Audit report, Middle Georgia Regional Educational Service Agency, Fort Valley, Georgia, year ended June 30, 1995

GA
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M5 \994-95
STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET ATLANTA. GEORGIA 30334

AUDIT REPORT MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY
FORT VALLEY, GEORGIA YEAR ENDED JUNE 30, 1995

MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY - TABLE OF CONTENTS -

Page

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

ALLFUNDTYPESANDACCOUNTGROUP

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

5

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

6

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

14

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

15

SCHEDULES

1 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

16

2 CASH AND CASH EQUIVALENTS

17

3 ACCOUNTS RECEIVABLE

18

SCHEDULE OF REVENUE

4

STATE

19

5

LOCAL AND OTHER

20

SCHEDULE OF EXPENDITURES BY OBJECT

6

GOVERNMENTAL FUND TYPES

21

7

LOTTERY PROGRAM

22

8 SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS

23

MIDDLE GEORGIA 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 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

MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY - TABLE OF CONTENTS -
SECTIONVI PERTINENT VIEWS OF RESPONSIBLE OFFICIALS PERTINENT VIEWS OF RESPONSIBLE OFFICIALS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
April 24, 1996

Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Director and Members of the Middle Georgia 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 Middle Georgia 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.
In our opinion, the general purpose financial statements present fairly, in all material respects, the financial position ofthe Middle Georgia Regional Educational Service Agency as of June 30, 1995, and the results of its 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 April 24, 1996, on our consideration ofthe Agency's internal control structure and a report dated April 24, 1996, on its compliance with laws and regulations.
95ARL-31 *

Our audit was conducted for the purpose offorming an opinion on the general purpose financial statements of the Middle Georgia Regional Educational Service Agency taken as a whole. The combining statements (Exhibits E and F), the financial schedules (Schedules 1 through 8 which includes the Schedule of Federal Financial Assistance) and the Schedule of Salaries and Travel, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part ofthe general purpose financial statements of the Middle Georgia Regional Educational Service Agency. Such information has been subjected to the auditing procedures applied in the audit ofthe 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 ofthe State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:dt 95ARL-31*

MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY - 1-

MIDDLE GEQBG!A REGIONAL EDUCATIONAL SERVICE AGEN~Y COMBINED BALANCI:; SHEET
& EYNQ TYPES AND ACCOUNT gROUP JUNE 30, 1995

EXHIBITA

~ Cash and Cash Equivalents Accounts Receivable General Fixed Assets
Equipment
TOCIII Assets

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

ACCOUNT GROUP GENERAL FIXED ASSETS

TOTALS
(Memorandum OnM
JUNE 30, 1995 JUNE 30, 1994

$ 575,686.84 $

9,867.74

$ 585,554.58 S 550,324.73

67,163.88

17,699.03

84,862.91

133,921.90

$

190,121.49

190,121.49

191,404.49

$ 642,sso.n s

27,586.77 $

190,121.49 $ 860,538.98 $ 875,651.12

LIABIUIIESANQEUNQECU!D'.
L,lABILmEs
Cash Overdraft Accounts Payable Salaries Payable
Expired Grant Balances Payable
Tolal Liabilities
FUNDECUITY Investment in General FIXed Assets
Fund Balances Reserved For Sick and Personal Leave
Unreserved Undesignated Total Fund Balances Total Fund Equity
Total Liabilities and Fund Equity

$

32,665.87 $

140,026.08

406.67

$ 173,098.62 $

27,586.77 27,586.77

$

s

16,063.64

453,688.46 $ s 469,752.10 $ $ 469,752.10 $

s 642,sso.n s

0.00 0.00 0.00 $
27,586.77 $

$

23,188.80

$

60,232.64

51,385.78

140,026.08

144,842.69

406.67

601.20

s 200,665.39 $ 220,018.47

190,121.49 $ 190,121.49 $ 191,404.49

$

16,063.64 $

16,653.60

$ 190,121.49 $

453,688.46 469,752.10 $ 659,873.59 $

447,574.56 464,228.16 655,632.65

190,121.49 $ 860,538.98 $ 875,651.12

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

MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVJCE AGENCY COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 1995

EXHIBITs

REVENUES
state Funds Federal Funds Local and other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Business Administration Maintenance and Operation of Plant
C&pital Outlay
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1

GENERAL FUND

SPECIAL REVENUE
FUND

TOTALS
{Memorandum On~ YEAR ENDED
JUNE 301 1995 JUNE 301 1994

$

558,578.42 $

1,325.75

1,093,490.47

$ 1,653,394.64 $

2,348.21 $ 139,090.03
141,438.24 $

560,926.63 $ 140,415.78 1,093,490.47
1,794,832.88 $

541,519.56 314,416.52 1,072,439.41
1,928,375.49

$

481,315.27 $

478,STT.64 446,072.42 133,430.87 32,821.59 75,352.91

$ 1,647,870.70 $

$

5,523.94 $

464,228.16

8,619.00 $ 110,000.00 22,489.75
329.49
141,438.24 $ 0.00 $ 0.00

489,934.27 $
588,877.64 468,562.17 133,760.36
32,821.59 75,352.91
1,789,308.94 $
5,523.94 $
464,228.16

532,660.14
607,364.10 526,452.46 126,875.16 33,326.29 77,678.16
8,019.84
1,912,376.15
15,999.34
448,228.82

FUND BALANCE JUNE 30

$

469?52.10 $

0.00 $

469?52.10 $

4641228.16

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

Dl Qv~k
fo1i

MIDDLE GEORGIA 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

EXHIBIT"C"

REVENUES
State Funds Federal Funds Local and Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Business Administration Maintenance and Operation of Plant
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1, 1994
Adjustments

GENERAL FUND

BUDGET

ACTUAL

$ 528,577.00 $ 558,578.42 1,325.75
1,057,344.74 1,093,490.47
$ 1,585,921.74 $ 1,653,394.64

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$

2,348.21

$ 177,647.20

139,090.03

$ 177,647.20 $ 141,438.24

$ 471,431.29 $ 481,315.27

508,229.80 508,264.24 204,135.11
47,496.90 121,494.54

478,877.64 446,072.42 133,430.87
32,821.59 75,352.91

$ 1,861,051.88 $ 1,647,870.70

$ -275,130.14 $

5,523.94

619,995.91 -280.31

464,228.16

$

8,619.00 $

8,619.00

110,000.00 58,678.20
350.00

110,000.00 22,489.75
329.49

$ 177,647.20 $ 141,438.24

$

0.00 $

0.00

230.89

0.00

-230.89

FUND BALANCE JUNE 30, 1995

$ 344,585.46 $ 469,752.10

$

0.00 $

0.00

The notes to the general purpose financial statements are an integral part of this statement. -5-

MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1995

EXHIBIT"D"

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Middle Georgia 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 of office are prescribed by the State Board ofEducation; provided, however, that at least one-third of the membership of each Board shall be individuals who hold no other public office, who are not employees of any local unit ofadministration, and who are not employees ofthe Georgia Department ofEducation.
The financial statements ofthe Agency have been prepared in conformity with generally accepted accounting principles as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles.
The more significant of the Agency's accounting policies are described below.
REPORTING ENTITY
In evaluating how to define the government unit for financial reporting purposes, management has considered the criteria set forth in GASB Codification of Governmental Accounting and Financial Reporting Standards, Section 2100, "Defining the Financial Reporting Entity". Based upon the application of the above criteria, the Middle Georgia Regional Educational Service Agency is determined to be a jointly governed organization.
The members of the Board are elected by an annual caucus of an equal number of members of local boards of education from the respective member local school systems. Each Board appoints and contracts with a director who is the executive officer ofthe regional educational service agency. The director is responsible for the administration of the programs and services approved by the Board.
Member boards of education in the Middle Georgia Regional Educational Service Agency are as follows: Bibb County, Crawford County, Houston County, Jones County, Monroe County, Peach County, and Twiggs 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.

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MIDDLE GEORGIA 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.
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 1YPES - 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 FIXED ASSETS ACCOUNT GROUP - used to account for all equipment acquired for use by the Agency. See Note 1 - General Fixed Assets
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 ofthese funds present increases (i.e., revenues) and decreases (i.e., expenditures) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds.
Governmental funds are accounted for using the modified accrual basis of accounting under which:

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MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1995

EXHIBIT "D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenues are recognw:d 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 Middle Georgia 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 principle~.
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 ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final budget. This final budget is then submitted to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits (including certificates of deposit and N.O.W. accounts) in authorized financial institutions. Georgia Laws authorize the Agency to depo~it its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
RECEIVABLES
Receivables consist ofgrant reimbursements due from Federal, State or other grantors for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

- 8-

MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1995

EXIIlBIT "D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL FIXED ASSETS
General fixed assets purchased are recorded as expenditures in the various funds at the time of purchase. All purchased general fixed assets are valued at cost where historical records are available and at estimated historical cost where no historical records exist. Donated general fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded cost. No depreciation has been provided on General Fixed Assets. The Agency is prohibited by Georgia Law from holding title to real property. The Peach County Board ofEducation owns the land and buildings utilized by the Agency.
RESERVED FUND BALANCES
Reserved Fund balances include unexpended funds received in prior years from the Georgia Department of Education for sick and personal leave to be paid to substitute personnel. These funds will be used for the original purpose until exhausted.
INTERFUND TRANSACTIONS
The Agency has the following type of interfund transactions:
Reimbursements of expenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
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.

- 9-

MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY
NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1995

EXHIBIT"D"

Note 2: DEPOSITS
Acceptable security for deposits consists of any one of or any combination ofthe 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 ofthe United States or ofthe State of Georgia,
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations ofthe counties or municipalities ofthe State ofGeorgia,
(5) Bonds ofany public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates 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 $697,607.92. The amounts of the total bank balances are classified into three categories of credit risk:
Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Agency or by the Agency's agent in the Agency's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Agency's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Agency's name.)

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MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1995

EXHIBIT "D"

Note 2: DEPOSITS

The Agency's deposits are classified by risk category at June 30, 1995, as follows:

Risk Category

Bank Balance

1

$ 150,000.00

2

547,607.92

3

0.00

Total

$ 697,607.92

Note 3: CHANGES IN GENERAL FIXED ASSETS

The following is a summary of changes in the General Fixed Assets Account Group during the fiscal year:

Balance July 1, 1994 Additions Deletions Balance June 30, 1995

Equipment $ 191,404.49
9,740.00 11,023.00 $ 190,121.49

Note 4: RISK MANAGEMENT

The Agency is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illnesses or injuries to employees; and natural disaster.

The Agency has obtained commercial insurance for risk of loss associated with torts, assets, errors or omissions, 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 natural disasters. The Agency has not experienced any losses related to natural disasters in the past three years.

Note 5: CONTINGENT LIABILITIES

Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Agency believes that such disallowances, if any, will be immaterial to its overall financial position.

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MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1995

EXHIBIT"D"

Note 5: CONTINGENT LIABil..ITIES
The Agency is a defendant in a legal proceeding pertaining to matters incidental to the performance of routine Agency operations. The ultimate disposition ofthis proceeding is not believed to be material to the general purpose financial statements.
Note 6: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by Agency's are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer public employee retirement system (PERS).
TRS provides service retirement, disability retirement and survivors benefits for its members 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 ofthe member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement benefits also include death and disability benefits. A disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service rettrement 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 $1,158,614.90; total payroll was $1,180,053.63.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Agency who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Agency makes monthly employer contributions to TRS at rates adopted by the TRS Board 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%.
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MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1995

EXHIBIT"D"

Note 6: RETIREMENT PLANS

Total contributions made during fiscal year 1995 amounted to $194,763.49, ofwhich $136,832.20 was made by the Agency and $57,931.29 was made by employees. These contributions represented 11.81% (Agency) and 5% (employees) of covered payroll.

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

Total unfunded pension benefit obligation ofTRS as ofJune 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 ofJune 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 $136,832.20 was actuarially determined and represented .0242% of total 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 7: SURETY BONDS

The Director, Dr. Jackie Stinchcomb, is bonded in the amount of $20,000.00 with the Western Surety Company, Sioux Falls, South Dakota, their Bond No. 18274994, on which premium was paid through July 1, 1995.

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MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 1995

EXHIBIT"E"

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

LOTTERY PROGRAMS

DRUG-FREE SCHOOLS AND COMMUNITIES
ACT

TOTALS JUNE 30, 1995 JUNE 30, 1994

$

0.00 $

9,867.74 $

9,867.74

17,699.03

17,699.03 $ _ _4__5__,8_53_.66_

$

0.00 $

27,566.n $

21,566.n $ _ _45_._8.5..3...6...6...

$

23,188.80

$

21,566.n $

21,566.n

16,673.72

5,991.14

$

21,566.n $

21,566.n $

45,853.66

$

0.00 $

0.00 $

0.00 $

0.00

$

0.00 $

21,566.n $

21,566.n $ _ _4_5_,853_._66_

See notes to the general purpose financial statements.

-14 -

MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 1995

EXHIBITF"

REVENUES
State Funds Federal Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration
Total Expenditures Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1
FUND BALANCE JUNE 30

LOTTERY PROGRAMS

DRUG-FREE SCHOOLS AND COMMUNITIES
ACT

TOTALS YEAR ENDED JUNE 30, 1995 JUNE 30, 1994

$

2,348.21

$

2,348.21 $

17,466.76

$

139,090.03

139,090.03

174,399.98

$

2,348.21 $

139,090.03 $

141,438.24 $

191,866.74

$

8,619.00 $

8,619.00 $

14,872.84

$

2,348.21

110,000.00 20,141.54 329.49

110,000.00 22,489.75 329.49

88,000.00 88,694.87
299.03

$

2,348.21 $

139,090.03 $

141,438.24 $

191,866.74

$

0.00 $

0.00 $

0.00 $

0.00

0.00

0.00

0.00

0.00

$

0.00 $

0.00 $

- - - - - 0.00 $

0.00

See notes to the general purpose financial statements.

- 15 -

MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE YEAR ENDED JUNE 30. 1995

SCHEDULE 1

FUNDING AGENCY PROGRAM/GRANT
Education, U. S. Department of Through Georgia Department of Education Drug-Free Schools and Communities Act 1994Grant 1994Carry-Over 1995 Grant Vocational Education Basic Grants to States High School Program Basic Grant 1994Grant Tech-Prep Education 1994Grant
TotalU.S.OepartmentofEducation
Health and Human Services, U. S. Department of Through Georgia Department of Education Comprehensive Health Education to Prevent Important Health Problems 1994 Contract 1995 Contract
TotalU.S.OepartmentofHealthand Human Services

CFDA NUMBER

AWARDS IN PERIOD

FEDERAL FUNDS RECEIVED IN PERIOD(NET OF REFUNDS)

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.186 84.186 $ 84.186

$ 32,619.00 112,452.00

28,386.90 32,619.00 $ as,n2.oo

32,619.00 $ 106,471.03

32,619.00 106,471.03

84.048 84.243
$

145,071.00 $

34,171.65 23,195.08 207,144.63 $

139,090.03 $

139,090.03

93.938 93.938 $
$

$ 6,200.00
6,200.00 $

6,179.58 $ 6,179.58 $

1,255.78 $ 69.97
1,325.75 $

1,255.78 69.97
1,325.75

Total Federal Financial Assistance

$ 1511271.00 $

The Agency had no major programs as defined by the Single Audit Act of 1984.

2131324.21 $ 1401415.78 $

1401415.78

See notes to the general purpose financial statements.

- 16 -

MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY CASH AND CASH EQUIVALENTS JUNE 30, 1995

SCHEDULE "2"

INTEREST BEARING ACCOUNTS
Citizens Bank, Fort Valley, Georgia
Certificates of Deposit No.18012 (5.00%) No. 18026 (5.00%) No. 18027 (5.00%) No. 18784 (5.00%) No.19034 (6.00%) No. 19064 (6.00%) No.19152 (6.75%)
Super N. 0. W. Account (2.75%)
Middle Georgia Bank, Fort Valley, Georgia
Certificates of Deposit No. 62581 (5.05%) No. 62582 (5.05%)

$ 25,000.00 30,000.00 25,000.00 30,000.00 30,115.30 10,000.00 50,000.00
335,439.28 $ 535,554.58

$ 25,000.00 25,000.00

50,000.00

$ 585,554.58

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

MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY ACCOUNTS RECEIVABLE JUNE 30. 1995

SCHEDULE "3"

Bibb County Board of Education Sales and Services
Crawford County Board of Education Sales and Services
Education, Georgia Department of Federal Programs Comprehensive Health Education to Prevent Important Health Problems Drug-Free Schools and Communities Act Contract Georgia Education Leadership Academy
Jones County Board of Education Sales and Services
Monroe County Board of Education Contract Services Reimbursement of Expenses Sales and Services.
Twiggs County Board of Education Sales and Services

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

490.20

$

490.20

285.89

285.89

69.97 $
100.00
6.00
66,043.47 2.00
158.85
7.50

17,699.03

69.97 17,699.03
100.00
6.00
66,043.47 2.00
158.85
7.50

$

67,163.88 $

17,699.03 $===84====,8=62==91=

See notes to the general purpose financial statements.

- 18 -

MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1995

SCHEDULE "4"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Other State Programs Regional Educational Service Agencies Staff Development Sex Education Grant Supervision and Assessment of Student and Beginning Teachers and PerformanceBased Certification Lottery Program Education Technology Centers
CONTRACTS Education, Georgia Department of Consultant - Georgia Education Leadership Academy

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 428,400.00 31,000.00
79,756.33 $

$ 428,400.00 31,000.00

2,348.21

79,756.33 2,348.21

19,422.09

19,422.09

$ 558,578.42 $

2,348.21 $ 560,926.63

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

MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF LOCAL AND OTHER REVENUE YEAR ENDED JUNE 30, 1995

SCHEDULE "5"

Boards of Education Membership Contributions and Contracted Services Bibb County Crawford County Houston County Jones County Monroe County Peach County Twiggs County Non-Contracted Services
Other Donation Northrop Corporation Interest Earned Registration Fees Rents Sales School Assets Sales and Services Less: Purchases for Resale Teacher's Certification Training Fees Other

GOVERNMENTAL FUND TYPE GENERAL FUND

$

12,205.50

188,276.48

39,113.16

184,836.48

279,535.68

110,404.32

230,214.60

3,670.00

3,492.00 21,063.92 10,149.95
5,725.00
23.00 7,586.84 -4,033.46
961.12 265.88

$ 1,093,490.47

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

MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF EXPENDITURES BY OBJECT GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1995

SCHEDULE 5

EXPENDITURES
Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical Services Compensation and Travel of Board Members Repair and Maintenance Services Rents Insurance Communications Shared Services Supplies Energy Books, Textbooks and Periodicals Dues and Fees Other Expenditures
Nonoperating Costs Equipment

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

$ 1,180,053.63 247,152.11 69,825.54 25,959.55 $ 2,202.08 2,886.32 8,855.18 9,034.80 14,224.85
42,233.01 10,727.55 11,812.40
9,472.36 3,691.32

$
6,666.85
2,000.00 110,000.00
19,270.20
2,368.00 1,133.19

1,180,053.63 247,152.11 69,825.54 32,626.40 2,202.08 2,886.32 8,855.18 9,034.80 16,224.85 110,000.00 61,503.21 10,727.55 11,812.40 11,840.36 4,824.51

9,740.00

9,740.00

Total Expenditures

$ 1,647,870.70 $ 141,438.24 $ 1,789,308.94

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

MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF EXPENDITURES BY OBJECT LOTTERY PROGRAM YEAR ENDED JUNE 30, 1995

SCHEDULE "7"

EXPENDITURES
Operating Costs Supplies

EDUCATION TECHNOLOGY
CENTERS
s ___2..34_s_.2_1
1

See notes to the general purpose financial statements.

- 22 -

MIDDLE GEORGIA REGIONAL. EDUCATIONAL SERVICE AGENCY
SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS YEAR ENDED JUNE 30, 1995

SCHEDULE "8"

BOARD MEMBER ADDRESS
Mr. Gene Trammell, Chairman (") Crawford County Board d Education P.O.Box8 Roberta, Georgia 31078
Mr. Charles Keily, Vice Chairman("} Twiggs County Board d Education P.O.Box232 Jeffersonville, Georgia 31044
Mr. Charles Dumas (") Monroe County Board of Education P.O.Box1308 Forsyth, Georgia 31029
Mr. Tony Hinnant M
Houston County Board of Education P.O.DrawerN Perry,Georgia31069
Mr. Linton Jordan (") P.O.Box517 Gray, Georgia 31032
Dr. Thomas Madison (")
Bibb County Board of Education 2064 Vineville Avenue Macon, Georgia 31213
Mr. Bill Mathews("} Jones County Board d Education P.O.Box519 Gray, Georgia 31032
Mrs. Myrtle Rawlins (") Route 19, Box 869 Macon, Georgia 31201
Mr. Eugene Sheets (") Peach County Board of Education P. 0. Box 1018 Fort Valley, Georgia 31030
Mr. Joseph Smith (") 102 Corbin Avenue Warner Robins, Georgia 31088
Mrs. Valeria Daniels Wimbish (") 3558 Lawton Road Macon, Georgia 31204

COMPENSATION

TRAVEL

$

600.00 $

159.18

600.00

450.00
250.00

142.90

(") Denotes Board Members Serving as of June 30, 1995

$

1,900.00 $

302.08

See notes to the general purpose financial statements.

- 23 -

SECTION II SUMMARY AND SCHEDULE OF SALARIES AND TRAVEL

MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SUMMARY OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30. 1995

SALARIES
GENERAL FUND Instruction Support Services PupilServices Improvement of Instructional Services General Administration BusineM Administration Maintenance and Operation of Plant
Total General Fund
SPECIAL REVENUE FUND
Total Salaries

TOTAL PER FINANCIAL STATEMENTS (ACCRUAL BASIS)

ADJUSTMENTS FOR ACCRUALS JUNE 30, 1994 JUNE 30, 1995

TOTAL PER SCHEDULE (CASH BASIS)

$

362,358.59 $

57,808.17 $ -57,308.28 $ 362,858.48

376,590.64 302,997.96
70,936.20 24,378.00 42,792.24

63,796.70 17,246.68

-58,147.34 -24,570.46

382,240.00 295,674.18
70,936.20 24,378.00 42,792.24

$

1,180,053.63 $ 138,851.55 $ -140,026.08 $ 1,178,879.10

0.00

5,991.14

5,991.14

$

144,842.69 $ -140,026.08 $ 1,184,870.24

GENERAL FUND Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Business Administration Maintenance and Operation of Plant
Total Travel

$

32,198.31

$

32,198.31

15,129.95 $ 14,286.41 3,122.70
18.69 5,069.48

251.16 $

-17.64 -466.15
-401.31

15,381.11 14,268.n 2,656.55
18.69 4 668.17

$

69,825.54 $

251.16 $

-885.10 s _ _ _6s_,,1_s_1_.so_

MIDDLE GEORGIA R.E.S.A.
SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 1995

NAME

TITLE CATEGORY

SALARIES AMOUNT

TRAVEL EXPENSE

BAILEY.VERNICE V

INSTRUCTION

$

BARTA,LYNNE C

INSTRUCTION

BERRANG,DEBORAH A

INSTRUCTION

BISSELL.HILLARY A

SUPPORT SERVICES - PUPIL SERVICES

BLANN,BRIAN M

SUPPORT SERVICES - PUPIL SERVICES

BORDERS.DENNIS S

MAINTENANCE & OPER. OF PLANT SERVICES

BORUM,CECIL J

SUPP SRVS - IMPROV INSTR & ED MED SRVS

BORUM,GERALDINE E

SUPPORT SERVICES - PUPIL SERVICES

BOYT.JANET D

GENERAL ADMINISTRATION

BUSH.LINDA L

INSTRUCTION

CAPISTA,STEPHEN R

SUPPORT SERVICES - PUPIL SERVICES

CARTER-WYCHE.TARYN

SUPPORT SERVICES - PUPIL SERVICES

COLLINS, ANGELA P

INSTRUCTION

COLLINS.ANGELA P

GENERAL ADMINISTRATION

COOPER,HENRY L

SUPP SRVS - IMPROV INSTR & ED MED SRVS

DAVIDSON.ROBERT E

INSTRUCTION

DAVIS.ANGELIA B

SUPP SRVS - IMPROV INSTR & ED MED SRVS

DELONEY.LUNA F

SUPPORT SERVICES - PUPIL SERVICES

DYKES.CAROLYN C

SUPP SRVS - IMPROV INSTR & ED MED SRVS

FITCHBEN, SUSAN P

INSTRUCTION

GOODMAN.LETICIA D

SUPPORT SERVICES - PUPIL SERVICES

GREEN.JACKIE L

DIRECTOR

GREEN,JACKIE L

GENERAL ADMINISTRATION

HALL.SHERRYL C

INSTRUCTION

HARSHMAN,ROBERT G

SUPPORT SERVICES - PUPIL SERVICES

HAYWARO,CORDELIA J

INSTRUCTION

HAYWARD,CORDELI~ J

SUPPORT SERVICES - PUPIL SERVICES

HENDERSON,LATESA Q

GENERAL ADMINISTRATION

JOHNSON,HEATHER R

GENERAL ADMINISTRATION

JONES.SHARON S

SUPPORT SERVICES - BUSINESS

LONG.SANDRA W

INSTRUCTION

LUNSFORD.RAMONA M

SUPP SRVS - IMPROV INSTR & ED MED SRVS

MARKS,ANGELA H

INSTRUCTION

MARKS,ANGELA H

GENERAL ADMINISTRATION

MCCANN,JACQUELINE J

SUPP SRVS - IMPROV INSTR & ED MED SRVS

MEADERS,KATHLEEN W

INSTRUCTION

MOORE,JAMES E

INSTRUCTION

MOORE,JAMES E

GENERAL ADMINISTRATION

POSEY,JOSEPH A

SUPP SRVS - IMPROV INSTR & ED MED SRVS

POSEY,JOSEPH A

SPECIAL REVENUE FUND - FEDERAL

RANDOLPH.FREDE

INSTRUCTION

REDDING-MCKINNIE,MARILYN SUPP SRVS - IMPROV INSTR & ED MED SRVS

REID,JANET S

SUPPORT SERVICES - PUPIL SERVICES

RUMPH,LAKESHA N

GENERAL ADMINISTRATION

SCOTT.DONNA W

INSTRUCTION

SHEAFFER,LEANN R

SUPPORT SERVICES - PUPIL SERVICES

STAPLETON.CONRADE

SUPP SRVS - IMPROV INSTR & ED MED SRVS

SWARTZ, CINDY M

INSTRUCTION

THARP,TWYLA

INSTRUCTION

TWIGGS,JAMES L

MAINTENANCE & OPER. OF PLANT SERVICES

VANDERBEEK,VALERIE L

SUPPORT SERVICES - PUPIL SERVICES

WALTON,CONNIE H

INSTRUCTION

WEYER,JENNI L

SUPPORT SERVICES - PUPIL SERVICES

WILLIAMS.BRENDAL

INSTRUCTION

WILLIAMS,BRENDA L

GENERAL ADMINISTRATION

WILSON,ANGELA K

SUPP SRVS - IMPROV INSTR & ED MED SRVS

WOOD.LARAINE E

SUPPORT SERVICES - PUPIL SERVICES

21,050.00 $ 35,614.70 23,836.64 11,091.32
37,302.88
27,292.20 20,123.36 21,231.12
1,045.50 23,836.64 39,352.68
4,984.12 1,767.50
167.52 45,521.90 30,889.18 41,657.40 32,636.84 35,215.20 33,550.14
3,645.00 60,632.40
24,667.98 40,957.18
795.00 37,772.98
3,710.25 3,630.56 24,378.00 23,836.64 14,481.36 1,265.68
250.91 33,089.46 33,699.80
1,767.50 111 . 68
31,300.40 5,991. 14
35,614.70 17,711.76 44,410.64
1,083.75 27,895.14 30,497.88 54,486.64 18,543.30
4,748.68 15,500.04 32,888.50 17, 711 . 76 16,008.66
1,767.50 303.63
2,086.70 29,460.20

1,685.30 3,881.22
432.84 577.50 1,657.51
302.83
1,926.54 1,665.42
2,200.39 3,468.36 2, 131 . 97
413.79 2, 197. 51 3,566.85
2,656.55 3,019.59 2,550.07
73.30 86.53
18.69 1,487.43
14.91
2,199.14 3,573.12
2,228.49
4,097.10 313.11
1,845.57
1,362.27 1,744.83 2,680.42 3,624.39
4,668.17 1,798.46
1,650.39
1,391.04

TOTALS

$1,184,870.24 $ 69,191.60

SECTION III COMPLIANCE

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
April 24, 1996

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe Middle Georgia Regional Educational Service Agency
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 ofthe Middle Georgia Regional Educational Service Agency as ofand for the year ended June 30, 1995, and have issued our report thereon dated April 24, 1996.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit 'to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
Compliance with laws, regulations, contracts, and grants applicable to Middle Georgia 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,
t.~
Claude L. Vickers State Auditor
CLV:dt 95CRL-10

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
April 24, 1996

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

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 ofthe Middle Georgia Regional Educational Service Agency as ofand for the year ended June 30, 1995, and have issued our report thereon dated April 24, 1996.

We have applied procedures to test the Middle Georgia Regional Educational Service Agency's compliance with the following requirements applicable to each ofits Federal :financial assistance programs, which are listed in the Schedule ofFederal Financial Assistance, for the year ended June 30, 1995:

(I) 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 ofan opinion on the Middle Georgia Regional Educational Service Agency's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion.

95CRL-40

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that Middle Georgia 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 Federa1 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-40

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
April 24, 1996

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members of the Middle Georgia Regional Educational Service Agency
SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS
Ladies and Gentlemen:
We have audited the general purpose financial statements ofthe Middle Georgia Regional Educational Service Agency as ofand for the year ended June 30, 1995, and have issued our report thereon dated April 24, 1996.
In connection with our audit ofthe fiscal year 1995 general purpose financial statements of the Middle Georgia 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 of Management and Budget (0MB) Circular A-128, "Audits of State and Local Governments", we selected certain transactions applicable to
certain nonmajor Federal financial assistance programs for the year ended June 30, 1995. As required by 0MB
Circular A-128, we have performed auditing procedures on the selected transactions to test compliance with the requirements governing:
Types of Services Allowed or Unallowed
Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Middle Georgia Regional Educational Service Agency's compliance with these requirements. Accordingly, we do not express such an opinion.
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 Middle Georgia Regional Educational Service Agency had not complied, in all material respects, with those requirements.

95CRL-120

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 AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
April 24, 1996

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members of the Middle Georgia Regional Educational Service Agency
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements ofthe Middle Georgia Regional Educational Service Agency as of and for the year ended June 30, 1995, and have issued our report thereon dated April 24, 1996.
We conducted our audit in accordance with generally accepted auditing standards, and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
The management ofthe Middle Georgia 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.
In planning and performing our audit of the general purpose financial statements of the Middle Georgia 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 of relevant policies and procedures and whether they have been placed in operation, and we assessed
95ICL-3

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 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 entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements.
As described in the Schedule ofFindings and Improper or Questioned Costs, a reportable condition was noted in the following control category:
Accounting Controls (Overall)
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 condition disclosed above is also considered to be a material weakness.
This condition was considered in determining the nature, timing, and extent ofthe procedures to be performed in our audit ofthe Middle Georgia Regional Educational Service Agency's financial statements and this report does not affect our report thereon dated April 24, 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,
~/4
Claude L. Vickers State Auditor
CLV:dt 95ICL-3

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
April 24, 1996

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe Middle Georgia Regional Educational Service Agency
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 ofthe Middle Georgia Regional Educational Service Agency as ofand for the year ended June 30, 1995, and have issued our report thereon dated April 24, 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.
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 opinion on the Agency's general purpose financial statements and to report on the internal control structure in accordance with 0MB Circular A-128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to Federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated April 24, 1996.
The management ofthe Middle Georgia Regional Educational Service Agency is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting
95ICL-15

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 REOUIRElMENTS

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

During the year ended June 30, 1995, the Middle Georgia Regional Educational Service Agency had no major Federal financial assistance programs and expended 99% of its total Federal financial assistance under the following nonmajor Federal financial assistance program:

Drug-Free Schools and Communities Act

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

95ICL-15

We noted a certain matter involving the internal control structure and its operation that we consider to be a reportable condition under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control structure that, in our judgment, could adversely affect the Agency's ability to administer Federal financial assistance programs in accordance with applicable laws and regulations.
As described in the Schedule ofFindings and Improper or Questioned Costs, a reportable condition was noted in the following control category:
Administrative Requirements
A material weakness is a reportable condition in which the design or operation of one or more 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 b~ material weaknesses as defined above. However, we believe that the reportable condition described above is also considered to be a material weakness.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~
Claude L. Vickers State Auditor
CLV:dt 95ICL-15

SECTIONV FINDINGS AND IMPROPER OR QUESTIONED COSTS

MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1995
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Uncollateralized Deposits Financial Statements Finding Resolved Audit Control Number 8644-94-01
The audit report for the year ended June 30, 1994, reported that the Agency failed to have its bank balances fully collateraliz.ed as provided by the Official Code ofGeorgia Annotated Section 45-8-12. For the year under review, audit test of the Agency's bank balances indicated that the Agency complied with the State laws governing collateralization ofcash deposits.
PRIOR YEAR/CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation ofDuties Reportable Condition - Material Weakness Audit Control Number 8644-93-01
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. For the year under review, the Agency made some improvements regarding separation of employee duties but still did not achieve an adequate degree of internal control. This deficiency was a result of management's decision to limit the number of administrative staff made responsible for accounting functions. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree of internal control with existing staff.
Note: All Federal financial assistance programs listed in the Schedule of Federal Financial Assistance, Schedule "l" of this report, are affected by this finding.

SECTION VI PERTINENT VIEWS OF RESPONSIBLE OFFICIALS

MIDDLE GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY PERTINENT VIEWS OF RESPONSIBLE OFFICIALS YEAR ENDED JUNE 30, 1995
ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREl\ffiNTS - Federal Financial Assistance Inadequate Separation ofDuties Reportable Condition - Material Weakness Audit Control Number 8644-93-01
We concur with this finding. Our operations require only one bookkeeper. With this limitation, this finding cannot be totally resolved. The administration feels it has provided for the most appropriate assignment of duties with the number of personnel available to perform the accounting functions. Procedures are in place to safeguard funds and maintain the integrity ofthe accounting program.