Review report, state of Georgia, Oconee Regional Educational Service Agency, Sandersville, Georgia, year ended June 30, 1997

REVIEW REPORT STATE OF GEORGIA OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY SANDERSVILLE, GEORGIA YEAR ENDED JUNE 30, 1997
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

3

C

COMBINED 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

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

14

2 SCHEDULE OF STATE REVENUE

15

3 SCHEDULE OF SALARIES AND TRAVEL

16

SECTIONll AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

SECTIONID CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
January 6, 1998

Honorable Zell Miller, Governor Members of the General Assembly of Georgia Members ofthe State Board of Education
and Director and Members ofthe Oconee Regional Educational Service Agency Board of Control
INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have reviewed the accompanying financial statements (Exhibits A through D) of Oconee Regional Educational Service Agency as of and for the year ended June 30, 1997, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the management of Oconee Regional Educational Service Agency.
A review consists principally of inquiries ofAgency personnel and analytical procedures applied to fmancial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the fmancial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, with the exception ofthe matter described in the following paragraph, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles.
* The 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 fmancial statements of this variance or omission have not been determined, but are believed to be material.

97ARL-RESA-l

Our review was made for the purpose ofexpressing limited assurance that there are no material modifications that, should be made to the financial statements in order for them to be in conformity with generally accepted accounting principles. The accompanying supplementary information (Schedules 1 through 3) is presented only for supplementary analysis purposes. Such infonnation has been subjected to the inquiries and analytical pro~edures applied in the review of the financial statements and we are not aware of any material modifications which should be made thereto.
Respectfully submitted,

CLV:gp 97ARL.;RESA-I

Claude 1. Vickers
State Auditor

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY COMBINED BALANCE SHEET ALL FUND TYPES JUNE 30.1997

EXHIBIT "A"

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

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTALS (Memorandum Only) JUNE 30,1997 JUNE 30,1996

$ 338.448.39 $

20,824.61 $

359.273.00 $

196.087.33

69,462.85

69,462.85

65.853.86

70.905.68

109.847.52

180.753.20

140.056.50

110.193.62

110,193.62

122.166.38

773.32 20,640.55

Total Assets

$

589,010.54 $

130,672.13 $

719,682.67 $

545,577.94

Total Liabilities and Fund Equity

$

589,010.54 $

130,672.13 $

719,682.67 $

545,577.94

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 30,1997

EXHIBIT "B"

FUND BALANCE JUNE 30

$ 562,351.27 $

2,395.87 $

564,747.14 $

378,633.75

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

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30,1997

EXHIBIT "c"

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Business Administration Maintenance and Operation of Plant Central Support Services Other Support Services
Capital Outlay Debt Service
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Other Sources Other Uses
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1,1996

GENERAL FUND

BUDGET

ACTUAL

$ 454,389.00 $ 119,099.00

561,520.55 2,598.73
568,834.05

$ 573,488.00 $ 1,132,953.33

$ $ 268,701.00
72,282.00 47,283.00 139,978.00
4,000.00 63,782.00

194,780,73 419,677.81
79,951.12 45,640.87 161,401.22
29,172.54

846.00

$ 596,026.00 $ 931,470,29

$ -22,538.00 $ 201,483,04

$

58,994,00

-30,000.00

$ 28,994.00

$

6,456.00 $ 201,483.04

373,977.32

250,674,61

FUND BALANCE JUNE 30, 1997

$ 380,433,32 $ 452,157,65

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 993,595.00 $ 920,376.00

232,282.00

277,824.73

6,881.54

$ 1,225,877.00 $ 1,205,082.27

$ 541,952.00 $ 585,395.40

240,912.00 150,081.00 213,269.00
29,774,00 44,982.00

202,368,35 123,898.54 203,816.58
32,247.52 59,007.77

1,745,00

$ 1,220,970.00 $ 1,208,479,16

$

4,907.00 $

-3,396.89

$

-4,907,00

$

-4,907.00

$

0.00 $

-3,396.89

21,973.14

5,792.76

$

21,973.14 $ ====2;:;,,3=9=5=.8==7

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

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1997
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
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 ofmembers and terms ofoffice are prescribed by the State Board ofEducation; provided, however, that at least one-third of the membership of each Board shall be individuals who hold no other public office, who are not employees of any local unit of administration, and who are not employees ofthe Georgia Department of Education.
The members ofthe Board are elected by an annual caucus of an equal number of members of local boards of education from the respective member local school systems. Each Board appoints and contracts with a director who is the executive officer of the regional educational service agency. The director is responsible for the administration ofthe programs and services approved by the Board.
For financial reporting purposes, the Agency is considered to be an organizational unit of the State, and therefore a part ofthe primary government ofthe State of Georgia.. Inclusion in the State's financial reporting entity is based on application of criteria defined in Section 2100 of the Governmental Accounting Standards Board Codification ofGovernmental and Financial Reporting Standards which indicates that the Agency does not have legal separate standing.
FUND ACCOUNTING
The Agency uses funds 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.
A fund is a separate accounting entity with a self-balancing set of accounts.
General Fixed Assets are recorded as expenditures in the various funds at the time ofpurchase. 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 and Other funds under control of the Agency, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds presented in this report are as follows:
-5-

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 3D. 1997
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 fmancial 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 received primarily from the
Georgia Department of Education and from the Federal government to accomplish specific objectives and are required to be accounted for separately.
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 fmancial 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 of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
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 of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by function. The legal level of budget control was established by the Agency at the aggregate level. The budget for governmental funds was prepared in accordance with generally accepted accounting principles.
-6-

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30. 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 of general 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, in accordance with provisions ofthe Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year end.

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 fund balance as reflected on Exhibit "B" of this report:

General Fund

FUND BALANCE JULY 1, 1996

$ 372,840.99

Adjustments Inventories - July 1, 1996 Inventories for Resale

-122.166.38

Fund Balance July 1, 1996 (Budget Basis)

$ 250,674.61

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

201,483.04

FUND BALANCE JUNE 30, 1997 (Budget Basis)

$ 452.157.65

CASH AND CASH EQUIVALENTS

COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits 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 the options for investment or among

-7-

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1997
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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:
(l) 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 State of Georgia, 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 on Federal, State or other grants 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 (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 of fund balance which indicates that it does not constitute "available spendable resources" even though it is a component of net current assets.
-8-

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1997
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
COMPENSATED ABSENCES
Compensated absences represent obligations of the Agency relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated.. No liability has been recorded in the individual funds for the current portion of this obligation as this amount is deemed immaterial to the general purpose financial statements.
Additionally, the dollar value ofaccumulated compensated absences at June 30, which will be payable from future resources has not been recorded in the General Long-Term Debt Account Group as this liability is also deemed to be immaterial to the fair presentation of these financial statements.
INTERFUND TRANSACTIONS
The Agency has the following types of interfund transactions:
Reimbursements of expenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
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. Certain reclassifications have been made to the comparative data to conform to the current year classifications.
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 of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of the 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 EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1997
Note 2: DEPOSITS AND INVESTMENTS
Acceptable security for deposits consists of anyone 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 of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws ofthe State ofGeorgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation ofthe 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, 1997, the bank balances were $521,681.51. 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 [mancial 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, 1997

Note 2: DEPOSITS AND INVESTMENTS

The Agency's deposits are classified by risk category at June 30, 1997, as follows:

Risk Category

Bank Balance

1 2 3
Total

$ 155,355.40 0.00
366,326.11
$ 521.681.51

CATEGORIZATION OF INVESTMENTS At June 30, 1997, the carrying amount of the Agency's total investments was $69,462.85 and consisted entirely of funds in the Local Government Investment Pool administered by the State of Georgia, 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. The investment policy of the State of Georgia, 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 ofloss 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 of the 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 incurred any liabilities for unemployment compensation during the past two fiscal years.
,
The Agency participates in the Georgia Education 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 United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Trust in excess of $250,000.00 loss per occurrence, up to $2,000,000.00.

- 11 -

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1997

Note 4: GENERAL LONG-TERM DEBT

The changes in General Long-Tenn Debt during the fiscal year ended June 30, 1997, were as follows:

Capital Leases

Compensated Absences

Total

Balance July 1, 1996

$

773,32 $ 20,640.55 $ 21,413.87

Deductions Annual Leave Earned and Utilized (Net) Payments

773.32

16,808.32

16,808.32 773.32

Balance June 30, 1997

$

0.00 $ 3,832.23 $ 3,832.23

Note 5: ON-BEHALF PAYMENTS

The Agency has recognized revenues and expenditures in the amount of $21,943.55 for health insurance contributions paid on the Agency's behalf by the following State Agency.

Georgia Department of Education Paid to the State Merit System of Personnel Administration For Health Insurance ofNon-Certified Personnel In the amount of$21,943.55

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 tenns. 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 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 of 3 days, shall be paid at the current rate of pay, to a tenninating 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

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OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1997

Nore8: RETIREMENTPLANS

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 defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department ofAudits and Accounts.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Agency who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Agency makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Contribution

1997 1996 1995

100% 100% 100%

$ 141,920.30 $ 131,762.43 $ 125,693.80

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OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30,1997

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Education, U. S. Department of Through Georgia Department of Education Safe and Drug-Free Schools 1997 Grant Individuals with Disabilities Education Act Part B - Special Education Special Projects Georgia Learning Resources System 1997 Grant Severely Emotionally Disturbed 1997 Grant Part 0 - Special Education Personnel Development and Parent Training Georgia Learning Resources System 1997 Grant Goals 2000 State and Local Education Systemic Improvement Grant 1997 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 1996 Contract
Total U. S. Department of Health and Human Services

CFDA NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.186 $

20,300,00 $

20,300.00

* 84.027 * 84,027

112,198.44 114,721.40

112,198,44 114,721,40

84.029

3,254.89

3,254.89

84.276 $

27,350,00 277,824.73 $

25,639.13 (1) 276,113,86

93.938 $ $

2,598,73 $ 2,598.73 $

2,598.73 2,598.73

Total Federal Financial Assistance

$ 280,423.46 $====2=78"",7...1.=:2,=59=

This program has been defined as a major program on a statewide basis in accordance with OMB Circular A-133. Intemal control and compliance testing for this program has been conducted at other organizational units of the State of Georgia.
The Agency did not provide Federal Assistance to any subrecipient.
(1) Expenditures for this program include State and/or Other Funds. Expenditures are not maintained by fund source.

See notes to the general purpose financial statements.

- 14 -

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30,1997

SCHEDULE "2"

AGENCYIFUNDING

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

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

$ 21,943,55 454,369,00
85,208.00

68,722,00 $ 851,654,00

TOTAL
68,722.00 21,943.55 454,369.00 851,654.00
85,208.00

$

561,520.55 $ ===92=01::::,37...6.=.0=,=0 $

1,481,896.55

See notes to the general purpose financial statements. - 15 -

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30,1997

SCHEDULE "3"

PERSONNEL
ANDERSON,CHERYL I ANDERSON,CHERYL I ANDERSON,STEPHANIE E ANDREWS,DON AUSTIN,KENNETH BARNES,MARION E BEDFORD,BRENDA W BEJARANO,ELBA Z BERRY,DARREN H BOWERS,NANCY. WARENIK BRINSON,FRIEDA P BRINSON,FRIEDA P BROWN,ROSA M BUCKHOLTS,CHERYL C BURKEY,CAROLYN 0 BURNS,JO ANN BURNS,ROSE MARIE CAPE,JEAN NIDA CARTWRIGHT,TIMOTHY J CARTWRIGHT,TIMOTHY J CHEEK,AMYD CHRISTIAN,JOYCE M CHRISTIAN,JOYCE M COLEMAN,JESSICA DAVlS,GRACE E DAVIS,VIRGINIA E DEAN,TYRONE P DRISKELL,DENISE DURDEN,CAROLYN A DURDEN,JOSH A ELLINGTON,CHARLES EDWARD ELLINGTON,CHARLES EDWARD FOSTER,CATHERINE HANCOCK,PAMELA J HARRISON,WILLIAM RHEIT HODGES,HAITIE M HOPKINS,DAVID L HOPKINS,WILLIAM F III HUGHEY,GERALD BREIT HUMPHREY,HUGH DUANNE HUNTER,ROBIN LEIGH JANES,DOROTHY S JONES,ANNE J JONES,ANNE J JONES,DONNA CLAY KEENE,BETIY H KEENE,BETIY H LUSK,EDITH P MAPP,CICILY MARKS,CONNIE DIANE MARTIN,TERESA MAY,CYNTHIA R MAY,CYNTHIA R MAY,CYNTHIA R MAY,CYNTHIA R MCGOWAN,HEATHER LEAH MEDLEY,DONALD R MELLOR,PHILIP F MILLER,EDDIE MOBLEY,WILLIE C JR MOHORNE,SARAH MONTGOMERY,FAYE H MONTGOMERY,FAYE H

PROGRAM
SUPP SRVS - IMPROV INSTR & ED MED SRVS SPECIAL REVENUE FUND - OTHER PROGRAMS SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SUPPORT SERVICES - BUSINESS SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM ENTERPRISE OPERATIONS SUPPORT SERVICES - BUSINESS SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM FEDERAL PROGRAMS SEVERELY EMOTIONALLY DISTURBED PROGRAM FEDERAL PROGRAMS SEVERELY EMOTIONALLY DISTURBED PROGRAM GEORGIA LEARNING RESOURCES SYSTEM FUND FEDERAL PROGRAMS SEVERELY EMOTIONALLY DISTURBED PROGRAM SUPP SRVS - IMPROV INSTR & ED MED SRVS SUPPORT SERVICES - BUSINESS SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM FEDERAL PROGRAMS SUPP SRVS - IMPROV INSTR & ED MED SRVS SUPP SRVS - IMPROV INSTR & ED MED SRVS SPECIAL REVENUE FUND - OTHER PROGRAMS FEDERAL PROGRAMS FEDERAL PROGRAMS SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SUPP SRVS - IMPROV INSTR & ED MED SRVS SEVERELY EMOTIONALLY DISTURBED PROGRAM MAINTENANCE & OPER. OF PLANT SERVICES SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SUPP SRVS - IMPROV INSTR & ED MED SRVS MISCELLANEOUS PROGRAMS SEVERELY EMOTIONALLY DISTURBED PROGRAM FEDERAL PROGRAMS MISCELLANEOUS PROGRAMS SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SUPP SRVS - IMPROV INSTR & ED MED SRVS SPECIAL REVENUE FUND - OTHER PROGRAMS FEDERAL PROGRAMS MISCELLANEOUS PROGRAMS SEVERELY EMOTIONALLY DISTURBED PROGRAM MAINTENANCE & OPER. OF PLANT SERVICES SEVERELY EMOTIONALLY DISTURBED PROGRAM MAINTENANCE & OPER. OF PLANT SERVICES MAINTENANCE & OPER. OF PLANT SERVICES SEVERELY EMOTIONALLY DISTURBED PROGRAM DIRECTOR GENERAL ADMINISTRATION

SALARIES
$ 20,113.42 $ 20,516.50 275.00 50.00 55.00 4,400.00 13,347.99 6,083.66 22,401.42 31,009.96 1,552.64 25,883.04 989.00 1,036.53 2,200.00 36,744.30 9,858.00 18,461.86 2,844.00 6,240.00 19,799.20 46,067.04 7,842.96 55.00 5,662.81 2,725.46 180.00 20.00 9,858.00 24,999,96 37,500.00 3,750,00 7,471.42 10,193.81 18,305.17 32,710.80 500.00 12,057.55 29,326.20 21,042.96 23,925.68 15,855,96 38,926.26
21,630.04 45,264.04
38.00 50.00 11,827,92 80.00 270.00 6,540.00 13,252.50 1,380.00 34,249.16 35,649.00 28,758,00 2,040,00 27,390.00 230,00 45,000.00

TRAVEL 1,355.84 1,159.94
733.30 137.75 676.40 705.00 239.35
661.25 324.25
3,689.10
2,171.98 4,074.14
740.13 273.76 601.50 1,636.84 163.50 369.50 1,611.99
27.50
41.75 1,136.30 1,923.75
183.25
1,180.94
3,531,81

-16 -

PERSONNEL
MOSLEY,ANNIE J MOYE,MARYM MOYE,MARYM ODOM,BETTY J OLIVER,ELIZABETH I OLIVER,JANE L PARKER,L1NDA PLOTT,ALEATHA R PRICE,GLENDA S PROSSER,BILLY LEE PROSSER,DAN RANDALL-BERRY,KELLY L RANDALL-BERRY,KELLY L RAY,MARYAD RICHARDSON,CONNIE Y RICKERSON,JEANIE E RILEY,REBECKA YOUNG ROBERTS,ANGELA M ROOKS,TOMIKO BARNES SIMMONS,L1LA MARIE SKAGGS,LOUISE W SMITH,BRENDA SMITH,DEBBIE STARR,DAVID ERNEST SUMNER,CAROLYN C SUMNER,CAROLYN C SWINT,MARION TAYLOR,KIMBERLY B THOMPSON,CAROLYN C TREPANIER,MICHAEL VEASLEY,ANNIE CAROLYN VEASLEY,ANNIE CAROLYN VEASLEY,ANNIE CAROLYN VEASLEY,ANNIE CAROLYN WARREN,CATHERINE WASHINGTON,RANDELL M WATKINS,PAULINE R WATSON,MELISSA WEST,LYNN B WILLlAMS,ROSIE LEE WILLlAMS,SARAH M WRIGHT, ELIZABETH E YOUNG,VICTOR
Accruals June 30, 1996 June 30, 1997

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30,1997

SCHEDULE "3"

PROGRAM
FEDERAL PROGRAMS SUPP SRVS - IMPROV INSTR & ED MED SRVS SPECIAL REVENUE FUND - OTHER PROGRAMS FEDERAL PROGRAMS SEVERELY EMOTIONALLY DISTURBED PROGRAM FEDERAL PROGRAMS SEVERELY EMOTIONALLY DISTURBED PROGRAM
SPEC~REVENUEFUND-OTHERPROGRAMS
SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM ENTERPRISE OPERATIONS SEVERELY EMOTIONALLY DISTURBED PROGRAM FEDERAL PROGRAMS SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SUPP SRVS - IMPROV INSTR & ED MED SRVS SUPPORT SERVICES - BUSINESS SEVERELY EMOTIONALLY DISTURBED PROGRAM FEDERAL PROGRAMS FEDERAL PROGRAMS SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM FEDERAL PROGRAMS MISCELLANEOUS PROGRAMS MAINTENANCE & OPER. OF PLANT SERVICES FEDERAL PROGRAMS SEVERELY EMOTIONALLY DISTURBED PROGRAM SEVERELY EMOTIONALLY DISTURBED PROGRAM SUPP SRVS - IMPROV INSTR & ED MED SRVS SUPPORT SERVICES - BUSINESS SPECIAL REVENUE FUND - OTHER 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 SEVERELY EMOTIONALLY DISTURBED PROGRAM ENTERPRISE OPERATIONS FEDERAL PROGRAMS

SALARIES

TRAVEL

$ 17,370.00 23,221.76 $ 17,290.40 6,662.18 3,747.34 2,550.73 43.00 5,743.46 5,676.04 130.86 16,371.00 20,387.76
18,870.02 26,436.80 13,273.84 18,857.38
3,747.34 7,790.00
19,00 39,081.96
35.63 40.00 20,791.70 15,855.94
10,710.24 33,333.30
129.00 43.00 10,323.36
9,000.00 1,833.26 8,235.00 10,745.46 19,799.20
40.00 26,721.70
9,571.34 40.00
5,970.02 1,004.44

1,581.35 799.00
543.00 100.00 110.00 40.00
547.25 98.50
3,520.60 21.62 150,86 83.35

$ 1,297,980.68 $ 36,946.35

-108,729.72 116,133,74

$ 1,305,384.70 $ 36,946.35

See notes to the general purpose financial statements.

-17-

SECTIONll AUDlTEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1997

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

8664-93-01 8664-93-02 8664-94-01 8664-96-01

Umesolved - See Corrective Action/Responses Umesolved - See Corrective Action/Responses Previously Reported Corrective Action Implemented Umesolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

ACCOUNTING CONTROLS (OVERALL) Inadequate Separation of Duties Finding Control Number 8664-93-01

Management continually analyzes the accounting procedures seeking the best possible means to separate duties using a small staff. All previous plans for resolving this finding have failed because of the limited number of staff members. The beginning of each fiscal year has always been the projected date of completion of this finding.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number 8664-93-02

The management of a 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 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. Date ofimplementation: Upon receipt of new GDOE accounting software.

EXPENDITURESILIABILITIESIDISBURSEMENTS Improper Expenditure Finding Control Number 8664-96-01

At the present time, the legal services of Harben and Hartley Law Firm have been procured to assist with legal procedures necessary to quickly reach a solution on this issue. All available avenues are being explored to receive reimbursement ofthese funds. Implementation: Presently being pursued.

SECTIONID CURRENT YEAR FINDINGS AND QUESTIONED COSTS

OCONEE REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number FS-8664-97-01
For the year under review, the management of the Oconee Regional Educational Service 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 ofequipment 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 ofall additions and deletions to the General Fixed Assets Account Group.