Review report, state of Georgia, Public Service Commission, year ended June 30, 1995

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

REVIEW REPORT STATE OF GEORGIA PUBLIC SERVICE COMMISSION YEAR ENDED JUNE 30, 1995

PUBLIC SERVICE COMMISSION TABLE OF CONTENTS -

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

EXHIBITS

FINANCIAL STATEMENTS

A COMBINED BALANCE SHEET (STATUTORY BASIS)

ALL FUND TYPES AND ACCOUNT GROUPS

2

B COMBINED STATEMENT OF CHANGES IN FUND BALANCES

(STATUTORY BASIS)

GOVERNMENTAL FUND TYPES

C STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

BUDGET FUND

4

D STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

COMPARED TO BUDGET

BUDGET FUND

6

E STATEMENT OfCASH RECEIPTS AND DISBURSEMENTS

STA TE REVENUE COLLECTIONS FUND

7

F NOTES TO THE FINANCIAL STATEMENTS

8

SUPPLEMENTARY INFORMATION

SCHEDULES

I SCHEDULE OF APPROVED BUDGET

22

2 CASH AND CASH EQUNALENTS

23

3 SCHEDULE OF FEDERAL REVENUES

24

4 SCHEDULE OF OTHER OPERA TING EXPENSES

25

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
September 29, 1995

Honorable Zell Miller, Governor Members of the General Assembly of Georgia Members of the Public Service Commission
and Honorable William J. Dover, Executive Director Public Service Commission
INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have reviewed the accompanying financial statements (Exhibits A through F) of the Public Service Commission as of and 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 Public Service Commission.
A review consists principally of inquiries of agency personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with the basis of accounting described in Note 1.
Our review was made for the purpose 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 (Schedules 1 through 4) is
95ARL-4

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,

CLV:gp 95ARL-4

Claude L. Vickers State Auditor

FINANCIAL STATEMENTS -I-

PUBLIC SEffi/lCE COMJIISSIQN C9MBINfP BALANl"!f SHl;fT {STATUTORY BASIS)
ALL FUND TYPES ANO ACCOUNT GROUPS
JUNE 30 1995

EXHIBIT"A"

GOVERNMENTAL FUND TYPES

STATE

REVENUE

BUDGET

COLLECTIONS

ACCOUNT GROUPS

GENERAL

GENERAL

FlXED

LONG-TERM

ASSETS

~

TOTALS (Memorandum Only) JUNE 30 1995 JUNE 30 1994

Cash and Cash Equivalents (See Schedule)
Accounts Receivable State Appropriation Federal Financial Assistance
FOOldAssels Equipment
Amount to be Provided for Payment of Accrued Compensated Absences

1 883 169.80 $ 404 800.05

2 287 969.85 $ 1661 000.57

284,861.35 248 750.72
533 612.07

284,861.35 $ 248 750.72
533 612.07 $

362,036.42 245 480.04
607 516.46

1493938.21

1<193938.21 $ 1396832.03

$ 587 465.83 $

587,465.83 $ 512 854.00

Total Asset&

$ 2 416 781.87 $ 404 800.05 $ 1 493 938.21 $ 587 465.83 $ 4 902,985.96 $ 4 178 203.06

LIABILITIES ANP FUND EQU(TY
Liabilities AccountsPayroll Withholdings Compensated Absences
Total Liabilities
Fund Equity Investment in General Fixed Assets Fund Balances Rese<Ved State Revenue Collections Fund Unreserved Designated Surplus
Total Fund Equity

2,208,6TT.15 145.00
2J08822.15

$ 587 465.83 $ 587 465.83 $

2,208,STT.15 $ 145.00
587 465.83
2 796 287.98 $

2,071,862.80 130.00
512 854.00
2 584 846.80

$ 1,493,938.21

1,493,93821 $ 1,396,832.03

404,800.05

404,800.05

62,880.30

207959.72 207 959.72 $

404 800.05 $ 1 493938.21

207 959.72

133643.93

2106697.98 $ 1 593356.26

Total Liabilities and Fund Equity

$ 2416781.87 $ 404800.05 $ 1,493938.21 $ 587465.83 $ 4,902,985.96 $ 4178.203.06

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary lnfonnation. The notes to the financial statements are an integral part of this statement.
-2-

PUBLIC SERVICE COMMISSION COMBINED TATEMENT OF CHANGES IN FUND BALANCES {STATUTORY BASIS}
GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 1995

EXHIBIT"B"

FUND BALANCES - JULY 1
Reserved Unreserved
Designated Surplus
ADDITIONS
Adjustments to Prior Year's Accounts Payable Cash Receipts for the Year
Exhibtt"E" Excess of Funds Available over Expenditures
Exhibtt"C" Prior Year's Checks Voided Reimbursement of Prior Year's Expenditures
DEDUCTIONS
Unreserved Fund Balance (Surplus) Returned to Office of Treasury and Fiscal Services Year Ended June 30, 1994 Year Ended June 30, 1995
Cash Disbursements for the Year Exhibtt"E"
Employees' Retirement System of Georgia Contribution Correction
FUND BALANCES - JUNE 30
(To Exhibit "A")

BUDGET

STATE REVENUE COLLECTIONS

TOTALS (Memorandum On~
YEAR ENDED JUNE 30 1995 JUNE 30 1994

$

62,880.30 $

62,880.30 $

400.00

$ 133,643.93 $ 133,643.93 $

62,880.30 $

133643.93 196,524.23 $

182,568.35 182,968.35

$

3,250.00

$

3,250.00 $

63,906.86

$ 5,976,824.05

5,976,824.05

1,565,713.30

204,570.07 19.65
120.00

204,570.07 19.65
120.00

66,475.49 0.00
3,385.13

$ 207 959.72 $ 5,976,824.05 $ 6 184 783.77 $ 1 699,480.78

$

0.00

133,643.93

$

0.00 $

182,568.35

133,643.93

0.00

$ 5,634,904.30

5,634,904.30

1,503,233.00

0.00

0.00

123.55

$ 133,643.93 $ 5,634,904.30 $ 5 768,548.23 $ 1,685,924.90

$ 207,959.72 $

404,800.05 $

612,759.77 $

196,524.23

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. -3-

PUBLIC SERVICE COMMISSION STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30 1995

EXHIBIT"C"

FUNDS AVAIi ABLE

TOTALS YEAR ENDED JUNE30 1995 JUNE30 1994

STATE APPROPRIATION General Appropriation Less: Lapsed Funds Total State Appropriation
FEDERAL REVENUES (See Schedule) OTHER REVENUES RETAINED
Sales of Photooopies
Total Funds Available

$ 8,382,229.00 $ 333947.00
$ 8 048 282.00 $
$ 2110 554.70 $

8,446,162.00 156 857.00
8289305.00
1856586.85

$

19194.43 $

18106.94

$ 10178031.13 $ 10,163998.79

EXPENDITURfS
PERSONAL SERVICES
Salaries and Wages Employer's Contributions for:
F.I.C.A. Retirement Health Insurance Personal Liabiltty Insurance Unemployment Compensation Insurance Workers' Compensation Insurance Assessments by Merit System Drug Testing
REGULAR OPERATING EXPENSES
Molor Vehicle Expenses Supplies and Materials Repairs and Maintenance Rents (Other than Real Estate) Insurance and Bonding Other Operating Expenses (See Schedule) Extraordinary Expendttures Duplicating and Rapid Copy Publications and Printing

$ 4,689,919.70 $
336,189.68 720,599.17 573,758.44
28,980.00 10,507.00 221,636.00 17,760.57
395.00
$ 6599745.56 $

4,522,788.28
324,971.62 701,349.29 555,393.14
28,840.00 5,914.00
115,303.00 17,639.08 879.76
6273078.17

85,100.67$ 170,507.41 69,873.50
4,478.00 15,032.77 52,090.21
0.00 2,450.03 28896.68
$ 428429.27 $

90,695.25 162,899.12 52,907.53
3,246.89 13,450.61 45,596.03 94,794.90 2,467.11 37754.23
503811.67

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Jnfonnation.
The notes to the financial statements are an integral part of this statement.
-4-

PUBLIC SERVICE COMMISSION STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30 1995

EXHIBIT"C"

EXPENDITURES
TRAVEL
MOTOR VEHICLE PURCHASES
EQUIPMENT
Equipment Purchases
COMPUTER CHARGES
Other Costs Supplies and Materials Repairs and Maintenance Other Operating Expenses (See Schedule)
Software Equipment
Equipment Purchases Per Diem, Fees and Contracts
Contracts Computer Billings, DOAS
REAL ESTATE RENTALS
TELECOMMUNICATIONS
PEB DIEM FEES AND CONTRACTS
Per Diem and Fees
Total Expenditures
Excess of Funds Available over Expend~ures

TOTALS YEAR ENDED JUNE 30 1995 JUNE30 1994

$

215599.99 $

$

228590.00 $

175180.76 151408.27

40429.28 $

70417.42

$

7,773.18 $

12.50

12,507.41

17,552.67

72,649.24

15,201.64 310269.34

$

435965.98 $

$ 304862.48 $

$

138 357.91 $

11,670.76 1,189.41
13,693.13 27,446.91
150,532.36
24,999.90 159305.22
388837.69
325 366.16
119694.98

1 581 480.59 $ 2 089728.18

$ 9,973,461.06 $ 10,097,523.30

204570.07

66475.49

$ 10178031.13 $ 10 163,998.79

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Jnfonnation.
The notes to the financial statements are an integral part of this statement.
-5-

PUBLIC SERVICE COMMISSION STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
YEAR ENDED JUNE 30 1995

EXHIBIT "D"

FUNDS AVAILABLE
REVENUES
State Appropriation Federal Revenues Other Revenues Retained

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$ 8,382,229.00 $ 8,048,282.00 $

2,012,590.00

2,110,554.70

16,273.00

19,194.43

-333,947.00 97,964.70 2,921.43

$ 10,411,092.00 $ 10,178,031.13 $

-233,060.87

EXPENDITURES
Personal Services Regular Operating Expenses Travel Motor Vehicle Purchases Equipment Computer Charges Real Estate Rentals Telecommunications Per Diem, Fees and Contracts

$ 6,743,916.00 $ 6,599,745.56 $

431,497.00

428,429.27

256,756.00

215,599.99

228,590.00

228,590.00

40,904.00

40,429.28

438,660.00

435,965.98

305,489.00

304,862.48

140,029.00

138,357.91

1,825,251.00

1,581,480.59

144,170.44 3,067.73
41,156.01 0.00
474.72 2,694.02
626.52 1,671.09 243,770.41

$ 10,411,092.00 $ 9,973,461.06 $

437,630.94

Excess of Funds Available over Expenditures

$

204,570.07 $

204 570.07

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-

PtJBl 'C SERVICE COMMISSION STATEMENT QF CASH RECEIPTS ANP QISBLJRSFMFNTS
STATE REVENUE COLLECTIONS FUND YEAR ENPEP JUNE 30 1995

STATE REVENUE COLLECTIONS
Automatic Dialing and Announcement Permits 11 Permit Fees at $100.00
Certificates of Public Convenience and Necessity 302 Certificates at $15.00 631 Certificates at $50.00 192 Certificates at $75.00 8 Certificates at $150.00 36 Certificates at $200.00 15 Emergency Temporary Authority Certificates at $50.00
Hazardous Materials Permits 579 Penntt Fees at $25.00 414 Penntt Fees at $100.00
Integrated Resource Planning Cost
Interstate Registration Permits 11 Penntt Fees at $5.00
222 Penntt Fees at $10.00 1,446 Penntt Fees at $25.00
Motor earner Wire Pemms 160 Penntt Fees at $8.00
Vehicle Identification and Registration Stamps 22,762 Stam))$ at $5.00 1,698 Penalty Tags at $25.00 Refunds
Penalty Fees Motor Carrier Civil Penalty- Transportation
Single State Vehicle Registration Fees Refunds Distributions to Other States
Net C8sh Receipts
CASH AND CASH EQUIVALENTS JULY 1 1994

CASH RE;CflPTS

To Office of Treasury and Fiscal Services CASH ANQ CASH EQUIVALENTS - JUNf 30 1995

DISBURSEMENTS

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

EXHIBIT"E"

1,100.00

4,530.00 31,550.00 14,400.00
1,200.00 7,200.00
750.00

59,630.00

14.475.00 41 400.00

55,875.00 734,585.00

55.00 2,220.00 36150.00

38,425.00

1.280.00

113,810.00 42,450.00 -5365.00

150.895 00

8,876,256.70 -32,333.05
3,920 264.60

11,375.00
4 923,659.05 5,976,824.05
62 880.30

$ 6,039.704.35

5,634,904.30 404,800.05
$ 6,039,704.35

PUBLIC SERVICE COMMISSION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXHlBIT "F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY The Public Service Commission, an organiz.ational unit of the State of Georgia, is part ofthe executive branch ofthe government of the State of Georgia. The Commission supervises and regulates all intrastate common carriers, express companies, railroad companies, dock or wharfage companies, terminal companies, telephone and telegraph companies, and gas, electric light and power companies. The Public Service Commission consists of five (5) members who are elected at a statewide general election by the qualified voters.
The Public Service Commission 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 Commission also does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, the Public Service Commission 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 Public Service Commission uses funds and account groups to report on its financial position and the results ofits operations determined in confonnity with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia. A fund is an independent fiscal and accounting entity with a selfbalancing set ofaccounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number offunds are maintained consistent with legal and managerial requirements. Account groups are a reporting device used to account for certain assets and liabilities of the governmental funds not recorded directly in those funds. 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.

- 8-

PUBLIC SERVICE COMMISSION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXHIBIT "F"

NOTE I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FUND ACCOUNTING
ACCOUNT GROUPS
GENERAL FIXED ASSETS - The account group used to account for fixed assets used in governmental fund type operations. Fixed assets purchased are recorded at 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 ofTreasury and Fiscal Services in the subsequent fiscal year.
GOVERNMENTAL FUND TYPES BUDGET FUND
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 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.

-9-

PUBLIC SERVICE COMMISSION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXIIlBIT "F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING GOVERNMENTAL FUND TYPES BUDGET FUND
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 ofGeorgia, 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.
BUDGET Appropriation allotments to the Public Service Commission are on the basis of a budget submitted by the Commission 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. 1208 ofGeorgia Laws 1994 (as approved April 18, 1994) and amended by Act No. 6 ofGeorgia Laws 1995 (as approved February 22, 1995), which is an appropriated budget and is referred to in these notes as the Amended Appropriations Act of 1994-1995.
Overexpenditure of a budget unit object class, except for the "common object classes", included in the Commission'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
- 10 -

PUBLIC SERVICE COMMISSION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXIIlBIT "F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUDGET 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 cash management pools that have the general characteristics of demand deposit accounts in that the Commission may deposit additional cash at any time and also may withdraw cash at any time without prior notice or penalty.
INVESTMENTS The Public Service Commission participates in an investment pool managed by the State of Georgia's Office ofTreasuiy and Fiscal Services (OTFS) referred to as the "Georgia Fund I". The Commission doe_s not have any risk exposure from investments in Georgia Fund I as the investment policy of OTFS does not provide for investments in derivatives or 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 ofthe reserve reflected in the accompanying financial statements:
STATE REVENUE COLLECTIONS FUND The balance ofrevenues collected but not transmitted to the Office of Treasuiy and Fiscal Services at fiscal year end. These funds are required by the Official Code of Georgia to be transferred to the Office of Treasuiy and Fiscal Services and are not available for use by the Commission.
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 ofTreasuiy and Fiscal Services in the subsequent fiscal year as surplus. This amount of unexpended general appropriations is available to the State for reappropriation in subsequent years.
COMPENSATED ABSENCES Compensated absences represent obligations of the Commission 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

- 11 -

PUBLIC SERVICE COMMISSION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXlilBIT "F"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
COMPENSATED ABSENCES 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 offunds each year to the Commission to cover the cost of annual leave paid to terminated employees.
The liability for compensated absences at year end is reported in the General Long-Term Debt Account Group for governmental funds.
MEMORANDUM ONLY -TOTAL COLUMNS Total columns on the Combined 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 Commission's financial position and operations. Comparative totals have not been included on statements where their inclusion would not provide enhanced understanding of the Commission'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 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 ofthe 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.
- 12 -

PUBLIC SERVICE COMMISSION NOTES TO THE FINANCIAL STATEMENTS
ruNE 30 1995

EXHIBIT "F"

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 ofa 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 Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

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

As authorized in the Official Code 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 bank balances which include demand deposits and/or interest bearing accounts. The bank balances as ofJune 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 Commission or by its age~t in the Commission's name.

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

Cash Deposits

Carrying
Amount

Bank Balances

$ 121826285 $ 233264627

Risk Categories
]00000 00 _ _d,o~oo1'!a s 2 232 646 21

CATEGORIZATION OF INVESTMENTS Investments are stated at cost. The carrying amount of the investment balance as ofJune 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.

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PUBLIC SERVICE COMMISSION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXHIBIT "F"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

CATEGORIZATION OF INVESTMENTS

Type ofinvestment

Carrying Amount

Market Value

State Investment Pool

$ 369 707 00 $ 369 707 00

NOTE 3: OPERATING LEASES

The Commission has entered into certain agreements to lease real property and equipment which are classified as operating leases. These leases generally contain provisions that, at the expiration date of the original term ofthe lease, the Commission has the option of renewing the lease on a year-to-year basis. Future minimum commitments for operating leases as ofJune 30, 1995, are listed below. Amounts are included only for multiyear 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

$ 121 277 40

Expenditures for rental of real property and equipment under operating leases for the year ended June 30, 1995, totaled $113,540.48.

NOTE 4: CHANGES IN GENERAL FIXED ASSETS

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

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

Balance July 1, 1994

$ 1,396,832.03

Additions Deductions

296,533.19 199 427.01

Balance June 30, 1995

$ 1 493 938 21

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PUBLIC SERVICE CO:MMISSION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXHIBIT "F"

NOTE 5: GENERAL LONG-TERM DEBT

CHANGES IN GENERAL LONG-TERM DEBT During the year ended June 30, 1995, the following changes occurred in the compensated absences liability reported in the General Long-Term Debt Account Group:

Balance July 1, 1994

$ 512,854.00

Additions Annual Leave Earned and Utilized (Net) Salaries Salary Related Fringe Benefits

36,765.48 37 846.35

Balance June 30, 1995

$ 587 465 83

NOTE 6: 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 ofGeorgia 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 of Personnel 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 of Administrative 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 Commission 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.

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PUBLIC SERVICE COMMISSION NOTES TO THE FINANCIAL STATEMENTS
JUNE30 1995

EXIIlBIT "F"

NOTE 7: DEFERRED COMPENSATION PLAN
The State of Georgia offers its employees a deferred compensation plan in accordance with Internal Revenue Code Section 457. The plan, available to employees ofthe State of Georgia and county health departments, permits such employees to defer a portion oftheir salary until future years. 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 ofthe State Personnel Board - Merit System of Personnel Administration for the year ended June 30, 1995.
NOTES: RETIREMENTPLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Plan Description The Public Service Commission participates in the Employees' Retirement System of Georgia ("ERS"), a single-employer, defined benefit plan established by the General Assembly of Georgia for the purpose of providing retirement allowances for employees ofthe State of Georgia. The Commission's payroll for the year ended June 30, 1995, for employees covered by ERS was $4,544,767.11. The Commission's total payroll for all employees was $4,689,919.70.
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 IO 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.

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PUBLIC SERVICE COMMISSION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXHIBIT "F"

NOTE 8: RETIREMENT 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% of annual compensation paid by the Commission on behalf of the employee. Under the new plan, member contributions consist solely of 1.25% of annual compensation paid by employee. The Commission 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 Commission amounted to 15.11% 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 $743,323.26, ofwhich $686,513.41 was made by the Commission and $56,809.85 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 of the present value ofpension benefits, adjusted for the effects ofprojected 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 of the funding method used to determine contributions to the plan.

The pension benefit obligation was computed as part of an actuarial valuation performed as of June 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 of7.5 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 of inflation and merit increases:

~ 20 25 30 35 40 to 65

Percentage 9.5% 8.5% 6.5% 6.0% 5.7%

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PUBLIC SERVICE COMMISSION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXHIBIT "F"

NOTE 8: RETIREMENT PLANS

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA

Funding Status and Progress Pension Benefit Obligation
3) ERS has the authority to grant cost-of-living adjustments by state statute. As of June 30, 1994, cost-ofliving adjustments have been included in the pension benefit obligation.

The total unfunded pension benefit obligation ofERS as ofJune 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

I 206 805 000

Total Pension Benefit Obligation

$5,168,164,000

Net Assets Available for Benefits

4 858 015 000

Unfunded Pension Benefit Obligation

$ 3)0 )49 000

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 ofannual 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.

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PUBLIC SERVICE COMMISSION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXHIBIT "F"

NOTE 8: RETIREMENT PLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Funding Status and Progress Funding Policy
Total contributions from all employers to ERS for the year ended June 30, 1995, were $256,624,679.00. The Commission's contnbution was actuarially determined and represented 0.27% 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 Public Service Commission is eligible to participate in the Georgia Defined Contribution Plan ("GDCP") which is a single-employer 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 parttime and are not members ofa public retirement or pension system. GDCP is administered by the Employees' Retirement System Board of Trustees. The Commission did not have any employees eligible to participate in the GDCP for the year ended June 30, 1995.
NOTE 9: 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.

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PUBLIC SERVICE COMMISSION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXIIlBIT "F"

NOTE 10: CONTINGENCIES
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditures which are disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although the Commission expects such amounts, if any, to be immaterial to its overall financial position.
Litigation, claims and assessments filed against the Public Service Commission, if any, are generally considered to be actions against the State of Georgia. Pursuant to the Official Code of Georgia Annotated, the Department of Administrative Services maintains a program of purchased insurance and self-insurance which provides coverage for such litigation, claims and assessments. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 1995.
NOTE 11: BONDING INFORMATION
All employees ofthe Public Service Commission are bonded under a Public Employees Blanket Bond written by Employers Insurance of Wausau, their Bond No. 1450-00-110723, on which the premium was paid to October 1, 1995. Under this agreement the Public Employee Dishonesty Coverage insures the Commission to a maximum ofSI,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees The Faithful Performance ofDuty Coverage insures the Commission to a maximum of $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 oftheir position or employment.
All employees of the Public Service Commission 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 Commission to a maximum of $9,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees.

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SUPPLEMENTARY INFORMATION -21-

PUl;!LIC SERVICE COMMISSION SCHEQULE OF APPROVED BUDGET
YEAR ENDED JUNE 30 1995

SCHEDULE "1"

FUNDS t,VAILABLE
RE:il5NUES
State Appropriation Federal Revenues other Revenues Retained

ORIGINAL

AMENDED

BUDGET

APPROPRIATION APPROPRIATION ADJUSTMENTS

TOTAL

$ 8,382,229. 00 $ 1,851,005.00

0.00 $

$ 161,585.00
16,273.00

8,382,229.00 2,012,590.00
16,273.00

$ 10,233,234.00 $

0.00 $

177,858.00 $ 10,411,092.00

EXPENDITURES
Personal Services Regular Operating Expenses Travel Motor Vehicle Purchases Equipment Computer Charges Real Estate Rentals Telecommunications Per Diem, Fees and Contracts

$ 6,773,916.00 390,285.00 $ 256,756.00 216,200.00 36,174.00 408,660.00 348,489.00 114,754.00
1,688,000.00

$ 31,000.00
-43,000.00 12,000.00

-30,000.00 $ 10,212.00
12,390.00 4,730.00
30,000.00
13,275.00 137,251.00

6,743,916.00 431,497.00 256,756.00 228,590.00 40,904.00 438,660.00 305,489.00 140,029.00
1,825,251.00

$ 10,233,234.00 $

0.00 $

177,858.00 $ 10,411,092.00

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
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PUBLIC SERVICE COMMISSION CASH AND CASH EQUIVALENTS
JUNE 30 1995
NONINTEREST BEARING ACCOUNTS Bank South, NA., Atlanta, Georgia
INTEREST BEARING ACCOUNT Funds on Deposit with Office of Treasury and Fiscal Services State Investment Pool

SCHEDULE "2"
$ 1,918,262.85 369,707.00
$ 2,287,969.85

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
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PUBLIC SERVICE COMMISSION SCHEDULE OF FEDERAL REVENUES
YEAR ENDED JUNE 30 1995

PROGRAM
Transportation, U.S. Department of Motor Carrier Safety Assistance Program Direct Pipeline Safety Direct

CFDA NUMBER
20.218 20.700

SCHEDULE "3"
AMOUNT $ 1,911,123.71
199,430.99 $ 2,110 554.70

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
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PUBLIC SERVICE COMMISSION SCHEDULE OF OTHER OPERATING EXPENSES
YEAR ENDED JUNE 30 1995
REGULAR OPERATING EXPENSES Clipping Services Freight, Express and Storage Legal Advertising Registration Fees Subscriptions and Dues
COMPUTER CHARGES Library Access Services Online Access Services Registration Fees

SCHEDULE "4"

$

746.60

3,834.25

946.06

28,402.03

18,140.02

$ 52,068.96

$

544.50

5,957.91

6,005.00

$ 12 507.41

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