GA Ageo R{ ;1.16 I 0Lf. ICjq5 -qb AUDIT REPORT OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY SANDERSVIlLE, GEORGIA YEAR ENDED JUNE 30, 1996 ---------- - - - - - STATE OF GEORGIA DEPARTMENT OF AUDITS 254 WASHINGTON STREET ATLANTA. GEORGIA 30334 OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY - TABLE OF CONTENT'S - SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE EXHIBITS GENERAL PURPOSE FINANCIAL STATEMENTS COMBINED STATEMENTS - OVERVIEW A COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP 2 B COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES 3 C STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS 4 D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 5 ADDITIONAL FINANCIAL INFORMATION COMBINING STATEMENTS SPECIAL REVENUE FUND E COMBINING BALANCE SHEET 16 F COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 17 SCHEDULES 1 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE 18 2 CASH AND CASH EQUIVALENTS 19 3 INVESTMENTS 20 4 ACCOUNTS RECEIVABLE 21 SCHEDULE OF REVENUE 5 STATE 22 6 OTHER 23 7 SCHEDULE OF EXPENDITURES BY OBJECT GOVERNMENTAL FUND TYPES 24 8 SCHEDULE OF COMPENSATION OF BOARD MEMBERS 25 OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY - TABLE OF CONTENTS - SECTIONll SUMMARY AND SCHEDULE OF SALARIES AND TRAVEL SECTION ill 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 SECTION V FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS SECTION VI PERTINENT VIEWS OF RESPONSIBLE OFFICIALS PERTINENT VIEWS OF RESPONSIBLE OFFICIALS SECTION I FINANCIAL CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 February 24, 1997 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 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, 1996, as listed in the table of contents. These financial statements are the responsibility ofthe 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 ofthe United States, and the provisions of the Office of Management and Budget Circular A-128, "Audits of State and Local Governments". Those standards and OMB Circular A-l28 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. We did not observe the taking ofinventories for resale at June 30, 1996, 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: 96ARL-33 * The general purpose financial statements of the Agency did not contain a General Fixed Assets Account Group to account for equipment owned by the Agency which should be included to conform to generally accepted accounting principles. The aggregate effects on the general purpose financial statements ofthis omission have not been determined, but are 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 ofthe matters 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, 1996, and the results ofits operations for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated February 24, 1997, on our consideration of the Agency's internal control structure and a report dated February 24, 1997, on its compliance with laws and regulations. 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 ofthe general purpose financial statements ofthe 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 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, 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. Respectfully submitted, ~~ Claude L. Vickers State Auditor CLV:cm 96ARL-33 OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY - 1- OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUp JUNE30 1996 EXHIBIT-A- ASSETS cash and cash Equivalents Investments Accounts Receivable Inventories for Resale Amount to be Provided in Future Years For Payment of: C8pita1 Lease Agreemerlts Compensated Absences GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS (Memorandum Only) JUNE 30, 1996 JUNE 30, 1995 $ 186,978.03 $ 9,109.30 $ 196,087.33 $ 163,456.51 65,853.86 65,853.86 62,266.97 26,480.81 113,575.69 140,056.50 61,067.64 122,166.38 122,166.38 122,507.13 $ 773.32 773.32 8,194.15 20,640.55 20,640.55 22,082.01 Total Assets $ 401 ,479.08 $ 122,684.99 $ 21,413.87 $ 545,577.94 $ 439,574.41 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable salaries Payable Expired Grant Balances Payable capital Lease Agreements Compensated Absences Total Liabilities FUNDEQU!TY Fund Balances Reserved For Inventories For Resale For Sick Leave Program Unreserved Undesignated Total Fund Equity $ 10,421.65 $ 18,216.44 $ 28,638.09 $ $ 122,166.38 1,600.02 $ 123,766.40 249,074.59 $ $ 372,840.99 $ 24,605.68 90,513.28 1,773.27 $ 116,892.23 $ 5,792.76 5,792.76 Total Liabilities and Fund Equity $ 401.479.08 $ 122,684.99 $ $ 773.32 20,640.55 21.413.87 $ 35,027.33 $ 108,729.72 1,77327 n3.32 20,640.55 166,944.19 $ 25,858.86 83,348.66 8,194.15 22,082.01 139,483.68 $ 122,166.38 $ 122,507.13 1,600.02 1,600.02 $ 123,766.40 $ 124,107.15 254,867.35 175,983.58 $ 378,633.75 $ 300,090.73 21.413.87 $ 545,5n.94 $ 439,574.41 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 All GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1996 EXHIBIT-B- REVENUES State Funds Federal Funds Other Funds Tolal Revenues EXPENDITURES Current Instruction Support services Pupil5ervices Improvement of Instructional Services Educational Media services General Administration Business Administration Maintenance and Operation of Plant Student Transportation 5ervices Other Operations of Non-Instructional 5ervices Capital Outlay Debt Service Principal Interest ToIal Expenditures Excess of Revenues over (under) Expenditures FUND BALANCE JULY 1 Inventory for Resale - Net Change in Period GENERAL FUND SPECIAL REVENUE FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30.1996 JUNE 30.1995 $ 522,705,24 $ 897,360,00 $ 1.420,065,24 $ 1,319,985,00 20,275.32 270,320,14 290,595.46 277,814,46 320.894.47 17.690.97 338.585.44 265,305.83 $ 863.875.03 $ 1.185,371.11 $ 2.049,246.14 $ 1,863,105,29 $ 538,325.73 $ 538,325.73 $ 500,714.09 $ 415,713.74 66.185,20 50,555.22 143,501.40 61,545.28 39,725.00 206.547.50 121,071.62 3,106.53 216,659.72 28,236.85 71,276.94 206.547.50 536,785,36 3,106.53 282,844.92 78,792,07 214,n8.34 61,545.28 39.725.00 152,945,13 525,014.21 2,663.14 311,571.40 72,250.84 200,590.45 41.00 61,209.48 7,420.83 490.81 7,420.83 490.81 6,872.05 1.039.59 $ 785.137.48 $ 1,185,224.89 $ 1.970,362.37 $ 1,834,911 ,38 $ 78.737.55 $ 146.22 $ 78,883.n $ 28,193.91 294,444.19 5.646.54 300,090.73 286,536.13 -340.75 -340.75 -14.639.31 FUND BALANCE JUNE 30 $ 372,840.99 $ 5.792.76 $ 378.633.75 $ _ .....3..0.0..0...9..0....7..3.. The notes to the general purpose financial statements are an integral part of this statement. -3- OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30,1996 EXHIBITC REVENUES State Funds Federal Funds Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Operations of Non-Instructional Services Capital Outlay Debt Service TotalExpend~ures Excess of Revenues over (under) Expend~ures OTHER FINANCING SOURCES (USES) Other Sources Other Uses Total Other Financing Sources (Uses) Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses FUND BALANCE JULY 1, 1995 GENERAL FUND BUDGET ACTUAL $ 414,287.00 $ 522,705.24 20,275.32 172,099,00 320,894.47 $ 586,386,00 $ 863,875.03 $ 261,931.00 $ 415,713,74 100,727.00 47,580.00 128,780.00 66,185.20 50,555.22 143,501,40 4,000.00 63,840,00 61,545,28 39,725,00 7,911,64 $ 606,858.00 $ 785,137.48 $ -20,472.00 $ 78,737.55 $ 59,872,00 -54,000.00 $ 5,872.00 $ -14,600.00 $ 301,540.14 78,737.55 171,937,06 FUND BALANCE JUNE 30,1996 $ 286.940.14 $ 250,674.61 SPECIAL REVENUE FUND BUDGET ACTUAL $ 983,074.00 $ 897,360.00 243,964.00 270,320.14 17,690.97 $ 1,227,038.00 $ 1,185,371.11 $ 541,293.00 $ 538,325.73 193,893.00 163,644.00 228,871.00 27,034.00 .66,031.00 400,00 206,547.50 121,071.62 3,106.53 216,659.72 28,236.85 71,276.94 $ 1,221,166,00 $ 1,185,224.89 $ 5,872.00 $ 146,22 $ -5,872,00 $ -5,872.00 $ 0,00 $ 13,530.03 146,22 5,646,54 $ 13,530,03 $ 5,792.76 The notes to the general purpose financial statements are an integral part of this statement. -4- OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXlllBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1996 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 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 ofthe 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 ofthe Georgia Department ofEducation. With the exception ofthe departure from generally accepted accounting principles disclosed in these notes, the financial statements ofthe Agency have been prepared in conformity with generally accepted accounting principles as applied to governmental units and unless otherwise disclosed in these notes, the financial statements present all of the fund types and account groups ofthe Agency. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant ofthe Agency's accounting policies are described below. REPORTING ENTITY In evaluating how to define the governmental 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 ofthe 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 ofthe regional educational service agency. The director is responsible for the administration ofthe programs and services approved by the Board. Member boards of education in the Oconee Regional Educational Service Agency are as 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. - 5- OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1996 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 notpresently 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 gene~ purpose financial statements account for all State, Federal and Other funds under control ofthe Agency, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows: GOVERNMENTAL FUND TYPES - are used to account for all or most of a regional educational service agency's general activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources of the Agency except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a regional educational service agency. SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. These funds are primarily received from the Georgia Department ofEducation and from the Federal government to accomplish specific objectives and are required to be accounted for separately. ACCOUNT GROUP GENERAL LONG-TERM DEBT ACCOUNT GROUP - used to account for material accrued compensated absences and capital lease obligations. BASIS OF ACCOUNTING The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure ofavailable spendable resources. Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group. - 6- OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Governmental funds are accounted for using the modified accrual basis ofaccounting under which: Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are intergovernmental grants, sales and services and investment income. Expenditures are generally recognized when the related fund liability is incurred. BUDGET The Oconee Regional Educational Service Agency's budget is a complete financial plan for the Agency's fiscal year and is based upon estimates ofexpenditures 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 function. The legal level ofbudget control was established by the Agency at the aggregate level. The budget for governmental funds was prepared in accordance with generally accepted accounting principles. The budget process begins when the Agency's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting 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 ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year end. The Statement ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the General Fund and Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to actual revenues, expenditures and fund balance as reflected on Exhibit "B" of this report: FUND BALANCE JULY 1, 1995 Adjustments Inventories - July 1, 1995 Inventories for Resale Fund Balance July 1, 1995 (Budget Basis) Excess ofRevenues and Other Financing Sources over (under) Expenditures and OtherFinancing Uses FUND BALANCE JUNE 30, 1996 (Budget Basis) General Fund $ 294,444.19 -122,507.13 $ 171,937.06 78,737.55 $ 250,674,61 - 7- OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1996 Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CASH AND CASH EQUIVALENTS COMPOSmON OF DEPOSITS Cash and cash equivalents consist ofdeposits (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 selecting among avenues ofinvestment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following: (I) Obligations issued by the State ofGeorgia 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 ofthe United States government, (5) Prime banker's acceptances, (6) The Local Government Investment Pool administered by the State ofGeorgia, Office ofTreasury and Fiscal Services, (7) Repurchase agreements, and (8) Obligations of other political subdivisions ofthe State of Georgia. 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- OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1996 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INVENTORIES GOODS FOR RESALE Inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). 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 offund 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. INTERFUND TRANSACTIONS The Agency has the following type of interfund transactions: Reimbunements ofexpenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed. 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 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. 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- OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXlllBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1996 Note 2: DEPOSITS AND INVESTMENTS Acceptable security for deposits consists of anyone ofor any combination ofthe following: (1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State ofGeorgia, (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 of Georgia, (5) Bonds ofany public authority created by the laws ofthe State ofGeorgia, 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 ofthe State of Georgia, and (7) Bonds, bills, notes, certificates ofindebtedness, 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, 1996, the bank balances were $394,035.20. The amounts ofthe 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.) - 10 - OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 Note 2: DEPOSITS AND INVESTMENTS The Agency's deposits are classified by risk category at June 30, 1996, as follows: Risk CategOJY 1 2 3 Total Bank Balance $ 177,238.63 0.00 216,796.57 $ 394.035.20 CATEGORIZATION OF INVESTMENTS At June 30, 1996, the canying amount ofthe Agency's total investments was $65,853.86 and consisted entirely offunds in the Local Government Investment Pool administered by the State of Georgia, Office ofTreasury and Fiscal Services which are not required to be categorized since the Agency did not own any specific identifiable securities in the pool. The investment policy ofthe State ofGeorgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool does not provide for investment in derivatives or similar investments. Note 3: RISK MANAGEMENT The Agency is exposed to various risks of loss related to torts~ theft of, damage to, and destruction of assets~ errors or omissions; job related illness or injuries to employees; natural disaster; and unemployment compensation. The Agency has obtained commercial insurance for risk of loss associated with torts, assets and errors or omissions. However, the errors or omissions policy excludes coverage for sexual harassment. The Agency .has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Agency's insurance coverage in any ofthe past three years. The Agency has elected to self-insure for all losses related to natural disaster. The Agency has not experienced any losses related to these risks in the past three years. The Agency is self-insured with regard to unemployment compensation claims. The Agency accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. The Agency has not experienced unemployment claims during the last two fiscal years. The Agency participates in the Georgia Education and Government Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991 to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The Agency pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the Continental Insurance Company to provide coverage for potential losses sustained by the Trust in excess of $250,000.00 loss per occurrence, up to $1,000,000.00. - 11 - OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1996 Note 4: GENERAL LONG-TERM DEBT CAPITAL LEASES The Oconee Regional Educational Service Agency has entered into various lease agreements as lessee for office equipment. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value ofthe future minimum lease payments as ofthe date oftheir inception. The changes in General Long-Term Debt during the fiscal year ended June 30, 1996, were as follows: Capital Leases Compensated Absences Total Balance July I, 1995 $ 8,194.15 $ 22,082.01 $ 30,276.16 Deductions Annual Leave Earned and Utilized (Net) Payments 7.420.83 1,441.46 1,441.46 7.420.83 Balance June 30, 1996 $ 773.32 $ 20,640.55 $ 21.413.87 At June 30,1996, payments due, by fiscal year which includes principal and interest for these items are as follows: Fiscal Year Ended June 30 Capital Leases 1997' $ 846.01 Deduct: Imputed Interest 72.69 Net Present Value of Future Minimum Lease Payments $'===f:77~3~.3~2 Note 5: ON-BEHALF PAYMENTS The Agency has recognized revenues and expenditures in the amount of $22,611.99 for health insurance contributions paid on the Agency's behalf by the following State Agency. Georgia Department ofEducation Paid to the State Merit System ofPersonnel Administration For Health Insurance ofNon-Certified Personnel In the amount of$22,611.99 - 12 - OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1996 Note 6: CONTINGENT LIABILITIES Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Agency believes that such disallowances, if any, will be immaterial to its overall financial position. Note 7: ACCUMULATED EMPLOYEES' LEAVB The Agency's twelve-month employees accrue annual leave at the rate of one and one-fourth days per month. Annual leave can be accumulated up to a maximum of forty-five days. Accumulated annual leave up to a maximum of3 days, shall be paid at the current rate of pay, to a 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. See Note 1 - Compensated Absences 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 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 multipli~d by the number of years of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death. Retirement benefits also include death and disability benefits. A disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service retirement allowance or a disability retirement allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of 10 years of service) and compensation up to the time of disability or death. Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employer contributions occurs, but the member's contributions are refunded with interest. - 13 - OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXlllBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 Note 8: RETIREMENT PLANS The Agency's payroll for employees covered by TRS for the year ended June 30, 1996, was $1,115,683.24; total payroll was $1,239,519.38. TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Agency who are covered by TRS are required by State statute to contribute 5% oftheir 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 1996 that rate for employer contributions was 11.81%. The interest rate assumption (rate ofretum on investments) was 7.50%. Total contributions made during fiscal year 1996 amounted to $187,546.97, ofwhich $131,762.43 was made by the Agency and $55,784.54 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, 1995, was as follows: Total pension benefit obligation $17,442,607,000.00 Net assets available for benefits, at cost 15,857,066.000.00 Unfunded pension benefit obligation $ 1.585,541.000.00 The measurement ofthe total pension benefit obligation is based on an actuarial valuation as ofJune 30, 1995. Net assets available to pay pension benefits were valued as ofthe 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, 1996 were $607,275,000.00. The Agency's contribution for the year ended June 30, 1996 of$131,762.43 was actuarially determined and represented .0217% oftotal contributions made by all participating employers. - 14 - OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 Note 8: RETIREMENT PLANS Ten year historical trend information is presented in the 1996 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. Faye H. Montgomery, is bonded in the amount of $30,000.00 with the United States Fidelity and Guaranty Company, Baltimore, Maryland, their Bond No. 02-0170-58976-95-4, on which premium is paid through August 11, 1997. - 15 - OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 1996 EXHIBIT-E- ASSETS Cash and Cash Equivalents Accounts Receivable GEORGIA LEARNING SEVERELY RESOURCES EMOTIONALLY SYSTEM DISTURBED DRUG-FREE SCHOOLS AND COMMUNITIES ACT TOTALS JUNE 30, 1996 JUNE 30, 1995 $ 7,566.89 $ 1,542.41 $ 0.00 $ 9,109.30 $ 74,401.70 8,954.80 104,620.89 113,575.69 21,929.72 Total Assets $ 16,521.69 $ 106,163.30 $ 0.00 $ 122,684.99 $ 96,397.42 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable salaries Payable Expired Grant Balances Payable $ 1,879.02 $ 22,726.66 7,076.64 83,436.64 1,773.27 Total Liabilities $ 10,728.93 $ 106,163.30 FUND EQUITY Fund Balances Unreserved Undesignated $ 5,792.76 $ 0.00 $ $ 24,605.68 $ .90,513.28 1,773.27 $ 116,892.23 $ 19,216.54 71,534.34 90,750.88 0.00 $ 5,792.76 $ 5,646.54 Total Liabilities and Fund Equity $ 16,521.69 $ 106,163.30 $ ....0...0. 0_$ 122,684.99 $ 96,397.42 See notes to the general purpose financial statements. -16- OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 1996 EXHIBIT-P FUND BALANCE JUNE 30 $ 5,792.76 $ 0,00 $ $ ..;O~.OO_ 5,792.76 $ _ ......5-.,.6...4..6...-.5.4.. See notes to the general purpose financial statements. -17 - OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE YEAR ENDED JUNE 30,1996 SCHEDULE -1- FUNDING AGENCY PROGRAM/GRANT Education, U, S, Department of Through Georgia Department of Education Drug-Free Schools and Communities Act 1996 Grant IndMduals with Disabilities Education Act Title VI, B Georgia Learning Resources System 1996 Grant Severely Emotionally Disturbed 1996 Grant Special Education Personnel Development and Parent Training Title VI, D 1995 RegUlar 1996 Grant Total U, S. Department of Education Health and Human Services, U. S. Department of Through Georgia Department of Education AIDS School Health Education Implementation of a Program in Comprehensive Health Education 1995 Contract. 1996 Contract Through Georgia Department of Human Resources Block Grant for Prevention and Substance Abuse 1996 Contract Total U. S. Department of Health and Human Services CFDA NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD 84.186 $ 20,000,00 $ 20,000,00 84,027 84,027 117,636.73 122,660,89 117,636,73 122,660,89 84,029 84.029 $ 4,340,52 5,682.00 270,320.14 $ 4,340.52 5,682.00 270,320,14 93,938 $ 93,938 2,633.49 $ 8,093.83 93.959 9,548.00 $ 20,275.32 $ 2,633.49 8,125.33 9,548.00 20,306,82 Total Federal Financial Assistance $ 290,595.46 $=======2=9:i:!0,=:62;,;;6:=.96= The Agency had no major programs as defined by the Single Audit Act of 1984. See notes to the general purpose financial statements. - 18 - OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY CASH AND CASH EQUIVALENTS JUNE 30, 1996 SCHEDULE "2" INTEREST BEARING ACCOUNTS Citizens Bank of Washington County, Sandersville, Georgia N,O.W. Account (3.00%) The George D. Warthen Bank, Sandersville, Georgia N.O,W. Account (3.00%) $ 52,898.50 143,188.83 $ 196,087.33 See notes to the general purpose financial statements. - 19 - OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY INVESTMENTS JUNE 30,1996 INVESTMENT POOL State of Georgia, Office of Treasury and Fiscal Services Local Government Investment Pool (5,361 %) SCHEDULE -3- $ 65,853,86 See notes to the general purpose financial statements. - 20 - OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY ACCOUNTS RECEIVABLE JUNE 30, 1996 SCHEDULE 0l4u Education, Georgia Department of Federal Programs Individuals with Disabilities Education Act TltleVl,B Georgia Learning Resources System Severely Emotionally Disturbed Contract Leadership Development Program Health and Human Services, U. S. Department of Through Georgia Department of Education AIDS School Health Education Through Georgia Department of Human Resources Block Grant for Prevention and Substance Abuse Various Sources Sales and Services GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND TOTAL $ 8,954.80 $ 8,954.80 104,620.89 104,620.89 $ 92.25 92.25 1,269.81 1,269.81 6,273.31 18,845.44 6,273.31 18,845.44 $ 26,480.81 $ 113,575.69 $ 140,056,50 See notes to the general purpose financial statements. - 21 - OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1996 SCHEDULE -5- AGENCYIFUNDING GRANTS Education, Georgia Department of Other State Programs Georgia Learning Resources System Health Insurance Regional Educational Service Agencies . Severely Emotionally Disturbed . Supervision and Assessment of Student and Beginning Teachers and Performance- Based Certification CONTRACT Education, Georgia Department of Leadership Development Program GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND TOTAL $ 75,674.00 $ 75,674,00 $ 22,611,99 22,611,99 414,287,00 414,287.00 821,686,00 821,686,00 85,714.00 85,714.00 92,25 92.25 $ 522,705.24 $ 897,360.00 $ 1,420,065,24 See notes to the general purpose financial statements. - 22 - OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF OTHER REVENUE YEAR ENDED JUNE 30, 1996 SCHEDULE "6" Local Sources County Government Washington County Board of Commissioners Other Sources Consultant Services Donations Indirect Cost Special Revenue Fund Interest Earned Jury Duty Fees Local Workshop Fees Membership Contributions 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 $ 43,976.14 $ 43,976,14 30,926.74 2,202.00 3,845.00 13,210.36 139.95 22,762.22 $ 28,964.57 9,560.57 8,552.57 8,228.57 11,153.57 18,083.57 10,455.57 1,979.63 382,004.13 -352,072.72 28,785.32 169,393.52 -122,787.64 1,275.00 255.83 30,926.74 2,202.00 15,434.52 3,845.00 13,210.36 139.95 38,196.74 1,755.15 28,964.57 9,560,57 8,552.57 8,228.57 11,153.57 18,083.57 10,455;57 3,734.78 382,004.13 -352,072.72 28,785.32 501.30 169,393.52 -122,787.64 1,275.00 757.13 $ 320,894.47 $ 17,690.97 $ 338,585.44 See notes to the general purpose financial statements. - 23 - OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF EXPENDITURES BY OBJECT GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1996 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 Building and Building Improvements EqUipment GENERAL FUND SPECIAL REVENUE FUND TOTAL $ 454,174,10 $ 116,764,09 21,848.21 36,300,57 1,760,00 302,00 9,137.11 5,137,65 4,748,50 8,771.59 4,127,80 41,928.13 2,271.00 7,721.14 6,186.95 785,345,28 $ 197,048,01 27,548,61 27,175,13 278.58 6,753,16 21,564,69 375,00 2,615,50 16,422,55 10,546.91 61,992,28 5,145.14 1,175.00 3,845.00 11,602.55 1,239,519,38 313,812,10 49,396,82 63,475,70 1,760,00 580,58 15,890.27 26,702,34 375.00 7,364,00 25,194,14 14,674,71 103,920.41 7,416.14 8,896.14 3,845.00 17,789.50 7,911.64 39,725.00 16,322.00 5,791.50 7,911.64 39,725.00 22,113.50 Total Expenditures $ 785,137.48 $ 1,185,224.89 $ 1,970,362.37 See notes to.the general purpose financial statements. - 24 - ocoNEE REGIONAL EDUCATIONAL SERV'CE AGENCY SCHEDULE Of COMPENSATION Of BOARD MEMBERS yEAR ENDED JUNE 30, 1996 BOARD MEMBER ADDRESS Dr. Julian Cope. Chairperson (*) Jasper County Board of EdUC/ltiOn 1125A fred Smith Street Monticello. Georgia 31064 Mr. E. Tarver Averett. Jr. (*) Washington County Board of Education P. O. Box 716 sandersville. Georgia 31082 Mr. Marion Barnes (*) Hancock County Board of EdUC/ltiOn P. 0, Box 488 Sparta, Georgia 31064 Mrs. Naomi Brannon (*) Route 3, Box 130 Gray. Georgia 31032 Mr, Nick Holton (*) Johnson County Board of Education P. O. Box 110 Wrightsville, Georgia 31096 Mr, Gene Mathis (*) 916 forsyth Street Monticello, Georgia 31064 Mr. Robert Nelson (*) 337 Oconee Street Eatonton. Georgia 31024 Mr. AI Reaves (*) Putnam County Board of Education P.O, Box 31 Eatonton, Georgia 31024 Mrs, Marlene Tompkins (*) Wilkinson County Board of Education P, 0, Box 206 Irwinton. Georgia 31042 Mr. Gene Trammell (*) Baldwin County Board of Education P, O. Box 1188 Milledgeville, Georgia 31061 Dr. Hoyt Washington Baldwin County Board of Education P. O. Box 1188 Milledgeville, Georgia 31061 Mr, Oliver Wilson (*) 219 Richmond Street Sandersville, Georgia 31082 (*) Denotes Board Members Serving as of June 30,1996 See notes to the general purpose financial statements, - 25 - SCHEDULE "8" $ 440.00 440.00 480.00 400,00 $ '. ,.7...,.6.0.,.0. .0. . SECTION II SUMMARY AND SCHEDULE OF SALARIES AND TRAVEL OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY SUMMARY OF SALARIES AND TRAVEL YEAR ENDED JUNE 30,1996 SALARIES 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 TOTAL PER FINANCIAL STATEMENTS (ACCRUAL BASIS) ADJUSTMENTS FOR ACCRUALS JUNE 30,1995 JUNE 30,1996 TOTAL PER SCHEDULE (CASH BASIS) $ 259,294.98 $ 11,814.32 $ -18,216.44 $ 252,892,86 41,225.09 41.225.09 33,823,71 33.823.71 74,606.14 74,606.14 45,224,18 45,224,18 $ 454,174,10 $ 11,814.32 $ -18,216.44 $ 447,n1.98 785,345.28 71,534,14 -90,513.28 766,366.14 Total Salaries $ 1,239,519,38 $ 83,348,46 $ -108,729,72 $ 1,214,138,12 TRAVEL GENERAL FUND Support Services ImproVement of Instructional Services General Administration Business Administration Maintenance and Operation of Plant Total General Fund SPECIAL REVENUE FUND Total Travel $ 17,376.69 $ 4,281.n 39.75 150,00 $ 21,848.21 $ 27,548.61 $ 49,396.82 $ 0,00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 17,376.69 4,281.n 39.75 150,00 21,848.21 27,548,61 0,00 $ 49;;,,1,.-396;;,;;,;,;;,8-.2 OCONEE R.E.S.A. SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 1996 NAME ANDERSON,CHERYL I ANDERSON,DONALD BEDFORD, BRENDA W BEJARANO, ELBA Z BERRY,DARREN H BOWERS,NANCY WARENIK BRADLEY,BETTY JEAN BRANNON,ANGELA L BRINSON,FRIEDA P BURNS,JO ANN BURNS, ROSE MARIE CAPE,JEAN NIDA CARTWRIGHT, TIMOTHY J CHILDRE,JANICE CHRISTIAN, JOYCE M CHRISTIAN,JOYCE M DAVIS,DIONKA DAVIS, VIRGINIA E DUNKEN,DAN I DURDEN, CAROLYN A DURDEN, JOSH A EVANS,KENNETH FEARS, LOUISE 0 FORNEY,CARNEISHA NICOLE FORNEY,CHARLIE LEE FOSTER,CATHERINE FOSTON,ULYSSES JR FULTON, JOYCE FULTON,JOYCE GRABLE,SHARON L GRANT ,BARBARA HANCOCK, PAMELA J HARRISON, WILLIAM RHETT HILL,DAVID R HOPKINS,DAVID L HORNE,BOBBY DEAN JR HUGHEY,GERALD BRETT HUMPHREY,HUGH DUANNE HUNTER, ROBIN LEIGH JACKSON, DEMETRIUS JAMES, ROBERT L SR JAMES, ROBERT L SR JANES,DOROTHY S JONES,ANNE J JONES,DONNA CLAY KEENE,BETTY H LEVERETT,SHEILA 0 LUSK,EDITH P LYNN, COURTNEY W MAPP,CICILY MAPP,CICILY MARKS,CONNIE DIANE MAY,CYNTHIA R MAY,CYNTHIA R MAY,CYNTHIA R MCCLENTON,DARRYL A MCGOWAN,HEATHER LEAH MCWHORTER,KATRINA G MEDLEY,DONALD R MILLER,EDDIE MOBLEY,WILLIE C JR MOHORNE,SARAH MONTGOMERY,FAYE H MONTGOMERY,FAYE H MOSLEY,ANNIE J MOYE,MARY M TITLE CATEGORY SUPP SRVS - IMPROV INSTR & ED MED $ SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM FEDERAL PROGRAMS SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM GEORGIA LEARNING RESOURCES SYSTEM FUND FEDERAL PROGRAMS SEVERELY EMOTIONALLY DISTURBED PROGRAM SUPPORT SERVICES - BUSINESS SEVERELY EMOTIONALLY DISTURBED PROGRAM FEDERAL PROGRAMS SUPP SRVS - IMPROV INSTR & ED MED SRVS 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 FEDERAL PROGRAMS 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 SEVERELY EMOTIONALLY DISTURBED PROGRAM MAINTENANCE & OPER. OF PLANT SERVICES SEVERELY EMOTIONALLY DISTURBED PROGRAM ENTERPRISE OPERATIONS DIRECTOR GENERAL ADMINISTRATION SEVERELY EMOTIONALLY DISTURBED PROGRAM SUPP SRVS - IMPROV INSTR & ED MED SRVS SEVERELY EMOTIONALLY DISTURBED PROGRAM FEDERAL PROGRAMS SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM FEDERAL PROGRAMS SEVERELY EMOTIONALLY DISTURBED PROGRAM SPECIAL REVENUE FUND - OTHER PROGRAMS FEDERAL PROGRAMS MISCELLANEOUS PROGRAMS SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM MAINTENANCE & OPER. OF PLANT SERVICES MAINTENANCE & OPER. OF PLANT SERVICES MAINTENANCE & OPER. OF PLANT SERVICES FEDERAL PROGRAMS DIRECTOR GENERAL ADMINISTRATION FEDERAL PROGRAMS SUPP SRVS - IMPROV INSTR & ED MED SRVS SALARIES AMOUNT 38,273.10 $ 220.00 50,798.04 36,175.46 21,950.50 29,979.96 86.00 38.00 23,053.92 36,090.00 8,015.00 24,514.64 3,627.00 43.00 43,291.92 15,554.96 40.00 33,823.71 118.00 9,887.14 24,999.96 55.00 120.00 300.00 4,434.75 1,404.30 55.00 344.00 365.18 1,600.00 22.50 8,105.17 17,291.34 3,678.24 1,149.65 3,546.82 26,559.34 10,382.18 20,038.49 9,425.30 5,291.83 15,855.96 35,906.12 16,986.25 35,383.20 372.18 20.00 25.00 75.00 369.23 11,827.92 2,955.00 16,095.00 3,780.00 3,363.00 29,816.46 38.59 34,611.00 2,060.00 26,592.96 8,775.48 35,933.26 17,370.00 41,519.58 TRAVEL EXPENSE 3,196.05 4,796.86 589.25 1,890.12 568.50 1,628.82 326.50 1,688.25 1,327.15 39.75 2,431.76 57.75 535.15 2,092.96 32.00 2,198.26 2,206.16 2,923.08 141.75 2,223.30 429.80 709.75 75.00 75.00 4,249.77 2,756.40 'OED OCONEE R.E.S.A. SCHEDULE OF SALARIES AND TRAVEL 2 YEAR ENDED uUNE 30, 1996 NAME TITLE CATEGORY SALARIES AMOUNT TRAVEL EXPENSE ODOM,BETTY u OLIVER,ELIZABETH I PENNAMON,DENISE PLOTT,ALEATHA R PRICE,GLENDA S PROSSER,DAN RANDALL-BERRY,KELLY L RICHARD,SHARRON RICHARDSON,CONNIE Y RICKERSON,uEANIE E ROBERTS,ANGELA M ROBINSON,KATHARINE E ROGERS,DOUGLAS PATRICK ROZAR,WANDA V SIMMONS,VERA GRANT SKAGGS,LOUISE W SMITH,PAULA L STANDIFER,SALLIE SUMNER,CAROLYN C SWINT,MARION THORNE,MARIA SAMPER TOOKE ,GINGER USSERY, uULIE USSERY, uULI E VEASLEY,ANNIE CAROLYN VEASLEY,ANNIE CAROLYN VEASLEY,ANNIE CAROLYN WALLER,BERNASTA WARREN,CATHERINE WARREN,CATHERINE WASHINGTON,MONA L WASHINGTON,RANDELL M WATERS,LASONYA WEST,LYNN B WILLIAMS,ROSIE LEE WILLIAMS,SARAH M WILLIAMS,SHENITA R WRIGHT,ELIZABETH E WRIGHT,ELIZABETH E YOUNG,VICTOR FEDERAL PROGRAMS $ SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SPECIAL REVENUE FUND - OTHER PROGRAMS SEVERELY EMOTIONALLY DISTURBED PROGRAM ENTERPRISE OPERATIONS SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SUPP SRVS - IMPROV INSTR & ED MED 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 SEVERELY EMOTIONALLY DISTURBED PROGRAM FEDERAL PROGRAMS MAINTENANCE & OPER. OF PLANT SERVICES SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM FEDERAL PROGRAMS SUPP SRVS - IMPROV INSTR & ED MED SRVS SPECIAL REVENUE FUND - OTHER PROGRAMS FEDERAL PROGRAMS SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM FEDERAL PROGRAMS 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 SUPP SRVS - IMPROV INSTR & ED MED SRVS ENTERPRISE OPERATIONS FEDERAL PROGRAMS 5,194.12 18,736.70 $ 20.00 39,893.26 28,463.93 14,122.92 18,734.66 40.00 20,380.00 45,976.26 18,426.04 120.00 38.00 141.75 43.00 36,960.62 57.00 59.00 15,855.84 960.00 3,870.46 40.00 177.19 56.70 7,888.68 7,868.40 1,999.92 117.02 5,735.14 37.87 37.87 10,188.14 38.00 21,625.50 7,781.70 179.00 85.05 21,675.96 6,031.83 533.00 2,138.61 1,408.71 3,746.29 444.25 535.05 609.00 121.77 18.75 636.25 16.00 TOTALS $ 1,214, 138. 12 $ 49,396.82 OED 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 ofthis 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:cm 96CRL-40 CLAUDE L. V,CKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 February 24, 1997 Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation and Director and Members ofthe Oconee Regional Educational Service Agency Board ofControl 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 ofand for the year ended June 30, 1996, and have issued our report thereon dated February 24, 1997. 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 1996 general purpose financial statements of the Oconee Regional Educational Service Agency and with our consideration of the Agency's control structure used to administer Federal financial assistance programs, as required by Office ofManagement and Budget (OMB) 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, 1996. As required by OMB 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 ofwhich is the expression of an opinion on the Oconee 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 96CRL-120 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 ofpublic record. CLV:cm 96CRL-120 Claude L. Vickers State Auditor SECTION ill COMPLIANCE CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 February 24, 1997 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 ofControl 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 ofand for the year ended June 30, 1996, and have issued our report thereon dated February 24, 1997. 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. We did not observe the taking ofinventories for resale at June 30, 1996, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories f~r 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. The results ofour tests disclosed no instances of noncompliance that are required to be reported herein under Government Auditing Standards. 96CRL-I0 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 ofpublic record. Respectfully submitted, ~ Claude L. Vickers State Auditor CLV:cm 96CRL-IO CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 February 24, 1997 Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation and Director and Members ofthe Oconee Regional Educational Service Agency Board ofControl SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REOUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS Ladies and Gentlemen: We have audited the general purpose financial statements ofthe Oconee Regional Educational Service Agency as ofand for the year ended June 30, 1996, and have issued our report thereon dated February 24, 1997. 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 ofits Federal financial assistance programs, which are listed in the Schedule ofFederal Financial Assistance, for the year ended June 30, 1996: (1) Political Activity (5) Allowable Costs/Cost Principles (2) Civil Rights (6) Audit Follow-UplResolution (3) Cash Management (7) Administrative Requirements (4) Federal Financial Reports Our procedures were limited to the applicable procedures described in the Office ofManagement and Budget's "Compliance Supplement for Single Audits ofState and Local Governments" and other additional procedures as deemed necessary. Our procedures were substantially less in scope than an audit, the objective ofwhich 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. 96CRL-40 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 February 24, 1997 Honorable Zell Miller, Governor Members ofthe General Assembly Members of the State Board ofEducation and Director and Members ofthe 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 ofand for the year ended June 30, 1996, and have issued our report thereon dated February 24, 1997. 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. We did not observe the taking ofinventories for resale at June 30, 1996, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories for resale through alternative procedures. 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, 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 96ICL-3 is subject to 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. 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, 1996, we obtained an understanding of the internal control structure. With respect to the internal control structure, we obtained an understanding of the design ofrelevant policies and procedures and whether they have been placed in operation, and we assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion. We noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements. As described in the Schedule ofFindings and Improper or Questioned Costs, reportable conditions were noted in the following control categories: (1) Accounting Controls (Overall) (2) General Fixed Assets A material weakness is a reportable condition in which the design or operation of one or more ofthe specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that the reportable conditions disclosed above are also considered to be material weaknesses. These conditions were considered in determining the nature, timing, and extent of the procedures to be performed in our audit of the Oconee Regional Educational Service Agency's financial statements and this report does not affect our report thereon dated February 24, 1997. 96ICL-3 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, c~~ State Auditor CLV:cm 96ICL-3 CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 February 24, 1997 Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation and Director and Members ofthe 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 ofand for the year ended June 30, 1996, and have issued our report thereon dated February 24, 1997. 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 ofManagement and Budget (OMB) Circular A-128, "Audits of State and Local Governments". Those standards and OMB 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. We did not obseIVe the taking ofinventories for resale at June 30, 1996, 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, 1996, 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 OMB Circular A-128. This report addresses our consideration ofinternal 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 ofthe general purpose financial statements in a separate report dated February 24, 1997. 96ICL-15 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 ofinternal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that Federal financial assistance programs are managed in compliance with applicable laws and regulations. Because ofinherent limitations in any internal control structure, errors, irregularities, or instances of noncompliance may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness ofthe design and operation of policies and procedures may deteriorate. For the purpose of this report, we have classified the significant internal control structure policies and procedures used in administering Federal financial assistance programs in the following control categories: GENERAL REQUIREMENTS SPECIFIC REQUIREMENTS (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 ofthe 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, 1996, the Oconee Regional Educational Service Agency had no major Federal financial assistance programs and expended 83% of its total Federal financial assistance under the following nonmajor Federal financial assistance programs: Individuals with Disabilities Education Act Title VI, B Georgia Learning Resources System Severely Emotionally Disturbea 96ICL-15 We perfonned tests of controls, as required by OMB 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 ofCertified 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 ofone or more ofthe internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a Federal financial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control structure policies and procedures used in administering Federal financial assistance would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that the reportable condition described above is also considered to be a material weakness. This report is intended for the infonnation of management, the Federal cognizant audit agency and other Federal grantor agencies and should not be used for any other purpose. This restriction is not intended to limit the distribution ofthis report which is a matter of public record. CLV:cm 96ICL-15 SECTION V FINDINGS AND IMPROPER OR QUESTIONED COSTS " OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR OUESTIONED COSTS YEAR ENDED JUNE 30 1996 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, 1995, 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, no improvement in adequate separation ofemployee duties was noted. This deficiency was a result ofmanagement's decision to limit the number ofadministrative 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: 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, 1995, 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. - 1- OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR OUESTIONED COSTS YEAR ENDED JUNE 301996 PRIOR YEAR/CURRENT YEAR PROCUREMENT Failure to Meet Legal Requirements Financial Statements Nonmaterial Noncompliance Audit Control Number 8664-94-01 The audit report for the year ended June 30, 1995, noted that the Agency had entered into a multi-year lease purchase agreement for office equipment that did not include the termination and 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 ofthe school system at the close ofthe 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 terminate such contract, and the nature of such action shall be determined by the school system and specified in the contract,...". This noncompliance occurred because management claimed to not be aware ofthe provisions of Georgia Law. The Agency should have this lease agreement amended to include the tennination 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. SUBSEOUENT YEAR EXPENDITURESILIABILITIESIDISBURSEMENTS Improper Expenditure Financial Statements Nonmaterial Noncompliance Amount: $8,495.62 Audit Control Number 8664-96-01 Prior to July 1, 1995, the Agency obtained American Express Corporate credit cards for several employees to be used for business related expenditures, with the individual to whom the card was issued being responsible for payment of charges incurred. -2- OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND ThfPROPER OR OUESTIONED COSTS YEAR ENDED JUNE 30 1996 SUBSEQUENT YEAR EXPENDITURESILIABILITIESIDISBURSEMENTS Improper Expenditure Financial Statements Nonmaterial Noncompliance Amount: $8,495.62 Audit Control Number 8664-96-01 On October 10, 1996, the Agency paid offan outstanding balance of $8,495.62 for a fonner employee who had used the credit card for non-business related expenditures. The Official Code of Georgia Annotated Section 20-2-411 provides, in part, as follows: "...school funds shall be used for educational purposes and may be used to pay the salaries of personnel and to pay for the utilization of school facilities, including school buses; for extracurricular and interscholastic activities, including literary events, music and atWetic programs within individual schools and between schools in the same or different school systems when such activities are sponsored by local boards of education as an integral part of the total school program; and for no other purposes..." Payment by the Agency ofa personal non-business related obligation is considered to be beyond the customary scope of use for "educational purposes" and is in violation of the gratuities clause of the State Constitution of Georgia (Article III, Section VI, Paragraph VI a) which provides in part as follows: "Except as otherwise provided in the Constitution, (1) the General Assembly shall not have the power to grant any donation or gratuity or to forgive any debt or obligation owing to the public, and (2) the General Assembly shall not grant or authorize extra compensation to any public officer, agent, or contractor after the service has been rendered or the contract entered into". While the Agency is seeking reimbursement, the fonner employee has filed for bankruptcy protection and as of the date of this audit the $8,495.62 has not been recovered. Reimbursement of the $8,495.62 should be secured and deposited into the Agency's General Fund. - 3 .. SECTION VI PERTINENT VIEWS OF RESPONSffiLE OFFICIALS OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY PERTINENT VIEWS OF RESPONSIBLE OFFICIALS YEAR ENDED JUNE 30. 1996 ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation ofDuties Reportable Condition - Material Weakness Audit Control Number 8664-93-01 A review of all accounting procedures and personnel transitions was made. Upon this review, it is management's decision to maintain duties as they are with the small staff that is currently in place due to budgetary constraints. GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 8664-93-02 The management ofa General Fixed Assets Account Group is not an accessible accounting procedure at the present time due to this function being inoperative in our accounting system that is provided and maintained by the State Department. With future upgrades to our system this should be a feasible accounting function that would bring our accounting procedures into conformity with Generally Accepted Accounting Principles. PROCUREMENT Failure to Meet Legal Requirements Financial Statements Nonmaterial Noncompliance Audit Control Number 8664-94-01 This noncompliance has been dealt with by turning the office equipment in at the end ofthe lease. No other multi-leases have been entered into at the present time. EXPENDITURESILIABILITIESIDISBURSEMENTS Improper Expenditure Financial Statements NOJ;unaterial Noncompliance Amount: $8,495.62 Audit Control Number 8664-96-01 At the present time, the legal services ofHarben and Hartley Law Firm have been procured to assist with the legal procedures necessary to quickly reach a solution on this issue. All available avenues are being explored to receive reimbursement ofthese funds.