Review report, state of Georgia, Georgia Forestry Commission, year ended June 30, 1994

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

REVIEW REPORT STAIB OF GEORGIA GEORGIA FORESTRY COMMISSION YEAR ENDED JUNE 30, 1994

GEORGIA FORESTRY COMMISSION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHIBITS

FINANCIAL STATEMENTS

A COMBINED BALANCE SHEET (STATUTORY BASIS)

ALL FUND TYPES AND ACCOUNT GROUPS

2

B STATEMENT OF CHANGES IN FUND BALANCES

(STATUTORY BASIS)

GOVERNMENTAL FUND TYPE

5

C STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

BUDGET FUND

6

D STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

COMPARED TO BUDGET

BUDGET FUND

8

E NOTES TO THE FINANCIAL STATEMENTS

9

SUPPLEMENTARY INFORMATION

F COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

FIDUCIARY FUND TYPE -AGENCY FUNDS

20

SCHEDULES

I SCHEDULE OF APPROVED BUDGET

21

2 CASH AND CASH EQUIVALENTS

22

3 SCHEDULE OF FEDERAL REVENUES

23

4 SCHEDULE OF OTHER REVENUES RETAINED

24

5 SCHEDULE OF OTHER OPERATING EXPENSES

25

6 SCHEDULE OF EXTRAORDINARY EXPENDITURES

26

SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS

SECTION I FINANCIAL

CLAUDE L. VICKERS STATE AUDllOR (404) 656-2174
TAX RATIO (404) 656-0494

~.epa:rtm.eut .nf J\.uh-its
254 WASHING10N STREET, S. W. ROOM 214
J\tlanta, "enrgia 3D334-84DD
August 29, 1994

FINANCIAL AUDITS (404) 656-2180
PROGRAM AUDITS (404) 656-2006

Honorable Zell Miller, Governor Members ofthe General Assembly of Georgia Members ofthe Georgia Forestry Commission
and Honorable John W. Mixon, Director Georgia Forestry Commission
INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have reviewed the accompanying financial statements (Exhibits A through E) of the Georgia Forestry Commission as of and for the year ended June 30, 1994, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. As described in Note 1, these financial statements were prepared on a prescribed basis of accounting that demonstrates compliance with the budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles. All information included in these financial statements is the representation of the management of the Georgia Forestry Commission.
A review consists principally of inquiries of agency personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware ofany material modifications that should be made to the accompanying financial statements in order for them to be in conformity with the basis ofaccounting described in Note 1.
Our review was made for the purpose ofexpressing limited assurance that there were no material modifications that should be made to the financial statements in order for them to be in conformity with the basis of accounting described in Note 1. The accompanying supplementary information (Exhibit F and Schedules 1 through 6) is presented only for supplementary analysis purposes. Such information has been subjected to the

94ARL-4

inquiries and analytical procedures applied in the review ofthe financial statements and we are not aware of any material modifications that should be made thereto.
Respectfully submitted,
~-Z:::::
Claude L. Vickers State Auditor
CLV:cm 94ARL-4

FINANCIAL STATEMENTS -I-

GEORGIA F<RESTRY CQ"4ISSION
COMBINED BALANCE SHEET CSTATUTORY BASISl ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30, 1994

EXHIBIT "A" Page 1

ASSETS
cash and Cash Equivalents (See Schecille)

GOVERNMENTAL FIDOCIARY FUND TYPE FUND TYPE

Bll>GET

AGENCY

ACCOUNT GROUPS

GENERAL FIXED ASSETS

GENERAL LONG-TERM
DEBT

TOTALS (Manorandtln Only)
JUNE 30, 1994 JUNE 30, 1993

$ 89,370.32

$ 89,370.32$ 83,029.18

Account, Receivable
State Appropriation Federal Financial Assistance Other

$1,457,436.39 2,471,340.19
205,304.88

$4,134,081.46

Inventorla

$ 654,573.60

Fixed Assets Equls-,it

Amount to be Provided for Payment of Accrued Conpensated Absences

$57,163,629.78

$1,457,436.39 $3,232,534.98 2,471,340.19 1,997,097.51 205,304.88 142,783.41
$4,134,081.46$ 5,372,415.90
$ 654,573.60$ 744,169.09
------------- -------
$57,163,629.78 $54,819,824.37

$2,885,465.50 $ 2,885,465.50 $ 2,541,129.06

Total Assets

$4,788,655.06$ 89,370.32 $57,163,629.78 $2,885,465.50 $64,927,120.66 $63,560,567.60

See Independent Accountant's Camined Report on Review of Financial Statements and Supplanentary Information. The notes to the financial statanents are an integral part of this statanent.
- 2-

GEORGIA FORESTRY CQP!4ISSION
COMBINED BALANCE SHEET {STATUTORY BASISl ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30. 1994

EXHIBIT "A" Page 2

GOVERNMENTAL FIDOCIARY FUND TYPE FUND TYPE

BUDGET

AGENCY

ACCOUNT GROUPS

GENERAL FIXED ASSETS

GENERAL LONG-TERM
DEBT

TOTALS (Memorandlan Only)
JUNE 30, 1994 JUNE 30, 1993

LIABILITIES AND FUND EQUITY

Liabilities Cash Overdraft Accounts Payable Payroll Withholdings Funds Held for Others ~nsated Absences

$ 120,874.89 3,641,925.13
699.32
$

89,370.32

$ 120,874.89$ 963,224.70

3,641,925.13 4,103,101.27

699.32

637.50

89,370.32 83,029.18

$2,885,465.50 2,885,465.50 2,541,129.06

Total Liabilities

$3,763,499.34$ 89,370.32

$2,885,465.50$ 6,738,335.16$ 7,691,121.71

Fund Equity Investment in General Fixed Assets Fund Balances Reserved Inventories Unreserved Designated Surplus

$ 654,573.60 370,582.12

$57,163,629.78

$57,163,629.78 $54,819,824.37 654,573.60 744,169.09 370,582.12 305,452.43

Total Fund Equity

$1,025,155.72

$57,163,629.78

$58,188,785.50 $55,869,445.89

Total Liabilities and

Fund Equity

$4,788,655.06$ 89,370.32 $57,163,629.78 $2,885,465.50 $64,927,120.66 $63,560,567.60

See Independent Accountant's Camined Report on Review of Financial Statements and Supplanentary Infonnation. The notes to the financial statanents are an integral part of this statanent.
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GEORGIA FORESTRY COMMISSION STATEMENT OF CHANGES IN FUND BALANCES {STATUTORY BASIS)
GOVERNMENTAL FUND TYPE
YEAR ENDED JUNE 30. 1994

EXHIBIT "B"

FUND BALANCES - JULY 1
Reserved Unreserved
Designated Surplus
ADDITIONS
Adjustments to Prior Year's Accounts Payable
Excess of Funds Available over Expenditures Exhibit "C"
Increase in Reserve for Inventories Reimbursement of Prior Years Expenditures
DEDUCTIONS
Unreserved Fund Balance (Surplus) Returned to Office of Treasury and Fiscal Services Year Ended June 30, 1992 Year Ended June 30, 1993
Adjustment to Prior Year's Accounts Receivables
Decrease in Reserve for Inventories
FUND BALANCES - JUNE 30
(To Exhibit "A")

BUDGET FUND YEAR ENDED JUNE 30. 1994 JUNE 30. 1993
$ 744.169.09 $ 629,413.47 305,452.43 827.120.19
$1,049,621.52 $1,456,533.66

$ 85,695.13 $ 88,432.67

284.737.71 226,597.35

0.00 114,755.62

1,863.44

659.61

------------- -------------

$ 372,296.28$ 430,445.25
------------- -------------

$

0.00 $ 827.120.19

305,452.43

0.00

1,714.16

10,237.20

89.595.49

0.00

------------- -------------

$ 396,762.08 $ 837,357.39
------------- -------------

$1,025,155.72$ 1,049,621.52

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement.
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GEORGIA FORESTRY COMMISSION STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30, 1994

EXHIBIT "C" Page 1

FUNDS AVAILABLE REVENUES
STATE APPROPRIATION General Appropriation Amended Appropriation
Less: Lapsed Funds Total State Appropriation
FEDERAL REVENUES (See Schedule) OTHER REVENUES RETAINED (See Schedule)
Total Funds Available

TOTALS YEAR ENDED JUNE 30, 1994 JUNE 30, 1993

$_33_,59_6,7_0.o9....,.0o.0o..

$32,770,566.00 -840,130.00

$33,596,709.00 $31,930,436.00 -90,000,00 -264,000.00

$33,506,709.00 $31,666,436.00

3,676,539.15 3,681,018.35

4,634,608.55 4,521,726.70

$41.817.856.70 $39.869.181.05

EXPENDITURES PERSONAL SERVICES
Salaries and Wages Employer's Contributions for:
F.I.C.A. Retirement Health Insurance Personal Liability Insurance Unemployment Compensation Insurance Workers' Compensation Insurance Assessments by Merit System Drug Testing
REGULAR OPERATING EXPENSES Motor Vehicle Expenses Supplies and Materials Repairs and Maintenance Uti 11 ties Rents (Other than Real Estate) Insurance and Bonding Tuition Grants to Counties, Cities, and Civil Divisions Other Operating Expenses (See Schedule) Extraordinary Expenditures (See Schedule) Duplicating and Rapid Copy Publications and Printing
IRAm
MOTOR VEHICLE PURCHASES

$20,069,420.20 $19,271,191.38

1,383,608.97
3,078,312.00 2,379,969.18
96,960.00 55,554.00 755,024.00 122,257.10
50.00

1,343,218.34 2,936,842.59 2,299,395.26
66,981.00 43,592.00 440,421.00 125,692.50
100.00

$27,941,155.45 $26,527,434.07

$2,580,776.07$ 2,265,308.17

1,697,274.33 2,261,857.67

253,617.16 191,869.05

631,798.09 550,345.68

20,715.31

17,606.61

233,540.00 255,137.00

4,044.50

0.00

1,635,689.09 1,585,207.57

141,391.82 113,835.70

1,147.85

27,071.50

502.25

197.00

85,790.23

99.541.82

$7,286,286.70$ 7.367.977.77

$ 155,117.79$ 169,193.47

$1,201,572.81 $ 957.063.06

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement.
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GEORGIA FORESTRY COMMISSION STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30. 1994

EXHIBIT "C"
Page 2

FUNDS AVAILABLE EQUIPMENT
Equipment Purchases COMPUTER CHARGES
Other Costs Supplies and Materials Repairs and Maintenance
Software Equipaent
Equipaent Purchases C011puter Billings, DOAS
REAL ESTATE RENTALS
TELECOMMUNICATIONS
PER DIEN. fEES ANO CONTRACTS
Per Di and Fees Contract a
CAPITAL PYib&I
Other Coats Supplies and Materials Repairs and Maintenance Rents (Other than Real Estate)
Per Die , Fees and Contracts Per Diem and Fees
QI!!il
CONTRACTUAL RESEARCH Per Diem, Fees and Contracts Contracts
WARE COUNTY GRANT FOR SOUTHERN FOREST WORLD Other Costs Grants to Couties, Cities and Civil Divisions
WARE COUNTY GRANT FOR ROAD MAINTENANCE Other Costs Grants to Counties, Cities and Civil Divisions Total Other Total Expenditures
Excess of Funds Available over Expenditures

TOTALS YEAR ENDED JUNE 30, 1994 JUNE 30, 1993

$ 1.860.241.68 $1,740,643.54

$ 19,729.96$ 9,710.75 61,133.98
263,773.37 27,622.40
$_.::=3,.:8.a1.=,9:.7:. 0.46 $
$_~;!..&5.4C,.7.l:6I 3.50$
$_......9.,.5:..1a.,a4,.9..0.05 $

12,459.22 17,590.38 24,726.10
176,489.71 43.760,98
275,026.39
52,247.00
932,903.42

$ 483,721.97$ 756,286.19 819,913.72 564,182.34
$1,303,635.69$ 1,320,468.53

$ 198,951.98 $ 196,241.23

107,137.88

12,905.92

795.00

229.30

0.00

850.00

$ 306,884.86$ 210,226.45

$

0.00 $ 24,500.00

$ 30.000.00 $____4._.9_0_,_0__,.0...,0

$ 60.000.00 $ 60.000.00

$ 90,000.00$ 89,400.00

$41,533,118.99 $39,642,583.70

284,737.71

226,597.35

$41.817.856.70 $39.869.181.05 See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement.
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GEORGIA FORESTRY COMMISSION STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
YEAR ENDED JUNE 30, 1994

EXHIBIT "D"

FUNDS AVAILABLE
REVENUES
State Appropriation Federal Revenues Other Revenues Retained
EXPENDITURES
Personal Services Regular Operating Expenses Travel Motor Vehicle Purchases Equipment Computer Charges Real Estate Rentals Telecommunications Per Diem, Fees and Contracts Capital Outlay Ware County Grant for Southern Forest World Ware County Grant for Road Maintenance

BUDGET

ACTUAL

VARIANCE FAVORABLE (UNFAVORABLE)

$33,596,709.00 $33,506,709.00$ 3,618,309.00 3,676,539.15 4,565,142.00 4,634,608.55

-90,000.00 58,230.15 69,466.55

$41,780,160.00 $41,817,856.70$ 37,696.70
=========== ------------- -------------

$28,052,377.00 $27,941,155.45$

7,247,306.00 7,286,286.70

165,570.00 155,117.79

1,212,005.00 1,201,572.81

1,887,071.00 1,860,241.68

386,823.00 381,970.46

55,245.00

54,763.50

1,015,119.00 951,490.05

1,361,644.00 1,303,635.69

307,000.00 306,884.86

30,000.00

30,000.00

60,000.00

60,000.00

111,221.55 -38,980.70 10,452.21 10,432.19 26,829.32
4,852.54 481. 50
63,628.95 58,008.31
115.14 0.00 0.00

Excess of Funds Available over Expendiures

$41,780,160.00 $41,533,118.99$ 247,041.01 =zsz===== ------------- -------------
$ 284,737.71 $ 284,737.71

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an _integral part of this statement.
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GEORGIA FORESTRY COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "E"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY The Georgia Forestry Commission, an organiutional unit of the State of Georgia, is part of the executive branch ofthe government ofthe State ofGeorgia. The Commission provides assistance and technical advice on reforestation and forest conservation to landowners and directs forest fire prevention and forest fire fighting efforts within the State ofGeorgia. The Commismon is composed offive members appointed by the Governor and confirmed by the Senate. The Commission appoints, with the advice ofthe Governor, a Director as its executive secretary and administrative officer.
The Georgia Forestry Commismon does not have authority to determine the amount offunding it will receive from the State of Georgia for any given fiscal year. Such authority is vested in the General Assembly of Georgia. The Commission also does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, the Georgia Forestry Commission is included within the State of Georgia reporting entity for financial reporting purposes because of the significance ofits legal, operational and financial relationships with the State ofGeorgia. These reporting entity relationships are defined in Section 2100 of the Governmental Accounting Standards Board Codification of Governmental Accounting and Financial Reporting Standards.
FUND ACCOUNTING The Georgia Forestry Commission uses funds and account groups to report on its financial position and the results ofits operations detennined in confonnity with accounting practices prescribed or permitted by statutes and regulations ofthe State ofGeorgia. 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 ofaccounts. An account group, on the other hand, 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 net expendable.available financial resources. Funds and account groups presented in the accompanying financial statements are as follows:
GOVERNMENTAL FUND TYPE
BUDGET FUND - The fund used to account for activities and functions as set forth in the Amended Appropriations Act of 1993-1994. The Budget Fund is similar in nature to a General Fund as identified in generally accepted accounting principles in that the Budget Fund is used to account for all activities except those required to be accounted for in some other fund.
FIDUCIARY FUND TYPE
AGENCY FUNDS - The funds used to account for assets held for use by other funds, governments, or individuals.

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GEORGIA FORESTRY COMMISSION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "E"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FUND ACCOUNTING
ACCOUNT GROUPS
GENERAL FIXED ASSETS - The account group used to account for fixed assets used in governmental fund type operations. Fixed assets purchased are recorded at historical cost. Donated fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded values. No depreciation has been provided o_n general fixed assets.
GENERAL LONG-TERM DEBT - The account group used to report the noncurrent portions ofcertain governmental long-tenn liabilities, such as claims, judgments and compensated absences, which will be paid from future resources.
BASIS OF ACCOUNTING MEASUREMENT FOCUS
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. Govenunental funds should be accounted for using the current financial resources measurement focus. With this measurement focus, only rurrent assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues) and decreases (i.e., expenditures) in net current assets.
GOVERNMENTAL FUND TYPE BUDGETFUND
Except as disclosed in the following paragraphs, units of government of the State of Georgia record their Budget Fund revenues and expenditures in accordance with the modified accrual basis ofaccounting. Under the modified accrual basis ofaccounting, 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. Revenues that are accrued include primarily State appropriations, Federal grants and entitlements, and certain amounts earned under operating agreements with other parties. Further, the modified accrual basis ofaccounting calls for expenditures, other than accrued interest ofgeneral long-term debt, to be recorded when the related fund liability is incurred.
Contractual obligations for services which have not been performed and for goods which have not been delivered at the end of the fiscal year are recognized as expenditures and liabilities in the accompanying financial statements. This accounting practice causes expenditure-driven grant revenues to be accrued based in part on the unexecuted portion of contracts for goods and services. The recognition ofencumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted by statutes and regulations ofthe State ofGeorgia, but is not consistent with generally accepted accounting principles, which provide for the recording of encumbrances as a reservation offund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures determined in accordance with generally accepted accounting principles.
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GEORGIA FORESTRY COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXIIlBIT "E"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING GOVERNMENTAL FUND TYPE BUDGETFUND
Prior period adjustments and certain other items are reported as additions to and deductions from fund balances ofthe Budget Fund in the accompanying financial statements. This presentation is in accordance with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, but differs from generally accepted accounting principles in that immaterial adjustments should be reported as current period revenues and expenditures.

FIDUCIARY FUND TYPE AGENCY FUNDS
The Agency Funds are custodial in nature in that assets are equally offset by liabilities to other funds, governmental units, or individuals. The modified accrual basis of accounting is utilized for recognizing assets and liabilities.

BUDGET

Appropriation allotments to the Georgia Forestry Commission are on the basis of a budget submitted by the

Commission and approved by the Legislature and the Governor. The budget is compiled in the same manner

as all State departments and expenditures are classified by budget unit object classes as provided in Act No.

608 ofGeorgia Laws 1993 (as approved April 28, 1993) and amended by Act No. 622 of Georgia Laws 1994

(as approved February 8, 1994), which is an appropriated budget and is referred to in these notes as the

Amended Appropriations Act of 1993-1994.



CASH AND CASH EQUIVALENTS Cash and Cash Equivalents consist of demand deposits with banks and other financial institutions.

INVENTORIES Inventories of supplies are valued at cost on the Combined Balance Sheet (Statutory Basis). The purchases
method is used to account for inventories whereby supply items are recorded as expenditures when purchased;
however, material amounts of inventories are reported as assets ofthe respective funds.

RESERVED FUND BALANCE Reserves represent those portions offund equity not appropriable for expenditure or legally segregated for a specific future use. The following is a brief description of the reserves reflected in the accompanying financial statements:

INVENTORIES Reported inventories, under the purchases method, are equally offset by an amount to indicate that they do
not constitute "available spendable resources" even though they are a component of net current assets.

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GEORGIA FORESTRY COMMISSION
NOTES TO TIIE FINANCIAL STATEMENTS
RJNE 30. 1994

EXHIBIT "E"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

COMPENSATED ABSENCES Compensated absences represent obligations of the Department relating to employee's rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting acaunu1ating annual 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 will not be liquidated with expendable available financial resources. Funds are provided in the appropriation offunds each year to Department to cover the cost ofannual leave paid to terminated employees.

The liability for compensated absences at year end is reported in the General Long-Term Debt Account Group for governmental funds.

MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the Combined Balance Sheet (Statutory Basis) are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position 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.

COMPARATIVE DATA

Comparative total data for the prior year have been presented in the accompanying financial statements in

order to provide an understanding ofchanges in the Commission's financial position and operations. However,

comparative data have not been presented in all statements because their inclusion would make certain

statements unduly complex and difficult to understand.



The amounts reflected on the Combined Balance Sheet (Statutory Basis) at June 30, 1994 for the asset caption "Fixed Assets - Equipment" and the fund equity caption "Investments in General Fixed Assets" includes a correction ofa prior period error (See Note 4). The amounts reflected for the asset and fund equity captions referred to above at June 30, 1993 have been restated to reflect this correction.

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS

STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds ofthe State of Georgia cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu ofa surety bond, the depository may pledge as collateral any one or more ofthe following securities as enumerated in the Official Code ofGeorgia Annotated
Section S0-17-S9:

(1) Bonds, bills, notes, certificates ofindebtedness or other direct obligations ofthe United States or ofthe State ofGeorgia.

(2) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities ofthe State ofGeorgia.

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GEORGIA FORESTRY COMMISSION
NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1994

EXHIBIT "E"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS

STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES (3) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose.

(4) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State ofGeorgia.

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

(6) Guarantee or insurance ofaccounts provided by the Federal Deposit Insurance Corporation.

As authorized in the Official Code ofGeorgia Annotated Section 50-17-53, the State Depository Board has adopted policies which allow agencies ofthe State ofGeorgia the option ofexempting demand deposits from the collateral requirements.

CATEGORIZATION OF DEPOSITS For purposes of analysis of custodial credit risk, cash deposits consist of all bank balances which include demand deposits and/or interest bearing accounts. These bank balances are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk.

Category 1 - Amounts covered by depository insurance or collateralized with securities (at market value) held by the Commission or by its agent in the Commission's name.

Category 2 - Amounts collateralized with securities (at market value) held by the financial institution's trust department or agent in the Commission's name.

Category 3 - Amounts collateralized with securities (at market value) held by the financial institution or by its trust department or agent, but not in the Commission's name, and amounts uncollateralized.

Canying ~

Built ~

Rilk Categories

2

3

CuhDcpolita

s

m " .31

s u,2 990 12

s 2 ,BO 40

s===,!!!ooo-

s 1,22402 72

- 13 -

GEORGIA FORESTRY COMMISSION
NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994

EXIIlBIT "E"

NOTE3: OPERATINGLEAsES

The Georgia Forestry Commission has entered into certain agreements to lease real property and equipment which are classified as operating leases. These leases generally contain provisions that, at the expiration date ofthe original term ofthe lease, the Commission has the option of renewing the lease on a year-to-year basis. Future minimum commitments for operating leases as of June 30, 1994, are listed below. Amounts are included only for multi-year leases and for cancellable leases for which an option to renew for the subsequent fiscal year has been exercised.

Fiscal Year Ending June 30
1995 1996 1997 1998 1999 2000 and Subsequent Total Future Minimum Commitments

$ 33,396.90 18,572.00 1,596.00 1,596.00 408.00 4,200.00
$ 59 768.90

Expenditures for rental of real property and equipment under operating leases for the year ended June 30, 1994, totaled $75,478.81.

NOTE 4: CHANGES IN GENERAL FIXED ASSETS

In accordance with the statutory definition of moveable personal property as defined in Official Code of Georgia Annotated Section 50-16-161, only those items with an acquisition cost of $1,000.00 or greater are reflected in the General Fixed Assets Account Group.

The following is a summary of changes of equipment in the General Fixed Assets Account Group during the fiscal year:

Balance July 1, 1993 Retroactive Restatement ofPrior Year Balance

$44,126,620.98 10,693,203.39

Additions Deductions

$54,819,824.37 3,785,707.16 -1.441.901.75

Balance June 30, 1994

$57,163.629 78

-14-

GEORGIA FORESTRY COMMISSION
NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1994

EXIIlBIT "E"

NOTE 5: GENERAL LONG-TERM DEBT

CHANGES IN GENERAL LONG-TERM DEBT During the year ended June 30, 1994, the following changes occurred in the compensated absences liability reported in the General Long-Tenn Debt Account Group:

Balance July 1, 1993 Additions
Annual Leave Earned and Utilized (Net) Salaries Salary Related Fringe Benefits (*)
Balance June 30, 1994

$2,541,129.06
139,284.78 205,051.66
S 2,885,465.50

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

NOTE 6: DEFERRED COMPENSATION PLAN

The State ofGeorgia offers its employees a deferred compensation plan in accordance with Internal Revenue Code Section 457. The plan, available to employees ofthe State of Georgia and county health departments, permits such employees to defer a portion oftheir salary until future years. Participants choose the option or options in which they wish to participate. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts ofcompensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the employee or other beneficiary) solely the property or rights ofthe State ofGeorgia subject only to the claims ofthe State's general creditors. Participant's rights under the plan are equal to those ofa general creditor ofthe State ofGeorgia in an amount equal to the fair market value ofthe deferred account ofeach participant. Financial information relative to the plan is presented in the financial report ofthe State Personnel Board - Merit System ofPersonnel Administration for the year ended June 30, 1994.

NOTE7: RETIREMENTPLANS

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA The Georgia Forestry Commission participates in the Employees' Retirement System of Georgia, a singleemployer, defined benefit pension plan. The Employees' Retirement System ofGeorgia was established by the
General Assembly of Georgia for the purpose of providing retirement allowances for employees ofthe State ofGeorgia. The Retirement System is funded through a combination ofemployee and employer contributions. Employees are required to contnbute a graduated percentage ofannual compensation. Employer contributions are for a specified percentage ofactive member payroll determined annually by an actuarial valuation. During the year ended June 30, 1994, the Commission contnbuted $3,078,312.00 to the Employees' Retirement System ofGeorgia. Participation in the Retirement System is not segregated by employee groups ofindividual governmental units and the Commission has no further liability under the retirement system other than future

- 15 -

GEORGIA FORESTRY COMMISSION
NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994

EXHIBIT "E"

NOTE7: RETIREMENTPLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA employer contributions as established for each fiscal year. Infonnation relative to the plan description, funding status and historical trends is presented in the financial report ofthe Employees' Retirement System ofGeorgia for the year ended June 30, 1994.
GEORGIA DEFINED CONTRIBUTION PLAN The State ofGeorgia also provides retirement coverage for temporary, seasonal, and part-time employees who are not eligible for membership in the Employees' Retirement System ofGeorgia referred to above through a single-employer defined contribution plan. The Georgia Defined Contribution Plan was established by the General Assembly of Georgia and is administered by the Board of Trustees of the Employees' Retirement System of Georgia. Covered employees are required to contribute 7.5% of their gross salary, with no matching contribution by the employer. A member who terminates employment may apply for a refund of contributions and interest. Benefits are based solely on the amount contributed by the employee plus investment earnings. Upon discretion ofthe Board ofTrustees, members who leave employment with less than $3,500.00 credited to their account may be required to make a lump-sum withdrawal. Members are eligible to retire at the age of65 with the option ofreceiving a periodic payment based on mortality tables and interest accumulation as adopted by the Board of Trustees of the Employees' Retirement System of Georgia. Information relative to the plan description and funding status is presented in the financial report of the Employees' Retirement System ofGeorgia for the year ended June 30, 1994.
NOTE 8: LEAVE POLICIES
Employees earn ten hours of sick leave each month with a maximum accumulation ofninety days. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination of employment.
Employees earn annual leave ranging from ten to fourteen hours each month depending upon the employees' length ofcontinuous State service with a maximum accumulation offorty five days. Employees are paid for unused accumulated annual leave upon retirement or termination ofemployment.
Certain employees who retire with one hundred and twenty days or more offorfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System ofGeorgia. See Note 1 - Compensated Absences
NOTE9: CONTINGENCIES
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditures which are disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although the Commission expects such amounts, ifany, to be immaterial to its overall financial position.

- 16-

GEORGIA FORESTRY COMMISSION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXIIlBIT "E"

NOTE9: CONTINGENCIES
Litigation, claims and assessments filed against the Georgia Forestry Commission, if any, are generally considered to be actions against the State of Georgia. Pursuant to the Official Code ofGeorgia Annotated, the Department of Administrative Services maintains a program of purchased insurance and self- insurance which provides coverage for such litigation, claims and assessments. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State ofGeorgia Comprehensive Annual Fmancial Report for the fiscal year ended June 30, 1994.
NOTE JO; BONDING INFORMATION
Mr. John W. Mixon, Director, is bonded in the amount ofSl0,000.00 with the Old Republic Surety Group, their Bond No. XPO 208419, on which premium has been paid to January 19, 1996.
The Director and all employees ofthe Georgia Forestry Commission are bonded under a Public Employees Blanket Bond written by Employers Insurance of Wausau, their Bond No. 1450-00-110723, on which the premium was paid to October 1, 1994. Under this agreement the Public Employee Dishonesty Coverage insures the Commission to a maximum of$1,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees. The Faithful Performance ofDuty Coverage insures the Commission to a maximum of $100,000.00 against loss sustained from failure of its employees to perform faithfully their duties or to account properly for all monies and property received by virtue oftheir position or employment.
All employees ofthe Georgia Forestty Commission are also bonded under a Commercial Crime Policy written by the United States Fire Insurance Company, their Policy No. 626 011675 2, on which the premium was paid to October 1, 1994. Under this additional public employee dishonesty coverage, the policy insures the Commission to a maximum of$4,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees.

-17-

SUPPLEMENTARY INFORMATION -19-

GEORGIA FORESTRY COMMISSION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30. 1994

EXHIBIT "F"

FUND
Conference Deposits Timber Escrow Deposits Ti ber Sa1es

ASSETS/ LIABILITIES JULY 1, 1993
------------

ADDITIONS
---------

DELETIONS
---------

ASSETS/ LIABILITIES JUNE 30, 1994
-------------

$ 25,922.13$ 31,977.31 $ 34,535.39 $ 23,364.05

57,107.05

54,555.55

45,656.33

66,006.27

1,725,481.32 1,725,481.32
------------- ------------- ------------- -------------

$ 83,029.18$ 1,812,014.18$ 1,805,673.04$ 89,370.32

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 20 -

GEORGIA FORESTRY COMMISSION
SCHEDULE OF APPROVED BUDGET
YEAR ENDED JUNE 30. 1994

SCHEDULE "1"

FUNDS AVAILABLE
REVENUES
State Appropriation Federal Revenues Other Revenues Retained

ORIGINAL

AMENDED

BUDGET

APPROPRIATION APPROPRIATION ADJUSTMENTS

TOTAL

$33,596,709.00 820,000.00
3,910,334.00$

$33,596,709.00 $ 2,798,309.00 3,618,309.00 -22,380.00 677,188.00 4,565,142.00

$38,327,043.00$ -22,380.00 $3,475,497.00 $41,780,160.00
------------ ------------ ------------ -----------

EXPENDITURES

Personal Services Regular Operating Expenses Travel Motor Vehicle Purchases Equipment Computer Charges Real Estate Rentals Telecommunications Per Diem, Fees and Contracts Capital Outlay Ware County Grant for Southern Forest World
Ware County Grant for Road Maintenance

$28,004,357.00$ 5,075,056.00 150,185.00 1,212,005.00 1,800,000.00 300,279.00 52,245.00 1,015,119.00 427,797.00 200,000.00 30,000.00 60,000.00
---------- --

-22,380.00 $ 70,400.00 $28,052,377.00

2,172,250.00 7,247,306.00

15,385.00 165,570.00

1,212,005.00

87,071.00 1,887,071.00

86,544.00 386,823.00

3,000.00

55,245.00

1,015,119.00

933,847.00 1,361,644.00

107,000.00 307,000.00

30,000.00

60,000.00

$38,327,043.00$ -22,380.00 $3,475,497.00 $41,780,160.00

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 21 -

GEORGIA FORESTRY COMMISSION CASH AND CASH EQUIVALENTS
JUNE 30. 1994
NONINTEREST BEARING ACCOUNTS
Citizens Bank, Pinehurst, Georgia First Union National Bank of Georgia, Macon, Georgia NationsBank of Georgia, Macon, Georgia Tattnall Bank, Reidsville, Georgia Trust Company Bank of Middle Georgia, Macon, Georgia

SCHEDULE "2"

$

1,000.00

20,660.00

21,603.26

1,000.00

-75,767.83

$ -31,504.57 ca:

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 22 -

GEORGIA FORESTRY COMMISSION SCHEDULE OF FEDERAL REVENUES
YEAR ENDED JUNE 30, 1994
PROGRAM
Agriculture, U. S. Department of Plant and Animal Disease, Pest Control, and Animal Care Direct Agricultural Conservation Program Direct Forestry Incentives Program Direct Conservation Reserve Program Direct Forestry Research Direct Cooperative Forestry Assistance Direct Resource Conservation and Development Direct
Energy, U.S. Department of State Energy Conservation Through Office of the Governor
Environmental Protection Agency, U. S. Water Quality Management Planning Through Department of Natural Resources
Small Business Administration, U.S. Procurement Assistance to Small Businesses Direct Natural Resource Development Tree Planting Program Direct
Tennessee Valley Authority Regional Biomass Energy Program 'Direct

SCHEDULE "3"

CFDA NUMBER

AMOUNT

10.025 10.063 10.064 10.069 10.652 10.664 10.901

$ 103,825.17 129,400.00 85,700.00 23,950.87 41,035.90
2,453,896.16 15,000.00

81.041

14,181.57

66.454

9,762.22

59.009 59.045

31,695.14 758,943.56

62.0FA

9,148.56

$3,676,539.15

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 23 -

GEORGIA FORESTRY COMMISSION
SCHEOULE OF OTHER REVENUES RETAINED
YEAR ENDED JUNE 30. 1994

SCHEDULE "4"

Cooperative Agreements Atlanta, City of Other Miscellaneous Vendors
Donations
Earnings - Forestry Service Cover Crops Fire Supression Fireline Plowing Rouged Timber Rural Fire Defense Sales Seedling Sales Site Preparation State Forest Sales T111ber Markings Tree Planter Rental Van Pool
Fire Protection from Counties
Insurance Recoveries
Patronage Refunds
Reimbursnents for Construction Glynn County Commissioners Lumpkin County Commissioners Pickens County Commissioners Toombs County Commissioners
Reimbursements for Damaged/Lost Equipment
Rents
State Housing for Employees
Other

$ 117,444.48
197,779.57 $
-------------

315,224.05 168,305.00

$ 1,954.07 7,174.35
378,999.59
545.55 277,517.59 1,763,729.58
20.00 600,636.77
2,529.44 16,382.23 4,317.92
-------------

3,053,807.09 876,222.00

117,179.05

3,540.42

$ 52,068.00 6,072.38
8,240.67 12,735.00
-------------

79,116.05 700.83

1,700.00

18,718.30

95.76
-------------

$4,634,608.55
-------------

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 24 -

GEORGIA FORESTRY COMMISSION
SCHEDULE OF OTHER OPERATING EXPENSES YEAR ENDED JUNE 30, 1994
REGULAR OPERATING EXPENSES
Clipping and Mailing Services Customs Duty Charge Emergency Fire-Fighting Expenses Freight, Express and Storage Laundry and Garbage Services Legal Advertising Physical Examinations Registration Fees Relocation of Employees Soil Testing Subscriptions and Dues

SCHEDULE "5"

$

439.15

178.29

15,394.28

3,622.67

14,827.12

6,053.59

1,462.00

55,147.87

666.58

6,911.30

36,688.97

$ 141,391.82
=====a=======-==

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 25 -

GEORGIA FORESTRY COMMISSION SCHEDULE OF EXTRAORDINARY EXPENDITURES
YEAR ENDED JUNE 30. 1994
REGULAR OPERATING EXPENSES
Epps, David D. Settlement of Property Damage Suit
Free, Terry D. Settlement of Property Damage Suit
Lindsey, Willie H. Settlement of Property Damage Suit
Posey, Gerald A. Settlement of Property Damage Suit
Pritchett, James L. Settlement of Property Damage Suit

SCHEDULE "6"

$

100.00

245.00

200.00

500.00

102.85

$ 1,147.85 z-=

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 26 -

SECTIONil FINDINGS AND IMPROPER OR QUESTIONED COSTS

GEORGIA FORESTRY COMMISSION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1994

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status offindings disclosed in the review report for the year ended June 30, 1993, is summarized below:

Audit Control Number

Status ofFinding

420-93-01

Corrective Action Implemented

CURRENT YEAR

EXPENDITURES/LIABILITIES/DISBURSEMENTS Failure to Comply with Statewide Travel Regulations Audit Control Number 420-94-01

For the year under review, an examination of the Georgia Forestry Commission's travel expenditures was performed to test the validity and accuracy ofthe travel transactions. The expenditures examined revealed that the Commission failed to comply with the statewide travel regulations as established by the State Auditor's Office and the Office ofPlanning and Budget. The Commission reimbursed employees for noon meals when the meals were not an integral part ofa scheduled meeting. Statewide travel regulations state, in part, that:

"Reimbursement may be allowed... for noon meals not associated with overnight lodging ifthe meals are an integral part of a scheduled meeting and the individual is an official representative of the department, or ifthe meals are a part of a required registration fee."

The Georgia Forestry Commission should discontinue the practice ofreimbursing employees for the noon meal not associated with overnight lodging unless the meal is an integral part of a scheduled meeting.