C:,I\ f\'60() .R\ C::11 \9'14--'iS STATE OF GEORGIA DEPARTMENT OF AUDITS 254 WASHINGTON STREET ATLANTA, GEORGIA 30334 REVIEW REPORT STATE OF GEORGIA OFFICE OF THE GOVERNOR YEAR ENDED JUNE 30, 1995 OFFICE OF THE GOVERNOR - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION EXIIlBITS FINANCIAL STATEMENTS A COMBINED BALANCE SHEET (STATUTORY BASIS) ALL FUND TYPES AND ACCOUNT GROUPS 2 B COMBINED STATEMENT OF CHANGES IN FUND BALANCES (STATUTORY BASIS) GOVERNMENTAL FUND TYPES 4 C STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND 5 STATEMENTS OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BUDGET FUND D "A" OFFICE OF THE GOVERNOR 10 E "B" LOTTERY FOR EDUCATION 11 F STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS STATE REVENUE COLLECTIONS FUND 12 G NOTES TO THE FINANCIAL STATEMENTS 13 SUPPLEMENTARY INFORMATION H COMBINING BALANCE SHEET (STATUTORY BASIS) BUDGET FUND 32 I COMBINING STATEMENT OF CHANGES IN FUND BALANCES (STATUTORY BASIS) BUDGET FUND 33 J COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND 34 K COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUND TYPE - AGENCY FUNDS 38 SCHEDULES SCHEDULES OF APPROVED BUDGET 1 "A" OFFICE OF THE GOVERNOR 39 2 "B" LOTTERY FOR EDUCATION 40 3 CASH AND CASH EQUIVALENTS 41 OFFICE OF THE GOVERNOR - TABLE OF CONTENTS - SECTION I FINANCIAL SUPPLEMENTARY INFORMATION SCHEDULES 4 SCHEDULE OF GOVERNOR'S EMERGENCY FUND 42 5 SCHEDULE OF FEDERAL REVENUES 43 6 SCHEDULE OF OTHER OPERATING EXPENSES 45 7 SUMMARY OF SALARIES, TRAVEL, AND PER DIEM AND FEES 46 SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS SECTION I FINANCIAL CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 December 1, 1995 Honorable Zell Miller, Governor Members of the General Assembly of Georgia and Honorable Timothy P. Burgess, Director Office ofPlanning and Budget 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 G) ofthe Office of the Governor as ofand for the year ended June 30, 1995, 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 Office of the Governor. 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, with the exception ofthe matter described in the following paragraph, 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 of accounting described in Note 1. As more fully discussed in Section II, Findings and Improper or Questioned Costs, material discrepancies were noted in the equipment inventory records of the Office of the Governor. Equipment inventory comprises the General Fixed Assets Account Group. We were unable to determine the effects these discrepancies may have on the financial statements. 95ARL-5 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 (Exhibits H through K and Schedules 1 through 7) is presented only for supplementary analysis purposes. Such information has been subjected to the inquiries and analytical procedures applied in the review of the financial statements and we are not aware of any material modifications that should be made thereto. Respectfully submitted, ~ Claude L. Vickers State Auditor CLV:jy 95ARL-5 FINANCIAL STATEMENTS -I- Caeh and Cash Equivalents (See Schedule) Accounts Receivable State Appropriation Federal Fmancial Aaai8tance Other Fixed Assets Equipment Amount to be Provided for Payment of Accrued Compensated Abaenc:es Capital Lease Commitments OFFICE OF THE GQYERNOR COMBINED BALANCE SHEET , 126,848.03 218,128.71 $ 69,453,048.14 0.00 $ 64,125.83 Total Assets 1.IABII.IIIES AND FUND EQUITY Liabilities Accounts Payable Payroll Withholdings Funds Held for Others Compensated Abaenc:es Capital Leases Total Liabilities Fund Equity Investment in General FIXed Assets Fund Balances Reserved Federal Financial Assistance Children and Youth Coordinating Council of Georgia Crime Victims Emergency Fund Ford Foundation Contract Georgia Council for the Arts Georgia Emergency Management Agency Disaster Assistance Matching Disaster Assistance Contingency Integrated Resources Plan Contract Nuclear Preparedness Training Grant State Revenue Collections Fund Unreeerved Designated Surplus Regular Lottery for Education Total Fund Equity Total Liabilities and Fund Equity $ 71,442,193.67 $ 0.00 $ 64,125.83 $ 43,798,437.22 6,528.25 $ 43,804,965.47 $ 4,754.92 0.00 3,143,798.16 0.00 537.56 17,566,300.03 5,594,253.31 0.00 13,169.57 $ 1,314,383.28 31.37 $ 27,637,228.20 $ $ 71,442,193.67 $ $ 64,125.83 $ 64,125.83 0.00 0.00 0.00 $ 64,125.83 See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the fmancial statements are an integral part of this statement. -2- EXHIBIT"A" ACCOUNT GROUPS GENERAL GENERAL FIXED LONG-TERM ASSETS DEBT TOTALS (Memorandum Only) JUNE 301 1995 JUNE 301 1994 $ 2,053,271.36 $ 14,338,099.36 $ 29,108,071.40 $ 1,160,708.69 40,126,848.03 11,426,306.21 218,128.71 784,460.13 $ 69,453,048.14 $ 13,371,475.03 $ 2,641,429.10 $ 2,641,429.10 $ 2,363,630.87 $ 1,426,358.00 $ 30,223.23 $ 1,456,581.23 $ 1,426,358.00 $ 30,223.23 1,456,581.23 $ 1,346,643.33 31,302.29 1,377,945.62 $ 216411429.10 $ 114561581.23 $ 7516041329.83 $ 31 1451 I150.88 $ $ 1,426,358.00 30,223.23 $ 1,456,581.23 $ 43,798,437.22 $ 6,528.25 64,125.83 1,426,358.00 30,223.23 45,325,672.53 $ 11,984,722.72 5,441.75 7,567.94 1,346,643.33 31,302.29 13,375,678.03 $ 2,641,429.10 $ 2,641,429.10 $ 2,363,630.87 4,754.92 0.00 3,143,798.16 0.00 537.56 17,566,300.03 5,594,253.31 0.00 13,169.57 0.00 12,799,615.76 667.82 2,141,797.73 9,485.86 0.00 0.00 0.00 25,026.22 58,746.10 0.00 $ 2,641,429.10 1,314,383.28 31.37 676,502.49 0.00 $ 30,278,657.30 $ 18,075,472.85 $ 216411429.10 $ 114561581.23 $ 7516041329.83 $ 31 1451 I150.88 -3- OFFICE OF THE GOVERNOR COMBINED STATEMENT OF CHANGES IN FUND BALANCES (STATUTORY BASIS) GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 1995 EXHIBITB FUND BALANCES - JULY 1 Reserved Unreserved Designated Surplus ADDITIONS Adjustments to Prior Year's Accounts Payable Cash Receipts for the Year Exhibit "F" Excess of Funds Available over Expenditures Exhibitc DEDUCTIONS Unreserved Fund Balance (Surplus) Returned to Office of Treasury and Fiscal Services Year Ended June 30, 1993 Year Ended June 30, 1994 Adjustments to Prior Year's Accounts Receivable Cash Disbursements for the Year Exhibit "F" Transfer to Georgia Environmental Facilities Authority Office of Energy Resources In Accordance with Official Code of Georgia Annotated 50-23-34 Reserved Fund Balance Carried Over from Prior Year as Funds Available FUND BALANCES - JUNE 30 (To Exhibit "A") BUDGET STATE REVENUE COLLECTIONS TOTALS {Memorandum Onl~} YEAR ENDED JUNE 30, 1995 JUNE 30, 1994 $ 15,035,339.49 $ 676,502.49 $ 15,711,841.98 $ 0.00 $ 15,035,339.49 $ 22,164,551.23 676,502.49 728,571.13 0.00 $ 15,711,841.98 $ 22,893,122.36 $ 607,663.63 $ 607,663.63 $ 397,768.37 $ 1,083,552.75 1,083,552.75 1,013,547.93 27,364,747.91 27,364,747.91 15,327,002.73 $ 27,972,411.54 $ 1,083,552.75 $ 29,055,964.29 $ 16,738,319.03 $ 0.00 676,502.49 $ 0.00 $ 728,571.13 676,502.49 0.00 335,183.34 335,183.34 12,929.12 $ 1,083,552.75 1,083,552.75 1,013,547.93 12,807,575.57 12,807,575.57 0.00 2,227,763.92 2,227,763.92 22,164,551.23 $ 16,047,025.32 $ 1,083,552.75 $ 17,130,578.07 $ 23,919,599.41 s_____ s $ 21,631,220.20 o_.oo_ s 21,631,220.20 15 111,841.ss 1 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. -4- OFFICE OF THE GOVERNOR STATEMENT OF FUNDS AVAILABLE ANO EXPENDITURES BUDGET FUND YEAR ENDED JUNE 30. 1995 EXHIBITc FUNDS AVAILABLE REVENUES STATE APPROPRIATION GeneralAppropriation Amended Appropriation GcNemor's Emergeucy Fund (See Schedule) Budget Adjuatments Less: l.ap&ed Funds Total state Appropriation FEDERAL REVENUES (See Schedule) OTHER REVENUES RETAINED Artists in Schools Census Data Contracts Georgia Crime Victims Fund Georgia Department of Children and Youth Services Georgia Department of Education Georgia Department of Transportation Georgia Environmental Facilities Authority Georgia Intern Program Integrated Resources Plan Atlanta Gas Light Company Georgia Power Company Savannah Electric and Power McFrugal Auto Rental Copying Services Donations Interest Earned Investigation Fees Nuclear Preparedness Training Grant Alabama Power Company Georgia Power Company Sale of Manuals Sale of Photographs Seminar Fees Total other Revenues Retained Total Revenues CARRY-OYER FROM PRIOR YEAR Transfer from Reserved Fund Balance Federal Financial Assistance Advisory Council on Science and Technology Children and Youth Coordinating Council Crime Victims Emergency Fund Ford Foundation Contract Integrated Resources Plan Contract Nuclear Preparedness Training Grant Total carry-Over from Prior Year TOTALS VEAR ENDED JONE 30, 1995 JONE 30, 1994 $ 24.190.854.00 $ 47,574,273.00 45,291,200.00 -43,784,840.00 $ 73,271,487.00 $ 450,000.00 $ - -72~,82~1,487.00 $ $ _1_ 33',-9'-6'-0-'-,844.94 $ 21,785,049.00 435,4162.00 3,225,565.00 -300,000.00 25, 1-46,076.00 132,499.00 25,013,577.00 39,230,951.34 $ 74,546.52$ 270.50 1,493,075.99 31,000.00 147,150.00 47,984.84 65,128.59 68,790.00 0.00 0.00 0.00 0.00 1,696.90 3,000.00 145,352.69 17,374.00 113,979.48 200,789.56 1,642.00 804.00 43,369.00 $---=~2;,4;;5.5,.,954.07 $ $ _2_ 09,_ 238~,286.01 $ 136,245.40 447.00 1,666,978.96 21,000.00 70,000.00 38,846.14 0.00 93,385.00 25,000.00 1,726,813.36 123,338.45 3,802.93 0.00 0.00 683,901.98 0.00 114,548.00 224,782.00 0.00 0.00 45,608.75 4,974,697.97 69,219,226.31 $ 17,066.41 $ 18,899,135.42 0.00 2,591.07 667.82 0.00 2,141,797.73 866,479.59 9,485.86 60,584.28 0.00 2,285,308.23 58,746.10 50,452.64 $ 2,227,763.92 $ 22,164,551.23 Total Funds Available $ 211,466,049.93 $ 91,383.m.54 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. -5- OFFICE OF THE GOVERNOR STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND YEAR ENDED JUNE 30 1995 EXHIBITc EXPENDITURES COST OF OPERATIONS 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 REGULAR OPERATING EXPENSES Motor Vehicle Expenses Supplies and Materials Repairs and Maintenance Rents (other than Real Estate) Insurance and Bonding other Operating Expenses (See Schedule) Duplicating and Rapid Copy Publications and Printing TRAVEL TOTALS VEAR ENDED JONE 30, 1995 JONE 30, 1994 $ 1,668,812.04 $ 118,170.32 256,533.33 205,320.13 17,250.00 1,264.12 5,315.88 $--==2,:2:7i2.,665.82 $ $ 659.63 $ 51,865.69 14,891.48 30,950.89 2,241.72 222,404.82 115.40 16,241.79 339,371.42 $ $ _ _-=:;.;:;.;;;.r.;:.;....;.;;..=.. $ _ _--=:.2...:4,.:9:..:1...1.:...:=0..4.!.. $ 1,692,621.55 119,421.74 274,582.47 207,204.00 22,442.00 825.00 3,788.50 2,320,885.26 588.50 53,206.53 15,261.25 42,597.18 6,002.80 220,181.15 545.57 13,572.54 351,955.52 26,106.36 EQUIPMENT Equipment Purchases Lease/Purchase of Equipment Rental of Equipment COMPUTER CHARGES Software Equipment Equipment Purchases Computer Billings, DOAS TELECOMMUNICATIONS PER DIEM, FEES AND CONTRACTS Per Diem and Fees Contracts Total Cost of Operations 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 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. -6- $ 4,166.28$ 3,473.98 15178.17 $----==2.2.,:8.1. 8.43$ $ 611.75 $ 1,608.00 50,276.79 $ _ 52,496 ____;:c=.L,;;,;:;. .54$ $ _ ____8;2:=,:2:.7. 1.03$ $ 42,684.59$ 49,682.50 $ - - - = =9:2:,.3.6:7 . 0 9 $ 2,886,901.37 $ $ _ ___;::,.;;;..:;..:.z.;;.;:;. 0.00 4,067.84 13,700.16 17,768.00 2,015.50 370.75_; 49,789.88 52,176.13 81,Sn.93 43,917.38 52,000.00 95,917.38 2,946,686.58 $ 11,225,720.70 $ 761,885.03 1,607,876.89 1,319,602.86 98,325.00 7,219.88 30,361.12 21,no.20 15,072,761.68 $ 9,816,103.12 692,370.56 1,530,181.74 1,210,654.21 128,698.00 4,928.00 22,704.50 23,067.81 13,428,707.94 OFFICE OF THE GOVERNOR STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND YEAR ENDED JUNE 30. 1995 EXHIBIT"C" EXPENDITURES REGULAR OPERATING EXPENSES Motor Vehicle Expenses Supplies and Materials Repairs and Maintenance Utilities Rents (other than Real Estate) Insurance and Bonding other Operating Expenses (See Schedule) Duplicating and Rapid Copy Publications and Printing TRAVEL MOTOR VEHICLE PURCHASES EQUIPMENT Equipment Purchases Lease/Purchase of Equipment Rental of Equipment COMPUTER CHARGES other Costs Supplies and Materials Repairs and Maintenance Rents (other than Real Estate) other Operating Expenses (See Schedule) Software Equipment Equipment Purchases Per Diem, Fees and Contracts Per Diem and Fees Contracts Computer Billings, DOAS REAL ESTATE RENTALS TELECOMMUNICATIONS PER DIEM, FEES AND CONTRACTS Per Diem and Fees Contracts OTHER MANSION ALLOWANCE other Costs Paid to Governor Zell Miller INTERN STIPENDS AND TRAVEL other Costs Stipends - List on File TOTALS YEAR ENDED JONE 30, 1995 JONE 30, 1994 $ 38,046.93$ 373,900.98 116,STT.89 48,290.78 1,267,151.17 53,441.63 174,597.01 41,408.06 122,403.01 $----==2.;,;2;=3.5:,.8..1.:7. .46 $ $ _ 304,94 _...;;.::...:.i.::... 8.16 $ $ _ ___1;7_,9~00.00 $ $ 272,895.68 $ 17,265.02 39,208.95 329,369.65 $ 28,976.26 273,406.14 91,638.96 14,888.15 121,861.88 65,758.05 160,844.94 63,607.73 114,922.07 935,904.18 258,848.17 1,397.00 99,162.83 19,461.50 37,716.38 156 340.71 $ 24,619.76 $ 20,449.84 480.00 6,004.00 63,694.02 346,658.77 31,618.00 350.00 219,268.12 $ _ _..7..:1..3..:,.1;:c4,,2,:._5=1 $ $ _ _...:9:.:9:...4.:..,.4.:.;5::..7:....:7..:.5.::.. $ $ __..4.1.:9..,3:.0=0=.9=6 $ 26,727.97 43,671.58 849.00 7,855.09 46,466.75 268,609.69 10,200.00 632.00 329,773.45 734,785.53 1,019,316.45 327,079.73 $ 1,774,025.19 $ 13,295,646.98 $ 15,069,672.17 $ 1, 133,569.26 28,593,316.86 29,726,886.12 s_ _-=-~~,ooo=~oo=s---~-=-ooo==~oo= $ 225,102.83 $ _ __,226=,.:.358=.8:.!....7 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. -7- OFFICE OF THE GOVERNOR STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND YEAR ENDED JUNE 30 1995 EXHIBITc EXPENDITURES OTHER ART GRANTS OF STATE FUNDS Personal Services Salaries and Wages Employer's Contribution for: F.I.C.A. OtherCosts Supplies and Materials Rents (Other than Real Estate) Grants to Counties, Cities and Civil Divisions Other Operating Expenses (See Schedule) Publications and Printing Travel Equipment Equipment Purchases Rental of Equipment Telecommunications Per Diem, Fees and Contracts Per Diem and Fees ART GRANTS OF NON-STATE FUNDS Personal Services Salaries and Wages Employer's Contribution for: F.I.C.A. Other Costs Supplies and Materials Repairs and Maintenance Rents (Other than Real Estate) Insurance and Bonding Grants to Counties, Cities and Civil Divisions Other Operating Expenses (See Schedule) Duplicating and Rapid Copy Publications and Printing Travel Equipment Equipment Purchases Lease/Purchase of Equipment Rental of Equipment Computer Charges Software Equipment Equipment Purchases Real Estate Rentals Telecommunications Per Diem, Fees and Contracts Per Diem and Fees Contracts HUMANITIES GRANT - STATE FUNDS OtherCosts Grants to Counties, Cities and Civil Divisions CHILDREN AND YOUTH GRANTS Other Costs Grants to Counties, Cities and Civil Divisions JUVENILE JUSTICE GRANTS Other Costs Grants to Counties, Cities and Civil Divisions TOTALS VEAR ENDED JONE 30, 1995 JONE 30, 1994 $ 70,318.50$ 1,041.07 1,309.94 0.00 2,987,799.00 5.00 22.40 421.04 0.00 0.00 785.71 87,854.34 3,149,557.00 $ 60,198.89 872.89 4,979.11 316.00 2,650,284.44 472.34 184.30 1,097.90 119.99 50.00 342.69 150,234.45 2,869,153.00 $ 57,348.00$ 51,145.70 810.00 741.61 17,845.21 0.00 4,976.08 0.00 152,915.00 12,796.95 18.90 460.78 3,717.11 8,752.16 40.00 0.00 50.00 312,625.27 16,308.13 252.22 327.94 2,865.97 0.00 1, 195.00 0.00 262.89 0.00 96.89 1,351.00 62.37 0.00 0.00 1,496.73 14,114.67 3,695.20 866.29 111,118.24 18,924.00 119,983.60 0.00 $ 383,n8.00 s _ _ _533~3_85_.9_1 1 s _ _ _60~.ooo-~.o..o... s _ _ _s~1~.aoo~~-oo~ $ 290,975.oo s _ _~290=-'-'"""01"""2""'.oo"'- $ 1,130,622.30 $ _ _1~,2_7~5,~039_.7_5__ 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. -8- OFFICE OF THE GOVERNOR STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND YEAR ENDED JUNE 30. 1995 EXHIBIT"C" EXPENDITURES OTHER GEORGIA CRIME VICTIMS ASSISTANCE PROGRAM Other Costs Claims and Indemnities GRANTS TO LOCAL SYSTEMS Other Costs Grants to Counties, Cities and Civil Divisions GRANTS - LOCAL EMA Other Costs Grants to Counties, Cities and Civil Divisions GRANTS - OTHER Other Costs Grants to Counties, Cities and Civil Divisions GRANTS - CIVIL AIR PATROL_ Other Costs Grants to Counties, Cities and Civil Divisions GRANTS - DISASTER Other Costs Grants to Counties, Cities and Civil Divisions TECHNOLOGY GRANTS Other Costs Grants to Counties, Cities and Civil Divisions Total Other Total Expenditures Excess of Funds Available over Expenditures TOTALS VEAR ENDED JONE 30, 1995 JONE 30, 1994 $ 449,340.11 $ 233,785.68 $ 684,400.00 $ 562,000.00 $ 1,092,799.91 $ 934,308.60 $ 0.00 $ 73 na.10 $ 60,000.00$ 60,000.00 $ 136,490,486.53 $ 19,355,200.49 $ 1,999,968.63 $ $ 146,057,030.31 $ $ 184,101 ,302.02 $ 27,364,747.91 0.00 26,520,822.40 76,056,TT4.81 15,327,002.73 $ 211,466,049.93 $ 91,383,m.54 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. -9- OFFICE OF THE GOVERNOR STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BUDGET FUND "A" OFFICE OF THE GOVERNOR YEAR ENDED JUNE 30 1995 EXHIBIT "D" FUNDS AVAILABLE REVENUES State Appropriation Federal Revenues Other Revenues Retained CARRY-OVER FROM PRIOR YEAR Transfer from Reserved Fund Balance BUDGET ACTUAL VARIANCEFAVORABLE {!,!NFAVORABLE} $ 71,271,487.00 $ 70,821,487.00 $ 154,514,342.00 133,960,844.94 1,668,931.00 2,455,954.07 -450,000.00 -20,553,497.06 787,023.07 $ 227,454,760.00 $ 207,238,286.01 $ -20,216,473.99 0.00 2,227,763.92 2,227,763.92 $ 227,454,760.00 $ 209,466,049.93 $ -17,988,710.07 EXPENDITURES Cost of Operations Personal Services Regular Operating Expenses Travel Motor Vehicle Purchases Equipment Computer Charges Real Estate Rentals Telecommunications Per Diem, Fees and Contracts Mansion Allowance Intern Stipends and Travel Art Grants of State Funds Art Grants of Non-State Funds Humanities Grant State Funds Children and Youth Grants Juvenile Justice Grants Georgia Crime Victims Assistance Program Grants to Local Systems Grants Local EMA Grants Civil Air Patrol Grants Disaster $ 3,337,267.00 $ 2,886,901.37 $ 16,513,999.00 15,072,761.68 2,421,514.00 2,235,817.46 483,177.00 304,948.16 17,900.00 17,900.00 416,814.00 329,369.65 920,564.00 713,142.51 1,023,177.00 994,457.75 477,890.00 419,300.96 16,923,667.00 15,069,672.17 40,000.00 40,000.00 275,000.00 225,102.83 3,149,557.00 3,149,557.00 383,850.00 383,778.00 60,000.00 60,000.00 290,975.00 290,975.00 2,086,005.00 1,130,622.30 500,000.00 449,340.11 684,400.00 684,400.00 1,412,566.00 1,092,799.91 60,000.00 60,000.00 175,976,438.00 136,490,486.53 450,365.63 1,441,237.32 185,696.54 178,228.84 0.00 87,444.35 207,421.49 28,719.25 58,589.04 1,853,994.83 0.00 49,897.17 0.00 72.00 0.00 0.00 955,382.70 50,659.89 0.00 319,766.09 0.00 39,485,951.47 $ 227,454,760.00 $ 182,101,333.39 $ 45,353,426.61 Excess of Funds Available over Expenditures 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. -10- $ 27,364,716.54 $ 27,364,716.54 OFFICE OF THE GOVERNOR STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BUDGET FUND "B" LOTTERY FOR EDUCATION YEAR ENDED JUNE 30, 1995 EXHIBIT"E" FUNDS AVAILABLE REVENUES State Appropriation BUDGET ACTUAL VARIANCEFAVORABLE (UNFAVORABLE) ____ $ 2,000,000.oo $ 2,000,ooo.oo $ ....o...o;_o~ EXPENDITURES Technology Grants Excess of Funds Available over Expenditures $ 2,000,000.oo $ 1,999,968.63 $ - - - - -31.3-7 $ 31.37 $ ======3=1,;,;3,;.,7 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. - 11 - OFFICE OF THE GOVERNOR STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS STATE REVENUE COLLECTIONS FUND YEAR ENDED JUNE 30, 1995 EXHIBIT"F" CASH RECEIPTS STATE REVENUE COLLECTIONS Buying Service Fees Donations Fines Motor Vehicle Arbitration Fees Teacher Certification Fees Total Cash Receipts CASH AND CASH EQUIVALENTS - JULY 1, 1994 $ 600.00 475.00 14,551.00 795,697.00 272,229.75 $ 1,083,552.75 0.00 $ 1,083,552.75 DISBURSEMENTS TRANSFERS To Office of Treasury and Fiscal Services CASH AND CASH EQUIVALENTS - JUNE 30, 1995 $ 1,083,552.75 0.00 $ 1,083,552.75 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. -12 - OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXIIlBIT "G" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Office ofthe Governor, an organizational unit of the State of Georgia, is part ofthe executive branch of the government of the State of Georgia. The Chief executive powers are vested in the Governor, who is elected by the qualified voters. The Office ofthe Governor does not have authority to determine the amount of funding it will receive from the State of Georgia for any given fiscal year. Such authority is vested in the General Assembly of Georgia. The Office ofthe Governor also does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, the Office of the Governor is included within the State of Georgia reporting entity for financial reporting purposes because of the significance of its legal, operational and financial relationships with the State of Georgia. 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 Office of the Governor uses funds and account groups to report on its financial position and the results ofits operations determined in conformity with accounting practices prescribed or permitted by statutes and regulations ofthe State ofGeorgia. 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 of funds 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. Funds and account groups presented in the accompanying financial statements are as follows: GOVERNMENTAL FUND TYPES BUDGET FUND - The fund used to account for activities and functions as set forth in the Amended Appropriations Act of 1994-1995. 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. STATE REVENUE COLLECTIONS FUND - The fund used to account for the collection of specific revenues ofthe State of Georgia as provided by statute or administrative action and the subsequent transfer of such funds to the Office of Treasury and Fiscal Services. This presentation differs from generally accepted accounting principles in that such activity should be included in the General Fund of the governmental organization. - 13 - OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXIIlBIT "G" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FUND ACCOUNTING FIDUCIARY FUND TYPE AGENCY FUNDS - The funds used to account for assets held for use by other funds, governments, or individuals. 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. 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. 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 ofavailable spendable resources. In accordance with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, the Budget Fund remits its unreserved fund balance (surplus) to the Office of Treasury and Fiscal Services in the subsequent fiscal year. GOVERNMENTAL FUND TYPES 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 of accounting. Under the modified accrual basis of accounting, 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 period. Revenues that are accrued include primarily State appropriations, Federal grants and entitlements, and certain amounts earned under operating agreements with other parties. Expenditures are recorded when the - 14 - OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXIIlBIT "G" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING GOVERNMENTAL FUND TYPES BUDGET FUND 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. 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 of encumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted by statutes and regulations ofthe State of Georgia, but is not consistent with generally accepted accounting principles, which provide for the recording of encumbrances as a reservation of fund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures determined in accordance with generally accepted accounting principles. 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. STATE REVENUE COLLECTIONS FUND The State Revenue Collections Fund is maintained on the Cash Receipts and Disbursements basis of accounting as prescribed or permitted by statutes and regulations of the State of Georgia. This basis of accounting is defined as that method of accounting in which certain revenue and the related assets are recognized when received rather than when earned, and certain expenses are recognized when paid rather than when the obligation is incurred. The State Revenue Collections Fund, which should be included in the General Fund in accordance with generally accepted accounting principles, should be maintained on the modified accrual basis of accounting. FIDUCIARY FUND TYPE AGENCY FUNDS Agency Funds are custodial in nature and do not measure results of operations or have a measurement focus. The modified accrual basis of accounting is utilized for recognizing assets and liabilities. BUDGET Appropriation allotments to the Office ofthe Governor are on the basis of budgets submitted by the Office and approved by the Legislature and the Governor. The budgets are adopted on a basis consistent with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia and are compiled in the - 15 - OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT"G" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BUDGET same manner as all State departments. Expenditures are classified by budget unit object classes as provided in Act No. 1208 ofGeorgia Laws 1994 (as approved April 18, 1994) and amended by Act No. 6 of Georgia Laws 1995 (as approved Februaty 22, 1995), which is an appropriated budget and is referred to in these notes as the Amended Appropriations Act of 1994-1995. Overexpenditure ofa budget unit object class, except for the "common object classes", included in the Office of the Governor's final amended budget is in violation of Section 80 of the 1994-1995 Amended Appropriations Act. Expenditures ofno more than 102% of the stated amount for each common object class are authorized by Section 80. However, the total expenditure for the group of common object classes may not exceed the sum of the stated amounts for the separate object classes of the group. The common object classes include Personal Services, Regular Operating Expenses, Travel, Motor Vehicle Purchases, Equipment, Computer Charges, Real Estate Rentals, Telecommunications and Postage. CASH AND CASH EQUIVALENTS Cash and Cash Equivalents include demand deposits with banks and other financial institutions and cash management pools that have the general characteristics of demand deposit accounts in that the Office may deposit additional cash at any time and also may withdraw cash at any time without prior notice or penalty. INVESTMENTS The Office of the Governor participates in an investment pool managed by the State of Georgia's Office of Treasury and Fiscal Services (OTFS) referred to as the "Georgia Fund l ". The Office does not have any risk exposure from investments in Georgia Fund 1 as the investment policy of OTFS does not provide for investments in derivativesor similar investments through the Georgia Fund 1. INVENTORIES No inventories ofsupplies are reported in the current financial statements. Expendable supplies are recorded as expenditures at the time of purchase. 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: FEDERAL FINANCIAL ASSISTANCE The residual portion ofFederal financial assistance revenues not yet expended or encumbered. This amount is restricted for expenditure in future years. This accounting treatment differs from generally accepted accounting principles in that the unearned portion of Federal financial assistance should be reflected as deferred revenue. - 16 - OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXIIlBIT "G" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES RESERVED FUND BALANCE CRIME VICTIMS EMERGENCY FUND Funds received from penalty assessments for driving under the influence of alcohol or drugs for the purpose ofcompensating innocent victims ofcrime. This amount is restricted for expenditures in subsequent years. GEORGIA COUNCIL FOR THE ARTS Funds received from the private sector to support the arts and are used primarily to provide matching funds for artists in the schools. This amount is restricted for expenditures in subsequent years in accordance with the wishes ofthe donor. GEORGIA EMERGENCY MANAGEMENT AGENCY - DISASTER ASSISTANCE DISASTER ASSISTANCE MATCHING AND CONTINGENCY The residual portion of state funds used to meet federal disaster assistance matching and contingency requirements. These amounts are reserved for expenditures in future years in accordance with contractual agreements related to disaster relief NUCLEAR PREPAREDNESS TRAINING GRANT Funds received for this program represent contractual agreements between the State of Georgia, Alabama Power Company and Georgia Power Company for emergency response planning and related activities at various nuclear power facilities. This amount is restricted for expenditures in subsequent years in accordance with contractual agreements. UNRESERVED FUND BALANCE In accordance with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, the Budget Fund's unreserved fund balance is remitted to the Office of Treasury and Fiscal Services in the subsequent fiscal year as surplus as follows. REGULAR - An amount of unexpended general appropriations available to the State for reappropriation in subsequent years. LOTTERY FOR EDUCATION - An amount of unexpended lottery appropriations available for future reappropriation for Lottery for Education. COMPENSATED ABSENCES Compensated absences represent obligations of the Office of the Governor relating to employee's rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulating 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 of this obligation as this amount will not be liquidated with expendable available financial resources. Funds are provided in the appropriation of funds each year to the Office ofthe Governor to cover the cost of annual leave paid to terminated employees. - 17 - OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT "G" NOTE 1: SUM:MARY OF SIGNIFICANT ACCOUNTING POLICIES COMPENSATED ABSENCES 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 Statements (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, 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 ofthis data. 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 Office's financial position and operations. Comparative totals have not been included on statements where their inclusion would not provide enhanced understanding of the Office's financial position and operations or would cause the statements to be unduly complex and difficult to understand. NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS 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 of a surety bond, the depository may pledge as collateral any one 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 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 of Georgia. - 18 - OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT "G" NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES (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 principal and interest, and debt obligations issued by the Federal Land Bank, the Federal Home Loan Banlc, the Federal Intermediate Credit Bank, the Central Banlc for Cooperatives, the Farm Credit Banlcs, 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 ofthe 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 banlc balances which include demand deposits and/or interest bearing accounts. The banlc balances as of June 30, 1995, 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 Office or by its agent in the Office's name. Category 2 - Amounts collateralized with securities (at market value) held by the pledging financial institution's trust department or agent in the Office'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 Office's name, and amounts uncollateralized. Cash Deposits Carrying Amount Bank Balances Risk Categories 2 3 $-1450 618 06 S 5 450 679 89 S 200 000 00 $=====0""=0"""0 $ 5250 679 89 CATEGORIZATION OF INVESTMENTS Investments are stated at cost. The carrying amount of the investment balance as of June 30, 1995, shown below is maintained in an investment pool by the Office of Treasury and Fiscal Services and is not subject to risk categorization. - 19 - OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT "G" NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS CATEGORIZATION OF INVESTMENTS Type of Investment Carrying Amount Market Value State Investment Pool $ 3,503,889.42 $ 3,503,889.42 NOTE 3: OPERATING LEASES The Office of the Governor 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 of the lease, the Office of the Governor has the option of renewing the lease on a year-to-year basis. Future minimum commitments for operating leases as of June 30, 1995, 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 1996 $ 353,939.16 Expenditures for rental of real property and equipment under operating leases for the year ended June 30, 1995, totaled $1,684,223.41. NOTE 4: CAPITAL LEASE COMMITMENTS The Office of the Governor acquires certain property and equipment through multi-year capital leases with varying terms and options. The majority ofthese agreements contain fiscal funding clauses in accordance with O.C.G.A 50-5-64 which prohibits the creation of a debt to the State of Georgia for the payment of any sums under such agreements beyond the fiscal year of execution if appropriated funds are not available. If renewal of such agreements is reasonably assured, however, capital leases requiring appropriation by the General Assembly of Georgia are considered noncancellable for financial reporting purposes. At June 30, 1995, future minimum commitments under capital leases for equipment are as follows: -20- OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT "G" NOTE 4: CAPITAL LEASE COMMITMENTS Fiscal Year Ending June 30 1996 1997 1998 1999 $ 11,573.16 11,573.55 8,030.61 3,316.00 Total Future Minimum Commitments $ 34,493.32 Less: Amounts Representing Interest 4,270.09 Present Value of Future Minimum Commitments $ 30,223 23 NOTE 5: 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, 1994 $ 2,363,630.87 Additions Deductions 473,145.74 195,347.51 Balance June 30, 1995 $2,641,429.10 NOTE 6: GENERAL LONG-TERM DEBT CHANGES IN GENERAL LONG-TERM DEBT A summary of changes in General Long-Term Debt for the year ended June.JO, 1995, follows: - 21 - OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXI-IlBIT "G" NOTE 6: GENERAL LONG-TERM DEBT CHANGES IN GENERAL LONG-TERM DEBT Compensated Capital Lease Absences Commitments Total Balance July 1, 1994 $ 1,346,643.33 $ 31,302.29 $ 1,377,945.62 Additions Annual Leave Earned and Utilized (Net) Salaries Salary Related Fringe Benefits Current Year Leases Deductions 74,049.86 5,664.81 17,550.00 18,629.06 74,049.86 5,664.81 17,550.00 18,629.06 Balance June 30, 1995 $ 1 426,358.00 $ 30,223.23 $ 1,456 581.23 NOTE 7: RISK MANAGEMENT Public Entity Risk Pool The State Personnel Board, Merit System ofPersonnel Administration internally administers for the State of Georgia a program of health benefits for the employees of units of government of the State of Georgia and 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. Other Risk Management The Department ofAdministrative Services (DOAS) has the responsibility for the State 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 services claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance is purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The Office of the Governor is part of the State of Georgia reporting entity, 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 state agencies by DOAS to provide claims servicing and claims payment. - 22- OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXIIlBIT "G" NOTE 8: 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 is presented in the financial report of the State Personnel Board - Merit System ofPersonnel Administration for the year ended June 30, 1995. NOTE9: RETIREMENTPLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Plan Description The Office ofthe Governor participates in the Employees' Retirement System of Georgia ("ERS"), a singleemployer, defined benefit plan established by the General Assembly of Georgia for the purpose of providing retirement allowances for employees ofthe State ofGeorgia. The Office's payroll for the year ended June 30, 1995, for employees covered by ERS was $11,856,207.74. The Office's total payroll for all employees was $13,022,199.24. 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. 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. 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. 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. -23 - OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATE:MENTS JUNE 30, 1995 EXIIlBIT "G" NOTE 9: RETIRE:MENT PLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Contributions Required and Contributions Made Under the old plan, member contributions consist of employee contributions paid by the employee of 1.25% ofannual compensation and 4.75% ofannual compensation paid by the Office of the Governor on behalfof the employee. Under the new plan, member contnbutions consist solely of 1.25% of annual compensation paid by employee. The Office also is required to contribute at a specified percentage of active member payroll determined annually by actuarial valuation. For the year ended June 30, 1995, the ERS employer contribution rate for the Office amounted to 14.99% of covered payroll and included the 4.75% contributed on behalf of the employee referred to above. Contributions are also made on amounts paid for accumulated leave of retiring employees. Total contributions to the plan made during fiscal year 1995 amounted to $1,923,856.98, of which $1,776,961.27 was made by the Office and $146,895.71 was made by employees. These contributions met the requirements of the plan. Funding Status and Progress Pension Benefit Obligation The amount shown as the "pension benefit obligation" is a standardized disclosure measure ofthe present value ofpension benefits, adjusted for the effects of projected salary increases and step-rate benefits, estimated to be payable in the future as a result ofemployee service to date. The measure is intended to help users assess the funding status ofERS on the going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due and make comparisons among employers. The measure is the actuarial present value of credited projected benefits, and is independent ofthe funding method used to determine contributions to the plan. The pension benefit obligation was computed as part ofan actuarial valuation performed as ofJune 30, 1994. Significant actuarial assumptions used in the valuation include the following: 1) The present value offuture pension benefits paid was computed using a discounted rate of 7. 5 percent. This rate is also the same rate assumed to be earned on investments in the plan in future years. 2) Future pension payments reflect the following assumed salary increases as a result ofinflation and merit increases: -24- OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT "G" NOTE9: RETIREMENTPLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Funding Status and Progress Pension Benefit Obligation Age Percentage 20 9.5% 25 8.5% 30 6.5% 35 6.0% 40 to 65 5.7% 3) ERS has the authority to grant cost-of-living adjustments by state statute. As of June 30, 1994, cost-of- living adjustments have been included in the pension benefit obligation. The total unfunded pension benefit obligation ofERS as of June 30, 1994, was $310,149,000, as follows: Pension Benefit Obligation: Retirees and Beneficiaries Currently Receiving Benefits and Terminated Employees Entitled to Benefits but Not Yet Receiving Benefits $ 2,227,653,000 Current Employees Accumulated Contributions 648,516,000 Employer-Financed Vested 1,085,190,000 Employer-Financed Nonvested 1,206,805,000 Total Pension Benefit Obligation $5,168,164,000 Net Assets Available for Benefits 4,858,015,000 Unfunded Pension Benefit Obligation $ 310,149,000 - 25 - OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXIIlBIT "G" NOTE 9: RETIREMENT PLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Funding Status and Progress Pension Benefit Obligation The measurement ofthe total pension benefit obligation is based on an actuarial valuation as of June 30, 1994. Net assets available for benefits were valued as of the same date. ERS does not make separate measurements of assets and pension benefit obligation for individual employers. Funding Policy The ERS funding policy provides for periodic employer contributions at actuarially determined rates that, expressed as percentages of annual payroll, are sufficient to accumulate sufficient assets to pay benefits when due. Level percentage of payroll employer contribution rates are determined using the entry age funding method. ERS also uses the level percentage of payroll method to amortize the unfunded liability within approximately 20 years following the valuation date. Total contributions from all employers to ERS for the year ended June 30, 1995, were $256,624,679.00. The Office's contribution was actuarially determined and represented .69% of total contributions made by all participating employers. Significant actuarial assumptions used to compute contributions are the same as those used to compute the standardized measure of pension obligation. Trend Information Historical trend information is presented in the financial report ofERS for the year ended June 30, 1995. This information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due. GEORGIA DEFINED CONTRIBUTION PLAN Plan Description The Office ofthe Governor participates in the Georgia Defined Contribution Plan ("GDCP") which is a singleemployer defined contribution plan established by the Georgia General Assembly in July 1993 for the purpose ofproviding retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Employees' Retirement System Board ofTrustees. The Office's payroll for the year ended June 30, 1995, for employees covered by GDCP was$ 866,243.28. The Office's total payroll for all employees was $13,022,199.24. - 26- OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT "G" NOTE 9: RETIREMENT PLANS GEORGIA DEFINED CONTRIBUTION PLAN 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 his/her account, the Board has the option ofrequiring 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 ofemployment, the amount ofthe member's account is refundable upon request by the member. Total contributions made by employees during fiscal year 1995 amounted to $64,968.64 which represents 7.50% of covered payroll. These contributions met the requirements of the plan. TEACHERS RETIREMENT SYSTEM OF GEORGIA Plan Description The Office ofthe Governor participates in the Teachers Retirement System of Georgia (TRS), a cost-sharing multiple-employer public employee retirement system (PERS) established by the General Assembly of Georgia for the purpose of providing retirement allowances and other benefits for teachers of the State of Georgia. The Office's payroll for the year ended June 30, 1995, for employees covered by TRS was $65,356.50. The Office's total payroll for all employees was $13,022,199.24. Benefits TRS provides service retirement, disability retirement, and survivor's benefits for its members. A member is eligible for service retirement after the member ( 1) has attained the age of 60 years and has at least ten years ofcreditable service, (2) has at least 30 years of creditable service, regardless of age, or (3) has attained the age of55 years and has at least 25 years of creditable service. For those members with 30 years of service or those age 60 with at least ten years of service, retirement benefits are equal to 2% of the average of the member's two consecutive highest paid years ofservice multiplied by the number ofyears of creditable service up to 40 years. Any member who has between 25 and 30 years of creditable service and is at least 55 years ofage shall receive a benefit which is reduced by the lessor of 1/12 of 7% for each month the member is below age 60, or by 7% for each year or :fraction thereofby which the member has less than 30 years of service. The normal retirement pension is payable monthly for life. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death. - 27 - OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT "G" NOTE9: RETIREMENTPLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA Benefits Retirement benefits also include death and disability benefits whereby the disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The benefit is based on member's creditable service (minimum of 10 years of service) and compensation up to the date of death or up to the time of disability. Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employer contributions occurs, but the member's contributions are refunded with interest. Contributions Required and Contributions Made Employees of the Office of the Governor who are covered by TRS are required to pay 5% of their gross earnings to TRS. The Institute makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees as advised by their independent actuary. For fiscal year 1995, the employer contribution rate was 11.81% for covered employees. The interest rate assumption (rate of return on investments) was 7.50%. Total contributions to the plan made during fiscal year 1995 amounted to $10,986.42, of which $7,718.64 was made by the Office ofthe Governor and $3,267.78 was made by employees. These contributions represented 11.81% (Office) and 5% (employees) of covered payroll. Funding Status and Progress Pension Benefit Obligation The amount of the total pension benefit obligation is based on a standardized measurement established by Statement No. 5 of the Governmental Accounting Standards Board (GASB) that is required to be used for reporting purposes. The standardized measurement is the actuarial present value of credited projected benefits. This pension valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date and is adjusted for the effects of projected salary increases and any step-rate benefits. A standardized measure of the pension benefit obligation was adopted by the GASB to enable readers ofthe PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among similar PERS. The total unfunded pension benefit obligation ofTRS as of June 30, 1994, which was the latest information available, was as follows: Total pension benefit obligation $15,313,743,000.00 Net assets available for benefits, at cost 14,254,785,000.00 Unfunded pension benefit obligation $ 1.058.958.000.00 - 28 - OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1995 EXHIBIT "G" NOTE9: RETIREMENTPLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA Funding Status and Progress Pension Benefit Obligation The measurement ofthe total pension benefit obligation is based on an actuarial valuation as of June 30, 1994. Net assets available for benefits were valued as of the same date. TRS does not make separate measurements of assets and pension benefit obligation for individual employers. Funding Policy Total contributions from all employers to TRS for the year ended June 30, 1995, were $565,117,811.00. The Office of the Governor's contribution for the year ended June 30, 1995, of $7,718.64 was actuarially determined and represented .00136% of total contributions made by all participating employers. Trend Information Historical trend information is presented in the financial report ofTRS for the year ended June 30, 1995. This information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due. NOTE 10: LEAVE 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. Employees earn annual leave ranging from ten to fourteen hours each month depending upon the employees' length ofcontinuous 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 11: CONTINGENCIES Amounts received or receivable from granter agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the granter 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 Office of the Governor expects such amounts, if any, to be immaterial to its overall financial position. -29 - OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATE:MENTS JUNE 30, 1995 EXHIBIT "G" NOTE 11: CONTINGENCIES Litigation, claims and assessments filed against the Office of the Governor, if any, are generally considered to be actions against the State of Georgia. Pursuant to the Official Code of Georgia Annotated, the Department ofAdministrative 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 ofGeorgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 1995. NOTE 12: OTHER FINANCIAL NOTES Pursuant to the provisions of the Official Code of Georgia Annotated 50-23-34, all assets, funds, property, contracts, programs, obligations and interests ofthe Office of Energy Resources in existence or effect on July 1, 1994, were transferred to the Georgia Environmental Facilities Authority on that date. A net fund balance adjustment of $12,807,575.57 is recorded on Exhibit "B" of these financial statements to reflect the transfer of cash and fund equity from the Office of the Governor to the Authority. NOTE 13: BONDING INFORMATION All employees of the Office of the Governor 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, 1995. Under this agreement the Public Employee Dishonesty Coverage insures the Office ofthe Governor 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 Office of the Governor to a maximum of $1,000,000.00 against loss sustained from failure ofits 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 Office ofthe Governor 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, 1995. Under these additional public employee dishonesty coverages, the policies insure the Office of the Governor to a maximum of$9,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees. - 30- SUPPLEMENTARY INFORMATION - 31 - OFFICE OF THE GOVERNOR COMBINING BALANCE SHEET (STATUTORY BASIS) BUDGET FUND JUNE 30. 1995 EXHIBIT H" ASSETS Cash and Cash Equivalents Accooots Receivable State Appropriations Federal Financial Assistance Other "A" OFFICE OF THE GOVERNOR "B" LOTTERY FOR EDUCATION TOTAL $ 3,126,127.61 $ 3,126,127.61 $ 27,869,071.40 $ 1,239,000.00 $ 29,108,071.40 40,126,848.03 40,126,848.03 218,128.71 218,128.71 $ 68,214,048.14 $ 1,239,000.00 $ 69,453,048.14 Total Assets $ 71,340,175.75 $ 1,239,000.00 $ 72,579,175.75 LIABILITIES AND FUND EQUITY Liabilities Cash Overdraft Accounts Payable Payroll Withholdings Total LiabUities Food Equity Fund Balances Reserved Federal Financial Assistance Crime Victims Emergency Fund Georgia Council for the Arts Georgia Emergency Management Agency Disaster Assistance Matching Disaster Assistance Contingency Nuclear Preparedness Training Grant Unreserved Designated Surplus Regular Lottery for Education Total Fund Equity $ 1,136,982.08 $ 1,1~,982.08 $ 43,696,450.67 101,986.55 43,798,437.22 6,528.25 6,528.25 $ 43,702,978.92 $ 1,238,968.63 $ 44,941,947.55 $ 4,754.92 3,143,798.16 537.56 17,566,300.03 5,594,253.31 13,169.57 1,314,383.28 $ $ 27,637,196.83 $ $ 4,754.92 3,143,798.16 537.56 17,566,300.03 5,594,253.31 13,169.57 31.37 1,314,383.28 31.37 31.37 $ 27,637,228.20 Total Liabilities and Fund Equity $ 71,340,175.75 $ 1,239,000.00 $ 72,579,175.75 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. -32- OFFICE OF THE GOVERNOR COMBINING STATEMENT OF CHANGES IN FUND BALANCES