GA. A.$JOO RI E ;)..(oi !V\4 1994_q5 STATE OF GEORGIA DEPARTMENT OF AUDITS 254 WASHINGTON STREET ATLANTA. GEORGIA 30334 AUDIT REPORT METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY ATLANTA, GEORGIA YEAR ENDED JUNE 30, 1995 METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE EXHIBITS GENERAL PURPOSE FINANCIAL STATEMENTS COMBINED STATEMENTS - OVERVIEW A COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP 2 B COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES 3 C STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS 4 D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 5 ADDITIONAL FINANCIAL INFORMATION 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 CASH AND CASH EQUIVALENTS 19 3 ACCOUNTS RECEIVABLE 20 SCHEDULE OF REVENUE 4 STATE 21 5 LOCAL AND OTHER 22 SCHEDULE OF EXPENDITURES BY OBJECT 6 GENERAL AND SPECIAL REVENUE FUNDS 23 7 SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS 24 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 PERTINENT VIEWS OF RESPONSIBLE OFFICIALS SECTION I FINANCIAL CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 June 21, 1996 Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation and Director and Members ofthe Metropolitan Regional Educational Service Agency Board ofControl INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE Ladies and Gentlemen: We have audited the general purpose financial statements (Exhibits A through D) of the Metropolitan Regional Educational Service Agency, as of and for the year ended June 30, 1995, 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 respects from generally accepted accounting principles. This variance is described as follows: * 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. 95ARL-33* The aggregate effects on the general purpose financial statements ofthis variance or omission have not been determined, but are 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, 1995, and the results ofits operations for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated June 21, 1996, on our consideration of the Agency's internal control structure and a report dated June 21, 1996, on its compliance with laws and regulations. Our audit was conducted for the purpose offorming 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 1 through 7 which includes the Schedule of Federal Financial Assistance) and the Schedule of Salaries and Travel, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the 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 ofthe State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24. L ~ Respectfully submitted, Claude L. Vickers State Auditor CLV:dt 95ARL-33* METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY - 1- METROPOUTAN REGIONAL EDUCATIONAL SERVICE AGENCY COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 1995 EXHIBIT"A" Cash and Cash Equivalents Accounts Receivable Amount to be Provided in Future Years For Payment of Capital Lease Agreements GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS {Memorandum Onl~} JUNE 30, 1995 JUNE 30, 1994 $ 109,830.08 $ 285,792.33 $ 395,622.41 $ 281,314.44 31,098.79 48,095.57 79,194.36 137,446.58 $ 21,875.27 21,875.27 10~51.16 Total Assets $ 140,928.87 $ 333,887.90 $ 21,875.27 $ 496,692.04 $ 429,012.18 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable $ Salaries Payable Expired Grant Balances Payable Capital Lease Agreements Total Liabilities $ FUND EQUITY Fund Balances Reserved for Continuation of Federal Programs Unreserved Undesignated $ Total Fund Equity $ 56,434.17 $ 56,434.17 $ 54,686.29 222,222.48 10,201.08 $ 287,109.85 $ $ 84,494.70 84,494.70 $ 3,027.59 43,750.46 46,TTS.05 $ 21,875.27 21,875.27 $ 111,120.46 $ 222,222.48 10,201.08 21,875.27 365,419.29 $ 70,880.13 231,561.99 19,089.99 10,251.16 331,783.27 $ 3,027.59 128,245.16 $ $ 131,272.75 $ 97,228.91 97,228.91 Total Liabilities and Fund Equity $ 140,928.87 $ 333,887.90 $ 21,875.27 $ 496,692.04 $ -=-=4=29==,0==1=2==.1=8 The notes to the general purpose financial statements are an integral part of this statement. -2- METROpoLJTAN REGIONAL EDUCATIONAL SERVICE AGENCY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GQYERNMENTAL FUND TYPES YEAR ENDED JUNE 30 1995 EXHIBIT Er' REVENUES State Funds Federal Funds Local and Other Funds Total Revenues EXPENDITURES Current lnstruc:tion 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 tUSES) capital Leases 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 On!x} YEAR ENDED JUNE 301 1995 JUNE 301 1994 $ 639,021.00 $ 2,223,580.84 $ 2,862,601.84 $ 2,812,589.16 14,521.46 603,666.07 618,187.53 717,306.39 305,196.47 29,658.47 334,854.94 316,973.74 $ 958,738.93 $ 2,856,905.38 $ 3,815,644.31 $ 3,846,869.29 $ 1,548,255.92 $ 1,548,255.92 $ 1,544,563.23 $ 293,363.87 . 432,130.70 37,934.66 89,073.33 89,504.21 540,071.13 275,027.47 22,183.29 369,517.19 36,790.52 52,681.80 4,060.00 540,071.13 568,391.34 22,183.29 801,647.89 74,725.18 141,755.13 4,060.00 89,504.21 548,944.40 541,559.42 16,235.83 854,138.87 79,083.07 127,777.55 100.00 89,442.78 6,472.89 2,630.49 6,472.89 2,630.49 4,419.41 2,099.71 $ 951,110.15 $ 2,848,587.32 $ 3,799,697.47 $ 3,808,364.27 $ 7,628.78 $ 8,318.06 $ 15,946.84 $ 38,505.02 $ 18,097.00 953.00 $ -2,325.47 $ 16,724.53 $ $ 2,325.47 -953.00 1 372.47 $ 18,097.00 3,278.47 $ -3,278.47 18,097.00 $ $ 24,353.31 $ 9,690.53 $ 34,043.84 $ 60,141.39 37,087.52 97,228.91 1,265;48 -1,265.48 0.00 38,505.02 58,723.89 FUND BALANCE JUNE 30 $ 84 494.70 $ 461778.05 $ 1311272.75 $ 971228.91 The notes to the general purpose financial statements are an integral part of this statement. -3- METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 1995 EXHIBITc 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) Capital Lease 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, 1994 Adjustments GENERAL FUND BUDGET ACTUAL $ 634,425.00 $ 639,021.00 14,521.46 239,100.00 305,196.47 $ 873,525.00 $ 958,738.93 $ 228,045.00 $ 293,363.87 439,978.00 38,927.00 82,000.00 432,130.70 37,934.66 89,073.33 84,575.00 89,504.21 9,103.38 $ 873,525.00 $ 951,110.15 $ 0.00 $ 7,628.78 $ 18,097.00 953.00 -2,325.47 $ 16,724.53 $ $ 86,200.79 2,664.54 24,353.31 60,141.39 FUND BALANCE JUNE 30, 1995 $ 88,865.33 $ 84,494.70 SPECIAL REVENUE FUND BUDGET ACTUAL $ 2,227,162.00 $ 2,223,580.84 644,018.57 603,666.07 29,658.47 $ 2,871, 180.57 $ 2,856,905.38 $ 1,579,533.87 $ 1,548,255.92 539,699.00 304,377.19 17,516.00 369,576.26 31,976.00 36,983.00 4,900.00 540,071.13 275,027.47 22,183.29 369,517.19 36,790.52 52,681.80 4,060.00 $ 2,884,561.32 $ 2,848,587.32 $ -13,380.75 $ 8,318.06 $ 2,325.47 -953.00 $ 1,372.47 $ -13,380.75 $ 21,TT6.26 -23,095.20 9,690.53 37,087.52 $ -14,699.69 $ 46,TTS.05 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, 1995 EXHIBIT"D" Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Metropolitan Regional Educational Service Agency (Agency) was established pursuant to the Official Code ofGeorgia Annotated Sections 20-2-270 through 20-2-274 for the purposes 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 ofoffice are prescribed by the State Board ofEducation; provided, however, that at least one-third of the membership of each Board shall be individuals who hold no other public office, who are not employees of any local unit ofadministration, and who are not employees of the Georgia Department ofEducation. With the exception ofthe departures from generally accepted accounting principles disclosed in these notes, the financial statements ofthe Agency have been prepared in conformity with generally accepted accounting principles as applied to government units. The GQvernmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant ofthe 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 of an 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 ofthe regional educational service agency. The director is responsible for the administration ofthe programs and services approved by the Board. Member boards of education in the Metropolitan Regional Educational Service Agency are as follows: City ofAtlanta, City ofBuford, Clayton County, Cobb County, City ofDecatur, Dekalb County, Douglas County, Fulton County, Gwinnett County, City ofMarietta 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 JUNE 30, 1995 EXHIBIT"D" Note I: 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 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 ~nd balance is considered a measure of available spendable resources. Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group. - 6- METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995 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 ofthe current period. Those revenues considered susceptible to accrual are intergovernmental grants, sales and services and investment income. Expenditures are generally recognized when the related fund liability is incurred. BUDGET The Metropolitan Regional Educational Service Agency's budget is a complete financial plan for the Agency's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Agency at the aggregate level. The budget for governmental funds was prepared in accordance with generally accepted accounting-principles. The budget process begins when the Agency's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral 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, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year end. The Statement ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the General Fund and Special Revenue Fund. CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits (including certificate of deposit and savings accounts) in an authorized financial institution. 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. - 7- METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS. JUNE 30, 1995 EXHIBIT"D" Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. 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 ofthis 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 ofexpenditures 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. lnterfund eliminations have not been made in the aggregation of this data. - 8- METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT"D" Note 2: DEPOSITS COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofthe securities pledged shall be equal to not less than 110 percent of the public funds being secured after the deduction of the amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts. Acceptable security for deposits consists of any one of or any combination of the following: ( 1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, (2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, (3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or ofthe State of Georgia, (4) Bonds, bills, notes, certificates ofindebtedness or other obligations of the counties or municipalities ofthe State of Georgia, (5) Bonds ofany public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use 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, 1995, the bank balances were $508,714.86. 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. - 9- METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT"D" Note 2: DEPOSITS Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Agency's name. Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Agency's name.) The Agency's deposits are classified by risk category at June 30, 1995, as follows: Risk Category Bank Balance 1 $ 100,000.00 2 408,714.86 3 0.00 Total $508,714.86 Note 3: RISK MANAGEMENT The Agency is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illnesses or injuries to employees and natural disaster. The Agency has obtained commercial insurance for risk of loss associated with torts, assets and job related illnesses or injuries to employees. The Agency has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Agency's insurance coverage in any of the past three years. The Agency has elected to self-insure for all losses related to errors or omissions, which includes, among other risks, risks for sexual harassment and discrimination. Additionally, the Agency has elected to self-insure for all losses related to natural disasters. The Agency has not experienced any losses related to these risks in the past three years. Note 4: GENERAL LONG-TERM DEBT CAPITAL LEASES The Metropolitan Regional Educational Service Agency has entered into various lease agreements as lessee for reproduction equipment. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value ofthe future minimum lease payments as of the date oftheir inception. - 10 - METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT"D" Note 4: GENERAL LONG-TERM DEBT The changes in General Long-Term Debt during the fiscal year ended June 30, 1995, were as follows: Capital Leases Balance July 1, 1994 $ 10,251.16 Additions 18,097.00 Deductions 6,472.89 Balance June 30, 1995 $ 21,875.27 At June 30, 1995, payments due, by fiscal year which includes principal and interest for these items are as follows: Fiscal Year Ended June 30 1996 1997 1998 1999 2000 Total Principal and Interest Deduct: Imputed Interest Net Present Value of Future Minimum Lease Payments Note 5: CONTINGENT LIABILITIES Capital Leases $ 10,601.12 5,168.52 5,168.52 5,168.52 2,584.26 $ 28,690.94 6 815.67 $ 21 875,27 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 granter agency for any expenditures which are disallowed under grant terms. The Agency believes that such disallowances, if any, will be immaterial to its overall financial position. Note 6: ACCUMULATED EMPLOYEES' LEAVE The Director's employment contract provides for reimbursement of unused vacation leave at the time of retirement/termination at the prevailing rate of pay. See Note 1 - Compensated Absences - 11 - METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT"D" Note 7: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by Agencies are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer public employee retirement system (PERS). TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. A member is eligible for service retirement after 30 years of creditable service, regardless ofage, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number of years of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death. Retirement benefits also include death and disability benefits. A disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service retirement allowance or a disability retirement allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of 10 years of service) and compensation up to the time of disability or death. Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting ofemployer contributions occurs, but the member's contributions are refunded with interest. The Agency's payroll for employees covered by TRS for the year ended June 30, 1995, was $2,346,302.36; total payroll was $2,359,411.50. TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Agency who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Agency makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. For fiscal year 1995 that rate for employer contributions was 11.81%. The interest rate assumption (rate of return on investments) was 7.50%. Total contributions made during fiscal year 1995 amounted to $394,414.25, of which $277,098.81 was made by the Agency and $117,315.44 was made by employees. These contributions represented 11. 81 % (Agency) and 5% (employees) of covered payroll. - 12 - METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT"D" Note 7: RETIREMENT PLANS 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, 1994, was as follows: Total pension benefit obligation $15,313,743,000.00 Net assets available for benefits, at cost 14,254,785,000.00 Unfunded pension benefit obligation $ 1,058,958.000.00 The measurement ofthe total pension benefit obligation is based on an actuarial valuation as of June 30, 1994. 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, 1995 were $565,117,811.00. The Agency's contribution for the year ended June 30, 1995 of $227,098.81 was actuarially determined and represented .0490% oftotal contributions made by all participating employers. Ten year historical trend information is presented in the 1995 TRS Component Unit Financial Report. This information is useful in assessing TRS's accumulation of sufficient assets to pay pension benefits as they become due. Note 8: SURETY BONDS The Director, Dr. A. Bernard Hatch, is bonded in the amount of $50,000.00 with the Glen Falls Insurance Company, New York, New York, their Bond No. BNP00l 1321, on which premium is paid through January 17, 1997. - 13 - METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1995 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 Reserved for Continuation of Federal Programs Unreserved Undesignated Total Fund Equity Total Liabilities and Fund Equity GEORGIA LEARNING RESOURCES SYSTEM SEVERELY EMOTIONALLY DISTURBED LOTTERY PROGRAMS $ 55,723.87 $ 233,699.62 $ 0.00 43,862.55 ---==-= $ 55,723.87 $ 277,562.17 $ 0.00 $ 54,686.29 222,222.48 $ 8,945.82 653.40 $ 8,945.82 $ 277,562.17 $ 3,027.59 43,750.46 $ 0.00 $ 0.00 $ 46,778.05 $ 0.00 $ 0.00 $ 55,723.87 $ 277,562.17 $ -======0=.=00= See notes to the general purpose financial statements. - 14 - EXHIBIT "E" 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, 1995 JUNE 30, 1994 $ 601.86 $ 0.00 $ 290,025.35 $ 241,720.60 $ 4,233.02 48,095.57 122,239.78 ----- $ 601.86 $ 0.00 $ 4,233.02 $ 338,120.92 $ 363,960.38 $ 601.86 $ 601.86 $ 4,233.02 $ 4,233.02 $ 10,868.12 54,686.29 66,431.56 222,222.48 231,561.99 10,201.08 18,011.19 $ 4,233.02 $ 291,342.87 $ 326,872.86 $ $ - - - -0.0-0 $ - - - - - -0.0-0 $- - - -0.0-0 $ - - - - o.oo $ ______o_.o_o $ o.oo $ 3,027.59 43,750.46 $ ---3-7-,08-7-.5246,778.05 $ ----3-7-,0-87-.-52- $ _ _=6=0=1=.8-6$-======o=.0=0$ 4,233.02 $ 338,120.92 $ 363,960.38 - 15 - METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 1995 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 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 FUND BALANCE JUNE 30 GEORGIA LEARNING RESOURCES SYSTEM SEVERELY EMOTIONALLY DISTURBED LOTTERY PROGRAMS $ 67,302.45 $ 2, 155,325.39 $ 193,658.06 359,202.21 29,658.47 $ 290,618.98 $ 2,514,527.60 $ 953.00 953.00 $ 1,547,936.92 $ $ 98,483.63 22,183.29 154,445.22 3,808.53 540,071.13 125,613.78 215,049.72 36,790.52 48,873.27 4,060.00 $ 278,920.67 $ 2,518,395.34 $ $ 11,698.31 $ -3,867.74 $ 0.00 0.00 953.00 $ 1,859.96 $ -953.00 $ 1,859.96 $ -953.00 $ 11,698.31 $ 35,079.74 -2,007.78 $ 2,007.78 0.00 0.00 $ 46,778.05 $ ----- 0.00 $ 0.00 See notes to the general purpose financial statements. -16 - EXHIBIT"F" 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, 1995 JUNE 30, 1994 $ 19,398.14 $ $ 19,398.14 $ 319.00 $ 319.00 $ $ 31,088.66 2,223,580.84 $ 2,181,124.96 603,666.07 701,537.83 29,658.47 34,762.96 31,088.66 $ 2,856,905.38 $ 2,917,425.75 $ $ 19,375.89 22.25 $ 19,398.14 $ $ 0.00 $ $ 0.00 $ 0.00 $ 0.00 $ 319.00 $ 319.00 $ 0.00 $ $ 1,548,255.92 $ 1,544,563.23 31,554.17 540,071.13 275,027.47 22,183.29 369,517.19 36,790.52 52,681.80 4,060.00 548,944.40 275,401.01 16,235.83 417,426.66 43,598.69 66,232.80 100.00 31,554.17 $ 2,848,587.32 $ 2,912,502.62 -465.51 $ 8,318.06 $ 4,923.13 $ 465.51 $ 2,325.47 $ 1,265.48 -953.00 $ 465.51 $ 1,372.47 $ _ _1....:.,2_6_5_.4_8 0.00 $ 0.00 0.00 $ 0.00 9,690.53 $ 37,087.52 6,188.61 30,898.91 0.00 $ 0.00 $ 46,778.05 $ 37,087.52 - 17 - METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE YEAR ENDED JUNE 3Q 1995 FUNDING AGENCY PROGRAM/GRANT CFDA NUMBER AWARDS IN PERIOD FEDERAL FUNDS RECEIVED IN PERIOD(NET OF REFUNDS) FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD Education, U. S. Department of Through Georgia Department of Education Drug-Free Schools and Communities Act 1992 Grant 84.186 1994 Grant 84.186 1995Grant 84.1"86 $ Elementary and Secondary Education Act Chapter 1 Education of Children in S~te Schools 1995 Regular 84.009 lndMduals with Disabilities Education Act TltleVl,B Flow Through 1994 Regular * 84.027 Georgia Leaming Resources System 1993 Carry-Over 84.027 1994 Carry-over 84.027 1995 Regular 84.027 Severely Emotionally Disturbed 1992 Carry-Over 84.027 1993 Carry-over * 84.027 1994 Regular 84.027 1994 Carry-Over * 84.027 1995 Regular 84.027 Special Education Personnel Development and Parent Training TltleVl,D 1994 Regular 84.029 1995 Regular 84.029 Vocational Education - Community Based Organizations 1994 Contract 84.174 1995 Contract 84.174 $ 20,000.00 319.00 7,400.00 16,000.00 155,802.00 16,857.00 355,526.00 9,509.00 23,392.00 3,315.60 111205.86 -476.07 -551.77 20,000.00 $ 19,398.14 $ 19,398.14 319.00 319.00 319.00 7,400.00 579.42 16,000.00 155,802.00 -54.88 80,000.00 792.43 16,857.00 291,094.45 7,388.21 15,874.60 149,882.46 16,857.00 334,957.00 7,388.21 15,874.60 149,882.46 16,857.00 334,957.00 12,274.43 18,392.00 7,402.40 8450.47 9,509.00 18,392.00 3,315.60 111205.86 9,509.00 15,364.41 (2) {2) Total U.S. Department of Education $ 6191326.46 $ 6341280.86 $ 5871098.87 $ 5691549.82 Health and Human Services, U. S. Department of Through Georgia Department of Education Acquired Immunodeficiency Syndrome (AIDS) School Health Education Training 1994 Contract 1995 Contract 93.938 93.938 $ $ 391200.00 28,110.00 $ 91613.76 17,241.86 $ 131846.78 17,707.39 (1) 131846.78 Total U.S. Department of Health and Human Services $ 391200.00 $ 37.723.76 $ 311086.66 $ 311554.17 Total Federal Financial Assistance $ 658,526.46 $ The Major Program is identified by an asterisk (*) 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. (2) Expenditures on this program were not maintained by fund source. 672,004.64 $ 618,187.53 $ 601,103.99 See notes to the general purpose financial statements. - 18 - METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY CASH AND CASH EQUIVALENTS JUNE 30, 1995 INTEREST BEARING ACCOUNTS Wachovia Bank of Georgia, Atlanta, Georgia Certificate of Deposit No. 5363068 (5.02%) Commercial Checking Account (Variable) Money Market Account (Variable) SCHEDULE ''2'' $ 20,310.79 339,543.01 35,768.61 $ 395,622.41 See notes to the general purpose financial statements. - 19 - METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY ACCOUNTS RECEIVABLE JUNE 30, 1995 SCHEDULE "3" City of Buford Board of Education Reimbursement of Expenses Cobb County Board of Education Educational Audit Fees Douglas County Board of Education Reimbursement of Expenses Education, Georgia Department of Vocational Education Federal Funds Federal Programs Individuals with Disabilities Education Act TrtleVl,B Severely Emotionally Disturbed Contract Acquired Immunodeficiency Syndrome (AIDS) School Health Education Training GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND TOTAL $ 16.39 $ 16.39 26,352.82 26,352.82 1,974.19 1,974.19 2,755.39 2,755.39 $ 43,862.55 4,233.02 43,862.55 4,233.02 $ 31,098.79 $ 48,095.57 $==7=9=,1=9=4-=36= See notes to the general purpose financial statements. - 20 - METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1995 SCHEDULE "4" AGENCY/FUNDING GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND TOTAL 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 PerformanceBased Certification Lottery Program Instructional Technology $ 67,294.12 $ 67,294.12 $ 389,136.00 389,136.00 2,155,325.39 2,155,325.39 31,000.00 31,000.00 214,285.00 953.00 214,285.00 953.00 CONTRACTS Education, Georgia Department of Training Program to Prepare Public School Personnel to Become Teachers/Sponsors of Teacher Cadet Programs 4,600.00 4,600.00 OTHER Supplies 8.33 8.33 $ 639,021.00 $ 2,223,580.84 $ 2,862,601.84 See notes to the general purpose financial statements. - 21 - METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF LOCAL AND OTHER REVENUE YEAR ENDED JUNE 30, 1995 SCHEDULE "5" Associate Membership Fees Boards of Education Chatham County Glynn County Richmond County Educational Audit Fees Cobb County Board of Education 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 Recovery of Prior Year Questioned Cost Travel Registration Fees Other GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND TOTAL $ 3,000.00 3,000.00 3,000.00 $ 3,000.00 3,000.00 3,000.00 44,104.95 44,104.95 25,792.00 6,210.72 $ 2,202.25 25,792.00 8,412.97 21,755.00 2,678.00 13,535.00 25,385.00 2,929.00 26,706.00 6,678.00 16,906.00 24,617.00 3,999.00 5,912.00 23,524.19 20,424.78 561.15 24,155.37 323.31 184.78 6,004.97 19;418.47 1,848.00 21,755.00 2,678.00 13,535.00 25,385.00 2,929.00 26,706.00 6,678.00 16,906.00 24,617.00 3,999.00 5,912.00 23,708.97 26,429.75 561.15 43,573.84 2,171.31 $ 305,196.47 $ 29,658.47 $ 334,854.94 See notes to the general purpose financial statements. - 22 - METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF EXPENDITURES BY OBJECT GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 1995 SCHEDULE "6" EXPENDITURES Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical SelVices Compensation and Travel of Board Members Water, Sewer and Cleaning SelVices Repair and Maintenance SelVices Rents Insurance Communications Other Purchased SelVices Supplies Energy Dues and Fees Indirect Costs Other Expenditures Nonoperating Costs Principal and Interest Equipment GENERAL FUND SPECIAL REVENUE FUND TOTAL $ 339,562.34 $ 2,019,849.16 $ 2,359,411.50 76,586.49 480,095.92 556,682.41 16,694.15 19,700.73 36,394.88 272,807.33 147,800.92 420,608.25 3,512.99 3,512.99 1,310.35 1,310.35 20,371.20 4,497.12 24,868.32 18,312.00 30,173.11 48,485.11 1,811.76 7,093.48 8,905.24 26,044.76 21,824.23 47,868.99 9,759.95 9,759.95 49,568.16 75,081.07 124,649.23 11,473.70 3,42721 14,900.91 82,110.00 400.00 82,510.00 25,792.00 25,792.00 3,744.54 945.00 4,689.54 9,103.38 18,097.00 2,147.42 9,103.38 20,244.42 Total Expenditures $ 951,110.15 $ 2,848,587.32 $ 3,799,697.47 See notes to the general purpose financial statements. - 23 - METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS YEAR ENDED JUNE 30, 1995 SCHEDULE "T BOARD MEMBER ADDRESS Mrs. Grace Calhoun, Chairman r) Cobb County Board of Education P. 0. Box 1088 Marietta, Georgia 30061 Dr. Benjamin Canada r) City of Atlanta Board of Education 210 Pryor Street, S. W. Atlanta, Georgia 30335 Mr. David Crews r) Gwinnett County Board of Education 52 Gwinnett Drive Lawrenceville, Georgia 30245 r) Dr. Ellis Dunbar Rockdale County Board of Education P. 0. Drawer 1199 Conyers, Georgia 30207 Dr. James H. Fox Fulton County Board of Education 786 Cleveland Avenue, S. W. Atlanta, Georgia 30315 r) 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. 0. Box 1265 Marietta, Georgia 30061 Dr. Don Griffith r) City of Decatur Board of Education 320 North McDonough Street Decatur, Georgia 30030 Mr. Arthur Griggs (*) 125 Melanie Court College Park, Georgia 30349 Dr. Joe Hairston r) Clayton County Board of Education 120 Smith Street Jonesboro, Georgia 30236 Mr. AndreNI Henderson (*) City of Buford Board of Education 70 Wiley Drive Buford, Georgia 30518 COMPENSATION TRAVEL $ 500.00 - 24 - METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS YEAR ENDED JUNE 30. 1995 SCHEDULE'7" BOARD MEMBER ADDRESS Mrs. Brenda Jackson r) . 3307 Renoir Court Decatur, Georgia 30034 r) Mr. Emmett Johnson 559 Larchmont Drive, N. W. Atlanta, Georgia 30318 Dr. Bob Livingston Clayton County Board of Education 120 Smith Street Jonesboro, Georgia 30236 r) Dr. Wimam McFatter Fulton County Board of Education 786 Cleveland Avenue, S. W. Atlanta, Georgia 30315 Mrs. Phyllis Schwartz 1300 Commerce Drive Decatur, Georgia 30030 r) Ms. Kathryn Shehane Douglas County Board of Education P. 0. Box 1077 Douglasville, Georgia 30133 r) Mrs. Felecca Taylor 5531 Deerfield Place Kennesaw, Georgia 30144 Mr. George Thompson Gwinnett County Board of Education 52 Gwinnett Drive Lawrenceville, Georgia 30245 Mrs. Peggy Walker r) 3108 Chapel Hill Road Douglasville, Georgia 30135 r) Denotes Board Members Serving as of June 30, 1995 COMPENSATION TRAVEL $ 300.00 $ 1,162.99 550.00 250.00 550.00 200.00 $ 2,350.00 $....,_==1...1;,;;;6,_2.=9=9 See notes to the general purpose financial statements. - 25 - SECTION II SUMMARY AND SCHEDULE OF SALARIES AND TRAVEL METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SUMMARY OF SALARIES AND TRAVEL YEAR ENDED JUNE 30. 1995 SALARIES GENERAL FUND Support Services Improvement of Instructional Services General Administration Business Administration Other Support Services Total General Fund SPECIAL REVENUE FUND Total Salaries TOTAL PER FINANCIAL STATEMENTS (ACCRUAL BASIS) ADJUSTMENTS FOR ACCRUALS JUNE 301 1994 JUNE 301 1995 TOTAL PER SCHEDULE (CASH BASIS) $ 76,199.94 $ 176.764.64 30,817.92 55,779.84 0.00 $ 0.00 $ 76,199.94 176,764.64 30,817.92 55,779.84 $ 339,562.34 $ 0.00 $ 0.00 $ 339,562.34 2,019,849.16 231,561.99 -222,222.48 2,029,188.67 $ 2,359,411.50 $ 231,561.99 $ -222,222.48 $ 2,368,751.01 GENERAL FUND Support Services Improvement of Instructional Services General Administration Total General Fund SPECIAL REVENUE FUND Total Travel $ 3,612.46 $ 13,081.69 $ 16,694.15 $ 19,700.73 $ 36,394.88 $ 0.00 $ 0.00 $ -228.27 $ -228.27 $ 3,384.19 13,081.69 16,465.88 19,700.73 0.00 $ -22a.21 $ _ _3...6...,.1.s.s_._s..,1 METRO R.E.S.A. SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 1995 NAME BAKER,JUDY A BEGGS,TRACY BENNETT.STEPHEN N BERUSCH,JILL R BLACK, LINDA B BROWN.ALFRED M BROWN.ALFRED M BROWN.PATRICIA BROWN.PATRICIA CALLAWAY,GORDON C CARSON, WILLIAM E CHERRY.MARCIE LEBLANC cLAY,AMANDA M CLEMENTS.ELEANOR A CORBIN.FRANCINE COXTON, LINDA D CRAVEN.MARYL CRAWFORD,PATRICIA B DAYKIN,LINDA L DEAN.JANICE M DEESON,AMY V DELO-LOCKE.KATHRYN L DURBIN.CLAIRE M EARL.MICHAEL A EARLEY, WILLIE L EDWARDS,CYNTHIA EDWARDS,GAIL W FERDINAND,WILHELMENIA FERGUSON,PATRICK FOLTZ.MARYL FRYMAN,KATHLEEN A FUGARO,JOSEPH A GENTILE.TINA MARIE GLENN.GARY GLOVER.JUDY C GOODSON.CONSTANCE F GRANT ,ALLISON S GRAVITT.SCOTT H GREENE.LORRI ANN HAMILTON.LESLIE ELLEN HASH.THOMAS W HATCH,A BERNARD HATCH.A BERNARD HEALEY,GAIL G HEARIN,PHYLLIS N HENDLEY.NANCY C HICKS.PAULETTE S HILL.DAVID L ISRAEL.SHARON B JOHNSON,WILLIE C JR JONES.CARLE JONES,ELLEN K JONES.JENNIFER JONES.JOSEPH B KAUWELL,EDWARD P KUWIK,ROBERT S KYSER.MARY P LABORDE,REBECCA F LAMMERT,JANICE H LAMMERT.JANICE H LEGGETT.JOAN LINDE, BARBARA LUGLAN,ANGELINE E MARION.SHARON K MATHEWS.JENNIFER MATOL,MICHELE F TITLE CATEGORY SEVERELY EMOTIONALLY DISTURBED PR $ SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM GEORGIA LEARNING RESOURCES SYSTEM FUND GENERAL ADMINISTRATION SUPPORT SERVICES - BUSINESS GENERAL ADMINISTRATION GEORGIA LEARNING RESOURCES SYSTEM FUND SEVERELY EMOTIONALLY DISTURBED PROGRAM GENERAL ADMINISTRATION SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM GENERAL ADMINISTRATION SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM GEORGIA LEARNING RESOURCES SYSTEM FUND SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM DIRECTOR GENERAL ADMINISTRATION SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM GENERAL ADMINISTRATION SPECIAL REVENUE FUND - OTHER PROGRAMS SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SALARIES AMOUNT 32,117.32 240.00 4,114.08 720.00 60,574.08 $ 30,817.92 27,463.92 3,793.16 38,414.48 20,725.00 4,116.21 34,864.08. 18,131.72 16,267.76 37,135.76 15,723.07 28,535.64 14,594.76 11,266.60 16,443.87 4,024.16 19,335.48 49,247.36 14,995.92 17,174.28 14,594.76 34,815.20 3,848.49 1,487.00 23,953.86 9,228.78 42,871.82 33,143.04 43,353.12 41,899.44 5,846.18 30,488.32 13,094.16 180.00 82,654.08 18,323.72 2,247.84 240.00 19,142.68 5,275.77 51,971.42 5,661.00 16,264.79 24,472.50 13,453.48 300.00 38,397.76 25,530.80 300.00 8,778.78 8,203.15 9,897.51 720.00 19,142.68 35,860.04 16,561 . 51 26,090.32 TRAVEL EXPENSE 3,039.34 573.97 381. 49 109.51 1,799.45 75.39 697.46 295.57 699.96 336.21 1,578.15 45.72 1,024.84 2,660.46 157.33 35.49 115.22 10,254.04 21. 19 496.84 364.35 200.58 196.40 ED METRO R.E.S.A. SCHEDULE OF SALARIES AND TRAVEL 2 YEAR ENDED JUNE 30, 1995 NAME TITLE CATEGORY SALARIES AMOUNT TRAVEL EXPENSE MAY.MARILYN A MCDONALD,JUDITH H MCGEE.JULIANNE F MCLAURIN,CHERYL W MEHNERT-JACOBY,KAREN L MOORE,VELMA MORRIS-LLOYD,M BALDWIN MORRIS-LLOYD,M BALDWIN MORRIS-LLOYD,M BALDWIN NEAL.HAROLD L OLSON.HEATHER u PARKER.NANCY S PATTERSON.DAWN PATTERSON.MARIAN C PHILLIPS.TAMARA K POTTER.MARIE D POWELL.ROBERTA QUIRK,CONSTANCE A RAGLAND.KIMBERLY S RAGLAND.KIMBERLY S RATLIFF,DEANGELO M REXINGER,JANE E RHOADES,R MICHAEL ROBERTSON,CHRISTIE RUANE.MARY P SCARBOROUGH.JACQUELINE SCHNUPP,JEANNETT SCOTT,MONA L SEBUSCH,DEE R SHENSKY,JOAN A SHURE,JANICE H SIXTO-MURREN,JENIFER SMITH.SHARON K SMITH, SUSAN K SPRIGGS.BARBARA L STRUSINER,ELLEN S STUBBS, LINDA D STURGEON,CHRISTINE SUMMERS.PETER J SWAIM.MIMIC TAUCHES,CHARLOTTE THEIL.DAVID A THOMPSON.CINDY L THOMPSON,MARETA A TRUITT, PATSY B WATSON,CHARLES E WEINER.LAWRENCE R WELLS, DAVID L WHITE.ALBERT P JR WHITE.DAVID A WHITE, KITTY WHITE,STEPHANIE W WINEBARGER.LAURA H WITTENBERG, JOSH WOLKIN,SUSAN S ZOECKLER,NATALIE R SEVERELY EMOTIONALLY DISTURBED PR $ SUPP SRVS - IMPROV INSTR & ED MED SRVS SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SUPP SRVS - IMPROV INSTR & ED MED SRVS GENERAL ADMINISTRATION SPECIAL REVENUE FUND - OTHER PROGRAMS OTHER SUPPORT SERVICES SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM OTHER SUPPORT SERVICES SEVERELY EMOTIONALLY DISTURBED PROGRAM GENERAL ADMINISTRATION SPECIAL REVENUE FUND - OTHER PROGRAMS SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY-EMOTIONALLY DISTURBED PROGRAM GENERAL ADMINISTRATION SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM 50,469.04 51,000.00 $ 19,669.12 23,303.97 24,238.53 1,580.25 25,199.94 9,000.00 24,727.92 120.00 30,561.82 1,080.00 11,819.81 280.00 5,017.00 31,051.92 49,833.62 2,090.28 1,290.00 47,627.96 20,121.60 2,030.16 15,344.64 13,823.64 2,020.00 12,700.83 720.00 17,562.59 46,000.36 4,487.81 20,832.00 22,598.46 26,511.64 38,416.57 33,080.80 35,447.84 4,310.84 120.00 1,600.00 580.00 16,267.76 36,935.84 16,714.44 16,267.76 71,395.92 20,658.04 240.00 46,535.04 41,602.46 10,075.56 46,419.26 60.00 53,969.74 14,207.60 2,229.62 197.40 1,154.57 4.81 167.24 171 .65 32.76 248.67 150.08 5.98 685.65 223.72 161 .07 3,885.75 310.34 48.72 521. 30 733.32 75.00 TOTALS $ 2, 368 , 751 . 01 $ 36,166.61 B0EO 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 June 21, 1996 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 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 ofand for the year ended June 30, 1995, and have issued our report thereon dated June 21, 1996. 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 ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are :free of material misstatement. Compliance with laws, regulations, contracts, and grants applicable to 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 oflaws, regulations, contracts, and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion. The results ofour tests disclosed no instances of noncompliance that are required to be reported herein under Government Auditing Standards. 95CRL-10 This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record. Respectfully submitted, L-~ Claude L. Vickers State Auditor CLV:dt 95CRL-I0 CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 June 21, 1996 Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation and Director and Members ofthe Metropolitan Regional Educational Service Agency Board ofControl SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS Ladies and Gentlemen: We have audited the general purpose financial statements of the Metropolitan Regional Educational Service Agency as ofand for the year ended June 30, 1995, and have issued our report thereon dated June 21, 1996. 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 ofFederal Financial Assistance, for the year ended June 30, 1995: (1) Political Activity (5) Allowable Costs/Cost Principles (2) Civil Rights (6) Audit Follow-Up/Resolution (3) Cash Management (7) Administrative Requirements (4) Federal Financial Reports Our procedures were limited to the applicable procedures described in the Office of Management and Budget's "Compliance Supplement for Single Audits of State and Local Governments" and other additional procedures as deemed necessary. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Agency's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion. 95CRL-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 ofnoncompliance 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, ~ Claude L. Vickers State Auditor CLV:dt 95CRL-50 CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 June 21, 1996 Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation and Director and Members ofthe Metropolitan Regional Educational Service Agency Board ofControl 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 of the Metropolitan Regional Educational Service Agency as ofand for the year ended June 30, 1995, and have issued our report thereon dated June 21, 1996. 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 wi~h the requirements governing: (1) Types of Services Allowed or Unallowed (5) Applicable Special Tests and Provisions (2) Eligibility (3) Matching, Level ofEffort, 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, 1995. 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. 95CRL-90 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. The results ofour audit procedures disclosed an immaterial instance of noncompliance with the requirements referred to above which is described in the Schedule of Findings and Improper or Questioned Costs. We considered this instance of noncompliance in forming our opinion on compliance, which is expressed in the following paragraph. 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, 1995. 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 ofpublic record. Respectfully submitted, ~ Claude L. Vickers State Auditor CLV:dt 95CRL-90 CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 June 21, 1996 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 ofand for the year ended June 30, 1995, and have issued our report thereon dated June 21, 1996. 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 ofthe fiscal year 1995 general purpose financial statements of the Metropolitan Regional Educational Service Agency and with our consideration of the Agency's control structure used to administer Federal financial assistance programs, as required by Office ofManagement and Budget (0MB) Circular A-128, "Audits of State and Local Governments", we selected certain transactions applicable to certain nonmajor Federal financial assistance programs for the year ended June 30, 1995. 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. 95CRL-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, CLV:dt 95CRL-120 Claude L. Vickers State Auditor SECTION IV INTERNAL CONTROL CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 June 21, 1996 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 ofControl REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Ladies and Gentlemen: We have audited the general purpose financial statements ofthe Metropolitan Regional Educational Service Agency as ofand for the year ended June 30, 1995, and have issued our report thereon dated June 21, 1996. 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 ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. 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 principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. 95ICL-3 In planning and perfonning our audit ofthe general purpose financial statements ofthe Metropolitan Regional Educational Service Agency for the year ended June 30, 1995, we obtained an understanding of the internal control structure. With respect to the internal control structure, we obtained an understanding of the design ofrelevant policies and procedures and whether they have been placed in operation, and we assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose :financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion. We noted 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 ofFmdings and Improper or Questioned Costs, reportable conditions were noted in the following control categories: (I) 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 internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that the reportable conditions disclosed above are also considered to be material weaknesses. 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 June 21, 1996. 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:dt 95ICL-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 June 21, 1996 Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation and Director and Members ofthe Metropolitan Regional Educational Service Agency Board ofControl SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS Ladies and Gentlemen: We have audited the general purpose financial statements of the Metropolitan Regional Educational Service Agency as ofand for the year ended June 30, 1995, and have issued our report thereon dated June 21, 1996. 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 major Federal financial assistance programs and have issued our opinion thereon dated June 21, 1996. 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 ofState 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, 1995, we considered the Agency's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinions 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 June 21, 1996. 95ICL-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 ofinternal 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 (I) Types of Services Allowed or Unallowed (2) Eligibility (3) Matching, Level ofEffort, and/or Earmarking (5) Allowable Costs/Cost Principles (4) Reporting (6) Audit Follow-Up/Resolution (7) Administrative Requirements (5) Applicable Special Tests and Provisions (6) Other Requirement Claims for Advances and Reimbursements For all ofthe 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, 1995, the Metropolitan Regional Educational Service Agency expended 85% ofits 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 95ICL-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 an opinion. We noted a certain matter involving the internal control structure and its operation that we consider to be a reportable condition under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation 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 descnbed 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 ofthe 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, 1995, and this report does not affect our report thereon dated June 21, 1996. 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 ofthis report which is a matter of public record. Respectfully submitted, L-~ Claude L. Vickers State Auditor CLV:dt 95ICL-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, 1995 PRIOR YEAR AUDIT FOLLOW-UP I RESOLUTION Travel Expenditure Reimbursement Procedures for Consultants Financial Statements Finding Resolved Audit Control Number 8564-94-03 The audit report for the year ended June 30, 1994, stated that the Agency did not comply with contract provisions which specifically reference travel regulations of the Georgia Department ofEducation as set forth in Chapter 40 ofthe Financial Management for Georgia Local Units of Administration. For the year under review, the Agency complied with contract provisions governing travel and subsistence reimbursements to consultants as required. AUDIT FOLLOW-UP I RESOLUTION Delinquent Program Reports Federal Financial Assistance Finding Resolved Audit Control Number 8564-94-05 The audit report for the year ended June 30, 1994, stated that a review of program reports submitted by the Agency to the Georgia Department ofEducation for the Individuals with Disabilities Education Act - Title VI, B - Severely Emotionally Disturbed Program (CFDA 84.027) revealed that the 1993 Carry-over and 1994 Regular Project Completion Reports were not filed by the required due dates. For the year under review, these completion reports were filed by the required due dates. 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, 1994, stated that the Agency did not provide for adequate separation ofemployee duties in the performance ofaccounting functions and related procedures for all funds. In the year under review, no improvement in adequate separation of employee duties was noted. This deficiency was a result ofmanagement'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 Note: All Federal financial assistance programs listed in the Schedule ofFederal Financial Assistance, Schedule "1" ofthis report, are affected by this finding. - 1- METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30. 1995 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 The audit report for the year ended June 30, 1994, 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 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. MATCHING, LEVEL OF EFFORT, AND/OR EARMARKING Failure to Maintain Required Level ofNon-Federal Expenditures Federal Financial Assistance Major Program Nonmaterial Noncompliance 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 greater than or equal to the amount expended in the prior fiscal period in the Individuals with Disabilities Education Act - Title VI, B - Georgia Learning Resources System Program (CFDA 84.027). During the year under review, the Agency again failed to expend non-federal funds in an amount greater than or equal to the amount expended in the prior fiscal period. Part II of the Statement of Assurances for the approved fiscal year 1995 project states in part: "The amount ofnon-federal funds expended for schools operated or supported by this agency will be maintained at the same level as they would have been maintained if no projects had been approved for these schools." Procedures should be implemented to ensure that the proper level of effort is maintained throughout the project period. The Georgia Department ofEducation should review this matter to determine the amount of refund, ifany, to be made as a result ofthe Agency's failure to meet the prescribed compliance requirement. -2- l\ffiTROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND Th1PROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30, 1995 PRIOR YEAR/CURRENT YEAR EXPENDITURES/1.JABILITIES/DISBURSEl\ffiNTS Improper Employee Travel Expenditure Reimbursement Procedures Financial Statements Nonmaterial Noncompliance Amount: $ 161.28 Audit Control Number 8564-94-02 The audit report for the year ended June 30, 1994, noted improper payments to employees for reimbursement of travel expenditures. A further review of these improper expenditures resulted in questioned costs of $161.28 for meal reimbursements paid for non-overnight travel. During the year under review, compliance tests oftravel vouchers disclosed the following deficiencies: (1) A parking expenditure was not evidenced by a receipt or written explanation. (2) Several travel expense reports did not contain odometer readings as required. (3) All travel reimbursement requests were not evidenced by the required travel expense report. These exceptions are a result ofthe Agency not complying 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. Accounting 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. Reimbursement ofthe $161.28 should be secured and deposited to the Agency's General Fund. AUDIT FOLLOW-UP/RESOLUTION Failure to File Corrective Action Plan Federal Financial Assistance Nonmaterial Noncompliance Audit Control Number 8564-94-08 The audit report for the year ended June 30, 1994, stated that the Agency failed to submit a corrective action plan for the 1993 audit report as required by 0MB Circular A-128 to the U. S. Department ofEducation and the Georgia Department ofEducation for various Federal financial assistance programs. During the year under review, the Agency again failed to submit a corrective action plan for the 1994 audit report as follows: -3- METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30, 1995 PRIOR YEAR/CURRENT YEAR AUDIT FOLLOW-UP/RESOLUTION Failure to File Corrective Action Plan Federal Financial Assistance Nonmaterial Noncompliance Audit Control Number 8564-94-08 SOURCES PROGRAMS Education, U. S. Department of Education, Georgia Department of Drug-Free Schools and Communities Act (CFDA 84.241) Individuals with Disabilities Education Act Title VI, B Georgia Leaming Resources System (CFDA 84.027) Severely Emotio11ally Disturbed (CFDA 84.027) Acquired Immunodeficiency Syndrome(AIDS) Health Education (CFDA 93.118) Even though formally notified in writing of their corrective action plan responsibility by the Department of Audits, management failed to prepare and submit the required document. Procedures should be implemented to ensure that corrective action plans are prepared and submitted to grantor agencies in accordance with requirements. CURRENT YEAR GENERAL LEDGER Completion Report Not Supported by Accounting Records Financial Statements Nonmaterial Noncompliance Finding Resolved Audit Control Number 8564-95-01 Our audit disclosed that the completion report, DE Form 0189, for the Psycho Educational State Teachers' Grant was not supported by the accounting records resulting in an expired grant balance payable to the Georgia Department ofEducation of$641.61. Instructions for the DE Form 0189 require that revenue and expenditures reported on the completion report be identifiable in the accounting records, that the report be :filed within 90 days ofthe close ofthe project, and that any amount due accompany the report. This occurred because management failed to reconcile the report to the accounting records. Accounting procedures should be established to ensure the accuracy ofcompletion reports, and that excess funds received be returned to the Georgia Department of Education as required. The amount of $641.61 was refunded to the Georgia Department ofEducation in the subsequent fiscal year. -4- :METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30, 1995 CURRENT YEAR AUDIT FOLLOW-UP/RESOLUTION Audit Distribution Requirements Federal Financial Assistance Nonmaterial Noncompliance Audit Control Number 8564-95-03 The Agency failed to submit a copy ofthe 1994 audit report to the U. S. Department ofEducation from whom the Agency received Drug-Free Schools and Communities Act (CFDA 84.241) funds. Paragraph l 3fof 0MB Circular A-128 requires that recipients ofFederal financial assistance submit copies of single audit reports to those agencies providing Federal financial assistance. Even though formally notified in writing of the audit report distnbution responsibilities by the Department of Audits, management failed to perform the distribution requirement. Procedures should be implemented to ensure that reports are submitted to grantor agencies in accordance with audit distribution requirements. - 5- SECTION VI PERTINENT VIEWS OF RESPONSIBLE OFFICIALS METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY PERTINENT VIEWS OF RESPONSIBLE OFFICIALS YEAR ENDED JUNE 30, 1995 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 Board is unable to hire the additional staff required to clear this finding. The Board feels it has provided for the most appropriate assignment ofduties 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 ofguidelines we have not been able to resolve this finding. The Georgia State Department ofEducation has recently issued guidelines to properly record general fixed assets and we anticipated correcting this finding in the future. EXPENDITURES/LIABILITIES/DISBURSEMENTS Improper Employee Travel Expenditure Reimbursement Procedures Financial Statements Nonmaterial Noncompliance Amount: $161.28 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 ofthe Financial Management for Georgia. Local Units of Administration. The questioned cost of $161.28 was reimbursed to the Agency's General Fund in the subsequent period and will be shown a~ resolved in the next reporting period. 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 because the audit follow-up letter from the Accounting Services Division closing our FY 1994 audit - 1- METROPOLITAN REGIONAL EDUCATIONAL SERVICE AGENCY PERTINENT VIEWS OF RESPONSIBLE OFFICIALS YEAR ENDED JUNE 30, 1995 AUDIT FOLLOW-UP/RESOLUTION Failure to File Corrective Action Plan Federal Financial Assistance Nonmaterial Noncompliance Audit Control Number 8564-94-08 file did not request one. A corrective action plan is prepared and will be submitted to the Georgia Department of Education and the U. S. Department ofEducation for both FY 1993 and FY 1994. This finding will be shown as resolved in the next audit report. AUDIT FOLLOW-UP/RESOLUTION Audit Distribution Requirements Federal Financial Assistance Nonmaterial Noncompliance Audit Control Number 8564-95-03 We concur with this finding. The FY 1994 audit report and the corrective action plan has been submitted to the U. S. Department ofEducation. 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. -2-