Audit report, Southwest Georgia Regional Educational Service Agency, Leary, Georgia, year ended June 30, 1994

GA A '?;co . ~I
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STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET ATLANTA, GEORGIA 30334

AUDIT REPORT SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY
LEARY, GEORGIA YEAR ENDED JUNE 30, 1994

SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

GOVERNMENTAL FUND TYPES

3

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - ACTUAL AND BUDGET

GOVERNMENTAL FUND TYPES

4

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

5

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

14

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

16

SCHEDULES

I SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

18

2 ANALYSIS OF CASH AND CASH EQUIVALENTS

19

3 ACCOUNTS RECEIVABLE

20

SCHEDULE OF REVENUE

4

STATE FUNDS

21

5

LOCAL AND OTHER FUNDS

22

SCHEDULE OF EXPENDITURES BY OBJECT

6

GOVERNMENTAL FUND TYPES

23

7

LOTTERY PROGRAM

24

8 SCHEDULE OF COMPENSATION OF BOARD MEMBERS

25

SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY -TABLE OF CONTENTS-
SECTION II SUMMARY AND SCHEDULE OF SALARIES AND TRAVEL
SECTION III COMPLIANCE
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS SINGLE AUDIT OPINION ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS
SECTION IV INTERNAL CONTROL REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
SECTIONV FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS

SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY - TABLE OF CONTENTS -
SECTION VI PERTINENT VIEWS OF RESPONSIBLE OFFICIALS SCHEDULE OF PERTINENT VIEWS OF RESPONSIBLE OFFICIALS

SECTION! FINANCIAL

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
August 3, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe Southwest Georgia 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 Southwest Georgia Regional Educational Service Agency, as of and for the year ended June 30, 1994, as listed in the table of contents. These financial statements are the responsibility of the Agency's management. Our responsibility is to express an opinion on these financial statements based on our audit.
Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the provisions of the Office of Management and Budget Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant 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, 1994, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories for resale through alternative procedures.
As described in the notes to the general purpose financial statements, the Agency's financial statements have been prepared using a certain accounting practice and policy which, in our opinion, varies in some respects from generally accepted accounting principles. This variance is described as follows:
94ARL-33

* The general purpose financial statements of the Agency did not contain a General Fixed Assets Account Group to account for equipment owned by the Agency which should be included to conform to generally accepted accounting principles.
The aggregate effects on the general purpose financial statements of this 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 of the matter referred to in the preceding paragraph, the general purpose financial statements present fairly, in all material respects, the financial position ofthe Southwest Georgia Regional Educational Service Agency as of June 30, 1994, and the results ofits operations for the year then ended, in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements ofthe Southwest Georgia Regional Educational Service Agency taken as a whole. The combining statements (Exhibits E and F), the financial schedules (Schedules I through 8 which includes the Schedule ofFederal Fmancial Assistance) and the Schedule of Salaries and Travel, as listed in the table of contents, are presented for purposes ofadditional analysis and are not a required part ofthe general purpose financial statements of the Southwest Georgia Regional Educational Service Agency. Such information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and, in our opinion, 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 ofGeorgia Annotated Section 50-6-24.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:jg 94ARL-33

SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY - 1-

aQ!Jit:fWET gEQRglA BEgJO~AL EC!!JQ!IIQHAL ~EB:illQE AS:ZEtiQY ~&INEP Dal !~QE ~!:IEE!
& B.!HQJ:!~ AH12 ~!Jlil gRQYf JUNE 30 1994

EXHIBIT"A"

~
CUh and CUh Equivalents
ll<=unls Receivable
1-lorResalo
Amount to be Provided in Future Years For Payment of. Capital Loue Agreements COmpensated-

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

ACCOUNT GROUP GENERAL LONG-TERM DEBT

TOTALS ~morandum On!t} JUNE30 1994 JUNE 30 1993

$

2,189.41

2,189.41 $

42,290.23

251,919.07 $

91,045.81

342,964.88

113,327.44

176,977.86

176,977.86

95,807.93

12,184.68 17638.89

12,184.88 17638.89

15,225.53 16293.62

Total Assets

$

431 086.34 $

91,045.81 $

29,823.57 $

551,955.n $

2821944.75

Ll~l.lTIE ~NQ FUNQ EQUITY

~

CUhOvllfdratt

Accounts Payable

$

SalariooPayable

Notes Payable

Expirod Grant Balances Payable

Capital Loue Agreements

Compensated -

Total Liabilttlos

F!JNQEQUITY

Fund Balances
RFor Continuation cl Federal Program
Fo, Expired Grant Balances/Questioned
Coots For Encumbrances
For Inventories for Resale For Sick and Personal Leave

$ Unreserved
Undesignatod

Total Fund Equity

$

$ 2,416.93 10,296.37 5,200.00
17 913.30 $
1,88827 176,977.86
1416.57 180,062.70 233110.34 $ 413173.04 $

21,888.61 52,373.27 16,763.93
$ 91 045.81
0.00 $ 0.00 $

Total Liabilities and Fund Equity

$

431 086.34 $

91 045.81 $

12,184.68 17638.89
29623.57 $

21,888.61 $ 54,790.20 27,080.30
5,200.00
12,184.68 17638.69
138782.68 $

25,709.96 13,213.27 23,236.38
6,000.47 15,225.53 16293.62
99679.23

$
0.00 0.00 $

$ 1,668.27 176,977.86 1 416.57 180,062.70 $ 233110.34 413173.04 $

493.43
2,230.87 95,807.93
1416.57 99,948.80 83316.n 183,265.52

29823.57 $

ss1 955.n $

282 944.75

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

SOUTHWEST GEORGIA REGIONAL EDUCATIONAb SERVICE AGENCY QQM!ll!::{ED STAIEMl;.NT OF RElll;.NUES 12,PENDITUBl;S AND C!::fANG!;S IN FUND BALANCES
GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 1994

EXHIBIT"B"

REVENUES
S-Funds Federal Funds Local and Other Funds
Total Revenues
EXPENDITURES
Cu11811t Support Services Improvement al Instructional Services General Administration Busir.ss Admini&1ralion Maint&nance and Operation al Plant Other Operations al Non-Instructional Services Facilities Acquisition and Construction Services
Debt Service Principal
I-
Total Expenditures
Excess of Revenues ow,r (under) Expenditures
OTHER FINANCING SOURCES (USES}
Operating Transfers In
Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources ow,r (under) Expenditures and other Financing Uses
FUND BALANCE JULY 1

GENERAL FUND

SPECIAL REVENUE
FUND

TOTALS (Memorandum On!):l
YEAR ENDED JUNE 30, 1994 JUNE 30, 1993

$ 379,646.00 S 161,455.37 $ 541,101.37 $ 483,045.08

643,231.92

643,231.92

664,748.10

548,121.49

548,121.49

201,049.36

$ 927,767.49 $ 804,687.29 $ 1,732,454.78 $ 1,348,842.54

$ 258,937.86 S 739,629.60 $ 998,567.48 $ 951,435.12

134,325.66

40,124.93

174,450.59

191,357.76

123,933.42

123,933.42

212,796.50

65,268.95

23,700.54

88,969.49

95,427.34

110,759.14

110,759.14

24,361.76

1,520.43 1,413.15

1,520.42 1,413.16

3,040.85 2,826.31

696,158.61 $ 806,388.65 $ 1,502,547.26 $ 1,475,378.48

$ 231,608.88 $

-1,701.36 $ 229,907.52 $ -126,535.94

s

$

-1,207.93

$

-1,207.93 $

$ 230,400.95 $
1a2.m.oo s

1,207.93 $ 1,207.93 $

1,207.93 $ -1,207.93
0.00 $

4,594.10 -4,594.10
0.00

-493.43 $ 493.43 $

229,907.52 $ 183,265.52 $

-126,535.94 309,801.48

FUND BALANCE JUNE 30

$ 413173.04 $

0.00 $ 413,173.04 $ 183,265.52

The notes to Iha general purpose financial statements are an integral part al 1his statement. -3-

QLm:fWEll ~EQB'11!i BE~IQ~L EtU.!QaIIQHAI SEB~ICE ~EN~ !.QMl!l!!EQ l!I6Jla!,1EH! QE BM!!!.!Eia Elleia!!ll!Il.!BE!a ~Q !.t:l,!\N!,E I!! E!.!!!Q l!,!11,.,!\N!:;E
~.!IL A!!ltl 11!.!tllala !aQ~B!!Mli!!IAL E!!!!tl D'.fE!a
YEAR ENtJl;Q J!,!!!I; 30 1994

EXHIBIT"C"

ACTUAL

ACTUAL

PER

PER

EXHIBIT"B" ADJUSTMENTS BUDGET BASIS

BUDGET

VARIANCE FAVORABLE !UNFAVORABLE)

BM!!lW!
5-Fundo Federal Fundo Local and Other Fundo

$ 541,101.37

$

643,231.92

548,121.49 $ -136,608.00

541,101.37 $ 643,231.92 411,513.49

495,722.00 $ 686,514.43 195,198.00

45,379.37 -43,282.51 216,315.49

Total Revenueo

$ 1,732,454.78 $ -136,608.00 $ 1,595,646.78 $ 1,3TT,434.43 $

218,412.35

lam!!tllI!.!BEl!

CUrrent Support Senriceo Improvement or lnatructional Senlices General Administration Bu&ineu Admintltration Maintenance and Operation of Plant Other Operationo or Non-lnatructional Services
llel>tSeNice

$ 998,567.46 $ 174,450.59 123,933.42 88,969.49 110,759.14 5,867.16

0.00 $

998,567.46 $ 174,450.59 123,933.42 88,969.49 110,759.14
5,867.16

1,034,056.78 $ 177,244.00 116,226.91 85,471.33 110,261.00

Total Exl)encfrtun,g

$ 1,502,547.26 $

0.00 $ 1,502,547.26 $ 1,523,262.02 $

Exceu or Reven- over (under) Expenditures

$ 229,907.52 $ -136,608.00 $

93,299.52 $ -145,827.59 $

Qil:tEB EINANCIN~ SQ!JBCES (!JE~l

Other Sources
other u....

$

1,207.93 $ 136,608.00 $ 137,815.93 $ 136,608.00 $

-1,207.93

-1,207.93

Total Other F"onancing Sources (Uaeo) $

0.00 $ 136,608.00 $ 136,608.00 $ 136,608.00 $

ex_. or R.....,_ and Other Financing Sources
_,. (under) Expenditun,g and Other Financing
u...

$ 229,907.52 $

o.oo $ 229,907.52 $ -9,219.59 $

E!JNP BA.LANCE J!JLY 1 1993

183.285.52

0.00

183,265.52

153,556.29

35,491.32 2,793.41 -7,706.51 -3,498.16 -498.14 -5,867.16
20,714.76 239,127.11
1,207.93 -1,207.93
0.00
239,127.11 29,70923

F!,!!!Q l!,!\L,,!\N!;;E J!,!!!E 30 1994

$ 413,173.04 $

0.00 $ 413,173.04 $ 144,336.70 $

268,836.34

The notes to the Qeneflll purJ)Ole financial statements are an integral part of this statement.

SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE30 1994
Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Southwest Georgia Regional Educational Service Agency (Agency) was established pursuant to the Official Code ofGeorgia Annotated Sections 20-2-270 through 20-2-274 for the purposes of providing shared services designed to improve the effectiveness ofeducational programs and services oflocal school systems and for providing instructional programs directly to selected public school students in the state.
Each regional educational service agency is governed by a board. The number of members and terms of office are prescribed by the State Board ofEducation; provided, however, that at least one-third of the membership of each Board shall be individuals who hold no other public office, who are not employees of any local unit of administration, and who are not employees ofthe Georgia Department ofEducation.
With the exception ofthe departures from generally accepted accounting principles disclosed in the following paragraphs, the financial statements ofthe Agency have been prepared in conformity with generally accepted accounting principles as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles.
The more significant ofthe Agency's accounting policies are described below.
REPORTING ENTITY
In evaluating how to define the government unit for financial reporting purposes, management has considered the criteria set forth in GASB Codification of Governmental Accounting and Financial Reporting Standards, Section 2100, "Defining the Fmancial Reporting Entity". Based upon the application of the above criteria, the Southwest Georgia Regional Educational Service Agency is determined to be a jointly governed organization.
The members of the Board are elected by an annual caucus of an equal number of members oflocal boards of education from the respective member local school systems. Each Board appoints and contracts with a director who is the executive officer of the regional educational service agency. The director is responsible for the administration of the programs and services approved by the Board.
Member boards ofeducation in the Southwest Georgia Regional Educational Service Agency are as follows: Baker County, Calhoun County, Colquitt County, Decatur County, Early County, Grady County, Lee County, Miller County, Mitchell County, Seminole County, Terrell County, Thomas County, Worth County, City of Pelham, and the City ofThomasville.
FUND ACCOUNTING
The Agency uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities.
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SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE30 1994
Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A fund is a separate accounting entity with a self-balancing set ofaccounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Agency. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
The general purpose financial statements account for all State, Federal, Local and Other Funds under control ofthe Agency, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most ofa regional educational service agency's general activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the Agency except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services traditionally provided by a regional educational service agency.
SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific 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.
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SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY EXIIlBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE30 1994
Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are intergovernmental grants, sales and services and investment income.
Expenditures are generally recognized when the related fund liability is incurred.
BUDGET
The Southwest Georgia Regional Educational Service Agency has a legally authorized nonappropriated budget which is formally approved by the Board at the aggregate level. Budgets are prepared to provide a basis for funding operations and there is no legal prohibition regarding overexpenditure of the aggregate budget. The budget process begins when the Agency's administration prepares a tentative aggregated budget for the Board's approval. After approval of this tentative budget by the Board, the budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final budget. This final budget is then submitted to the Georgia Department ofEducation.
The Agency prepares its budget on the modified accrual basis, which is the same basis on which it presents its financial statements. The budget comparison on Exhibit "C" presents actual and budget data for all governmental funds on a combined basis. To facilitate comparison with the budget, a portion of actual revenues as reflected on Exhibit "B" have been reclassified on a basis consistent with the budget.
CASH AND CASH EQUIVALENTS
COMPOSITION 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.
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.
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SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE30 1994
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 methodology to account for inventories whereby an asset is recorded when purchased and costs ofgoods sold are recorded at the time the items are sold. 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 ofthis obligation as this amount is deemed immaterial to the general purpose financial statements.
RESERVED FUND BALANCES
Reserve for Sick and Personal Leave-This reserve includes $1,416.57 in unexpended funds received in prior years from the Georgia Department ofEducation for sick and personal leave to be paid to substitute personnel. These funds will be used for the original purpose until exhausted.
INTERFUND TRANSACTIONS
The Agency has the following types ofinterfund transactions:
Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY -TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation ofthis data.
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SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE30 1994
Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral in an amount of not less than 110 percent ofthe public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one ofor any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or ofthe State of Georgia,
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations of the counties or municipalities ofthe State ofGeorgia,
(5) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 1994, the bank balances were $93,078.18. The bank balances were entirely covered by Federal depository insurance.
Note 3: RISK MANAGEMENT
The Agency has established a limited risk management program for Unemployment Compensation. Estimated claims are budgeted by management based on known claims and prior experience. Each fund contributes their
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SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PIJRPOSE FINANCIAL STATEMENTS JUNE30 1994

Note 3: RISK MANAGEMENT

pro rata share to cover Unemployment Compensation claims made during the fiscal year. During fiscal year 1994, no claims were paid.

Note4: GENERALLONG-TERMDEBT

CAPITAL LEASES The Southwest Georgia Regional Educational Service Agency has entered into a lease agreement as lessee for copiers. This lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value ofthe future minimum lease payments as of the date ofits inception.

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

Capital Leases

Compensated Absences

Total

Balance July 1, 1993

$ 15,225.53 $ 16,293.62 $ 31,519.15

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

91.79 1,253.48

91.79 1,253.48

Deductions

3 040.85

3 040.85

Balance June 30, 1994

$ 12 184 68 $ l2 63 82 $ 22 823 ~2

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

At June 30, 1994, payments due, by fiscal year which includes principal and interest for the capital leases are as follows:

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

Capital Leases
$ 5,867.16 5,867.16 4 400.37
$ 16,134.69
3 950.0]
$ ii ]8468

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SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE30 1994
Note 5: CONTINGENT LIABil..ITIES
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 6: ACCUMULATED EMPLOYEES' LEAVE
The Agency's administrative staff and certain other full-time employees earn five-sixths of a day per month annual leave. Annual leave may be accumulated to a maximum of ten days. Employees are paid, at their current rate of pay, for accumulated vacation leave up to the maximum upon retirement or termination of employment. See Note 1- Compensated Absences
Note 7: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by Agency's are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer public employee retirement system (PERS).
TRS provides service retirement, disability retirement and survivors benefits for its members. A member is eligible for service retirement after 30 years of creditable service, regardless of age, or after IO years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number of years of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution ofthe member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement benefits also include death and disability benefits. A disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service retirement allowance or a disability retirement allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of IO years of service) and compensation up to the time of disability or death.
Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting ofemployer contributions occurs, but the member's contributions are refunded with interest.
The Agency's payroll for employees covered by TRS for the year ended June 30, 1994, was $820,133.87; total payroll was $825,318.76.
- 11 -

SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE30 1994

Note 7: RETIREMENT PLANS

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Agency who are covered by TRS are required to contribute 6% of their gross earnings to TRS. The Agency makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees as advised by their independent actuary. For fiscal year 1994 that rate for employer contributions was 11.81%. The interest rate assumption (rate of return on investments) was 7.50%.

Total contributions made during fiscal year 1994 amounted to $146,066.18, ofwhich $96,858.10 was made by the Agency and $49,208.08 was made by employees. These contributions represented 11.81 % (Agency) and 6% (employees) of covered payroll.

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

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

Total pension benefit obligation

$13,912,014,000.00

Net assets available for benefits, at cost

12 821 722 000.00

Unfunded pension benefit obligation

$ l 090 292 000 00

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

Total contributions from all employers to TRS for fiscal year ended June 30, 1994 were $521,550,000.00. The Agency's contribution for the year ended June 30, 1994 of$96,858.I0 was actuarially determined and represented .0186% of total contributions made by all participating employers.

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

- 12 -

SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE30 1994
Note 8: SURETY BONDS The Director, Dr. Calfrey C. Calhoun, is bonded in the amount of $10,000.00 with the Western Surety Company, Sioux Falls, South Dakota, their Bond No. 60235881, on which premium was paid through July I, 1994.
- 13 -

SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY COMBINING BAI AW~E SHEET
SPECIAL REVENUE FUND JUNE 30 1994

Cash and Cash Equivalents Accounts Receivable
Total Assets

RESA ANNUAL EVALUATION COORDINATION PROGRAM

SEX EDUCATION
TEACHER EDUCATION PROGRAM

$

4,637.20 $

0.00

$

LOTTERY PROGRAM
48,014.62

$

4,637.20 $

0.00 $

48,014.62

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabillties
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Program Unreserved Undesignated
Total Fund Equity
Total Liabillties and Fund Equity

$

735.45

3,901.75

s _ _ _4c.;,e;.:3c:..7:;::2=-o

$

23.00

47,991.62

$ ___4-"8"",0'-'1'-'4:..:.62::::.

$ _ _ _ _.;:.0:;::0=-0 $ $ _ _ _ _.;:.0:.:.0.:;..0 $

o.oo s_ _ _ _.:::0:.:.0::::.0
o.oo $ _ _ _ _..:::o:..:.o=-o

$ _ _ _4_.e_3_1._2_0 s_ _ _ _ _o_.o_o s ___4_s..,.0_1-4_.e;;;.2

See notes to the general purpose financial statements.

-14-

EXHIBIT"E"

ACQUIRED IMMUNODEFICIENCY
SYNDROME (AIDS) ACTIVITY

DRUG-FREE SCHOOLS AND COMMUNITIES
ACT

GRIFFIN INITIATIVE
IN MATHEMATICS AND SCIENCE

TOTALS

JUNE 30, 1994

JUNE 30, 1993

$

4,637.20 $

14,512.22

$

6,718.59 $

29,915.33 $

6,397.27

91,045.81

56,690.52

$

6,718.59 $

29,915.33 $

6,397.27 $

95,683.01 $

71,202.74

$

6,718.59 $

13,436.90 $

6,347.32 $

26,525.81 $

40,222.18

3,596.25

49.95

52,373.27

11,308.16

12,882.18

16,783.93

13,205.31

5,973.66

$

6,718.59 $

29,915.33 $

6,397.27 $

95,683.01 $

70,709.31

s _ _ _ _ __. ::,:o.;. oo'-s s --------'o,;.;.o.c...o s
s $ _ _ _ _s_,7_1_s_.s_9

0.00 $ 0.00 $
29,915.33 $

$

493.43

0.00 $ _ _ _---"0"".0~0

0.00

0.00 $

0.00 $ _ _ _ _4_9_3_.4~3

6,397.27 $

95,683.01 $ _ _ _7;.;.1~,2_0_2;.;..7.;.4

- 15 -

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

REVENUES
State Funds Federal Funds
Total Revenues
EXPENDITURES
Current Support Services Improvement of Instructional Services General Administration Maintenance and Operation of Plant
Debt Service Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
FUND BALANCE JUNE 30

RESA ANNUAL EVALUATION COORDINATION PROGRAM

SEX EDUCATION
TEACHER EDUCATION PROGRAM

LOTTERY PROGRAM

$

82,440.75 $

31,000.00 $

48,014.62

$

82,440.75 s _ _ _3_1~,o_o_o_.o_o s _ _ _48~,0_1_4_.6_2

$

79,551.94 $

31,116.28 $

48,014.62

3,031.00

$ _ _ _8;;.:2"',5;.;:8;:;2c;.94-'-$

$

-142.19 $

31,116.28 s___4-"8'-',0'-1--'4-.6~2

-116.28 $

0.00

142.19

116.28

$

0.00 $

0.00 $

0.00

0.00

0.00

0.00

$

0.00 $

o.oo s_____o_.o_o

See notes to the general purpose financial statements.

-16 -

EXHIBIT "F''

ACQUIRED IMMUNODEFICIENCY
SYNDROME (AIDS) ACTIVITY

DRUG-FREE SCHOOLS AND COMMUNITIES
ACT

GRIFFIN INITIATIVE
IN MATHEMATICS AND SCIENCE

TOTALS YEAR ENDED JUNE 30, 1994 JUNE 30, 1993

$

161,455.37 $

108,891.99

$

11,538.59 $

625,296.06 $

6,397.27

643,231.92

664,748.10

$

11,538.59 $

625,296.06 $

6,397.27 $

804,687.29 $

773,640.09

$

10,865.31 $

563,908.14 $

6,173.31 $

739,629.60 $

712,787.29

40,124.93

40,124.93

44,925.35

1,346.56

19,099.02

223.96

23,700.54

28,733.36

1,520.42 1,413.16

1,520.42 1,413.16

$

12,211.87 $

626,065.67 $

6,397.27 $

806,388.65 $

786,446.00

$

-673.28 $

-769.61 $

0.00 $

-1,701.36 $

-12,805.91

673.28

276.18

1,207.93

4,594.10

$

0.00 $

-493.43 $

0.00 $

-493.43 $

-8,211.81

0.00

493.43

0.00

493.43

8,705.24

$

0.00 $

0.00 $

0.00 $

0.00 $

493.43

-17 -

SOUTHWeSI GeOBG1ABeGIONAL eDUCATIQNAI SFRVl<:Ce AGENCY SCHEDULE OF Fl=DERAL FINANCIAL ASSISTANCE
YEAR ENDED JUNE 3P 1994

SCHEDULE 1

FUNDING AGENCY
PROORAU/GRANT

Education, U. S. Department of Through c.-iJia Department of Education

llnlg-Free -

and Commun_ Act

1993 Regular

1993 Cany-C)vw

1994 Grant Through c.-gia Department of Human R....,,_

Drug-Free -

and Commu.- Act

Contract No. 427-83-21747

Contract No. 427-93-31604

Contract No. 427-93-31990

Contract No. 427-83-41490

CFDA NUMBER

AWARDS IN PERIOD

FEDERAL FUNDS RECEIVED IN PERIOD(NET OF REFUNDS)

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.186 84.186 84.186
84.186 84.186 84.186 84.186

$ 44,886.00 495,099.00
65000.00

17,904.67 <10,641.00 $ 445,988.00

<10,641.00 $ 455,973.59

<10,681.10 (1) 456,208.87 (1)

3,983.65 36,005.00 53,987.73 41 361.00

13,403.00 61,700.00 53t!!.8,47

13,896.43 (1) 61,700.80 (1) 53t!!.8,47

Total U.S. Department of Education
Heatth and Human Services, U.S. Department of Through c.-iJia Department of Human Resouroes Acqui..cl Immunodeficiency Syndrome (AIDS) Activity Teacher Tratning AIDS Heatth Education Contract No. 93-1 062 Implementation of a Program in ~ Heatth Education Contract No. IM--0961
Total U.S. Heatth and Human Services
Labor, U.S. Department of Through c.-iJia Department of Education Job Training Partnership Act Contract No. 12-214-13-123

604985.00 $

639 871.05 $ 625296.06 $

626065.67

93.118

$

93.118 $ $

8~.00 8230.00 $

4,820.00 $

4,820.00$

4820.00 $

6718.59 11 536.59 $

5,493.28 (1)
6718.59 12211.87

17.250

6320.46

QT!:IER FEC!EBAL ~l!!TAN!:;E

National Scionce Foundation Through Griffin Regional Educational Satvice Agency Griffin I - in Malhem,ities and Scionce

$ 11951.00

6397.27 $

6397.27

Total Federal FinancNII Assistance

625,166.00 $

651,011.51 $ 643,231.92 $

644,674.81

The Ma; Program is identffied by an asterisk M in front of the CFOA number.

(1) Expenditures for this program include State, and/or Local and Other Funds. Expenditures are not maintained by fund source.

See notes to the general purpose financNII statements.

18

SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY ANALYSIS OF CASH AND CASH EQUIVALENTS JUNE 30 1994

SCHEDULE "2"

NONINTEREST BEARING ACCOUNTS
Bostwick Banking Company, Arlington, Georgia
INTEREST BEARING ACCOUNTS
Jordan Banking Company, Leary, Georgia
N.O.W. Account (3.50%)

$

1,326.90

-21,026.10 $ -19,699.20

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

SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY ACCOUNTS RECEIVABLE JUNE 30 1994

SCHEDULE "3"

Boards of Education Various Equipment Repair Allotment Sales and Services
Education, Georgia Department of Federal Programs Drug-Free Schools and Communities Act Acquired Immunodeficiency Syndrome (AIDS) Lottery Program Education Technology Centers
Human Resources, Georgia Department of Federal Program Drug-Free Schools and Communities Act
National Science Foundation Through Griffin Regional Educational Service Agency Griffin Initiative in Mathematics and Science

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

3,200.00

248,719.07

$

3,200.00

248,719.07

$

9,985.59

6,718.59

48,014.62

9,985.59 6,718.59
48,014.62

19,929.74

19,929.74

6,397.27

6,397.27

$

251,919.07$

91,045.81 $

342,964.88

See notes to the general purpose financial statements.

- 20 -

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

SCHEDULE 4

AGENCY/FUNDING
GRANTS Education, Georgia Department of Other State Programs Staff Development Sex Education Grant Regional Educational Service Agencies Supervision and Assessment of Student and Beginning Teachers and PerformanceBased Certification Lottery Program Education Technology Centers
OTHER Education, Georgia Department of Reimbursement for Supplies Reimbursement for Video Equipment

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

$

379,008.00

31,000.00$

31,000.00 379,008.00

82,440.75 48,014.62

82,440.75 48,014.62

80.00 558.00

80.00 558.00

$

379,646.00 $

161,455.37 $

541,101.37

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

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

SCHEDULE "5"

Equipment Repair Allotment Boards of Education Baker County Calhoun County Colquitt County Decatur County Early County Grady County Lee County Miller County Mitchell County Pelham, City of Seminole County Terrell County Thomas County Thomasville, City of Worth County Technical Institute Moultrie Area Technical Institute
Interest Earned Membership Dues
Boards of Education Baker County Calhoun County Colquitt County Decatur County Early County Grady County Lee County MmerCounty Mitchell County Pelham, City of Seminole County Terrell County Thomas County ThomasviUe, City of Worth County
Reimbursements For Indirect Cost Special Revenue Fund
Sales and Services Suppies, Printing, Equipment, and Other Less: Cost of Goods Sold
Tuition Other

See notes to the general purpose financial statements.

- 22 -

GOVERNMENTAL FUND TYPE GENERAL FUND

$

200.00

1,800.00

3,600.00

3,300.00

2,400.00

3,000.00

2,400.00

1,800.00

3,000.00

1,800.00

1,800.00

2,400.00

3,000.00

3,000.00

3,000.00

1,950.00 4,646.12

800.00 4,500.00 13,632.00 10,226.00 6,000.00 7,500.00 7,500.00 4,500.00 7,500.00 4,500.00 4,500.00 4,500.00 7,500.00 7,500.00 7,500.00

34,029.00
1,168,642.49 -844,888.70
17,405.00 31,679.58

$

548,121.49

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

SCHEDULE "6"

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 Insurance Communications Other Purchased Services Supplies Energy Federal Indirect Costs Other Expenditures
Nonoperating Costs Principal and Interest Equipment

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

$

472,509.85 $

352,808.91 $

825,318.76

91,321.45

71,62829

162,949.74

17,220.57

27,985.37

45,205.94

6,207.53

115,492.97

121,700.50

1,575.00

1,575.00

450.22

484.72

934.94

24,941.75

5,598.63

30,540.38

1,968.50

200.00

2,168.50

6,950.86

2,271.00

9,221.86

13,687.90

12,371.39

26,059.29

16,837.02

16,837.02

29,990.74

69,052.92

99,043.66

7,279.90

2,774.80

10,054.70

34,029.00

34,029.00

8,677.51

46,816.69

55,494.20

2,933.58 10,443.25

2,933.58 45,103.36

5,867.16 55,546.61

Total Expencfrtures

$

696,158.61 $

806,388.65 $ 1,502,547.26

See notes to the general purpose financial statements. - 23 -

SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF EXPENDITURES BY OBJECT LOTTERY PROGRAM YEAR ENDED JUNE 30 1994

SCHEDULE '7"

EXPENDITURES
Operating Costs Suppfies
Nonoperating Costs Equipment

EDUCATION TECHNOLOGY
CENTERS

$

2,911.26

45,103.36

Total Expenditures

$

48 014.62

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

SOUTHWEST GEORGIA REGIONAi EDUCATIONAL SERVICE AGENCY SCHEDULE OF COMPENSATION OF BOARD MEMBERS YEAR ENDED JUNE 30 1994

SCHEDULE "8"

BOARD MEMBER ADDRESS
Mr. Ric Hall, Chairman () Early County Board of Education 503 Columbia Highway Blakely, Georgia 31723
Mr. Robert Aaron () Terrell County Board of Education P.O. Box 151 Dawson, Georgia 31742
Dr. Jim Cable Thomasville City Board of Education 915 East Jackson Avenue Thomasvile, Georgia 31792
Dr. Corl<in Cherubini c)
Calhoun County Board of Education P.O. Box38 Morgan, Georgia 31766
Dr. Robert Clay () Lee County Board of Education P. 0. Box236 Leesburg, Georgia 31763
Mr. Spencer Davis c)
1020 Lee Street Bainbridge, Georgia 31717
Dr. Fred Dorminy Thomasville City Board of Education 915 East Jackson Street ThomasviUe, Georgia 31792
Mr. Sherman Hall (J Route 3, Box 181
Pavo, Georgia 31778
Mrs. Joanne Holland cJ
403 Cuthbert Street Colquitt, Georgia 31737
Mrs. Emory Hopkins () Route 2, Box 74 Thomasville, Georgia 31792
Mrs. Carrie Jefferson ()
P. 0. Box 155
Sylvester, Georgia 31791

$

225.00

200.00 200.00 250.00 275.00

- 25 -

SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF COMPENSATION OF BOARD MEMBERS YEAR ENDED JUNE 30 1994

SCHEDULE "8"

BOARD MEMBER ADDRESS

Mrs. Roger A Jones(") P.O. Box365 Camilla, Georgia 31730
Dr. Glenn Keebler (J
Decatur County Board of Education P. 0. Box 1406 Bainbridge, Georgia 31717

Mr. Alan Kimbro (J
Worth County Board of Education 204-A East Franklin street Sylvester, Georgia 31791

Mrs. Helen Manry(") P. 0. Box95 Edison, Georgia 31746
Mr. Jesse Mcleod (J
Seminole County Board of Education 800 South WooWork Avenue Donalsonville, Georgia 31745

Mr.Billy Mock

.

Colquitt County Board of Education

P.O. Box 1806

Moultrie, Georgia 31776

Dr. James Parker (J
Pelham City Board of Education 188 West Railroad Street Pelham, Georgia 31779

Mr. Larry Rawlins () Grady County Board of Education P. 0. Box300 Cairo, Georgia 31728

Mr. Tommy Rogers() Baker County Board of Education P. 0. Box40 Newton, Georgia 31770

Dr. Lee Shiver () Thomasville City Board of Education 915 East Jackson Street Thomasville, Georgia 31792

Dr. Terrel Solana() Thomas County Board of Education P. 0. Box2300 Thomasville, Georgia 31799

- 26 -

$

150.00

275.00

SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF COMPENSATION OF BOARD MEMBERS YEAR ENDED JUNE 30 1994

SCHEDULE "8"

BOARD MEMBER ADDRESS
Mr. Kelley Summers r)
Miller County Board of Education P.O. Box188 Colquitt, Georgia 31737
Mr. Bobby Tabb(*) Mitchell County Board of Education
P. 0. Box588
Camilla, Georgia 31730
Mr. Bill Yearta (*) Colquitt County Board of Education
P. o. Box 1806
Moultrie, Georgia 31766

$ ====1,=57=5=.0=0

(*) Denotes Board Members Serving as of June 30, 1994

See notes to the general purpose financial statements.

- 27 -

SECTION II SUMMARY AND SCHEDULE OF SALARIES AND TRAVEL

SOUTHWEST GEORGIA R!;GIONAL !;DUCATIONAL SERVICE AGENCY SUMMARY OF SALARIES ANQ TRA\!l;;L YEAR ENDED JUNE 30 1994

SALARIES
GENERAL FUND Support Se!vices Improvement of Instructional Se!vices General Administralion BusinNs Administration Maini..nce and Operation of Plant Other Operations of Non-Instructional Services
Total General Fund
SPECIAL REVENUE FUND

TOTAL PER FINANCIAL STATEMENTS (ACCRUAL BASISl

ADJUSTMENTS FOR ACCRUALS JUNE30 1993 JUNE 30 1994

TOTAL PER SCHEDULE (CASH BASISl

$

182,562.30 $

10.031.07 $

-10,296.37 $

182,297.00

100,556.86

100,556.86

94,926.50

94,926.50

5,066.19

5,066.19

89398.00

89398.00

472,509.85 $

10,031.07

-10,296.37 $

472,244.55

352,808.91

13205.31

-16783.93

349230.29

Total Salaries

825318.76 $

23236.38 $

-27080.30 $

821474.84

TRAVEL

GENERAL FUND Support Services Improvement of lnslructional Se!vices General Administration Busina& Administration Other Operations of Non-Instructional Services

Total General Fund

$

SPECIAL REVENUE FUND

13,171.39 $ 2,481.12 1,147.24
420.82
17,220.57 $
27985.37

0.00 $ 0.00 $

0.00 $ 0.00 $

13,171.39 2,481.12 1,147.24 420.82
17,220.57
27985.37

Total Travel

45.205.94 $

0.00 $

0.00 $

45205.94

NAME
BEAL. RICHARD R BROWN.ANNIE B BROWN.DAVID T BROWN.DAVID T CALHOUN, CALFREY C CALHOUN, CAL FREY C CALHOUN, CAL FREY C CALLAWAY ,MILTON E COLLIER.DEBORAH K CURRY, CONSTANCE E CURRY, CONSTANCE E DAVIS.DUANE M DAVIS.DUANE M ERWIN, SARAH C FLEMING, CAROL H HAGAN, J FRANK HOUSTON, WALLACE R HOUSTON, WALLACE R HOUSTON, WALLACE R KELLY, JANE S LATIMER, JEAN C LAWHORN.JR LAWHORN.JR MALCOM.CINDY J
MARTIN. EUGENIA w MARTIN, EUGENIA w
MCCOY, LYNN B MCCOY, LYNN B MCLENDON, DEBORAH D PAUL, RHONDA G PAUL, RONALD R ROBERTS, JEANE P SANDERS, CHRISTINE SANDERS, CHRISTINE SANDERS, CHRISTINE SMITH, DAVID SMITH.DAVID TEDDER, MARY BETH THOMAS, ARTHUR L JR THOMPSON, NELLIE S WILLIAMS.KENNETH A JR WILLIAMS.KENNETH A JR

SOUTHWEST GEORGIA R. E. S. A. SCHEDULE OF SALARIES ANO TRAVEL
YEAR ENOEO JUNE 30, 1994

TITLE CATEGORY

SPECIAL REVENUE FUND - OTHER PROG

$

MAINTENANCE & DPER. OF PLANT SERVICES

SUPPORT SERVICES - BUSINESS

OTHER OPERATIONS OF NONINSTRUCT. SERV.

DIRECTOR

GENERAL ADMINISTRATION

SUPPORT SERVICES - BUSINESS

GENERAL ADMINISTRATION

SPECIAL REVENUE FUND - OTHER PROGRAMS

SUPPORT SERVICES - INSTRUCTIONAL STAFF

SPECIAL REVENUE FUND - OTHER PROGRAMS

SUPPORT SERVICES - INSTRUCTIONAL STAFF

SPEC I AL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

OTHER OPERATIONS OF NONINSTRUCT. SERV.

GENERAL ADMINISTRATION

SUPPORT SERVICES - BUS I NESS

OTHER OPERATIONS OF NDNINSTRUCT. SERV.

SPECIAL REVENUE FUND - OTHER PROGRAMS

SUPPORT SERVICES - BUSINESS

SUPPORT SERVICES - BUSINESS

OTHER OPERATIONS OF NONINSTRUCT. SERV.

SUPPORT SERVICES - INSTRUCTIONAL STAFF

SUPPORT SERVICES - BUSINESS

SPECIAL REVENUE FUND - OTHER PROGRAMS

SUPPORT SERVICES - INSTRUCTIONAL STAFF

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

GENERAL ADMINISTRATION

OTHER OPERATIONS OF NONINSTRUCT. SERV.

SPECIAL REVENUE FUND - OTHER PROGRAMS

SUPPORT SERVICES - INSTRUCTIONAL STAFF

SUPPORT SERVICES - BUSINESS

OTHER OPERATIONS OF NONINSTRUCT. SERV.

SUPPORT SERVICES - INSTRUCTIONAL STAFF

SPECIAL REVENUE FUND - OTHER PROGRAMS

SPECIAL REVENUE FUND - OTHER PROGRAMS

OTHER OPERATIONS OF NONINSTRUCT. SERV.

SPECIAL REVENUE FUND - OTHER PROGRAMS

SUPPORT SERVICES - INSTRUCTIONAL STAFF

SPECIAL REVENUE FUND - OTHER PROGRAMS

TOTALS

$

SALARIES AMOUNT
46,651.92 $ 5,066.19
14,696 .so
65,060.86
34,163.38 14,360.00
2,872.00 50,401.46
32,114.94 46,699.58 27,168.00
11,484 .oo
13,572.00 6,264.00
41,759.38 28,356.00 17,808.00
936.00 3,738.64 3,284.00 16,420.00 33,637.22
48,303.04 24,012.00 28,908.00 18,468.00
3,624 .oo
17,210.00 910.00
36,824.96
46,949.55 25,212.00
14,828. so
39,710.72
821,474.84 $

TRAVEL EXPENSE
4,651.85
149.52 122 .43
770.05 216.51 1,053.92 3,556.74
25.83
4,054.05 37 .59
3,458.14 2,851.54
509. 73 561.54 286 .42 3,421.51 219.67
42.84 3,272.70
23.52 5,803.24
147 .42 11.97 78. 75
3,719.25 24.36
3,960.74
2,099.56 74.55
45,205.94

SECTION III COMPLIANCE

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
August 3, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe Southwest Georgia Regional Educational Service Agency Board of Control
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Southwest Georgia Regional Educational Service Agency as of and for the year ended June 30, 1994, and have issued our report thereon dated August 3, 1995. This report was qualified for a scope limitation and for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perfonn the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
We did not observe the taking of inventories for resale at June 30, 1994, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories for resale through alternative procedures.
Compliance with laws, regulations, contracts, and grants applicable to Southwest Georgia Regional Educational Service Agency is the responsibility ofthe Agency's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we perfonned tests ofthe Agency's compliance with certain provisions oflaws, regulations, contracts, and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion.

94CRL-10

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

C!AUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
August 3, 1995

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

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

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Southwest Georgia Regional Educational Service Agency as of and for the year ended June 30, 1994, and have issued our report thereon dated August 3, 1995. This report was qualified for a scope limitation and for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

We have applied procedures to test the Southwest Georgia Regional Educational Service Agency's compliance with the following requirements applicable to each ofits Federal financial assistance programs, which are listed in the Schedule ofFederal Financial Assistance, for the year ended June 30, 1994:

(I) Political Activity

(5) Allowable Costs/Cost Principles

(2) Civil Rights

(6) Audit Follow-Up/Resolution

(3) Cash Management

(7) Administrative Requirements

(4) Federal Financial Reports

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

94CRL-50

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph ofthis report. With respect to items not tested, nothing came to our attention that caused us to believe that the Southwest Georgia Regional Educational Service Agency had not complied, in all material respects, with those requirements. However, the results ofour procedures disclosed immaterial instances of noncompliance with those requirements, which are described in the Schedule ofFindings and Improper or Questioned Costs.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal granter agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:jg 94CRL-50

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
August 3, 1995

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

SINGLE AUDIT OPINION ON COMPLIANCE WITII SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Southwest Georgia Regional Educational Service Agency as of and for the year ended June 30, 1994, and have issued our report thereon dated August 3, 1995. This report was qualified for a scope limitation and for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

We have also audited the Southwest Georgia Regional Educational Service Agency's compliance with the requirements governing:

(!) Types of Services Allowed or Unallowed

(5) Applicable Special Tests and Provisions

(2) Eligibility
(3) Matching, Level ofEffort, and/or Earmarking

(6) Other Requirement Claims for Advances and Reimbursements

(4) Reporting

These requirements are applicable to the major Federal financial assistance program, which is identified in the Schedule of Federal Financial Assistance, for the year ended June 30, 1994. The management of the Southwest Georgia Regional Educational Service Agency is responsible for the Agency's compliance with

94CRL-80

those requirements. Our responsibility is to express an opinion on compliance with those requirements based on our audit.
Except as discussed in the following paragraph, we conducted our audit ofcompliance in accordance with generally accepted auditing standards; Government Auditing Standards issued by the Comptroller General of the United States; and Office of Management and Budget (0MB) Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether material noncompliance with the requirements referred to above occurred. An audit includes examining, on a test basis, evidence about the Southwest Georgia Regional Educational Service Agency's compliance with those requirements. We believe that our audit provides a reasonable basis for our opinion.
We did not observe the taking ofinventories for resale at June 30, 1994, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories for resale through alternative procedures. However, this matter has no affect on the Agency's compliance with the requirements listed in the second paragraph of this report.
In our opinion, the Southwest Georgia Regional Educational Service Agency complied, in all material respects, with the requirements as disclosed in the second paragraph that are applicable to its major Federal financial assistance program for the year ended June 30, 1994.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~/4
Claude L. Vickers State Auditor
CLV:jg 94CRL-80

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
August 3, 1995

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

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

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Southwest Georgia Regional Educational Service Agency as of and for the year ended June 30, 1994, and have issued our report thereon dated August 3, 1995. This report was qualified for a scope limitation and for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

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

(1) Types of Services Allowed or Unallowed

(2) Eligibility

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

94CRL-120

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

SECTION TV INTERNAL CONTROL

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
August 3, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members of the Southwest Georgia Regional Educational Service Agency Board ofControl
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Southwest Georgia Regional Educational Service Agency as of and for the year ended June 30, 1994, and have issued our report thereon dated August 3, 1995. This report was qualified for a scope limitation and for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards, and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose :financial statements are free of material misstatement.
We did not observe the taking of inventories for resale at June 30, 1994, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories for resale through alternative procedures.
In planning and performing our audit of the general purpose financial statements of the Southwest Georgia Regional Educational Service Agency for the year ended June 30, 1994, we considered the internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide assurance on the internal control structure.
The management of the Southwest Georgia Regional Educational Service Agency is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control
94ICL-3

structure policies and procedures. The objectives ofan 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 ofany evaluation of the structure to future periods is subject to risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.

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

(I) Cash and Cash Equivalents

(6) Employee Compensation

(2) Inventories

(7) General Ledger

(3) Revenues/Receivables/Receipts

(8) General Fixed Assets

(4) Procurement

(5) Expenditures/Liabilities/ Disbursements

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

We noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute ofCertified 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:

(I) General Ledger

(2) General Fixed Assets

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

94ICL-3

Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that all ofthe 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 ofthe Southwest Georgia Regional Educational Service Agency's financial statements and this report does not affect our report thereon dated August 3, 1995.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:jg 94ICL-3

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
August 3, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members of the Southwest Georgia Regional Educational Service Agency Board of Control
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTIJRE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Southwest Georgia Regional Educational Service Agency as of and for the year ended June 30, 1994, and have issued our report thereon dated August 3, 1995. This report was qualified for a scope limitation and for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We have also audited the Agency's compliance with requirements applicable to the major Federal financial assistance program and have issued our opinion thereon dated August 3, 1995.
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 (0MB) Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement and about whether the Southwest Georgia Regional Educational Service Agency complied with laws and regulations, noncompliance with which would be material to a major Federal financial assistance program.
We did not observe the taking of inventories for resale at June 30, 1994, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories for resale through alternative procedures.

94ICL-7

In planning and performing our audit for the year ended June 30, 1994, we considered the Agency's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the Agency's general purpose financial statements and on its compliance with requirements applicable to the major Federal financial assistance program and to report on the internal control structure in accordance with 0MB Circular A-128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to Federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit ofthe general purpose financial statements in a separate report dated August 3, 1995.

The management of the Southwest Georgia Regional Educational Service Agency is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs 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 of inherent 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 ofchanges in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.

For the purpose of this report, we have classified the significant internal control structure policies and procedures used in administering Federal financial assistance programs in the following control categories:

GENERAL REQUIREMENTS

SPECIFIC REQUIREMENTS

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

(1) Types of Services Allowed or Unallowed
(2) Eligibility
(3) Matching, Level ofEffort, and/or Earmarking

(5) Allowable Costs/Cost Principles

(4) Reporting

(6) Audit Follow-Up/Resolution (7) Administrative Requirements

(5) Applicable Special Tests and Provisions
(6) Other Requirement Claims for Advances and Reimbursements

94ICL-7

For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and detennined whether they have been placed in operation, and we assessed control risk.
During the year ended June 30, 1994, the Southwest Georgia Regional Educational Service Agency expended 97% ofits total Federal financial assistance under a major Federal financial assistance program.
We performed tests of controls, as required by 0MB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with general requirements and specific requirements, as described above that are applicable to the Agency's major Federal financial assistance program, which is identified in the Schedule ofFederal Financial Assistance. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion.
We noted a certain matter involving the internal control structure and its operation that we consider to be a reportable condition under standards established by the American Institute 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 Jaws and regulations.
As descnbed in the Schedule ofFindings and Improper or Questioned Costs, a reportable condition was noted in the following control category:
Administrative Requirements
A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that noncompliance with Jaws 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 ofperfonning their assigned functions.
Our consideration of the internal control structure policies and procedures used in administering Federal financial assistance would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that the reportable condition described above is also considered to be a material weakness.
This condition was considered in detennining the nature, timing, and extent of the procedures to be performed in our audit ofthe Southwest Georgia Regional Educational Service Agency's compliance with requirements applicable to its major Federal financial assistance program for the year ended June 30, 1994, and this report does not affect our report thereon dated August 3, 1995.
94ICL-7

This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report which is a matter of public record.
~/-r::::: Respectfully submitted,
Claude L. Vickers State Auditor
CLV:jg 94ICL-7

SECTIONV FINDINGS AND IMPROPER OR QUESTIONED COSTS

SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30 1994
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Improper Expenditure Financial Statements Finding Resolved Audit Control Number 8844-93-05
The audit report for the year ended June 30, 1993, stated that expenditures of$198.15 were made from the Agency's General Fund for settlement ofan employee's salary garnishment. This matter had not been resolved at June 30, 1994. However, in the subsequent fiscal year, refund of$198.15 was secured and deposited in the Agency's General Fund.
AUDIT FOLLOW-UP/RESOLUTION Salary Payment Errors Financial Statements Federal Financial Assistance Finding Resolved Audit Control Number 8844-93-06
The audit report for the year ended June 30, 1993, disclosed that the Agency overpaid various employees in the amount of $6,247.68 and underpaid two employees in the amount of $860.30, which resulted from erroneous salary calculations for 12 month employees. In the year under review, additional documentation was provided to resolve these questioned costs.
PRIOR YEAR/CURRENT YEAR
GENERAL LEDGER Inadequate Accounting Procedures Financial Statements Reportable Condition - Material Weakness Audit Control Number 8844-93-01
The audit report for the year ended June 30, 1993, stated that the accounts receivable as reported on the Agency's financial statements for the General Fund were not supported by accurate subsidiary records. For the year under review, this deficiency continued to exist. This condition occurred because management failed to ensure that general ledger postings to the accounts receivable were supported by accurate subsidiary records. The Agency should implement procedures to ensure that general ledger postings are supported by accurate subsidiary accounting records.

SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30 1994
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 8844-93-02
The audit report for the year ended June 30, 1993, noted that the management of the Southwest Georgia 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.
FEDERAL FINANCIAL REPORTS Delinquent Completion Report Federal Financial Assistance Major Program Nonmaterial Noncompliance Audit Control Number 8844-93-03
The audit report for the year ended June 30, 1993, stated that the Agency failed to file a final completion report by the required date, for the Drug-Free Schools and Communities Act (CFDA 84. 186) Program in accordance with regulations established by the Georgia Department of Education. Our audit for fiscal year 1994 noted that this problem continued as the completion report due July 21, 1994, was not filed until August 3, 1995. This condition was a result of management's failure to adequately monitor federal financial reporting requirements as set forth by the Georgia Department of Education. Procedures should be implemented to ensure that final completion reports are filed in a timely manner as required .
ADMINISTRATIVE REQUIREMENTS Inadequate Inventory Records Federal Financial Assistance Major Program Reportable Condition - Material Weakness Nonmaterial Noncompliance Audit Control Number 8844-93-04
Toe audit report for the year ended June 30, 1993, stated that the Agency's property management records for the Drug-Free Schools and Communities Act (CFDA 84.186) were incomplete and failed to meet property

SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30 1994
PRIOR YEAR/CURRENT YEAR
ADMINISTRATIVE REQUIREMENTS Inadequate Inventory Records Federal Financial Assistance Major Program Reportable Condition - Material Weakness Nonmaterial Noncompliance Audit Control Number 8844-93-04
standards as outlined in Chapter 8 of the Georgia Financial Accounting Handbook for Local School Systems (GFAH). For the year under review, the Agency's property management records again failed to meet these requirements. The records as presented for audit did not correctly identify the Programs percentage of participation in the cost and did not provide adequate documentation of the disposition of equipment. These conditions occurred because management disregarded the provisions of GFAH. An inventory system should be implemented that provides for the identification of all equipment purchased as outlined in Chapter 8 of GFAH. Perpetual inventory records should include historical information regarding additions and deletions made to the equipment inventory during each fiscal year, when applicable. Periodic physical inventory counts should be made and reconciled to the property records to ensure that accuracy of the Agency's inventory records.
CURRENT YEAR
ALLOWABLE COSTS/COST PRINCIPLES Federal Financial Assistance Salary Overpayment Major Program Nonmaterial Noncompliance Amount: $1,295.48 Audit Control Number 8844-94-01
In the year under review, the Southwest Georgia Regional Educational Service Agency overpaid an employee in the amount ofSl,086.24. This overpayment was a result of payroll personnel using an incorrect number ofyears ofexperience when calculating an employee's contracted salary for the period July I, 1993 to June 30, 1994. Reimbursement of $1,086.24 should be secured for deposit to the Agency's General Fund. Reimbursements of$209.24 for associated employer's cost for fiinge benefits should also be secured from appropriate sources. The salary overpayment ofSI,086.24 and associated employer cost of$209.24 was paid out ofthe Drug-Free Schools and Communities Act (CFDA 84. 186) Program. A refund ofSI,295.48 should be made to the Georgia Department of Education for the salary overpayment and associated employer cost.

SOUTIIWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30 1994
CURRENT YEAR
ALLOWABLE COST/COST PRINCIPLES Inaccurate Indirect Cost Calculation Federal Financial Assistance Major Program Nonmaterial Noncompliance Amount: $372. 79 Audit Control Number 8844-94-02
A review of the Agency's indirect cost calculations revealed an error in the calculation which resulted in an overpayment of$372.79 by the Drug-Free Schools and Communities Act (CFDA 84.186) Program to the General Fund. This condition resulted because the Agency applied the indirect cost rate to an incorrect expenditure base. Refund of $372.79 should be made to the Georgia Department of Education from the Agency's General Fund.
AUDIT FOLLOW-UP/RESOLUTION Audit Distribution Requirements Federal Financial Assistance Nonmaterial Noncompliance Audit Control Number 8844-94-03
The Agency failed to submit a copy ofthe 1993 audit report to the Georgia Department ofHuman Resources from whom the Agency received Drug-Free Schools and Communities Act (CFDA 84.186) funds. Paragraph 13fofOMB Circular A-128 requires that the recipients ofFederal financial assistance submit copies of single audit reports to those agencies providing Federal financial assistance. This condition occurred because management was not aware ofthe provisions of paragraph 13fofOMB Circular A-128. Procedures should be implemented to ensure that reports are submitted to grantor agencies in accordance with audit distribution requirements.

SECTION VI PERTINENT VIEWS OF RESPONSIBLE OFFICIALS

SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF PERTINENT VIEWS OF RESPONSIBLE OFFICIALS YEAR ENDED JUNE 30 1994
GENERAL LEDGER Inadequate Accounting Procedures Financial Statements Reportable Condition - Material Weakness Audit Control Number 8844-93-01
We do not concur with this finding. The accounting procedure is basically sound, and accurate subsidiary records are available. Aged Trial Balance reports are run monthly and overdue accounts are followed up with a Board-approved collection procedure. Supporting documentation is available in the form of printouts and actual invoices to customers. Effective with FY 96, purchasing-related accounts receivable will deliver one journal entry per month into the Genesis General Ledger system. Our purchasing activity now has its own General Ledger with supporting documentation. Also available will be the Trial Balance, Income Statement, and Balance sheet for the purchasing unit. We will follow up on a monthly basis to ensure that the accounts receivable subsidiary listing agrees with the accounting records.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 8844-93-02
This RESA, as well as every other RESA and school system in the state, has received this finding for years. This is due to the DOE's failure to update the Genesis accounting software to handle this. We have kept a computer listing offixed assets since 1990. Generally accepted accounting principles require that fixed assets are part oftotal assets. Since the State did not provide the software update to handle this, we do not feel that a finding is justified. However, for FY 96, we have entered General Fixed Assets into the accounting systems which DOE added to the Genesis software in FY 95. Inventory records are updated on a regular basis. Additions and deletions are maintained when there are changes to General Fixed Assets.
FEDERAL FINANCIAL REPORTS Delinquent Completion Report Federal Financial Assistance Major Program Nonmaterial Noncompliance Audit Control Number 8844-93-03
We do not concur with this finding. This was carry-over money for the previous fiscal year. It was divided due to an audit finding in FY 93. Two separate budgets were sent in and two separate final completion reports were sent. At the time of FY 94 audit, we were informed that this should have been sent in on one final completion report. This was done on August 3, 1995.

SOUTHWEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF PERTINENT VIEWS OF RESPONSIBLE OFFICIALS
YEAR ENDED JUNE 30 1994
ADMINISTRATIVE REQUIREMENTS Inadequate Inventory Records Federal Financial Assistance Major Program Reportable Condition - Material Weakness Nonmaterial Noncompliance Audit Control Number 8844-93-04
We concur with this finding. Inventory records are now maintained to comply with the provisions of GFAH. Periodic physical inventory counts are being made to ensure that property records are completely accurate.
ALLOWABLE COSTS/COST PRINCIPLES Federal Financial Assistance Salary Overpayment Major Program Nonmaterial Noncompliance Amount: $1,295.48 Audit Control Number 8844-94-01
We concur with this finding. The incorrect number of years of experience was used when calculating an employee's salary for FY 94. This will be resolved by deducting this from the employee's FY 96 salary on a monthly basis. A refund of the $1,295.48 will be returned to the Georgia Department ofEducation for this miscalculation.
ALLOWABLE COST/COST PRINCIPLES Inaccurate Indirect Cost Calculation Federal Financial Assistance Major Program Nonmaterial Noncompliance Amount: $372.79 Audit Control Number 8844-94-02
We do not concur with this finding. Even though we applied the indirect cost rate to an incorrect expenditure base, we did not claim all of the indirect cost from the Drug-Free Schools and Communities Act (CFDA 84.186) Program to the General Fund.
AUDIT FOLLOW-UP/RESOLUTION Audit Distribution Requirements Federal Financial Assistance Nonmaterial Noncompliance Audit Control Number 8844-94-03
We were not aware that we had to submit a copy of our 1993 audit report to the Georgia Department of Human Resources. A copy was submitted at the time of this audit when we became aware of this provision. The 1994 audit report will be submitted to Georgia DHR upon our receipt of same.