Review report, Georgia Agrirama Development Authority, a component unit of the state of Georgia, year ended June 30, 1996

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REVIEW REPORT GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY
A COMPONENT UNIT OF THE STATE OF GEORGIA
YEAR ENDED JUNE 30, 1996

GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY - TABLE OF CONTENTS -

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

3

C STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

BUDGET FUND

4

D STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

COMPARED TO BUDGET

BUDGET FUND

6

E NOTES TO THE FINANCIAL STATEMENTS

7

SUPPLEMENTARY INFORMATION

SCHEDULES

1 SCHEDULE OF APPROVED BUDGET

20

2 CASH AND CASH EQUIVALENTS

21

3 SCHEDULE OF RESTRICTED FUND ACTIVITY

22

4 SCHEDULE OF OTHER OPERATING EXPENSES

23

5 SUMMARY OF SALARIES, TRAVEL, AND PER DIEM AND FEES

24

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
September 20, 1996

Honorable Zell Miller, Governor Members of the General Assembly of Georgia Members ofthe Georgia Agrirama Development Authority
and Honorable Teresa Veazey, Executive Director
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 Agrirama Development Authority as of and for the year ended June 30, 1996, 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 Agrirama Development Authority_
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 of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with the basis of accounting described in Note 1.
Our review was made for the purpose of expressing 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 (Schedules 1 through 5) is presented only for supplementary analysis purposes. Such information has been subjected to the inquiries and

96ARL-4

analytical procedures applied in the review of the financial statements and we arenot aware of any material modifications that should be made thereto.
Respectfully submitted,
~
Claude L. Vickers State Auditor
CLV:gp 96ARL-4

FINANCIAL STATEMENTS - 1-

GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY COMBINED BALANCE SHEET (STATUTORY BASIS)
ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30 1996

EXHIBIT "A"

ASSETS
cash and cash Equivalents (See Schedule)
Investments
Inventories
Fixed Assets Land, Buildings and Equipment
Amounts to be Provided for Payment of Accrued Compensated Absences Installment Purchase Commitments

GOVERNMENTAL FUND TYPE BUDGET

ACCOUNT GROUPS

GENERAL

GENERAL

FIXED

LONG-TERM

ASSETS

DEBT

TOTALS (Memorandum Only)

$

51,309.39

$

0.00

$

49,741.31

$

51,309.39 $

87,663.98

$

0.00 $ 100,000.00

$

49,741.31 $

53,861.07

$ 2,735,823.54

$ 2,735,823.54 $ 2,589,843.68

$ 43,934.68 $ 35,000.00
$ 78,934.68 $

43,934.68 $ 35,000.00
78,934.68 $

44,260.18 70,000.00
114,260.18

Total Assets

$

101,050.70 $ 2,735,823.54 $ 78,934.68 $ 2;915,808.92 $ 2,945,628.91

LIABILITIES AND FUND EQUITY

Liabilities

Accounts Payable

$

Payroll Withholdings

Compensated Absences

Installment Purchases

Total Liabilities

$

Fund Equity

Investment in General Fixed Assets

Fund Balances

Reserved

Inventories

$

Restricted Funds

Unreserved

Undesignated

Total Fund Equity

$

7,664.05 1,773.74
9,437.79

$
$ 43,934.68 35,000.00
$ 78,934.68 $

7,664.05 $ 1,773.74 43,934.68 35,000.00
88,372.47 $

16,857.63 1,560.20
44,260.18 70,000.00
132,678.01

$ 2,735,823.54

$ 2,735,823.54 $ 2,589,843.68

49,741.31 13,559.67
28,311.93
91,612.91 $ 2,735,823.54

49,741.31 13,559.67

53,861.07 112,117.09

28,311.93

57,129.06

$ 2,827,436.45 $ 2,812,950.90

Total Liabilities and Fund Equity

$

101,050.70 $ 2,735,823.54 $ 78,934.68 $ 2,915,808.92 $ 2,945,628.91

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.
-2-

GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY STATEMENT OF CHANGES IN FUND BALANCES (STATUTORY BASIS)
GOVERNMENTAL FUND TYPE YEAR ENDED JUNE 30.1996

EXHIBIT-B-

FUND BALANCES - JULY 1
Reserved Unreserved
Undesignatecl

BUDGET FUND YEAR ENDED JUNE 30,1996 JUNE 30,1995

$ 165,978.16 $ 163,651.60

57,129.06

137,395.48

$ 223,107.22 $ 301,047.08

See Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
The notes to the financial statements are an integral part of this statement. -3-

GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND
YEAR ENPED JUNE 30 1996

EXHIBITC

FUNpS AVAILABLE
REVENUES
FEDERAL REVENUES
OTHER REVENUES RETAINED Contracts Georgia Department of Agriculture Georgia Department of Transportation Gifts and Grants Restricted Funds (See Schedule) Unrestricted Sales Concession Stand Country Store Departmental Gate Receipts On - Site Manufactured Products Other Cash Over/Short Interest Earned Sale of Photocopies Telephone Commissions Vendor's Compensation of Sales Tax Collections Other
Total Other Revenues Retained
Total Revenues
CARRY-OvER FROM PRIOR YEAR
Transfer from Reserved Fund Balance Reserved Unreserved
Total Carry-Over from Prior Year

TOTALS YEAR ENDED JUNE 30,1996 JUNE 30, 1995

$

0.00 $ 86,314.04

$ 705,708.00 $ 623,860.00

2,766.45

21,578.51

17,830.00 23,312.92

82,040.00 35,709.73

66,615.25 100,732.88
6,968.90 193,566.94 26,265.55

70,857.21 115,518.06 20,278.01 172,406.99 22,041.10

200.48 10,068.19
0.00 0.00 519.63 347.64

54.53 9,330.53
155.00 297.86 515.56 443.63

$ 1,154,902.83 $ 1,175,086.72

$ 1.154,902.83 $ 1,261,400.76

$ 165,978.16 $ 163,651.60

57,129.06

137,395.48

$ 223,107.22 $ 301,047.08

Total Funds Available

$ 1,378,010.05 $ 1,562A47.84

EXPENDITURES
PERSONAL SERViCES
Salaries and Wages Employer's Contributions for:
F.I.C.A. Retirement - Health Insurance Liability Insurance Unemployment Compensation Insurance Workers' Compensation Insurance
REGULAR OPERATING EXPENSES
Motor Vehicle Expenses Supplies and Materials Repairs and Maintenance Utilities
See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
The notes of the financial statements are an integral part of this statement.
-4-

$ 573,603.21 $ 567,861.43

27,437.53 51,167.89 71,644.69
6,188.00 1,585.00 75,975.00

27,526.25 52,740.39
69,788.39 6,154.00 1,066.00
74,725.00

$ 807,601.32. $ 799,861.46

$ 12,995.08 $

9,266.19

38,003.86

40,723.18

14,787.75

20,911.56

32,705.04

29,676.35

GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND
YEAR ENDED JUNE 30 1996

EXHIBIT .C"

EXPENDITURES
REGULAR OPERATING EXPENSES
Rents (Other than Real Estate) Insurance and Bonding Other Operating Expenses (See Schedule) Publications and Printing
TRAVEL
EQUIPMENT
Equipment Purchases
COMPUTER CHARGES
EqUipment Equipment Purchases
TELECOMMUNICATIONS
pER DIEM FEES AND CONTRACTS
Per Diem and Fees Contracts
CAPITAL OUTLAY
Personal Services Salaries and Wages Employer'S Contributions for. F.I.C.A. Retirement Health Insurance
Other Costs Supplies and Materials Repairs and Maintenance Other Operating Expenses (See Schedule)
Equipment EqUipment Purchases
Per Diem, Fees and Contracts Per Diem and Fees Contracts
QII:ffIl
GOODS FOR RESALE Other Costs Supplies and Materials
Total Expenditures
Excess of Funds Available over Expenditures

TOTALS YEAR ENDED JUNE 30,1996 JUNE 30,1995

$ 27,321.00 $ 11,929.31 14,783.66 1,n2.70
$ - -15=4,2= 98.= 40 $
$--~7~11:.13.$

31,235.50 7,790.15
14,498.45 9,541.10
163,642.48
2,751.51

$-_---:::.0:..0::0. $

8,938.00

$

7.449.00 $

0.00

$

7,075.34 $

7,496.92

$

1,820.34 $ 25,578.81

890.38

782.59

$

2,710.72 $ 26,361.40

$

7,657.05 $

585.n 1,197.57
957.12

75,909.37 0.00
500.00

37,828.97

13,905.00 75,350.49

$ -2= 13,= 891= .34 $

8,931.54
683.26 1,396.89 1,116.44
44,319.01 400.00 525.00
30,000.00
2,356.20 150,500.95
240,229.29

$ 92,659.89 $ 90,059.56

$ 1,286,397.14 $ 1,339,340.62

91,612.91

223,107.22

$ 1,378,010.05 $ 1,562,447.84

See Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
The notes of the financial statements are an integral part of this statement.
-5-

GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
YEAR ENDED JUNE 30,1996

EXHIBIT-D-

FUNDS AVAILABLE REVENUES
Other Revenues Retained CARRYOVER FROM PRIOR YEAR
Transfer from Reserved Fund Balance

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$ 1,337,575.00 $ 1,154,902.83 $

-182,672.17 .

5,500.00

223,107.22

217,607.22

$ 1,343.075.00 $ 1,378,010.05 $ _ _...;;34..:.:,~93;;.;;,5,;,,;;'05~

EXPENDITURES
Personal Services Regular Operating Expenses Travel Computer Charges Telecommunications Per Diem, Fees and Contracts Capital Outlay Goods for Resale

$

837,692.00 $

179,636.00

1,500.00

9,000.00

7,500.00

3,380.00

210,367.00

94,000.00

807,601.32 $ 154,298.40
711.13 7,449.00 7,075.34 2,710.72 213,891.34 92,659.89

30,090.68 25,337.60
788.87 1,551.00
424.66 669.28 -3,524.34 1,340.11

Excess of Funds Available over Expenditures .

- - - - ' - - - - $ 1,343,075.00 $ 1,286,397.14 $

56,677.86

========== $

91,612.91 $

91,612.91

See Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement
-6-

GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996

EXHIBIT "E"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Georgia Agrirama Development Authority is an instrumentality of the State of Georgia and a public corporation. The fourteen (14) members of the Authority are accountable as trustees. The Authority is assigned to the Department of Agriculture for administrative purposes and support services. The Georgia Agrirama Development Authority is considered a component unit of the State of Georgia and is included within the State ofGeorgia reporting entity for financial reporting purposes because of the significance ofits legal, operational and financial relationship with the State of Georgia. These reporting entity relationships are defined in Section 2100 of the Governmental Accounting Board Codification of Governmental Accounting and Financial Reporting Standards.
FUND ACCOUNTING
The Georgia Agrirama Development Authority uses a fund and account groups to report on its financial position and the results of its operations determined in conformity with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal.and contractual provisions. The minimum number offunds are maintained consistent with legal and managerial requirements. Account groups are a reporting device used to account for certain assets and liabilities of the governmental funds not recorded directly in those funds. The fund 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 operating budget approved by the Georgia Agrirama Development Authority. This presentation differs from generally accepted accounting principles in that such principles provide that the Budget Fund of the Authority be accounted for as a Proprietary Fund Type - Enterprise Fund. An Enterprise Fund is used to account for operations that are financed and operated in a manner similar to private business enterprises, where the intent is that costs ofproviding goods or services to the general public on a continuing basis are financed or recovered primarily through user charges or that periodic measurement of revenues earned and expenses incurred are appropriate for capital maintenance, public policy, accountability and other purposes.
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 cost or at estimated historical cost if historical cost is not practically determinable. Donated fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded values. No depreciation has been provided on general fixed assets. This methodology ofaccounting for general fixed assets differs from generally accepted accounting principles in that the Budget Fund of the Authority should be accounted for as a Proprietary Fund TypeEnterprise Fund. Fixed assets utilized in the operations of proprietary fund types should be recorded as
-7-

GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996

EXHIBIT "E"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FUND ACCOUNTING
ACCOUNT GROUPS
GENERAL FIXED ASSETS assets of such funds, rather than in the General Fixed Assets Account Group. The depreciation of such fixed assets should be recorded as an expense of proprietary fund types in order to more effectively determine the total cost of providing goods and services.
The cost ofnormal maintenance and repairs that do not add to the value ofthe asset or materially extend assets' lives are not included in the General Fixed Assets Account Group. Material improvements adding to the value or useful life of the assets are included in the General Fixed Assets Account Group.
GENERAL LONG-TERM DEBT - The account group used to report the noncurrent portions of certain governmental long-term liabilities, such as claims, judgments and compensated absences, which will be paid from future resources. This presentation differs from generally accepted accounting principles in that the Budget Fund of the Authority should be reflected as a Proprietary Fund Type - Enterprise Fund. The liabilities and related expenses for the items listed above should be recorded as a part of the proprietary fund type in order to more effectively determine the total cost of providing goods and services.
BASIS OF ACCOUNTING MEASUREMENT FOCUS
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. Governmental funds should be accounted for using the flow of current financial resources measurement focus. With this measurement focus, operating statements present increases and decreases in net current assets and unreserved fund balance is a measure of available spendable resources.
Proprietary fund types, on the other hand, should be accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities are included on the balance sheet. Operating statements of these funds present increases, (i.e., revenues) and decreases, (i.e., expenses) in net total assets. This measurement focus emphasizes the determination of net income. In accordance with accounting practices prescribed or permitted by statutes and regulations ofthe State of Georgia, the Budget Fund, which should be reflected as a Proprietary Fund Type - Enterprise Fund in accordance with generally accepted accounting principles, utilizes the current financial resources measurement focus.
GOVERNMENTAL FUND TYPE
BUDGET FOND
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 of accounting. Under the modified accrual basis ofaccounting, revenues are recognized when susceptible to accrual (i.e., when they are "measurable and available"). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to pay liabilities of the current
-8-

GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 3D. 1996

EXHIBIT "E"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING GOVERNMENTAL FUND TYPE BUDGETFUND
period. Revenues that are accrued include primarily certain amounts earned under operating agreements with other parties. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on general long-term debt which is recognized when due, and certain compensated absences, claims and judgements which are recognized when the obligations are expected to be liquidated with expendable available financial resources. The Budget Fund, which should be reflected as a Proprietary Fund Type Enterprise Fund in accordance with generally accepted accounting principles, should be maintained on the accrual basis of accounting.

Contractual obligations for goods and services which have not been received at the end of the fiscal year are

Tecognized as expenditures and liabilities in the accompanying financial statements. The recognition of

encumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted

by statutes and regulations of the State of Georgia, but is not consistent with generally accepted accounting

principles, which do not provide for the recording of encumbrances within the Proprietary Fund Type -

Enterprise Fund.

.

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 for proprietary fund types in that immaterial adjustments should be reported as current period revenues and expenses.

In accordance with policies of the State of Georgia, the cost of annual and sick leave is recorded when paid rather than when earned. The cost of annual leave earned but not yet paid at the end of the fiscal year is reflected in the General Long-Term Debt Account Group, in that such liability is not expected to be financed from expendable available financial resources. This practice differs from generally accepted accounting principles for proprietary fund types in that the total accrued liability for compensated absences at the end of the fiscal year should be reflected as a fund liability ofthe proprietary fund type involved.

BUDGET The budget ofthe Georgia Agrirama Development Authority is adopted on a basis consistent with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia and is compiled in the same manner as all State departments. Expenditures are classified by budget unit object classes as provided in Act No. 476 ofGeorgia Laws 1995 (as approved April 21, 1995) and amended by Act No. 513 of Georgia Laws 1996 (as approved February 16, 1996). This budget is considered to be an appropriated budget and is referred to in these notes as the Amended Appropriations Act of 1995-1996. There is no legal prohibition regarding overexpenditure of the aggregate budget.

-9-

GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30.1996

EXHIBIT "E"

NOTE 1: Sillv1MARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS Cash and Cash Equivalents include currency on hand and demand deposits with banks and other financial institutions.
INVENTORIES No inventories of supplies are reported in these financial statements. Expendable supplies are recorded as expenditures at the time of purchase.
Inventories ofgoods for resale are valued at cost on the Combined Balance Sheet (Statutory Basis) using the first-in/first-out (FIFO) method. The consumption method is used to account for the use of inventories. Under the consumption method, the costs of inventories are recorded as expenditures when the inventories are consumed rather than when purchased.
RESERVED FUND BALANCE Reserves represent those portions of fund 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 of goods for resale, under the consumption method, are offset by a portion of fund balance to provide working capital for managing a reasonable level of inventories.
RESTRICTED FUNDS Funds received as Restricted Funds (Gifts and Grants) are donations and interest earnings from these donations. These funds are restrictive in nature and are to be used only for restoring specific projects.
COMPENSATED ABSENCES Compensated absences represent obligations of the Authority relating to employee's rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulating annual and compensatory leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount will not be liquidated with expendable available financial resources.
MEMORANDUM ONLY - TOTAL COLUMNS . Total columns on the Combined Balance Sheet (Statutory Basis) are captioned "Memorandum Only" because they do not represent consolidated financial information and are presented only to facilitate financial analysis. The columns do not present information that reflects 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 of this data.

- 10 -

GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30.1996

EXHIBIT "E"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

COMPARATIVE DATA Comparative total data for the prior year have been presented in selected sections of the accompanying financial statements in order to provide an understanding of the changes in the Authority's financial position and operations. Comparative totals have not been included on statements where their inclusion would not provide enhanced understanding of the Authority's financial position and operations or would cause the statements to be unduly complex and difficult to understand. Also, certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year's presentation.

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS

STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES

Funds of the 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 of a surety bond, the depository may pledge as

collateral anyone or more ofthe following securities as enumerated in the Official Code of Georgia Annotated

Section 50-17-59:

.

(1) Bonds, bills, certificates of indebtedness, notes, or other direct obligations of the United States or of the State of Georgia.

(2) Bonds, bills, certificates ofindebtedness, notes, or other obligations of the counties or municipalities of the State of Georgia.

(3) Bonds ofany 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.

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

(5) Bonds, bills, certificates ofindebtedness, notes, 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, or 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.

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

As authorized in the Official Code ofGeorgia Annotated Section 45-8-11, the Georgia Agrirama Development Authority has the authority of exempting demand deposits from the collateral requirements.

- 11 -

GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1996

EXlllBIT "E"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS

CATEGORIZAnON 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. The bank balances as of June 30, 1996, 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 Authority or by its agent in the Authority's name.

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

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

Cash Deposits

Carrying Amount

Bank Balances

Risk Categories

2

3

$ 49.60939 $ 14039026 $ 14039026 $

o00 $====,O~O~O

NOTE 3: INSTALLMENT PURCHASE COMMITMENTS

The Georgia Agrirama Development Authority acquired certain equipment through a multi-year installment purchase. At June 30, 1996, the future minimum commitment under the installment purchase for equipment was as follows:

Fiscal Year Ending June 30

1997

$ 35.000.00

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 equipment 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 in the General Fixed Assets Account Group during the fiscal year:

- 12-

GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996

EXHIBIT "E"

NOTE 4: CHANGES IN GENERAL FIXED ASSETS

Balance July 1, 1995 Additions Balance June 30, 1996

Land and Land
Improvements

Buildings

Equipment

Total

$ 449,669.00 $ 1,911,964.15 $ 228,210.53 $ 2,589,843.68

135,701.89

10.277.97

145,979.86

$ 44966900 $ 204766604 $ 23848850 $ 273582354

NOTE 5: GENERAL LONG-TERM DEBT

CHANGES IN GENERAL LONG-TERM DEBT A summary of changes in General Long-Term Debt for the year ended June 30, 1996, follows:

Compensated Absences

Installment Purchase
Commitments

Total

Balance July 1, 1995

$

Additions

Annual Leave Earned and Utilized (Net)

Salaries

Salary Related Fringe Benefits

Deductions

44,260.18 $
-326.24 0.74

70,000.00 $ 114,260.18

35,000.00

-326.24 0.74
35,000.00

Balance June 30, 1996

$ 43,93468 $ 35,00000 $ 7893468

NOTE 6: RISK MANAGEMENT

Public Entity Risk Pool

The State Personnel Board, Merit System of Personnel Administration administers for the State of Georgia a program ofheaIth benefits for the employees ofunits of government of the State of Georgia, units of county government and local education agencies located within the State of Georgia. This plan is funded by participants covered in the plan, by employers' contributions paid by the various units of government participating in the plan, and appropriations made by the General Assembly of Georgia. The State Personnel Board, Merit System ofPersonnel Administration has contracted with Blue Cross Blue Shield of Georgia to process claims in accordance with the State Employees' Health Benefit Plan as established by the State Personnel Board.

- 13 -

GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996

EXHIBIT "E"

NOTE 6: RISK MANAGEMENT
Other Risk Management
The Department ofAdministrative Services (DOAS) has the responsibility for theState of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk ofloss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts ofcommercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The Georgia Agrirama Development Authority is a component unit of the State of Georgia, and as such, is covered by the State of GeOrgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment. (See Note 10 - Contingencies)
NOTE 7: 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 of the State of Georgia and county health departments, permits such employees to defer a portion oftheir salary until future years. Participation in the plan is optional. 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 of compensation 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 of the State of Georgia subject only to the claims of the State's general creditors. Participant's rights under the plan are equal to those of a general creditor of the State of Georgia in an amount equal to the fair market value of the deferred account of each participant. Financial information relative to the plan will be presented in the State of Georgia Comprehensive Annual Financial Report for the year ended June 30, 1996.
NOTE 8: RETIREMENTPLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Plan Description The Georgia Agrirama Development Authority participates in the Employees' Retirement System of Georgia (tiERS"), a single-employer, defined benefit plan established by the General Assembly of Georgia for the purpose of providing retirement allowances for employees of the State of Georgia. The Authority's payroll for the year ended June 30, 1996, for employees covered by ERS was $334,817.72. The Authority's total payroll for all employees was $581,260.26.

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GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996

EXlllBIT "E"

NOTE 8: RETffiEMENTPLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Benefits The benefit structure of ERS was significantly modified on July 1, 1982. Unless elected otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July 1, 1982, is an "old plan" member subject to the plan provisions in effect prior to July 1, 1982. All other members are "new plan" members subject to the modified plan provisions.
Under both the old plan and new plan, members become vested after 10 years of creditable service. A member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 65. If 10 years of service is completed and age 60 is reached, the member may retire with a reduced benefit. Additionally, there are certain provisions allowing for retirement after 30 years of service regardless of age.
Retirement benefits paid to members are based upon a formula which considers the monthly average of the member's highest eight consecutive calendar quarters of salary, the number of years of creditable service, and the member's age at retirement. Postretirement cost-of-living adjustments are also made to member's benefits. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension at reduced rates to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS.
Funding Status and Progress Funding status and progress information is presented in the ERS June 30, 1~96, financial report which may be obtained through ERS.
Contributions Required and Contributions Made As established by State statute, all full-time employees of the State of Georgia and its political subdivisions, who are not members ofother state retirement systems, are eligible to participate in the ERS. Both employer and employee contributions are established by State statute.
Under the old plan, member contributions consist of employee contributions paid by the employee of 1.25% ofcompensation and 4.75% ofcompensation paid by the Authority on behalf of the employee. Under the new plan, member contributions consist solely of 1.25% of compensation paid by employee. The Authority also is required to contribute at a specified percentage of active member payroll determined annually by actuarial valuation. For the year ended June 30, 1996, the ERS employer contribution rate for the Authority amounted to 14.89O!cl ofcovered payroll and included the 4.75% contributed on behalfofthe employee under the old plan referred to above. The employer contributions are projected to liquidate the unfunded actuarial liability within 20 years based upon the actuarial valuation of June 30, 1995. Employer contributions are also made on amounts paid for accumulated leave to retiring employees.
Actuarial assumptions used by the ERS to compute actuarially determined contribution requirements are the same as those used to compute the pension benefit obligation.
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GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1996

EXlllBIT "E"

NOTE 8: RETIREMENTPLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Contributions Required and Contributions Made Total contributions to the plan made during fiscal year 1996 amounted to $54,039.58, ofwhich $49,854.36 was made by the Authority and $4,185.22 was made by employees. These contributions met the requirements of the plan.
Trend Information Historical trend information is presented in the ERS June 30, 1996, financial report which may be obtained through ERS. This information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due.
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description The Georgia Agrirama Development Authority participates in the Georgia Defined Contribution Plan ("GDCP") which is a single-employer defined contribution plan established by the Georgia General Assembly for the purpose ofproviding retirement coverage for State employees who are temporary, seasonal, and parttime and are not members of a public retirement or pension system. GDCP is administered by the Employees' Retirement System Board of Trustees. The Authority's payroll for the year ended June 30, 1996, for employees covered by GDCP was $240,179.46. The Authority's total payroll for all employees was $581,260.26.
Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board. If a member has less than $ 3,500 credit to hislher account, the Board has the option of requiring a lump sum distribution to the member in lieu of making periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary.
Contributions and Vesting Member contributions are seven and one-half percent (7.5%) of gross salary. There are no employer contributions. Earnings are credited to each member's account in a manner established by the Board. Upon termination of employment, the amount of the member's account is refundable upon request by the member. Total contributions made by employees during fiscal year 1996 amounted to $18,013.92 which represents 7.5% of covered payroll. These contributions met the requirements of the plan.
NOTE 9: LEAVB POLICIES
Employees earn ten hours of sick leave each month with a maximum accumulation of ninety days. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination of employment.
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GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1996

EXHIBIT "E"

NOTE 9: LEAVB POLICIES
Employees earn annual leave ranging from ten to fourteen hours each month depending upon the employees' length of continuous State service with a maximum accumulation of forty five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. See Note 1 - Compensated Absences.
Certain employees who retire with one hundred and twenty days or more of forfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System of Georgia.
NOTE 10: CONTINGENCIES
Litigation, claims and assessments filed against the Georgia Agrirama Development Authority, if any, are generally considered to be actions against the State of Georgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 1996.
NOTE 11: BONDING INFORMATION
The Executive Director and all employees ofthe Georgia Agrirama Development Authority are bonded under a Public Employees Blanket Bond written by Employers Insurance of Wausau, their Bond No. 1450-02110723, on which the premium was paid to October 1, 1996. Under this agreement the Public Employee Dishonesty Coverage insures the Authority to a maximum of $1,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees. The Faithful Performance of Duty Coverage insures the Authority to a maximum of $1,000,000.00 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 of their position or employment.
All employees of the Georgia Agrirama Development Authority are also bonded under Commercial Crime Policies written by the United States Fire Insurance Company, their Policy Nos. 626 012292 6 and 626 012294 4, on which premiums were paid to October 1, 1996. Under these additional public employee dishonesty coverages, the policies insure the Authority to a maximum of $9,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees and from failure of its employees to perform faithfully.

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'Bla-V"\ Ie Pj 1'6

I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I

SUPPLEMENTARY INFORMATION
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GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY SCHEDULE OF APPROVED BUDGET YEAR ENDED JUNE 30.1996

FUNDS AVAILABLE REVENUE
Other Revenues Retained CARRY-OVER FROM PRIOR YEAR
Transfer from Fund Balance

ORIGINAL

AMENDED

BUDGET

APPROPRIATION APPROPRIATION ADJUSTMENTS

TOTAL

$

1,366,188.00 $

43,301.00 $

-71,914.00 $ 1,337,575.00

0.00

5,500.00

0.00

5,500.00

$

1,366,188.00 $

48,801.00 $

-71,914.00 $ 1,343,075.00

EXPENDITURES
Personal Services Regular Operating Expenses Travel Motor Vehicle Purchases Equipment Computer Charges Telecommunications Per Diem, Fees and Contracts Capital Outlay Goods for Resale

$

867,358.00 $

2,298.00 $

-31,964.00 $ 837,692.00

173,980.00

5,656.00

179,636.00

5,500.00

-400.00

-3,600.00

1,500.00

12,700.00

1,300.00

-14,000.00

0.00

35,150.00

-35,150.00

0.00

5,000.00

2,600.00

1,400.00

9,000.00

7,500.00

7,500.00

9,500.00

-3,120.00

-3,000.00

3,380.00

140,000.00

70,367.00

210,367.00

109,500.00

5,250.00

-20,750.00

94,000.00

$

1,366,188.00 $

48,801.00 $

-71,914.00 $ 1,343,075.00

See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
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GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY CASH AND CASH EQUIVALENTS JUNE 30, 1996

SCHEPULE "2"

NONINTEREST BEARING ACCOUNTS
NationsBank of Georgia, NA, Tifton, Georgia
South Georgia Banking Company, Tifton, Georgia
INTEREST BEARING ACCOUNTS
Citizens Bank of Tifton, Tifton, Georgia
Money Market Account
South Georgia Banking Company, Tifton, Georgia
Money Market Accounts
OTHER
Cash on Hand Petty Cash

$

-36,765,28

3,130,39 $

-33,634,89

$

19,769,65

63,474,63

83,244,28

1,700.00

$

51,309.39

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

GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY SCHEDULE OF RESTRICTED FUND ACTIVITY YEAR ENDED JUNE 30,1996

SCHEDULE "3"

FUND Dentist OffICe Doctor's Office Drug Store Ubrary Fund Shepherd Complex Tift House

BALANCE JULY1,1995

REVENUES IN PERIOD

GIFTS AND

INTEREST

GRANTS

EARNED

TOTAL FUNDS AVAILABLE

NET EXPENDITURES
IN PERIOD

BALANCE JUNE 30,1996

$

855.93

2,886.78 $

841.44

3,689.06

100,000.00

3,843.88

$ 1,520.00
16,000.00 310.00

29.45 $

885.38

101,86

4,508.64

28.93

870.37

126.99

3,816.05

4,437,83

120,437,83 $

122.60

4,276.48

$
120,437.83 797.25

885.38 4,508.64
870,37 3,816.05
0.00 3,479.23

$ 112,117.09 $ 17,830.00 $ 4,847.66 $ 134,794.75 $

121,235.08 $ ====1:::3,:=55=9=.67=

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
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GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY SCHEDULE OF OTHER OPERATING EXPENSES YEAR ENDED JUNE 3D, 1996
REGULAR OPERATING EXPENSES Advertising Bank Service Charges Brochure Distribution Exhibit Freight Inspection Memberships Registration Fees Subscriptions
CAPITAL OUTLAY other Cost Inspection

SCHEDULE "4N

$

2,433.35

830.75

5,820.00

2,500.00

783.21

500.00

1,460.00

401.35

55.00

$

14,783.66

$ -=====5=:0=0=.0.0..

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

BUDGET FUND
Regular Capital Outlay

GEORGIA AGRIRAMA DEVELOPMENT AUTHORITY SUMMARY OF SALARIES. TRAVEL AND PER DIEM AND FEES
YEAR ENDED JUNE 30.1996

SCHEDULE "5"

SALARIES

TRAVEL

PER DIEM AND FEES

$ 573,603.21 $ 7,657.05

711,13 $

1,820.34 13,905.00

$ 581,260.26 $

711.13 $ _-==15=:,=72=5=,34=

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