Audit report, Heart of Georgia School Systems Regional Educational Service Agency, Eastman, Georgia, year ended June 30, 1994

GA
ABOO oRl
E:J...Co l H4 \ ~\ 3--9L{
STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET ATLANTA. GEORGIA 30334

AUDIT REPORT HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY
EASTMAN, GEORGIA YEAR ENDED JUNE 30, 1994

HEART OF GEORGIA SCHOOL SYSTEMS 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

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

GOVERNMENTAL FUND TYPES

3

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - ACTUAL AND BUDGET

GOVERNMENTAL FUND TYPES

4

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

5

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

14

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

15

SCHEDULES

1 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

16

2 ANALYSIS OF CASH AND CASH EQUIVALENTS

17

3 ACCOUNTS RECEIVABLE

18

SCHEDULE OF REVENUE

4

STATE FUNDS

19

5

LOCAL AND OTHER FUNDS

20

SCHEDULE OF EXPENDITURES BY OBJECT

6

GOVERNMENTAL FUND TYPES

21

7

LOTTERY PROGRAM

22

8 SCHEDULE OF COMPENSATION OF BOARD MEMBERS

23

HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY
- TABLE OF CONTENTS -
SECTION IT 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
SECTIONV FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 22, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board ofEducation
and Director and Members ofthe Heart of Georgia School Systems Regional Educational Service Agency Board ofControl
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 Heart of Georgia School Systems Regional Educational Service Agency, as of and for the year ended June 30, 1994, as listed in the table of contents. These financial statements are the responsibility ofthe Agency's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the provisions of the Office of Management and Budget Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general purpose financial statements, the Agency's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:

94ARL-33

* The general purpose financial statements of the Agency did not contain a General Fixed Assets Account Group to account for equipment owned by the Agency which should be included to conform to generally accepted accounting principles.
* The Agency did not report the deferred compensation plan assets and liabilities within the general purpose financial statements. To conform to generally accepted accounting principles, these amounts should be included in the general purpose financial statements.
The aggregate effects on the general purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements ofthe matters referred to in the preceding paragraph, the general purpose financial statements present fairly, in all material respects, the financial position of the Heart of Georgia School Systems Regional Educational Service Agency as of June 30, 1994, and the results ofits operations for the year then ended, in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements of the Heart of Georgia School Systems Regional Educational Service Agency taken as a whole. The combining statements (Exhibits E and F), the financial schedules (Schedules 1 through 8 which includes the Schedule of Federal Financial Assistance) and the Schedule of Salaries and Travel, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the Heart of Georgia School Systems 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 effects ofthe matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
ZA
Claude L. Vickers State Auditor
CLV:cm 94ARL-33

HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY
- 1-

HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY
COMBINED BALANCE SHEET ALL FUND TYPES JUNE 30 1 1994

EXHIBIT "A"

ASSETS
Cash and Cash Equivalents Accounts Receivable Inventories for Resale

GOVERNMENTAL FUND TYPES

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

TOTALS

SPECIAL

(Memorandum Only)

GENERAL FUND

REVENUE FUND

----------------------------
JUNE 30, 1994 JUNE 30, 1993

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

$ 257,678.80

$ 257,678.80 $ 399,007.75

$ 53,786.24

53,786.24

12,891.14

16,348.58

16,348.58

16,165.33

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

Total Assets

$ 274,027.38
=============

$ 53,786.24
---------===-

$ 327,813.62
=============

$=--4--2=8-,0--6-4-.=22-

LIABILITIES AND FUND EQUITY
---------------------------
LIABILITIES
-----------
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities FUND EQUITY
-----------
Fund Balances Reserved For Continuation of Federal Programs For Inventories For Resale For Sick and Personal Leave
Unreserved Undesignated Total Fund Equity

$ 20,909.64 $ 20,909.64

$ 10,870.05

2,921.00

13,791.05 $ 23,556.58

33,347.92

5,375.00

38,722.92

36,449.67

101. 62

7,849.38

7,951.00

34,131.98

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

$ 44,319.59 $ 37,055.02 $ 81,374.61 $ 94,138.23
------------- ------------- ------------- -------------

$ 16,731.22 $ 16,731.22 $

8,021.80

$ 16,348.58

16,348.58

16,165.33

5,670.00

5,670.00

5,670.00

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

$ 22,018.58 $ 16,731.22 $ 38,749.80 $ 29,857.13

207,689.21

0.00

207,689.21

304,068.86

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

$ 229,707.79 $ 16, 73f. 22 $ 246,439.01 $ 333,925.99
------------- ------------- ------------- -------------

Total Li abil it i es and Fund Equity $ 274,027.38 $ 53,786.24 $ 327,813.62 $ 428,064.22
============= ============= ============= =============

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

HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 1994

EXHIBIT "B"

GENERAL FUND

SPECIAL REVENUE
FUND

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

REVENUES

State Funds Federal Funds Local and Other Funds
Total Revenues
EXPENDITURES

$ 49B,571.3B $ 4B,706.91 $ 547,27B.29 $ 4B9,354.00

3,170.00 474,032.50 477,202.50 612,477.05

214,457.37

214,457.37 236,581.54

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

$ 716,198.75 $ 522,739.41 $ 1,238,938.16 $ 1,338,412.59
------------- ------------- ------------- -------------

Current

Support Services

Pupil Services

$ 77,529.38

$ 77,529.38$ 101,584.64

Improvement of Instructional Services

410,790.91 $ 508,130.08

918,920.99

965,562.54

General Administration

165,647.95

165,647.95 129,436.12

Business Administration

25,444.94

5,899.91

31,344.85

30,140.14

Maintenance and Operation of Plant

42,896.66

42,896.66

50,748.10

Central Support Services

4,088.99

4,088.99

4,782.33

Other Support Services

56,179.57

56,179.57

53,995.29

Capital Outlay

30,000.00

30,000.00

Total Expenditures

$ 812,578.40$ 514,029.99 $1,326,608.39 $1,336,249.16

Excess of Revenues over (under) Expenditures $ -96,379.65 $

FUND BALANCE JULY 1

325,904.19

8,709.42 $ -87,670.23 $ 2,163.43

8,021.80

333,925.99

331,774.94

Inventory For Resale July 1 June 30

-16,165.33 16,348.58

-16,165.33 16,348.58

-16,177.71 16,165.33

FUND BALANCE JUNE 30

$ 229,707.79 $ 16,731.22 $ 246,439.01 $ 333,925.99
============= ============= ============= =============

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

HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ACTUAL AND BUDGET - GOVERNMENTAL FUND TYPES
YEAR ENDED JUNE 30, 1994

EXHIBIT "C"

REVENUES
--------
State Funds Federal Funds Local and Other Funds
Total Revenues

ACTUAL

ACTUAL

VARIANCE

PER

PER

FAVORABLE

EXHIBIT 811 11 ADJUSTMENTS BUDGET BASIS

BUDGET

(UNFAVORABLE)

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

$ 547,278.29

$ 547,278.29 $ 499,391.00 $ 47,887.29

477,202.50

477,202.50 231,020.00 246,182.5-0

214,457.37 $ 12,645.77 227,103.14 194,860.00 32,243.14

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

$1,238,938.16$ 12,645.77 $1,251,583.93 $ 925,271.00 $ 326,312.93

EXPENDITURES

Current

Support Services

Pupil Services

$ 77,529.38

l111>rovement of Instructional Services

918,920.99

General Adninistration

165,647.95

Business Adninistration

31,344.85

Maintenance and Operation of Plant

42,896.66

Central Support Services

4,088.99

Other Support Services

56,179.57 $

Capital Outlay

30,000.00

Total Expenditures

$1,326,608.39$

$ 77,529.38$ 131,595.00 $ 54,065.62

918,920.99 561,408.00 -357,512.99

165,647.95 137,782.00 -27,865.95

31,344.85 41,184.00

9,839.15

42,896.66

69,400.00

26,503.34

4,088.99

6,500.00

2,411.01

12,645.77

68,825.34

71,985.00

3,159.66

30,000.00

-30,000.00

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

12,645.77 $1,339,254.16$ 1,019,854.00$ -319,400.16

Excess of Revenues over (under) Expenditures $ -87,670.23 $

0.00 $ -87,670.23 $ -94,583.00 $ 6,912.77

FUND BALANCE JULY 1, 1993

333,925.99 -16,165.33 317,760.66 332,629.46 -14,868.80

ADJUSTMENTS

Prior Year (Net) INVENTORY

-3,813.95

3,813.95

July 1, 1993 June 30, 1994

-16,165.33

16,165.33

0.00

0.00

16,348.58 -16,348.58

0.00

0.00

FUND BALANCE JUNE 30, 1994

$ 246,439.01 $ -16,348.58 $ 230,090.43 $ 234,232.51 $ -4,142.08
============ ======== ========== ============ ============

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

HEART OF GEORGIA SCHOOL SYSTEMS

EXHIBIT "D"

REGIONAL EDUCATIONAL SERVICE AGENCY

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1994

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Heart of Georgia School Systems 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 of members and terms of office are prescribed by the State Board ofEducation; provided, however, that at least one-third of the membership of each Board shall be individuals who hold no other public office, who are not employees of any local unit of administration, and who are not employees of the Georgia Department ofEducation.
With the exception ofthe departures from generally accepted accounting principles disclosed in the following paragraphs, the financial statements of the Agency have been prepared in conformity with generally accepted accounting principles as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles.
The more significant of the Agency's accounting policies are described below.
REPORTING ENTITY
In evaluating how to define the government unit for financial reporting purposes, management has considered the criteria set forth in GASB Codification of Governmental Accounting and Financial Reporting Standards, Section 2100, "Defining the Financial Reporting Entity". Based upon the application of the above criteria, the Heart of Georgia School Systems 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 Heart of Georgia School Systems Regional Educational Service Agency are as follows: Bleckley County, City of Dublin, Dodge County, Laurens County, Montgomery County, Pulaski County, Telfair County, Treutlen County, Wheeler County, and Wilcox County.
FUND ACCOUNTING
The Agency uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a selfbalancing set of accounts.
- 5-

HEART OF GEORGIA SCHOOL SYSTEMS

EXIDBIT "D"

REGIONAL EDUCATIONAL SERVICE AGENCY

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1994

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Agency. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
The general purpose financial statements account for all State, Federal, Local and Other Funds under control
ofthe Agency, in compliance with generally accepted accounting principles applicable to governmental units,
unless otherwise disclosed in these notes. Funds presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all of a regional educational service agency's general activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the Agency except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services traditionally provided by a regional educational service agency.
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. These funds are primarily received from the Georgia Department ofEducation and from the Federal government to accomplish specific objectives and are required to be accounted for separately.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Those revenues considered susceptible to accrual are intergovernmental grants, sales and services and investment income.
Expenditures are generally recognized when the related fund liability is incurred.
- 6-

HEART OF GEORGIA SCHOOL SYSTEMS

EXHIBIT "D"

REGIONAL EDUCATIONAL SERVICE AGENCY

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1994

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUDGET
The Heart of Georgia School Systems Regional Educational Service Agency has a legally authorized nonappropriated budget which is formally approved by the Board at the aggregate level. Budgets are prepared to provide a basis for funding operations and there is no legal prohibition regarding overexpenditure of th~ aggregate budget. The budget process begins when the Agency's administration prepares a tentative aggregated budget for the Board's approval. After approval ofthis tentative budget by the Board, the budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final budget. This final budget is then submitted to the Georgia Department of Education.
The Agency prepares its budget on the modified accrual basis, which is the same basis on which it presents its financial statements.
The budget comparison on Exhibit "C" presents actual and budget data for all governmental funds on a combined basis. To facilitate comparison with the budget, the following adjustments have been made to actual revenues, expenditures and fund balance as reflected on Exhibit "B":
(I) Inventories have been eliminated from fund balance and
(2) Reclassification of revenues and expenditures on a basis consistent with the budget.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits (including certificates of deposit and N.O.W. accounts) in authorized financial institutions. Georgia Laws authorize the Agency to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
RECEIVABLES
Receivables consist of grant reimbursements due from Federal and 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.

- 7-

HEART OF GEORGIA SCHOOL SYSTEMS

EXIDBIT "D"

REGIONAL EDUCATIONAL SERVICE AGENCY

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1994

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVENTORIES
GOODS FOR RESALE Inventories are reported on the Combined Balance Sheet at cost. 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 offund balance which indicates that it does not constitute "available spendable resources" even though it is a component of net current assets.
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.
Additionally, the dollar value of accumulated compensated absences at June 30, which will be payable from future resources has not been recorded in the General Long-Term Debt Account Group as this liability is also deemed to be immaterial to the fair presentation of these financial statements.
RESERVED FUND BALANCES
Reserved fund balances include $5,670.00 in unexpended funds received in prior years from the Georgia Department ofEducation for sick and personal leave to be paid to substitute personnel. These funds will be used for the original purpose until exhausted.
INTERFUND TRANSACTIONS
The Agency has the following type ofinterfund transactions:
Reimbursements ofexpenditures initially made from a fund that are prop~rly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate :financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
- 8-

HEART OF GEORGIA SCHOOL SYSTEMS

EXHIBIT "D"

REGIONAL EDUCATIONAL SERVICE AGENCY

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1994

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 ofmoney which has not been secured by surety bond, by guarantee ofinsurance, or by collateral in an amount of not less than 110 percent of the public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State ofGeorgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates ofindebtedness or other direct obligations of the United States or ofthe State of Georgia,
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations ofthe counties or municipalities of the State of Georgia,
(5) Bonds ofany public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates ofindebtedness, or other obligations ofa subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central.Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 1994, the bank balances were $457,506.87. The amounts of the total bank balances are classified into three categories of credit risk:
Category I - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Agency or by the Agency's agent in the Agency's name.
- 9-

HEART OF GEORGIA SCHOOL SYSTEMS

EXHIBIT "D"

REGIONAL EDUCATIONAL SERVICE AGENCY

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1994

Note 2: DEPOSITS

Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Agency's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Agency's name.)

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

Risk Categozy

Bank Balance

1

$ 219,690.88

2

237,815.99

3

0.00

Total

$ 457,506.87

Note 3: 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 4: DEFERRED COMPENSATION PLAN

The Agency offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all Agency employees, permits them to defer a portion oftheir salary until future years. Participation in the plan is optional. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency.

All amounts ofcompensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property or rights are (until paid or made available to the employee or other beneficiary) solely the property and rights of the Agency subject only to the claims of the Agency's general creditors. Participants' rights under the plan are equal to those of general creditors ofthe Agency in an amount equal to the fair market value ofthe deferred account for each participant.

The Agency has designated an independent plan administrator to operate and maintain the plan. The assets and liabilities of the plan are not reflected in these financial statements. To conform to generally accepted accounting principles, these amounts should be recorded in the general purpose financial statements.

- 10 -

HEART OF GEORGIA SCHOOL SYSTEMS

EXHIBIT "D"

REGIONAL EDUCATIONAL SERVICE AGENCY

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1994

Note 5: ACCUMULATED EMPLOYEES' LEAVE
The Agency's administrative staff and certain other full-time employees earn one and one-quarter days per month of annual leave. Annual leave may be accumulated to a maximum of forty-five days, and an amount based on unused leave, up to 15 days, is paid to employees, at their current rate of pay, upon retirement or termination of employment. See Note 1 - Compensated Absences
Note 6: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by Agency's are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer public employee retirement system (PERS).
TRS provides service retirement, disability retirement and survivors benefits for its members. A member is eligible for service retirement after 30 years ofcreditable 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 ofyears of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution ofthe member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement benefits also include death and disability benefits. A disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service retirement allowance or a disability retirement allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of 10 years of service) and compensation up to the time of disability or death.
Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting 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, 1994, was $607,343.05 total payroll was $625,625.95.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Agency who are covered by TRS are required to contribute 6% of their gross earnings to TRS. The Agency makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees as advised by their independent actuary. For fiscal year 1994 that rate for employer contributions was 11.81%. The interest rate assumption (rate of return on investments) was 7.50%.
- 11 -

HEART OF GEORGIA SCHOOL SYSTEMS

EXIIlBIT "D"

REGIONAL EDUCATIONAL SERVICE AGENCY

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1994

Note 6: RETIREMENT PLANS

Total contributions made during fiscal year 1994 amounted to $108,167.77 ofwhich $71,727.17 was made by the Agency and $36,440.60 was made by employees. These contributions represented 11.81% (Agency) and 6% (employees) of covered payroll.

TRS FUNDING STATUS AND PROGRESS The amount of the total pension benefit obligation is based on a standardized measurement established by Statement No. 5 ofthe Governmental Accounting Standards Board (GASB) that, with some exceptions, must be used by a PERS. The standardized measurement is the actuarial present value of credited projected benefits. This valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date, and is adjusted for the effects of projected sa1my increases. A standardized measure ofthe pension benefit obligation was adopted by the GASB to enable readers of PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among other PERS and among other employers.

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

Total pension benefit obligation

$13,912,014,000.00

Net assets available for benefits, at cost

12,821,722,000.00

Unfunded pension benefit obligation

$ 1,090 292,000.00

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

Total contributions from all employers to TRS for fiscal year ended June 30, 1994 were $521,550,000.00. The Agency's contribution for the year ended June 30, 1994 of $71,727.17 was actuarially determined and represented .0138% of total contributions made by all participating employers.

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

Note 7: SURETY BONDS

Dr. Benny B. Wade, Director through June 30, 1994, was bonded in the amount of$100,000.00 with the United States Fidelity and Guaranty Company, Baltimore, Maryland, their Bond No. 02-0170-01599-79-0.

- 12 -

HEART OF GEORGIA SCHOOL SYSTEMS

EXHIBIT D 11 11

REGIONAL EDUCATIONAL SERVICE AGENCY

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1994

Note 7: SURETY BONDS
The Director, Ms. JuneD. Bradfield, effective July 1, 1994, is bonded in the amount of$100,000.00 with the United States Fidelity and Guaranty Company, Baltimore, Maryland, their Bond No. 02-0170-10877-94-9, on which premium was paid through July 12, 1995.

- 13 -

HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY
COMBINING BALANCE SHEET SPECIAL REVENUE FUND
JUNE 30. 1994

EXHIBIT "E"

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets

ACQUIRED

DRUG-FREE

IMMUNODEFICIENCY SCHOOLS AND JOB TRAINING

TOTALS

LOTTERY SYNDROME (AIDS) C01t4UNITIES PARTNERSHIP ----------------------------

PROGRAM

ACTIVITY

ACT

ACT

JUNE 30, 1994 JUNE 30, 1993

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

$ 14,536.79$ 17,693.46$ 32,230.25$ 44,766.95

$ 48,706.91 $

4,432.98

646.35

53,786.24

12,891.14

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

$ 48,706.91 $

4,432.98$ 14,536.79$ 18,339.81 $ 86,016.49 $ 57,658.09

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

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft

$ 48,706.91 $

Accounts Payable

Salaries Payable

Expired Grant Balances Payabl 7

Total Liabilities

$ 48,706.91 $

FUND EQUITY

Fund Balances

Reserved

For Continuation of Federal

Programs

Unreserved

Undesignated

$

0.00 $

Total Fund Equity

$

0.00 $

4,432.98 $

1,462.02 $ 5,375.00 7,699.77

$ 1,458.98
149.61

53,139.89 2,921.00$ 5,375.00 7,849.38

10,314.93 5,189.38 34,131.98

4,432.98$ 14,536.79$ 1,608.59 $ 69,285.27 $ 49,636.29

0.00 $ 0.00 $

$ 16,731.22 $

0.00

0.00

16,731.22 $ 0.00

8,021.80 0.00

0.00 $ 16,731.22 $ 16,731.22 $ 8,021.80

Total Liabilities and

Fund Equity

$ 48,706.91 $

4,432.98$ 14,536.79 $ 18,339.81 $ 86,016.49 $ 57,658.09

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

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

HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 1994

EXHIBIT "F"

REVENUES

LOTTERY PROGRAM
-----------

ACQUIRED IMMUNODEFICIENCY SYNDROME (AIDS)
ACTIVITY
----------------

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

JOB TRAINING PARTNERSHIP
ACT
------------

TOTALS YEAR ENDED JUNE 30, 1994 JUNE 30, 1993

State Funds Federal Funds Local and Other Funds

$ 4B,706.91 $

$ 48,706.91 7,944.12 $166,950.99 $ 299,137.39 474,032.50$ 615,654.70
1,340.00

Total Revenues

$ 48,706.91 $

7,944.12 $166,950.99 $ 299,137.39 $ 522,739.41 $ 616,994.70

EXPENDITURES

Current Support Services
I""rovement of Instructional Services
Business Aaninistration

$ 48,706.91 $

7,944.12 $161,051.08$ 290,427.97 $ 508,130.08 $ 621,992.58

5,899. 91

5,899.91

4,890.54

Total Expenditures $ 48,706.91 $

7,944.12 $166,950.99 $ 290,427.97 $ 514,029.99 $ 626,883.12

Excess of Revenues over (under)

Expenditures

$

FUND BALANCE JULY l

0.00 $ 0.00

0.00 $ 0.00

0.00 $ 0.00

8,709.42 $ 8,021.80

8,709.42 $ 8,021.80

-9,888.42 17,910.22

FUND BALANCE JUNE 30

$

0.00 $

0.00 $

0.00 $ 16,731.22 $ 16,731.22 $ 8,021.80

=========== ============== -----. ---- ============ ============= ============

See notes to the general purpose financial statements. - 15 -

HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
YEAR ENDED JUNE 30. 1994

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

AWARDS
IN PERIOD

FEDERAL FUNDS RECEIVED IN PERIOD (NET OF REFUNDS)

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Education, U. S. Department of Through Georgia Department of Education Drug-Free Schools and Cam1.1nities Act 1992 Grant 1993 Grant 1993 Carry-Over 1994 Grant

B4.186 84.186 B4.186 $ 84.186

$
34,129.00 171,818.00

-2,242.16
-34,131.98 34,129.00$ 140,521.76

34,129.00$ 132,821.99

34,129.00 132,821.99

Total U. S. Department of Education

$ 205,947.00$ 138,276.62 $ 166,950.99 $ 166,950.99

Health and Human Services, U.S. Department of Through Georgia Department of Education Acquired Imrunodeficiency Syndrane (AIDS) Activity 1992 AIDS Health Education 1993 AIDS Health Education 1994 AIDS Health Education Cooperative Agreements to Support School Health Education to Prevent the Spread of Acquired Imrunodeficiency Syndrane (AIDS) Georgia School Health Education Profiles 1994 Contract

93.118 93.118 93.118 $
93.938

$ 6,500.00
3,170.00

-935.49 3,647.47 $ 3,170.00

3,511.14 $ 4,432.98
3,170.00

3,511.14 4,432.98
(1)

Total U.S. Department of Health and Hinan Services

$ 9,670,00 $ 5,881.98$ 11,114.12 $ 7,944.12

Labor, U.S. Department of Through Georgia Department of Education Job Training Partnership Act 22-2-15-50-766 Through Georgia Department of Technical and Adult Education Job Training Partnership Act 22-3-15-50-796 Through Heart of Georgia Regional Development Center Job Training Partnership Act 22-1-12-35-995/22-1-12-43-993 22-2-12-43-343/22-2-12-35-335 22-2-12-43-433/22-22-12-44-444 22-2-20-33-110 22-3-16-42-121 22-3-20-33-210/22-3-20-30-310
Total U.S. Department of Labor

17.250

$

586.59

17.250 $ 24,925.00

24,536.87 $ 24,713.86$ 24,713.86

17.250

-234.30

12,727.02

17.250

24,022.98

16,103.10

9,768.48

17.250

10,631.66

7,829.25

7,829.25

17.250

66,871.00 159,662.01 158,685.44 158,685.44

17.250 117,974.00

65,276.65

65,127.04

65,127.04

17.250 219,361.00

26,913.00

26,913.00

11,576.88

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

$ 429,131.00 $ 311,629.76 $ 299,137.39 $ 290,427.97
------------- ------------- ------------- -------------

Total Federal Financial Assistance

$ 644,748.00$ 455,788.36 $ 477,202.50$ 465,323.08
========= =========== ============ =============

The Board had no major programs as defined by the Single Audit Act of 1984. (1) Expenditures on this program were not maintained by fund source.

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

HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY ANALYSIS OF CASH AND CASH EQUIVALENTS
JUNE 30, 1994

SCHEDULE "2"

NONINTEREST BEARING ACCOUNTS
Bank of Eastman, Eastman, Georgia
INTEREST BEARING ACCOUNTS
Bank of Eastman, Eastman, Georgia
Certificates of Deposit No. 18921 (4.00%) No. 18922 (4.00%) No. 18923 (4.00%) No. 18924 (4.00%)
N.O.W. Account (2.63%)
Citizens Bank and Trust, Eastman, Georgia
Certificates of Deposit No. 504 (3.75%) No. 505 (3.75%) No. 506 (3.75%) No. 507 (3.75%)

$ 17,693.46

$ 25,000.00 25,000.00 25,000.00 25,000.00 49,075.70

149,075.70

$ 10,000.00 10,000.00 25,000.00 25,000.00

70,000.00

$ 236,769.16
=============

See notes to the general purpose financial statements. - 17 -

HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY
ACCOUNTS RECEIVABLE JUNE 30 1 1994
Education, Georgia Department of Lottery Program Education Technology Center Federal Program Acquired Immunodeficiency Syndrome (AIDS) Activity
Heart of Georgia Regional Development Center Federal Programs Job Training Partnership Act
Technical and Adult Education, Georgia Department of Federal Programs Job Training Partnership Act

SCHEDULE "3"
GOVERNMENTAL FUND TYPE SPECIAL REVENUE FUND
$ 48,706.91 4,432.98
469.36
176.99
$ 53,786.24
=============

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

HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY
SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1994

SCHEDULE "4"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Other State Programs Regional Educational Service Agencies Staff Development Sex Education Grant Supervision and Assessment of Student and Beginning Teachers and Performance-Based Certification Lottery Program Education Technology Center

GOVERNMENTAL FUND TYPES

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

$ 379,008.00 30,898.38

$ 379,008.00 30,898.38

88,665.00
$

48,706.91

88,665.00 48,706.91

$ 498,571.38 $ 48,706.91 $ 547,278.29
============= ============= =============

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

HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF LOCAL AND OTHER REVENUE
YEAR ENDED JUNE 30, 1994
Other Author's Day Activities Interest Earned Participation by Boards of Education Bleckley County Dodge County Dublin, City of Laurens County Montgomery County Pulaski County Telfair County Treutlen County Wheeler County Wilcox County Registration Fees Rents Sales and Services Audio - Visual Repairs Less: Purchases For Resale Business Machine Repairs Less: Purchases For Resale Computer Repairs Less: Purchases For Resale Office Supplies Photocopying Shared Services Drug-Free Schools Awareness Program - Local Pulaski County Board of Education Psychological Services Boards of Education Laurens County Montgomery County Pulaski County Treutlen County Wheeler County Other
See notes to the general purpose financial statements.
- 20 -

SCHEDULE "5"
GOVERNMENTAL FUND TYPE
GENERAL FUND
$ 5,911.09 ll,535.B7
8,634.00 14,004.00 16,103.00 19,636.00 4,884.00 7,013.00 9,273.00 5,409.00 4,148.00 5,659.00 14,973.17 2,514.00
5,878.77 -5,245.09 4,124.95 -1,717.67 12,285.93 -5,683.01 3,869.42
547.31
4,600.00
8,084.14 3,515.66 10,201.81 26,200.93 17,467.29
629.80
$ 214,457.37

HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF EXPENDITURES BY OBJECT
GOVERNMENTAL FUND TYPES
YEAR ENDED JUNE 30. 1994

SCHEDULE 611 11

EXPENDITURES
------------
Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical Services Compensation of Board Members Water, Sewer and Cleaning Services Repair and Maintenance Services Rents Insurance Communications Other Purchased Services Supplies Energy Books, Textbooks and Periodicals Dues and Fees Other Expenditures
Nonoperating Costs Building and Building Improvements Equipment
Total Expenditures

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

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

$ 454,405.09 $ 171,220.86 $ 625,625.95

125,931.17

45,370.61

171,301.78

22,239.86

6,302.71

28,542.57

34,646.89

58,161.25

92,808.14

2,450.00

2,450.00

438.00

438.00

8,008.24

8,008.24

10,793.08

7,309.00

18,102.08

695.50

695.50

8,009.24

7,994.73

16,003.97

3,760.00

3,760.00

57,867.81

22,023.92

79,891.73

13,519.37

13,519.37

14,447.21

14,447.21

2,575.00

2,575.00

1,914.06

142,355.18

144,269.24

30,000.00

30,000.00

20,877.88

53,291.73

74,169.61

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

$ 812,578.40$ 514,029.99 $1,326,608.39
============= ============= =============

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

HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF EXPENDITURES BY OBJECT
LOTTERY PROGRAM YEAR ENDED JUNE 30. 1994
EXPENDITURES Operating Costs Supplies Nonoperating Costs Equipment
Total Expenditures

SCHEDULE "7"
EDUCATION TECHNOLOGY
CENTER
$ 1,647.69 47,059.22
$ 48,706.91

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

HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF COMPENSATION OF BOARD MEMBERS
YEAR ENDED JUNE 30. 1994
BOARD MEMBER ADDRESS
Mr. Gary M. Walden, Chairman(*) Treutlen County Board of Education 202 Third Street Soperton, Georgia 30457 Dr. Bill Rowe, Vice-Chairman (*) Laurens County Board of Education 207 Shamrock Drive Dublin, Georgia 31040 Mr. Ronny Clark(*) Wheeler County Board of Education P. 0. Box 427 Alamo, Georgia 30411 Mr. Larry Gibbs(*) Wilcox County Board of Education Wilcox County Courthouse Abbeville, Georgia 31001 Mrs. Jackie S. Harper(*) Route 2 Cochran, Georgia 31014 Mr. Frederick Mullis, Jr. (*) P. 0. Box 607 Eastman, Georgia 31023 Mrs. Faye Outlaw(*) 1005 Dogwood Lane McRae, Georgia 31055 Mr. Charles Patterson(*) 117 South Calhoun Street Dublin, Georgia 31021 Dr. Ro Pipes(*) Pulaski County Board of Education P. 0. Box 1138 Hawkinsville, Georgia 31036 Dr. Jim Paul Poole(*) Montgomery County Board of Education P. 0. Box 315 Mount Vernon, Georgia 30445 Mr. Tony Portivent Pulaski County Board of Education P. 0. Box 1138 Hawkinsville, Georgia 31036 Mrs. Ida Mae Rivers(*) P. 0. Box 523 Alamo, Georgia 30411 Mr. Jerry Rogers(*) Telfair County Board of Education P. 0. Box 240 McRae, Georgia 31055 Mr. Don Turknett (*) Bleckley County Board of Education P. 0. Box 516 Cochran, Georgia 31014 Dr. Charles Warnock (*) City of Dublin Board of Education 117 East Jackson Street Dublin, Georgia 31021 Mrs. Charlotte Williams (*) Dodge County Board of Education P. 0. Box 1029 Eastman, Georgia 31023
(*) Denotes Board Members Serving as of June 30, 1994
See notes to the general purpose financial statements; - 23 -

SCHEDULE "8"

$

550.00

650.00

550.00

700.00

$

2,450.00

SECTION II SUMMARY AND SCHEDULE OF SALARIES AND TRAVEL

HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY
SUMMARY OF SALARIES AND TRAVEL YEAR ENDED JUNE 30. 1994

SALARIES

TOTAL PER FINANCIAL
STATEMENTS (ACCRUAL BASIS)

ADJUSTMENTS FOR ACCRUALS

TOTAL PER

---------------------------- SCHEDULE JUNE 30, 1993 JUNE 30, 1994 (CASH BASIS)

GENERAL FUND

Support Services

Pupil Services

$

55,977.96 $ 9,313.81 $ -6,574.66 $ 58,717 .H

Improvement of Instructional Services

230,383.27

21,946.48

-26,773.26

225,556.49

General Administration

104,517.30

104,517.30

Business Administration

19,697.52

19,697.52

Other Support Services

43,829.04

43,829.04

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

Total General Fund

$

454,405.09 $ 31,260.29 $ -33,347.92 $ 452,317.46

SPECIAL REVENUE FUND

.171,220.86

5,189.38

-5,375.00 171,035.24

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

Total Salaries

$

625,625.95 $ 36,449.67 $ -38,722.92 $ 623,352.70

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

TRAVEL

GENERAL FUND

Support Services

Pupil Services

$

Improvement of Instructional Services

General Administration

Business Administration

Other Support Services

Total General Fund

$

SPECIAL REVENUE FUND

2,750.71 $ 14,778.47 3,776.70
153.06 780.92
22,239.86 $
6,302.71

0.00 $
0.00 $ 305.13

$
-233.52

2,750.71 14,778.47 3,543.18
153.06 780.92

-233.52 $ -93.45

22,006.34 6,514.39

Total Travel

$

28,542.57 $

305.13 $

-326.97 $ 28,520.73

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

NAME
BOUTWELL.BETTINA B BRADFIELD.JUNE D BURKE.WILLIAM W CANNON.SHIRLEY EVANS,L C JR EVANS,L C JR FRAISER.PAULA M FRAISER,PAULA M HEMPHILL.JUDYE R INGLEY,THERISA M INGLEY,THERISA M LEWIS.JUNE G LOCKE.MARLYN P LOYD, MARION H MASHBURN.MARLA MELLOR.PHILIP F PITTMAN.SYLVIA SMITH, CHERRIE STANLEY.JOYS STANLEY.JOYS STANLEY.JOYS STOREY.DANIEL EDWARD WADE.BENNY B WADE.BENNY B WADE.BENNY B WILCOX.MILDRED J WILCOX.MILDRED J WILCOX.MILDRED J WYNN.DEBRA T WYNN.DONNA L WYNN.DONNA L

HEART OF GEORGIA SCHOOL SYSTEM R.E.S.A. SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 1994

TITLE CATEGORY

SALARIES AMOUNT

TRAVEL EXPENSE

FEDERAL PROGRAMS

$

SUPP SRVS - IMPROV INSTR & ED MED SRVS

OTHER SUPPORT SERVICES

GENERAL ADMINISTRATION

SUPP SRVS - IMPROV INSTR & ED MED SRVS

SPECIAL REVENUE FUND - FEDERAL

SUPP SRVS - IMPROV INSTR & ED MED SRVS

SPECIAL REVENUE FUND - FEDERAL

SPECIAL REVENUE FUND - FEDERAL

SUPPORT SERVICES - PUPIL SERVICES

SPECIAL REVENUE FUND - FEDERAL

SUPP SRVS - IMPROV INSTR & ED MED SRVS

FEDERAL PROGRAMS

OTHER SUPPORT SERVICES

FEDERAL PROGRAMS

SUPPORT SERVICES - PUPIL SERVICES

FEDERAL PROGRAMS

SUPP SRVS - IMPROV INSTR & ED MED SRVS

SUPPORT SERVICES - INSTRUCTIONAL STAFF

SUPPORT SERVICES - BUSINESS

SPECIAL REVENUE FUND - FEDERAL

SUPP SRVS - IMPROV INSTR & ED MED SRVS

DIRECTOR

GENERAL ADMINISTRATION

SPECIAL REVENUE FUND - FEDERAL

SUPPORT SERVICES - INSTRUCTIONAL STAFF

GENERAL ADMINISTRATION

SPECIAL REVENUE FUND - FEDERAL

GENERAL ADMINISTRATION

SUPP SRVS - IMPROV INSTR & ED MED SRVS

SPECIAL REVENUE FUND - FEDERAL

19,884.00 $ 40,792.10 21,905.04 16,319.52
8,670.99 46,220.62 44,243.92
4,106.52 12,557.76 39,271.96
40,573.92 35,712.00 21,924.00
5,518.00 19,445.15
4,000.00 37,970.50
1,680.00 19,697.52
4,692.60 38,590.72 73,140.30
5,927.60
3,046.40 15,057.48
7,106.74 35,297.34

356. 16 3,709.88
260.40 129. 11 371. 59 2,310.38 3,126.68 149.47
18.90 1,771.30
392. 16 1,835.07
560". 28 520. 52
93.45 979.41
99.96 2,077.17
153.06
3,026.46
3,300.67 53.97
200.28 37.59
75.81 431. 34 2,479.66

TOTALS

$

623,352.70 $ 28,520.73

OED

SECTION ill COMPLIANCE

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 22, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe Heart of Georgia School Systems Regional Educational Service Agency Board ofControl
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Heart of Georgia School Systems Regional Educational Service Agency as of and for the year ended June 30, 1994, and have issued our report thereon dated February 22, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
Compliance with laws, regulations, contracts, and grants applicable to Heart of Georgia School Systems Regional Educational Service Agency is the responsibility ofthe Agency's ~anagement. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of the Agency's compliance with certain provisions of laws, regulations, contracts, and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion.
The results of our tests indicate that, with respect to the items tested, the Heart of Georgia School Systems Regional Educational Service Agency complied, in all material respects, with the provisions referred to in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Agency had not complied, in all material respects, with those provisions.
94CRL-10

This report is intended for the information of management, the Federal cognizant audit agency and other Federal 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:cm 94CRL-10

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 22, 1995

Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe Heart of Georgia School Systems 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 Heart of Georgia School Systems Regional Educational Service Agency as of and for the year ended June 30, 1994, and have issued our report thereon dated February 22, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

We have applied procedures to test the Heart of Georgia School Systems 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 ofFederal Financial Assistance, for the year ended June 30, 1994:

(1) Political Activity

(5) Allowable Costs/Cost Principles

(2) Civil Rights

(6) Audit Follow-Up/Resolution

(3) Cash Management

(7) Administrative Requirements

(4) Federal Financial Reports

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 Agency's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion.

94CRL-40

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that the Heart of Georgia School Systems 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,
d~
Claude L. Vickers State Auditor
CLV:cm 94CRL-40

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 22, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe Heart of Georgia School Systems Regional Educational Service Agency Board of Control

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

Ladies and Gentlemen:

We have audited the general purpose financial statements ofthe Heart of Georgia School Systems Regional Educational Service Agency as of and for the year ended June 30, 1994, and have issued our report thereon dated February 22, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

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

(1) Types of Services Allowed or Unallowed

(3) Applicable Special Tests and Provisions

(2) Eligibility

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

94CRL-120

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Heart ofGeorgia School Systems 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:cm 94CRL-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
February 22, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe Heart of Georgia School Systems Regional Educational Service Agency Board ofControl
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Heart of Georgia School Systems Regional Educational Service Agency as of and for the year ended June 30, 1994, and have issued our report thereon dated February 22, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards, and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
In planning and performing our audit of the general purpose financial statements of the Heart of Georgia School Systems Regional Educational Service Agency for the year ended June 30, 1994, we considered the internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide assurance on the internal control structure.
The management ofthe Heart of Georgia School Systems Regional Educational Service Agency is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use
94ICL-3

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

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

(I) Cash and Cash Equivalents

(6) Employee Compensation

(2) Inventories

(7) General Ledger

(3) Revenue/Receivables/Receipts

(8) General Fixed Assets

(4) Procurement

(5) Expenditures/Liabilities/ Disbursements

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

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:

General Fixed Assets

A material weakness is a reportable condition in which the design or oper~tion of one or more ofthe specific internal control structure elements does not reduce to a relatively low level ihe 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.

94ICL-3

This condition was considered in detennining the nature, timing, and extent of the procedures to be performed in our audit of the Heart of Georgia School Systems Regional Educational Service Agency's financial statements and this report does not affect our report thereon dated February 22, 1995.
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:cm 94ICL-3

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 22, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members of the Heart of Georgia School Systems Regional Educational Service Agency Board ofControl
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 Heart of Georgia School Systems Regional Educational Service Agency as of and for the year ended June 30, 1994, and have issued our report thereon dated February 22, 1995. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of Office of Management and Budget (0MB) Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement and about whether the Heart ofGeorgia School Systems Regional Educational Service Agency complied with laws and regulations, noncompliance with which would be material to a Federal financial assis~ance program.
In planning and performing our audit for the year ended June 30, 1994, we considered the internal control structure in order _to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and to report on the internal control structure in accordance with 0MB 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 February 22, 1995.
94ICL-13

The management ofthe Heart ofGeorgia School Systems 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 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 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

(I) Political Activity (2) Civil Rights (3) Cash Management (4) Federal Financial Reports

(I) Types of Services Allowed or Unallowed
(2) Eligibility
(3) Matching, Level of Effort, and/or Earmarking

(5) Allowable Costs/Cost Principles

(4) Reporting

(6) Audit Follow-Up/Resolution (7) Administrative Requirements

(5) Applicable Special Tests and Provisions
(6) Other Requirements Claims for Advances and Reimbursements

For all of the internal control structure categories listed above, we obtained an understanding of the design

ofrelevant policies and procedures and whether they have been placed in operation, and we assessed control

risk.



During the year ended June 30, 1994, the Heart of Georgia School Systems Regional Educational Service Agency had no major Federal financial assistance programs and expended 62% of its total Federal financial assistance under the following nonmajor Federal financial assistance program:

Job Training Partnership Act

94ICL-13

We performed tests of controls, as required by 0MB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with general requirements and specific requirements as described above, that are applicable to the aforementioned nonmajor Federal financial assistance program. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion.
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,
d--~~
Claude L. Vickers State Auditor
CLV:cm 94ICL-13

SECTIONV FINDINGS AND IMPROPER OR QUESTIONED COSTS
.,.

HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1994
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 8764-93-01
The management of the Heart of Georgia School Systems Regional Educational Service Agency has chosen not to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements of the Agency being incomplete and not in accordance with generally accepted accounting principals. Appropriate action should be taken by the Agency to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of equipment owned by the Agency and should include but may not be limited to date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
Note: The Heart of Georgia School Systems Regional Educational Service Agency was provided an opportunity to include pertinent comments from the Agency's management concerning these audit findings, conclusions and recommendations. The Agency has elected not to provide comments for inclusion in this report.