G;A A:fTDO .12.\ G'l \ qq5-Cf~ REVIEW REPORT STATE OF GEORGIA OFFICE OF TIIE GOVERNOR YEAR ENDED JUNE 30, 1996 OFFICE OF THE GOVERNOR - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION .EXHIBITS FINANCIAL STATEMENTS A COMBINED BALANCE SHEET (STATUTORY BASIS) ALL FUND TYPES AND ACCOUNT GROUPS 2 B COMBINED STATEMENT OF CHANGES IN FUND BALANCES (STATUTORY BASIS) .GOVERNMENTAL FUND TYPES 4 C STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND 5 D STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BUDGET FUND 10 E STATEMENT OF CASH RECEIPTS AND DISBURSEMENT$ STATE REVENUE COLLECTIONS FUND 11 F NOTES TO THE FINANCIAL STATEMENTS 12 SUPPLEMENTARY INFORMATION G COMBINING BALANCE SHEET (STATUTORY BASIS) BUDGET FUND 28 H COMBINING STATEMENT OF CHANGES IN FUND BALANCES (STATUTORY BASIS) BUDGET FUND 29 I COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND 30 J COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUND TYPE - AGENCY FUNDS 35 SCHEDULES 1 SCHEDULE OF APPROVED BUDGET 36 2 CASH AND CASH EQUIVALENTS 37 3 SCHEDULEOFGOVERNO~SEMERGENCYFUND 38 4 SCHEDULE OF FEDERAL REVENUES 39 OFFICE OF THE GOVERNOR - TABLE OF CONTENTS- SECTION I FINANCIAL SUPPLEMENTARY INFORMATION SCHEDULES 5 SCHEDULE OF OTHER OPERATING EXPENSES 41 6 RECONCILIATION OF SALARIES AND TRAVEL 42 7 SUMMARY OF SALARIES, TRAVEL, AND PER DIEM AND FEES 43 SECTIONll 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 31, 1996 Honorable Zell Miller, Governor Members of the General Assembly of Georgia and Honorable Timothy P. Burgess, Director Office of Planning 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 F) of the Office of the Governor 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 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 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. 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. 96ARL-5 Our review was made for the purpose ofexpressing limited assurance that there were no material modifications that should be made to the financial statements in order for them to be in conformity with the basis of accounting described in Note 1. The accompanying supplementary information (Exhibits G through I 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 ofthe financial statements and we are not aware of any material modifications that should be made thereto. Respectfully submitted, t::L~ Claude L. Vickers State Auditor CLV:gp 96ARL-5 FINANCIAL STATEMENTS - 1- cash and cash Equivalents (see SchedUle) Accounts Receivable State Appropriation Federal Financial Assistance other FIXed Assets Equipment Amount to be Provided for Payment of Accrued Compensated Absences capital Lease Commitments OFFICE OF THE GOVERNOR COMBINED BALANCE SHEET (STATUTORY BASIS) ALL FUNp TYPES ANp ACCOUNT GROUPS JUNE 30, 1996 GOVERNMENTAL FUND TYPES STATE REVENUE BUDGET COLLECTIONS FIDUCIARY FUND TYPE AGENCY $ $ 26,980,920.63 46,565,561.05 235,485.03 $ 73,781,966,71 50.00 $ _ _.::63:::&,.:.:173=.43;:::.. Total Assets $ 73,781.966,71 $ LIABILITIES AND FUND EQUITY Liabilities Cash Overdraft Accounts Payable Accrued Salaries Payroll Withholdings Funds Held for Others Compensated Absences capital Leases Total Liabilities Fund Equity Investment in General Fixed Assets 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 State Revenue Collections Fund Unreserved Designated Surplus Regular Lottery for Education Total Fund Equity $ 1,127,084.54 47,629,940,99 13,653.83 10.338,39 $. 48,781,017,75 $ 1,156,84 3,965,166,35 56,937.18 15,042.643.60 4,830,661.31 0,00 $ 1,101,929.01 2,454.67 $ 25,000,948.96 $ Total Liabilities and Fund Equity $ 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. 73.781.966.71 $ -2- 50,00 $ 63"".;,;1.73...4..3. $ 63,173.43 $ 63,173,43 50,00 50.00 50,00 $ 63,..,.;,;1.73.;;;:.4:;;:.3 ACCOUNT GROUPS GENERAL GENERAL FIXED LONG-TERM ASSETS DEBT TOTALS (Memorandum Only) JUNE 30, 1996 JUNE 30, 1995 $ 63,223.43 $ 2,053,271.36 $ 26,980,920.63 $ 29,108,071.40 46,565,561.05 40,126,848.03 235,485.03 218,128.71 $ 73,781,966.71 $ 69.453,048.14 $ 3,015,677.06 $ 3,015,677.06 $ 2,641,429.10 $ 1,466,767.81 $ 23,728.84 $ 1.490,496.65 $ 1,466,767.81 $ 23,728.84 1,490,496.65 $ 1,426,358.00 30,223.23 1,456,581.23 $ 3,015,677.06 $ 1,490.496.65 $ 78,351,363.85 $ 75,604,329.83 $ $ 1,466,767.81 23,728.84 $ 1,490,496.65 $ 1,127,084.54 $ 47,629,940.99 13,653.83 10,338.39 63,173.43 1,466,767.81 23,728.84 50,334,687.83 $ 0.00 43,798,437.22 0.00 6,528.25 64,125.83 1,426,358.00 30,223.23 45,325,672.53 .$ 3,015,677.06 $ 3,015,677.06 $ 2,641,429.10 1,156.84 3,965,166.35 56,937.18 15,042,643.60 4,830,661.31 0.00 50.00 4,754.92 3,143,798.16 537.56 17,566,300.03 5,594,253.31 13,169.57 0.00 $ 3,015,677.06 1,101,929.01 2,454.67 1,314,383.28 31.37 $ 28,016,676.02 $ 30,278,657.30 $ 3,015,677.06 $ 1.490.496.65 $ 78,351,363.85 $ 75,604,329.83 -3- OFFICE OF THE GOVERNOR COMBINED STATEMENT OF CHANGES IN FUND BALANCES (STATUTORY BASIS) GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 1996 EXHIBIT-B" 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 SIDEMENT OF FUNDS AVAILABLE AND EXPEND'TURES BUDGET FUND YEAR ENDED JUNE 30,1996 EXHIBITC FUNDS AVAILABLE REVENUES STATE APPROPRIATION General Appropriation Amended Appropriation Governor's Emergency Fund (See Schedule) Budget Adjustments Less: Lapsed 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 Community Affairs Georgia Department of Education Georgia Department of Human Resources Georgia Department of Transportation Georgia Environmental Facilities Authority Georgia Intern Program Georgia Peace Officers Standards and Training Council 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-OVER FROM PRIOR YEAR Transfer from Reserved Fund Balance Federal Financial Assistance Children and Youth Coordinating Council Crime Victims Emergency Fund Ford Foundation Contract Georgia Council for the Arts Georgia Emergency Management Agency Disaster Assistance Matching Disaster Assistance Contingency Nuclear Preparedness Training Grant Total Carry-Over from Prior Year TOTALS YEAR ENDED JUNE 30,1996 JUNE 30,1995 $ 28,192,063.00 $ -49,100.00 2,503,644.00 225,3n.00 $ 30,871,984.00 $ 950,000.00 $_..=2.9t,9=2-1=,9-8=4-.0'0~ $ $-....:;.6.;4--,=4=65,","3"7,"5,.,1,;9;,, $ 24,190,854.00 47,574,273.00 45,291,200.00 -43,784,840.00 73,271,487.00 450,000.00 72,821,487.00 133,960,844.94 $ 162,855.29 $ 141.00 1,370,405.15 0.00 100,000.00 0,00 14,502.43 55,226.18 36,722.20 58,335.00 ' 72,748.80 754.00 0.00 213,032.87 31,350.12 199,823.37 104,483.76 820.00 2,237.15 18,143.17 $--=-2,,-44,1-,5,8-0,.4=9~ $ $--9=6,8=28=,93=9.6=8 $ 74,546.52 270.50 1,493,075.99 31,000.00 0.00 147,150.00 0.00 47,984,84 65,128.59 68,790.00 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 2,455,954.07 209,238,286.01 $ 4,754.92 $ 0.00 3,143,798.16 0.00 537.56 17,066.41 667.82 2,141,797.73 9,485.86 0.00 17,566,300.03 5,594,253.31 13,169.57 0.00 0.00 58,746.10 $ 26,322,813.55 $_--=2=,22==.J7,,,,,,763=,9;.:,,2 Total Funds Available 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- $ 123,151,753.23 $ 211,466,049.93 OFFICE OF THE GOVERNOR . STATEMENT OF FUNDS AVAILABLE ANP EXPENPITURES BUDGET FUNp YEAR ENDEp JUNE 30 1996 EXHIBIT "C EXPENDITURES COST OF OPERATIONS PERSONAL SERVICES Salaries and Wages Employer's Contributions for: F.I.C.A. Retirement Health Insurance Personal Uability 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 Grants to Counties, Cities and Civil Divisions Other Operating Expenses (See Schedule) Duplicating and Rapid Copy Publications and Printing Equipment Purchases TOTALS YEAR ENDED JUNE 30,1996 JUNE 30,1995 $ $_--=:=.L:..:..:=. $ TRAVEL EQUIPMENT Equipment Purchases Lease/Purchase of Equipment Rental of EqUipment COMPUTER CHARGES Software Computer Billings, DOAS $ $ _ _-=J.:..:.:=-=" $ 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.CA Retirement Health Insurance Personal Liability Insurance 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- $ 11,627,920.33 $ 805,280.31 1,728,367.51 1,394,295.17 71,417.00 11,225,720.70 761,885.03 1,607,876.89 1,319,602.86 98,325.00 OFFICE OF THE GOVERNOR STATEMENT OF FUNDS AVAILABLE AND EXpENDITURES . BUpGET FUND YEAR ENDED JUNE 30.1996 EXHIBITC EXPENPITURES PERSONAL SERVICES Employer's Contributions for: Unemployment Compensation Insurance Workers' Compensation Insurance Assessments by Merit System Drug Testing 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 Equipment Purchases TRAVEL MOTOR VEHICLE PURCHASES EQUIPMENT Equipment Purchases Lease/Purchase of Equipment Rental of Equipment COMPUTER CHARGES 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 TOTALS YEAR ENDED JUNE 30,1996 JUNE 30,1995 $ 8,614.00 $ 32,478.00 21,326.39 237.00 $-....1:5,.6=8:9;,9=3=5~..7:1..$ 7,219.88 30,361.12 21,nO.20 0.00 15,072,761.68 $ 50,048.79 $ 403,091.71 237,685.72 89,080.71 146,060.03 45,100.01 .178,087.27 69,202.47 156,741.90 244,016.72 $_--:.1'1:,:6'=1"9:,"1:'1::5=.3=3.. $ $-_::::2.6:1..,=04=0.=88- $ $---_....::.0:..00:~$ 38,046.93 398,520.74 137,027.73 48,290.78 1,267,631.17 53,441.63 180,601.01 41,408.06 122,403.01 241,686.80 2,529,057.86 304,948.16 17,900.00 $ 163,032.06 $ 12,510.15 59,571.10 235,113.31 $ 70,106.28 17,265.02 39,208.95 126,580.25 $ 132,802.09 $ 501,466.47 7,364.00 43,819.87 215,957.86 $ _---.,;:9::0=1.,.4:1.0J~.2==9 $ $_---'..1L,=1c2:.6:,.8.n...7:.4~ $ $ _ _5=c9.2.,:4.7:.9...7:5:~$ 63,694.02 307,761.37 31,618.00 350.00 219,268.12 622,691.51 994,457.75 419,300.96 $ 1,296,869.56 $ 18,414,219.12 $ 19,711,088.68 $ 1,n4,025.19 13,295,646.98 15,069,672.17 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 30,1996 EXHIBIT-C" ;; EXPENDITURES QItI.f8 MANSION ALLOWANCE Other Costs Paid to Governor Zell Miller INTERN STIPENDS AND TRAVEL other Costs Stipends - List on File ART GRANTS OF STATE FUNDS Personal Services salaries and Wages Employer's Contribution for: F,I.C,A, Other Costs Supplies and Materials Rents (Other than Real Estate) Grants to Counties, Cities and Civil Divisions Other Operating Expenses Publications and Printing Travel 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) Grants to Counties, Cities and Civil Divisions Other Operating Expenses (See Schedule) Duplicating and Rapid Copy Publications and Printing EqUipment Purchases Travel EqUipment EqUipment Purchases Computer Charges Software Telecommunications Per Diem, Fees and Contracts Per Diem and Fees Contracts HUMANITIES GRANT - STATE FUNDS Other Costs Grants to Counties, Cities and Civil Divisions CHILDREN AND YOUTH GRANTS Other Costs Grants to Counties, Cities and Civil Divisions 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. -8- TOTALS YEAR ENDED JUNE 30,1996 JUNE 30,1995 $ 40,000,00 $ 40,000,00 $ 210,333,03 $ 225,102,83 $ 40,799,98 $ 591,61 0,00 165,00 3,787,093.41 0,00 100,00 0,00 0.00 123,750.00 $ 3,952,500,00 $ 70,318,50 1,041.07 1,309,94 0,00 2,987,799,00 5,00 22,40 421.04 785,71 87,854,34 3,149,557,00 $ 36,102.43 $ 523,47 13,474,65 119,21 1,275,06 191,923,00 25,067.73 0.00 9,727.00 745.94 1,959,75 1,547,00 241.81 233,71 156,064,09 0,00 $ 439,004.85 $ 57,348.00 810,00 17,845,21 0.00 4,976,08 152,915,00 12,796.95 18,90 460,78 0.00 3,717,11 0,00 1,351,00 1,496,73 111,118,24 18,924,00 383,n8,00 $ 130,600,00 $ 60,000,00 $ 290,975.00 $ 290,975.00 OFFICE OF THE GOVERNOR STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND YEAR ENDED JUNE 30,1996 EXHIBITC EXPENDITURES QI!iER JUVENILE JUSTICE GRANTS Other Costs Grants to Counties, Cities and Civil Divisions 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 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 YEAR ENDED JUNE 30,1996 JUNE 30,1995 $ 1,534,155,87 $ 1,130,622,30 $ 500,876,69 $ 449,340,11 $ 684,400,00 $ 684,400,00 $ 1,235,328,55 $ 1,092,799,91 $ 60,000,00 $ 60,000,00 $ 46,341,286,20 $ 136,490,486,53 $ 0,00 $ 1,999,968,63 $ 55,419,460.19 $ 146,057,030,31 $ 98,614,670,37 $ 184,101,302,02 24,537,082,86 27,364,747.91 $ 123,151,753.23 $ 211,466,049,93 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. -9- OfACE OF THE GOYERNOR STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BUDGET FUND YEAR ENDED JUNE 30, 1996 EXHIBIT "0- FUNDS AVAILABLE REVENUES State Appropriation Federal Revenues Other Revenues Retained . CABRv.oyER FROM PRIOR YEAR Transfer from Reserved Fund Balance BUDGET ACTUAL VARIANCE FAVORABLE (UNFAVORABLE) $ 30,871,984.00 $ 107.328,871.00 1,818,772.00 29.921,984.00 $ 64.465,375.19 2,441.580.49 -950,000.00 -42,863,495.81 622,808.49 $ 140,019,627.00 $ 96,828.939.68 $ -43,190.687.32 0,00 26,322,813.55 26,322,813.55 $ 140,019,627.00 $ 123.151,753.23 $ .16,867,873.77 EXPENDITURES Cost of Operations Personal Services Regular Operating Expenses Travel 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 $ 3,512,745.00 $ 3,058,148.49 $ 17,300,699.00 15,689,935.71 1,797,339.00 1.619,115.33 365,729.00 261,040.88 333,567.00 235,113.31 995,915.00 901,410.29 1,200,314.00 1,126,877.74 627,464.00 592,479,75 32,012,716,00 19,711,088.68 40,000.00 40,000.00 240,000,00 210,333.03 3,952,500.00 3,952,500.00 507,889.00 439,004.85 130,600.00 130,600.00 290,975.00 290,975.00 3,599,446.00 1,534,155.87 516,000.00 500,876.69 684,400.00 684,400.00 1,602,729.00 1,235,328.55 60,000,00 60,000.00 70,248,600.00 46,341,286.20 454,596.51 1,610,763.29 178,223.67 104,688.12 98,453.69 94,504.71 73,436.26 34,984.25 12,301.627.32 0.00 29,666.97 0.00 68,884.15 0.00 0.00 2,065,290.13 15,123.31 0.00 367,400.45 0.00 23,907,313.80 $ 140,019,627.00 $ 98,614,670.37 $ 41,404,956,63 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 - $ 24,537,082.86 $ 24,537,082.86 OFFICE OF THE GOVERNOR STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS STATE REVENUE COLLECTIONS FUND YEAR ENDED JUNE 30, 1996 EXHIBIT"E" CASH RECEIPTS STATE REVENUE COLLECTIONS Buying Service Fees Fines Motor Vehicle Arbitration Fees Teacher Certification Fees Total Cash Receipts CASH AND CASH EQUIVALENTS - JULY 1, 1995 $ 550.00 28,294.78 795,807.00 250,111.40 $ 1,074,763.18 0.00 $ 1,074,763.18 DISBURSEMENTS TRANSFERS To Office of Treasury and Fiscal Services CASH AND CASH EQUIVALENTS - JUNE 30,1996 $ 1,074,713.18 50.00 $ 1,074,763.18 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 NOTES TO THE FINANCIAL STATEMENTS JUNE 30,1996 EXHIBIT "F" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Office ofthe Governor, an organizational unit of the State of Georgia, is part of the 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 of the 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 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 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 1995-1996. The Budget Fund is similar in nature to a General Fund as defined 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. FIDUCIARY FUND TYPE AGENCY FUNDS - The funds used to account for assets held for use by other funds, governments, or individuals. - 12 - OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1996 EXHIBIT "F" NOTE 1: SUMI\1ARY OF SIGNIFICANT ACCOUNTING POLICIES FUND ACCOUNTING ACCOUNT GROUPS GENERAL FIXED ASSETS - The account group used to account for fixed assets used in governmental fund type operations. Fixed assets purchased are recorded at 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 of the 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 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 ofthe 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 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. - 13 - OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996 EXHIBIT "F" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING GOVERNMENTAL FUND TYPES BUDGET FUND Contractual obligations for goods and services which have not been received at the end ofthe fiscal year are recognized as expenditures and liabilities iil the accompanying financial statements. This accounting practice causes expenditure-driven grant revenues to be accrued based, in part, on the unexecuted portion ofcontracts 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 of the State of Georgia, but is not consistent with generally accepted accounting principles, which provide for the recording ofencumbrances as a reservation offund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures determined in accordance with generally accepted accounting principles. 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 of the Governor are on the basis ofa budget submitted by the Office and approved by the Legislature and the Governor. The budget 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. - 14 - OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996 EXHIBIT "F" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BUDGET 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 54 of the 1995-1996 Amended Appropriations Act. Expenditures ofno more than 102% ofthe stated amount for each common object class are authorized by Section 54. 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 currency on hand, 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 I". The Office does not have any risk exposure related to investments in derivatives or similar investments in Georgia Fund 1 as the investment policy of OTFS does not provide for investments in derivatives or similar investments through the Georgia Fund 1. INVENTORIES No inventories of supplies are reported in these 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. CRIME VICTIMS EMERGENCY FUND Funds received from penalty assessments for driving under the influence of alcohol or drugs for the purpose of compensating innocent victims of crime. This amount is restricted for expenditures in subsequent years. - 15 - OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30.1996 EXHIBIT "F" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES RESERVED FUND BALANCE 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 of the donor. GEORGIA EMERGENCY MANAGEMENT AGENCY 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. STATE REVENUE COLLECTIONS FUND The balance ofrevenues collected but not transmitted to the Office of Treasury and Fiscal Services at fiscal year end. These funds are required by the Official Code of Georgia to be transferred to the Office of Treasury and Fiscal Services and are not available for use by the Office of the Governor. 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 ofunexpended regular appropriations designated for reappropriation by the State in subsequent years. LOTTERY FOR EDUCATION - An amount of unexpended lottery appropriations designated for future reappropriation by the State 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 ofthis 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 terminatedemployees. The liability for compensated absences at year end is reported in the General Long-Term Debt Account Group for governmental funds. . - 16- OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996 EXHIBIT "F" NOTE 1: SUM:MARY OF SIGNIFICANT ACCOUNTING POLICIES 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 of this 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 ofthe Office'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 AND INVESTMENTS 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 ofindebtedness, 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 of the bonds for this purpose. (4) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia. (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, 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. - 17 - OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996 EXHIBIT "F" NOTE 2: GUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES (6) ~arantee 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 ofexempting demand deposits from the collateral requirements. CATEGORIZATION OF DEPOSITS For purposes of analysis of custodial credit risk, cash deposits consist of all bank balances which include demand deposits and/or interest bearing accounts. 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 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 $-5 55791896 $ 338942969 $ 200 000.00 $,==~o~o~o $ 3 189429.69 CATEGORIZATION OF INVESTMENTS Investments are stated at cost. The carrying amount of the investment balance as ofJune 30, 1996, shown below is maintained in an investment pool by the Office ofTreasury and Fiscal Services and is not subject to risk categorization. Type of Investment Carrying Amount Market Value State Investment Pool $4,493 957.85 $4,493,957.85 - 18 - OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996 EXlllBIT "F" NOTE 3: OPERATING LEASES The Office ofthe Governor hasentered into certain agreements to lease real property and equipment which are classified as operating leases. These leases generally contain provisions that, at the expiration date ofthe original term ofthe lease, the Office of the Governor has the option of renewing the lease on a year-to-year basis. Future minimum commitments for operating leases as ofJune 30, 1996, 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 1997 $ 435;905.64 Expenditures for rental of real property and equipment under operating leases for the year ended June 30, 1996, totaled $710,898.35. 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, 1996, future minimum commitments under capital leases for equipment are as follows: Fiscal Year Ending June 30 1997 $ 12,512.31 1998 9,246.59 1999 4.533.16 Total Future Minimum Commitments $ 26,292.06 Less: Amounts Representing Interest 2,563.22 Present Value of Future Minimum Commitments $ 23,728.84 - 19- OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30,1996 EXHIBIT "F" 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 ofSl,OOO.OO 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, 1995 S 2,641,429.10 Additions Deductions 504,419.10 130,171.14 Balance June 30, 1996 S 3,015,677.06 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 30, 1996, follows: Compensated Capital Lease Absences Commitments Total Balance July 1, 1995 S 1,426,358.00 S 30,223.23 $ 1,456,581.23 Additions Annual Leave Earned and Utilized (Net) Salaries Salary Related Fringe Benefits Leases Deductions 37,538.14 2,871.67 6,680.69 13,175.08 37,538.14 2,871.67 6,680.69 13.175.08 Balance June 30, 1996 $ 1,466767.81 S 23,72884 $ 1,490.496.65 NOTE 7: RISK MANAGEMENT Public Entity Risk Pool The State Personnel Board, Merit System ofPersonnel Administration administers for the State of Georgia a program ofhealth 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 - 20- OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996 EXHIBIT "F" NOTE 7: RISKMANAGEMENT Public Entity Risk Pool 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 processes 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 are 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 various state organizations by DOAS to provide claims servicing and claims payment. 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 will be presented in the State of Georgia Comprehensive Annual Financial Report for the year ended June 30, 1996. NOTE 9: RETIREMENT PLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Plan Description The Office of the Governor participates in the Employees' Retirement System of Georgia ("ERSil), a singleemployer, defined benefit plan established by the General Assembly of Georgia for the purpose of providing - 21 - OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1996 EXHIBIT "F" NOTE9: RETIREMENT PLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Plan Description retirement allowances for employees ofthe State of Georgia. The Office's payroll for the year ended June 30, 1996, for employees covered by ERS was $12,694,930.11. The Office's total payroll for all employees was $13,442,982.83. 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 1 years of creditable service and attainment of age 65. If 1 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, 1996, 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% of compensation paid by the Office of the Governor on behalf of the employee. Under the new plan, member contributions consist solely of 1.25% of 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, 1996, the ERS employer contribution rate for the Office amounted to 14.95% ofcovered payroll and included the 4.75% contributed on behalf of the employee under the old plan referred to above. The employer contributions are projected to liquidate the unfunded actuarial - 22- OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996 EXIllBIT "F" NOTE9: RETIREMENT PLANS EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Contributions Required and Contributions Made liability within 20 years based upon the actuarial valuation ofJune 30, 1995. Employer contributions are also made on amounts paid for accumulated leave to retiring employees. Actuarial assumptions used by the ERS to complite actuarially determined contribution requirements are the same as those used to compute the pension benefit obligation. Total contributions to the plan made during fiscal year 1996 amounted to $2,056,630.28, of whicp $1,897,939.88 was made by the Office and $158,690.40 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 ofthe 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 for the purpose of providing 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 of Trustees. The Office's payroll for the year ended June 30, 1996, for employees covered by GDCP was $575,129.11. The Office's total payroll for all employees was $13,442,982.83. 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 $43,134.91 which represents 7.50% of covered payroll. These contributions met the requirements of the plan. - 23 - OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996 EXHIBIT "F" NOTE 9: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA Plan Description Office of the 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, 1996, for employees covered by TRS was $72,194.50. The Office's total payroll for all employees was $13,442,982.83. 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 of 55 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 of years 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. 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 1 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 ofemployer contributions occurs, but the member's contributions are refunded with interest. Contributions Required and Contributions Made Employees of the Institute who are covered by TRS are required to pay 5% oftheir 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 1996, 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 1996 amounted to $12,135.86, of which $8,526.14 was made by the Office and $3,609.72 was made by employees. These contributions represented 11.81% (Office) and 5% (employees) of covered payroll. - 24- OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30.1996 EXHIBIT nFn NOTE 9: RETIREMENTPLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA 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 of the 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, 1995, which was the latest information available, was as follows: Total pension benefit obligation $ 17,442,607,000.00 Net assets available for benefits, at cost 15,857,066,000.00 Unfunded pension benefit obligation $ 1.585,541.00000 The measurement ofthe total pension benefit obligation is based on an actuarial valuation as of June 30, 1995. 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. Retirement System Contributions Total contributions from all employers to TRS for the year ended June 30, 1996, were $607,274,559.00. The Institute's contribution for the year ended June 30, 1996, of $8,526.14 was actuarially determined and represented .0014% of total contributions made by all participating employers. Trend Information Historical trend information is presented in the TRS June 30, 1996, financial report. 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. - 25- OFFICE OF THE GOVERNOR NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996 EXHIBIT "FII NOTE 10: LEAVE POLICIES Employees earn annual leave ranging from ten to fourteen hours each month depending upon the employees~ length ofcontinuous State service with a maximum accumulation offorty five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. See Note 1 - Compensated Absences. Certain employees who retire with one hundred and twenty days or more offorfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System of Georgia. NOTE 11: CONTINGENCIES Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditures which are disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although the Office of the Governor expects such amounts, if any, to be immaterial to its overall financial position. Litigation, claims and assessments filed against the Office of the Governor, if any, are generally considered to be actions agairist the State of Georgia. 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, 1996. NOTE 12: BONDING INFORMATION All employees of the Office of the Governor are bonded under a Public Employees Blanket Bond written by Employers Insurance ofWausau, their Bond No. 1450-02-110723, on which the premium was paid to October 1, 1996. Under this agreement the Public Employee Dishonesty Coverage insures the Office of the Governor to a maximum of$I,OOO,OOO.OO agairist 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 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 ofthe Office ofthe Governor are also bonded under Commercial Crime Policies written by the United States Fire Insurance Company, their Policy Nos. 6260122926 and 626 012294 4, on which premiums were paid to October 1, 1996. 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 and from failure of its employees to perform faithfully. - 26- SUPPLEMENTARY INFORMATION - 27- OFFICE OF THE GOVERNOR COMBINING BALANCE SHEET (STATUTORY BASIS) BUDGET FUND JUNE 30,1996 EXHIBIT"GH ASSETS Cash and Cash Equivalents Accounts Receivable State Appropriations Federal Financial Assistance Other HAN OFFICE OF THE GOVERNOR HB" LOTIERYFOR EDUCATION TOTAL $ $ 26,978,934,08 $ 46,565,561.05 235,485.03 $ 73,779,980.16 $ 468.12 $ 468.12 1,986.55 $ 26,980,920,63 46,565,561.05 235,485.03 1,986.55 $ 73,781,966.71 Total Assets $ 73,779,980.16 $ 2,454.67 $ 73,782,434,83 LIABILITIES AND FUND EQUITY Liabilities Cash Overdraft Accounts Payable Accrued Salaries Payroll Withholdings Total Liabilities Fund 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 Unreserved Designated Surplus Regular Lottery for Education Total Fund Equity $ 1,127,552.66 47,629,940.99 13,653.83 10,338.39 $ 48,781,485.87 $ 1,127,552.66 47,629,940.99 13,653.83 10,338.39 $ 48,781,485.87 $ 1,156.84 3,965,166.35 56,937.18 15,042,643.60 4,830,661.31 $ 1,156.84 3,965,166.35 56,937.18 15,042,643.60 4,830,661.31 1,101,929.01 $ $ 24,998,494.29 $ 2,454.67 1,101,929.01 2,454.67 2,454.67 $ 25,000,948.96 Total Liabilities and Fund Equity $ 73,779,980.16 $ See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information. - 28- 2,454.67 $ 73,782,434.83 OFFICE Of. THE GOVERNOR COMBINING STATEMENT OF CHANGES IN FUND BALANCES (STATUTORY BASIS) BUDGET FUND YEAR ENDED JUNE 30, 1996 EXHIBIT "K' See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. - 29- OFFICE OF THE GOVERNOR COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND YEARENDED JUNE 30. 1996 EXHIBIT-I- FUNDS AVAILABLE REVENUES STATE APPROPRIATION General Appropriation Amended Appropriation Governor's Emergency' Fund Budget Adjustments Less: Lapsed Funds Total State Appropriation FEDERAL REVENUES OTHER REVENUES RETAINED Artists in Schools Census Data Contracts Georgia Crime Victims Fund Georgia Department of Community Affairs Georgia Department of Human Resources Georgia Department of Transportation Georgia Environmental Facilities Authority Georgia Intern Program Georgia Peace Officers Standards and Training Council Copying Services 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 CARRYOVER FROM PRIOR YEAR Transfer from Reserved Fund Balance 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 Total Carry-Over from Prior Year ~A OFFICE OF THE GOVERNOR -B- LOTTERY FOR EDUCATION TOTAL $ 28,192,063.00 $ -49,100.00 2,503,644.00 225,3n.00 $ 30,871,984.00 $ 950,000.00 $ 29,921,984.00 $ $ 64,465,375.19 $ 162,855.29 141.00 1,370,405.15 100,000.00 14,502.43 55,226.18 36,722.20 58,335.00 72,748.80 754.00 213,032.87 31,350.12 199,823.37 104,483.76 820.00 2,237.15 18,143.17 $ 2,441,580.49 $ 96,828,939.68 $ $ 4,754.92 3,143,798.16 537.56 17,566,300.03 5,594,253.31 13,169.57 $ 26,322,813.55 0.00 $ 0.00 $ 0.00 $ $ 28,192,063.00 -49,100.00 2,503,644.00 225,3n.00 30,871,984.00 950,000.00 29,921,984.00 64,465,375.19 $ $ 0.00 $ 162,855.29 141.00 1,370,405.15 100,000.00 14,502.43 55,226.18 36,722.20 58,335.00 72,748.80 754.00 213,032.87 31,350.12 199,823.37 104,483.76 820.00 2,237.15 18,143.17 2,441,580.49 96,828,939.68 $ 4,754.92 3,143,798.16 537.56 17,566,300.03 5,594,253.31 13,169.57 $ 26,322,813.55 Total Funds Available $ 123,151,753.23 $ 0.00 $ 123,151 ,753.23 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. -30- OFFICE OF THE GOVERNOR COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES .. '. BUDGET FUND YEAR ENDED JUNE 30,1996 EXHIBIT-I" EXPENDITURES COST OF OPERATIONS PERSONAL SERVICES Salaries and Wages Employer's Contributions for: F,I.CA 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 Grants to Counties, Cities and Civil Divisions Other Operating Expenses Duplicating and Rapid Copy Publications and Printing Equipment Purchases TRAVEL EQUIPMENT LeaselPurchase of Equipment Rental of Equipment COMPUTER CHARGES Software Computer Billings, DOAS TELECOMMUNICATIONS PER DIEM, FEES AND CONTRACTS Per Diem and Fees Total Cost of Operations PERSONAL SERVICES Salaries and Wages Employer's Contributions for: F.I.CA Retirement Health Insurance Personal Liability Insurance -A- OFFICE OF THE GOVERNOR -B- LOTIERYFOR EDUCATION TOTAL $ 1,738,160.09 120,990.64 273,393.99 213,793.88 11,178.00 1,333.00 5,026.00 $ 2,363,875.60 $ 762.06 54,854.11 17,686.99 26,518.06 2,194.85 86,944.00 221,144.70 138.44 40,851.01 5,335.54 $ 456,429.76 $ 28,723.20 $ 2,n8.2O 25,992.55 $ 28,nO.75 $ 652.98 58,089.46 $ 58,742.44 $ 81,963.69 $ 39,643.05 $ 3,058,148.49 $ 11,627,920.33 805,280.31 1,728,367.51 1,394,295.17 71,417.00 $ 1,738,160.09 120,990.64 273,393.99 213,793.88 11,178.00 1,333.00 5,026.00 $ 2,363,875.60 $ 762.06 54,854.11 17,686.99 26,518.06 2,194.85 86,944.00 221,144.70 138.44 40,851.01 5,335.54 $ 456,429.76 $ 28,723.20 $ 2,n8.2O 25,992.55 $ 28,nO.75 $ 652.98 58,089.46 $ 58,742.44 $ 81,963.69 $ 39,643.05 $ 3,058,148.49 $ 11,627,920,33 805,280.31 1,728,367.51 1,394,295.17 71,417.00 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. - 31 - OFFICE OF THE GOVERNOR COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND YEAR ENDED JUNE 30.1996 "A" OFFICE OF c, THE GOVERNOR "B" LOTTERY FOR EDUCATION EXHIBIT"r TOTAL OFFICE OF THE GOVERNOR COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND YEAR ENDED JUNE 30,1996 EXHIBIT "I" EXPENDITURES OTHER MANSION ALLOWANCE Other Costs Paid to Governor Zell Miller INTERN STIPENDS AND TRAVEL Other Costs Stipends - Ust on File ART GRANTS OF STATE FUNDS Personal Services Salaries and Wages Employer's Contribution for: F.I.C.A. Other Costs Rents (Other than Real Estate) Grants to Counties, Cities and Civil Divisions Publications and Printing 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.CA Other Costs Supplies and Materials Repairs and Maintenance Rents (Other than Real Estate) Grants to Counties, Cities and Civil Divisions Other Operating Expenses Publications and Printing Equipment Purchases Travel Equipment Equipment Purchases Computer Charges Software Telecommunications Per Diem, Fees and Contracts Per Diem and Fees HUMANITIES GRANT - STATE FUNDS Other Costs Grants to Counties, Cities and Civil Divisions CHILDREN AND YOUTH GRANTS Other Costs Grants to Counties, Cities and Civil Divisions "A" OFFICE OF THE GOVERNOR "B" LOTTERY FOR EDUCATION TOTAL $ 40,000.00 $ 210,333,03 $ 40,799.98 591.61 165.00 3,787,093.41 100.00 123,750.00 $ 3,952,500.00 $ 36,102.43 523.47 13,474.65 119.21 1,275.06 191,923.00 25,067.73 9,727.00 745.94 1,959.75 1,547.00 241.81 233.71 156,064.09 $ 439,004.85 $ 130,600.00 $ 290,975.00 $ 40,000,00 $ 210,333.03 $ 40,799.98 591.61 165.00 3,787,093.41 100.00 123,750.00 $ 3,952,500.00 $ 36,102.43 523.47 13,474.65 119.21 1,275.06 191,923.00 25,067.73 9,727.00 745.94 1,959.75 1,547.00 241.81 233.71 156,064.09 $ 439,004.85 $ 130,600.00 $ 290,975.00 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. -33 - OFFICE OF THE GOVERNOR COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES BUDGET FUND YEAR ENDED JUNE 30, 1996 EXHIBIT-r EXPENDITURES OTHER JUVENILE JUSTICE GRANTS Other Costs Grants to Counties, Cities and Civil Divisions GEORGIA CRIME VICTIMS ASSISTANCE PROGRAM other Costs Claims and Indemnities GRANTS TO LOCAL SYSTEMS Other Costs Grants to Counties, Cities and Civil Divisions GRANTS-LOCALEMA 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 -A- OFFICE OF THE GOVERNOR -B- LOTIERYFOR EDUCATION TOTAL $ 1,534,155,87 $ 500,876,69 $ 684.400.00 $ 1,235,328.55 $ 60,000.00 $ 46,341,286.20 $ $ 55,419,460.19 $ $ 98,614,670.37 $ 24,537,082.86 $ 1,534,155,87 $ 500,876.69 $ 684,400.00 $ 1,235,328.55 $ 60,000.00 $ 46,341 ,286.20 0.00 $ 0.00 $ 0.00 $ 0.00 0.00 55,419,460.19 98,614,670.37 24,537,082.86 $ 123,151,753.23 $ 0.00 $ 123,151,753.23 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. - 34- OFFICE OF THE GOVERNOR COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30,1996 EXHIBIT".!' FUND ASSETS/ LIABILITIES JULY 1,1995 ADDITIONS DELETIONS ASSETS/ LIABILITIES JUNE 30, 1996 Consumer Division Marketing Settlement $ 240.00 $ 28,771.90 $ 27,878.39 $ 1,133.51 Continental Marketing Association Settlement 718.00 1,974.50 2,323.50 369.00 Family Savings Network Settlement 3,084.42 3,084.42 Family Vending/Star MFG/Cabinet Express 20,000.00 19,448.36 551.64 Golden Age Travel 750.00 500.00 1,250.00 Jewell and Miller Settlement 1,000.00 1,000.00 Lewis Merchandising 1,375.00 5,438.00 6,798.00 15.00 EWC/ Mogul Settlement 63,045.72 3,631.79 396.00 66,281.51 Staff Coffee/Flower Fund -7,237.31 3,571.13 6,545.47 -10,211.65 USA Network 950.00 950.00 Winning Image Promotions 1,200,00 705.00 1,905,00 $ 64,125.83 $ 65,592.32 $ 66,544.72 $===63:=l:'..;.;17,.;;;3.,.4.,.;;:3 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. - 35- OfACE OETHE GOVERNOR SCHEOULEOF APPROVED BUDGET )'EAR ENDED JUNE 30, 1996 SCHEDULE "1" FUNDS AVAILABLE REVENUES State Appropriation Federal Revenues Other Revenues Retained ORIGINAL APPROPRIATION AMENDED APPROPRIATION GOVERNOR'S EMERGENCY FUND BUDGET ADJUSTMENTS TOTAl. $ 28,192,063.00 $ 6,568,745.00 879,337,00 -49,100.00 $ 100,000,00 2,503,644.00 $ 225,377.00 $ 100,660,126.00 939,435,00 30,871,984,00 107,328,871.00 1,818,m,00 $ 35,640,145.00 $ 50,900,00 $ 2,503,644.00 $ 101,824,938.00 $ 140,019,627.00 EXPENDITURES Cost of Operations Personal Services Regular Operating Expenses Travel Equipment Computer Charges Real Estate Rentals Telecommunications Per Diem, Fees and Contracts Mansion Allowance Intern Stipends and Travel Arts 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 $ 3,512,745,00 15,412,038,00 $ 995,619,00 304,734,00 108,346,00 685,977.00 1,019,100.00 378,556.00 5,103,427.00 40,000,00 165,000.00 4,000,000,00 372,960,00 130,600,00 290,975.00 1.189,700,00 100,000.00 684.400,00 1,085,968,00 .60,000.00 0,00 305,753,00 $ 113,483.00 14,163.00 -8,620,00 -56,363.00 8,322,00 -175,838.00 -150,000.00 70,258,00 $ 2,850.00 7,150,00 320,886,00 102,500.00 $ 1,512,650.00 685,387,00 46,832.00 233,841,00 359,151.00 181,214.00 240,586,00 26,764,241.00 75,000,00 134,929,00 2.409,746.00 3,512,745,00 17,300,699.00 1,797,339,00 365,729.00 . 333,567.00 995,915.00 1,200,314,00 627,464.00 32,012,716,00 40,000,00 240,000,00 3,952,500.00 507,889,00 130,600.00 290,975,00 3,599.446,00 2,000,000.00 416,000,00 516.761.00 68,248,600.00 516.000.00 684,400,00 1,602,729,00 60,000,00 70,248.600,00 $ 35,640.145,00 $ 50,900.00 $ 2,503,644.00 $ 101,824.938,00 $ 140,019,627,00 See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information. - 36- OFFICE OF THE GOVERNOR CASH AND CASH EQUIVALENTS JUNE 30, 1996 SCHEDULE "2" NONINTEREST BEARING ACCOUNTS NationsBank of Georgia, NA, Atlanta, Georgia Wachovia Bank of Georgia, Atlanta, Georgia INTEREST BEARING ACCOUNTS Funds on Deposit with Office of Treasury and Fiscal Services State Investment Pool OTHER Cash on Hand $ -5,852,692,96 294,774,00 $ -5,557,918,96 4,493,957,85 100.00 $ -1,063,861.11 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. - 37- OFFICE OF THE GOVERNOR SCHEDULE OF GOVERNOR'S EMERGENCY FUND YEAR ENDED JUNE 30,1996 Georgia Council for the Arts - Assist the Crisp Area Arts Alliance with Program Expenses Georgia Council for the Arts - Assist the City of Hazlehurst with Expenses in Connection with "The Ughtwood Kno!", an Outdoor Drama Georgia Council for the Arts - Assist the World Youth Alliance, Incorporated with Program Expenses Georgia Council for the Arts - Assist the Golden Isles Arts and Humanities Association with Expenses in Connection with their"Artz for Kidz" Program Georgia Emergency Management Agency - Reimburse the Georgia National Guard for Costs Related to the GEMA SurpluslExcess Property Distribution Program Georgia Council for the Arts - Assist Jomandi Productions with Program Expenses Children and Youth Coordinating Council- Assist the Peer Information Network with Operating Expenses Children and Youth Coordinating Council - Assist the Sunshine Brotherhood Community Foundation with Program Expenses Children and Youth Coordinating Council- Assist the Adopt-A-Role Model Program with Operating Expenses Georgia Emergency Management Agency - Assist with Operating Expenses Human Relations Commission - Georgia Commission on the Holocaust - Expenses in Connection with Educational Video Georgia Council for the Arts - Assist the Atlanta Peach Caribbean Carnival, Incorporated with Expenses in Connection with their Festival Georgia Council for the Arts - To Assist with the Purchase of Computers and Equipment to Improve Communication Georgia Council for the Arts - Assist the Michael C. Carlos Museum with Expenses in Connection with the International Exhibition Sponsored by the Government of Catalan Georgia Council for the Arts - Assist the Margaret Mitchell House, Incorporated with Expenses in Connection with their Outdoor Exhibits Georgia Council for the Arts - Albany Symphony Association - Assist with Expenses in Connection with Youth Concert Series Children and Youth Coordinating Council- To Assist the Sixty-Six Club Outreach, Incorporated with Expenses in Connection with their Summer Camp Children and Youth Coordinating Council- Assist Family Resource Services, Incorporated Expenses in Connection with Project M.A.R.T.I.N. Georgia Emergency Management Agency - State Match for Disaster Spending Related to Hurricane Opal Georgia Emergency Management Agency - Reimburse the Department of Defense for Aviation Flight in Support of Damage Assessment and for a GEMA Approved Search and Rescue Mission Georgia Emergency Management Agency - To Contract with the Georgia Department of Defense for Security Services During the Olympics SCHEDULE "3" $ 7,500.00 2,500.00 10,000.00 10,000.00 50,000.00 15,000.00 7,000.00 12,000.00 10,000.00 70,258.00 10,000.00 20,000.00 10,000.00 20,000.00 12,500.00 5,000.00 7,000.00 5,000.00 2,000,000.00 9,886.00 210,000.00 $ 2,503,644.00 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. . - 38- OFFICE OF THE GOVERNOR SCHEDULE OF FEDERAL REVENUES YEAR ENDED JUNE 30,1996 PROGRAM Consumer Products Safety Commission, U. S. ATV Undercover Visits Direct Education, U. S. Department of Vocational Education - State Councils Direct Energy, U. S. Department of Nuclear Energy, Reactor Systems, Development, and Technology Direct Equal Employment Opportunity Commission, U. S. Employment Discrimination - Title VII of the Civil Rights Act of 1964 Direct Federal Emergency Management Agency Hazardous Materials Training Program for Implementation of the Superfund Amendment and Reauthorization Act (Sara) of 1986 Direct Hazardous Materials Assistance Program Direct Community Assistance Program - State Support Services Elements Direct Civil Defense - State and Local Emergency Management Assistance Direct State Disaster Preparedness Grants Direct Disaster Assistance Direct Hazard Mitigation Assistance Direct Hurricane Program Direct Earthquake Hazards Reduction Grants Direct Emergency Management Institute Field Training Program Direct State and Local Emergency Management Assistance Other Assistance Direct Facilities and Equipment Direct Emergency Management - State and Local Assistance Direct See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. - 39- CFDA NUMBER N/A 84,053 81.095 30.001 83.011 83.012 83.105 83.503 83.505 83.516 83.519 83.520 83.521 83.528 83.531 83.532 83.534 SCHEDULE "4" AMOUNT $ 1,506.28 242,725.30 554,743.90 133,099.47 65,611.96 7,094.28 100,000.00 881,669.00 72,522.54 35,241,272.30 7,859,986.33 59,002.01 32,770.41 120,269.80 154,763.74 25,500.00 1,372,091.47 OFFICE OF THE GOVERNOR SCHEDULE OF FEDERAL REVENUES YEAR ENDED JUNE 30, 1996 PROGRAM Housing and Urban Development, U. S. Department of Fair Housing Assistance Program -.State and Local Direct Justice, U. S. Department of Juvenile Justice and Delinquency Prevention Allocation to States Direct Title V - Delinquency Prevention Program Direct Part E - State Challenge Activities Direct Justice Research, Development, and Evaluation Project Grants Direct Crime Victim Assistance Direct Crime Victim Compensation Direct Drug Control and System Improvement - Formula Grant Direct Violence Against Women Formula Grants Direct Labor, U. S. Department of Job Training Partnership Act School-To-Work State Development Grant Direct National Foundation on the Arts and the Humanities Promotion of the Arts - Arts in Education Direct Promotion of the Arts - State and Regional Program Direct Promotion of the Arts - Folk and Traditional Arts Direct Transportation, U. S. Department of State and Community Highway Safety Through Georgia Department of Public Safety Interagency Hazardous Materials Public Sector Training and Planning Grants Direct CFDA NUMBER 14.401 16.540 16.548 16.549 16.560 16.575 16.576 16.579 16.588 17.250 45.003 45,007 45.015 20.600 20.703 SCHEDULE -4- AMOUNT $ 147,823.23 1,307,800.62 198,552.54 244,000.00 358,721.45 1,952,916.42 76,000.00 11,911,308,81 403,000.00 52,393.65 70,900.00 615,818.97 34,500.00 25,229.76 141,780.95 $ 64,465,375.19 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. - 40- OFFICE OF THE GOVERNOR SCHEDULE OF OTHER OPERATING EXPENSES YEAR ENDED JUNE 30, 1996 COST OF OPERATIONS Clipping Service Film Processing Freight, Express and Storage Publicity Registration Fees Rewards Subscriptions and Dues REGULAR OPERATING EXPENSES Cleaning Service Clipping Service Court Costs Film Processing Freight, Express and Storage Investigative Expense Meals - Prisoners Publicity Registration Fees Subscriptions and Dues SUbstiMe Teacher ART GRANTS OF NON-STATE FUNDS Film Processing Freight, Express and Storage Publicity Registration Fees Subscriptions and Dues SubstiMe Teacher See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. - 41 - SCHEDULE "5" $ 1,263.70 22,314.94 13,648.79 1,462.50 2,804.00 2,000,00 177,650,77 $ 221,144,70 $ 4,030.00 1,856.05 165.85 2,264.39 17,478.15 2,366.02 5,728.52 3,373.77 57,229.80 79,127.31 4,467.41 $ 178,087,27 $ 7,476.90 68.81 85.02 4,635.00 12,634.00 168.00 $ 25,067.73 OFFICE OF THE GOVERNOR RECONCILIATION OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 1996 SCHEDULE "6" Totals per Annual Supplement Accruals June 30,1996 SALARIES TRAVEL $ 13,429,329.00 $ 291,273.83 13,653.83 450.00 Totals per Report $ 13,442,982.83 $ 291,723.83 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. - 42- OFFICE OF THE GOVERNOR i SUMMARY OF SALARIES. TRAVEL, AND PER DIEM AND FEES YEAR ENDED JUNE 30. 1996 SCHEDULE "'7- BUDGET FUND Cost of Operations Regular Computer Charges Art Grants of State Funds Art Grants of Non-State Funds SALARIES TRAVEL PER DIEM AND FEES $ 1,738,160.09 $ 11,627,920.33 40,799,98 36,102.43 28,723.20 $ 261,040.88 1,959.75 39,643,05 1,296,869.56 7,364.00 123,750,00 156,064.09 $ 13,442,982.83 $ 291,723.83 $ 1,623,690.70 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. - 43- SECTION IT FINDINGS AND IMPROPER OR QUESTIONED COSTS OFFICE OF THE GOVERNOR SCHEDULE OF FINDINGS AND IMPROPER OR OUESTIONED COSTS YEAR ENDED JUNE 30. 1996 STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS The status of the findings disclosed in the review report for the year ended June 30, 1995, is summarized below: Audit Control Number Status ofFindings 422-95-01 422-95-02 422-95-03 Corrective Action Implemented Corrective Action Implemented See Audit Control Number 422-96-01 PRIOR YEAR/CURRENT YEAR GENERAL FIXED ASSETSIPROPERTY MANAGEMENT - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequacies in Operation ofProperty Management System Audit Control Number 422-96-01 The review report for the year ended June 30, 1995, noted deficiencies in the procedures used to account for general fixed assets. For the year under review, our examination included a review of the accounting procedures utilized by the Office ofthe Governor in maintaining their State Property System. This review also consisted oftesting the System for compliance with Federal and State laws and regulations. Procedures were also completed to verify the accuracy of the total equipment inventory valuation contained in the inventory records, which comprises the General Fixed Assets Account Group. Fifty-two (52) equipment items were selected to test the accuracy of the Department's general fixed asset records. These items contained a value of $184,809.41 and were selected for the purpose oflocating the equipment as recorded in the inventory records. The following deficiencies were noted at the Georgia Emergency Management Agency, which is administratively attached to the Office of the Governor: (1) Eleven (11) items totaling $29,292.21 could not be located. (2) Two (2) items totaling $2,869.00 were surplused, but were not removed from the inventory records. (3) Two (2) items totaling $2,696.00 were traded-in, but were not removed from the inventory records. In addition, one (1) item located in the test area was not included on the inventory records. The Office of the Governor is required to maintain equipment inventories in accordance with provisions of paragraph 32 ofOMB's Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments (Common Rule) and the State Property System Manual. The discrepancies identified above were caused by the Office's failure to follow guidelines for maintaining equipment inventories. - 1- OFFICE OF THE GOVERNOR SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30. 1996 PRIOR YEAR/CURRENT YEAR GENERAL FIXED ASSETSIPROPERTY MANAGEMENT - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequacies in Operation ofProperty Management System Audit Control Number 422-96-01 The Office should establish the necessary procedures to ensure that equipment inventories are maintained in accordance with provisions of OMB's Common Rule and the State Property System Manual. Federal Grantor Agencies Affected: Federal Emergency Management Agency U. S. Department ofEnergy U. S. Department ofJustice U. S. Department of Transportation CURRENT YEAR EXPENDITURESILIABILITIESIDISBURSEMENTS Improper Reporting and Budgeting ofExpenditures Financial Statements Audit Control Number 422-96-02 In the year under review, the Office of the Governor expended $18,414,219.12 under the Object Class - Per Diem, Fees and Contracts for contracts. Funds budgeted for contracts under Object Class - Per Diem, Fees and Contracts normally contemplate that goods and/or services will be received by the State Agency. However, a random sample of 12 contracts revealed that the Office of the Governor simply provided funds to various parties and received no goods or services in return. The related expenditures totaling $957,635.00 for the 12 items tested should have been charged to a grants object class instead of Per Diem, Fees and Contracts. The Office ofthe Governor should perform an extensive review ofthe fiscal year 1997 budget to ensure that grants are correctly budgeted and recorded in the accounting records. - 2-