REVIEW REPORT STATE OF GEORGIA HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY EASTMAN, GEORGIA YEARENDED JUNE 30, 1997
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY
- TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

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

ALL GOVERNMENTAL FUND TYPES

3

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL AND SPECIAL REVENUE FUNDS

4

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

5

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

12

2 SCHEDULE OF STATE REVENUE

13

3 SCHEDULE OF SALARIES AND TRAVEL

14

SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

SECTION III CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
January 20, 1998

Honorable Zell Miller, Governor Members ofthe General Assembly of Georgia Members of the State Board of Education
and Director and Members of the Heart of Georgia School Systems 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 Heart of Georgia School Systems 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 financial statements is the representation of the management of Heart of Georgia School Systems 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 0 bjective 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 matter 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 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 aggregate effects on the financial statements of this variance or omission have not been determined, but are believed to be material.

97ARL-RESA-l

Our review was made for the purpose of expressing limited assurance that there are no material modifications that should be made to the financial statements in order for them to be in conformity with generally accepted accounting principles. The accompanying supplementary information (Schedules 1 through 3) is presented only for supplementary analysis purposes. Such information has been subjected to the inquiries and analytical procedures applied in the review of the fmancial statements and we are not aware of any material modifications which should be made thereto.
Respectfully submitted,
L~
Claude L. Vickers State Auditor
CLV:dt 97ARL-RESA-I

ASSETS Cash and Cash Equivalents Accounts Receivable Inventories for Resale
Total Assets

HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY
COMBINED BALANCE SHEET ALL FUND TYPES JUNE 30,1997

EXHIBIT "A"

GOVERNMENTAL FUNDTYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTALS (Memorandum Only) JUNE30,1997 JUNE 30,1996

$ 286,840,70

$ 286,840.70 $

73,956.83

68,813,14 $ 157,534.05

226,347.19

138,194.31

12,071,99

$ 355,653.84 $ 157,534,05 $ 513,187.89 $ 224,223,13

Total Liabilities and Fund Equity

$ 355,653,84 $ 157,534,05 $ 513,187,89 $ 224,223,13

The notesto 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
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30,1997

EXHIBIT "B"

GENERAL FUND

SPECIAL REVENUE
FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30.1997 JUNE 30.1996

REVENUES

State Funds Federal Funds Other Funds

$ 724.629.48

$ 724.629.48 $ 590,497,86

49,750.00 $ 890,126.99

939,876.99

729.210.12

633.233.37

236.00

633.469.37

431,171.30

Total Revenues

$ 1.407.612.85 $ 890.362.99 $ 2.297.975.84 $ 1.750.879.28

EXPENDITURES

Current Support Services Pupil Services Improvement of Instructional Services General Administration School Administration Business Administration Maintenance and Operation of Plant Central Support Services Other Support Services

$ 140.711.23 $ 347.672,69 $ 488,383.92 $ 464.688.21

532.491.44

223.058.07

755.549.51

645.810.19

273,373.31

106.467.19

379.840,50

291.811.02

84.936.33

84.936.33

112.964.18

57.824.52

57,824,52

47,732.02

79.483.74

79.483.74

85,497.64

37,389.08

37.389.08

2.679.14

64.467.49

135,870.90

200.338.39

116,387.23

Total Expenditures

$ 1,185,740.81 $ 898.005.18 $ 2.083.745.99 $ 1,767.569.63

Excess of Revenues over (under) Expenditures

$ 221.872.04 $

-7.642.19 $ 214.229.85 $ -16.690.35

OTHER FINANCING SOURCES (USES)

Operating Transfers In Operating Transfers Out

$

$

-2,001.89

2.001.89 $

2,001.89 $ -2,001.89

963.50 -963.50

Total Other Financing Sources (Uses)

$

-2.001.89 $

2.001.89 $

0.00 $

0.00

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $

219.870.15 $

-5.640.30 $ 214.229.85 $ -16.690.35

FUND BALANCE JULY 1

68.558.88

6,542.50

75,101.38

91,564.30

Inventory for Resale - Net Change in Period

-12,071.99

-12.071.99

227.43

FUND BALANCE JUNE 30

$ 276.357.04 $

902.20 $ 277,259.24 $ _.....7..5....1..0..1..3..8...

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
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 Support Services Pupil Services Improvement of Instructional Services General Administration School Administration Business Administration Maintenance and Operation of Plant Central Support Services Other Support Services
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES lUSES)
Other Sources Other Uses
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1, 1996
Adjustments Inventories for Resale
Net Change in Period

GENERAL FUND

BUDGET

ACTUAL

$ 652,905.00 $ 724,629.48

156,878.00

49,750.00

316,316.00

633,233.37

$ 1,126,099.00 $ 1,407,612.85

$ 113,100,00 $ 466,584.00 223,064.00

140,711.23 532,491.44 273,373.31

40,644.00 84,532,00 78,801.00 16,000.00

57,824,52 79,483.74 37,389.08 64,467.49

$ 1,022,725.00 $ 1,185,740.81

$ 103,374.00 $ 221,872.04

$

-2,001.89

$

-2,001.89

$ 103,374.00 $ 0.00

219,870.15 68,558.88

-12,071.99

FUND BALANCE JUNE 30,1997

$ 103,374.00 $ 276,357.04

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 793,563.00 $ 890,126.99 236.00
$ 793,563.00 $ 890,362.99

$ 285,840.00 $ 347,672.69

201,857.00

223,058.07

41,700.00

106,467.19

100,269.00

84,936.33

2,952.00

161,245.00

135,870.90

$ 793,863.00 $ 898,005.18

$

-300.00 $ -7,642.19

$

2,001.89

$

2,001.89

$

-300.00 $ -5,640.30

0.00

6,542.50

0.06

$ -299.94 $ ======9=02=.=20=

The notes to the general purpose financial statements 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. 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Heart of Georgia School Systems Regional Educational Service Agency (Agency) was established pursuantto the Official Code ofGeorgiaAnnotated Sections 20-2-270 through 20-2-274 for the purposes of providing sharedservices designed to improvethe effectiveness of educational programs and servicesof local school systems and for providing instructional programs directly to selected public school students in the state.
Eachregional educational service agency is governed by a board. Thenumberof members and terms of office are prescribed by the State BoardofEducation; provided, however, that at least one-third of the membership ofeach 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 GeorgiaDepartment ofEducation.
The membersofthe 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 directorwho 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 primarygovernment of the Stateof Georgia. Inclusion in the State's financial reporting entityis based on application of criteriadefined in Section 2100 of the Governmental Accounting Standards BoardCodification of Governmental and Financial Reporting Standards whichindicates that the Agency does not have legal separate standing.
FUND ACCOUNTING
The Agencyuses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid fmancial management by segregatingtransactions related to certain governmental functions or activities.
A fund is a separate accounting entity with a self-balancing set of accounts.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presentlymaintained by the Agency. To conform to generallyaccepted 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 accountfor all State, Federaland Other funds under control of the Agency, in compliance with generally accepted accounting principles applicable to governmental units,unless otherwise disclosed in these notes. Funds presented in this report are as follows:
- 5-

HEART OF GEORGIA SCHOOL SYSTEMS

EXHIBIT "D"

REGIONAL EDUCATIONAL SERVICE AGENCY

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GOVERNMENTAL FUND TYPES - are used to account for all or most of a regional educational service agency's general activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all fmancial resources of the Agency except those required to be accounted for in anotherfund. Thesetransactions relateto resources obtained and used for services provided by a regional educational service agency.
SPECIAL REVENUE FUND- the fund usedto account for the proceeds of specificrevenue sources that are legallyrestricted to expenditures for specified purposes. These funds are received primarily from the GeorgiaDepartment of Education and fromthe Federal government to accomplish specific objectives and are required to be accounted for separately.
BASIS OF ACCOUNTING
The accounting and financial reportingtreatment applied to a fund is determined by its measurementfocus. 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 fmancing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendableresources.
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 modifiedaccrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., whentheybecome bothmeasurable and available). "Measurable" meansthe amountof the transaction canbe determined and "available" meanscollectible within the currentperiod or soon enoughthereafter to be usedto pay liabilities of the current period. Thoserevenues considered susceptible to accrual are intergovernmental grants, sales and servicesand investment income.
Expenditures are generallyrecognized when the related fund liabilityis incurred.
BUDGET
The Heart of Georgia School Systems Regional Educational Service Agency's budgetis a complete financial plan for the Agency's fiscal year and is basedupon 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 generallyaccepted accounting principles.
- 6-

HEART OF GEORGIA SCHOOL SYSTEMS

EXHIBIT "D"

REGIONAL EDUCATIONAL SERVICE AGENCY

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1997

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 ofgeneralcirculation in the locality. At the next regularmeeting of the Boardafter advertisement, the Boardreceivescomments on the tentative budget, makes revisions as necessary and adoptsa final budget. This final budgetis then submitted, in accordance with provisions of the Quality BasicEducation Act, OCGA Section20-2-167, to the GeorgiaDepartment of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authoritylapses at fiscal year end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorizedfinancial institutions. Georgia Laws authorize the Agencyto deposit its funds in one or more solventbanks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
RECEIVABLES
Receivables consist of grant reimbursements due on Federal, Stateor othergrants 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.
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 Groupas this liability is also deemed to be immaterial to the fair presentation of these financial statements.
RESERVED FUND BALANCES
Reserves represent those portions of fund equity that are legallysegregated for a specific future use.

-7-

HEART OF GEORGIA SCHOOL SYSTEMS

EXHIBIT "D"

REGIONAL EDUCATIONAL SERVICE AGENCY

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE30, 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reserved fund balances include $5,670.00 in unexpended funds received in prior years from the Georgia Department of Education 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 types of interfund transactions:
Reimbursements of expenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Certain reclassifications have been made to the comparative data to conform to the current year classifications.
Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of the securities pledged shall be equal to not less than 110 percent of the public funds being secured after the deduction of the amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
-8-

HEART OF GEORGIA SCHOOL SYSTEMS

EXHIBIT "D"

REGIONAL EDUCATIONAL SERVICE AGENCY

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1997

Note 2: DEPOSITS

(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 of the 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 $308,267.36. The amounts ofthe total bank balances are classified into three categories of credit risk:

Category 1 Category 2 Category 3 -

Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Agency or by the Agency's agent in the Agency's name. Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Agency's name. Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Agency's name.)

The Agency's deposits are classified by risk category at June 30, 1997, as follows:

- 9-

HEART OF GEORGIA SCHOOL SYSTEMS

EXHffiIT "D"

REGIONAL EDUCATIONAL SERVICE AGENCY

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 3: RISK MANAGEMENT
The Agency is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees and natural disaster.
The Agency has obtained commercial insurancefor risk ofloss associatedwith torts and assets. 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. In addition, the Agency has elected to self-insure for errors or omissions, which includes, among other risks, risks for sexual harassment and discrimination. The Agency has not experiencedany losses related to these risks in the past three years.
The Agency participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991 to develop, implement and administer a program of workers' compensation self-insurancefor its member organizations. The Agencypays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the United States Fidelity and GuarantyCompanyto provide coverage for potential losses sustained by the Trust in excess of $250,000.00 loss per occurrence, up to $2,000,000.00.
Note 4: ON-BEHALF PAYMENTS
The Agency has recognized revenues and expenditures in the amount of$25,319.48 for health insurance paid on the Agency's behalf by 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$25,319.48
Note 5: CONTINGENT LIABILITIES
Amounts received or receivableprincipally 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 6: 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 accumulatedto 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
- 10-

HEARTOF GEORGIA SCHOOL SYSTEMS

EXHIBIT "D"

REGIONAL EDUCATIONAL SERVICE AGENCY

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1997

Nore7: RETIREMENTPLANS

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 Systemof Georgia (TRS), which is a cost-sharing multiple employer defmed benefit pension plan. TRS provides service retirement, disability retirement and survivors benefitsfor its members in accordance with Statestatute. The Teachers Retirement System of Georgia issues a separate stand alone financial 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 makesmonthly 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 contributioris for the currentfiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Contribution

1997 1996 1995

100% 100% 100%

$ 105,499.76 $ 93,796.72 $ 78,754.49

- 11 -

HEART OF GEORGIA SCHOOL SYSTEMS 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 Safe and Drug-Free Schools 1997 Grant Goals 2000 State and Local Education Systemic Improvement Grant 1997 Grant
Total U. S. Department of Education
Health and Human Services, U, S, Department of Through Georgia Department of Education AIDS School Health Education Implementation of a Program In Comprehensive Health Education 1997 Contract
Labor, U. S. Department of Through Georgia Department of Labor Job Training Partnership Act 1997 Grants Through Georgia Department of Technical and Adult Education Job Training Partnership Act 1997 Grants Through Middle Flint Regional Development Center Job Training Partnership Act 1997 Grants
Total U. S. Department of Labor

CFDA NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.186 $

74,005,81 $

74,005,81

84,276 $

49,750.00 123,755.81 $

49,750.00 123,755,81

93,938 $

1,960.25 $

1,960.25

* 17.250 $ 236,507.05 $

244,385.24 (1)

* 17.250

43,732.86

43,732.86

* 17.250 $

533,921.02 814,160.93 $

533,921.02 822,039.12

Total Federal Financial Assistance

$ 939,876.99 $=====9~4=7=,7=5=5=.1=8=

* 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.
(1) Expenditures for this program include State and/or Local and Other Funds. Expenditures are not maintained by fund source,
The Board did not provide Federal Assistance to any subrecipient.

See notes to the general purpose financial statements.

- 12 -

HEARTOF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY
SCHEDULE OF STATEREVENUE YEAR ENDED JUNE 30,1997
AGENCYIFUNDING
GRANTS Education, Georgia Department of Other State Programs Health Insurance Regional Educational ServiceAgencies Supervision and Assessment of Student and Beginning Teachersand PerformanceBased Certification
OTHER Education, GeorgiaDepartment of School Improvement Workshop

SCHEDULE "2"

GOVERNMENTAL FUND TYPE
GENERAL FUND

$

25,319.48

612,152.00

85,208.00

1,950.00

724,629.48

See notesto the general purpose financial statements. - 13 -

PERSONNEL
AMERSON,BARBARA J ASBELL,PAUL D BARRETT,JUDY M BLACKSHEAR,NORMAN BOUlWELL,BETTINA B BOUlWELL,BETTINA B BOUlWELL,BETTINA B BRADFIELD,JUNE D BRADFIELD,JUNE D BREWER,WILLIAMJR BROWN,BRAXTON BROWN,LASHONDA BRYANT,RONALD R BURKE,WILLIAM W CANNON,SHIRLEY ELVINE,ANTHONY FRAISER,PAULA M FRAISER,PAULA M GAPCZVNSKI,SELINA H GAPCZVNSKI,SELINA H GARNTO,MARLA M GARNTO,MARLA M GUNDY,KYRA LESHAWN HARRIS,GENEVA HEMPHILL,JUDYE R HEMPHILL,JUDYE R HERRINGTON,B ALANE HICKMAN,TRACY H HOLMES,LEROY A HOWELL,CONNIE A IVEY,PATRICK L JONES,ANN S JONES,ANNS KINCHEN,GLENDA KINCHEN,GLENDA KINCHEN,GLENDA LEWIS,JUNE G LEWIS,JUNE G LOCKE,MARLYN P LOCKE,MARLYN P LOCKE,MARLYN P LOYD,MARION H MCCRANIE,JUDY E MCCRANIE,JUDY E MCDILDA,LORRAINE D O'NEAL,ANTONIO PILCHER,JACQUELINE PITIMAN,SYLVIA ROLAND,L1NDA SHEFFIELD,JOANNE E SMITH,JOHN SAMUEL SMITH,JOHN SAMUEL STANLEY,JOY S STANLEY,JOY S STEPHENS,ERICA STOREY,DANIEL EDWARD SUNDAY,TONYA WEST,CHERYL L WEST,CHERYL L WHIPPLE,DAVID J WILCOX,KADRIA N WILCOX,MILDRED J

HEARTOF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY
SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE30, 1997

SCHEDULE "3"

PROGRAM
SPECIAL REVENUE FUND- OTHER PROGRAMS SPECIAL REVENUE FUND- OTHER PROGRAMS SPECIAL REVENUE FUND- OTHER PROGRAMS MISCELLANEOUS PROGRAMS SPECIAL REVENUE FUND- OTHER PROGRAMS SPECIAL REVENUE FUND- S,E.D, MISCELLANEOUS PROGRAMS DIRECTOR GENERAL ADMINISTRATION SPECIAL REVENUE FUND- OTHER PROGRAMS MISCELLANEOUS PROGRAMS MISCELLANEOUS PROGRAMS SPECIAL REVENUE FUND- OTHER PROGRAMS
SUPPORTSER~CES-CENTRAL
GENERAL ADMINISTRATION SPECIAL REVENUE FUND- OTHER PROGRAMS SUPPORT SER~CES -INSTRUCTIONAL STAFF SPECIAL REVENUE FUND- OTHER PROGRAMS SPECIAL REVENUE FUND- OTHER PROGRAMS SPECIAL REVENUE FUND- S.E.D. SPECIAL REVENUE FUND- OTHER PROGRAMS MISCELLANEOUS PROGRAMS SPECIAL REVENUE FUND- OTHER PROGRAMS SPECIAL REVENUE FUND- OTHER PROGRAMS GENERAL ADMINISTRATION SPECIAL REVENUE FUND~ OTHER PROGRAMS SUPPORT SERVICES - PUPILSERVICES SUPPORT SERVICES - PUPILSERVICES SPECIAL REVENUE FUND- OTHER PROGRAMS SUPPORT SERVICES -INSTRUCTIONAL STAFF SPECIAL REVENUE FUND- OTHER PROGRAMS SPECIAL REVENUE FUND- OTHER PROGRAMS SPECIAL REVENUE FUND- S,E,D. SPECIAL REVENUE FUND- OTHER PROGRAMS SPECIAL REVENUE FUND- S.E,D. MISCELLANEOUS PROGRAMS SUPPORT SERVICES - INSTRUCTIONAL STAFF SPECIAL REVENUE FUND- OTHER PROGRAMS SPECIAL REVENUE FUND- OTHER PROGRAMS SPECIAL REVENUE FUND- S,E,D, MISCELLANEOUS PROGRAMS SUPPORT SERVICES - CENTRAL SPECIAL REVENUE FUND- OTHER PROGRAMS SPECIAL REVENUE FUND- S,E,D, SUPPORT SERVICES PUPILSERVICES MISCELLANEOUS PROGRAMS SPECIAL REVENUE FUND- OTHER PROGRAMS SPECIAL REVENUE FUND- S.E.D, SPECIAL REVENUE FUND- OTHER PROGRAMS GENERAL ADMINISTRATION SUPPORT SERVICES - BUSINESS SPECIAL REVENUE FUND - S,E,D, SUPPORT SERVICES - BUSINESS SPECIAL REVENUE FUND- OTHER PROGRAMS SPECIAL REVENUE FUND- OTHER PROGRAMS SUPPORT SERVICES -INSTRUCTIONAL STAFF SPECIAL REVENUE FUND- OTHER PROGRAMS SUPPORT SERVICES - INSTRUCTIONAL STAFF SPECIAL REVENUE FUND- OTHER PROGRAMS SPECIAL REVENUE FUND- OTHER PROGRAMS MISCELLANEOUS PROGRAMS GENERAL ADMINISTRATION
-14 -

SALARIES

$

2,850,00

17.00

18,333,36 $

147,25

16,409,60

3,515,40

3,511.00

74,314,44

285.26 270.75 232.75 40,033.36 12,921.60 19,253.52 153,19 43,081.90 4,636,68 16,913.79
67.36 20,647.00
1,8n.OO 12,720.00
617.31 4,012.45 10,803.11 29,057.56 2,420.26
174,97 45,095.88 27,978,80 33,205,51
2,410,49 13,751.55
8,356,05 1,318.45 47,027,49

20,964,74 16,438,06 4,741,20 12,932.76 7,1n.84 12,398,24 46,368,32
244,63 99,88
21,780,00 8,000,00
12,596,64 3,937,50 5,062.50
37,095,84 1,650.00 1,031,63
33,859,20 94,90
27,062,61 16,745.59
386,75 133,00

TRAVEL
1,492.00 1,730.02
107.54 396,19 4,003.64
2,555.74 931.50 132,68
2,970,16 337.22
2,230.00 132.25
2,772,25
2,249.71
1,603,00 2,930.05
252.50 44,50 347,08 96.92
2,505,89 83,00
1,289,25 774.91
1,254.12 2,174.50
907,20 55,00
150,21
801.00 1,854.73
171,75
6,50

PERSONNEL
WILCOX,MILDRED J WILEY,YOLANDA WILLlAMS,JUAQUITA LACHAN WILLlAMS,JUAQUITA LACHAN WILLlAMS,JUAQUITA LACHAN WRIGHT,DEMETRICE WYNN,DEBRA T WYNN,DONNA L WYNN,DONNA L
Accruals June 30, 1996 June 30, 1997
Unidentified Variance

HEARTOF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY
SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE30.1997

SCHEDULE "3"

PROGRAM
SPECIAL REVENUE FUND- OTHER PROGRAMS SPECIAL REVENUE FUND- OTHERPROGRAMS
SPEC~LREVENUEFUND-OTHERPROGRAMS
SPECIAL REVENUE FUND- S.E.D. MISCELLANEOUS PROGRAMS MISCELLANEOUS PROGRAMS GENERAL ADMINISTRATION SUPPORT SERVICES -INSTRUCTIONAL STAFF
SPEC~LREVENUEFUND-OTHERPROGRAMS

SALARIES

$

2,464.95

1,187.32

3,576.00 $

5,960.00

1,264.00

270.75

17,764.56

2,404.75

55,309.25

$ 899,425.50 $

TRAVEL
20.50 72.00 232.00
219.70 78.52
3,483.48
43,449.21

-39,925.84 50,782.50

-535.11 1,523.75

$ 910,282.16 $=====4=4=,4=3=7=.8=5=

See notesto the general purposefinancial statements.

-15 -

SECTIONll AUDlTEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

HEART OF GEORGIA SCHOOL SYSTEMS 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

8764-93-01 8764-95-01 8764-96-01

Unresolved - See Corrective ActionlResponses Unresolved - See Corrective ActionlResponses Unresolved - See Corrective ActionlResponses

CORRECTIVE ACTIONIRESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number 8764-93-01

Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff, the Board has decided not to pursue the recording of general fixed assets on the financial statements.

ACCOUNTINGCONJROLSOVERALL ADMINISTRATIVE REQUIREMENTS Inadequate Separation of Duties Finding Control Number 8764-95-01

Additional staff is available to assist in the accounting function. The Board feels it has provided for the most appropriate assignment of duties with the number of personnel available to perform the accounting functions, due to budget limitations.

GENERAL LEDGER Inadequate Accounting Procedures Finding Control Number 8764-96-01

Steps were taken in FY 97 to clear all questionable entries. An additional staff person is available beginning in FY 98 to perform the JTPA accounting functions.

PRIOR YEAR FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

8764-96-01

Unresolved - See Corrective ActionlResponses

- 1-

HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY
AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIORYEARFINDINGS AND QUESTIONED COSTS
YEARENDED JUNE 30. 1997 PRIOR YEAR FEDERALAWARDS FINDINGS AND QUESTIONED COSTS
CORRECTIVE ACTIONIRESPONSES ADMINISTRATIVE REQUIREMENTS Inadequate Accounting Procedures Finding Control Number 8764-96-01 Steps were taken in FY 97 to clear all questionable entries. An additional staff person is available beginning in FY 98 to perform the JTPA accounting functions.
- 2-

SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS

HEART OF GEORGIA SCHOOL SYSTEMS REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1997
FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-8764-97-01
For the year under review, the management of the Heart of Georgia School Systems Regional Educational Service Agency did not 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 principles. Appropriate action should be taken by the Agency to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of equipment owned by the Agency and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.