Review report, Georgia Rail Passenger Authority, a component unit of the state of Georgia, year ended June 30, 1997

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REVIEW REPORT GEORGIA RAIL PASSENGER AUTHORITY
A COMPONENT UNIT OF THE STATE OF GEORGIA
YEAR ENDED JUNE 30, 1997

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASH I NGTON STREET
ATLANTA, GEORGIA 30334-8400

GEORGIA RAIL PASSENGER AUTHORITY - TABLE OF CONTENTS-

INDEPENDENT ACCOUNTANTS COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMAnON

EXHIBITS

FINANCIAL STATEMENTS

A COMBINED BALANCE SHEET (STATUTORY BASIS)

ALL FUND TYPES

2

B STATEMENT OF CHANGES IN FUND BALANCE

(STATUTORY BASIS)

GOVERNMENTAL FUND TYPE

3

C STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

GENERAL FUND

4

D NOTES TO THE FINANCIAL STATEMENTS

5

SUPPLEMENTARY INFORMAnON

E STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

FIDUCIARY FUND TYPE - AGENCY FUND

12

SCHEDULES

1 CASH AND CASH EQUIVALENTS

13

2 SCHEDULE OF FEDERAL REVENUES

14

3 SCHEDULE OF OTHER OPERATING EXPENSES

15

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
September 12, 1997

Honorable Zell Miller, Governor Members of the General Assembly of Georgia Members of the Georgia Rail Passenger Authority
and Honorable Wayne Shackleford, Commissioner Department of Transportation
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 D) of the Georgia Rail Passenger Authority as of and for the year ended June 30, 1997, 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 fmancial statements is the representation of the management of the Georgia Rail Passenger Authority.
A review consists principally of inquiries of agency personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with the basis of accounting described in Note 1.
Our review was made for the purpose of expressing limited assurance that there were no material modifications that should be made to the financial statements in order for them to be in conformity with the basis of accounting described in Note 1. The accompanying supplementary information (Exhibit E and Schedules 1 through 3) is presented only for supplementary analysis purposes. Such information has been

97ARL-4

subjected to the inquiries and analytical procedures applied in the review of the fmancial statements and we are not aware of any material modifications that should be made thereto.
Respectfully submitted,
L~
Claude L. Vickers State Auditor
CLV:cm
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FINANCIAL STATEMENTS - 1-

GEORGIA RAIL PASSENGER AUTHORITY COMBINED BALANCE SHEET (STATUTORY BASIS)
ALL FUND TYPES JUNE 30.1997

EXHIBIT"A"

ASSETS Cash and Cash Equivalents
(See Schedule) Accounts Receivable
Federal Financial Assistance Other
Total Assets

GOVERNMENTAL FUND TYPE GENERAL

FIDUCIARY FUND TYPE
AGENCY

TOTALS (Memorandum Only) JUNE 3D, 1997 JUNE 30,1996

$

333,041.38 $

47,392.38 $ 380,433.76 $

89,475.75

5,000.00 0.00

5,000.00 0.00

0.00 7,483.82

$

338,041.38 $

47,392.38 $ 385,433.76 $

96,959.57

LIABILITIES AND FUND EQUITY

Liabilities

Accounts Payable

$

Contracts Payable

Funds Held for Others

Total Liabilities

$

Fund Equity Fund Balances Unreserved Undesignated

Total Liabilities and Fund Equity

$

10,482.70 297,468.00
$
307,950.70 $

$ 47,392.38 47,392.38 $

10,482.70 $ 297,468.00
47,392.38
355,343.08 $

1,968.00 42,496.00 45,011.75
89,475.75

30,090.68

30,090.68

7,483.82

338,041.38 $

47,392.38 $ 385,433.76 $

96,959.57

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

GEORGIA RAIL PASSENGER AUTHORITY STATEMENT OF CHANGES IN FUND BALANCE (STATUTORY BASIS)
GOVERNMENTAL FUND TYPE YEAR ENDED JUNE 30,1997

EXHIBIT"B"

FUND BALANCE - JULY 1
Unreserved Undesignated
ADDITIONS
Adjustments to Prior Year's Contracts Payable Excess of Funds Available over Expenditures
Exhibit "C"
DEDUCTIONS
Unreserved Fund Balance (Undesignated) Unobligated Contract Balance Returned to Georgia Department of Transportation Year Ended June 30, 1996
FUND BALANCE - JUNE 30 (To Exhibit "A")

GENERAL FUND YEAR ENDED
JUNE 30,1997 JUNE 30,1996

$

7,483.82 $

0.00

$

30,000.00 $

90.68

$

30,090.68 $

0.00 7,483.82 7,483.82

$

7,483.82 $

0.00

$

30,090.68 $

7,483.82

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-

GEORGIA RAIL PASSENGER AUTHORITY STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
GENERAL FUND YEAR ENDED JUNE 30. 1997

EXHIBIT"C"

FUNDS AVAILABLE
REVENUES
FEDERAL REVENUES (See Schedule)
OTHER REVENUES RETAINED Contract Georgia Department of Transportation

TOTALS YEAR ENDED JUNE 30,1997 JUNE 30,1996

$

5,000.00 $

0.00

350,000.00

105,000.00

Total Revenues

$

355,000.00 $ ........,-..;,1.0.5..:.l.'0;o.;;0..0.,.;,,:,.0.=0

EXPENDITURES REGULAR OPERATING EXPENSES
Supplies and Materials Rents (Other than Real Estate) Insurance and Bonding Other Operating Expenses (See Schedule) Publications and Printing
TELECOMMUNICATIONS PER DIEM. FEES AND CONTRACTS
Per Diem and Fees Contracts
Total Expenditures Excess of Funds Available over Expenditures

$

341.68 $

5,203.00

18,684.00

13,753.60

4,018.81

$

42,001.09 $

$

69.69 $

176.52 0.00
21,072.00 5,697.07 1,556.90
28,502.49
732.56

$

32,866.54 $

279,972.00

$

312,838.54 $

$

354,909.32 $

90.68

25,160.13 43,121.00 68,281.13
97,516.18
7,483.82

$

355,000.00 $ ==1..0.==5,;,,;:,0==.0.0....0..0. =

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-

GEORGIA RAIL PASSENGER AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT"D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY The Georgia Rail Passenger Authority was established as an instrumentality of the State of Georgia and a public corporation to implement rail passenger service and public transportation projects in the State of Georgia. The Authority consists of thirteen (13) members appointed by the Governor. One member is appointed from and a resident of each of the congressional districts and two members are appointed from the state at large. Administrative services are provided to the Authority by the Department of Transportation. The Georgia Rail Passenger Authority is considered a component unit ofthe State of Georgia and 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 defmed in Section 2100 ofthe Governmental Accounting Standards Board Codification of Governmental Accounting and Financial Reporting Standards.
FUND ACCOUNTING The Georgia Rail Passenger Authority uses funds to report on its financial position and the results of its operations determined in conformity with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia. A fund is an independent fiscal and accounting entity with a selfbalancing 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. Funds presented in the accompanying financial statements are as follows:
GOVERNMENTAL FUND TVPE
GENERAL FUND - The fund used to account for activities and functions of the Georgia Rail Passenger Authority. This presentation differs from generally accepted accounting principles in that such principles provide that the General Fund of the Authority be accounted for as a Proprietary Fund Type - Enterprise Fund. An Enterprise Fund is used to account for operations that are financed and operated in a manner similar to private business enterprises, where the intent is that costs of providing goods or services to the general public on a continuing basis are financed or recovered primarily through user charges or that periodic measurement of revenues earned and expenses incurred are appropriate for capital maintenance, public policy, accountability and other purposes.
FIDUCIARY FUND TYPE
AGENCY FUND - The fund used to account for assets held for use by other funds, governments, or individuals.

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GEORGIA RAIL PASSENGER AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXlllBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING MEASUREMENT FOCUS
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. Governmental funds should be accounted for using the flow ofcurrent financial resources measurement focus. With this measurement focus, operating statements present increases and decreases in net current assets and unreserved fund balance is a measure of available spendable resources.
Proprietary fund types on the other hand, should be accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities are included on the balance sheet. Operating statements of these funds present increases, (i.e., revenues) and decreases, (i.e., expenses) in net total assets. This measurement focus emphasizes the determination ofnet income. In accordance with accounting practices prescribed or permitted by statutes and regulations ofthe State of Georgia, the General Fund, which should be reflected as a Proprietary Fund Type - Enterprise Fund in accordance with generally accepted accounting principles, utilizes the current fmancial resources measurement focus.
GOVERNMENTAL FUND TYPE GENERAL FUND
Except as disclosed in the following paragraphs, units of government of the State of Georgia record their General Fund revenues and expenditures in accordance with the modified accrual basis of accounting. Under the modified accrual basis ofaccounting, revenues are recognized when susceptible to accrual (i.e., when they are "measurable and available"). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to pay liabilities of the current period. Revenues that are accrued include primarily 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. The General Fund, which should be reflected as a Proprietary Fund Type - Enterprise Fund in accordance with generally accepted accounting principles, should be maintained on the accrual basis of accounting.
Contractual obligations for goods and services which have not been received at the end of the fiscal year are recognized as expenditures and liabilities in the accompanying fmancial 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 of the State of Georgia, but is not consistent with generally accepted accounting principles, which do not provide for the recording of encumbrances within the Proprietary Fund Type - Enterprise Fund. Further, revenue recognition for expensedriven grants should be based upon expenses determined in accordance with generally accepted accounting principles.

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GEORGIA RAIL PASSENGER AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT"D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING GOVERNMENTAL FUND TYPE GENERAL FUND
Prior period adjustments and certain other items are reported as additions to and deductions from. fund balances ofthe General Fund in the accompanying financial statements. This presentation is in accordance with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, but differs from generally accepted accounting principles for proprietary fund types in that immaterial adjustments should be reported as current period revenues and expenses.
FIDUCIARY FUND TYPE AGENCY FUND
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 An internal operations budget for management purposes is prepared by the Georgia Rail Passenger Authority and is approved by members of the Authority at a selected meeting. The budget is not subject to review or approval by the Legislature of the State of Georgia and therefore, is a nonappropriated budget.
CASH AND CASH EQUIVALENTS Cash and Cash Equivalents include funds on deposit (demand deposits) with the Department of Transportation and cash management pools that have the general characteristics of demand deposit accounts in that the Authority may deposit additional cash at any time and also may withdraw cash at any time without prior notice or penalty.
INVESTMENTS The Georgia Rail Passenger Authority 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 Authority 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.
MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the Combined Balance Sheet (Statutory Basis) are captioned "Memorandum Only" because they do not represent consolidated fmancial information and are presented only to facilitate financial analysis. The columns do not present information that reflects financial position in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
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GEORGIA RAIL PASSENGER AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT"D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
COMPARATIVE DATA Comparative total data for the prior year have been presented in the accompanying financial statements in order to provide an understanding ofthe changes in the Authority's financial position and operations.
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 anyone or more of the 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 of indebtedness, notes, or other obligations of the counties or municipalities of the State of Georgia.
(3) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose.
(4) Industrial revenue bonds and bonds of development authorities created by the laws 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.
(6) Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation.
As authorized in the Official Code of Georgia Annotated Section 45-8-11, the Georgia Rail Passenger Authority has the option of exempting demand deposits from the collateral requirements.
CATEGORIZATION OF DEPOSITS The Georgia Rail Passenger Authority is assigned to the Department of Transportation (DOT) for administrative purposes, and as such, DOT maintains accounting records, including certain deposits, for the Authority. As a result, we are unable to provide a separate disclosure for custodial credit risk for the Authority.
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GEORGIA RAIL PASSENGER AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXlllBIT "D"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

CATEGORIZATION OF INVESTMENTS Investments are stated at cost. The carrying amount of the investment balance as of June 30, 1997, shown below is maintained in an investment pool by the Office of Treasury and Fiscal Services and is not subject to risk categorization.

Type of Investment

Carrying Amount

Market Value

State Investment Pool

$ 47.392.38 $ 47,392.38

NOTE 3: 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 Georgia Rail Passenger Authority 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.

Mr~ Wayne Shackleford, Commissioner of the Department of Transportation, is bonded through a separate policy in the amount of $100,000.00 which insures against loss sustained through fraudulent or dishonest acts.

NOTE 4: 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 Authority expects such amounts, if any, to be immaterial to its overall financial position.

Litigation, claims and assessments filed against the Georgia Rail Passenger Authority, if any, are generally considered to be actions against the State of Georgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 1997.

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TIDS PAGE LEFT BLAHK

SUPPLEMENTARY INFORMATION - 11 -

GEORGIA RAIL PASSENGER AUTHORITY STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUND YEAR ENDED JUNE 3D. 1997

EXHIBIT "E"

Interstate Rail Passenger Network Compact

ASSETS! LIABILITIES JULY 1,1996

ADDITIONS

DELETIONS

ASSETS! LIABILITIES JUNE 30.1997

$

45.011.75 $

2.380.63 $

0.00 $ ===4...7.=,3=9=2=,3=8

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
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GEORGIA RAIL PASSENGER AUTHORITY CASH AND CASH EQUIVALENTS JUNE 30. 1997
NONINTEREST BEARING ACCOUNT Funds on Deposit with Georgia Department of Transportation
INTEREST BEARING ACCOUNT Funds on Deposit with Office of Treasury and Fiscal Services State Investment Pool

SCHEDULE "1"
$ 333,041.38 47,392.38
$ =====3::::.80=.4=3=3=.7==6

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
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GEORGIA RAIL PASSENGER AUTHORITY SCHEDULE OF FEDERAL REVENUES YEAR ENDED JUNE 30,1997

PROGRAM
Energy, U. S. Department of State Energy Conservation Through Georgia Environmental Facilities Authority

CFDA NUMBER
. 81.041

SCHEDULE "2"
AMOUNT $====5,=00=0.:;;;.0.0...

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
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GEORGIA RAIL PASSENGER AUTHORITY SCHEDULE OF OTHER OPERATING EXPENSES
YEAR ENDED JUNE 30, 1997
REGULAR OPERATING EXPENSES
Legal Advertising Registration Fees Reimbursement to Georgia Department of Transportation
for Administrative Expenses Subscriptions and Dues Workshop Expenses

SCHEDULE "3"

$

673,31

2,745.00

8,606.34 1,518.00
210,95

$ 13.753,60

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