Audit report, Metropolitan Regional Educational Service Agency, Atlanta, Georgia, year ended June 30, 1994

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

AUDIT REPORT METROPOLITAN REGIONALEDUCATIONAL
SERVICE AGENCY ATLANTA, GEORGIA YEAR ENDED JUNE 30, 1994

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY - TABLE OF CONTENTS -

SECTION!

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 AND ACCOUNT GROUP

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

16

SCHEDULES

1 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

18

2 ANALYSJS OF CASH AND CASH EQUIVALENTS

20

3 ACCOUNTS RECEIVABLE

21

SCHEDULE OF REVENUE

4

STATE FUNDS

22

5

LOCAL AND OTHER FUNDS

23

SCHEDULE OF EXPENDITURES BY OBJECT

6

GOVERNMENTAL FUND TYPES

24

7

LOTTERY PROGRAMS

25

8 SCHEDULE OF COMPENSATJON AND TRAVEL OF BOARD MEMBERS

26

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY - TABLE OF CONTENTS -
SECTION II SUMMARY AND SCHEDULE OF SALARIES AND TRAVEL
SECTION III COMPLIANCE
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS SINGLE AUDIT OPINION ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS
SECTION IV INTERNAL CONTROL REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
SECTIONV FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY -TABLE OF CONTENTS-
SECTION VI PERTINENT VIEWS OF RESPONSIBLE OFFICIALS SCHEDULE OF PERTINENT VIEWS OF RESPONSIBLE OFFICIALS

SECTION! FINANCIAL

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

DEPARTMENT OF AUDITS
254 Washington Street, S,W., Suite 214 Atlanta, Georgia 30334-8400
March 24, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board ofEducation
and Director and Members of the Metropolitan Regional Educational Service Agency Board of Control
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARYINFORMATIONSCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
Ladies and Gentlemen:
We have audited the general purpose financial statements (Exhibits A through D) of the Metropolitan 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 of the Agency's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the provisions of the Office of Management and Budget Circular A-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 a certain accounting practice and policy which, in our opinion, varies in some respect from generally accepted accounting principles. This variance is 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 aggregate effects on the general purpose financial statements of this omission has not been determined, but is believed to be material.
In our opinion, except for the effects on the general purpose financial statements of the matter referred to in the preceding paragraph, the general purpose financial statements present fairly, in all material respects, the financial position of the Metropolitan Regional Educational Service Agency as of June 30, 1994, and the results of its 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 Metropolitan Regional Educational Service Agency taken as a whole. The combining statements (Exhibits E and F), the financial schedules (Schedules I 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 Metropolitan 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, 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.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:jg 94ARL-33

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY - 1-

SECTION II SUMMARY AND SCHEDULE OF SALARIES AND TRAVEL

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SUMMARY OF SALARIES AND TRAVEL YEAR ENDED JUNE 30 1994

SALARIES
GENERAL FUND Support Services Improvement of Instructional Services General Administration Business Administration Maintenance and Operation of Plant Other Support Services
Total General Fund
SPECIAL REVENUE FUND

TOTAL PER FINANCIAL STATEMENTS (ACCRUAL BASIS)

ADJUSTMENTS FOR ACCRUALS

JUNE 30, 1993

JUNE 30, 1994

TOTAL PER SCHEDULE (CASH BASIS)

$

61,936.66 $

200,814.10

28,725.08

10,059.00

53,123.04

0.00 $

$

354,657.88 $

0.00 $

2,047,461.52

217,653.78

0.00 $

61,936.66 200,814.10
28,725.08 10,059.00 53,123.04

0.00 $

354,657.88

-231,561.99

2,033,553.31

Total Salaries

$

2,402,119.40 $

217,653.78 $

-231,561.99 $ 2,388,211.19

TRAVEL

GENERAL FUND

Support Services

Improvement of Instructional Services

$

General Administration

Total General Fund

$

SPECIAL REVENUE FUND

1,118.36 $ 13,942.92
15,061.28 $
17,562.51

0.00 $ 0.00 $

0.00 $ 0.00 $

1,118.36 13,942.92
15,061.28
17,562.51

Total Travel

$

32,623.79 $

0.00 $

0.00 $

32,623.79

METRO R. E S A SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30. 1994

NAME
AIKEN.JOHN L BAKER.JUDY A BAY.FRANCINE L BEERS.MARY K BENNETT.STEPHEN N BERUSCH,JILL R BLACK, LINDA B BRADLEY.DANIEL P BROWN.ALFRED M BROWN, ALFRED M BROWN, PATRICIA BRYAN.REBECCA CALLAWAY,GOROON C CARSON.WILLIAM E CLEMENTS.ELEANOR A CORBIN, FRANC I NE COXTON. LINDA D CRAVEN.MARY L CRAWFORD, PATRICIA 8 DAYKIN.LINDA L DEAN, JANICE M DELO-LOCKE ,KATHRYN L DRAKE.VICKI C DULA, JOYCE DURBIN.CLAIRE M EARLEY ,WILLIE L EDWARDS, CYNTHIA EDWARDS, GAIL W FERDINAND,WILHELMENIA FERGUSON, PATRICK FLEISIG. BETSY GLENN, GARY GLOVER, JUDY C GOODSON.CONSTANCE F GRANT, ALLISON S GREENE.LORRI ANN HACKMAN.MARY ALICE HAMILTON.LESLIE ELLEN HATCH.A BERNARD HATCH.A BERNARD HEAD, MELODIE HEALEY.GAIL G HEARIN.PHYLLIS N HENDLEY.NANCY C HICKS, PAULETTE S ISRAEL.SHARON B JOHNSON, WI LL! E C JR JONES. CARL E JONES, ELLEN K JONES.JENNIFER KAUWELL, EDWARD P KELLY,CHARLES EM KOHLER.DAVID E KYSER, MARY P LABORDE.REBECCA F LAMMERT, JANICE H LAMMERT.JANICE H LINDE, BARBARA LOMACH,THOMAS J LOWRY, ROBERT K LUGLAN,ANGELINE MARION, SHARON K MATHEWS, JENNI FER MATOL.MICHELE F MAY ,MARILYN A MCOONALO,JUOITH H

TITLE CATEGORY

SPECIAL REVENUE FUND - OTHER PROG

$

SPECIAL REVENUE FUND - OTHER PROGRAMS

SUPP SRVS - IMPROV INSTR & ED MED SRVS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

GEORGIA LEARNING RESOURCES SYSTEM FUND

SPECIAL REVENUE FUND - OTHER PROGRAMS

GENERAL ADMINISTRATION

SUPPORT SERVICES - BUSINESS

GEORGIA LEARNING RESOURCES SYSTEM FUND

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

GENERAL ADM I NI STRATI ON

GENERAL ADMINISTRATION

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

GEORGIA LEARNING RESOURCES SYSTEM FUND

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

DIRECTOR

GENERAL ADMINISTRATION

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

GENERAL ADMINISTRATION

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SUPP SRVS - IMPROV INSTR & ED MED SRVS

SA LARI ES AMOUNT
9,844.81 31,282.28 32,976.66
120 00 49,209.38
100 00 57,404.82
60 00 625.00 28,725.08 26, 155. 92 2,670 00 22,721.48 67. 541 . 94 33,204.00 17,582.60 15,774.64 36,114.08 12,905.00 27,595.52 14,152.64 31,736.64 240 00 120 00 23,989.12 47,334.51 14,541.28 16.654.40 14. 152.64 33,910.16 480 00 42,083.30 31,565.04 40,821.42 26,527.36 29,507.28
60 00 11,349.84 78,718.08
540 00 17,847.76 13,405.20
240 00 18,562.92 44,141.44 33,910.16 16,478.02 21,450 00 13,046.40 37,249.34
60 00 6,719.16
540.00 8,139.50
37,500.00 1,344.00 100.00 60.00
18,562.92 34,927.52 15,805.99 16,530.46 48,860.87 28,960.00

TRAVEL EXPENSE
31. 50 15.00 609 .00 1,384.60 2,118.44 422. 89 367. 34 3,308.03 71. 40 260.46 32. 55 46. 83
50 00 1,507.58
508.26 2, 143 22
156 .69
9,235.17
477. 04 449. 20
631 .59 585 .61
3.99 23 .94 509. 36

NAME
MCGEE. JULIANNE F MCLAURIN.CHERYL W MCMILLIAN.JUNE ANN MEHNERT-JACOBY, KAREN L MOORE, VELMA NEAL, HAROLD L PATTERSON.DAWN H PATTERSON.MARIAN C PHILLIPS. TAMARA K POWELL, ROBERTA PROCTOR, GARY
our RK, CONSTANCE A
s RAGLAND, KIMBERLY s RAGLAN , KIMBERLY
REX INGER, JANE E R08ERTSON,CHRISTIE RODGERS, FREDDIE LEE ROWE. MARY 8 RUANE, MARY p SCARBOROUGH, JACOUEL INE SCHNUPP, JEANNETT SCOTT, MONA L SHENSKY, JOAN A SHURE, JANICE H SIXTO-MURREN, JENIFER SMITH, RALPH SMITH, SHARON K SPRIGGS.BARBARA L STRUSINER, ELLEN S STUBBS.LINDA D STURGEON, CHRISTINE SULLIVAN.CAROLYN A SUMMERS, PETER J TAUCHES,CHARLOTTE THOMPSON, CI NOY L THOMPSON, MARET A A TRUITT, PATSY B WATSON.CHARLES E
WATSON, NANCY s
WEINER.LAWRENCE R WELLS, DAVID L WHITE ,DAVID A WHITE, JOHN L III WHITE, KITTY WHITE, STEPHANIE W WINEBARGER, LAURA H WOLK IN, SUSAN S

METRO R E S A SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30. 1994

TITLE CATEGORY

SALARIES AMOUNT

- SPECIAL REVENUE FUND - OTHER PROG

$

SPECIAL REVENUE FUND OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

- OTHER SUPPORT SERVICES
SPECIAL REVENUE FUND OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

OTHER SUPPORT SERVICES

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

GENERAL ADMINISTRATION

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

MAINTENANCE & PER. OF PLANT SERVICES

GENERAL ADMINISTRATION

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

19,073 .44 39,578. 20 $
4,103 84 33,910. 16 12, 746 30 23. 550 00
4,594 16 4. 765 . 44
420. 00 29. 573 .04 12. 680. 76 48,061 .66
885 .00 16,025 .30 46,205. 38 11,076 .60
1,823 .42 1,307 .20 13,624 .08 13,405 .20 1,875 .00 4,328 . 64 37. 982. 47 44,590 84 5,440. 44 10,059 .00 19,840 08 25,658 .04 33, 187 . 28 32,065 68 34,472. 40 2,445. 84 21,554 20 1,350 00 15. 774 . 64 35,802 . 52 16,208 .20 15. 774 .64 36,121 .92 67,996 .02 9,215 .80 46,384 .70
120 00 40,359. 10 29,154 .90 45,142.58 52,358.50

TOTALS

$ 2,388,211.19 $

TRAVEL EXPENSE
623 77
150 00 273 . 84 438 36 539 . 56
117. 87 140. 40
9 45 199. 56
15 .00 92 .40 29. 61 3. 257 71 274. 13 293. 43 166 97 1,052 .04 32,623 . 79

SECTION III COMPLIANCE

CLAUDE L. VICKERS
STATE AUDITOR (404) 656 2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 24, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members of the Metropolitan Regional Educational Service Agency Board of Control
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Metropolitan Regional Educational Service Agency as of and for the year ended June 30, 1994, and have issued our report thereon dated March 24, 1995. This report was qualified for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
Compliance with laws, regulations, contracts, and grants applicable to the Metropolitan Regional Educational Service Agency is the responsibility of the Agency's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests ofthe 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 Metropolitan 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 granter agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
z_:~
Claude L. Vickers State Auditor
CLV:jg 94CRL-10

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 24, 1995

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

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 Metropolitan Regional Educational Service Agency as ofand for the year ended June 30, 1994, and have issued our report thereon dated March 24, 1995. This report was qualified for a departure 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 Metropolitan Regional Educational Service Agency's compliance with the following requirements applicable to each of its Federal financial assistance programs, which are listed in the Schedule of Federal Financial Assistance, for the year ended June 30, 1994:

(1) Political Activity

(5) Allowable Costs/Cost Principles

(2) Civil Rights

(6) Drug-Free Workplace Act

(3) Cash Management

(7) Audit Follow-Up/Resolution

(4) Federal Financial Reports

(8) Administrative Requirements

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-50

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that the Metropolitan Regional Educational Service Agency had not complied, in all material respects, with those requirements. However, the results of our procedures disclosed immaterial instances of noncompliance with those requirements, which are described in the Schedule ofFindings and Improper or Questioned Costs.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~x~
Claude L. Vickers State Auditor
CLV:jg 94CRL-50

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 24, 1995

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

SINGLE AUDIT OPINION ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS

Ladies and Gentlemen:

We have audited the general purpose financial statements ofthe Metropolitan Regional Educational Service Agency as of and for the year ended June 30, 1994, and have issued our report thereon dated March 24, 1995. This report was qualified for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

We have also audited the Metropolitan Regional Educational Service Agency's compliance with the requirements governing:

(1) Types of Services Allowed or Unallowed

(5) Applicable Special Tests and Provisions

(2) Eligibility
(3) Matching, Level of Effort, and/or Earmarking

(6) Other Requirement Claims for Advances and Reimbursements

(4) Reporting

These requirements are applicable to the major Federal financial assistance program, which is identified in the Schedule of Federal Financial Assistance, for the year ended June 30, 1994. The management of the Metropolitan Regional Educational Service Agency is responsible for the Agency's compliance with those requirements. Our responsibility is to express an opinion on compliance with those requirements based on our
audit.

94CRL-80

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY COMBINED BALANCE SHEET
ALL FUND TYPES ANO ACCOUNT GROUP JUNE 30 1994

EXHIBIT"A"

ASSETS Cash and Cash Equivakmts Accounts Receivable Amount to be Provided in Future Years
For Payment of Capital Lease Agreement

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

$

50,461.96 $

230,852.46

15,206.80

122,239.78

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS {Memorandum Onl:tl JUNE 30, 1994 JUNE 30, 1993

$ 281,314.44 $ 332,101.95

137,446.58

32,882.64

$

10251.16

10251.16

14670.58

Total Asset.

$

65 668.76 $

353,092.26 $

10251.16 $ 429,012.18 $ 379655.15

LIABILITIES AND FUND EQUITY

LIABILITIES

Accounts Payable

$

Salaries Payable

Expired Grant Balances Payable

Capital Lease Agreement

Total Liabilities

$

FUND EQUITY

Fund Balances Unreserved Undesignated

4,448.57 $ 1,078.80
5,527.37 $

66,431.58 231,581.99
18,011.19 $
316,004.74 $

$
10251.16 10,251.16 $

70,880.13 $ 231,581.99
19,089.99 10,251.16
331,783.27 $

71,570.06 217,653.78
17,036.86 14670.56
320,931.26

60141.39

37,087.52

97228.91

58 n3.89

Total Liabilnies and Fund Equity

65 668.76 $

353,092.26 $

10 251.16 $ 429,012.18 $ 379655.15

1he notes to the general purpose financial statements are an integral part of this statement. -2-

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 1994

EXHIBIT "B"

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

GENERAL FUND

SPECIAL REVENUE
FUND

TOTALS (Memorandum Onlll
YEAR ENDED JUNE 30, 1994 JUNE 30, 1993

$

631,464.20 $ 2,181,124.96 $ 2,812,589.16 $ 2,746,925.44

15,768.56

701,537.B3

717,306.39

576,118.97

282,210.78

34 762.96

316973.74

265,931.18

$

929 443.54 $ 2,917,425.75 $ 3,846,869.29 $ 3,588,975.59

$ 1,544,563.23 $ 1,544,563.23 $ 1,560,119.65

$

266,158.41

436,712.21 35,484.38 61,544.75

89,442.78

548,944.40 275,401.01
16,235.B3 417,426.66
43,598.69 66,232.80
100.00

548,944.40 541,559.42
16,235.B3 854,138.87
79,083.07 127,777.55
100.00 89,442.78

515,193.62 337,565.34
19,671.05 875,112.57
76,408.66 147,300.98
218.02 82,183.81

4,419.41 2,099.71

4,419.41 2099.71

$

895,861.65 $ 2,912,502.62 $ 3,808,364.27 $ 3,613,773.70

$

33,581.89 $

4923.13 $

38,505.02 $

-24 798.11

$

$

-1 265.48

$

-1 265.48 $

1,265.48 $ 1 265.48 $

1,265.48 $ -1 265.48
0.00 $

5,811.52 -5811.52
0.00

$

32,316.41 $

6,188.61 $

38,505.02 $

-24,798.11

27,824.98

30898.91

58 723.89

83,522.00

FUND BALANCE JUNE 30

$

60,141.39 $

37,087.52 $

97,228.91 $

58,723.89

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

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY

EXHIBIT "C"

COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES

ACTUAL AND BUDGET - GOVERNMENTAL FUND TYPES

YEAR ENDED JUNE 30 1994

REVENUES
State Funds Federal Funds Local and Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Debt Service
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES {USES)
Other Sources Other Uses
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1 1993
ADJUSTMENTS
Prior Year (Net)
FUND BALANCE JUNE 30 1994

ACTUAL PER
EXHIBIT"B"

BUDGET

VARIANCE FAVORABLE (UNFAVORABLE)

$ 2,812,589.16 $ 2,796,635.00 $

717,306.39

755,438.18

316.973.74

226,169.94

15,954.16 -38,131.79 90,803.80

$ 3,846,869.29 $ 3,778,243.12 $ _ _ _6~8,~62_6_.1_7

$ 1,544,563.23 $ 1,560,576.94 $

16,013.71

548,944.40 541,559.42
16,235.83 854,138.87
79,083.07 127,777.55
100.00 89,442.78
6,519.12

550,758.00 540,957.74
16,501.00 830,903.61
78,459.00 155,132.00
100.00 81,526.00
0.00

1,813.60 -601.68 265.17
-23,235.26 -624.07
27,354.45 0.00
-7,916.78 -6,519.12

$ 3,808,364.27 $ 3,814,914.29 $ _ _---'6"',5'-5~0."'-02~

$

38,505.02 $ -36,671.17 $ _ _ _7'-'5"-,1'-'-7~6--19-'-

$

1,265.48 $

26,871.17 $

-1,265.48

-25,605.69 -1,265.48

$

0.00 $

26,871.17 $ _ _ _ 2~6~,8~7_1._17_

$

38,505.02 $

-9,800.00 $

58,723.89

71,287.25

48,305.02 -12,563.36

-39,703.84

39,703.84

$

97,228.91 $

21,783.41 $ _ _ _7_5_.4_4_5_.5_0

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

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30 1994

EXHIBIT"D"

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Metropolitan Regional Educational Service Agency (Agency) was established pursuant to the Official Code of Georgia Annotated Sections 20-2-270 through 20-2-274 for the purposes of providing shared services designed to improve the effectiveness of educational programs and services oflocal school systems and for providing instructional programs directly to selected public school students in the state.
Each regional educational service agency is governed by a board. The number of members and terms of office are prescribed by the State Board ofEducation; provided, however, that at least one-third of the membership of each Board shall be individuals who hold no other public office, who are not employees ofany local unit of administration, and who are not employees of the Georgia Department of Education.
With the exception ofthe departure 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 Metropolitan Regional Educational Service Agency is determined to be a jointly governed organization.
The members of the Board are elected by an annual caucus ofan equal number of members oflocal 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 Metropolitan Regional Educational Service Agency are as follows: City of Atlanta, City ofBuford, Clayton County, Cobb County, City of Decatur, DeKalb County, Douglas County, Fulton County, Gwinnett County, City of Marietta and Rockdale County.
FUND ACCOUNTING
The Agency uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities.

- 5-

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE30 1994

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
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 and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of a regional educational service agency's general activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the Agency except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services 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.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - used to account for material capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure ofavailable spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
- 6-

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE30 1994

EXHIBIT"D"

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
BUDGET
The Metropolitan Regional Educational Service Agency has a legally authorized nonappropriated budget which is fonnally 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 ofthe aggregate budget. The budget process begins when the Agency's administration prepares a tentative aggregated budget for the Board's approval. After approval of this tentative budget by the Board, the budget is advertised at least once in a newspaper ofgeneral 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.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits (including certificates of deposit) 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 ofgrant reimbursements due from Federal, State or other grantors for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

- 7-

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE30 1994

EXHIBIT"D"

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
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 ofthis data.
Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral in an amount of not less than 110 percent ofthe 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.

- 8-

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE30 1994

EXHIBIT"D"

Note 2: DEPOSITS
Acceptable security for deposits consists of any one of or any combination of the following:
(I) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates ofindebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations of the counties or municipalities ofthe State of Georgia,
(5) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 1994, the bank balances were $415,096.31. The amounts of the total bank balances are classified into three categories of credit risk:
Category 1 - 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.
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:

- 9-

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30 1994

EXHIBIT"D"

Note 2: DEPOSITS

Risk Category

Bank Balance

1

$ 100,000.00

2

315,096.31

3

0.00

Total

$ 415 096 31

Note3: GENERALLONG-TERMDEBT

CAPITAL LEASES The Metropolitan Regional Educational Service Agency has entered into a lease agreement as lessee for printing equipment. This lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value of the future minimum lease payments as of the date ofits inception.

The changes in General Long-Term Debt during the fiscal year ended June 30, 1994, were as follows:

Balance July 1, 1993 Additions Deductions Balance June 30, 1994

Capital Leases $ 14,670.56
0.00 4 419.41 $ 1025115

At June 30, 1994, payments due, by fiscal year which includes principal and interest for these items are:

Fiscal Year Ended June 30
1995 1996 Total Principal and Interest Deduct: Imputed Interest Net Present Value of Future
Minimum Lease Payments

Capital Leases $ 6,519.12
5 433.60 $ 11,952.72
1 701.57
$ 1Q251]5

- 10 -

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE30 1994

EXHIBIT"D"

Note 4: 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 5: ACCUMULATED EMPLOYEES' LEAVE
The Director's employment contract provides for the reimbursement of unused vacation leave at the time of retirement/termination at the prevailing rate of pay. 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 IO 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 distn"'bution 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 JO 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 Jess than ten years of service, no vesting of employer 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 $2,349,816.44; total payroll was $2,402,119.40.

- 11 -

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE30 1994

EXHIBIT"D"

Note 6: RETIREMENT PLANS

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 ofretum on investments) was 7.50%.

Total contributions made during fiscal year 1994 amounted to $418,501.35, of which $277,511.75 was made by the Agency and $140,989.60 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 salary increases. A standardized measure ofthe pension benefit obligation was adopted by the GASB to enable readers of PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among other PERS and among other employers.

Total unfunded pension benefit obligation ofTRS as 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 of June 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$277,51 l.75 was actuarially determined and represented .0532% 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.

- 12 -

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT"D"

Note 7: SURETY BONDS
The Director, Dr. Bernard Hatch, is bonded in the amount of $50,000.00 with the Glens Falls Insurance Company, New York, New York, their Bond No. BNP 00113 21, on which premium was paid through January 17, 1995.

- 13 -

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30 1994

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities FUND EQUITY
Fund Balances Unreserved Undesignated
Total Liabilities and Fund Equity

GEORGIA LEARNING RESOURCES
SYSTEM

SEVERELY EMOTIONALLY
DISTURBED

$ 31,918.45 $ 209,250.38

3,740.67

97,649.47

$ 35,659.12 $

306,899.85

$

56,473.04

231,561.99

$

579.38

16,857.04

$

579.38 $

304,892.07

35,079.74

2,007.78

$ 35,659.12 $

306,899.85

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

EXHIBIT"E"

LOTTERY PROGRAMS

DRUG-FREE SCHOOLS AND COMMUNITIES
ACT

ELEMENTARY AND SECONDARY EDUCATION ACT
CHAPTER 1 EDUCATION OF
CHILDREN IN STATE SCHOOLS

AIDSHEALTH EDUCATION TRAINING

TOTALS JUNE 30, 1994 JUNE 30, 1993

$

551.77 $

0.00

$ 241,720.60 $ 301,477.08

$

9,981.52

$ 10,868.12

122,239.78

22,793.81

$

9,981.52 $

551.77 $

0.00 $ 10,868.12 $ 363,960.38 $ 324,270.89

$

9,958.52

23.00 $

$

9,981.52 $

551.77 551.77

$ 10,868.12 $ 10,868.12

66,431.56 $

62,259.85

231,561.99

217,653.78

18,011.19

13,458.35

$ 10,868.12 $ 326,872.86 $ 293,371.98

0.00

$

9,981.52 $

o.oo $ _____o_.o_o

0.00

37,087.52

30,898.91

551.77 $~_ _ _ _o_.o_o $ 10,s6s.12 $ 363,960.38 $ 324,270.89

- 15 -

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30 1994

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

GEORGIA LEARNING RESOURCES
SYSTEM

SEVERELY EMOTIONALLY
DISTURBED

$ 63,295.44 $ 2,107,871.00

167,233.85

421,732.96

34,762.96

$ 265,292.25 $ 2,529,603.96

$ 1,533,542.71

$ 85,714.15 16,235.83
152,475.63
4,705.00

548,944.40 120,041.43
222,790.74 43,598.69 61,527.80 100.00

$ 259,130.61 $ 2,530,545.77

$

6,161.64 $

-941.81

26.97

$

6,188.61 $

28,891.13

941.81
0.00 2,007.78

$ 35,079.74 $

2,007.78

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

EXHIBIT"F"

LOTTERY PROGRAMS

DRUG-FREE SCHOOLS AND COMMUNITIES
ACT

ELEMENTARY AND SECONDARY EDUCATION ACT
CHAPTER 1 EDUCATION OF
CHILDREN IN STATE SCHOOLS

AIDSHEALTH EDUCATION TRAINING

TOTALS YEAR ENDED JUNE 30, 1994 JUNE 30, 1993

$

9,958.52

$ 55,124.69 $

$

9,958.52 $

55,124.69 $

1,062.00 $ 1,062.00 $

$ 56,384.33

2,181,124.96 $ 701,537.83 34,762.96

2,131,516.90 571,761.99 14,123.68

56,384.33 $ 2,917,425.75 $ 2,717,402.57

$

9,958.52

$

$ 28,572.44 26,552.26

$

9,958.52 $

55,124.70 $

$

0.00 $

-0.01 $

$

0.00 $

0.00

0.01
0.00 $ 0.00

$

0.00 $

0.00 $

1,062.00 $
1,062.00 $ 0.00 $

$ 1,544,563.23 $ 1,558,319.63

41,072.99 15,608.03

548,944.40 275,401.01
16,235.83 417,426.66
43,598.69 66,232.80
100.00

515,193.62 102,699'.04
19,671.05 433,755.64
41,589.26 65,627.72
218.02

56,681.02 $ 2,912,502.62 $ 2,737,073.98

-296.69 $

4,923.13 $ -19,671.41

0.00 $ 0.00

296.69

1,265.48

5,811.52

0.00 $ 0.00

6,188.61 $ 30,898.91

-13,859.89 44,758.80

0.00 $

0.00 $

37,087.52 $

30,898.91

-17-

METROeQ!,ITAN REGIONAL EQUCATIONA!, ERVl!,E AG!;;~!,:( !,HEQU!,E OF F!aDERA!, FINANCIAL ASSISTAN!,E
YEAR ENDED JUNE 30 1994

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Education, U.S. Department of Direct Drug-Free Schools and Communities Act Counseklr Training 1992 Grant 1993 Grant Through Georgia Department of Education Drug--Free Schools and Communities Act 1992 Carry-Over Grant 1993Grant 1993 Carry-Over Grant 1994 Grant Registration for the Fall Comprehensive School Health Education Meeting for Drug-Free Schools Coordinators 1994 Contract Elementary and Secondary Education Act Chapter 1 Education of Children in State Schools 1994 Regular Individuals with Disabilities Education Act TitleVI, B Fk>'NThrough 1993 Cany-0,er Georgia Leaming Resources System 1992 Regular 1993 Regular 1993 Carry-Over 1994 Regular Severely Emotionally Disturbed 1992 Regular 1992 Carry-Over 1993 Regular 1993 Cany-Over 1994 Regular TitleVl,D Spacial Education Personnel Development and Parent Training 1993 Regular 1994 Regular Vocational Education - Basic Grants to States High School Program Community Based Organizations Vocational Educattonal Support Program 1993 Contrect 1994 Contract
Total U.S. Department of Education

CFDA NUMBER

AWARDS IN PERIOD

FEDERAL FUNDS RECEIVED IN PERIOD(NET OF REFUNDS)

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.241 84.241
84.186 84.186 84.186 84.186

$
159.00 20,000.00

$ 48,885.50

-476.07 35,517.47 $

35,517.47

326.00 -159.98 159.00 20,000.00

-0.01 159.00 19,448.23

158.00 19,448.23

84.186

1,200.00

1,200.00

1,200.00

3,962.43 (1)

84.009

1,062.00

1,062.00

1,062.00

1,062.00

84.027
84.027 84.027 84.027 84.027
84.027 84.027 84.027 84.027 84.027

9,295.00
20,657.00 125,881.00
128,521.00 300,n4.00

9,295.00
-373.31 -12,657.08 19,666.00 125,881.00
-854.75
2,476.99 48,521.00 283,124.53

9,295.00
20,245.42 125,881.00
-54.88 128,521.00 283,916.96

9,295.00
20,245.42 125,907.97 (1)
128,521.00 283,916.96

84.029 84.029

2,000.00 26,288.00

7,928.94 14,000.00

4,342.00 16,765.43

4,342.00 16,765.43

84.174 84.174

15099.51

$ 650,936.51 $

5,088.83 11 012.71

15 099.51

584,582.38 $ 660,922.06 $

15099.51 664,242.42

- 18

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE YEAR ENDED JUNE 30 1994

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA ~

AWARDS IN PERIOD

FEDERAL FUNDS RECEIVED IN PERIOD (NET OF REFUNDS)

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Health and Human Services, U.S. Department of

Through Georgia Department of Education

Acquired Immunodeficiency Syndrome (AIDS)

Hearth Education

1991 Grant

93.118

1992Grant

93.118

1993Grant

93.118

School Hearth Education Training

1994 Contracts

Comprehensive School Hearth Education

Training for HIV/AIDS Consultants

in Disease Prevention

93.938 $

Training of Trainers in "Totally

Awesome Comprehensive School Health

Education Workshop

93.938

Administer the 1994 Georgia School Health

Education Profiles as Required by the

Cooperative Agreement with the Centers

For Disease Control and Prevention 93.938

$
4,800.00 9,300.00 39 500.00

-3,937.19 -3,501.85 25,666.00 $

22,630.15 $

22,926.84 (1)

2,306.46 9,189.60

2,306.46 9,189.60

2,306.46 9,189.60

11 390.00

22,258.12

22,258.12

Total U. S. Department of Health and Human Services

$ 53600.00 $

41113.02 $ 56384.33 $

56681.02

Total Federal Financial Assistance

$ 704,536.51 $

625,695.40 $ 7171306.39 $

no,923.

Major Programs are identified by an asterisk (j in front of the CFDA number.

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

See notes to the general purpose financial statements.

19

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY ANALYSIS OF CASH AND CASH EQUIVALENTS JUNE 30 1994

SCHEDULE "2"

INTEREST BEARING ACCOUNTS
Wachovia Bank of Georgia, Atlanta, Georgia
Commercial Checking Accounts (Variable) Certificate of Deposit No. 5363068 (3.59%)

$ 263,205.90 18,108.54
$ 281,314.44

See notes to the general purpose financial statements. - 20 -

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY ACCOUNTS RECEIVABLE JUNE 30 1994

SCHEDULE "3"

City of Marietta Board of Education Reimbursement of Expenses
Clayton County Board of Education Tuition
Education, Georgia Department of Vocational Education Federal Funds Federal Programs lndMduals Wrth Disabilities Education Act TitleVl,B Georgia Learning Resources System Severely Emotionally Disturbed Title VI, D - Special Education Personnel Development and Parent Training Lottery Programs Computers in Classrooms Distant Learning Contracts Training Program to Prepare Public School Personnel to Become Teachers/Sponsors of Teacher Cadet Programs Acquired Immunodeficiency Syndrome (AIDS) School Health Education Training Administer the 1994 Georgia School Health Education Profiles as Required by the Cooperative Agreement with the Centers for Disease Control and Prevention
Various Sources Registration Fees

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

2,630.00

$

2",630.00

2,250.00

2,250.00

4,086.80

4,086.80

$

975.24

97,649.47

2,765.43

9,000.00 981.52

975.24 97,649.47
2,765.43
9,000.00 981.52

5,200.00

5,200.00

1,040.00

10,868.12

10,868.12 1,040.00

$

15,206.80 $ 122,239.78 $ 137,446.58

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

METROPOLITAN 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 Georgia Leaming Resources System Regional Educational Service Agencies Severely Emotionally Disturbed Staff Development Sex Education Grant Supervision and Assessment of Student and Beginning Teachers and Performance-Based Certification Lottery Programs Computers in Classrooms Distant Leaming
CONTRACTS Education, Georgia Department of Development of Resource Guide for Introduction to Education Course Training Program to Prepare Public School Personnel to Become Teachers/Sponsors of Teacher Cadet Programs
OTHER Education, Georgia Department of Registration Fee for GARP Conference

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

63,295.44 $

63,295.44

$ 379,008.00

379,008.00

2,107,871.00

2,107,871.00

29,921.20

29,921.20

214,285.00

8,977.00 981.52

214,285.00
8,977.00 981.52

3,000.00

3,000.00

5,200.00

5,200.00

50.00

50.00

$ 631,464.20 $ 2,181,124.96 $ 2,812,589.16

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

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF LOCAL AND OTHER REVENUE YEAR ENDED JUNE 30 1994

SCHEDULE 5

Associate Membership Fees Boards of Education Chatham County Glynn County Richmond County Department of Children and Youth Services, Georgia
Indirect Cost Special Revenue Fund
Interest Earned
Membership Fees Boards of Education Atlanta, City of Buford, City of Clayton County Cobb County Decatur, City of DeKalb County Douglas County Fulton County Gwinnett County Marietta, City of Rockdale County
Printing
Publications
Tuition
Other

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

3,000.00

3,000.00

3,000.00

3,000.00

26,775.00 5,978.36

$

3,000.00

3,000.00

3,000.00

3,000.00

26,775.00 5,978.36

20,433.00 2,667.00
13,030.00 24,304.00
2,871.00 25,585.00
6,573.00 15,689.00 23,297.00
3,462.00 5,710.00
17,378.12
22,340.77 $
18,362.00
35,755.53

4,372.00 30,390.96

20,433.00 2,667.00
13,030.00 24,304.00
2,871.00 25,585.00
6,573.00 15,689.00 23,297.00
3,462.00 5,710.00
17,378.12
26,712.77
18,362.00
66,146.49

$ 282,210.78 $

34,762.96 $ 316,973.74

See notes to the general purpose financial statements. - 23 -

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF EXPENDITURES BY OBJECT GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 1994

SCHEDULE "6"

EXPENDITURES
Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical Services Compensation and Travel of Board Members Water, Sewer and Cleaning Services Repair and Maintenance Services Rents Insurance Communications Other Purchased Services Supplies Energy Dues and Fees Federal Indirect Costs Other Expenditures
Nonoperating Costs Principal and Interest Equipment

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

$ 354,657.88 $ 2,047,461.52 $ 2,402,119.40

78,224.99

488,172.21

566,397.20

15,061.28

17,562.51

32,623.79

240,035.04

131,609.19

371,644.23

2,783.65

2,783.65

1,264.86

1,264.86

8,601.70

10,327.71

18,929.41

5,000.00

34,833.73

39,833.73

2,456.83

2,541.24

4,998.07

23,972.15

26,714.90

50,687.05

3,962.43

3,423.06

7,385.49

56,600.62

95,034.48

151,635.10

13,682.06

4,000.00

17,682.06

74,608.35

1,220.00

75,828.35

26,775.00

26,775.00

4,429.00

5,126.63

9,555.63

6,519.12 4,001.69

17,700.44

6,519.12 21,702.13

Total Expenditures

$ 895,861.65 $ 2,912,502.62 $ 3,808,364.27

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

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF EXPENDITURES BY OBJECT LOTTERY PROGRAMS YEAR ENDED JUNE 30 1994

SCHEDULE "7"

EXPENDITURES Operating Costs Supplies Nonoperating Costs Equipment
Total Expenditures

COMPUTERS IN
CLASSROOMS

DISTANT LEARNING

TOTAL

$

$

8,977.00

$

8,977.00 $

981.52 $

981.52 8,977.00

981.52 $

9,958.52

See notes to the general purpose financial statements. - 25 -

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS
YEAR ENDED JUNE 30 1994

SCHEDULE "8"

BOARD MEMBER ADDRESS
Mr. George Thompson, Chairman (*) Gwinnett County Board of Education 52 Gwinnett Drive Lawrenceville, Georgia 30245
Mrs. Richardean Anderson 2020 Wallace Road, S. W. AHanta, Georgia 30331
Mrs. Beauty Baldwin (*) City of Buford Board of Education 70 Wiley Drive Buford, Georgia 30518
Mrs. Grace Calhoun (*) Cobb County Board of Education P.O. Box 1088 Marietta, Georgia 30061
Mrs. Jane M. Carithers(*) 5585 Lower Roswell Road Marietta, Georgia 30068
Dr. Robert Clark City of Marietta Board of Education P.O. Box 1265 Marietta, Georgia 30061
Dr. Ellis Dunbar(*) Rockdale County Board of Education P.O. Drawer 1199 Conyers, Georgia 30207
Dr. James Fox(*) Fulton County Board of Education 786 Cleveland Avenue, S. W. AHanta, Georgia 30315
Dr. Robert Freeman (*) DeKalb County Board of Education 3770 North Decatur Road Decatur, Georgia 30032
Mr. Ronald Galloway(*) City of Marietta Board of Education P.O. Box 1265 Marietta, Georgia 30061
Mrs. Beveriy Glover (*) 2523 Amalfi Drive Lithonia, Georgia 30058

COMPENSATION

TRAVEL

$

200.00

350.00

- 26 -

100.00

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS
YEAR ENDED JUNE 30 1994

SCHEDULE "8"

BOARD MEMBER ADDRESS
Mr. Don L. Griffith (*) City of Decatur Board of Education 320 North McDonough Street Decatur, Georgia 30030
Mr. Arthur Griggs(*) 125 Melanie Court College Park, Georgia 30349
Mrs. Brenda Jackson (*) 3307 Renoir Court Decatur, Georgia 30034
Dr. Bob Livingston (*) Clayton County Board of Education 120 Smith Street Jonesboro, Georgia 30236
Dr. Kathleen O'Neill Rockdale County Board of Education P.O. Drawer 1199 Conyers, Georgia 30207
Mrs. Phyllis Schwanz (*) 1300 Commerce Drive Decatur, Georgia 30030
Ms. Kathryn M. Shehane (*) Douglas County Board of Education P.O. Box 1077 Douglasville, Georgia 30133
Mrs. Felecca Taylor(*) 5531 Deerfield Place Kennesaw, Georgia 30144
Mr. Lawrence Thompson (*) City of Atlanta Board of Education 210 Pryor Street, S. W. Atlanta, Georgia 30335
(*) Denotes Board Members Serving as of June 30, 1994

COMPENSATION

TRAVEL

$

250.00 $

34.86

350.00

698.79

350.00

450.00

$

2,050.00 $

733.65

See notes to the general purpose financial statements.

- 27 -

We conducted our audit ofcompliance in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and Office ofManagement 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 material noncompliance with the requirements referred to above occurred. An audit includes examining, on a test basis, evidence about the Agency's compliance with those requirements. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the Metropolitan Regional Educational Service Agency complied, in all material respects, with the requirements as disclosed in the second paragraph that are applicable to its major Federal financial assistance program for the year ended June 30, 1994.
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.

Respe~ submitted, .

CLV:jg 94CRL-80

~~,,Y/~
Claude L. Vickers State Auditor

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 24, 1995

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

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

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Metropolitan Regional Educational Service Agency as of and for the year ended June 30, 1994, and have issued our report thereon dated March 24, 1995. This report was qualified for a departure 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 Metropolitan 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 ofManagement and Budget (0MB) Circular A-128, "Audits ofState and Local Governments", we selected certain transactions applicable to certain nonrnajor 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

(2) Eligibility

Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Metropolitan 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 Metropolitan 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,
~~~
Claude L. Vickers State Auditor
CLV:jg 94CRL-120

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
March 24, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members of the Metropolitan Regional Educational Service Agency Board of Control
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Metropolitan Regional Educational Service Agency as ofand for the year ended June 30, 1994, and have issued our report thereon dated March 24, 1995. This report was qualified for a departure 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 ofthe general purpose financial statements of the Metropolitan 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 ofexpressing our opinion on the general purpose financial statements and not to provide assurance on the internal control structure.
The management ofthe Metropolitan Regional Educational Service Agency is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting
94ICL-3

principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection ofany 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

(5) Employee Compensation

(2) Revenue/Receivables/Receipts

(6) General Ledger

(3) Procurement

(7) General Fixed Assets

(4) Expenditures/Liabilities/Disbursements

For all ofthe internal control 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.

We noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements.

As described in the Schedule ofFindings and Improper or Questioned Costs, reportable conditions were noted in the following control categories:

(1) Accounting Controls (Overall)

(2) General Fixed Assets

A material weakness is a reportable condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.

Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that all of the reportable conditions disclosed above are also considered to be material weaknesses.

94ICL-3

These conditions were considered in determining the nature, timing, and extent of the procedures to be performed in our audit of the Metropolitan Regional Educational Service Agency's financial statements and this report does not affect our report thereon dated March 24, 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,

CLV:jg 94ICL-3

Claude L. Vickers State Auditor

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 24, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board ofEducation
and Director and Members of the Metropolitan Regional Educational Service Agency Board of Control
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Metropolitan Regional Educational Service Agency as of and for the year ended June 30, 1994, and have issued our report thereon dated March 24, 1995. This report was qualified for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We have also audited the Metropolitan Regional Educational Service Agency's compliance with requirements applicable to the major Federal financial assistance program and have issued our opinion thereon dated March 24, 1995.
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 Metropolitan Regional Educational Service Agency complied with laws and regulations, noncompliance with which would be material to a major Federal financial assistance program.
In planning and performing our audit for the year ended June 30, 1994, we considered the Agency's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the Agency's general purpose financial statements and on its compliance with requirements applicable to the major Federal financial assistance program 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 March 24, 1995.
94ICL-7

The management ofthe Metropolitan Regional Educational Service Agency is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by , management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that, assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that Federal financial assistance programs are managed in compliance with applicable laws and regulations. Because ofinherent limitations in any internal control structure, errors, irregularities, or instances of noncompliance may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness ofthe design and operation of policies and procedures may deteriorate.

For the purpose of this report, we have classified the significant internal control structure policies and procedures used in administering Federal financial assistance programs in the following control categories:

GENERAL REQUIREMENTS

SPECIFIC REQUIREMENTS

(I) Political Activity (2) Civil Rights (3) Cash Management (4) Federal Financial Reports (5) Allowable Costs/Cost Principles

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

(6) Drug-Free Workplace Act (7) Audit Follow-Up/Resolution (8) Administrative Requirements

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

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

During the year ended June 30, 1994, the Metropolitan Regional Educational Service Agency expended 79"/o of its total Federal financial assistance under a major Federal financial assistance program,

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 Agency's major Federal financial assistance program, which is

94ICL-7

identified in the Schedule ofFederal Financial Assistance. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such a opinion.
We noted a certain matter involving the internal control structure and its operation that we consider to be a reportable condition under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control structure that, in our judgment, could adversely affect the Agency's ability to administer Federal financial assistance programs in accordance with applicable laws and regulations.
As described in the Schedule ofFindings and Improper or Questioned Costs, a reportable condition was noted in the following control category:
Administrative Requirements
A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a Federal financial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.
Our consideration of the internal control structure policies and procedures used in administering Federal financial assistance would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that the reportable condition described above is also considered to be a material weakness.
This condition was considered in determining the nature, timing, and extent of the procedures to be performed in our audit of the Metropolitan Regional Educational Service Agency's compliance with requirements applicable to its major Federal financial assistance program for the year ended June 30, 1994, and this report does not affect our report thereon dated March 24, 1995.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~-~
Claude L. Vickers State Auditor
CLV:jg 94ICL-7

SECTIONV FINDINGS AND IMPROPER OR QUESTIONED COSTS

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Time and Attendance Records Not Utilized Federal Financial Assistance Finding Resolved Audit Control Number 8564-93-01
The audit reports for the years ended June 30, 1992 and June 30, 1993, reported $476.07 in expenditures charged to the Drug-Free Schools and Communities Act Program (CFDA 84.241) that were not supported by time and attendance records for the 1992 fiscal year. For the year under review, the Agency did not take any action to resolve this matter. During the subsequent fiscal year, the Agency submitted a corrective action plan and refunded $476.07 to the U. S. Department of Education and this amount is included in Accounts Payable as shown on the Combined Balance Sheet, Exhibit "A" ohhis report.
AUDIT FOLLOW-UP/RESOLUTION Failure to File Required Reports Within Required Time Period Federal Financial Assistance Finding Resolved Audit Control Number 8564-93-04
The audit report for the year ended June 30, 1993, stated that the Agency did not file the required semi-annual report (DE Form 0072D) for the Individuals with Disabilities Education Act - Title VI, B - Georgia Learning Resources System Program (CFDA 84.027) within the required time period for the 1991, 1992 and 1993 fiscal years. For the year under review, the Agency submitted the semi-annual reports as required.
AUDIT FOLLOW-UP/RESOLUTION Inadequate Accounting Records Federal Financial Assistance Finding Resolved Audit Control Number 8564-93-05
The audit report for the year ended June 30, 1993, stated that the books and records for the AIDS-Health Education Program (CFDA 93 .118) were not adequately segregated to ensure identification of revenues and expenditures by specific project as required by 46 CFR 74.42. In the year under review, the accounting records applicable to this program were segregated to ensure identification of revenues and expenditures by specific project as required.

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Travel Expense Reimbursement Procedures Financial Statements Finding Resolved Audit Control Number 8564-93-06
The audit report for the year ended June 30, 1993, stated that adequate documentation was not provided to support the Director's travel expenses in the amount of$200.15. This finding had not been resolved at June 30, 1994. However, reimbursement of$200.15 was received from the Director for deposit into the Agency's General Fund in the subsequent fiscal period.
AUDIT FOLLOW-UP/RESOLUTION Expenditures/Obligations Not Liquidated Federal Financial Assistance Finding Resolved Audit Control Number 8564-93-07
The audit report for the year ended June 30, 1993, reported that an unexpended grant balance of $54.88 remained on hand after the close ofthe grant period for the Individuals with Disabilities Education Act - Title VI, B Program (CFDA 84.027). This unexpended grant balance was the result of expenditures/obligations not liquidated in 90 days following the end of the grant award period, as required. This finding had not been resolved at June 30, 1994. However, subsequent to June 30, 1994, refund of$54.88 was made to the Georgia Department ofEducation and this amount is included in Accounts Payable as shown on the Combined Balance Sheet, Exhibit "A" of this report.
AUDIT FOLLOW-UP/RESOLUTION Inadequate Accounting Records Federal Financial Assistance Finding Resolved Audit Control Number 8564-93-08
The audit report for the year ended June 30, 1993, stated that the accounting records applicable to Individuals with Disabilities Education Act - Title VI, B - Severely Emotionally Disturbed (CFDA 84.027) were not maintained on an individual project basis. In the year under review, the accounting records applicable to this program were segregated to ensure identification of revenues and expenditures on a project by project basis as required.

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Failure to Maintain Required Level ofNon-Federal Expenditures Federal Financial Assistance Audit Control Number 8564-93-10
The audit report for the year ended June 30, 1993, reported that the Agency failed to expend non-federal funds in an amount equal to or greater than the amount expended in the prior fiscal period in the Education of the Handicapped Act, Instructional Services - Title VI, B - Georgia Learning Resources System Program (CFDA 84.027). For the year under review, no action was taken to resolve this finding.
PRIOR YEAR/CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation ofDuties Reportable Condition - Material Weakness Audit Control Number 8564-93-02
The audit report for the year ended June 30, 1993, stated that the Agency did not provide for adequate separation of employee duties in the performance ofaccounting functions and related procedures for all funds. For the year under review, the Agency made some improvements regarding separation of employee duties, but still did not achieve an adequate degree of internal control. This deficiency was a result of management's decision to limit the number of administrative staff made responsible for accounting functions. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree of internal control with existing staff for the General Fund and the Individuals with Disabilities Education Act - Title VI, B program (CFDA 84.027).
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 8564-93-03
The audit report for the year ended June 30, 1993, noted that the management of the Metropolitan Regional Educational Service Agency had chosen not to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. In the year under review, the Agency did not establish a General Fixed Assets Account Group within the formal accounting records. This condition results in the general purpose financial statements of the Agency being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Agency to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of equipment

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 I994
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 8564-93-03
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.
CURRENT YEAR
EXPENDITURES/LIABILITIES/DISBURSEMENTS Travel Expense Reimbursement Procedures for Employees Financial Statements Nonmaterial Noncompliance Amount: $361.00 Audit Control Number 8564-94-02
An examination of travel expenditures was performed to test the validity and accuracy of the expenditure transactions. The expenditures examined revealed that the Agency did not comply with travel regulations of the Georgia Department of Education as set forth in Chapter 40 of the Financial Management for Georgia Local Units of Administration. The following exceptions were noted:
(1) The Agency regularly reimburses for the noon meal on non-overnight travel even though the meal is not a integral part of the meeting attended.
(2) Reimbursements were made to the Director who paid for meals of Board members and consultants.
(3) Numerous travel statements were incomplete and did not contain itemized meals, odometer readings were not listed on a daily basis, and many travel statements did not contain a purpose for the travel or proper authorization.
(4) Mileage was not reimbursed at the approved rate.
The above exceptions resulted in questioned costs of$361.00. These improper expenditures occurred because management claims to not be aware ofthe specific limitations imposed upon the Agency by the aforementioned travel regulations. Internal controls should be implemented by the Agency to ensure that all travel expenditures are reviewed for proper documentation and compliance with travel regulations prior to payment and recording ofsuch expenditures in the financial records. Reimbursement of the $361.00 should be secured from the individuals involved and deposited to the Agency's General Fund.

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1994
CURRENT YEAR
EXPENDITURES/LIABILITIES/DISBURSEMENTS Travel Expense Reimbursement Procedures for Consultants Financial Statements Nonmaterial Noncompliance Audit Control Number 8564-94-03
An examination ofthe Agency's expenditures for consultants was performed to test the validity and accuracy of the expenditure transactions. The expenditures examined revealed that the Agency did not comply with contract provisions which specifically reference travel regulations of the Georgia Department of Education which are set forth in Chapter 40 of the Financial Management for Georgia Local Units of Administration. The following exceptions were noted:
(a) Meal limitations were not adhered to.
(b) Motel charges were paid without proper documentation.
(c) One consultant was reimbursed for travel and subsistence expenses without completing the "Expense Statement for Consultants" document as required.
This condition occurred because management disregarded the specific contractual limitations imposed upon travel and subsistence reimbursements to consultants. Procedures should be implemented by the Agency to ensure that all travel expenditures are reviewed for proper documentation and compliance with travel regulations prior to payment and recording of such expenditures in the financial records.
FEDERAL FINANCIAL REPORTS Failure to Refund Unexpended Grant Balances Federal Financial Assistance Major Program Nonmaterial Noncompliance Finding Resolved Audit Control Number 8564-94-04
Accounting records applicable to the 1994 Regular Project in the Individuals with Disabilities Education Act Title VI, B - Severely Emotionally Disturbed Program (CFDA 84.027) reflected an unexpended grant balance of$16,857.04 at June 30, 1994. Instructions pertaining to project completion reports require that unexpended grant balances be refunded to the Georgia Department of Education. Although a completion report was submitted to the Georgia Department of Education as required, personnel of the Agency did not include a refund check with the project completion report as required. Accordingly, the unexpended grant balance of $16,857.04 remained on hand at June 30, 1994. This balance was refunded to the Georgia Department of Education in the subsequent fiscal year.

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994

CURRENT YEAR

FEDERAL FINANCIAL REPORTS Delinquent Program Reports Federal Financial Assistance Major Program Nonmaterial Noncompliance Audit Control Number 8564-94-05

A review of program reports submitted by the Agency to the Georgia Department of Education for the Individuals with Disabilities Education Act - Title VI, B - Severely Emotionally Disturbed Program (CFDA 84.027) for the year under review showed that two required reports were not submitted by the due date as listed below:

Report

Due Date

Date Submitted

1993 Carry-Over Project Project Completion Report

July 31, 1994

November 28, 1994

1994 Regular Project Project Completion Report

September 30, 1994

November 28, 1994

This noncompliance occurred because of management's failure to follow instructions included with each project completion report. Appropriate procedures should be established and implemented by the Agency to ensure that each program report is submitted by the required due date.

FEDERAL FINANCIAL REPORTS Project Completion Reports Not Supported by Accounting Records Federal Financial Assistance Major Program Nonmaterial Noncompliance Finding Resolved Audit Control Number 8564-94-06

A comparison of the Agency's project completion report for the 1993 Carry-Over project of the Individuals with Disabilities Education Act - Title VI, B - Georgia Leaming Resources System Program (CFDA 84.027) to the accounting records revealed that the project completion report was not supported by expenditures recorded in the accounting records, as indicated below:

Actual Expenditures

Project Completion
Report

1993 (Carry-Over)

$ 20 245 42 $ 20 64) 24

:METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994
CURRENT YEAR
FEDERAL FINANCIAL REPORTS Project Completion Reports Not Supported by Accounting Records Federal Financial Assistance Major Program Nonmaterial Noncompliance Finding Resolved Audit Control Number 8564-94-06
An unexpended grant balance in the amount of$395.82 remained on hand at June 30, 1994. This occurred because the project completion report submitted to the Georgia Department ofEducation included payables which were voided by the Agency prior to June 30, 1994. Procedures should be implemented to ensure that project completion reports are accurate and verifiable to the accounting records. In the subsequent fiscal year, refund of$395.82 was made to the Georgia Department ofEducation.
AUDIT FOLLOW-UP/RESOLUTION Audit Distribution Requirements Federal Financial Assistance Nonmaterial Noncompliance Finding Resolved Audit Control Number 8564-94-07
The Agency failed to submit a copy ofthe 1993 audit report to the U.S. Department ofEducation from whom the Agency received Drug-Free Schools and Communities Act Funds (CFDA 84.241). Paragraph l 3f of 0MB Circular A-128 requires that the recipients of Federal financial assistance submit copies of single audit reports to those agencies providing Federal financial assistance. Even though formally notified in writing of these report distribution responsibilities by the Department of Audits, management claimed it was unaware of this audit distribution requirement. Procedures should be implemented to ensure that reports are submitted to grantor agencies in accordance with audit distribution requirements.
In the subsequent fiscal year, the Agency submitted a copy of the 1993 audit report to the U.S. Department ofEducation as required.
AUDIT FOLLOW-UP/RESOLUTION Failure to File Corrective Action Plan Federal Financial Assistance Nonmaterial Noncompliance Audit Control Number 8564-94-08
Our audit disclosed that the Agency failed to submit a corrective action plan for the 1993 audit report as required by 0MB Circular A-128 to various entities that were the sources ofFederal Financial Assistance, as follows:

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994

CURRENT YEAR

AUDIT FOLLOW-UP/RESOLUTION Failure to File Corrective Action Plan Federal Financial Assistance Norunaterial Noncompliance Audit Control Number 8564-94-08

SOURCES

PROGRAM

Education, U. S. Department of

Drug-Free Schools and Communities Act (CFDA 84.241)

Education, Georgia Department of

Individuals with Disabilities Education Act Title VI, B Georgia Learning Resources System (CFDA 84.027) Severely Emotionally Disturbed (CFDA 84.027)
Acquired Immunodeficiency Syndrome (AIDS) Health Education (CFDA 93.118)

Management maintained they were unaware of this federal requirement. The Agency should implement procedures to submit corrective action plans in a timely manner.

SECTION VI PERTINENT VIEWS OF RESPONSIBLE OFFICIALS

METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF PERTINENT VIEWS OF RESPONSIBLE OFFICIALS
YEAR ENDED JUNE 30 1994
ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation ofDuties Reportable Condition - Material Weakness Audit Control Number 8564-93-02
We concur with this finding, however due to current budgetary constraints, the Agency is unable to hire the additional staff required to clear this finding. The Agency feels it has provided for the most appropriate assignment of duties with the number of personnel available to perform the accounting functions. With staff limitations, this finding can not be totally resolved.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 8564-93-03
We concur with this finding, however due to our current staffing, budgetary constraints and lack of guidelines we have not been able to resolve this finding. The Georgia State Department of Education has recently issued guidelines to properly record general fixed assets and we anticipated correcting this finding in the future.
EXPENDITURES/LIABILITIES/DISBURSEMENTS Travel Expense Reimbursement Procedures for Employees Financial Statements Nonmaterial Noncompliance Amount: $361.00 Audit Control Number 8564-94-02
We concur with this finding. The Agency has implemented internal control procedures to ensure that all travel statements are reviewed for proper documentation and compliance with travel regulations of the Georgia Department ofEducation as set forth in Chapter 40 of the Financial Management for Georgia Local Units of Administration. The questioned cost of $361.00 was reimbursed to the Agency's General Fund in the subsequent period and will be shown as resolved in the next reporting period.
EXPENDITURES/LIABILITIES/DISBURSEMENTS Travel Expense Reimbursement Procedures for Consultants Financial Statements Nonmaterial Noncompliance Audit Control Number 8564-94-03
We concur with this finding. The Agency has implemented internal control procedures to make project directors and consultants aware of the travel regulations. We have also implemented procedures to review all consultant expense statements for proper documentation and compliance with travel regulations of the Georgia Department ofEducation as set forth in Chapter 40 of the Financial Management for Georgia Local Units of Administration.

l\1ETROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF PERTINENT VIEWS OF RESPONSIBLE OFFICIALS
YEAR ENDED JUNE 30 1994
FEDERAL FINANCIAL REPORTS Delinquent Program Reports Federal Financial Assistance Major Program Nonmaterial Noncompliance Audit Control Number 8564-94-05
We concur with this finding. The Agency has implemented internal control procedures to ensure that all project completion reports are submitted by the due date.
AUDIT FOLLOW-UP/RESOLUTION Failure to File Corrective Action Plan Federal Financial Assistance Nonmaterial Noncompliance Audit Control Number 8564-94-08
We concur with this finding. The corrective action plan was not submitted to the Georgia Department of Education nor the U. S. Department ofEducation because the request for the audit follow-up was received from the Grants Management Section while the current audit was under review. The response was not completed until after the auditors field work was completed. This finding will be shown as resolved in the next audit report.
Note: The Metropolitan Regional Educational Service Agency has elected not to provide comments for inclusion in this report other than the above.