G-A A~o() Rl eabl C~ l'1q6~~, REVIEW REPORT STATEOF GEORGIA COASTAL PLAINSREGIONAL EDUCATIONAL SERVICE AGENCY LENOX, GEORGIA YEARENDEDJUNE 30, 1997 STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS 254 WASHINGTON STREET ATLANTA, GEORGIA 30334-8400 COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT ACCOUNTANTS COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION EXlllBITS 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 COMBINED 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 ADDmONAL FINANCIAL INFORMATION COMBINING AND INDIVIDUAL FUND STATEMENTS SPECIAL REVENUE FUND E COMBINING BALANCE SHEET 16 F COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 17 G FIDUCIARY FUND TYPE STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND 18 SCHEDULES 1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 19 2 SCHEDULE OF STATE REVENUE 20 3 SCHEDULE OF SALARIES AND TRAVEL 21 SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS SECTION I FINANCIAL CLAUDE L. VICKERS STATE AUDITOR (404) 6562174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 December 19, 1997 Honorable Zell Miller, Governor Members of the General Assembly of Georgia Members of the State Board of Education and Director and Members of the Coastal Plains Regional Educational Service Agency Board of Control INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION Ladies and Gentlemen: We have reviewed the accompanying financial statements (Exhibits A through D) of Coastal Plains Regional Educational Service Agency as of and for the year ended June 30, 1997, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these fmancial statements is the representation of the management of Coastal Plains Regional Educational Service Agency. A review consists principally of inquiries of Agency personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, with the exception ofthe matters described in the following paragraph, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles. * The Agency did not report compensated absences within the financial statements as required by generally accepted accounting principles. * The Agency did not recognize as expenditures, in the year ended June 30, 1997, a portion of salaries and the corresponding employer's cost ofrelated benefits earned for contractual services completed prior to June 30, 1997. Also funds received, subsequent to June 30, 1997, from the Georgia Department of Education 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 97ARL- RESA-l revenues for contractual services completed prior to June 30, 1996, were improperly recorded in the year ended June 30, 1997. 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 effectson the fmancial statements of these variances or omissions have not been determined, but are believed to be material. Ourreviewwas made for the purposeof expressing limitedassurance that there are no material modifications that shouldbe made to the fmancial statements in order for them to be in conformity with generally accepted accounting principles. The accompanying supplementary information (Exhibits E through G and Schedules 1 through3) is presented only for supplementary analysis purposes. Such informationhas been subjected to the inquiries and analytical procedures applied in the review of the financial statements, and except for the effectsof the mattersdiscussed in the paragraph above, we are not aware of anymaterial modifications which should be made thereto. Respectfully submitted, CLV:cm 97ARL-RESA-1 ClaudeL. Vickers State Auditor COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30.1997 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 $ 32,479.32 $ 10,917.48 $ 1,345.16 8,076.00 98,804.64 Total Assets 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 Equity $ 139,359.96 $ 10,917.48 $ ======1~,3=4=5.=16= $ 2,216.68 8,335.46 $ $ 10,552.14 $ 1,345.16 1,345.16 $ $ 98,804.64 365.34 40,555.32 0.00 $ 0.00 $ 139,359.96 $ 365.34 $ 0.00 Total Liabilities and Fund Equity $ 139,359.96 $ 10,917.48 $ ===~==1,=34=5=.1=6 The notes to the general purpose financial statements are an integral part of this statement. -2- EXHIBIT "A" ACCOUNT GROUPS GENERAL GENERAL FIXED LONG-TERM ASSETS DEBT TOTALS (Memorandum Only) JUNE 30,1997 JUNE 30,1996 $ 44,741.96 $ 67,392.81 8,076.00 1,130.58 98,804.64 94,081.19 $ 329,646.17 329,646.17 301,995.22 $ 5,079.14 5,079.14 10,620.02 $ 329,646.17 $ 5,079.14 $ 486,347.91 $ 475,219.82 $ 2,216.68 $ 2,104.06 8,335.46 7,911.24 1,345.16 2,475.27 $ 5,079.14 5,079.14 10,620.02 $ 5,079.14 $ 16,976.44 $ 23,110.59 $ 329,646.17 $ 329,646.17 $ 301,995.22 $ ---=="-3'29~,'6-4'6-.1'7- $ 329,646.17 $ 365.34 98,804.64 11,395.27 94,081.19 40,555.32 44,637.55 $ 469,371.47 $ 452,109.23 5,079.14 $ 486,347.91 $ 475,219.82 -3- COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 3D. 1997 EXHIBIT"B" FUND BALANCE JUNE 30 $ 139,359.96 $ 365.34 $ 139,725.30 $ =====1=5=0=,1=1=4=.=0=1= The notes to the general purpose financial statements are an integral part of this statement. - 4- COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30,1997 EXHIBIT "C" REVENUES State Funds Federal Funds Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration Business Administration Maintenance and Operation of Plant Other Support Services Debt Service Total Expenditures Excess of Revenues over (under) Expenditures FUND BALANCE JULY 1, 1996 Inventory for Resale - Net Change in Period GENERAL FUND BUDGET ACTUAL $ 582,467.00 $ 220,159.00 $ 802,626,00 $ 595,397.72 193,771.58 789,169.30 $ 416,508.82 $ 174,697.91 21,962.14 22,713.00 204,837.60 $ 840,719.47 $ $ -38,093.47 $ 137,933,48 425,513.17 194,568.48 25,008.52 25,171.08 122,962.67 5,540,88 798,764.80 -9,595.50 144,232.01 4,723.45 SPEC~LREVENUEFUND BUDGET ACTUAL $ 161,465.88 $ 160,555.00 148,931.00 163,052.16 5,900.00 $ 316,296.88 $ 323,607.16 $ 20,000.00 $ 20,855.61 159,051.75 80,321,33 7,278.00 42,960.92 674.00 6,010.88 157,592.53 82,959,86 9,014.20 42,006.35 620,98 5,087.13 10,987.16 $ 316,296.88 $ 329,123,82 $ 0.00 $ -5,516.66 11,049.95 5,882.00 FUND BALANCE JUNE 30,1997 $ 99,840.01 $ 139,359.96 $ 11,049.95 $=====36=5~,3=4 The notes to the general purpose financial statements are an integral part of this statement. -5- THIS PAGE LErr BLANK COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 EXHIBIT"D" Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Coastal Plains Regional Educational Service Agency (Agency) was established pursuant to the Official Code ofGeorgia Annotated Sections 20-2-270 through 20-2-274 for the purposes ofproviding 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 of Education; 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. 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. For financial reporting purposes, the Agency is considered to be an organizational unit of the State, and therefore a part ofthe primary government ofthe State of Georgia. Inclusion in the State's financial reporting entity is based on application of criteria defined in Section 2100 of the Governmental Accounting Standards Board Codification of Governmental and Financial Reporting Standards which indicates that the Agency does not have legal separate standing. 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. 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 of the Agency, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the 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: -7- COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1997 EXHIBIT"D" Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 received primarily 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 FUNDS - the funds used tc account for assets held in a fiduciary capacity for other individuals. ACCOUNT GROUPS GENERAL FIXED ASSETS ACCOUNT GROUP - A financial reporting device used to account for all general fixed assets acquired or constructed for use by the Agency. Land and buildings used in the operation of the Agency are owned by the Lowndes County Board of Education. GENERAL LONG-TERM DEBT ACCOUNT GROUP - A fmancial reporting device used to account for material capital lease obligations. BASIS OF ACCOUNTING The accounting and fmancial 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. 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: -8- COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 EXlllBIT "D" Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe 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 departure from the above definitions is the accounting treatment afforded the final two payments on certain employees contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1997, a substantial number of personnel of the Agency were employed for a one hundred and ninety day period beginning in late August 1996 and ending in early June 1997. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1996 and ending in August 1997. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the Agency in the same twelve months. As of June 30, 1997, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 1997, had not been made. Payments for these two months were made and recorded as expenditures by the Agency subsequent to June 30, 1997. Also, the State's portion of the compensation paid in July and August 1997 was received and recorded as revenue in the fiscal year subsequent to June 30, 1997. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1996, were recorded in the year ended June 30, 1997. 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. RESTATEMENT OF PRIOR YEAR FUND BALANCE In prior years, the Agency's Equipment Repair Fund was reported as a Special Revenue Fund. The Equipment Repair Fund had a balance of$94,081.19 at June 30,1996. For fiscal year 1997, this fund has been reported as a part of the General Fund. The fund balance at July 1, 1996, has been restated as appropriate. BUDGET The Coastal Plains Regional Educational Service Agency's budget is a complete fmancial 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 in accordance with generally accepted accounting principles. - 9- COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1997 EXIllBIT"D" Note 1: SUMMARY 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 of general circulation in 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 fmal budget. This final budget is then submitted, in accordance with provisions ofthe 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 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 on Federal, State or other grants 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 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. - 10- COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 EXlllBIT "D" Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES It is the 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 of the minimum lease 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. 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 individual funds for the current portion of this obligation as this amount is deemed immaterial to the general purpose financial statements. However, the dollar value of accumulated compensated absences at June 30, which will be payable from future resources is material to the general purpose fmancial 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. 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, 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. - 11 - COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 EXHIBIT"D" Note 2: DEPOSITS COLLATERALIZAnON OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofthe 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: (l) 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 ofthe 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. CATEGORIZAnON OF DEPOSITS At June 30, 1997, the bank balances were $106,201.71. The bank balances were entirely covered by Federal depository insurance. - 12 - COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 EXIllBIT "D" Note 3: GENERAL FIXED ASSETS The following is a swnmary of changes in the General Fixed Assets Account Group during the fiscal year: Balance July 1, 1996 Additions Deductions Balance June 30, 1997 Equipment $ 301,995.22 41,899.03 14,248.08 $ 329,646.17 Note 4: 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; 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-insure for all losses related to natural disaster. The Agency has not experienced any losses related to this risk in the past three years. The Agency is self-insured with regard to unemployment compensation claims. The Agency accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount ofthat 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, 1997: Equipment General Fixed Assets $ 16,622.64 - 13- COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 EXHIBIT"D" Note 5: GENERAL LONG-TERM DEBT The changes in General Long-Term Debt during the fiscal year ended June 30, 1997, were as follows: Balance July 1, 1996 Deductions Payments Capital Leases $ 10,620.02 5.540.88 Balance June 30, 1997 $ 5,079.14 At June 30, 1997, payments due, by fiscal year which includes principal and interest for these items are as follows: Fiscal Year Ended June 30 Capital Leases 1998 $ 5,079.14 Note 6: ON-BEHALF PAYMENTS The Agency has recognized revenues and expenditures in the amount of $13,503.72 for health insurance contributions paid on the Agency's behalfby the following State Agency. Georgia Department of Education Paid to the State Merit System of Personnel Administration For Health Insurance of Non-Certified Personnel In the amount of $13,503.72 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 of the Coastal Plains Regional 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 - 14- COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 EXHIBIT "D" 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 defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone fmancial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. 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 of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: Fiscal Year Percentage Contributed Contribution 1997 1996 1995 100% 100% 100% $ 86,790.13 $ 83,025.94 $ 75,253.17 - 15 - COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY COMBINING BALANCE SHEET SPEC~LREVENUEFUND JUNE 30.1997 EXHIBIT"E" ASSETS Cash and Cash Equivalents FEDERAL PROGRAMS OTHER PROGRAMS TOTALS JUNE 30, 1997 JUNE 30, 1996 $ 365.34 $ 10,552.14 $ 10,917.48 $ ======1=5=,=8=9=7=.=3=0= Total Liabilities and Fund Equity $ 365.34 $ 10,552.14 $ 10,917.48 $_.....1.=5=,=8=9...7......3...0= See notes to the general purpose financial statements. -16 - COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "F" COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 1997 FEDERAL PROGRAMS OTHER PROGRAMS TOTALS YEAR ENDED JUNE 30,1997 JUNE 30,1996 REVENUES State Funds Federal Funds $ 75,347,00 $ 163,052.16 85,208.00 $ 160,555.00 $ 163,052.16 167,644.00 141,813.00 Total Revenues $ 238,399,16 $ 85,208.00 $ 323,607.16 $ 309,457.00 EXPENDITURES Current Instruction $ 20,855.61 Support Services Pupil Services 157,592.53 Improvement of Instructional Services 18,031,74 $ Educational Media Services 9,014.20 General Administration 21,726.47 Business Administration 620,98 Maintenance and Operation of Plant 5,087.13 Other Support Services 10,987.16 $ 64,928.12 20,279,88 20,855,61 $ 157,592.53 82,959.86 9,014,20 42,006,35 620.98 5,087.13 10,987.16 19,604.48 151,545.88 64,177,21 15,357.95 41,270,25 3,996.42 7,745.75 Total Expenditures $ 243,915.82 $ 85,208.00 $ 329,123.82 $ 303,697.94 Excess of Revenues over (under) Expenditures $ -5,516.66 $ 0.00 $ -5,516.66 $ 5,759.06 FUND BALANCE JULY 1 5,882.00 0.00 5,882.00 122.94 FUND BALANCE JUNE 30 $ 365,34 $ 0.00 $ 5,882.00 See notes to the general purpose financial statements. -17- COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUND TYPE - AGENCY FUND YEAR ENDED JUNE 30,1997 EXHIBIT"G" CONFERENCE ACCOUNT ASSETS Cash and Cash Equivalents BALANCE JULY 1,1996 ADDITIONS DEDUCTIONS BALANCE JUNE 3D, 1997 $ 2,475.27 $ 23,913.78 $ 25,043.89 $ 1,345.16 LIABILITIES Funds Held for Others $ 2,475.27 $ 23,913.78 $ 25,043.89 $ ...............1...,.3..4..5....1..6... See notes to the general purpose financial statements. - 18- COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30.1997 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 Flow-Through Innovative Special Education Proposal Georgia Leaming Resources System 1997 Grant Part D - Special Education Personnel Development and Parent Training Georgia Leaming Resources System 1996 Grant 1997 Grant Safe and Drug-Free Schools High Risk Youth Grant Key-Nections Program 1997 Grant Total U. S. Department of Education Health and Human Services, U. S. Department of Through Georgia Department of Human Resources Block Grants for Prevention and Treatment of Substance Abuse 1997 Grant 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 CFDA NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD * 84.027 $ 126,578.00 $ 126,578.00 84.029 84.029 4,587.00 5,882.00 4,221.66 84.186 $ 20,900.00 152,065.00 $ 20,900.00 157,581.66 * 93.959 $ 10,987.16 $ 10,987.16 $ 0.00 $ 5,513.27 Total Federal Financial Assistance $ 163,052.16 $======1=7=4=,0=8=2=.0=9= * This program has been defined as a major program on a statewide basis in accordance with OMB Circular A-133. Internal control and compliance testing for this program has been conducted at other organizational units of the State of Georgia. The Agency did not provide Federal Assistance to any subrecipient. See notes to the general purpose financial statements. - 19 - COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1997 SCHEDULE "2" AGENCY/FUNDING GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND GRANTS Education, Georgia Department of Other State Programs Georgia Learning Resources System Health Insurance $ Regional Educational Service Agency Supervision and Assessment of Student and Beginning Teachers and Performance- Based Certification $ 13,503.72 581,894.00 75,347.00 $ 85,208.00 TOTAL 75,347.00 13,503.72 581,894.00 85,208.00 $ 595,397.72 $ ===1=60::1:,5=5=5=:.0=0 $ =====7=5=5,=9~52=.=72= See notes to the general purpose financial statements. - 20 - COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 1997 SCHEDULE "3" PERSONNEL ALDERMAN,RICHARD A BARNES,SANDRA D CONRAD,DELTHIA CONRAD,DELTHIA CRAGO,SUSAN CRAGO,SUSAN DEMOn,JUDITH A DEMOn,JUDITH A DENNIS,TAMARA T DENNIS,TAMARA T FIVEASH,GREGORY N GOLDEN,M GAYLE GRIFFIN,MARILYN B MCSWAIN,BARBARA P MOORE,CARY MOORE,WILLIAM C II NAFE SHIRLEY J PICKENS,CAROL K PICKENS,CAROL K PlnS,L ALLEN ROBINSON,JANE STALVEY,NAN T TAYLOR,E LYNN TERRELL,AMOS C THORNTON,MARY LOU THORNTON,MARY LOU WETHERINGTON,ROBERTA A WILLlAMS,DANIEL W Accruals June 30, 1996 June 30, 1997 PROGRAM INTERNAL SERVICES FUND GENERAL ADMINISTRATION SUPP SRVS - IMPROV INSTR & ED MED SRVS SPECIAL REVENUE FUND - OTHER PROGRAMS SUPP SRVS - IMPROV INSTR & ED MED SRVS SPECIAL REVENUE FUND - OTHER PROGRAMS SUPP SRVS - IMPROV INSTR & ED MED SRVS GENERAL ADMINISTRATION SUPP SRVS - IMPROV INSTR & ED MED SRVS SUPPORT SERVICES - BUSINESS INTERNAL SERVICES FUND SUPP SRVS - IMPROV INSTR & ED MED SRVS SUPP SRVS - IMPROV INSTR & ED MED SRVS GEORGIA LEARNING RESOURCES SYSTEM FUND DIRECTOR INTERNAL SERVICES FUND SUPP SRVS - IMPROV INSTR & ED MED SRVS SUPP SRVS - IMPROV INSTR & ED MED SRVS SPECIAL REVENUE FUND - OTHER PROGRAMS INTERNAL SERVICES FUND GEORGIA LEARNING RESOURCES SYSTEM FUND SPECIAL REVENUE FUND - OTHER PROGRAMS GEORGIA LEARNING RESOURCES SYSTEM FUND INTERNAL SERVICES FUND SUPP SRVS - IMPROV INSTR & ED MED SRVS SPECIAL REVENUE FUND ~ OTHER PROGRAMS SUPP SRVS - IMPROV INSTR & ED MED SRVS INTERNAL SERVICES FUND SALARIES TRAVEL $ 13,894,74 17,231,12 22,934.11 $ 16,291.68 49,588,54 18,962.04 19,163.50 20,471.04 49,838.50 59,265,60 54,514.20 76,609.32 13,785.64 43,666.32 49,296.90 27,633,38 13,331.04 15,429.00 65,728.56 5,877,14 27,729.31 49,296.90 4,347.00 1,826.71 1,805.25 1,272.29 79.55 5.55 3,032.96 1,249.86 3,300.49 2,424.79 2,671.11 652.11 3,275.61 1,877.53 233.52 2,266.26 $ 734,885.58 $ 25,973.59 -7,911.24 8,335.46 $ 735.309.80 $ 25,973.59 See notes to the general purpose financial statements. - 21 - SECTION II AUDlTEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS COASTAL PLAINS REGIONAL EDUCATIONAL SERVICE AGENCY AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS 8864-93-02 8864-93-03 Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented