Athens Regional Library, Athens, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2007

ATHENS REGIONAL LIBRARY
ATHENS, GEORGIA REPORT ON AUDIT OF THE FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2007
STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
Russell W. Hinton State Auditor

ATHENS REGIONAL LIBRARY - TABLE OF CONTENTS -

SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION REQUIRED SUPPLEMENTARY INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS

EXHIBITS

BASIC FINANCIAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

A

STATEMENTOFNETASSETS

1

B

STATEMENT OF ACTIVITIES

2

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUNDS

3

D

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET ASSETS

4

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

5

F

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THE STATEMENT OF ACTIVITIES

6

G

NOTES TO THE BASIC FINANCIAL STATEMENTS

7

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL FUND

19

ATHENS REGIONAL LIBRARY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

SCHEDULES

SUPPLEMENTARY INFORMATION

SCHEDULES OF REVENUE

2

STATE

20

3

FEDERAL

21

4

LOCAL

22

5 SCHEDULE OF SALARIES AND TRAVEL

23

SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

SECTION III FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION IV MANAGEMENT'S RESPONSES SCHEDULE OF MANAGEMENT'S RESPONSES

SECTION I FINANCIAL

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
February 16, 2009

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the Board of Regents of the University System of Georgia
and Director and Members of the Athens Regional Library Board
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying financial statements of the governmental activities and the major funds (Exhibits A through G) of the Athens Regional Library as of and for the year ended June 30, 2007, which collectively comprise the Library's basic financial statements as listed in the table ofcontents. These financial statements are the responsibility ofthe Athens Regional Library's management. Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness ofthe Library's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and the major funds of the Athens Regional Library, as of June 30, 2007, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
2007ARL-41

Management's Discussion and Analysis and the Schedule ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on pages i through vi and page 19 are not a required part of the basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States ofAmerica. We have applied certain limited procedures, which consisted principally ofinquiries ofmanagement regarding the methods ofmeasurement and presentation ofthe required supplementary information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Athens Regional Library's basic financial statements. The accompanying supplementary information which consist of Schedules 2 through 5, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe basic financial statements, and in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated section 50-6-24.
Respectfully submitted,
=&tw~in~~ State Auditor
RWH:gp 2007ARL-41

ATHENS REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007
Management's discussion and analysis of the financial performance of the Athens Regional Library System (ARLS) is intended to provide the reader of these financial activities for the year ended June 30, 2007.
OVERVIEW OF THE ATHENS REGIONAL LIBRARY SYSTEM
A regional library system by definition is a group of county library boards located in multijurisdictional political areas with an operating agreement to provide centralized management, ordering of materials, financial responsibilities, and professional library services under the authority of a regional library board.
Member library boards of the Athens Regional Library System are Athens-Clarke, Franklin, Madison, Oconee and Oglethorpe Counties. Government funding is received from each of the counties, several boards of education and some cities with each county.
The accounting records of the Athens Regional Library System are maintained in a manner to allow each local board to receive a detailed statement of net assets and fund financial statements specific to its funding level. Regional dues are allocated to a separate fund to cover those expenditures that are incurred by the regional offices. The following reports combine all operating information into one government-wide financial statement.
FINANCIAL HIGHLIGHTS FOR 2007
* The State of Georgia provided an End of Year May Rebate/Supplemental System Services
Grant of $24,165 received from Georgia Public Library Services. Funds were used to buy materials needed and computer software for the region.
Received Library Services and Technology Act grant funds in the amount of $4,000 for 2007 Vacation Reading Program and $48,079 for a Family Literacy Grant.
Continued Year 3 of the Institute of Library and Museum Sciences grant for Pinewoods Hispanic Library. The IMLS National Leadership Grant award for this year was $101,516. Pinewoods Library received the Public Library Association Highsmith Library Innovation Award in June 2007 for its "Familia a Familia" program.
* The Endowment continues its exclusive support for the Athens-Clarke County Library with
$674,363 in investments and money market funds.
General revenues were $2,597,651 and accounted for 62% of total revenue for fiscal year 2007. Program specific revenues in the form of charges for services and grants and contributions were $1,650,856. Expenses related to governmental activities were $4,032,089.

ATHENS REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the Library System's basic financial statements. The Library System's basic financial statements comprise three parts: government-wide financial statements, fund financial statements, and notes to the basic financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the Library System's finances, in a manner similar to a private-sector business by combining all funds into one reporting entity. By combining all funds the reader, can, at a glance, answer the question "How did we do financially during fiscal year 2007?"
The statement of net assets presents information on all of the Library System's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Library System is improving or deteriorating.
The statement of activities presents information showing how the Library System's net assets changed during the most recent fiscal year based on the activities specific to a Library System. The activities (or functions) of the Library System include Public Services, Technical Services, Support Services, Maintenance and Operations and Information Technology.
All revenues and expenditures are reported as soon as the underlying event occurs, regardless of when the cash will be affected. Thus, revenues and expenditures are reported in this statement for some items that will result in cash flows in future fiscal periods.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been separated for specific activities or objectives. The Library System uses fund accounting to ensure compliance with finance-related legal requirements. All of the funds of the Library System are considered governmental funds.
Governmental funds are used to account for essentially the same functions reported in the government-wide financial statements. However, unlike the government-wide financial statements, fund financial statements focus on how money flows into and out of those funds and the balances left at year-end for spending in future periods. These funds are reported using an accounting method called modified accrual accounting. The governmental fund statements provide a detailed short-term view of the Library System's general government operations and the basic services it provides.
11

ATHENS REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007

FINANCIAL ANALYSIS GOVERNMENT-WIDE

The Summary of the Regional Library System's Net Assets provides the perspective of the Library System as a whole. Table 1 provides a summary of the Library System's net assets for fiscal year 2007 compared to fiscal year 2006.

Table 1 Net Assets

Governmental Activities

Fiscal

Fiscal

Year 2007

Year 2006

Assets Cash and Cash Equivalents Investments Accounts Receivable, Net Local Federal Government Other Less: Allowance for Doubtful Accounts Inventories Capital Assets Equipment Library Collections Less: Accumulated Depreciation

$ 487,124 $ 1,204,788 756,922

455,339 99,663 36,316 -27,912 23,214

150,171 75,046 38,493
14,233

294,016 9,684,238 -6,995,412

294,016 9,378,682 -6,581.235

Total Assets

$ 4.813.508 $ 4574,194

Liabilities Accounts Payable Long-Term Liabilities Due Within One Year Due in More Than One Year

$

8,933

135,232 $ 36.682

146,027 11.924

Total Liabilities

$

180.847 $_---=1=-57-'-"'"-=95'-=-1

Net Assets Invested in Capital Assets, Net of Related Debt Restricted for Endowment Fund Unrestricted

$ 2,982,842 $ 3,091,463

674,363

589,679

975,456

735,101

Total Net Assets

$ 4,632,661 $ 4,416.243

Total Liabilities and Net Assets

$ 4,813,508 $ 4,574.194

111

ATHENS REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007

Net assets serve as an indicator of an entity's financial position. The Regional Library System's unrestricted net assets at June 30, 2007 were approximately $975,456.

Table 2 shows the changes in net assets for fiscal year 2007 compared to the changes in net assets for fiscal year 2006.

Table 2 Change in Net Assets

Revenues Program Revenues: Charges for Services Operating Grants and Contributions

Governmental Activities

Fiscal

Fiscal

Year 2007

Year2006

$

188,642 $

180,654

1,462,214

1,075,562

Total Program Revenues

$ 1,650,856 $ 1,256.216

General Revenues:

Allotment from Participating Governments $ 2,409,856 $ 2,162,298

Interest

67,404

41,793

Grants and Contributions not Restricted to

Specific Programs

37,665

Miscellaneous

82,726

58,222

Total General Revenues

$ 2,597,651 $ 2,262,313

Total Revenues

$ 4,248,507 $ 3,518.529

Expenditures Current Public Services Technical Services Support Services Maintenance and Operations Information and Technology

$ 2,524,906 $ 2,586,489

246,489

232,802

748,577

420,664

195,651

173,400

316,466

312,060

Total Expenditures

$ 4,032,089 $ 3,725,415

Change in Net Assets

$ 216,418 $ -206,886

Net Assets, Beginning of Year

4,416,243

4,623,129

Net Assets, End of Year

$ 416321661 $ 4.4161243

THE REGIONAL LIBRARY SYSTEM'S FUNDS

The Regional Library System's Funds are accounted for using the modified accrual basis of accounting. Total governmental funds had revenues of $4.2 million and expenditures of $3.9 million and were not significantly amended during the year.

lV

ATHENS REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007

CAPITAL ASSETS AND DEBT ADMINISTRATION

At the end of fiscal year 2007, the Library had $2.9 million invested in capital assets. Table 3, shown below, indicates balances in capital assets at June 30, 2007, compared with June 30, 2006 balances.

Table 3 Capital Assets (Net of Depreciation)

Governmental Activities

Fiscal

Fiscal

Year 2007

Year 2006

Equipment Library Collections

$

89,664 $

105,938

2,893,178

2,985,525

Total Capital Assets

$ 2,982,842 $ 3,091.463

DEBT

At fiscal year end June 30, 2007, the Library had $0.2 million in compensated absences outstanding. Table 4, shown below, summarizes balances in compensated absences at June 30, 2007, compared with June 30, 2006 balances.

Table 4 Debt at June 30

Governmental Activities

Fiscal

Fiscal

Year 2007

Year 2006

Compensated Absences

$

171,914 $.=====<!1:!!:57,f,l,,-95~1

ECONOMIC FACTORS AND NEXT YEAR'S BUDGET

The Library's financial position for next year is expected to remain stable. State Grant Funds are expected to decrease due to State Legislative proposed budget cuts in System and Services and Special Needs Library Services. Local funding agencies are expected to match at least the level of funding from the previous year. Limited SPLOST materials funds will be available during fiscal year 2008 but will continue in fiscal year 2009. There are no know facts, decisions, or conditions that are expected to have a significant effect on the Library's financial position (net assets) or results of operations (revenues, expenses, and other changes in net assets).

V

ATHENS REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007 REQUEST FOR INFORMATION This financial report is designed to provide a general overview of the Regional Library System's finances and to show the Library System's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Mamie Fike Simonds, Business Manager of the Athens Regional Library System, Athens, Georgia. You may email your questions to msimonds@athenslibrary.org.
VI

ATHENS REGIONAL LIBRARY

ATHENS REGIONAL LIBRARY STATEMENT OF NET ASSETS
JUNE 30, 2007
ASSETS
Cash and Cash Equivalents Investments Accounts Receivable
Local Federal Government Other Less: Allowance for Doubtful Accounts Inventories Capital Assets Equipment Library Collections Less: Accumulated Depreciation
Total Assets
LIABILITIES
Accounts Payable Long-Term Liabilities
Due Within One Year Due in More Than One Year
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Restricted for
Endowment Fund Unrestricted
Total Net Assets
Total Liabilities and Net Assets

EXHIBIT"A"

GOVERNMENTAL ACTIVITIES

$

487,123.51

756,922.04

455,338.58 99,662.99 36,315.63 -27,911.57 23,214.33

294,016.00 9,684,238.02 -6,995,412.02

$ ==='4,=8=13=,5=0=7=.5=1

$

8,932.61

135,232.42 36 681.50

$

180 846.53

$

2,982,842.00

674,362.90 975 456.08

$

4,632,660.98

$ ===='4,=8=13=,5=0=7=5=1

The notes to the basic financial statements are an integral part of this statement. -1-

ATHENS REGIONAL LIBRARY STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2007

EXHIBIT"B"

EXPENSES

PROGRAM REVENUES

OPERATING

CHARGES FOR

GRANTS AND

SERVICES

CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS

GOVERNMENTAL ACTIVITIES

Current Services Public Services Technical Services Support Services Maintenance and Operations Information Technology

$ 2,524,905.81 $ 246,488.35 748,577.25 195,651.06 316 466.30

188,641.93 $

1,073,705.69 $
229,794.64 158,713.50

-1,262,558.19 -246,488.35 -518,782.61 -36,937.56 -316 466.30

Total Governmental Activities

$ 4,032,088.77 $

188641.93 $

1462213.83 $ _ _ _2~,3_8_1~,2_3_3_.0_1

General Revenues Allotments from Participating Governments Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous

$

2,409,856.37

37,664.64 67,403.90 82 726.08

Total General Revenues

Change in Net Assets

$

216,417.98

Net Assets - Beginning of Year

4416243.00

Net Assets - End of Year

$===4=,6=3=2=,6=6=0=.9=8

The notes to the basic financial statements are an integral part of this statement. -2 -

ATHENS REGIONAL LIBRARY BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2007

EXHIBIT"C"

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable
Local Federal Government Other Less: Allowance for Doubtful Accounts Inventories
Total Assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable Deposits and Deferred Revenue
Total Liabilities
FUND BALANCES
Reserved for: Endowment Inventories for Resale
Unreserved Undesignated Reported in: General Fund
Total Fund Balances
Total Liabilities and Fund Balances

GENERAL FUND

SPECIAL REVENUE FUND ATHENS-CLARKE
COUNTY ENDOWMENT FUND,
INCORPORATED

TOTAL

$ 325,542.35 $ 244,140.30
455,338.58 99,662.99 36,315.63 -27,911.57 23,214.33

161,581.16 $ 512,781.74

487,123.51 756,922.04
455,338.58 99,662.99 36,315.63 -27,911.57 23,214.33

$ 1,156,302.61 $ =======67=4=3=6=2=.9=0 $ 1,830,665.51

$

8,932.61

5,097.85

$

14,030.46

$

8,932.61

5,097.85

$

14,030.46

$

$

23,214.33

1,119,057.82 $ 1,142,272.15 $

674,362.90 $

674,362.90 23,214.33

1,119,057.82 674,362.90 $ 1,816,635.05

$ 1,156,302.61 $ ====67=4==3=6=2-=9=0 $ 1,830,665.51

The notes to the basic financial statements are an integral part of this statement. -3-

ATHENS REGIONAL LIBRARY RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30, 2007

EXHIBIT"D"

Total Fund Balance - Governmental Funds (Exhibit "C")
Amounts reported for Governmental Activities in the Statement of Net Assets are different because:
Capital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of:
Equipment Library Collections Accumulated Depreciation
Total Capital Assets
Fines and Fees Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the Governmental Funds.
Long-Term Liabilities are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-Term Liabilities at year-end consist of:
Compensated Absences

$ 1,816,635.05

$ 294,016.00 9,684,238.02 -6,995,412.02

2,982,842.00

5,097.85

-171 913.92

Net Assets of Governmental Activities (Exhibit "A")

$ 4,632,660.98

The notes to the basic financial statements are an integral part of this statement. -4 -

ATHENS REGIONAL LIBRARY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2007

EXHIBIT"E"

REVENUES
Local Funds State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Public Services Technical Services Support Services Maintenance and Operations Information Technology
Total Expenditures
Net Change in Fund Balance
Fund Balance - Beginning
Fund Balance - Ending

GENERAL FUND

SPECIAL REVENUE FUND A THENS-CLARKE
COUNTY ENDOWMENT FUND,
INCORPORATED

TOTAL

$ 2,409,856.37 1,257,796.54 153,595.29 216,553.50 7,516.44 $ 87,381.30
$ 4,132,699.44 $

$
59,887.46 50,822.00

2,409,856.37 1,257,796.54
153,595.29 216,553.50
67,403.90 138,203.30

110 709.46 $ 4,243,408.90

$ 2,384,046.34 $ 245,894.35 748,577.25 195,651.06 309,310.30
$ 3,883,479.30 $
$ 249,220.14 $
893,052.01

26,025.56 $

2,410,071.90 245,894.35 748,577.25 195,651.06 309,310.30

26,025.56 $ 3,909,504.86

84,683.90 $ 333,904.04

589 679.00 1,482,731.01

$ 1,142,272.15 $====67=4=3=6=2=.9=0 $ 1,816,635.05

The notes to the basic financial statements are an integral part of this statement. -5-

ATHENS REGIONAL LIBRARY RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2007

EXHIBIT"F"

Total Net Change in Fund Balance - Governmental Funds {Exhibit "E")
Amounts reported for Governmental Activities in the Statement of Activities are different because:
Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:
Capital Outlay Depreciation Expense
Excess of Depreciation Expense over Capital Outlay
Fines and Fees Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the Governmental Funds.
Some items reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in Governmental Funds. These activities consist of:
Increase in Compensated Absences

$ 333,904.04

$ 390,384.00 -499,005.00

-108,621.00

5,097.85

-13,962.91

Change in Net Assets of Governmental Activities {Exhibit "B")

$ 216,417.98

The notes to the basic financial statements are an integral part of this statement. -6-

ATHENS REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "G"

Note 1: DESCRIPTION OF LIBRARY AND REPORTING ENTITY
REPORTING ENTITY
The Athens Regional Library (Library) operates pursuant to Official Code of Georgia Annotated Sections 20-5-40 through 20-5-59 to provide public library services with costs shared by participating local governmental agencies and grants from the State of Georgia.
The Library Board is comprised of 16 members which are also trustees ofthe member library which appointed them. The Library Board membership consists of4 members appointed from the AthensClarke County Library Board, 3 members appointed from the Franklin County Library Board, 3 members appointed from the Madison County Library Board, 3 members appointed from the Oconee County Library Board, and 3 members appointed from the Oglethorpe County Library Board. The Library Board is without authority to determine the amount of its funding, except by submission of budget requests to local governmental units from which the Library receives support and to the State of Georgia for State and Federal flow through funding. Membership in the Library and participation in library services is at the discretion ofeach participating governmental agency. The Library Board has the power to designate management, the power to retain unreserved fund balances of local and other funds for continued operations and is the lowest level of oversight responsibility for the Library's operations. The Athens Regional Library is therefore determined to be a joint venture.
Blended Component Unit The Athens-Clarke County Endowment Fund, Inc. was organized exclusively for the charitable and educational purpose of establishing and maintaining an endowment fund for the Athens-Clarke County Library.
The Endowment will raise funds from public donations and fundraising activities to establish an investment corpus. Income from the corpus will be used to either purchase materials for the Library's collection or make grants to the Library for the exclusive purpose ofpurchasing materials. The financial statements of the endowment fund have been blended with the Library as a Special Revenue Fund.
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The Library's basic financial statements are collectively comprised of the Library-wide financial statements, fund financial statements and notes to the basic financial statements of the Athens Regional Library.
Library-wide Statements: The Statement ofNet Assets and the Statement ofActivities display information about the financial activities of the overall Library. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through intergovernmental revenues and other nonexchange transactions.
-7 -

ATHENS REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "G"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Statement ofActivities presents a comparison between direct expenses and program revenues for each function of the Library's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the Library related to the administration and support ofthe Library's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
Program revenues include (a) charges paid by the recipients ofgoods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues are presented as general revenues.
Fund Financial Statements: The fund financial statements provide information about the Library's funds. Eliminations have been made to minimize the double counting of internal activities. The emphasis of fund financial statements is on major governmental funds.
The Library reports the following major governmental funds:
General Fund is the Library's primary operating fund. It accounts for all financial resources of the Library, except those resources required to be accounted for in another fund.
Special Revenue Fund - Athens-Clarke County Endowment Fund, Incorporated for revenue sources legally restricted to expenditures for charitable and educational purposes for AthensClarke County Library.
BASIS OF ACCOUNTING
The basis ofaccounting determines when transactions are reported on the financial statements. The Library-wide governmental financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless ofwhen the related cash flows take place. Nonexchange transactions, in which the Library gives (or receives) value without directly receiving (or giving) equal value in exchange, include grants and donations. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
The Library uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts.
-8-

ATHENS REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "G"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis ofaccounting. Under this method, revenues are recognized when measurable and available. The Library considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Interest is considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for compensated absences, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds.
The Library funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the Library's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Official Code of Georgia Annotated Section 45-8-14 authorizes the Library to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Library in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year and equity investments are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Library to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
-9 -

ATHENS REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "G"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLES
Receivables consist ofamounts due from grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed, fines and fees from patrons and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the basic financial statements do include amounts which would necessitate the need for an allowance for uncollectible receivables.
INVENTORIES
Inventories of goods for resale are valued at cost and are recorded as expenditures at the time of purchase. The inventories reported on the balance sheet are equally offset by a reservation of fund balance which indicates that this amount does not constitute "available spendable resources" even though they are a component of net current assets.
CAPITAL ASSETS
Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time ofpurchase. On the Library-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method. During the fiscal year under review, no events or changes in circumstances affecting a capital asset that may indicate impairment were known to the Library.
Capitalization thresholds and estimated useful lives of capital assets reported in the Library-wide statements are as follows:

- 10 -

ATHENS REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "G"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Capitalization Policy

Estimated Useful Life

Equipment Library Collections

$ 5,000.00 All

10 years 10 years

Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives.

NET ASSETS

The Library's net assets in the Library-wide Statements are classified as follows:

Invested in capital assets, net of related debt - This represents the Library's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt.

Restricted net assets - These represent resources for which the Library is legally or contractually obligated to spend resources for endowment funds in accordance with restrictions imposed by external third parties.

Unrestricted net assets - Unrestricted net assets represent resources derived from grants and contributions not restricted to specific programs, charges for services, and miscellaneous revenues. These resources are used for transactions relating to the general operations ofthe Library, and may be used at the discretion of the Library to meet current expenses for those purposes.

FUND BALANCES RESERVED
Reserves represent those portions of fund balance equity that are legally segregated for a specific future use.

The Athens-Clarke County Library Endowment Fund, Inc., was organized exclusively for the charitable and educational purpose of establishing and maintaining an endowment fund for the Athens-Clarke County Library. Income from the corpus will be used to either purchase materials for the Library's collection or make grants to the Library for the exclusive purpose of purchasing materials.

Note 3: DEPOSITS AND INVESTMENTS

COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not

- 11 -

ATHENS REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "G"

Note 3: DEPOSITS AND INVESTMENTS
been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13 .1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, 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.
CATEGORIZATION OF DEPOSITS At June 30, 2007, the bank balances were $1,318,103.14. The amounts of the total uninsured bank balances are classified into three categories of custodial credit risk:
Category 1 - Uncollateralized Category 2 - Cash collateralized with securities held by the pledging financial institution, or Category 3 - Cash collateralized with securities held by the pledging financial institution's
trust department or agent but not in the Library's name.

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ATHENS REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "G"

Note 3: DEPOSITS AND INVESTMENTS

The Library's deposits are classified by custodial credit risk category at June 30, 2007, as follows:

Custodial Credit Risk Category

Bank Balance

1

$

264.56

2

0.00

3

592,365.91

Total

$ 592,630.47

CATEGORIZATION OF INVESTMENTS The Library's investments as of June 30, 2007, are presented below. All investments are presented by investment type and debt securities are presented by maturity.

Investment Type

Fair Value

Other Investments Equity Mutual Funds Equity Securities - Domestic

$ 208,646.96 3,165.95

Total Investments

$ 211,812.91

Interest Rate Risk Interest rate risk is the risk that changes in interest rates of debt investment will adversely affect the fair value of an investment. The Library does not have a formal policy for managing interest rate risk.

Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event ofthe failure ofthe counterparty to a transaction, the Library will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The Library does not have a formal policy for managing custodial credit risk.

At June 30, 2007, the carrying value of the Library's investments was $211,812.91 which is materially the same as fair value. Fair value is based on quoted market prices, unless otherwise noted. These investments consist of Equity Mutual Funds (open-end mutual funds) and Domestic Common Stock held in the Library's name which are not required to be classified by categories of custodial credit risk.

- 13 -

ATHENS REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "G"

Note 3: DEPOSITS AND INVESTMENTS

Credit Quality Risk Credit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The Library does not have a formal policy for managing credit quality risk.

The Equity Mutual Fund does not have a credit quality rating.

Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The Library does not have a formal policy for managing concentration of credit risk. More than 5% of the Library's investments are in Federated Max-Cap Index Fund. This investment is 28% of the Library's total investments.

Note 4: CAPITAL ASSETS

The following is a summary of changes in the Capital Assets during the fiscal year:

Governmental Activities Capital Assets Being Depreciated
Equipment Library Collections
Less Accumulated Depreciation for: Equipment Library Collections
Governmental Activity Capital Assets - Net

Balances
July I. 2006

Increases

Decreases

Balances June 30, 2007

$ 294,016.00

$ 294,016.00

9,378,682.00 $ 390,384.00 $ 84,827.98 9,684,238.02

188,078.00 6,393,157.00

16,274.00 482,731.00

204,352.00 84,827.98 6,791,060.02

$ 3,091,463.0Q $ -1Q8,621.00 $

Q.Q0 $ 2,982,842,Q0

Current year depreciation expense by function is as follows:

Public Services Support Services Information Technology

$ 460,698.00 36,019.00 2,288.00

$ 499,005.00

Note 5: RISK MANAGEMENT

The Library is exposed to various risks ofloss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation.

- 14 -

ATHENS REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "G"

Note 5: RISK MANAGEMENT

The Library has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and job related illness or injuries to employees. The Library has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Library's insurance coverage in any of the past three years.

The Library has elected to self-insure for all losses related to acts of God. The Library has not experienced any losses related to this risk in the past three years.

The Library is self-insured with regard to unemployment compensation claims. The Library accounts for claims within the General Fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated.

Changes in the unemployment compensation claims liability during the last two fiscal years are as follows:

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

2006 2007

$

0.00 $

1,578.00 $

1,578.00 $

0.00

$

0.00 $

664.11 $

664.11 $

0.00

The Library has purchased a surety bond to provide additional insurance coverage as follows:

Position Covered

Amount

All Employees

$ 500,000.00

Note 6: LONG-TERM DEBT

COMPENSATED ABSENCES Compensated absences represent obligations of the Library relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. Typically, the General Fund is the fund used to liquidate this long-term debt. The Library uses the vesting method to compute compensated absences.

The changes in Long-Term Debt during the fiscal year ended June 30, 2007, were as follows:

- 15 -

ATHENS REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "G"

Note 6: LONG-TERM DEBT

Balance July 1, 2006

Governmental Funds
Compensated Absences
$ 157,951.01

Additions Annual Leave Earned

135,232.42

Deductions Annual Leave Utilized

121,269.51

Balance June 30, 2007

$ 171,913.92

Portion of Long-Term Debt Due within One Year

$ 135,232.42

Note 7: SIGNIFICANT CONTINGENT LIABILITIES

Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any costs which are disallowed under grant terms. The Library believes that such disallowances, if any, will be immaterial to its overall financial position.

Note 8: RELATED PARTY TRANSACTIONS

Mrs. Pam Blake, Administrative Assistant for the Athens Regional Library, is married to Mr. Dennis Blake, the Library's insurance agent. For the year under review, the Library's insurance policies were handled by Mr. Blake and his employer, The Boswell Group.

Note 9: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all librarians and clerical personnel employed by regional and county libraries are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

- 16 -

ATHENS REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT"G"

Note 9: RETIREMENT PLANS

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Library who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Library makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 9.28% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2007 2006 2005

100% 100% 100%

$ 163,049.06 $ 162,703.00 $ 161,095.00

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(This page left intentionally blank)

ATHENS REGIONAL LIBRARY GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2007

SCHEDULE "1"

REVENUES
Local Funds State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Public Services Technical Services Support Services Maintenance and Operations Information Technology
Total Expenditures
Net Change in Fund Balance
Fund Balance - Beginning

NONAPPROPRIATED BUDGETS

ORIGINAL (1)

FINAL (1)

ACTUAL AMOUNTS

$

2,375,692.00 $

2,375,692.00 $

2,409,856.37

1,028,001.90

1,028,001.90

1,257,796.54

108,165.89

108,165.89

153,595.29

139,375.00

139,375.00

216,553.50

10,000.00

10,000.00

7,516.44

87 381.30

$

3,661,234.79 $

3,661,234.79 $

4, 132,699.44

$

2,595,348.35 $

2,595,348.35 $

2,384,046.34

154,100.00

154,100.00

245,894.35

438,979.54

438,979.54

748,577.25

208,705.39

208,705.39

195,651.06

276,425.51

276,425.51

309,310.30

$ 3,673,558.79 $ 3,673,558.79 $ 3,883,479.30

$

-12,324.00 $

-12,324.00 $

249,220.14

797 921.00

797,921.00

893,052.01

Fund Balance - Ending

$

785 597.00 $

785,597.00 $

1,142,272.15

Notes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual
(1) Original and Final Budget amounts do not include budgeted revenues or expenditures of the blended component unit.
The accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.

See notes to the basic financial statements.

- 19 -

ATHENS REGIONAL LIBRARY SCHEDULE OF STATE REVENUE
YEAR ENDED JUNE 30, 2007
AGENCY/FUNDING
GRANTS Board of Regents of the University System of Georgia Office of Public Library Services Salaries Library Materials Maintenance and Operations Repairs and Maintenance Talking Book Centers

SCHEDULE "2"

GOVERNMENTAL FUND TYPE GENERAL FUND

$

601,932.64

123,916.46

158,713.50

229,794.64

143,439.30

$ ===1,=2=57='7=9=6=.5=4

See notes to the basic financial statements.

- 20 -

ATHENS REGIONAL LIBRARY SCHEDULE OF FEDERAL REVENUE
YEAR ENDED JUNE 30, 2007
AGENCY/FUNDING
GRANTS Museum and Library Services, Institute of Through Board of Regents of the University System of Georgia Library Services and Technology Act
2004 IMLS National Leadership Grant
Family Literacy Grant Family Literacy Grant - Vacation Reading Program

SCHEDULE "3"

GOVERNMENTAL FUND TYPE GENERAL FUND

$

101,515.89

48,079.40

4,000.00

$ =======1=53:i.,5;;,;9=5=.2=9

See notes to the basic financial statements.

- 21 -

ATHENS REGIONAL LIBRARY SCHEDULE OF LOCAL REVENUE
YEAR ENDED JUNE 30, 2007
LOCAL SOURCES Boards of Education Franklin County Oconee County Oglethorpe County City Governments Arnoldsville Bogart Carnesville Franklin Springs Maxey Royston Watkinsville Winterville County Governments Boards of Commissioners Athens-Clarke Franklin Madison Oconee Oglethorpe

SCHEDULE "4"

GOVERNMENTAL FUND TYPE GENERAL FUND

$

30,000.00

35,000.00

15,000.00

500.00 6,000.00 1,750.00 3,000.00
200.00 13,416.70
8,000.00 12,500.00

1,683,963.07 31,500.00 150,018.25
380,258.25 38,750.10

$ ======2=,4=0==-9'=85=6=.3=7

See notes to the basic financial statements.

- 22 -

ATHENS REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2007

SCHEDULE "5"

NAME
ALEXANDER, GAYLE B. AMES, KATHRYN S. ANDERSON, RAYMOND V. II ANDERSON, MICHELLE M. ARCHIBALD, WRENFORD N. ATWOOD, JUDY J. AUWARTER, CLARE AWADALLA, NICOL RENEE BAACK, BRITTNEY BALLARD, REBECCA ELIZABETH BANKS, LINDA L. BASINGER, PHILIP E. BERNSTEIN, ELIZABETH BEST, GLENDA S. BILLINGS, JESSICA L. BLAKE, PHYLLIS M. BLEVINS, ALISHA MARIE BOBILIN, ERIK VICTOR BOTTS, LINDA BOWDEN, HOLLY L. BOWER, ERIN COLLEEN BOYLAN, SAMANTHA MICHELLE BRAGG, DORIS MARIE WELDON BRAGG, JAMIE M. BROOKE, AMANDA BROOKS, PHYLLIS M. BROSTROM, CHERYLLE CRAFT BRYANT, RODNEY ANTHONY JR. BURROUGHS, JANET A. BUSH, EVAN MICHAEL CAMPBELL, JENNIFER LYNN
CANTRELL, DORIS 0.
CARLAN, MARSHA D. CARTER, LAURA W. CARTER, SARA S. CASTENGERA, VIVAN CHITWOOD, ROSEMARY D. CLAPP, JANET E. CLAY, SUSAN CLAYTOR, ALISA YVONNE CODY, TOMMY L. COPELAND, EVE COYNE, CARMEN ASHLEY CRONIN, DIANE CRONK, MARTY DALEY-BAILEY, KATHERINE DALTON, MAXINE A. DANIEL, DOROTHY D. DEAL, MARCUS GREGORY DEGRASSE, SUZANNE M. DEMPSEY, THEODORA DEROSHIA, ELIZABETH ASHLEY DICKSON, GREG DIETZ, CHRISTINE H. DINGLER, NANCY F. DINGUS, LAYLA CERESE DOUGLAS, KAREN W. DRIVER, MARY ANNE R. DROST, AMY MICHELLE DUARTE, ENRIQUETA DUARTE, MARIA GUADALUPE DUNN, TARA LYNN DUTTON, SANDRA

TITLE CATEGORY
Library Assistant Director Security Guard Library Assistant Computer Technician Librarian Librarian Library Assistant Library Assistant Library Assistant Library Assistant Security Guard Branch Manager Library Assistant Library Assistant Admin Assistant Library Assistant Library Assistant Library Assistant Librarian Library Assistant Library Assistant Library Assistant Library Assistant Support/Clerical Library Assistant Library Assistant Library Assistant Branch Manager Library Assistant Library Assistant Library Assistant Library Assistant Librarian Library Assistant Library Assistant Branch Manager Library Assistant Technical Services Clerk Library Assistant Custodian Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Computer Technician Branch Manager Library Assistant Library Assistant Security Guard Library Assistant Library Assistant Library Assistant Computer Technician Librarian Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant
- 23 -

SALARIES

TRAVEL

$

6,826.28

91,746.00 $

4,262.50

37.80

35,926.32

74,046.00

73,446.00

6,784.05

1,800.00

5,913.96

1,093.75

3,043.75

773.50

6,736.80

2,756.25

31,599.36

4,780.00

14,719.67

1,884.96

53,985.72

2,200.00

2,856.33

7,695.30

1,243.80

1,613.50

3,930.72

2,114.00

418.75

26,668.56

1,872.28

421.26

4,064.92

22,056.48

72,846.00

26,477.46

2,685.32

16,640.04

10,589.61

3,397.50

26,018.02

6,103.68

2,842.70

2,738.91

4,102.50

4,616.00

6,566.75

1,897.64

20,527.50

47,277.00

30,224.04

385.00

20,030.28

7,006.25

7,293.97

50.40

3,298.52

24,360.06

54,366.00

2,806.00

442.68

3,892.32

5,353.70

3,973.20

1,429.41 1,609.86
153.21
157.29 152.64
120.24 60.14
351.18

NAME
ELSNER, JACQUELINE C. FAUST, TWANNA B. FIRESTONE, GAIL C. FLAKE, KATHRYN SUZANNE FLEMING, ALFREDA W. FLOYD, ROBIN D. FLYNN, THERESA MARIE GEDDIS, JANET GENTRY, MELISSA D. GERSON, TAMRA FRIED GIBSON, JOAN M. GIESZLER, CRISTINE P. GILMOUR, NATHAN GOLDWIRE, MEESHA GORDON, JANICE MARIE GORDON, MABLE LAVERN GRAHAM, THERESA L. GREEN, TRUDI HALE, MARY BETH HANNA.PETER HARDY, SARAH L. HARRISON, DOROTHY D. HARTEL, MARY JEAN HAWKES, MONICA R. HAWORTH, KATHRYN HAYEK, MATTHEW W. HAYGOOD, TERESA HAYNES, GLORIA K. HENZEL, JUDY HULSEY HILL, SHAYLA HITCHCOCK, ANNEMARIE HOLAHAN, LORRAINE HOOVER, LUVERNE E. HUMPHRIES, CAROL JANE HUNTER, SARAH N. IVEY, JENNIFER F. JAMES, KIMBERLY JAMESON, CYNTHIA C. JEWELL, PRENTICE L. JOHNSON, DORIS K. JOHNSON, JESSIE L. JOHNSON.KAREN JONES, ELIZABETH KASTELLEC, MIKE ANDREW KEAM, PAULA DERELLE KNAUFT, EVELYN ANDERSON KNOLL, SAMANTHA LECROY, EMMA L. LEFFERT, KIMBERLY B. LESTER, MARY LOU LINDSEY, LAURA NELL LINNEMANN, MARY PALMER LUMPKIN, MARILYN MACEDO, ADELAIDA MARKOV, CLAUDIA L. MATHERLY, JASON MAZZAFERRO, SARAH BETH MCCUTCHEN.SHEA MILFORD, MEGAN ROSE MILLER, AMY LEIGH MONK, JONATHAN D. MONTFORD, AMANDA MOORE, BEVERLY

ATHENS REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2007

SCHEDULE "5"

TITLE CATEGORY
Librarian Library Assistant Librarian Library Assistant Purchasing ILL Security Guard Librarian Storyteller P Horizons Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Intern PR Library Assistant Library Assistant Library Assistant Librarian Library Assistant Library Assistant Library Assistant Library Assistant Librarian Library Assistant Library Assistant SNLC Manager Custodian Library Assistant Library Assistant Business Assistant Library Assistant Library Assistant Library Assistant Library Assistant Custodian Library Assistant Library Assistant Library Assistant Custodian Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Branch Manager Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Custodian Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Volunteer Coord, Store Manager Computer Technician Library Assistant Administrative Support

SALARIES

TRAVEL

$ 64,462.32 $
27,533.16 38,208.58
1,111.15 29,292.84 14,506.25
2,887.50 224.00 27.72
15,912.00 121.66
3,936.94 4,856.40
218.36 44.22
29,565.00 22,732.80 38,676.16
176.00 374.50 30,299.40 8,274.24 58,992.54 25,071.00 2,037.50 27,540.00 3,024.00 26,724.00 954.07 3,359.64 624.00 3,164.00 5,920.40 5,075.70 3,208.80 7,089.63 4,281.89 26,971.68 28,413.12 4,676.54 21,320.04 1,357.50 2,398.50 23,451.96 4,752.50 7,528.68 1,000.00 16,640.04 6,174.02 15,348.36 1,845.59 4,299.56 144.50 182.00 27,547.02 6,762.00 2,463.50 112.50 1,499.96 29,801.64 33,660.00 1,946.00 894.34

238.04 154.06 498.76
174.83
116.40 251.01
16.01 167.37 171.51 801.22

-24-

ATHENS REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2007

SCHEDULE "5"

NAME
MOORE, VICKI C. MUMAH, CARRIE ANN NEWTON, EMILY A. NIX, LAURA OVERSTREET,STACEY PAINTER, ROBERT D. PATEL, PRIYA A. PEEPLES, LAUREN KAYLA PEEPLES, SUSAN W. PIERCE-TOMLIN, CHRISTINA MARIE POPE, GAIL R. PYE.MEGAN ROSSITER, JANE ALICE SCHMIDT, MARION P. SCHROEDER, MARILYN ANITA SCOTT, TIMOTHY D. SEIGLER, PHILLIP E. SIMONDS, MAMIE FIKE SIMS, ANNETTE E. SKINNER, BETHANY SLABODA, LEVI JESSE SLABODA, VICTORIA SMITH, CLARA LOUISE SMITH, KRISTY SPEED, TIFFANY STANLEY, JUSTIN STEERE.ELIZABETH STEINBOOK, JESSICA STREETMAN,JOHNATHAN STICKLAND, SARA FRANCIS STRICKLAND-MERRITT, MIRIAM TANNER.LINDSAY TATE, WILLIAM JEFFERSON TUCKER, LINDA H. UHALL, MICHAEL BENJAMIN UPSHAW, ROSHAE S. VERMILYA, JENNY VICENTE, MIGUEL J. VON WALDNER, CHRISTINA ALLISON WARD, THERESA M. WEBBER, GEORGE F. WEBSTER, BENJAMIN A. WEDDLE, KRISTEN L. WHITEHEAD, DONALD EARL WILKERSON, AMER R. WILLIAMS, DIANE T. WILLIAMS, ERIN ELIZABETH WILSON, KATHERINE E. WINDERS, AMY WINKLER, MARTHA J. WITZLER, RYLAND P. WOLF, JENNIFER WRIGHT, AQUILA WRIGHT, JANET WRIGHT, LASKISHA Y. WRIGHT, NATALIE D. ZARATE, ELISA ABEL
Totals per Report
See notes to the basic financial statements.

TITLE CATEGORY
Library Assistant PR Intern Library Assistant Library Assistant Public Relations Manager Courier Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Librarian Security Guard Library Assistant Business Manager Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Librarian Library Assistant Library Assistant Library Assistant Library Assistant Branch Manager Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Librarian Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Technical Services Clerk Library Assistant Librarian Branch Manager Library Assistant Library Assistant
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SALARIES

TRAVEL

$

6,839.06

7,305.35 $

4,139.10

899.50

34,847.00

7,417.44

1,692.60

2,649.90

830.97

24.00

5,058.00

1,066.00

24,704.52

5,008.00

3,010.74

12,443.75

26,155.52

49,470.00

5,679.14

7,438.00

2,940.20

2,360.70

1,518.90

115.50

1,498.25

633.50

6,319.88

3,024.00

5,708.08

1,053.00

512.82

1,540.50

44,880.00

777.90

6,352.00

536.80

5,104.25

40,000.08

565.50

4,273.06

22,840.18

7,368.00

2,222.00

1,359.00

24,480.00

34,476.00

1,363.60

7,062.00

928.00

1,090.00

1,433.20

1,627.50

1,694.25

1,701.36

11,472.71

17,681.36

2,227.75

73.84
434.51
1,029.56 328.63 7.76

$ 2,177,247.96 $

8 497.48

SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

ATHENS REGIONAL LIBRARY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2007

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6292-05-02 FS-6292-05-04 FS-6292-06-01 FS-6292-06-02

Further Action Not Warranted Further Action Not Warranted Partially Resolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

CASH AND CASH EQUIVALENTS INVESTMENTS INVENTORIES REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Accounting Controls Finding Control Number: FS-6292-06-01

CASH AND CASH EQUIVALENTS We concur with this finding. This is a repeat finding (FS-6292-05-02) from the year ended June 30, 2005. We have attempted to correct this finding (during fiscal year 2007) by hiring one additional part-time Accounting Clerk in order to separate the function of duties. Administrative review of the bank reconciliations will also be maintained during fiscal year 2007.

The bank reconciliation list of outstanding checks has been importing erroneous journal entries and voided checks that should not be included on the reconciliation report. We believe that this is due to the accounting system used (Fundware, Inc. Accounting Systems). During fiscal year 2008, the Business Manager and Fundware Technology Technician ran various reports to correct this problem and have since formalized a report that corrects this finding. Although the bank reconciliation module used by the accounting system still does not tie to the general ledger, the Business Manager now manually does this each month in order to comply with generally accepted accounting principles. The Library's money market account activity has been reported during June of2007 to reflect on the general ledger.

INVESTMENTS We concur with this finding. Stocks and Certificates of Deposits are reported on the general ledger at fair market value to correct this finding during fiscal year 2007.

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ATHENS REGIONAL LIBRARY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2007
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CORRECTIVE ACTION/RESPONSES CASH AND CASH EQUIVALENTS INVESTMENTS INVENTORIES REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Accounting Controls Finding Control Number: FS-6292-06-01 INVENTORIES We concur with this finding. The Library Store did a physical inventory during June of 2007 in order to comply with this finding. REVENUES/RECEIVABLES/RECEIPTS We concur with this finding. All negative receivables have been corrected on the general ledger during fiscal year 2007. The Library General Fund revenue that was deposited into the Endowment operating account in error will be corrected by November of 2007 by writing a check from the Endowment to the Athens Regional Library System. This will correct this finding. All MMR grants for reconstruction of the Madison County Library are reported properly by depositing all checks into the Library's operating account and then writing checks to the appropriate agencies for the amount identified. EXPENDITURES/LIABILITIES/DISBURSEMENTS We concur with this finding. Once again, the additional staff will be used to separate the invoicing from the general ledger function. All invalid payables were removed from the general ledger during fiscal year 2007. All travel charges are now coded with object code 55800.
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ATHENS REGIONAL LIBRARY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2007
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CORRECTIVE ACTION/RESPONSES
GENERAL LEDGER Inadequate Accounting Records Finding Control Number: FS-6292-06-02
We concur with this finding. This is a repeat finding (FS-6292-05-04 and FS-6292-04-02) from the years ended June 30, 2005 and June 30, 2004, respectively. The Library does maintain accounting records for the Library Endowment Fund which was determined to be a Blended Component Unit ofthe Library, although the records are kept separate and are not included on the general ledger. The Endowment Board of Directors understand this and continue to maintain separate accounting records at this time. All Endowment records have been presented to the auditors and continue to remain a Blended Component Unit of the Library.
The Endowment Board is aware of GASB 39 and its intent to present financial statements ofEndowment Organizations on the general ledger. We feel that it was not Management's failure to adhere to the By-Laws established by the Endowment Fund Board ofDirectors which is entirely volunteer. Management does not have the authority to call a Board meeting; this is the Board's responsibility. The Endowment does have a Treasurer and still maintains this Board Position. There are internal controls in place over the Endowment assets. These currently consist of the spending account maintained as 25% of the investment pool cannot be over spent by the Director. At no time did the Endowment have expenditures in excess ofthis amount, thereby following internal controls as specified by the Board. Management has taken steps to present the Endowment in accordance with generally accepted accounting principles.
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
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SECTION III FINDINGS AND QUESTIONED COSTS

ATHENS REGIONAL LIBRARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2007

COMMUNICATION OF INTERNAL CONTROL DEFICIENCIES

The auditor is required to communicate to management and those charged with governance control deficiencies identified during the course of the financial statement audit that, in the auditor's judgment, constitute significant deficiencies or material weakness.

A control deficiency exists when the design or operation ofa control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affect the Athens Regional Library's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the Athens Regional Library's financial statements that is more than inconsequential will not be prevented or detected by the Athens Regional Library's internal control.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement ofthe financial statements will not be prevented or detected by the Athens Regional Library's internal control.

Any identified deficiencies in internal controls that we did not consider to be significant deficiencies and/or material weaknesses have been communicated to management and those charged with governance within a separate management letter dated February 16, 2009. Internal control deficiencies identified during the course of this engagement that were considered to be significant deficiencies and/or material weaknesses are presented below:

FINANCIAL REPORTING Inadequate Controls over Financial Reporting Material Weakness Finding Control Number: FS-6292-07-01

Condition:

The Library did not have adequate controls in place over the financial statement reporting process.

Criteria:

Management is responsible for having adequate controls over the financial reporting process, which not only includes proper recording oftransactions to the general ledger, but extends to accurate preparation and presentation ofthe financial statements, including note disclosures.

Questioned Cost: NIA

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ATHENS REGIONAL LIBRARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2007

FINANCIAL REPORTING Inadequate Controls over Financial Reporting Material Weakness Finding Control Number: FS-6292-07-01

Information:

The Governmental Accounting Standards Board (GASB) Statement 34 reporting model requires the presentation of both fund level and entity-wide level statements in the Library's financial statements. Due to a lack of adequate controls over the financial statement preparation and reporting process, the auditor had to prepare the appropriate fund level and entity-wide level financial statements from the Library's general ledger.

Cause:

The Library did not implement an adequate system of internal control over the financial statement reporting process.

Effect:

The Library did not have adequate controls in place to ensure that the financial statements were properly prepared in accordance with generally accepted accounting principles.

Recommendation:

The Library should develop and implement internal controls over the financial statement reporting process to ensure that activity is properly recorded in the general ledger; to verify that financial statements (including note disclosures) properly reflect activity reported in the general ledger, and to include a monitoring process to evaluate the accuracy of the financials presented for audit.

CASH AND CASH EQUIVALENTS INVESTMENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Accounting Controls Material Weakness Finding Control Number: FS-6292-07-02

Condition:

This is a repeat finding (FS-6292-06-01 and FS-6292-05-02) from the years ended June 30, 2006 and June 30, 2005, respectively. The accounting procedures of the Library were insufficient to provide for adequate controls over Cash and Cash Equivalents, Investments, Revenues/Receivables/ Receipts, and Expenditures/Liabilities/Disbursements.

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ATHENS REGIONAL LIBRARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2007

CASH AND CASH EQUIVALENTS INVESTMENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Accounting Controls Material Weakness Finding Control Number: FS-6292-07-02

Criteria:

The Library's management is responsible for designing and maintaining internal controls that provide reasonable assurance that all financial activity is properly approved, documented, processed and reported within the accounting records in accordance with generally accepted accounting principles.

Questioned Cost: NIA

Information:

Our examination of the accounting records revealed the following deficiencies:

Cash and Cash Equivalents The Library did not attempt to reconcile its cash accounts during the fiscal year. Other than reconciliations for June 2005, June 2006, and June 2007, which were prepared at the time of audit fieldwork, no other reconciliations have been prepared since June 2004. The reconciliation for the General Operating bank statement at June 30, 2007 was incomplete and contained numerous reconciling items that were either unidentified variances or could not be adequately documented by Library personnel. The reconciliation for the General Operating bank statement at June 30 did not reconcile to the general ledger by $10,556.57. The outstanding check list provided for the audit contained voided checks totaling $80,189.40. The Library was unable to provide documentation for $20,135.72 of these voided checks. An audit adjustment of $100,000.00 was required to correct a posting error made by the Library.

Investments Stocks and Certificates of Deposit were not reported on the general ledger at fair market value at June 30, 2007, resulting in an understatement of$12,027.15.

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ATHENS REGIONAL LIBRARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2007

CASH AND CASH EQUIVALENTS INVESTMENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Accounting Controls Material Weakness Finding Control Number: FS-6292-07-02

Revenues/Receivables/Receipts Negative receivables totaling $33,950.50 were noted on the general ledger at June 30, 2007. The prior year audit report disclosed a $290,189.00 posting error between the Library General Fund revenue and the Endowment Fund. The subsequent period adjustment made by the Library was incorrect leaving a balance of $4,464.72 still due to the General Fund. Unrecorded receivables totaling $78,857.00 were noted in the subsequent period review.

Expenditures/Liabilities/Disbursements At June 30, 2007, invalid payables totaling $8,932.00 were noted on the general ledger. Twenty-two expenditure items selected for testing could not be located. Credit card charges totaling $7,365.55 were not properly classified as employee travel.

Cause:

Management failed to reconcile subsidiary ledgers to the general ledger and failed to properly monitor program cash, investments, revenues, expenditures and employee compensation adequately to ensure that financial activity was accurate and properly recorded within the accounting records.

Effect:

Without satisfactory accounting controls and procedures in place, the Library could place itself in a position where potential misappropriation of assets could occur. In addition, the lack ofcontrols could impact the reporting ofits financial position and results of operations.

Recommendation:

The Library should review the accounting procedures in place and design and implement procedures necessary to ensure that all financial activity is properly recorded and reflected within the accounting records.

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ATHENS REGIONAL LIBRARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2007

GENERAL LEDGER Failure to Report Athens-Clarke County Library Endowment Fund Material Weakness Finding Control Number: FS-6292-07-03

Condition:

This is a repeat finding (FS-6292-06-02, FS-6292-05-04 and FS-6292-04-02) from the years ended June 30, 2006, June 30, 2005, and June 30, 2004, respectively. The Library failed to report assets, liabilities and fund balances and the revenues, expenses/expenditures and changes in net assets/fund balances for the Library Endowment Fund which is a blended component unit of the Library. A journal entry was made by the auditor to properly reflect this activity on the financial statements.

Criteria:

GASB Statement No. 39 Determining Whether Certain Organizations are Component Units indicates the Library must prepare their financial statements in accordance with generally accepted accounting principles, which includes presenting the financial statements ofthe Library Endowment Fund on the general ledger.

Questioned Cost: NIA

Information:

During our examination of the Library Endowment Fund, the following deficiencies were noted:

Current year revenue and expenditure activity as well as assets, liabilities and changes in net assets/fund balances were not included in the Library's general ledger. All financial activity was maintained in the check book of the endowment bank account.
The prior year audit report disclosed $290,189.00 ofLibrary General Fund revenues deposited into the Endowment Fund bank account. As ofthe end of fieldwork, $4,464.72 was still due to the General Fund.

Cause:

Management failed to ensure that adequate accounting controls are established for the Endowment Fund.

Effect:

The failure ofthe Library to maintain an accurate general ledger can lead to inaccurate internal and external reporting.

Recommendation: Administrative procedures should be implemented to ensure that all financial data is properly recorded in the general ledger.

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SECTIONIV. MANAGEMENT'S RESPONSES

ATHENS REGIONAL LIBRARY SCHEDULE OF MANAGEMENT'S RESPONSES
YEAR ENDED JUNE 30, 2007
Athens Regional Library's responses to the findings described below were not audited and accordingly, we express no opinion on them.
Finding Control Number: FS-6292-07-01
We concur with this finding. Although management did attempt to prepare the Library's financial statements, the auditor prepared the financial statements due to the time constraints of the engagement. Management will attempt to prepare the statements for fiscal year 2008. The Library will develop and implement internal controls over the financial statement reporting process to ensure that activity is properly recorded in the general ledger and to verify that financial statements (including note disclosures) properly reflect activity in the general ledger and include a monitoring process to evaluate the accuracy ofthe financials presented for audit or Agreed Upon Procedures by June 30, 2009.
Finding Control Number: FS-6292-07-02
CASH AND CASH EQUIVALENTS We concur with this finding. This is a repeat finding (FS-6292-06-02) from the year ended June 30, 2006. We have attempted to correct this finding (during fiscal year 2007) by hiring one additional part-time Accounting Clerk in order to separate the function of duties as required by Georgia Department of Audits. Administrative review of the bank reconciliations will also be maintained during fiscal year 2008.
The bank reconciliation list ofoutstanding checks has been importing erroneous joumal entries and voided checks that should not be included on the reconciliation report. We believe that this is due to the accounting system used (Fundware, Inc., Accounting Systems). During fiscal year 2008, the Business Manager and Fundware Technology Technician ran various reports to correct this problem and have since formalized a report that corrects this finding. Although the bank reconciliation module used by the accounting system still does not tie to the general ledger, the Business Manager now manually does this each month in order to comply with generally accepted accounting principles.
INVESTMENTS We concur with this finding. Stocks and Certificates ofDeposits are reported on the general ledger at fair market value to correct this finding during fiscal year 2008. This was done during fiscal year 2007 subsequent period and corrected in full by September 30, 2008.
REVENUES/RECEIVABLES/RECEIPTS We concur with this finding. All negative receivables have been corrected on the general ledger during fiscal year 2008. The Library General Fund revenue that was deposited into the Endowment operating account in error of$4,464.72 will be corrected by March of2009 by writing a check from the Endowment to the Athens Regional Library System. This will correct this finding.
- 1-

ATHENS REGIONAL LIBRARY SCHEDULE OF MANAGEMENT'S RESPONSES
YEAR ENDED JUNE 30, 2007
Finding Control Number: FS-6292-07-02
EXPENDITURES/LIABILITIES/DISBURSEMENTS We concur with this finding. Once again, the additional staffwill be used to separate the invoicing from the general ledger function. All invalid payables were removed from the general ledger during fiscal year 2007. All travel charges are now coded with object code 55800 which complies with audit requirements. Management has located all of the missing invoices (done in the expenditure sample) and will continue to file invoices in accordance with generally accepted accounting principles.
Finding Control Number: FS-6292-07-03
We concur with this finding. This is a repeat finding (FS-6292-06-02, FS-6292-05-04, and FS-629204-02) from the years ended June 30, 2006, June 30, 2005, and June 30, 2004, respectively. The Library does maintain accounting records for the Library Endowment Fund which was determined to be a Blended Component Unit of the Library, although the records are kept separate and are not included on the general ledger. The Endowment Board ofDirectors understands this and continues to maintain separate accounting records at this time. All Endowment records have been presented to the auditors and continue to remain a Blended Component Unit of the Library. The Endowment Board is aware of GASB 39 and its intent to present financial statements of Endowment Organizations on the general ledger. We feel that it was not management's failure to adhere to the By-Laws established by the Endowment Fund Board of Directors which is entirely volunteer. Management does not have the authority to call a Board meeting, it is the Board's responsibility. The Endowment does have a Treasurer and still maintains this Board position. There are internal controls in place over the Endowment assets. These currently consist of the spending account maintained as 25% ofthe investment pool cannot be overspent by the Director. At no time did the Endowment have expenditures in excess of this amount, thereby following the internal controls as specified by the Board. Management has taken steps to present the Endowment in accordance with generally accepted accounting principles.
Contact Person: Mamie Fike Simonds, Business Manager Phone: (706) 613-3650 Fax: (706) 613-3660 E-mail: msimonds@athenslibrary.org
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