Audit report, Oconee Regional Educational Service Agency, Sandersville, Georgia, year ended June 30, 1994

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

AUDIT REPORT OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY
SANDERSVILLE, GEORGIA YEAR ENDED JUNE 30, 1994

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY - TABLE OF CONTENTS -

SECTION!

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS-OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

GOVERNMENTAL FUND TYPES

3

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - ACTUAL AND BUDGET

GOVERNMENT AL FUND TYPES

5

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

6

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

16

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

18

SCHEDULES

1 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

20

2 ANALYSIS OF CASH AND CASH EQUIVALENTS

21

3 INVESTMENTS

22

4 ACCOUNTS RECEIVABLE

23

SCHEDULE OF REVENUE

5

STATE FUNDS

24

6

LOCAL AND OTHER FUNDS

25

7 SCHEDULE OF EXPENDITURES BY OBJECT

GOVERNMENTAL FUND TYPES

26

8 SCHEDULE OF COMPENSATION OF BOARD MEMBERS

27

OCONEE 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

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
April 14, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members of the Oconee Regional Educational Service Agency Board of Control
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 Oconee Regional Educational Service Agency, as of and for the year ended June 30, 1994, as listed in the table of contents. These financial statements are the responsibility of the Agency's management. Our responsibility is to express an opinion on these financial statements based on our audit.
Except as discussed in the following paragraph, 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 estiniates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
The Agency did not perform an inventory ofgoods for resale at June 30, 1994, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories for resale through alternative procedures.
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:
94ARL-33

* The general purpose financial statements of the Agency did not contain a General Fixed Assets Account Group to account for equipment owned by the Agency which should be included to conform to generally accepted accounting principles.
The aggregate effect on the general purpose financial statements of this omission has not been determined, but is believed to be material.
In our opinion, except for the effect ofadjustments, ifany, on the General Fund as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the inventories for resale as discussed in the third paragraph, and 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 Oconee Regional Educational Service Agency as of June 30, 1994, and the results ofits operations for the year then ended, in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements ofthe Oconee Regional Educational Service Agency taken as a whole. The combining statements (Exhibits E and F), the financial schedules (Schedules 1 through 8 which includes the Schedule of Federal Financial Assistance) and the Schedule of Salaries and Travel, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the Oconee 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, except for the effect of adjustments, ifany, on the General Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the inventories for resale as discussed in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
"Z~
Claude L. Vickers State Auditor
CLV:jg 94ARL-33

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY - 1-

ASSETS Cash and Cash Equivalents Investments Accounts Receivable Inventories for Resale Amount to be Provided in Future Years
For Payment of: Compensated Absences Capital Lease Agreements
Total Assets

~Q~EE BEGIONA! EDU~eiTIQ~I l;R~~E A~l;N~Y
!;;OMBINED BA~CE SHEET
ALL F!.!~Q TYPE ~Q ACQQUNI QRQUP JUNE 30 J994

EXHIBIT"A"

GOVERNMENTAL
GENERAL FUND

FUND TYPES SPECIAL REVENUE FUND

67,531.10 $

88,344.39

59,025.53

38,314.99

20,032.54

137,146.44

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS (Memorandum On~ JUNE 30 1994 JUNE 30 1993

155,875.49 $

134,955.66

59,025.53

116,887.80

58,347.53

40,638.03

137,146.44

1ss,3n.s1

25,341.24 15066.20

25,341.24 15066.20

19,766.56 21444.46

302,018.06 $

108,376.93 $

40,407.44 $

450,802.43 $

491,665.38

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payabkt Expired Grant Balances Payable Deferred Revenue Compensated Absences Capital Lease Agreements
Total Liabilities
FUNQE;QUITY
Fund Balances Rese,ved For Sick Leave Program For Continuation of Federal Programs For Inventories for Resale
Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity

4,052.63 $ 16,944.48

18,540.65 n,540.90
6.20 11,774.00
$

20~7.11

102861.75 $

25,341.24 15066.20
40407.44 $

22,593.28 $ 89,485.38
6.20 11,TT4.00 25,341.24 15066.20
164 266.30 $

24,749.n 100,667.80
215.12
19,766.56 21 444.46
166843.71

1,600.02 $
137146.44
138,746.46 $
142 274.49
281 020.95 $

1,124.87
1,124.87 4390.31 5,515.18

302,018.06 $

108,376.93 $

1,600.02 $ 1,124.87 137146.44
139,871.33 $
146664.80
286.536.13 $

1,600.02 528.96
1ss3n.87
180,501.85
164 519.82
325021.67

40,407.44 $

450,802.43 $

491,665.38

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

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

EXHIBIT"B"

REVENUES
S-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 Other Operations of Non-Instructional Services
Debt Service Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1
Inventory for Resale July 1 June30

GENERAL FUND

SPECIAL REVENUE
FUND

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

495,722.00 $ 3,469.66
221 652.08

789,951.67 $ 247,953.95
16,360.84

1,285,673.67 $ 251,423.61 238,012.92

1,259,491.62 257,817.39 259,058.33

720,843.74

1,054,266.46

1,775,110.20

1,776,367.34

$

516,263.47 $

516,263.47

545,969.39

392,976.96
100,991.99 42,365.34
130,754.91 64,437.97

160,808.60 99,466.50 2,098.97
199,040.52 20,972.73 54,279.74

160,808.60 492,443.46
2,098.97 300,032.51
63,338.07 185,034.65
64,437.97

129,842.42 567,831.01
1,613.83 291,053.04
63,018.65 172,944.44
53,179.65

6,378.26 1,533.35

6,378.26 1,533.35

739,438.78 $ 1,052,930.53 $ 1,792,369.31 $ 1,825,452.43

$

-18,595.04 $

1,335.93 $

-17,259.11 $

-49,085.09

320,842.42

4,179.25

325,021.67

389,748.95

-158,372.87 137,146.44

-158,372.87 137,146.44

-174,015.06 158,372.87

FUND BALANCE JUNE 30

$

281,020.95 $

5,515.18 $

286,536.13 $

325,021.67

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

Blcu1k

g;;ONE!; REGIONAi Ei2UQATIONAL ERVIQE A!:,ENQY
QQMBINE12 STATaMENT QF REVENUES EXPENDITUR!;S ANQ QHANGES IN F\JNQ illlL ~NQES
ACTUAb AND BUDGET GOl,'.ERNMENTAL FUNQ TYP!;S
YEAR ENDED JUNE 30 1994

EXHIBIT"C"

ACTUAL PER
EXHIBIT"B"

ADJUSTMENTS

ACTUAL PER
BUDGET BASIS

BUDGET

VARIANCE FAVORABLE (UNFAVORABLE)

REVaNUES

State Funds Federal Funds Local and other Funds

$ 1,285,673.67 $ 251,423.61 238,012.92

0.00 $

1,285,673.67 $ 1,279,884.00 $

251,423.61

196,163.00

238,012.92

151,522.00

5,789.67 55,260.61 86,490.92

Total Revenues

$ 1,775,110.20 $

0.00 $ 1,775,110.20 $ 1,627,569.00 $

147,541.20

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration Business Administration Maintenance and Operation of Plant Central Support Services Other Operations of Non-Instructional Services
Debt Service

516,263.47 $
160,808.60 492,443.46
2,098.97 300,032.51
63,338.07 185,034.65
64,437.97 7,911.61

0.00 $

516,263.47 $
160,808.60 492,443.46
2,098.97 300,032.51
63,338.07 185,034.65
64,437.97 7,911.61

521,852.00 $
146,518.00 419,622.00
278,685.00 65,458.00
178,726.00 4,000.00
61,507.00

5,588.53
-14,290.60 -72,821.46
-2,098.97 -21,347.51
2,119.93 -$,308.65 4,000.00 -2,930.97 -7,911.61

Total Expenditures

1,792,369.31 $

0.00 $ 1,792,369.31 $ 1,676,368.00 $

-116,001.31

Excess of Revenues over (under) Expenditures

-17,259.11 $

0.00 $

-17,259.11 $ -48,799.00 $

31,539.89

OTHER FINANCING SOURCES (USES)

Other Sourceg Other Uses

$

58,636.00$

-58,636.00

-58,636.00 58,636.00

Total Other Financing Sources (Uses)

$

0.00 $

0.00

Excess of Revenues and other Financing Sources over (under} Expenditures and Other Financing Uses

-17,259.11 $

0.00 $

-17,259.11 $ -48,799.00 $

31,539.89

FUND BALANCE JULY 1 1993

325,021.67

-158,372.87

166,648.80

310,679.45

-144,030.65

INVENTORY FOR RESALE

July 1, 1993 June 30, 1994

-158,372.87 137,146.44

158,372.87 -137,146.44

0.00 0.00

0.00 0.00

FUND llllLANCE JUNE 30 1994

286,536.13 $ -137, 146.44 $ 149,389.69 $ 261,880.45 $

-112,490.76

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

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO TIIB GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30 1994
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Oconee Regional Educational Service Agency (Agency) was established pursuant to the Official Code of Georgia Annotated Sections 20-2-270 through 20-2-274 for the purposes of providing shared services designed to improve the effectiveness of educational programs and services of local school systems and for providing instructional programs directly to selected public school students in the state.
Each regional educational service agency is governed by a board. The number of members and terms of office are prescribed by the State Board ofEducation; provided, however, that at least one-third of the membership of each Board shall be individuals who hold no other public office, who are not employees of any local unit of administration, and who are not employees of the Georgia Department of Education.
With the exception ofthe departure from generally accepted accounting principles disclosed in the following paragraphs, the financial statements of the Agency have been prepared in conformity with generally accepted accounting principles as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles.
The more significant of the Agency's accounting policies are described below.
REPORTING ENTITY
In evaluating how to define the government unit for financial reporting purposes, management has considered the criteria set forth in GASB Codification of Governmental Accounting and Financial Reporting Standards, Section 2100, "Defining the Financial Reporting Entity". Based upon the application of the above criteria, the Oconee Regional Educational Service Agency is determined to be a jointly governed organization.
The members of the Board are elected by an annual caucus ofan equal number of members oflocal boards of education from the respective member local school systems. Each Board appoints and contracts with a director who is the executive officer of the regional educational service agency. The director is responsible for the administration of the programs and services approved by the Board.
Member boards of education in the Oconee Regional Educational Service Agency are a& follows: Baldwin County, Hancock County, Jasper County, Johnson County, Putnam County, Washington County and Wilkinson 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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OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30 1994
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Agency'. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
The general purpose financial statements account for all State, Federal, Local and Other Funds under control ofthe Agency, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of a regional educational service agency's general activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the Agency except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services traditionally provided by a regional educational service agency.
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. These funds are primarily received from the Georgia Department ofEducation and from the Federal government to accomplish specific objectives and are required to be accounted for separately.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - used to account for material accrued compensated absences and material capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is detennined 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 decreases (i.e., expenditures) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
- 7-

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE30 1994
Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Those revenues considered susceptible to accrual are intergovernmental grants, sales and services and investment income.
Expenditures are generally recognized when the related fund liability is incurred.
BUDGET
The Oconee Regional Educational Service Agency has a legally authorized nonappropriated budget which is formally approved by the Board at the aggregate level. Budgets are prepared to provide a basis for funding operations and there is no legal prohibition regarding overexpenditure ofthe aggregate budget. The budget process begins when the Agency's administration prepares a tentative aggregated budget for the Board's approval. After approval of this tentative budget by the Board, the budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final budget. This final budget is then submitted to the Georgia Department of Education.
The Agency prepares its budget on the modified accrual basis, which is the same basis on which it presents its financial statements. The budget comparison on Exhibit "C" presents actual and budget data for all governmental funds on a combined basis. To facilitate comparison with the budget, inventories as reflected on Exhibit "B" have been eliminated from fund balance.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits (including N.O.W. accounts) in authorized financial institutions. Georgia Laws authorize the Agency to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Agency are stated at cost. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Agency to invest its funds in the following:
- 8-

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXI-IlBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30 1994
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLES
Receivables consist of grant reimbursements due from Federal 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.
INVENTORIES
GOODS FOR RESALE Inventories are reported on the Combined Balance Sheet at cost. The Agency uses the purchases method to account for inventories whereby purchases for resale are recorded at the time of purchase. The inventory reported on the balance sheet is equally offset by a reservation of fund balance which indicates that it does not constitute "available spendable resources" even though it is a component of net current assets.
COMPENSATED ABSENCES
Compensated absences represent obligations of the Agency relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount is deemed immaterial to the general purpose financial statements.
- 9-

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
ruNE 30 1994
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INTERFUND TRANSACTION
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 confonnity 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 AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral in an amount of not less than 110 percent of the public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State 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 of indebtedness or other obligations of the counties or municipalities ofthe State of Georgia,
(5) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose,
- 10 -

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30 1994

Note 2: DEPOSITS AND INVESTMENTS

(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 1994, the bank balances were $375,125.68. The amounts of the total bank balances are classified into three categories of credit risk:

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Agency or by the Agency's agent in the Agency's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Agency's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Agency's name.)

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

Risk Category

Bank Balance

1

$ 140,820.30

2

0.00

3

234 305.38

Total

$ 375 125 68

CATEGORIZATION OF INVESTMENTS Investments are classified as to risk by the three categories described below:

Category I - Insured or registered, or securities held by the Agency or the Agency's agent in the Agency's name.
Category 2 - Uninsured or unregistered, with securities held by the counterparty's trust department or agent in the Agency's name.
Category 3 - Uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent but not in the Agency's name.

- 11 -

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30 1994

Note 2: DEPOSITS AND INVESTMENTS

Funds invested in an investment pool managed by another government are not required to be categorized unless the investing entity owns specific, identifiable investment securities in the pool.

At June 30, 1994, the canying amount ofthe Agency's total investments was $59,025.53 and consisted entirely offunds in the Local Government Investment Pool administered by the Office of Treasury and Fiscal Services which are not required to be categorized since the Agency did not own any specific identifiable securities in the pool.

Note 3: RISK MANAGEMENT

The Agency has established a limited risk management program for Unemployment Compensation. Estimated claims are budgeted by management based on known claims and prior experience. During fiscal year 1994, no claims were paid.

Note 4: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Oconee Regional Educational Service Agency has entered into various lease agreements as Jessee for office equipment. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date oftheir inception.

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

Capital Leases

Balance July 1, 1993

Retroactive Restatement of Prior Year Balances

$ 21 444.46

Balance July I, 1993 Restated

$ 21,444.46

Additions Annual Leave Earned and Utilized (Net) Salaries Salary Related Fringe Benefits (*)

Deductions

6 378.26

Compensated Absences
$ 19,766.56
$ 19,766.56
4,780.96 793.72

Total $ 19,766.56
21444.46
$ 41,211.02
4,780.96 793.72
6 378.26

Balance June 30, 1994

$ JS Q66 20 $ 25 341 24 $ 40 407 44

(*) Includes related fringe benefits applicable to compensated absences at July 1, 1993.

- 1.2 -

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXIIlBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30 1994

Note 4: GENERAL LONG-TERM DEBT

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

Fiscal Year Ended June 30
1995 1996 1997
Total Principal and Interest
Deduct: Imputed Interest
Net Present Value ofFuture Minimum Lease Payments
Note 5: SIGNIFICANT COMMITMENTS

Capital Leases
$ 7,911.64 7,911.64 846.01
$ 16,669.29
1 603.09
$ IS 066 2Q

At June 30, 1994, the Agency had encumbrances in the amount of$12,774.00 for the unperformed portion of purchase orders, contracts and other commitments for goods and services associated with the Lottery Programs. The Georgia Department ofEducation has funding available to the Agency in an amount equal to these encumbrances. The revenues and expenditures associated with these encumbrances will be recognized in the subsequent fiscal year. Encumbrances outstanding do not constitute expenditures or liabilities in the current year because these commitments will be honored during the subsequent year. These encumbrances are identified by Lottery Program as follows:

Computers in Classrooms Distant Learning
Safe Schools Grant

$ 8,770.00 1,000.00 3 004.00
$ )2 774 00

The amounts described in this note are not reflected in the general purpose financial statements.

Note 6: CONTINGENT LIABILITIES

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

Note 7: ACCUMULATED EMPLOYEES' LEAVE

The Agency's twelve-month employees accrue annual leave at the rate ofone and one-fourth days per working month for each completed month of service. Annual leave can be accumulated up to a maximum of forty-five days. Accumulated annual leave up to a maximum of 15 days, shall be paid at their current rate of pay, to a

- 13 -

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE30 1994
Note 7: ACCUMULATED EMPLOYEES' LEAVE
terminating employee provided the employee leaves the employment of the Agency due to retirement, resignation with proper notice, program activity completion or due to an involuntary reduction in workforce.
Note 8: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by Agency's are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer public employee retirement system (PERS).
TRS provides service retirement, disability retirement and survivors benefits for its members. A member is eligible for service retirement after 30 years ofcreditable service, regardless of age, or after IO years ofservice 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 2/4 of the average of the member's two consecutive highest paid years of service multiplied by the number ofyears of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution ofthe member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement benefits also include death and disability benefits. A disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service retirement allowance or a disability retirement allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of IO 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 of employer contributions occurs, but the member's contributions are refunded with interest.
The Agency's payroll for employees covered by TRS for the year ended June 30, 1994, was $1,046,072.90; total payroll was $1,098,319.05.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Agency who are covered by TRS are required to contribute 6% oftheir gross earnings to TRS. The Agency makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees as advised by their independent actuary. For fiscal year 1994 that rate for employer contributions was 11.81%. The interest rate assumption (rate of return on investments) was 7.50%.
- 14 -

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
TIJNE 30 1994

Note 8: RETIREMENT PLANS

Total contributions made during fiscal year 1994 amounted to $186,305.44, of which $123,541.36 was made by the Agency and $62,764.08 was made by employees. These contributions represented 11.81% (Agency) and 6% (employees) of covered payroll.

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

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

Total pension benefit obligation

$13,912,014,000.00

Net assets available for benefits, at cost

12 821 722 000.00

Unfunded pension benefit obligation

$ I 090 292 000 00

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

Total contributions from all employers to TRS for fiscal year ended June 30, 1994 were $521,550,000.00. The Agency's contribution for the year ended June 30, 1994 of$123,541.36 was actuarially determined and represented .0236% of total contributions made by all participating employers.

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

Note 9: SURETY BONDS

The Director, Dr. Robert L. James, is bonded in the amount of$30,000.00 with the United States Fidelity and Guaranty Company, Baltimore, Maryland, their Bond No. 02-0170-11005-93-8, on which premium is paid through July 1, I 995.

- 15 -

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

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs Unreserved Undesignated Total Fund Equity
Total Liabilities and Fund Equity
See notes to the general purpose financial statements. -16-

GEORGIA LEARNING RESOURCES
SYSTEM

SEVERELY EMOTIONALLY
DISTURBED

$

5,515.12 $

71,055.27

8,226.54

11,806.00

$ 13,741.66 $ 82,861.27

$

1,395.98 $

17,144.67

6,830.50

65,710.40

6.20

$

8,226.48 $

82,861.27

$

1,124.87

4,390.31 $

0.00

$

5,515.18 $

0.00

$ 13,741.66 $

82,861.27

EXHIBIT"E"

LOTTERY PROGRAMS

DRUG-FREE SCHOOLS AND COMMUNITIES
ACT

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

TOTALS JUNE 30, 1994 JUNE 30, 1993

$ 11,774.00 $

0.00 $

0.00 $ 88,344.39 $ 81,786.55

20,032.54

19,217.81

$ 11,774.00 $

0.00 $

0.00 $ 108,376.93 $ 101,004.36

$ 11,774.00 $ 11,774.00

$ 18,540.65 $
72,540.90 6.20
11,774.00
$ 102,861.75 $

19,495.27 77,114.72
215.12
96,825.11

$

0.00 $

$

0.00 $

$ 11,774.00 $

$
o.oo $ _ _ _ _ _o_.o_o o.oo $ _ _ _ _ _o_.o_o $

1,124.87 $ 4,390.31
5,515.18 $

528.96 3,650.29 4,179.25

o.oo $-~=~o_.o_o $ 108,376.93 $ 101,004.35

-17-

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

REVENUES
State Funds Federal Funds Local and Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration Business Administration Maintenance and Operation of Plant
Total Expenditures
Excess of Revenues over (under) Expendttures
FUND BALANCE JULY 1
FUND BALANCE JUNE 30

GEORGIA LEARNING RESOURCES
SYSTEM

SEVERELY EMOTIONALLY
DISTURBED

$ 63,479.00 $ 104,851.73 15,353.46

726,472.67 119,386.73
1,007.38

$ 183,684.19 $ 846,866.78

$ 512,737.61

$ 78,895.25 2,098.97 90,223.84 184.00 10,946.20

160,808.60 435.00
108,763.30 20,788.73 43,333.54

$ 182,34826 $ 846,866.78

$

1,335.93 $

0.00

4,179.25

0.00

$

5,515.18 $

0.00

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

EXHIBIT"F"

LOTTERY PROGRAMS

DRUG-FREE SCHOOLS AND COMMUNITIES
ACT

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

TOTALS YEAR ENDED JUNE 30, 1994 JUNE 30, 1993

$

0.00

$ 789,951.67 $ 777,066.76

$

20,179.96 $

3,535.53

247,953.95

249,474.13

16,360.84

21,672.18

$

0.00 $

20,179.96 $

3,535.53 $ 1,054,266.46 $ 1,048,213.07

$

0.00

$

3,525.86 $ 516,263.47 $ 545,969.39

$

20,136.25

43.71

9.67

160,808.60 99,466.50 2,098.97
199,040.52 20,972.73 54,279.74

129,842.42 112,274.03
1,613.83 192,365.97
19,392.57 44,107.88

$

0.00 $

20,179.96 $

3,535.53 $ 1,052,930.53 $ 1,045,566.09

$

0.00 $

0.00 $

0.00 $

1,335.93 $

2,646.98

0.00

0.00

0.00

4,179.25

1,532.27

$

0.00 $

0.00 $

0.00 $

5,515.18 $

4,179.25

-19-

OCONEE REGIONAL EDYCATIO!jAL SERVICE AGENCY SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE YEAR ENDED JUNE 30 1994

SCHEDULE 1

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

AWARDS IN PERIOD

FEDERAL FUNDS RECEIVED IN PERIOD(NET OF REFUNDS)

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Education, U.S. Department of Through Georgia Department of Education Drug-Free Schools and Communities Act 1992 carry-Over 1994 Grant Elementary and Secondary Education Act Chapter 1 Education of Children in State Schools 1994 Regular Individuals with Disabilities Education Act TltleVI, B Georgia Leaming Resources System 1992 carry-Over 1993 Regular 1993 carry-over 1994 Regular Severely Emotionally Disturbed 1992 carry-Over 1993 Regular 1993 carry-Over 1994 Regular TrtleVl,D 1993 Regular 1994 Regular

84.186 84.186

180.00 $ 20,000.00

179.96 $ 20,000.00

179.96 $ 20,000.00

179.96 20,000.00

84.009

3,540.00

3,535.53

3,535.53

3,535.53

84.027 84.027 84.027 84.027
84.027 84.027 84.027 84.027
84.029 84.029

6,000.00 8,000.00 88,791.00 16,020.00 30,000.00 103,372.00
7320.00

6,000.00 7,964.24 8,000.00 75,305.19
16,020.00 11,240.49 29,998.89 61,565.36
7 320.00

6,000.00 8,000.00 83,531.73 16,020.00 29,998.89 73,367.84
7320.00

6,000.00
8,000.00 83,531.73
16,020.00
29,998.89 73,367.84
528.96 6195.13

Total U. S. Department of Education

$ 283223.00 $

247129.66 $ 247953.95 $

247358.04

Health and Human Services, U.S. Department of Through Georgia Department of Education AIDS School Health Education Implementation of a Program in Comprehensive Health Education 1994 AIDS Education Cooperative Agreements to Support School Health Education to Prevent the Spread of Acquired Immunodeficiency Syndrome (AIDS) 1993 AIDS Health Education

93.938 $ 93.938

6,500.00$

2,261.85$

2,261.85 $

2,261.85

3 656.00

1207.81

1207.81

Total U.S. Department of Health and Human Services

$

6 500.00 $

5917.85 $

3469.66 $

3469.66

Total Federal Financial Assistance

289 723.00 $

253047.51 $ 251 423.61 $

250 827.70

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

See notes to the general purpose financial statements.

- 20 -

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY ANALYSIS OF CASH AND CASH EQUIVALENTS JUNE 30 1994
INTEREST BEARING ACCOUNTS
Citizens Bank of Washington County, Sandersville, Georgia
N.O.W. Account (3.04%)
George D. Warthen Bank, Sandersville, Georgia
N.O.W. Account (3.00%)

SCHEDULE "2"

$

16,378.68

139,496.81

$ 155,875.49

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

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY INVESTMENTS JUNE 30 1994
INVESTMENT POOL Office of Treasury and Fiscal Services Local Government Investment Pool (4.237%)

SCHEDULE "3" $ 59,025.53

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

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY ACCOUNTS RECEIVABLE JUNE 30 1994

SCHEDULE "4"

Education, Georgia Department of Federal Programs Individuals with Disabilities Education Act TitleVl,B Georgia Learning Resources System Severely Emotionally Disturbed
Various Sources Sales and Services

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

8,226.54$

8,226.54

11,806.00

11,806.00

$

38,314.99

38,314.99

$

38,314.99 $

20,032.54 $

58,347.53

See notes to the general purpose financial statement&. - 23 -

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 1994

SCHEDULE 5

AGENCY/FUNDING
GRANTS Education, Georgia Department of other State Programs Georgia Leaming Resources System Regional Educational Service Agencies Severely Emotionally Disturbed Staff Development Sex Education Grant Supervision and Assessment of Student and Beginning Teachers and PerformanceBased Certification

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

63,479.00 $

$ 379,008.00

726,472.67

31,000.00

63,479.00 379,008.00 726,472.67
31,000.00

85,714.00

85,714.00

$ 495,722.00 $ 789,951.67 $ 1,285,673.67

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

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

SCHEDULE "6"

Other Consultant Services Donations Indirect Cost Special Revenue Fund Interest Earned Local Workshop Fees Membership Contributions Boards of Education Baldwin County Hancock County Jasper County Johnson County Putnam County Washington County Wilkinson County Printing and Laminating Sales and Services Merchandise for Resale Less: Purchases for Resale Staff Development Fees Technical Service Audio-Visual and Business Machines Less: Purchases for Resale Very Special Arts Festival Grant Other

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

27,372.05

2,774.00

$

27,372.05

2,774.00

3,500.00 10,152.14 30,009.00 $

14,052.27

3,500.00 10,152.14 44,061.27

27,585.00 8,892.00 5,814.00 6,835.50 8,424.00
14,742.00 9,229.50 464.32
418,809.34 -391,856.36
4,810.95
83,723.75 -50,729.11
1,100.00

1,301.19 1,007.38

27,585.00 8,892.00 5,814.00 6,835.50 8,424.00
14,742.00 9,229.50 1,765.51
418,809.34 -391,856.36
4,810.95
83,723.75 -50,729.11
1,100.00 1,007.38

_$ 221,652.08 $

16,360.84 $ 238,012.92

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

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

SCHEDULE '7"

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

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

$

448,761.46 $

649,557.59 $ 1,098,319.05

99,560.55

158,380.39

257,940.94

22,427 2 0

22,867.59

45,294.79

55,368.64

27,696.03

83,064.67

1,680.00

1,680.00

252.00

252.00

20,192.36

3,591.46

23,783.82

6,829.20

16,356.48

23,185.68

220.00

220.00

5,488.58

4,483.96

9,972.54

10,665.14

13,566.53

24,231.67

6,214.32

6,214.32

39,700.45

91,708.62

131,409.07

2,400.00

6,170.96

8,570.96

6,246.50

1,998.00

8,244.50

3,500.00

3,500.00

5,992.77

1,981.20

7,973.97

7,911.61

50,599.72

7,911.61 50,599.72

Total Expenditures

$

739,438.78 $ 1,052 ,930.53 $ 1,792,369.31

See notes to the general purpose financial statements. - 26 -

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF COMPENSATION OF BOARD MEMBFRS
YEAR ENDED il/Nf 30 1994
BOARD MEMBER ADDRESS
Dr. Hoyt Washington, Chairman (") Baldwin County Board of Education
P.O. Box 1188
Milledgeville, Georgia 31061
Mr. Tarver Averett, Jr. (") Washington County Board of Education P.O. Box716 Sandersville, Georgia 31082
Or. Julian Cope (") Jasper County Board of Education 1125A Fred Street Monticello, Georgia 31064
Mr. M. R. Davey(") Route 1, Box 860 McIntyre, Georgia 31054
Mr. Nick Hollon (") Johnson County Board of Education P.O. Box110 Wrightsville, Georgia 31096
Mr. M. E. Lewis (") Hancock County Board of Education P.O. Box488 Sparta, Georgia 31064
Mr. Gene Mathis (") 916 Forsyth Street Monticello, Georgia 31064
Mr. Al Reaves (") Putnam County Board of Education P.O. Box31 Eatonton, Georgia 31024
Mrs. Mary Slaughter (") Route 1, Box 795 Wrightsville, Georgia 31096
Mrs. Marlene Tompkins(") Wilkinson County Board of Education P.O. Box206 Irwinton, Georgia 31042
Mr. Oliver Wilson (") 219 Rlohmond Street Sandersville, Georgia 31082

(") Denotes Board Members serving
as of June 30, 1994
see notes to the general purpose financial statements.

27

SCHEDULE "8"
440.00 440.00 400.00 400.00 $ _ _ _1..,680...,.00..,

SECTION II SUMMARY AND SCHEDULE OF SALARIES AND TRAVEL

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

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

TOTAL PER FINANCIAL STATEMENTS (ACCRUAL BASIS)

ADJUSTMENTS FOR ACCRUALS JUNE 30 1993 JUNE 30 1994

TOTAL PER SCHEDULE (CASH BASIS)

240,320.56 $ 57,999.96 27,604.25 70,992.36 51,844.33
448,761.48
649 557.59

23,553.08 $
23,553.08 $ 77114.72

-16,944.48 $
-16,944.48 $ -72 540.90

246,929.16 57,999.96 27,604.25 70,992.36 51 844.33
455,370.06
654131.41

Total Salaries

1,098,319.05 $

100,667.80 $

-89,485.38 $ 1,109,501.47

TRAVEL
GENERAL FUND Support Services Improvement of Instructional Services General Administration Business Administration Maintenance and Operation of Plant other Operations of Non-Instructional Services
Total General Fund
SPECIAL REVENUE FUND

$

18,278.99

3,248.36

299.00

587.06

13.79

$

22,427.20

22 867.59

0.00 $ 0.00 $

0.00 $ 0.00 $

18,278.99 3,248.36 299.00 587.06 13.79
22,427.20
22867.59

Total Travel

45,294.79 $

0.00 $

0.00 $

45,294.79

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

NAME
ALLEN.MA CRISTINA G ANDERSON. CHERYL I ANDERSON.DALE K ANDERSON, DALE K BARKSON. JOSEPH M BAYMON.MONICA DONELL BEDFORD, BRENDA W BEJARANO, ELBA Z BELL.KEITH E BOWERS, NANCY WARENIK BOYD, WILBUR BRINSON, FRIEDA BRINSON, FRIEDA BRINSON. FRI EDA BURNS, JO ANN CALLAWAY, CAROL A CAPE, JEAN NIDA CHRISTIAN, JOYCE M CLEMENTS, DAVID CRAWFORD, DORIS W DAVIS, VIRGINIA E DAVIS, VIRGINIA E DAY ,DAWN LARISCEY DURDEN, JOSH A FLOYD, ALICIA FORNEY, CHARLIE LEE FOSTER, LARRY FRAZIER.KATHY FRENCH,HATTIE F GAY ,GEORGIA ELLEN GLOVER, JAMES E GOLDSBERRY, GREGORY E GOTELL,MAREECE HANCOCK, PAMELA J HARGROVE, JEANNIE L HARTMAN, IRIS P HENLEY, HENRY L HILL.DAVID R HOBSTETTER, LYNNE Q I VERY, GLADYS JACKSON, DEMETR !US JAMES.ROBERT L SR JAMES, ROBERT L SR JANES, DOROTHY S JOHNSON, CATHY R JOHNSTON, GENE JONES, ANNE J JONES, RONNIE LARRAURI, GLADYS D LAVAUGHN, INELL LAWSON, AMANDA JENKINS LEVERETT, SHE I LA 0 LONDON.LI LA 0 MARKS, CONNIE O I ANE MAY.CYNTHIA R MAY.CYNTHIA R MCCLENTON, DARRYL A MCGOWAN, HEATHER LEAH MCMASTER.FAYE M MCMASTER.FAYE M MCMULLEN.AMELIA E MEDLEY, DONALD R MILLER.EDDIE MOBLEY,WILLIE C JR MOHORNE, SARAH MORRIS.GEORGIA

TITLE CATEGORY

SEVERELY EMOTIONALLY DISTURBED PR

$

SUPP SRVS - IMPROV INSTR & EO MEO SRVS

SUPP SRVS - IMPROV INSTR & ED MED SRVS

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

GENERAL ADMINISTRATION

SUPPORT SERVICES - BUSINESS

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

FEDERAL PROGRAMS

SPECIAL REVENUE FUND - G.L.R.S.

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SUPPORT SERVICES - BUSINESS

FEDERAL PROGRAMS

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SUPP SRVS - IMPROV INSTR & EO MEO SRVS

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

FEDERAL PROGRAMS

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMDT I NALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

FEDERAL 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

OTHER OPERATIONS OF NONINSTRUCT. SERV

DIRECTOR

GENERAL ADMINISTRATION

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SUPP SRVS - IMPROV INSTR & ED MEO SRVS

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

SUPPORT SERVICES - INSTRUCTIONAL STAFF

FEDERAL PROGRAMS

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

GENERAL ADMINISTRATION

OTHER OPERATIONS OF NON INSTRUCT. SERV.

SEVERELY EMOTIONALLY DISTURBED PROGRAM

MAINTENANCE & OPER. OF PLANT SERVICES

MAINTENANCE & PER. OF PLANT SERVICES

MAINTENANCE & OPER. OF PLANT SERVICES

FEDERAL PROGRAMS

SEVERELY EMOTI NALLY OI STURBEO PROGRAM

SALARIES AMOUNT
9,426 41 34,593 36 15,912 00
40 00 7,867 44 46,413 96 32. 049 54
147 .oo
28, 173 96 240 98
4,476 00 15,642 60 28,284.10
49 00 30,421.50 40,763 84
24 50 325 00 23, 128 25 1,998 55 17,415 80 24,999 96
56 70 10,481.55
24.00 50.00 2,241.75 1,334.00
117 .oo
196.00 61. 75
5,683.88 5,251. 70 2,446 72
75.00 3,160.30 3,464.06 32,730.18 11,458.20 57,999.96
12,252 96 8,091.18 270.00
31,900.44 97 .50
4,373.96 40.00
3,464.06 214.50 691. 72
9,303 .oo
2,400.00 12,840.00 17,039.40 21,827.60
28,230 96 5,467.36
32,974 56 1,400 00
23,643 60 9,418.10 1,348 26

TRAVEL EXPENSE
314. 68 2,312.63
647. 74 100 94
5,206 77 133 60
3,725 44 130 88 96 40 98 80
2,078 76 995. 15
2,384.10
202 60 246 00 1,802 07
52.00
2,976.54
1,766.63
310 94 1,633.28
703 88 40 00 13 79
193 95 324. 44

NAME
MOSLEY, ANNIE J MOYE, MARY M MURPHY, OTIS E NELIGAN,DORRIE P NEWTON, LARRY M NORRIS,BRENOA ODOM, HENRY W JR PENNINGTON, TAMMY PHELPS, CALVIN PLOTT ,ALEATHA R PLOTT, ALEATHA R PR I CHARD, ANNE C PROSSER, DAN RAYFORD,BEVERLY J REAVES.CELIA S REAVES.CELIA S RICHARD, SHARRON ROBINSON.ANGELA H ROBINSON.KATHARINE E ROGERS, DOUGLAS PATRICK SIMS, LARRY J SKAGGS.LOUISE W SLATER.BERTHA H SNELL, JUL LENE H SNOW, BONNIE M STONE, BRENDA H STUBBS, KENNETH E JR SUMNER, CAROLYN C TAYLOR.JANE W THOMAS, ROLAND THOMPKINS, HAROLD THOMPSON, MARIA 0 THORNE, MARIA SAMPER VEASLEY, ANNIE CAROLYN VINCI ,MARCIA M WALKER, BETTY E WARD, KE ITH R WASHINGTON, MONA L WEST, LYNN B WILKERSON, BRENDA R WI LKINSDN, HARRI ET WILLIAMS,GLDR!A WILLIAMS,LA DON M WILLIAMS.SARAH M WILSON, JOHNNIE S YOUNG, VICTOR

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

TITLE CATEGORY

SALARIES AMOUNT

FEDERAL PROGRAMS

$

SUPP SRVS - IMPROV INSTR & ED MEO SRVS

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SUPP SRVS - IMPROV INSTR & EO MEO SRVS

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SUPPORT SERVICES - INSTRUCTIONAL STAFF

SPECIAL REVENUE FUND - OTHER PROGRAMS

SUPP SRVS - IMPRDV INSTR & EO MEO SRVS

OTHER OPERATIONS OF NON INSTRUCT. SERV.

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

FEDERAL PROGRAMS

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

MAINTENANCE & OPER. OF PLANT SERVICES

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY OISTURBEO PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY OISTURBEO PROGRAM

GEORGIA LEARNING RESOURCES SYSTEM FUND

MAINTENANCE & OPER. OF PLANT SERVICES

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SUPP SRVS - IMPROV INSTR & EO MEO SRVS

GEORGIA LEARNING RESOURCES SYSTEM FUND

SEVERELY EMOTIONALLY DISTURBED PROGRAM

SEVERELY EMOTIONALLY OISTURBEO PROGRAM

SEVERELY EMOTIONALLY 01 STURBED 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

14,067.96 42,692.80
294 00 7,061.08 24,221 76
80.00 200.00 4,252 84
1,225 50 8,402 00 30,247 00 34,720 60 12,155.17
49.00 163. 52 7,769.04 120.00 2,160.32 40.00
40.00 12,454.20 34,949.02
24 .50 3,013.40
343. 00 897 .00
28. 35 14,102.28
520.00 559 .00
49.00 30,965.22 24,190.66 13,999.92 48,486.00
75 .00 633. 60
49.00 1,102.50
924. 96 39.00
240.00 278. 89
100.00 448. 50 4,550.22

TOTALS

1,109,501.47 $

TRAVEL EXPENSE 3,136 99
817 46 467 33 6,374 50 1,292 81
68 67 122 80
245 .07
333 75 634 68 3,308 72
45,294.79

SECTION III COMPLIANCE

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
April 14, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members of the Oconee 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 ofthe Oconee Regional Educational Service Agency as of and for the year ended June 30, 1994, and have issued our report thereon dated April 14, 1995. This report was qualified for a scope limitation and for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
Except as discussed in the following paragraph, 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 Agency did not perform an inventory ofgoods for resale at June 30, 1994, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories for resale through alternative procedures.
Compliance with laws, regulations, contracts, and grants applicable to Oconee 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 of the Agency's compliance with certain provisions of laws, regulations, contracts, and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion.

94CRL-10

The results of our tests indicate that, with respect to the items tested, the Oconee Regional Educational Service Agency complied, in all material respects, with the provisions referred to in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Agency had not complied, in all material respects, with those provisions.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:jg 94CRL-10

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
April 14, 1995

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

SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS

Ladies and Gentlemen:

We have audited the general purpose financial statements ofthe Oconee Regional Educational Service Agency as of and for the year ended June 30, 1994, and have issued our report thereon dated April 14, 1995. This report was qualified for a scope limitation and 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 Oconee Regional Educational Service Agency's compliance with the following requirements applicable to each of its Federal financial assistance programs, which are listed in the Schedule ofFederal Financial Assistance, for the year ended June 30, 1994:

(1) Political Activity

(5) Allowable Costs/Cost Principles

(2) Civil Rights

(6) Audit Follow-Up/Resolution

(3) Cash Management

(7) Administrative Requirements

(4) Federal Financial Reports

Our procedures were limited to the applicable procedures described in the Office of Management and Budget's "Compliance Supplement for Single Audits of State and Local Governments" and other additional procedures as deemed necessary. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Oconee Regional Educational Service Agency's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion.

94CRL-40

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that Oconee Regional Educational Service Agency had not complied, in all material respects, with those requirements.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~
Claude L. Vickers State Auditor
CLV:jg 94CRL-40

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
April 14, 1995

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

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

Ladies and Gentlemen:

We have audited the general purpose financial statements ofthe Oconee Regional Educational Service Agency as of and for the year ended June 30, 1994, and have issued our report thereon dated April 14, 1995. This report was qualified for a scope limitation and for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

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

(1) Types of Services Allowed or Unallowed

(2) Eligibility

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

94CRL-120

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Oconee Regional Educational Service Agency had not complied, in all material respects, with those requirements.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~~
Claude L. Vickers State Auditor
CLV:jg 94CRL-120

SECTION IV INTERNAL CONTROL

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
April 14, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members of the Oconee Regional Educational Service Agency Board of Control
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements ofthe Oconee Regional Educational Service Agency as of and for the year ended June 30, 1994, and have issued our report thereon dated April 14, 1995. This report was qualified for a scope limitation and for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
Except as discussed in the following paragraph, 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 Agency did not perform an inventory ofgoods for resale at June 30, 1994, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories for resale through alternative procedures.
In planning and performing our audit of the general purpose financial statements of the Oconee Regional Educational Service Agency for the year ended June 30, 1994, we considered the internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide assurance on the internal control structure.
The management of the Oconee 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
94ICL-3

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.

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

(1) Cash and Cash Equivalents (2) Investments (3) Inventories (4) Revenue/Receivables/Receipts (5) Procurement

(6) Expenditures/Liabilities/ Disbursements
(7) Employee Compensation
(8) General Ledger
(9) General Fixed Assets

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

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

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

(1) Accounting Controls (Overall)

(2) Inventories

(3) General Fixed Assets

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

94ICL-3

Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that all of the reportable conditions disclosed above are also considered fo 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 Oconee Regional Educational Service Agency's financial statements and this report does not affect our report thereon dated April 14, 1995.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.

CLV:jg 94ICL-3

Claude L. Vickers State Auditor

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
April 14, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board of Education
and Director and Members of the Oconee Regional Educational Service Agency Board of Control
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
Ladies and Gentlemen:
We have audited the general purpose financial statements ofthe Oconee Regional Educational Service Agency as of and for the year ended June 30, 1994, and have issued our report thereon dated April 14, 1995. This report was qualified for a scope limitation and for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of Office of Management and Budget (0MB) Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement and about whether the Oconee Regional Educational Service Agency complied with laws and regulations, noncompliance with which would be material to a Federal financial assistance program.
The Agency did not perform an inventory of goods for resale at June 30, 1994, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories for resale through alternative procedures.
In planning and performing our audit for the year ended June 30, 1994, we considered the Agency's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the Agency's general purpose financial statements and 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

94ICL-15

have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated April 14, 1995.

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

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

(1) 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, 1994, the Oconee Regional Educational Service Agency had no major Federal financial assistance programs and expended 87% of its total Federal financial assistance under the following nonmajor Federal financial assistance programs:

94ICL-15

Individuals with Disabilities Education Act Title VI, B Georgia Learning Resources System Severely Emotionally Disturbed
We performed tests of controls, as required by O1\,ffi 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 programs. 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 Jaws and regulations.
As described in the Schedule ofFindings and Improper or Questioned Costs, a reportable condition was noted in the following control category:
Administrative Requirements
A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a Federal financial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.
Our consideration of the internal control structure policies and procedures used in administering Federal financial assistance would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe 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 granter agencies and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~-~~
Claude L. Vickers State Auditor
CLV:jg 94ICL-15

SECTIONV FINDINGS AND IMPROPER OR QUESTIONED COSTS

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Failure to Maintain Required Level of Non-Federal Expenditures Federal Financial Assistance Finding Resolved Audit Control Number 8664-93-03
The audit report for the year ended June 30, 1993, reported that the Oconee Regional Educational Service Agency failed to expend non-federal funds in an amount equal to or greater than the amount expended in the prior fiscal period in the Education of the Handicapped Act, Instructional Services - Title VI, B - Georgia Learning Resources System Program (CFDA 84.027). For the year under review, the Agency implemented procedures to ensure that the proper level of effort is maintained for non-federal expenditures. The Georgia Department ofEducation reviewed this matter and in a letter dated November 17, 1994, resolved this finding without a reclaim of funds.
AUDIT FOLLOW-UP/RESOLUTION Inadequate Inventory Records Federal Financial Assistance Finding Resolved Audit Control Number 8664-93-05
The audit report for the year ended June 30, 1993, stated that the property management records maintained for the Individuals with Disabilities Education Act - Title VI, B - Severely Emotionally Disturbed Program (CFDA 84.027) failed to meet the property management standards as set forth in Chapter 8 of the Georgia Financial Accounting Handbook for Local School Systems. In the year under review, it was noted that property management records were maintained as required.
PRIOR YEAR/CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation ofDuties Reportable Condition - Material Weakness Audit Control Number 8664-93-01
The audit report for the year ended June 30, 1993, stated that the Agency did not provide for adequate separation of employee duties in the performance of accounting functions and related procedures. For the year under review, our audit noted no improvement regarding adequate separation of employee duties. 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

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994
PRIOR YEAR/CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation ofDuties Reportable Condition - Material Weakness Audit Control Number 8664-93-01
Note: Federal financial assistance programs affected by this finding are as follows: Individuals with Disabilities Education Act, Title VI-B Georgia Learning Resources System (CFDA 84.027) Severely Emotionally Disturbed (CFDA 84.027)
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 8664-93-02
The audit report for the year ended June 30, 1993, noted that the management of the Oconee 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.
INVENTORIES Inventory for Resale not Reconcilable to Records Financial Statements Reportable Condition - Material Weakness Audit Control Number 8664-93-04
The audit report for the year ended June 30, 1993, noted that the inventory for resale at June 30 was not reconcilable from beginning to ending balance through an analysis of yearly purchase/sales activity. Furthermore, the ending balance reflected on the accounting records was the result of the actual physical counts as ofJanuary 1994, which did not include the last six months activity for the year. For the year under review, no improvements were noted in the inventory records. The inventory for resale records were incomplete and failed to meet the inventory standards as set forth in Chapter 12 of the Financial Management for Georgia Local Units of Administration (FMGLUA).

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994
PRIORYEAR/CURRENTYEAR
INVENTORIES Inventory for Resale not Reconcilable to Records Financial Statements Reportable Condition - Material Weakness Audit Control Number 8664-93-04
This condition occurred because management claimed to not be aware of the provisions ofFMGLUA. Audit adjustments were necessary to reflect the results of purchases and sales in the ending inventory for resale balance. Appropriate action should be taken by management to ensure that accounting records document the purchase/sales activity for all inventory for resale. Periodic physical inventory counts should be made and reconciled to the inventory records to ensure the accuracy of the Agency's inventory records.
CURRENT YEAR
PROCUREMENT Failure to Meet Legal Requirements Financial Statements Nonmaterial Noncompliance Audit Control Number 8664-94-01
The Agency has entered into a multi-year lease purchase agreement for office equipment that does not include the renewal provision requirements of the Official Code of Georgia Annotated Section 20-2-506 as follows:
"(a) Except as otherwise provided in this Code section, each county, independent, or area school system in this State shall be authorized to enter into multiyear lease, purchase, or lease purchase contracts of all kinds for the acquisition of goods, materials, real and personal property, services, and supplies, provided that any such contract shall contain provisions for the following:
( 1) The contract shall terminate absolutely and without further obligation on the part of the school system at the close of the calendar year in which it was executed and at the close of each succeeding calendar year for which it may be renewed as provided in this Code section;
(2) The contract may provide for automatic renewal unless positive action is taken by the school system to tenninate such contract, and the nature of such action shall be detennined by the school system and specified in the contract;...".
This noncompliance occurred because management claimed to not be aware of the provisions of Georgia Law. The Agency should have this lease agreement amended to include the termination and renewal provisions noted above and establish the necessary controls and procedures to ensure that lease, purchase, or lease purchase agreements meet all ofthe requirements ofthe Georgia Laws prior to entering into those types of agreements.

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1994
Note: The Oconee Regional Educational Service Agency was provided an opportunity to include pertinent comments from the Agency's management concerning these audit findings, conclusions and recommendations. The Agency has elected not to provide comments for inclusion in this report.