 0.00 $ $ 94,081.19 $ 2,104.06 7,911.24 10,015.30 $ 5,882.00 $ 0.00 0.00 $ 5,882.00 0.00 $ 5,882.00 $ Total Liabilities and Fund Equity $ 94,081.19 $ 10,015.30 $ 5,882.00 $ $ 2.104.06 $ 2.702.41 7,911.24 10,412.80 $ 10,015.30 $ 13,115.21 $ $ 0.00 0.00 $ 5,882.00 $ 94.081.19 99,963.19 $ 0.00 99,963.19 $ 122.94 84,317.30 84,440.24 0.00 84,440.24 0.00 $ 109,978.49 $ 97,555.45 See notes to the general purpose financial statements. -18- COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY COMBINING SWEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUND YEAR ENDED JUNE 30 1996 EXHIBIT"P REVENUES State Funds Federal Funds Other Funds Total Revenues EXPENPITURES Current . Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration Business Administration Maintenance and Operation of Plant Other Operations of Non-Instructional 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 Inventory for Resale - Net Change in Period EQUIPMENT REPAIR FUND ANNUAL EVALUATION CONTINUATION GRANT GEORGIA LEARNING RESOURCES SYSTEM SAFE AND DRUG-FREE SCHOOLS TOTALS YEAR ENDED JUNE 30, 1996 JUNE 30,1995 $ $ 7,087,14 $ 7,087.14 $ 85,714.00 $ 81,930,00 $ 121,813.00 $ 20,000,00 85,714.00 $ 203,743.00 $ . 20,000,00 $ 167,644,00 $ 141,813.00 7,087,14 162,538,45 134,227.00 2,691.20 316,544,14 $ 299,456.65 $ $ 115,619.88 $ 115,619.88 $ $ -108,532.74 $ $ 62,952,21 19,736,94 3,024.85 $ 151,545.88 1,225,00 15,357,95 21,137.79 3,996.42 4,720.90 19,604.48 $ 395.52 85,714.00 $ 197,983.94 $ 20,000.00 $ 19,604,48 $ 17,353,84 151,545,88 142,413,98 64,177.21 15,357,95 41,270,25 3,996,42 68,400,97 14,079,97 42,834,60 3,264,92 7,745,75 10,191,89 115,619.88 100,702.75 419,317.82 $ 399,242.92 0.00 $ 5,759.06 $ 0.00 $ -102,773,68 $ -99,786,27 108,532.74 $ 0,00 $ 84,317,30 9,763.89 0.00 $ 0,00 5,759.06 $ 122.94 108,532.74 98,011.55 0,00 $ 0,00 5,759,06 $ 84,440,24 9,763;89 -1,774.72 99,974,36 -13,759.40 FUND BALANCE JUNE 30 $ 94,081.19 $ 0.00 $ 5,882,00 $ 0.00 $ 99,963.19 $ 84,440.24 See notes to the general purpose financial statements. - 19 - COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUND TYPE - AGENCY FUND YEAR ENDED JUNE 30. 1996 EXHIBIT"G" CONFERENCE ACCOUNT ASSETS Cash and Cash Equivalents BALANCE JULY 1,1995 ADDITIONS DEDUCTIONS BALANCE JUNE 30, 1996 $ 3,322.27 $ 16,994.95 $ 17,841.95 $ 2,475.27 LIABILITIES Funds Held for Others $ 3,322.27 $ 16,994.95 $ 17,841.95 $ ==:::::=:2::,::4=7=5=.2=7= See notes to the general purpose financial statements. - 20- COASTAL PLAINS 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 Individuals with Disabilities Education Act Part B - Special Education Georgia Learning Resources System 1996 Grant Special Education Personnel Development and Parent Training Title VI, D 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 Comprehensive .School Health Programs to Prevent the Spread of HIV and Other Important Health Problems 1995 AIDS Health Education OTHER FINANCIAL ASSISTANCE National Science Foundation Through Board of Regents of the University System of Georgia Griffin Regional Educational Service Agency Georgia Initiative in Mathematics and Science 1995 Contract Total Federal Financial Assistance CFDA NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD 84.027 $ 115,931.00 $ 115,931.00 84.029 84.029 84.186 s 5,882.00 20,000.00 141,813.00 $ 122.94 20,000.00 136,053.94 s 93.938 7,162.16 $ 7,162.16 $ 10,167.00 $ 4,653.73 $ 159,142.16 $==::::::1::4:7:,:8:6:9:~.8==3= The Agency had no major programs as defined by the Single Audit Act of 1984. See notes to the general purpose financial statements. - 21 - COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY CASH AND CASH EQUIVALENTS JUNE 30, 1996 SCHEDULE "2" INTEREST BEARING ACCOUNTS Nations Bank, N. A" Atlanta, Georgia N.O.W. Account (Variable) Valdosta Bank and Trust, Valdosta, Georgia Money Market Account (3.277%) $ 27,430,88 39,961,93 $ 67,392.81 See notes to the general purpose financial statements. - 22 - COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY ACCOUNTS RECEIVABLE JUNE 30, 1996 SCHEDULE "3" Education, Georgia Department of Federal Program Cooperative Agreements to Support Comprehensive School Health Programs to Prevent the Spread of HIV and Other Important Health Problems GOVERNMENTAL FUND TYPE GENERAL FUND $ ======1,=13=0=.5=8 See notes to the general purpose financial statements. - 23 - COASTAL PLAINS 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 Georgia Learning Resources System Health Insurance Regional Educational Service Agencies Supervision and Assessment of Student and Beginning Teachers and PerformanceBased Certification Administrative Services, Georgia Department of Georgia Statewide Academic and Medical System GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND TOTAL. $ $ 12,175.69 523,162.00 81,930.00 $ 81,930.00 12,175.69 523,162.00 85,714.00 85,714.00 1,089.12 1,089.12 $ 536,426.81 $ 167,644.00 $ 704,070.81 See notes to the general purpose financial statements. - 24 - COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF OTHER REVENUE YEAR ENDED JUNE 30, 1996 SCHEDULE "5" Boards of Education Membership Contributions Ben Hill County Berrien County Brooks County Cook County Echols County Irwin County Lanier County Lowndes County Tift County Turner County Valdosta, City of Indirect Cost Special Revenue Fund Interest Earned Sales and Services Equipment Repairs Less: Purchases for Resale Other GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND TOTAL s 11,537.14 9,134.52 8,590.10 9,092.14 1,978.63 5,897.34 4,182.58 25,967.76 24,127.26 6,353.74 24,032.72 $ 11,537.14 9,134.52 8,590.10 9,092.14 1,978.63 5,897.34 4,182.58 25,967.76 24,127.26 6,353.74 24,032.72 5,368.00 9,104.98 s 7,150.09 94,137.23 -87,050.09 5,368.00 9,104.98 94,137.23 -87,050.09 7,150.09 $ 152,517.00 $ 7,087.14 $ 159,604.14 See notes to the general purpose financial statements. - 25 - COASTAL PLAINS 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 Shared Services Supplies Dues and Fees Federal Indirect Costs Other Expenditures Nonoperating Costs Principal and Interest Equipment Total Expenditures GENERAL FUND SPECIAL REVENUE FUND TOTAL $ 411,643.01 $ 289,630.46 "$ 114,686.74 76,671.18 23,560.32 11,483.12 5,728.13 1,525.17 2,962.00 1,144.28 6,065.00 4,300.00 1,942.74 2,935.30 14,124.84 2,745,75 13,791.06 8,243.52 15,102.41 13,024.54 5,368.00 3,429.75 701,273.47 191,357.92 35,043,44 7,253.30 2,962.00 1,144.28 10,365.00 4,878.04 16,870,59 13,791.06 23,345,93 13,024,54 5,368.00 3,429.75 5,540.88 15,920.93 9,556.43 5,540.88 25,477.36 $ 641,807.74 $ 419,317.82 $ 1,061,125.56 See notes to the general purpose financial statements. - 26 - COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS YEAR ENDED JUNE 30,1996 SCHEDULE "7" BOARD MEMBER ADDRESS Mr. Larry Hunt, Chairman (*) Cook County Board of Education P. O. Box 152 Adel, Georgia 31620 Mr. Jimmy Alberson (*) Turner County Board of Education P. O. Box 609 Ashburn, Georgia 31714 Mr. John Wayne Baxter (*) Lowndes County Board of Education P. O. Box 1227 Valdosta, Georgia 31603-1227 Mr. Jackie Carter (*) P. O. Box 131 Statenville, Georgia 31648 Mr. Rudene Gentry (*) Irwin County Board of Education P, O. Box 225 Ocilla, Georgia 31774 Mr. Gerald Griffin (*) Berrien County Board of Education P. O. Box 625 Nashville, Georgia 31639 Mr. Louis Harper (*) Ben Hill County Board of Education P, O. Drawer 5189 Fitzgerald, Georgia 31750 Mr. Donald Hicks (*) Echols County Board of Education P. O. Box 207 Statenville, Georgia 31648 Mr. John Horton (*) Brooks County Board of Education P. O. Box 511 Quitman, Georgia 31643 Mr. Ed McCray (*) P. 0, Box 823 Tifton, Georgia 31794 COMPENSATION TRAVEL $ 400,00 $ 112.00 - 27 - 350,00 COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS YEAR ENDED JUNE 30.1996 SCHEDULE "7" BOARD MEMBER ADDRESS Mr. Dan Mcintyre (*) Tift County Board of Education P. O. Box 389 Tifton, Georgia 31793 Ms. Marie Mitchell (*) 715 McClendon Street Ashburn, Georgia 31714 Mr. Raymond Moore (*) Lanier County Board of Education P. O. Box 158 Lakeland, Georgia 31635 Mr. Lane Smith (*) 702 Howard Street Nashville, Georgia 31639 Mr. Nathaniel Thomas (*) 209 West 8th Street Adel, Georgia 31620 Mr. Gary Walker (*) City of Valdosta Board of Education P. O. Box 5407 Valdosta, Georgia 31603-5407 Mr. Bobby Watson (*) 5929 Snake Nation Road Hahira, Georgia 31632 (*) Denotes Board Members Serving as of June 30, 1996 COMPENSATION TRAVEL $ 550.00 550.00 600.00 400.00 $ ========== 2,850.00 $ 112.00 See notes to the general purpose financial statements. - 28 - SECTION II SUMMARY AND SCHEDULE OF SALARIES ANDTRAVEL COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY SUMMARY OF SALARIES AND TRAVEL YEAR ENDED JUNE 30,1996 SALARIES GENERAL FUND Support Services Improvement of Instructional Services General Administration Business Administration Total General Fund SPECIAL REVENUE FUND Total Salaries TOTAL PER . FINANCIAL STATEMENTS (ACCRUAL BASIS) ADJUSTMENTS FOR ACCRUALS JUNE 30,1995 JUNE 30,1996 TOTAL PER SCHEDULE (CASH BASIS) $ 286,nO.89 $ 108,660.14 16,211.98 0.00 $ 0.00 $ 286,nO.89 108,660.14 16,211.98 $ 411,643.01 $ 0.00 $ 0.00 $ 411,643.01 289,630.46 10,412.80 -7,911.24 292,132.02 $ 701,273.47 $ 10,412.80 $ -7,911.24 $ 7.0....3...,..n...5....._03_ TRAVEL GENERAL FUND Support Services Improvement of Instructional Services $ 23,372.82 $ Maintenance and Operation of Plant 187.50 Total General Fund $ 23,560.32 $ SPECIAL REVENUE FUND 11,483.12 0.00 $ 0.00 $ 0.00 0.00 $ 0.00 $ 0.00 23,372.82 187.50 23,560.32 11,483.12 Total Travel $ 35,043.44 $ 0.00 $ 0.00 $ _ _.3...5..,..0..4...3...4...4... COASTAL PLAINS R.E.S.A. SCHEOULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 1996 NAME " BARNES,SANDRA 0 CONRAD,DELTHIA CONRAD,DELTHIA CRAGO,SUSAN CRAGO,SUSAN DEMOTT,JUDITH A DENNIS,TAMARA T FIVEASH, GREGORY N FIVEASH,GREGORY N GIST,DE A GOLDEN,M GAYLE GRIFFIN,MARILYN B MCSWAIN,BARBARA P MOORE,CARY MORECROFT,FREDERICK B NAFE,SHIRLEY J PICKENS, CAROL K PITTS,L ALLEN PITTS,L ALLEN ROBINSON, JANE STALVEY,NAN T TAYLOR,E LYNN TERRELL,AMOS C TERRELL,AMOS C THORNTON,MARY LOU THORNTON,MARY LOU WETHERINGTON,ROBERTA A WILLIAMS,DANIEL W WILLIAMS,DANIEL W TITLE CATEGORY GENERAL ADMINISTRATION $ SUPP SRVS - IMPROV INSTR & ED MED SRVS FEDERAL PROGRAMS SUPP SRVS - IMPROV INSTR & ED MED SRVS SPECIAL REVENUE FUNO - OTHER PROGRAMS GENERAL ADMINISTRATION SUPPORT SERVICES - BUSINESS SUPP SRVS - IMPROV INSTR & ED MED SRVS SPECIAL REVENUE FUND - OTHER PROGRAMS SUPPORT SERVICES - BUSINESS SUPP SRVS - IMPROV INSTR & ED MED SRVS SUPP SRVS - IMPROV INSTR & ED MED SRVS GEORGIA LEARNING RESOURCES SYSTEM FUND DIRECTOR SPECIAL REVENUE FUND - OTHER PROGRAMS SUPP SRVS - IMPROV INSTR & ED MED SRVS SUPP SRVS - IMPROV INSTR & ED MED SRVS SUPP SRVS - IMPROV INSTR & ED MED SRVS SPECIAL REVENUE FUND - OTHER PROGRAMS GEORGIA LEARNING RESOURCES SYSTEM FUND SPECIAL REVENUE FUND - OTHER PROGRAMS GEORGIA LEARNING RESOURCES SYSTEM FUND SUPP SRVS - IMPROV INSTR & ED MED SRVS SPECIAL REVENUE FUND - OTHER PROGRAMS SUPP SRVS - IMPROV INSTR & ED MED SRVS MAINTENANCE & OPER. OF PLANT SERVICES SUPP SRVS - IMPROV INSTR & ED MED SRVS SUPP SRVS - IMPROV INSTR & ED MED SRVS SPECIAL REVENUE FUND - OTHER PROGRAMS TOTALS $ SALARIES AMOUNT TRAVEL EXPENSE 16,695.26 18,534.02 $ 18,720.97 1,500.00 47,024.88 18,410.04 1,920.64 17,210.04 14,291.34 47,316.52 56,211.00 51,464.16 73,554.84 10,109.28 43,624.90 48,823.30 27,039.00 12,942.48 14,979.00 62,337.96 23,679.96 22,703.39 48,057.76 6,624.29 2,254.32 249.25 1,487.58 2,559.43 31.00 3,437.32 1,737.79 4,547.11 4,515.79 3,098.27 672.36 4,127.33 199.55 2,222.63 187.50 3,651.76 64.45 703,775.03 $ 35,043.44 OED 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 15, 1997 Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education and Director and Members of the Coastal Plains 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 fmancial statements of the Coastal Plains Regional Educational Service Agency as of and for the year ended June 30, 1996, and have issued our report thereon dated May 15, 1997. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. Except as discussed in the following paragraph, 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 Agency did not perform an inventory count at June 30, 1996, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories for resale through alternative procedures. Compliance with laws, regulations, contracts, and grants applicable to Coastal Plains Regional Educational Service Agency is the responsibility ofthe Agency's management. As part of obtaining reasonable assurance about whether the general purpose fmancial statements are free of material misstatement, we performed tests of the Agency's compliance with certain provisions oflaws, 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:gp 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 15, 1997 Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation and Director and Members of the Coastal Plains 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 Coastal Plains Regional Educational Service Agency as of and for the year ended June 30, 1996, and have issued our report thereon dated May 15, 1997. This report was qualified for a scope limitation and 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 Coastal Plains 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 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 of an opinion on the Coastal Plains Regional Educational Service Agency's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion. 96CRL-50 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 ofthis report. With respect to items not tested, nothing came to our attention that caused us to believe that the Coastal Plains Regional Educational Ser"viceAgency had not complied, in all material respects, with those requirements. However, the results of our procedures disclosed an immaterial instance ofnoncompliance with those requirements, which is described in the Schedule ofFindings 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, CLV:gp 96CRL-50 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 15, 1997 Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education and Director and Members of the Coastal Plains Regional Educational Service Agency Board of Control SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REOUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS Ladies and Gentlemen: We have audited the general purpose financial statements of the Coastal Plains Regional Educational Service Agency as of and for the year ended June 30, 1996, and have issued our report thereon dated May 15,1997. This report was qualified for a scope limitation and 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 Coastal Plains 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: Types of Services Allowed or Unallowed Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Coastal Plains 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 requirementslisted in the second paragraph. With respect to items not tested, nothing ~e to our attention that caused us to believe that the Coastal Plains 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:gp 96CRL-120 Claude L. Vickers State Auditor 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 15, 1997 Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education and Director and Members of the Coastal Plains 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 of the Coastal Plains Regional Educational Service Agency as of and for the year ended June 30, 1996, and have issued our report thereon dated May 15, 1997. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. Except as discussed in the following paragraph, 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 Agency did not perform an inventory count at June 30, 1996, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories for resale through alternative procedures. The management of the Coastal Plains 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 96ICL-3 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. In planning and performing our audit ofthe general purpose financial statements of the Coastal Plains 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 ofrelevant 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 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 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, a reportable condition was noted in the following control category: Inventories 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 condition disclosed above is also considered to be a material weakness. This condition was considered in determiningthe nature, timing, and extent of the procedures to be performed in our audit ofthe Coastal Plains Regional Educational Service Agency's financial statements and this report does not affect our report thereon dated May 15, 1997. 96ICL-3 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:gp 96ICL-3 CLAUDE L. VICKERS STATEAUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 May 15, 1997 Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education and Director and Members of the Coastal Plains 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 Coastal Plains Regional Educational Service Agency as of and for the year ended June 30, 1996, and have issued our report thereon dated May 15, 1997. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. Except as discussed in the following paragraph, 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. The Agency did not perform an inventory count at June 30, 1996, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories for resale through alternative procedures. In planning and performing our audit for the year ended June 30, 1996, 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 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 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 15, 1997. 96ICL-13 The management of the Coastal Plains 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 applicable laws and regulations. Because ofinherent limitationsin 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 purposes 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 (1) Types of Services Allowed or Unallowed (2) Matching, Level of Effort, and/or Earmarking (4) Federal Financial Reports (3) Reporting (5) Allowable Costs/Cost Principles (6) Audit Follow-UplResolution (7) Administrative Requirements (4) Applicable Special Tests and Provisions (5) 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 whether they have been placed in operation, and we assessed control risk. During the year ended June 30, 1996, the Coastal Plains Regional Educational Service Agency had no major Federal financial assistance programs and expended 78% of its total Federal financial assistance under the following nonmajor Federal financial assistance program: Individuals with Disabilities Education Act Part B - Special Education Georgia Learning Resources System 96ICL-13 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 de;cribed above that are applicable to the aforementioned nonmajor Federal financial assistance program. Our procedures were less in scope than would be necessaryto render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion. 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 constitute material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a 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. We noted no matters involving the internal control structure and its operation that we consider to be material weaknesses as defined above. 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:gp 96ICL-13 SECTION V FINDINGS AND IMPROPER OR QUESTIONED COSTS COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30, 1996 PRIOR YEAR AUDIT FOLLOW-UP/RESOLUTION Excessive Cash Balances Federal Financial Assistance Finding Resolved Audit Control Number 8864-95-01 The audit report for the year ended June 30, 1995, stated that a review of cash management procedures for the Individuals with Disabilities Education Act - Title VI, B - Georgia Learning Resources System program (CFDA 84.027) disclosed that cash draws utilizing DE Form 0147, "Quarterly Report of Expenditures and Estimated Requirements for Grant Funds", were made in advance of immediate cash needs, resulting in the accumulation of excessive cash balances. For the year under review, audit tests of cash management procedures revealed no excessive cash balance accumulations by the Agency. PRIOR YEAR/CURRENT YEAR INVENTORIES Inventories for Resale not Reconcilable to Records Financial Statements Reportable Condition - Material Weakness Audit Control Number 8864-93-02 The audit report for the year ended June 30, 1995, reported that inventories for resale were not reconcilable from beginning to ending balance through an analysis of yearly purchases/sales activity. For the year under review, the Agency did not perform an inventory count at June 30, 1996, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through an analysis of yearly purchases/sales activity as reflected on the accounting records. Appropriate action should be taken by management to ensure that an inventory is taken at year end and that the accounting records document the purchases/sales activity for all inventories for resale. CASH MANAGEMENT Excessive Cash Balances Federal Financial Assistance Nonmaterial Noncompliance Audit Control Number 8864-93-03 The audit report for the year ended June 30, 1995, stated that a review of cash management procedures for the Safe and Drug-Free Schools Program (CFDA 84.186) disclosed that cash draws utilizing DE Form 0147, "Quarterly Report of Expenditures and Estimated Requirements for Grant Funds", were made in advance of immediate cash needs, resulting in the accumulation of excessive cash balances. For the year under review, audit tests of cash management procedures again revealed excessive cash balance accumulations by the Agency. During fiscal year 1996, the program had excessive ending monthly cash balances in four months. Procedures should be implemented to minimize the time elapsing between the transfer of funds from the Georgia Department of Education and disbursement of such funds by the Agency. SECTION VI PERTINENT VIEWS OF RESPONSIBLE OFFICIALS COASTALPLAINS REGIONALEDUCATIONAL SERVICE AGENCY PERTINENT VIEWS OF RESPONSIBLE OFFICIALS YEAR ENDED JUNE 30. 1996 INV"ENTORIES Inventories for Resale not Reconcilable to Records Financial Statements Reportable Condition - Material Weakness Audit Control Number 8864-93-02 We reconciled the inventory balance on our accounting records on June 30, 1996 to those kept by the shop secretary, who keeps a perpetual inventory based on purchases and sales. CASH MANAGEMENT Excessive Cash Balances Federal Financial Assistance Nonmaterial Noncompliance Audit Control Number 8864-93-03 During FY 97, stepswere taken to insurethat the Drug-Free SchoolsProgram had a zero balance at the end of each month.