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AUDIT REPORT WEST GEORGIA REGIONAL EDUCATIONAL
SERVICE AGENCY GRANTVILLE, GEORGIA YEAR ENDED JUNE 30, 1996
- - - ~----~------ - ~-~~~-~~-~~

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

WEST 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

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

3

C

STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL AND SPECIAL REVENUE FUNDS

5

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

6

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

16

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

18

SCHEDULES

1 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

20

2 CASH AND CASH EQUIVALENTS

21

3 INVESTMENTS

22

4 ACCOUNTS RECEIVABLE

23

SCHEDULE OF REVENUE

5

STATE

24

6

FEDERAL REVENUE THROUGH BOARDS OF EDUCATION

25

7

OTHER

26

WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

SCHEDULE OF EXPENDITURES BY OBJECT

8

GOVERNMENTAL FUND TYPES

27

9

LOTTERY PROGRAMS

28

10 SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS

29

SECTION II SUMMARY AND SCHEDULE OF SALARIES AND TRAVEL

SECTION III
COMPLIANCE
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS
SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS

SECTION IV
INTERNAL CONTROL
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY - TABLE OF CONTENTS -
SECTION IV INTERNAL CONTROL SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
SECTION V FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 14, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members of the West Georgia Regional Educational Service Agency Board ofControl
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
Ladies and Gentlemen:
We have audited the general purpose financial statements (Exhibits A through D) of the West Georgia Regional Educational Service Agency, as of and for the year ended June 30, 1996, as listed in the table of contents. These financial statements are the responsibility 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 OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. 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 of inventories for resale at June 30, 1996, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories for resale through alternative procedures.
As described in the notes to the general purpose financial statements, the Agency's financial statements have been prepared using a certain accounting practice and policy which, in our opinion, varies in some respects from generally accepted accounting principles. This variance is described as follows:

96ARL-33

* The general purpose financial statements of the Agency did not contain a General Fixed Assets
Account Group to account for equipment owned by the Agency which should be included to conform to generally accepted accounting principles.
The aggregate effects on the general purpose financial statements 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 ofthe matter referred to in the preceding paragraph, the general purpose financial statements present fairly, in all material respects, the financial position of the West Georgia Regional Educational Service Agency as of June 30, 1996, and the results ofits operations for the year'then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated March 14, 1997, on our consideration ofthe Agency's internal control structure and a report dated March 14, 1997, on its compliance with laws and regulations.
Our audit was conducted for the purpose offorming an opinion on the general purpose financial statements of the West Georgia Regional Educational Service Agency taken as a whole. The combining statements (Exhibits E and F), the financial schedules (Schedules 1 through 10 which includes the Schedule ofFederal Financial Assistance) and the Summary and Schedule of Salaries and Travel, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements ofthe West 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 of adjustments, if any, 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 ofthe State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
d:. ~
Claude L. Vickers State Auditor
CLV:dt 96ARL-33

WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY
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WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY COMBINED BALANCE SHEET ALL FUND TYPES JUNE 3D, 1996

EXHIBIT "A"

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

WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30,1996

EXHIBIT "B"

FUND BALANCE JUNE 30

$ 259,227.30 $

4,725,28 $ 263,952.58 $===27...3==,1..1.=8..7..=1

The notes to the general purpose financial statements are an integral part of this statement.
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THIS PAGE LEFT BLANK

WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30. 1996

EXHIBITC

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Improvement of Instructional Services General Administration Business Administration Maintenance and Operation of Plant Other Support Services Other Operations of Non-Instructional Services
Total~ndnures
Excess of Revenues over (under) Expendnures
FUND BALANCE JULY 1, 1995
Adjustments
Inventories for Resale - Net Change in Period

GENERAL FUND

BUDGET

ACTUAL

$ 517,970.32 $ 460,365.16

350.00

901,944.98

731,665.35

$ 1,419,915.30 $ 1,192,380.51

$ 464,186.00 $ 556,425.49

127,727.32 280,801.73 106,007.00
76,081.00 131,283.00 283,608.00

41,689.37
2n,559.45
106,999.86
n,02O.57
135,173.17 5,490.52

$ 1,469,694.05 $ 1,200,358.43

$ -49,n8.75 $

-7,9n.92

225,756.07

251,981,07

-7,438.28

14,091,37

15,224.15

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 217,859.00 $ 491,752.15

398,548.00

514,1n.31

65,000.00

$ 681,407.00 $ 1,005,929.46

$ 347,n5.15 $ 344,307.41

346,625.00 274,560.00

397,769.47 273,805.96

6,400.00

6,458.98

$ 975,360.15 $ 1,022,341.82

$ -293,953.15 $ -16,412.36

328,230.82

21,137.64

-13,741,95

FUND BALANCE JUNE 30,1996

$ 182,630.41 $ 259,227.30

$ 20,535.72 $

4,725.28

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

WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT "0"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The West Georgia Regional Educational Service Agency (Agency) was established pursuant to the Official Code ofGeorgia Annotated Sections 20-2-270 through 20-2-274 for the purposes of providing shared services designed to improve the effectiveness of educational programs and services of local school systems and for providing instructional programs directly to selected public school students in the state.

Each regional educational service agency is governed by a board. The number of members and terms of office are prescribed by the State Board ofEducation; provided, however, that at least one-third of the membership of each Board shall be individuals who hold no other public office, who are not employees of any local unit of administration, and who are not employees of the Georgia Department ofEducation.

With the exception of the departure from generally accepted accounting principles disclosed in these notes, the financial statements of the Agency have been prepared in conformity with generally accepted accounting principles as applied to governmental units and unless otherwise disclosed in these notes, the financial statements present all of the fund types and account groups of the Agency. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles.

The more significant of the Agency's accounting policies are d~scribed below.

REPORTING ENTITY

In evaluating how to define the governmental unit for financial reporting purposes, management has considered the criteria set forth in GASB Codification of Governmental Accounting and Financial Reporting Standards, Section 2100, "Defining the Financial Reporting Entity". Based upon the application of the above criteria, the West Georgia Regional Educational Service Agency is determined to be a jointly governed organization.

The members of the Board are elected by an annual caucus of an equal number of members of local boards of education from the respective member local school systems. Each Board appoints and contracts with a director who is the executive officer of the regional educational service agency. The director is responsible for the administration of the programs and services approved by the Board.

Member boards of education in the West Georgia Regional Educational Service Agency are as follows: Carroll County, City of Carrollton, Coweta County, Heard County, Meriwether County and Troup County.

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.

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WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1996

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 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:
GOVERNMENTAL FUND TYPES - are used to account for all or most of a regional educational service agency's general activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the Agency except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a regional educational service agency.
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. These funds are primarily received from the Georgia Department ofEducation and from the Federal government to accomplish specific objectives and are required to be accounted for separately.
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 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 of the current period. Those revenues considered susceptible to accrual are intergovernmental grants, sales and services and investment income.
Expenditures are generally recognized when the related fund liability is incurred.
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WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUDGET
The West Georgia Regional Educational Service Agency's budget is a complete financial plan for the Agency's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Agency at the aggregate level. The budget for governmental funds was prepared in accordance with generally accepted accounting principles.
The budget process begins when the Agency's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting 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, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year end.
RESTATEMENT OF PRIOR YEAR FUND BALANCE
In prior years, the risk financing activities for the Agency's unemployment compensation liabilities were reported as an expendable trust fund. This fund had a fund balance of$32,438.28 at June 30, 1995. For fiscal year 1996, this fund has been reported as a part of the General Fund. The fund balance at July 1, 1995 has been restated as appropriate.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in an authorized financial institution. Georgia Laws authorize the Agency to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Agency are stated at cost. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Agency to invest its funds in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,

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WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1996

EXHIBIT "0'1

>-
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(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 ofthe State of Georgia.
RECEIVABLES
Receivables consist ofgrant reimbursements due from 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.
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.
RESERVED FUND BALANCE
Reserve for Sick and Personal Leave - this reserve includes $2,022.52 in unexpended funds received in prior years from the Georgia Department of Education, for sick and personal leave to be paid to substitute personnel. These funds will be used for the original purpose until exhausted.
INTERFUND TRANSACTIONS
The Agency has the following type of interfund transactions:

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WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30. 1996

EXHIBIT"D"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of the securities pledged shall be equal to not less than 110 percent ofthe 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.
Acceptable security for deposits consists of anyone of or any combination ofthe following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates ofindebtedness 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 of Georgia, 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
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WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30,1996

EXHIBIT"D"

Note 2: DEPOSITS AND INVESTMENTS

(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, 1996, the bank balances were $122,880.07. The amounts of the total bank balances are classified into three categories of credit risk:

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

The Agency's deposits are classified by risk category at June 30, 1996, as follows:

Risk Category

Bank Balance

1

$ 100,000.00

2

0.00

3

22,880.07

Total

$ 122,880.07

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

Category 1 - Insured or registered, or securities held by the Agency or the Agency's agent in the Agency's name.
Category 2 - Uninsured or unregistered, with securities held by the counterparty's trust department or agent in the Agency's name.
Category 3 - Uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent but not in the Agency's name.

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

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WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30,1996

EXHIBIT"D"

Note 2: DEPOSITS AND INVESTMENTS

At June 30, 1996, the carrying amount of the Agency's total investments was $167,833.41 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 of loss related to torts; theft of, damage to, and destruction of assets; errors or. omissions; job related illness or injuries to employees; natural disaster; and unemployment compensation.

The Agency has obtained commercial insurance for risk of loss associated with torts, assets and job related illness or injuries to employees. The Agency has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Agency's insurance coverage in any of the past three years.

The Agency has obtained commercial insurance for errors and omissions, however, the policy excludes coverage for sexual harassment on claims relating to students. This exclusion does not apply to claims brought by or on behalfof employees. The Agency has not experienced any losses related to sexual harassment claims in 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 natural disaster in the past three years

The Agency is self-insured with regard to unemployment compensation claims. A premium is charged when needed by the General Fund to each user fund on the basis of the percentage of that fund's payroll to total payroll in order to cover estimated claims budgeted by management based on known claims and prior experience. The Agency accounts for claims 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.

Changes in the unemployment compensation claims liability during the last two fiscal years are as follows:

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

1995 1996

$

0.00 $

0.00 $

0.00 $

0.00

$

0.00 $

4,920.00 $

4,920.00 $

0.00 ...

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WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 3D. 1996

EXHIBIT"D"

Note 4: ON-BEHALF PAYMENTS
TheAgency has recognized revenues and expenditures in the amount of$24,351.37 for health insurance and retirement contributions paid on the Agency's behalfby the following State Agency:
Georgia Department ofEducation Paid to the State Merit System ofPersonnel Administration For Health Insurance ofNon-Certified Personnel In the amount of$24,351.37
Note 5: CONTINGENT LIABTI.JTIES
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: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by Agency's are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer public employee retirement system (PERS).
TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. A member is eligible for service retirement after 30 years of creditable service, regardless ofage, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number of years of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement benefits also include death and disability benefits. A disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service retirement allowance or a disability retirement allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of 10 years of service) and compensation up to the time of disability or death.

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WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1996

EXHIBIT"D"

Nme6: RETmEMffiNTPLANS

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, 1996, was $1,072,512.78; total payroll was $1,078,533.61.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Agency who are covered by TRS are -required by State statute to contribute 5% of their gross earnings to TRS. The Agency makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. For fiscal year 1996 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 1996 amounted to $180,289.43, of which $126,663.59 was made by the Agency and $53,625.84 was made by employees. These contributions represented 11.81% (Agency) and 5% (employees) of covered payroll.

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

Total unfunded pension benefit obligation ofTRS as ofJune 30, 1995, was as follows:

Total pension benefit obligation

$ 17,442,607,000.00

Net assets available for benefits, at cost

15,857,066,000.00

Unfunded pension benefit obligation

$ .1.585,541.000.00

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as ofJune 30, 1995.

Net assets available to pay pension benefits were valued as of the same date. TRS does not make separate

measurements of assets and pension benefit obligation for individual employers.

"

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WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30.1996

EXHIBIT"D"

Nore6: RETmEMENTPLANS
Total contributions from all employers to TRS for fiscal year ended June 30, 1996 were $607,275,000.00. The Agency's contribution for the year ended June 30, 1996 of$126,663.59 was actuarially determined and represented .0209% oftotal contributions made by all participating employers.
Ten year historical trend information is presented in the 1996 TRS Component Unit Financial Report. This information is useful in assessing TRS's accumulation of sufficient assets to pay pension benefits as they become due.
Note 7: SURETY BONDS
The Director, Mr. J. Paul Abernathy, is bonded in the amount of $50,000.00 with the Selective Insurance Company ofAmerica, Branchville, New Jersey, their Bond No. B701115, on which premium is paid through June 1, 1997.

- 15 -

WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1996

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs Unreserved Undesignated Total Fund Equity
Total Liabilities and Fund Equity

GEORGIA LEARNING RESOURCES SYSTEM

ANNUAL EVALUATION COORDINATION

LOTIERY PROGRAMS

$ 10,996.60 $

0.00

16,099.00

$

1;982.90

$ 27,095.60 $

0.00 $ _ _1,..9.8. _2_.9.0...

$

1,344.69

4,624.80

18,461.02

$ 24,430.51

$

1,922.90

60.00

$

1,982.90

$

2,665.09

0.00 $

$

2,665.09 $

$ 27,095.60 $

0.00 $

0.00

0.00 $

0.00

0.00 $ -=====1,==98=2=.9.=0

See notes to the general purpose financial statements. - 16-

EXHIBIT "E"

" INDIVIDUALS WITH
DISABILITIES EDUCATION ACT
PARTB SPECIAL EDUCATION PRESCHOOL

SAFE AND DRUG-FREE SCHOOLS

VOCATIONAL EDUCATION
FEDERAL

HIGH RISK YOUTH
PROGRAM

TOTALS JUNE 30, 1996 JUNE 30, 1995

$

2,060.19 $

5,465.30 $

9,929.11 $

0.00 $

28,451.20 $ 1,046,906.29

4,298.00

22,379.90

37,424.13

$

2,060.19 $

9,763.30 $

9,929.11 $

0.00 $

50,831.10 $ 1,084,330.42

$

1,190.44

4,143.98

4,428.88 $

9,929.11

$

9,763.30 $

9,929.11

$

1,922.90 $

7,318.53

2,535.13

766,686.41

8,768.78

6,994.84

32,879.01

21,280.05

260,912.95

$

46,105.82 $ 1,063,192.78

$

2,060.19

0.00 $

$

2,060.19 $

0.00 $ 0.00 $

$

0.00 $ _ _-.,;.0..;.;;,.0..;;...0

0.00 $

0.00 $

4,725.28 $
0.00
4,725.28 $

21,137.64 0.00
21,137.64

$

2,060.19 $

9,763.30 $

9,929.11 $

0.00 $

50,831.10 $ 1,084,330.42

-17 -

WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 1996

FUND BALANCE JUNE 30

$ 2,665.09 $

0.00 $

0.00

......= = = =.........-

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

EXHIBIT"F"

.. INDIVIDUALS WITH
DISABILITIES EDUCATION ACT
PARTB SPECIAL EDUCATION PRESCHOOL

SAFE AND DRUG-FREE SCHOOLS

VOCATIONAL EDUCATION
FEDERAL

HIGH RISK YOUTH
PROGRAM

TOTALS YEAR ENDED JUNE 30, 1996 JUNE 30, 1995

$ 491,752.15 $ 1,422,414.85

$

65,000.00 $ 218,427.12 $ 77,019.21 $

25,505.00

514,177.31

525,252.95

$

65,000.00 $ 218,427.12 $ 77,019.21 $

25,505.00 $ 1,005,929.46 $ 1,947,667.80

$

43,254.51

$ 344,307.41 $ 1,333,476.88

11,567.02 $ 25,884.37
1,223.52

80,502.13 $ 136,089.53
1,835.46

77,019.21 $

25,505.00

397,769.47 273,805.96
6,458.98

315,699.00 310,034.37
12,299.32

$

81,929.42 $ 218,427.12 $ 77,019.21 $

25,505.00 $ 1,022,341.82 $ 1,971,509.57

$

-16,929.42 $

0.00 $

0.00 $

0.00 $

-16,412.36 $ -23,841.77

$

-16,929.42 $

18,989.61

0.00 $ 0.00

0.00 $ 0.00

8.19

0.00 $ 0.00

-16,412.36 $ 21,137.64

-23,833.58 44,971.22

$

2,060.19 $

0.00 $

0.00 $

0.00 $

4,725.28 $

21,137.64

- 19-

WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE YEAR ENDED JUNE 30.1996

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Education, U. S. Department of Through Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Georgia Learning Resources System 1995 Grant 1996 Grant Title VI, D Special Education Personnel Development and Parent Training 1995 Regular 1996 Grant Safe and Drug-Free Schools 1996 Grant 1996 Contract Vocational Education - Basic Grants to States High School Program Basic Grant 1996 Grant 1996 Grant Tech-Prep Education 1996 Grant Through Georgia Department of Human Resources Safe and Drug-Free Schools High Risk Youth Program 1996 Grant Through Various Boards of Education (See Schedule "6") Individuals with Disabilities Education Act Part B - Special Education Preschool 1995 Regular 1996 Grant

CFDA NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.027 $ 84.027

99.00 $ 122,444.98

99.00 122,444.98

84.029 84.029
84.186 84.186

5,682.00
218,427.12 350.00

2,148.03 3,016.91
218,427.12 350.00

84.048 84.048
84.243

41,948.32 25,000.00
10,070.89

41,948.32 25,000.00
10,070.89

84.186

25,505.00

25,505.00

84.173 84.173

65,000.00

18,989.61 62,939.81

Total Federal Financial Assistance

$ 514,527.31 $ ====5=30:!:,=93..9..:=.6==7

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

See notes to the general purpose financial statements.

- 20 -

WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY CASH AND CASH EQUIVALENTS JUNE 3D. 1996
, INTEREST BEARING ACCOUNTS
Nations Bank of Georgia, NA, LaGrange, Georgia
Commercial Bonus Checking (Variable)

SCHEDULE "2" $ 4,652.88

See notes to the general purpose financial statements.

- 21 -

WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY INVESTMENTS JUNE 30.1996
INVESTMENT POOL State of Georgia, Office of Treasury and Fiscal Services Local Government Investment Pool (5.361%)

SCHEDULE "3" $ 167.833.41

See notes to the general purpose financial statements.

- 22 -

WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY ACCOUNTS RECEIVABLE JUNE 30, 1996

SCHEDULE "4"

Education. Georgia Department of Lottery Program Education Technology Centers Federal Programs Special Education Personnel Development and Parent Training TrtleVl,D Safe and Drug-Free Schools
Various Sources Equipment and Repair Services

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

1,982.90 $

1.982.90

16.099.00

16.099.00

$ _ _....::5:..!.:.8:....:4.::.:5.~44.:...

4,298.00

4,298.00 5.845.44

$

5,845.44 $

22,379.90 $ ==2=8=,2=:2=5=.34=

See notes to the general purpose financial statements.

- 23 -

WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1996

SCHEDULE "5"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Other State Programs Georgia Learning Resources System Health Insurance Regional Educational Service Agencies Supervision and Assessment of Student and Beginning Teachers and PerformanceBased Certification Lottery Programs Education Technology Centers Model Technology Schools
CONTRACT Education, Georgia Department of Technology Training
OTHER Education, Georgia Department of Registration Fees Curriculum Director's Conference Reimbursements In-School Suspension School of Excellence

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

$

24,351.37

429,915.00

69,345.00 $

69,345.00 24,351,37 429,915.00

85,714.00
24,940.00 273,953.15

85,714.00
24,940.00 273,953.15

37,800.00

37,800.00

6,000.00
61.00 37.79

6,000.00
61.00 37.79

$

460,365.16 $

491,752.15 $==9=:5:=2=,11=7=.3=1

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

WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FEDERAL REVENUE THROUGH BOARDS OF EDUCATION
YEAR ENDED JUNE 30, 1996

SCHEDULE "6"

AGENCYIFUNDING
SUB-GRANTS Various Boards of Education Individuals with Disabilities Education Act Part B - Special Education Preschool Coweta County Troup County

GOVERNMENTAL FUND TYPE SPECIAL REVENUE FUND

$

22,500.00

42,500.00

$

65,000.00

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

WEST GEORGIA REGIONAL EPUCATIONAL SERVICE AGENCY SCHEDULE OF OTHER REVENUE YEAR ENDED JUNE 30, 1996

Donations Indirect Cost
Special Revenue Fund Interest Earned Membership Contributions
Boards of Education Carroll County Carrollton, City of Coweta County Heard County Meriwether County Troup County
Sales Equipment and Repair Services Less: Purchases for Resale Resource Materials
Salaries Reimbursement Shenandoah Georgia Youth Science Training Center
Shared Service Contributions Audiology Boards of Education Carroll County Carrollton, City of Heard County Meriwether County Community Action for Improvement Occupational Therapy Services Boards of Education Coweta County Heard County Meriwether County Troup County
Staff Development Boards of Education Carroll County Carrollton, City of Coweta County Meriwether County Troup County
Teacher Assistant Contracts Boards of Education Carroll County Carrollton, City of Coweta County Heard County Meriwether County Troup County
Tuition Workshop Registration Fees Other

See notes to the general purpose financial statements.

- 26

SCHEDULE...,..

GOVERNMENTAL FUND TYPE GENERAL FUND

$

40,000,00

19,790,00 28,071,11

31,278.00 31,518.00 37,593,00 12,206,25 37,116.00 98,208,00
258,840.91 -273,097.00
4,538,26
66,473,71

37,125,00 5,304,00 2,652,00 5,304,00 2,650,00

54,040.00 10,808,00 16,212,00 54,040.00

4,349,00 1,396,00 5,116.00 1,676,00 4,344,00

2,970,00 1,110,00 2,110,00
520,00 780,00 2,420,00 28,807,00 92,263.36
. 3,132,75

$

731,665,35

WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF EXPENDITURES BY OBJECT GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1996

SCHEDULE "8"

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

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

$ 729,128.71 $ 349,404.90 $ 1,078,533.61

224,131.76

98,906.96

323,038.72

33,085.49

16,584.01

49,669.50

60,614.52

187,906.05

248,520.57

1,518.83

1,518.83

929.13

929.13

3,695.81

3,695.81

6,000.00

6,000.00

17,228.67

17,228.67

8,598.47

5,934.18

14,532.65

64,831.48

48,262.97

113,094.45

29,290.51

29,290.51

6,790.50

4,513.16

11,303.66

19,790.00

19,790.00

14,514.55

291,039.59

305,554.14

Total Expenditures

$ 1,200,358.43 $ 1,022,341.82 $ 2,222,700.25

See notes to the general purpose financial statements. - 27 -

WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF EXPENDITURES BY OBJECT LOTTERY PROGRAMS YEAR ENDED JUNE 30, 1996

SCHEDULE "9"

EXPENDITURES
Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical Services Supplies Dues and Fees
Nonoperating Costs Equipment

EDUCATION TECHNOLOGY CENTERS (1)

MODEL TECHNOLOGY
SCHOOLS

TOTAL

$

25,182.00

7,484.99

1,997.57

$

2,870.44

205.00

$ 2,260.65

25,182.00 7,484.99 1,997.57 2,260.65 2,870.44 205.00

25,000.00

271,692.50

296,692.50

Total Expenditures

$

62,740.00 $ 273,953.15 $ ====3:::::36::!:,6=:9:=3=.1=5

(1) Expenditures include $37,800.00 in non-lottery State funds.

See notes to the general purpose financial statements. - 28 -

WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS
YEAR ENDED JUNE 30. 1996

SCHEDULE -10"

BOARD MEMBER ADI!)RESS
Mr. Leon Golden, Chairman (*) Carroll County Board of Education 164 Independence Drive Carrollton, Georgia 30116
Mr. Benjamin Hyatt, Vice-Chairman (*) Heard County Board of Education P. O. Box 1330 Franklin, Georgia 30217
Mr. Richard Brooks (*) Coweta County Board of Education 237 Jackson Street Newnan, Georgia 30263
Mr. Robert Hawk (*) Meriwether County Board of Education P. O. Box 70, North Court Square Greenville, Georgia 30222
Dr. Terry Jenkins (*) Troup County Board of Education
P. o. Box 1228,201 Main Street
LaGrange, Georgia 30241
Mr. Dennis McEntire (*) Dross Brooks Drive Newnan, Georgia 30263
Mrs. Judy Miller (*) n94 Georgia Highway 34 Franklin, Georgia 30217
Mr. Lamar Moody (*) 42 Community Drive Villa Rica, Georgia 30180
Dr. Ronnie Williams (*) City of Carrollton Board of Education 106 Trojan Drive Carrollton, Georgia 30117
Mr. James Yeager 305 Fourth Street Manchester, Georgia 31816
(*) Denotes Board Members Serving as of June 30, 1996

COMPENSATION

TRAVEL

$

50.00 $

80.69

450.00

138.14

300.00

500.00

$

1,300.00 $ ====2=1=8=.8=3

See notes to the general purpose financial statements.

- 29 -

SECTION II SUMMARY AND SCHEDULE OF SALARIES AND TRAVEL

WEST GEORGIA REGIONAL EPUCATIONAL SERVICE AGENCY SUMMARY OF SALARIES AND TRAVEL YEAR ENDED JUNE 30,1996

SALARIES
GENERAL FUND Instruction Support services Improvement of Instructional Services Genenal Administnation Business Administnation Maintenance and Openation of Plant Other Support Services
Total~enalFund
SPECIAL REVENUE FUND
Total Salaries
TRAVEL
GENERAL FUND Instruction Support Services Improvement of Instructional Services General Administnation Business Administnation Other Support Services
Total Genenal Fund
SPECIAL REVENUE FUND
Tetal Tnavel

TOTAL PER FINANCIAL STATEMENTS (ACCRUAL BASIS)

ADJUSTMENTS FOR ACCRUALS JUNE 30, 1995 JUNE 30, 1996

TOTAL PER SCHEDULE (CASH BASIS)

$

324,937.35 $

3,305,34 $

-1,775,98 $

326,466,71

29,000,00 196,891.29
75,188,15 16,382,88 86,729,04

29,000,00 196,891,29
75,188,15 16,382,88 86,729.04

$

n9,128,71 $

3,305,34 $

-1,775,98 $

730,658.07

349,404,90

6,994,84

-8,768,78

347,630,96

$

10.300.18 $

-10,544.76 $ 1,078,289.03

$

23,136.90 $

2,370.93 5,215.91
562.50 1,799.25

$

33,085.49 $

16,584.01

$

0,00 $ 0,00 $ 0.00 $

0.00 $ 0,00 $

23,136.90
2,370.93 5,215,91
562.50 1,799.25
33,085.49
16,584.01

0..0..0. $

49,669.50

WEST GEORGIA R.E.S.A. SCHEDULE OF SALARIES ANO TRAVEL
YEAR ENDED JUNE 30, 1996

NAME

TITLE CATEGORY

SALARIES AMOUNT

TRAVEL EXPENSE

ABERNATHY~J PAUL ABERNATHY,J PAUL
AUSTON, JUDY BASTON,MICHAEL 0 CARPENTER,MICHAEL R CLARK,ANGELYNN S COGGIN,MILLIE SHELL CREWS, AMY
DENNY,CYNTHIA DENNY, CYNTHIA
DODDS,MARK D DORSETT-KELLY,DIANNE
DORSETT-KELLY,DIANNE
DWIGHT,DEBRA DWIGHT,DEBRA ECHOLS, JACKIE FLETCHER,ANNE TIMMONS HAINES,TONITA
HARRISON, ROBERT WAYNE HAWKINS, INEZ HAWKINS, INEZ HOWARD, EVEANN JAMES,PATRICIA L LANEY, EDDIE LANEY, JONATHAN
LANEY, JONATHAN LITTLEFIELD,BEATRICE
LITTLEFIELD,BEATRICE LITTLEFIELD, TRACEY LITTLEFIELD, TRACEY LITTLEFIELD, TRACEY LOVVORN,JOYCE H MARLOW, PATSY D MARLOW, PATSY D MARLOW, PATSY D MORGAN,ROBERT A
MOSELEY,LEWIS WAYNE NEWBORN,MARILEEN B NEWBORN,MARILEEN B
OEHLER, SUSAN OEHLER,SUSAN OWENSBY, LUANNE RHODES,MARK DAVIS
SCHEIBEL-SCHMITT,CAROLE WHITE, STEVEN P WHITE, STEVEN P
WHITE, STEVEN P WRIGHT,CATHY

DIRECTOR

$

GENERAL ADMINISTRATION

INSTRUCTION

SPECIAL REVENUE FUND - FEDERAL

SPECIAL REVENUE FUND - FEDERAL

GENERAL ADMINISTRATION

GENERAL ADMINISTRATION

SPECIAL REVENUE FUND - MISC. PROGRAMS

GENERAL ADMINISTRATION

SPECIAL REVENUE FUND - OTHER PROGRAMS

OTHER SUPPORT SERVICES

INSTRUCTION

SPECIAL REVENUE FUND - FEDERAL

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

SPECIAL REVENUE FUND - FEDERAL

SPECIAL REVENUE FUND - FEDERAL

INSTRUCTION

INSTRUCTION

OTHER SUPPORT SERVICES

INSTRUCTION

SPECIAL REVENUE FUND - OTHER PROGRAMS

GENERAL ADMINISTRATION

SPECIAL REVENUE FUND - FEDERAL

SUPPORT SERVICES - BUSINESS

SUPPORT SERVICES - BUSINESS

OTHER SUPPORT SERVICES

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

SPECIAL REVENUE FUND - FEDERAL

SUPPORT SERVICES - BUSINESS

OTHER SUPPORT SERVICES

SPECIAL REVENUE FUND - MISC. PROGRAMS

SUPPORT SERVICES - BUSINESS

INSTRUCTION

SUPPORT SERVICES - INSTRUCTIONAL STAFF

SPECIAL REVENUE FUND - FEDERAL

SUPPORT SERVICES - BUSINESS

INSTRUCTION

MAINTENANCE & OPER. OF PLANT SERVICES

SPECIAL REVENUE FUND - FEDERAL

INSTRUCTION

SPECIAL REVENUE FUND - MISC. PROGRAMS

INSTRUCTION

OTHER SUPPORT SERVICES

INSTRUCTION

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

SPECIAL REVENUE FUND - FEDERAL

SPECIAL REVENUE FUND - MISC. PROGRAMS

GENERAL ADMINISTRATION

79,230.00
$
20,761.70 25,182.00 38,509.46 27,264.00
3,935.25 33,310.30 12,632.04 12,631.92 28,343.04 12,185.24 24,025.22
27,748.80 8,698.26
53,679.72 52,256.04 29,193.00
55,494.36 25,263.96 25,263.96 31,193.04
3,258.15
25,263.96 12,631.92
12,632.04 26,264.04 22,434.52 28,213.90
786.10 1,841.00 49,870.92 16,382.88 1,200.00 36,397.17
40,522.20 29,193.00 38,359.20 43,377.96 10,692.72
3,600.00 48,566.04

3,395.91 739.50
1,997.57 2,680.79
665.75
2,206.25 1,154.25
202.31 1,122.12 2,236.62
198.98 845.77 216.50 4,323.76 4,210.75
2,893.43
712.25 244.25
15.00 382.50
69.00 59.00 644.00 776.95 259.25
3,157.03 6.00
2,370.22
370.00 324.45 4,311.78 937.94 2,795.34 1,076.52 2,067.76

TOTALS

$ 1,078, 289 .03 $ 49,669.50

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
March 14, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe West Georgia Regional Educational Service Agency Board ofControl
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the West Georgia Regional Educational Service Agency as ofand for the year ended June 30, 1996, and have issued our report thereon dated March 14, 1997. This report was qualified for a scope limitation and for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted
auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
We did not observe the taking of inventories for resale at June 30, 1996, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories for resale through alternative procedures.
Compliance with laws, regulations, contracts, and grants applicable to West Georgia Regional Educational Service Agency is the responsibility of the Agency's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests ofthe Agency's compliance with certain provisions oflaws, regulations, contracts, and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that are required to be reported herein under Government Auditing Standards.
96CRL-10

This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
"
Respectfully submitted,

CLV:dt 96CRL-IO

Claude L. Vickers State Auditor

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 14, 1997

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

SINGLE AUDIT REPORT ON COMJ>LIANCE WITH THE GENERAL REOUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the West Georgia Regional Educational Service Agency as of and for the year ended June 30, 1996, and have issued our report thereon dated March 14, 1997. This report was qualified for a scope limitation and for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

We have applied procedures to test the West Georgia Regional Educational Service Agency's compliance with the following requirements applicable to each of its Federal financial assistance programs, which are listed in the Schedule ofFederal Financial Assistance, for the year ended June 30, 1996:

(1) Political Activity

(5) Allowable Costs/Cost Principles

(2) Civil Rights

(6) Audit Follow-Up/Resolution

(3) Cash Management

(7) Administrative Requirements

(4) Federal Financial Reports

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

96CRL-40

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that West 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 ofpublic record.
Respectfully submitted,

CLV:dt 96CRL-40

Claude L. Vickers State Auditor

CLAUDE L. VICKERS
STATE AUDITOR (404) 6562174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 14, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members of the West 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 West Georgia Regional Educational Service Agency as ofand for the year ended June 30, 1996, and have issued our report thereon dated March 14, 1997. This report was qualified for a scope limitation and for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

In connection with our audit ofthe fiscal year 1996 general purpose financial statements of the West Georgia Regional Educational Service Agency and with our consideration of the Agency's control structure used to administer Federal financial assistance programs, as required by Office of Management and Budget (OMB) Circular A-128, "Audits of State and Local Governments", we selected certain transactions applicable to certain nonmajor Federal financial assistance programs for the year ended June 30, 1996. As required by OMB Circular A-128, we have performed auditing procedures on the selected transactions to test compliance with the requirements governing:

(1) Types of Services Allowed or Unallowed

(2) Eligibility

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

96CRL-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 West 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,
tYAe<4~
Claude L. Vickers State Auditor
CLV:dt 96CRL-120

SECTION IV INTERNAL CONTROL

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 14, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members of the West Georgia Regional Educational Service Agency Board of Control
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements ofthe West Georgia Regional Educational Service Agency as ofand for the year ended June 30, 1996, and have issued our report thereon dated March 14, 1997. This report was qualified for a scope limitation and for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards, and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
We did not observe the taking of inventories for resale at June 30, 1996, nor could we satisfy ourselves as to the accuracy ofthe amounts stated as inventories for resale through alternative procedures.
The management ofthe West Georgia Regional Educational Service Agency is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may
96ICL-3

nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.
."
In planning and performing our audit ofthe general purpose financial statements of the West Georgia Regional Educational Service Agency for the year ended June 30, 1996, we obtained an understanding of the internal control structure. With respect to the internal control structure, we obtained an understanding ofthe design ofrelevant policies and procedures and whether they have been placed in operation, and we assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion.
We noted a certain matter involving the internal control' structure and its operation that we consider to be reportable condition under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation 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, a reportable condition was noted in the following control category:
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,
Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that the reportable condition disclosed above is also considered to be a material weakness.
This condition was considered in determining the nature, timing, and extent of the procedures to be performed in our audit of the West Georgia Regional Educational Service Agency's financial statements and this report does not affect our report thereon dated March 14, 1997.
96ICL-3

This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
"
Respectfully submitted,
~
Claude L. Vickers State Auditor
CLV:dt 96ICL-3

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

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
March 14, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members of the West Georgia Regional Educational Service Agency Board of Control
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the West Georgia Regional Educational Service Agency as ofand for the year ended June 30, 1996, and have issued our report thereon dated March 14, 1997. This report was qualified for a scope limitation and for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of Office ofManagement and Budget (OMB) Circular A-128, "Audits of State and Local Governments". Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
We did not observe the taking of inventories for resale at June 30, 1996, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories for resale through alternative procedures.
In planning and performing our audit for the year ended June 30, 1996, we considered the internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and to report on the internal control structure in accordance with OMB Circular A-128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to Federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated March 14, 1997.
96ICL-13

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

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

GENERAL REQUIREMENTS

SPECIFIC REQUIREMENTS

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

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

(5) Allowable Costs/Cost Principles

(4) Reporting

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

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

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

During the year ended June 30, 1996, the West Georgia Regional Educational Service Agency had no major Federal financial assistance programs and expended 69% of its total Federal financial assistance under the following nonmajor Federal financial assistance programs:

96ICL-13

Safe and Drug-Free Schools Individuals with Disabilities Education Act
Part B - Special Education " Georgia Learning Resources System
We performed tests of controls, as required by OMB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with general requirements and specific requirements as described above that are applicable to the aforementioned nonmajor Federal financial assistance programs. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion.
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 constitute material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a Federal financial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control structure and its operation that we consider to be material weaknesses as defined above.
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:dt 96ICL-13

SECTION V FINDINGS AND IMPROPER OR QUESTIONED COSTS

WEST GEORGIA REGIONAL EDUCATIONAL SERVICE AGENCY SCHEDULE OF FINDINGS AND IMPROPER OR OUESTIONED COSTS
YEAR ENDED JUNE 30. 1996
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 8604-93-01
The audit report for the year ended June 30, 1995, noted that the management of the West 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.
Note: The West Georgia Regional Educational Service Agency was provided an opportunity to include pertinent comments from the Agency's management concerning these audit findings, conclusions and recommendations. The Agency has elected not to provide comment for inclusion in this report.