1> &A r,@O ., Z I &431 l99 3 -94 AUDIT REPORT GEORGIA BUILDING AUTHORITY (PENAL) YEAR ENDED JUNE 30, 1994 . GEORGIA BUILDING AUTHORITY (PENAL) - TABLE OF CONTENTS - INDEPENDENT AUDITOR'S REPORT EXHIBITS FINANCIAL STATEMENTS A COMBINED BALANCE SHEET B STATEMENT OF REVENUES AND EXPENDITURES C STATEMENT OF CHANGES IN FUND BALANCE D NOTES TO FINANCIAL STATEMENTS SCHEDULES 1 2 3 4 5 SUPPLEMENTARY INFORMATION CASH AND CASH EQUIVALENTS INVESTMENTS LAND AND BUILDINGS RESERVED FUND BALANCE PER DIEM AND FEES Page 2 3 4 5 11 12 13 14 15 jmft4 ano 3Raah, JI.QI. @ertifiea Jublic Accounhmts 400 Jira! 3!lnion i"liuillling 250 'lzral Janre lle 1Ueon Auenue 3-Be.mtur. ~eorght 30030 ilelep~one 404 377-9500 Jzrrsimile 404 377-5501 INDEPENDENT AUDITOR'S REPORT Members of the Georgia Building Authority (Penal}: We have audited the accompanying component unit financial statements of the Georgia Building Authority (Penal) as of June 30, 1994, and for the year then ended. These financial statements are the responsibility of the Georgia Building Authority (Penal) management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the 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. Generally accepted accounting principles require that the Authority account for fixed assets in the General Fixed Assets Account Group with the recording of the historical cost of land, buildings, fixtures, equipment and vehicles. The Georgia Building Authority (Penal) records only land and buildings. Because the Authority does not maintain subsidiary cost records on fixed assets other than land and buildings, the total value of fixed assets could not be dete~mined. In our opinion, except for the effect on the financial statements of the omission described in the preceding paragraph, the financial sta~ements referred to above present fairly, in all material respects, the financial position of the Georgia Building Authority (Penal) as of June 30, 1994, and the results of its operations for the year then ended, on the basis of accounting described in Note 1. Our audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental information listed as supporting schedules in the table of contents is presented for the purposes of additional analysis and is not a required part of the financial statements of the Georgia Building Authority (Penal). Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. August 25, 1994 FINANCIAL STATEMENTS 1 GEORGIA BUILDING AUTHORITY (PENAL} COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 1994 EXHIBIT "A" ASSETS Cash and cash equivalents (See Schedule) Investments (See Schedule) Interest receivable Land and buildings (See Schedule) TOTAL ASSETS GOVERNMENTAL FUND TYPE CAPITAL PROJECTS ACCOUNT GROUP GENERAL TOTALS FIXED (Memorandum Onlv\ ASSETS JUNE 30, 1994 JUNE 30, 1993 $ 1,525,276 208,490 7,342 s 1,741,108 $ 84,971,703 $84,971,703 $ 1,525,276 208,490 7,342 84,971,703 $86,712,811 $ 1,672,075 357,470 8,030 84,778,203 $86,815,778 LIABILITIES AND FUND EQUITY Liabilities s s s s Equity: Investment in General Fixed Assets Fund Balances: Reserved (See Schedule) Unreserved: Designated Undesignated Total Equity TOTAL LIABILITIES AND EQUITY $ 1,442,694 298,414 s 1,741,108 s 1,741,108 $84,971,703 $84,971,703 $84,971,703 $84,971,703 1,442,694 298,414 $86 I 712 I 811 $86,712,811 $84,778,203 1,738,400 299,175 $86,815,778 $86,815,778 The accompanying notes are an integral part of these financial statements. 2 GEORGIA BUILDING AUTHORITY (PENAL) STATEMENT OF REVENUES AND EXPENDITURES CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 1994 EXHIBIT "B" Revenues: Interest on investments Total Revenues Expenditures: Personal Services: Per diem and fees Operating expenses Repairs Insurance Total Expenditures Excess of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Capital outlay Excess of Revenues Over (Under) Expenditures and Other Financing Uses TOTALS YEAR ENDED June 30, 1994 JUNE 30, 1993 s 68,103 s 68,103 $ 104,013 $ 104,013 $ 24,815 1,530 762 25,395 s 52,502 s 15,601 ($ 312,068) $ 83,684 49,310 25,397 $ 158,391 ($ 54,378) ($1,927,186) ($ 296,467) ( $1. 981,564) The accompanying notes are an integral part of these financial statements. 3 GEORGIA BUILDING AUTHORITY (PENAL) STATEMENT OF CHANGES IN FUND BALANCE CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 1994 EXHIBIT "C" Fund Balance, July 1 Excess of Revenues and Other Financing Sources Over (Under) Expenditures and Other Financing Uses Fund Balance, June 30 TOTALS YEAR ENDED JUNE 30, 1994 JUNE 30, 1993 $ 2,037,575 $ 4,019,139 296,467) $ 1,741,108 1,981,564) $ 2,037,575 The accompanying notes are an integral part of these financial statements. 4 GEORGIA BUILDING AUTHORITY (PENAL) NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994 EXHIBIT "D" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Georgia Building Authority (Penal), hereafter referred to as the Authority, is a body corporate and politic created and existing by and under the Constitution and laws of the State of Georgia. The Authority is duly authorized by law to acquire, construct and furnish penal facilities and accommodations which the Authority deems necessary and convenient for any department, institution or agency which conducts and operates penal facilities of the State. The Authority may also make contracts, leases and other instruments necessary or convenient with respect to the use of its projects and repair, maintain, and collect rentals for the use of any project constructed and equipped by it. In prior years, the Authority held title to fixed assets as security for the payment of bond debt; however, the Authority no longer has bond debt; therefore, title to fixed assets may be transferred to the Department of Corrections upon written request by Corrections and approval by the Authority. FUNDS AND ACCOUNT GROUPS INCLUDED IN FINANCIAL STATEMENTS The Georgia Building Authority (Penal) uses funds 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. 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. An account group, on the other hand, is a financial reporting device designed to provide accountability for certain assets and li'3.biL.ties that are not recorded in the funds because they do not directly affect net expendable available financial resources. Funds and account groups presented in this report are as follows: GOVERNMENTAL FUND TYPES CAPITAL PROJECTS FUND - This fund accounts for financial resources to be used for the acquisition or construction of major capital facilities or facility repairs and renovations. This fund also pays for the necessary costs of administering the affairs of the Authority. ACCOUNT GROUP 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 on general fixed assets. 5 GEORGIA BUILDING AUTHORITY (PENAL) NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994 EXHIBIT "D" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING MEASUREMENT FOCUS The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. Governmental funds and expendable trust funds should be accounted for using the 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 decreases (i.e., expenditures) in net current assets. Proprietary fund types and nonexpendable trust funds, on the other hand, should be accounted for on a flow of economic resources measurement focus, in which all assets and all liabilities are included on the balance sheet GOVERNMENTAL FUND TYPES CAPITAL PROJECTS FUND The financial statements are maintained in accordance with the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when 'susceptible to accrual (i.e., when they become both 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 be used to pay liabilities of the current period. Further, the modified accrual basis of accounting calls for expenditures, other than accrued interest of general long-term debt, to be recorded when the related fund liability is incurred. CASH AND CASH EQUIVALENTS cash and Cash Equivalents include currency on hand, demand deposits with banks and other financial institutions, and cash management pools tha~ have the general characteristics of demand deposit accounts in that the Department may deposit additional cash at any time and also effectively may withdraw cash at any time without prior notice or penalty. Cash and Cash Equivalents also include short term, highly liquid investments with maturity dates within three months of the date acquired. INVESTMENTS Investments are defined as those financial instruments with terms in excess of three months from the date of purchase and certain other securities held for the production of revenue. Investments are stated at cost. The investment policy of the State of Georgia is to maximize the protection of State funds on deposit while accruing an advantageous yield on those funds in excess of those required for current operating expenses (O.C.G.A. 50-17-51). The State Depository Board may permit any department, board, bureau or other agency to invest funds collected directly by such organization in short term time deposit agreements, provided that the interest income of those funds is remitted to the director of the Office of Treasury and Fiscal Services, as revenues of the State of Georgia. As a matter of general practice, however, demand funds of any department, board, bureau or other agency in excess of current operating expenses are required to be deposited with ' 6 GEORGIA BUILDING AUTHORITY (PENAL) NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994 EXHIBIT "D" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES the Director of the Office of Treasury and Fiscal Services for the purpose of pooled investment. RESERVES AND DESIGNATIONS OF FUND BALANCES The Authority records two general types of reserves. Reserved fund balance represents that portion of fund balance that is segregated for various renovation and construction projects and emergency repairs to facilities. Unreserved designated fund balance represents that portion of fund balance that is also to be used in ongoing construction projects and is not appropriable for expenditures. MEMORANDUM ONLY - TOTAL COLUMNS Total columns in the Combined 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, results of operations or changes in 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. COMPARATIVE DATA Comparative total data for the prior year have been presented in the accompanying financial statements in order to provide an understanding of changes in the Authority'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. NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMEKTS STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds belonging to 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 any one or more of the following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59: (1) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia. (2) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State .of Georgia. (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 of the bonds for this purpose. (4) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia. 7 GEORGIA BUILDING AUTHORITY (PENAL) NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994 EXHIBIT "D" NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS (5) Bonds, bills, certificates of indebtedness, 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 the principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, 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 of Georgia Annotated Section 50-17-53, the State Depository Board has adopted policies which allow agencies of the State of Georgia the option of exempting 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 Authority or by its agent in the Authority's name. category 2 - Amounts collateralized with securities (at market value) held by the financial institution's trust dep~~tment or agent in the Authority'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 Authority's name, and amounts uncollateralized. Cash Deposits Carrying Amount $ 7,658 Bank Balance $ 7,658 Risk Categories 1 2 3 $ 7,658 $ $ CATEGORIZATION OF INVESTMENTS For purposes of analysis of custodial credit risk, investments consist of U.S. Government securities and repurchase agreements. Investments are stated at cost and are summarized and classified as to custodial credit risk within the categories described below. Category 1 - Insured or registered, or securities held by the Authority or its agent in the Authority's name. 8 GEORGIA BUILDING AUTHORITY (PENAL) NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994 EXHIBIT "D" NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS Category 2 - Uninsured or unregistered with securities held by the counterparty's trust department or agent in the Authority's name. Category 3 - Uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent but not in the Authority's name. The carrying amounts shown below also include amounts maintained in an investment pool by the Office of Treasury and Fiscal Services. Type of Investment U.S. Government Securities State Investment Pool Risk Categories 1 2 3 s $208,490 s Carrying Amount Market Value $ 208,490 $ 210,527 1,517,618 $1,726,108 1,517,618 $1,728,145 NOTE 3: CHANGES IN GENERAL FIXED ASSETS The following is a summary of changes to Land and Buildings in the General Fixed Assets Account Group during the fiscal year: Balance July 1, 1993 $84,778,203 Additions 193,500 Balance June 30, 1994 $84,971,703 9 SUPPLEMENTARY INFORMATION 10 GEORGIA BUILDING AUTHORITY (PENAL) CASH AND CASH EQUIVALENTS JUNE 30, 1994 INTEREST BEARING ACCOUNTS Wachovia Bank of Georgia - Operating Account Northside Bank and Trust - Operating Account Office of Treasury and Fiscal Services State Investment Pool SCHEDULE "l" $6,525 1,133 $ 7,658 1,517,618 $1,525,276 11 INVESTMENT TYPE U.S. Treasury Bill U.S. Treasury Bill GEORGIA BUILDING AUTHORITY (PENAL) INVESTMENTS JUNE 30, 1994 SCHEDULE "2" PURCHASE DATE February 10, 1994 June 2, 1994 MATURITY DATE February 9, 1995 June 1, 1995 AMOUNT $109,758 98,732 $208,490 12 GEORGIA BUILDING AUTHORITY (PENAL) LAND AND BUILDINGS JUNE 30, 1994 Diagnostic Center and Maximum Security Prison, Butts County, Georgia Montgomery County Branch Prison, Montgomery County, Georgia Walker County Branch Prison, Walker County, Georgia Savannah Area Community Correctional Center, Savannah, Georgia Columbus Area Community Correctional Center, Columbus, Georgia Georgia Women's Correctional Institution, Hardwick, Georgia Macon Area Community Correctional Center, Macon, Georgia Dooley Correctional Institution Dooley County, Georgia Mitchell Correctional Insitution Mitchell County, Georgia Calhoun Correctional Institution Calhoun County, Georgia Pulaski County Facility Pulaski County Wilcox Correctional Institution Wilcox County, Georgia Women's Detention Center Evans County, Georgia Georgia Industrial Institute - Alto Habersham County, Georgia Gateway Women's Diversion Center Fulton County, Georgia Eastman Youth Development Facility Dodge County, Georgia Total Land and Buildings SCHEDULE "3" $11,454,112 1,301,792 1,481,548 246,185 6,010,514 4,041,392 7,058,238 7,365,769 12,314,231 10,470,029 919,933 14,164,544 576,402 795,797 987,744 5,783,473 $84,971,703 13 GEORGIA BUILDING AUTHORITY (PENAL) RESERVED FUND BALANCE JUNE 30, 1994 DESCRIPTION Butts County Facility Walter Montgomery Facility Modular Housing Georgia State Prison Augusta Facility Dodge County Facility Rogers Facility Wastewater Plant Wilcox County Facility Eastman Youth Development Facility I Revolving Fund Reserve Dooley County Facility Mitchell County Facility Calhoun County Facility Johnson County Facility Eastman Youth Development Facility II 310 Ponce de Leon Avenue SCHEDULE "4" CAPITAL PROJECTS $ 1,535 3,554 724 3,034 3,715 4,906 1,939 12,039 343,227 45,026 156,690 247,695 198,352 273,000 15,000 105,379 26879 ~lt442t694 14 GEORGIA BUILDING AUTHORITY (PENAL) PER DIEM AND FEES YEAR ENDED JUNE 30, 1994 SCHEDULE "5" Planning and Parking Consultants, Inc. Smith and Raab, P.C. Turner Associates Georgia Building Authority Consultants Audit Architects Project Supervisor $4,156 5,742 12,404 2,513 $24,815 15