GA 1-\800 .Rl Rifb C3 iqq5-q~ AUDIT REPORT CHATHAM-EFFINGHAM-LIBERTY REGIONAL LIBRARY A COMPONENT UNIT OF THE CHATHAM COUNTY BOARD OF COMMISSIONERS SAVANNAH, GEORGIA YEAR ENDED JUNE 30,1996 STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS 254 WASH I NGTON STREET ATLANTA, GEORGIA 30334-8400 CHATHAM-EFFINGHAM-LffiERTY REGIONAL LffiRARY - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE EXHIBITS GENERAL PURPOSE FINANCIAL STATEMENTS COMBINED STATEMENTS - OVERVIEW A COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP 2 B COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUND 4 C STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -BUDGET AND ACTUAL (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS 7 D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 8 ADDITIONAL FINANCIAL INFORMATION COMBINING STATEMENTS SPECIAL REVENUE FUND E COMBINING BALANCE SHEET 18 F COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 19 CAPITAL PROJECTS FUND G COMBINING BALANCE SHEET 20 H COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 21 SCHEDULES 1 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE 22 2 CASH AND CASH EQUIVALENTS 23 3 ACCOUNTS RECEIVABLE 24 SCHEDULE OF REVENUE 4 STATE 25 5 OTHER 26 CHATRAM-EFFINGHAM-LIBERTY REGIONAL LIBRARY - TABLE OF CONTENTS - SECTION I FINANCIAL ADDITIONAL FINANCIAL INFORMATION SCHEDULES SCHEDULE OF EXPENDITURES BY OBJECT 6 GENERAL AND SPECIAL REVENUE FUNDS 27 7 LOTIERY PROGRAM 28 8 FIDUCIARY FUND TYPE EXPENDABLE TRUST FUND 29 9 SCHEDULE OF SALARIES AND TRAVEL 30 10 MEMBERSlllP OF LIBRARY BOARD 31 SECTION II COMPLIANCE COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS SECTION ill INTERNAL CONTROL REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS SINGLE AUDIT REPORTON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS CHATHAM-EFFINGHAM-LffiERTY REGIONAL LffiRARY - TABLE OF CONTENTS - SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS SECTION I FINANCIAL CLAUDEL. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 July 2, 1997 Honorable Zell Miller, Governor Members ofthe General Assembly Members of the State Board of Education and Director and Members ofthe Chatham-Effingham-Liberty Regional Library Board INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE Ladies and Gentlemen: We have audited the general purpose fmancial statements (Exhibits A through D) ofthe Chatham-EffmghamLiberty Regional Library, a component unit of the Chatham County Board of Commissioners, as of and for the year ended June 30, 1996, as listed in the table of contents. These financial statements are the responsibility of the Library's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and the standards for financial and compliance audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and the provisions of the Office of Management and Budget Circular A-128, "Audits of State and Local Governments". Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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 opinion. As described in the notes to the general purpose fmancial statements, the Library's financial statements have been prepared using a certain accounting practice and policy which, in our opinion, varies in some respects from generally accepted accounting principles. This variance is described as follows: * The general purpose financial statements of the Library did not contain a General Fixed Assets Account Group to account for property, equipment and inexhaustible collections and books owned by the Library which should be included to conform to generally accepted accounting principles. 96ARL-44 The aggregate effects on the general purpose fmancial statements ofthis variance or omission have not been. determined, but are believed to be material. In our opinion, except for the effects on the general purpose financial statements of the matters referred to in the third paragraph, the general purpose fmancial statements present fairly, in all material respects, the financial position of the Chatham-Effmgham-Liberty Regional Library as of June 30, 1996, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated July 2, 1997, on our consideration ofthe Library's internal control structure and a report dated July 2, 1997, on its compliance with laws and regulations. Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements ofthe Chatham-Effingham-Liberty Regional Library taken as a whole. The combining statements (Exhibits E through H) and the fmancial schedules (Schedules 1 through 10 which includes the Schedule of Federal Financial Assistance), as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the general purpose fmancial statements of the Chatham-Effingham-Liberty Regional Library. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects in relation to the general purpose 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, ~ Claude L. Vickers State Auditor CLV:gp 96ARL-44 eRATHAM-EFFINGRAM-LffiERTY REGIONAL LffiRARY - 1- CHATHAM-EFFINGHAM-L1BERTY REGIONAL LIBRARY COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP JUNE 30,1996 ASSETS Cash and Cash Equivalents Investments Accounts Receivable Amount to be Provided in Future Years For Payment of Compensated Absences GOVERNMENTAL FUND TYPES SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND $ 388,020,88 $ 0,00 $ 51,296.60 601.92 Total Assets $ 388,622.80 $ 0.00 $===5=1,2=9=6=.6=,=0 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable Contracts Payable Compensated Absences Total Liabilities FUND EQUITY Fund Balances Reserved For State Capital Outlay Projects Unreserved Undesignated Total Fund Equity Total Liabilities and Fund Equity $ 76,294.55 $ 76,294.55 $ 312,328.25 $ $ 312,328.25 $ $ 388,622.80 $ $ 0.00 0.00 $ 51,296.60 0.00 51,296.60 0.00 $ ===5:::l:1,2=9=6=.6,;,,0 The notes to the general purpose financial statements are an integral part of this statement. -2- EXHIBIT "A" FIDUCIARY FUND TYPE EXPENDABLE TRUST FUND ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS (Memorandum Only) JUNE 30, 1996 JUNE 30,1995 $ 3,219.41 $ 442,536.89 $ 498,331.41 5,460.00 601.92 73,094.00 $ 383,805.38 383,805.38 414,030.76 $ 3,219.41 $ 383,805.38 $ 826,944.19 $ 990,916.17 $ $ _ _---"'-38=3:..!.:,8:..:0~5.:..=;3~8 $ 383,805.38 $ 76,294.55 $ 383,805.38 460,099.93 $ 159,249.50 50,918.45 414,030.76 624,198.71 $ _ _.;.:3,.;..21.;.;9.;..4;..;..1 $ _ _.=.:3,=21.:.;:9~.4:....:....1 $ 3,219.41 $ $ 51,296.60 $ 73,448.67 315,547.66 293,268.79 $ 366,844.26 $ 366,717.46 383,805.38 $ 826,944.19 $ 990,916.17 -3- CHATHAM-EFFINGHAM-L1BERTY REGIONAL LIBRARY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUND YEAR ENDED JUNE 30, 1996 REVENUES State Funds Federal Funds Other Funds Total Revenues EXPENDITURES Current Program Services Technical Services Circulation Administration Maintenance and Operations Capital Outlay Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES) Operating Transfers In Operating Transfers Out Total Other Financing Sources (Uses) Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses FUND BALANCE JULY 1 GENERAL FUND GOVERNMENTAL FUND TYPES SPECIAL CAPITAL REVENUE PROJECTS FUND FUND $ 805,384,60 $ 2,962,33 3,824,446,03 $ 4,632,792,96 $ 10,000,00 48,251.00 $ 58,251.00 $ 319,038,70 319,038,70 $ 3,644,523,43 $ 41,132.48 328,594.67 529,840,11 54,472.00 $ 4,598,562,69 $ $ 34,230,27 $ 43,909,11 14,341.89 $ 58,251,00 $ 0,00 $ 353,069.20 353,069.20 -34,030,50 $ 34,230.27 $ 278,097,98 0,00 $ 0,00 -34,030.50 85,327,10 FUND BALANCE JUNE 30 $ 312,328,25 $ 0,00 $ ===51,;,,;;,2=9=6=,6==0 The notes to the general purpose financial statements are an integral part of this statement. -4- EXHIBIT"B" TOTAL FIDUCIARY FUND TYPE EXPENDABLE TRUST FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30,1996 JUNE 30,1995 $ 815,384.60 $ 815,384.60 $ 1,585,347.31 51,213.33 51,213.33 49,634.47 4,143,484.73 $ _ _----'6:;.;;8.;..;.44~ 4,143,553.17 2,517,979.98 $ 5,010,082.66 $ _ _----'6:;.;;8.;..;.44~ $ 5,010,151.10 $ 4,152,961.76 $ 3,688,432.54 $ 41,132.48 328,594.67 544,182.00 54,472.00 353,069.20 $ 5,009,882.89 $ $ 199.77 $ 141.41 $ 3,688,573.95 $ 41,132.48 328,594.67 544,182.00 54,472.00 353,069.20 2,467,482.68 45,914.66 319,464.56 523,604.42 41,441.25 829,365.34 141.41 $ 5,010,024.30 $ 4,227,272.91 -72.97 $ 126.80 $ -74,311.15 $ 199.77 $ 363,425.08 $ 250.00 -250.00 $ 0.00 -72.97 $ 3,292.38 126.80 $ 366,717.46 -74,311.15 441,028.61 $ 363,624.85 $ 3,219.41 $ 366,844.26 $ 366,717.46 -5- TIDS PAGE LEFT BLANK CHATHAM-EFFINGHAM-L1BERTY REGIONAL LIBRARY STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30.1996 EXHIBIT"C" GENERAL FUND ACTUAL (BUDGET BUDGET BASIS) REVENUES State Funds Federal Funds Other Funds $ 809,460.08 $ 805,384.60 2,962.33 400,850.78 3,824,446.03 Total Revenues $ 1,210,310.86 $ 4,632,792.96 EXPENDITURES Current Program Services Technical Services Circulation Administration Maintenance and Operations $ 267,086.37 $ 3,644,523.43 48,243.16 41,132.48 300,724.41 328,594.67 540,556.92 529,840.11 53,700.00 54,472.00 Total Expenditures $ 1,210,310.86 $ 4,598,562.69 Excess of Revenues over (under) Expenditures $ 0.00 $ 34,230.27 FUND BALANCE JULY 1.1995 278,807.62 278,097.98 Adjustments -713.40 SPECIAL REVENUE FUND ACTUAL (BUDGET BUDGET BASIS) $ 10,000.00 $ 10,000.00 48,251.00 48,251.00 $ 58,251.00 $ 58,251.00 $ 48,251.00 $ 43,909.11 10,000.00 14,341.89 $ 58,251.00 $ 58,251.00 $ 0.00 $ 0.00 1,413.11 0.00 FUND BALANCE JUNE 30.1996 $ 278,094.22 $ 312,328.25 $ 1,413.11 $====0.=0=,=0 The notes to the general purpose financial statements are an integral part of this statement. -7- CHATHAM-EFFINGHAM-LffiERTY REGIONAL LIBRARY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1996 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Chatham-Effingham-Liberty Regional 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. With the exception of the departures from generally accepted accounting principles disclosed in these notes, the financial statements ofthe Library have been prepared in conformity with generally accepted accounting principles as applied to governmental units and unless otherwise disclosed in these notes, the financial statements present all fund types and account groups of the Library. The Governmental Accounting Standards Board (GASB) is the accepted standardsetting body for establishing governmental accounting and financial reporting principles. The more significant of the Library's accounting policies are described below. REPORTING ENTITY In evaluating how to define the governmental unit for fmancial reporting purposes, management has considered the criteria set forth in GASB Codification of Governmental Accounting and Financial Reporting Standards, Section 2100, "Defining the Financial Reporting Entity". Based upon the application ofthe above criteria, the Chatham-Effmgham-Liberty Regional Library is determined to be a component unit of the Chatham County Board of Commissioners. The Library Board consists of 14 members; 12 members appointed by Chatham County Board of Commissioners, 1 member appointed by Effmgham County Library Board and 1 member appointed by Liberty County Library Board. The 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 funding. Membership in the Library and participation in library services is at the discretion of each participating governmental agency. The Board has the power to designate management, the power to retain unreserved fund balances of local funds for continut?d operations and is the lowest level of oversight responsibility for the Library's operations. The Chatham County Board of Commissioners appoints a majority of the Library's Board members and provides a substantial majority of funding for the operations of the Library, consequently, the Library is deemed to have a financial benefit/burden relationship with the Chatham County Board of Commissioners as defined by GASB. The Chatham-Effingham-Liberty Regional Library is located in Savannah, Georgia, and serves Chatham, Effingham and Liberty Counties. FUND ACCOUNTING The Library uses funds and an account group 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. -8- CHATHAM-EFFINGHAM-LIDERTY REGIONAL LIBRARY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a fmancial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources. General Fixed Assets, which includes the Library's inexhaustible collections and books, are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Library. To confonn to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types. The general purpose financial statements account for all State, Federal and Other funds under control of the Library, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows: GOVERNMENTAL FUND TYPES - used to account for all or most of the Library's general activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources of the Library except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a Library. SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. The primary type of special revenue fund consists of proceeds received from State and Federal sources to accomplish specific objectives and are required to be accounted for separately. CAPITAL PROJECTS FUND - the fund used to account for fmancial resources to be used for the acquisition or construction of major capital facilities. FIDUCIARY FUND TYPE - the trust fund used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. This fund includes: EXPENDABLETRUSTFUND The Hortense Orcutt Memorial Association Fund - the fund used to account for the purchase of children's books for inclusion in the Hortense Orcutt collection. ACCOUNT GROUP GENERAL LONG-TERM DEBT ACCOUNT GROUP - used to account for material compensated absences. - 9- CHATHAM-EFFINGHAM-LffiERTY REGIONAL LIBRARY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 3D. 1996 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental and expendable trust funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities are generally included on the balance sheet. Operating statements ofthese funds present increases (Le., revenues and other fmancing sources) and decreases (Le., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources. Liabilities which are expected to be fmanced from available spendable resources are reported as liabilities in'the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group. Governmental and expendable trust funds are accounted for using the modified accrual basis of accounting under which: Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are intergovernmental grants and investment income. Expenditures are generally recognized when the related fund liability is incurred. BUDGET The Chatham-Effmgham-Liberty Regional Library's budget is a complete financial plan for the Library's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Library at the aggregate level. The budget for governmental funds was not prepared in accordance with generally accepted accounting principles as payments made on behalf ofthe Library by third parties were not included in budgeted revenues and expenditures. (See Note 5) The budget process begins when the Library's administration prepares a tentative aggregated budget for the Board's approval. After approval of this tentative budget by the Board, copies are sent to all local funding agencies. After funding approval is received from all local funding agencies, the Board makes revisions as necessary and adopts the budget. The budget is then submitted to the Georgia Department of Education, Division of Public Library Services as a part of the Library's annual application for State aid. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year end. - 10- CHATHAM-EFFINGHAM-LffiERTY REGIONAL LffiRARY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofdeposits (including certificates ofdeposit, savings and N.O.W. accounts) in authorized financial institutions. Georgia Laws authorize the Library to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations. RECEIVABLES Receivables consist. of grant reimbursements due from State grantors for expenditures made but not reimbursed. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose fmancial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. COMPENSATED ABSENCES Compensated absences represent obligations of the Library relating to employees' rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount is deemed immaterial to the general purpose fmancial statements. INTERFUND TRANSACTIONS The Library has the following type of interfund transactions: Reimbursements of expenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed. MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate fmancial analysis. Data in these columns do not present fmancial position or results of operations in conformity with generally accepted accounting principles, nor is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. For comparison purposes, amounts paid on behalf ofthe Library by third parties have been included in prior year revenues and expenditures. - 11 - CHATHAM-EFFINGHAM-LffiERTY REGIONAL LIBRARY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 Note 2: DEPOSITS COLLATERALIZAnON 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 been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts. Acceptable security for deposits consists of anyone of or any combination ofthe 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 ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe 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 and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Fann Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. CATEGORIZAnON OF DEPOSITS At June 30, 1996, the bank balances were $490,151.07. The amounts ofthe total bank balances are classified into three categories of credit risk: Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Library or by the Library's agent in the Library's name. - 12- CHATHAM-EFFINGHAM-LIBERTY REGIONAL LIBRARY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 Note 2: DEPOSITS Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Library's name. . Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Library's name.) The Library's deposits are classified by risk category at June 30, 1996, as follows: Risk Category Bank Balance 1 $ 306,087.38 2 184,063.69 3 0.00 Total $ 490,151.07 Note 3: 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; natural disaster; and unemployment compensation. As discussed in Note 1, theChatham-Effingham-Liberty Regional Library has been determined to be a component unit of the Chatham County Board of Commissioners. The Chatham County Board of Commissioners has obtained commercial insurance for risk ofloss associated with assets and natural disasters for Chatham County Libraries participating in the Chatham-EffIngham-Liberty Regional Library. The Effingham County Board of Commissioners has obtained commercial insurance for risk of loss associated with torts, assets, errors or omissions and natural disaster for Effingham County Libraries participating in the Chatham-EffIngham-Liberty Regional Library. The Liberty County Board of Commissioners has obtained commercial insurance for risk of loss associated with assets for the Liberty County Libraries participating in the Chatham-EffIngham-Liberty Regional Library. The Regional Library has obtained commercial insurance for the Effingham and Liberty County Libraries for risk of loss associated with job related illnesses or injuries to employees. The Regional Library has elected to self-insure participating Liberty County Libraries for all losses relating to errors or omissions, which includes, among other risks, risks for sexual harassment and discrimination. In addition, the Regional Library has elected to self-insure Liberty County Libraries for all losses relating to torts and natural disaster. - 13- CHATHAM-EFFINGHAM-LffiERTY REGIONAL LIBRARY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 Note 3: RISK MANAGEMENT The Chatham County Board of Commissioners has elected to self-insure the participating Chatham County Libraries for all losses relating to torts, errors or omissions and job related illnesses or injuries to employees which includes, among other risks, risks for sexual harassment and discrimination. An excess coverage insurance policy was obtained to cover individual workers' compensation claims in excess of $300,000.00 loss per occurrence, up to the statutory limit. The Chatham County Board of Commissioners has elected to self-insure all employees with regard to unemployment compensation claims. Note 4: GENERAL LONG-TERM DEBT The changes in General Long-Term Debt during the fiscal year ended June 30, 1996, were as follows: Compensated Absences Balance July 1, 1995 $ 414,030.76 Additions Leave Earned and Utilized (Net) -30,225.38 Balance June 30, 1996 $ 383,805.38 Note 5: ON BEHALF PAYMENTS The Library has recognized revenues and expenditures in the amount of $3,269,780.98 for salaries and employers' contributions paid on the Library's behalf as follows: Chatham County Board of Commissioners City of Port Wentworth Effingham County Board of Education Liberty County Board of Commissioners $ 3,217,647.84 340.08 24,101.21 27,691.85 $ 3,269,780.98 Note 6: SIGNIFICANT COMMITMENTS The following is an analysis of significant outstanding construction or renovation contracts executed by the Library as of June 30, 1996, together with funding available: - 14- CHATHAM-EFFINGHAM-LIBERTY REGIONAL LIBRARY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 Note 6: SIGNIFICANT COMMITMENTS Project Unearned Executed Contracts Funding Available From State 6252-96S-SB-001 $ 187,000.00 $ 2,000,000.00 The amounts described in this note are not reflected in the general purpose fmancial statements. Nore7: CONTINGENTLIAB~ITIES 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 expenditures which are disallowed under grant terms. The Library believes that such disallowances, if any, will be immaterial to its overall fmancial position. Note 8: ACCUMULATED EMPLOYEES' LEAVE The Library's full-time and part-time regular employees earn sick leave according to their regular work week schedule ranging from 5 to 15 hours per month with no maximum accumulation. Unused sick leave is paid to employees having at least three years of service for one-half of total hours accumulation up to a maximum of 240 hours, at their current rate of pay, upon retirement or termination of employment. The Library's regular employees working at least twenty hours per week earn vacation leave according to their length of service ranging from 4 to 24 hours per month with a maximum accumulation of 480 hours. All unused vacation leave is paid to employees, at their current rate of pay, upon retirement or termination of employment. The Library's non-professional employees can accrue compensatory time and are paid for all unused time, at their current rate of pay, upon retirement or termination of employment. See Note 1 - Compensated Absences Note 9: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION All full-time 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 public employee retirement system (PERS). - 15 - CHATHAM-EFFINGHAM-LIBERTY REGIONAL LIBRARY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 Nore9: RETIREMENTPLANS TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. A member is eligible for service retirement after 30 years of serVice, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number ofyears of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution ofthe member's monthly pension at a reduced rate to a designated beneficiary on the member's death. Retirement benefits also include disability and death benefits. A disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service retirement allowance or a disability retirement allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of 10 years of service) and compensation up to the time of disability or death. Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employee contributions occurs, but the member's contributions are refunded with interest. The Chatham County Board of Commissioners pays salaries for the Chatham-EffIngham-Liberty Regional Library. The Library's payroll for employees covered by TRS for the year ended June 30, 1996, was $2,022,977.09; total payroll was $2,543,154.64. The Library reimbursed the Board of Commissioners $535,064.47 for a portion of these salaries. TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Library who are covered by TRS are required by State statute to pay 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. At June 30, 1996, the TRS Library employer contribution rate was 11.81%. The interest rate assumption (rate of return on investments) was 7.50%. Total contributions made during fiscal year 1996 amounted to $340,062.79, of which $238,913.73 was made by the Chatham County Board of Commissioners on behalf of the Library and $101,149.06 was made by employees. These contributions represented 11.81% (Library) and 5% (employees) of covered payroll. The Library reimbursed the Board of Commissioners $59,124.47 for a portion of these contributions. TRS FUNDING STATUS AND PROGRESS The amount of the total pension benefit obligation is based on a standardized measurement established by Statement No.5 ofthe Governmental Accounting Standards Board (GASB) that, with some exceptions, must be used by a PERS. The standardized measurement is the actuarial present value of credited projected benefits. This valuation method reflects the present value of estimated pension benefits that will be paid in - 16- CHATHAM-EFFINGHAM-LIBERTY REGIONAL LIBRARY EXHIBIT liD" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 Nme9: RETIREMENT PLANS future years as a result of employee services performed to date, and is adjusted for the effects of projected salary increases. A standardized measure of the pension benefit obligation was adopted by the GASB to enable readers of PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among other PERS and among other employers. Total unfunded pension benefit obligation ofTRS as of June 30, 1995, was as follows: Total pension benefit obligation $ 17,442,607,000.00 Net assets available for benefits, at cost 15,857,066,000.00 Unfunded pension benefit obligation $ 1.585.541.000.00 The measurement ofthe total pension benefit obligation is based on an actuarial valuation as of June 30, 1995. Net assets available to pay pension benefits were valued as of the same date. TRS does not make separate measurements of assets and pension benefit obligation for individual employers. Total contributions from all employers to TRS for fiscal year ended June 30, 1996, were $607,275,000.00. The Chatham County Board of Commissioners' contribution on behalf of the Library for the year ended June 30, 1996, of$238,913.73 was actuarially determined and represented .0393% oftotal contributions made by all participating employers. Ten year historical trend information is presented in the 1996 TRS Component Unit Financial Report. This information is useful in assessing TRS's accumulation of sufficient assets to pay pension benefits as they become due. Note 10: SURETY BONDS All employees of the Chatham-Effingham-Liberty Regional Library are covered by a blanket bond in the amount of$I,OOO,OOO.OO with the Reliance Insurance Company, Philadelphia, Pennsylvania, their Bond No. B-244-69-62, on which premium was paid through January 1, 1997. - 17 - CHATHAM-EFFiNGHAM-LIBERTY REGIONAL LIBRARY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1996 EXHIBIT"E" ASSETS Cash and Cash Equivalents LOTTERY PROGRAM LIBRARY SERVICES AND CONSTRUCTION ACT TITLE I PUBLIC LIBRARY SERVICES TOTALS JUNE 30,1996 JUNE 30,1995 $ 0,00 $ 0,00 $ 0,00 $====0=,0.0... FUND EQUITY Fund Balances Unreserved Undesignated $ 0,00 $ 0.00 $ 0,00 $=====,0=,0..0... See notes to the general purpose financial statements. - 18- CHATHAM-EFFINGHAM-L1BERTY REGIONAL LIBRARY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUND YEAR ENDED JUNE 30,1996 EXHIBIT "F" LOTIERY PROGRAM LIBRARY SERVICES AND CONSTRUCTION ACT TITLE I PUBLIC LIBRARY SERVICES TOTALS YEAR ENDED JUNE 30,1996 JUNE 30,1995 REVENUES State Funds Federal Funds $ 10,000,00 $ $ 48,251,00 10,000,00 $ 48,251,00 76,438,11 48,251,00 Total Revenues $ 10,000,00 $ 48,251,00 $ 58,251,00 $ 124,689.11 EXPENDITURES Current Program Services Administration $ $ 10,000,00 43,909.11 $ 4,341.89 43,909.11 $ 14,341.89 122,034,02 2,655.09 Total Expenditures $ 10,000.00 $ 48,251.00 $ 58,251.00 $ 124,689.11 Excess of Revenues over (under) Expenditures $ 0,00 $ 0.00 $ 0,00 $ 0,00 FUND BALANCE JULY 1 0.00 0.00 0.00 0.00 FUND BALANCE JUNE 30 $ 0.00 $ 0.00 $ 0.00 $===~O,;;;;.O~O See notes to the general purpose financial statements. -19- CHATHAM-EFFINGHAM-L1BERTY REGIONAL LIBRARY COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 1996 EXHIBIT"G" ASSETS Cash and Cash Equivalents Investments Accounts Receivable GEORGIA STATE FINANCING AND INVESTMENT COMMISSION PROJECT PROJECT 6252-94-8B-002 6252-96S-SB-001 TOTALS JUNE 30, 1996 JUNE 30,1995 $ 50,869,34 $ 42726 $ 51,296.60 $ 71,503.18 5,460,00 72,380,60 Total Assets $ 50,869,34 $ 427.26 $ 51,296,60 $ .........-.1.4.,;;;j9,.3..4..3.;;,;7..8.. LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable Contracts Payable Total Liabilities FUND EQUITY Fund Balances Reserved For State Capital Outlay Projects $ Unreserved Undesignated Total Fund Equity $ 50,869,34 $ 0,00 50,869.34 $ Total Liabilities and Fund Equity $ 50,869.34 $ $ 13,098.23 50,918.45 $ _ _..;64:..:.1.:,0:;.:1.:,6:.;:.6,:.8 427.26 $ 0.00 427.26 $ 51,296,60 $ 0.00 51,296.60 $ 73,448.67 11,878.43 8:.:5"",,3=.=2:.:,.7.:..,:.1.:;..0 427,26 $ 51,296.60 $ ===14...9:;;,34=.=3=.7.;.8 See notes to the general purpose financial statements. -20 - CHATHAM-EFFINGHAM-L1BERTY REGIONAL LIBRARY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 1996 EXHIBIT "H" FUND BALANCE JUNE 30 $ 50,869.34 $ 427.26 $ 51,296.60 $ ===8=5=,30=2.7....1..=0 See notes to the general purpose financial statements. - 21 - CHATHAM-EFFiNGHAM-LIBERTY REGIONAL LIBRARY SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE YEAR ENDED JUNE 30.1996 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT Education, U. S. Department of Through Georgia Department of Education Library Services and Construction Act Title I - Public Library Services Basic Grant 1995 Carry-Over Major Urban Resource Libraries 1995 Carry-Over Title III - Interlibrary Cooperation and Resource Sharing 1996 Contract CFDA NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD 84.034 $ 84.034 36,000.00 $ 12,251.00 84.035 2,962.33 36,000.00 12,251.00 (1) Total Federal Financial Assistance $ 51,213.33 $===4~8,=25=1=.0=0 The Library had no major programs as defined by the Single Audit Act of 1984. (1) Expenditures on this program were not maintained by fund source. See notes to the general purpose financial statements. - 22- CHATHAM-EFFINGHAM-L1BERTY REGIONAL LIBRARY CASH AND CASH EQUIVALENTS JUNE 30.1996 SCHEDULE "2" NONINTEREST BEARING ACCOUNT First Union National Bank, Savannah, Georgia Hinesville Bank, Hinesville, Georgia Nations Bank of Georgia, Springfield, Georgia INTEREST BEARING ACCOUNTS Carver State Bank, Savannah, Georgia Passbook Savings Account (2.50%) First Union National Bank, Savannah, Georgia Passbook Savings Account (1.98%) Hinesville Bank, Hinesville, Georgia N.O.W. Account (2.10%) Certificate of Deposit No. 15272 (5.55%) Nations Bank of Georgia, Springfield, Georgia Checking Accounts (Variable) Certificate of Deposit No. 7001 (5.85%) Sun Trust Bank, Savannah, Georgia N.O.W. Account (2.12%) OTHER Petty Cash $ 122,223.21 1,585.45 19,053.44 $ 142,862.10 $ 3,014.77 3,209.62 18,693.77 10,000.00 199,486.40 5,452.68 59,196.55 299,053.79 621.00 $ 442,536.89 See notes to the general purpose financial statements. - 23 - CHATHAM-EFFINGHAM-L1BERTY REGIONAL LIBRARY ACCOUNTS RECEIVABLE JUNE 3D, 1996 Education, Georgia Department of Library Services and Construction Act Title III - Interlibrary Cooperation and Resource Sharing SCHEDULE "3" GOVERNMENTAL FUND TYPE GENERAL FUND $ =======60=1.=,9=:2 See notes to the general purpose financial statements. - 24 - CHATHAM-EFFINGHAM-L1BERTY REGIONAL LIBRARY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30,1996 SCHEDULE "4" AGENCY/FUNDING GRANTS Education, Georgia Department of Public Libraries Salaries and Travel Library Materials Maintenance and Operations Talking Book Centers Lottery Program Technology Installation GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND TOTAL $ 380,420.60 $ 187.054.00 182.454.00 55.456.00 _ _ _ _ _ $ _ _....:.;10::.l..0:::;.::0:.;;;0.:.;:.0~0 380,420.60 187.054.00 182.454.00 55.456.00 10.000.00 $ 805.384.60 $ 10.000.00 $ =====8=15=,3:=8==4.=60= See notes to the general purpose financial statements. - 25 - CHATHAM-EFFINGHAM-LIBERTY REGIONAL LIBRARY SCHEDULE OF OTHER REVENUE YEAR ENDED JUNE 30,1996 SCHEDULE "5" GOVERNMENTAL FUND TYPES CAPITAL GENERAL PROJECTS FUND FUND FIDUCIARY FUND TYPE EXPENDABLE TRUST FUND TOTAL LOCAL SOURCES Boards of Education Effingham County Liberty County City Governments Hinesville Midway Riceboro County Governments Boards of Commissioners Chatham Liberty $ 180,000.00 54,625,26 48,912.00 2,856.91 2,856.91 4,873,16 $ 23,000.26 310,335.25 $ 180,000.00 54,625.26 48,912,00 2,856.91 2,856.91 315,208.41 23,000,26 OTHER SOURCES Donations Fines and Fees Gain on Sale of Investments Interest Earned Interlibrary Loan Lost and Damaged Books Salaries and Fringe Benefits Chatham County Board of Commissioners City of Port Wentworth Effingham County Board of Education Liberty County Board of Commissioners Sales and Services Microfilm Rental Photocopies Reader Printer Savannah Area Literacy Training Temporary Cards Used Books Telephone Commissions Other 74,944.20 80,960.80 9,206.70 755.82 9,785,12 3,217,647,84 340.08 24,101.21 27,691.85 231,50 52,745.98 2,639.78 961,85 622.50 3,891,23 553.26 241.81 7,120.02 1,583.43 $ 68,44 74,944.20 80,960.80 7,120.02 10,858.57 755.82 9,785.12 3,217,647.84 340.08 24,101.21 27,691.85 231.50 52,745.98 2,639.78 961.85 622.50 3,891.23 553.26 241,81 $ 3,824,446.03 $ 319,038.70 $==~6;,;;;8=.44;.,;, $ 4,143,553.17 See notes to the general purpose financial statements. - 26 - CHATHAM-EFFiNGHAM-LIBERTY REGIONAL LIBRARY SCHEDULE OF EXPENDITURES BY OBJECT GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30,1996 SCHEDULE "6" EXPENDITURES Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical Services Property Services Supplies Library Books and Materials Communications and Insurance Dues and Fees Other Nonoperating Costs Equipment Total Expenditures GENERAL FUND SPECIAL REVENUE FUND TOTAL $ 2,543,154,64 1,381,307.41 13,799,57 33,349,04 $ 44,971,91 101,084.17 373,462.66 97,419.29 3,737.00 631,01 $ 107,91 13,355.16 42,686.43 2,101.50 2,543,154,64 1,381,307.41 13,799,57 33,456,95 44,971.91 114,439.33 416,149,09 99,520.79 3,737.00 631,01 5,645.99 5,645.99 $ 4,598,562.69 $ 58,251.00 $ 4,656,813.69 See notes to the general purpose financial statements. - 27 - CHATHAM-EFFINGHAM-L1BERTY REGIONAL LIBRARY SCHEDULE OF EXPENDITURES BY OBJECT LOTTERY PROGRAM YEAR ENDED JUNE 30.1996 EXPENDITURES Operating Costs Supplies Communications and Insurance Total Expenditures SCHEDULE "7" TECHNOLOGY INSTALLATION $ 7,898.50 2,101.50 $===10=,==00=0':::00"",=0 See notes to the general purpose financial statements. - 28 - CHATHAM-EFFiNGHAM-LIBERTY REGIONAL LIBRARY SCHEDULE OF EXPENDITURES BY OBJECT FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUND YEAR ENDED JUNE 3D, 1996 SCHEDULE "8" EXPENDITURES Operating Costs Library Books and Materials $====1=4=1,==4=1 See notes to the general purpose financial statements, - 29 - CHATHAM-EFFiNGHAM-LIBERTY REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30.1996 SCHEDULE "9" EMPLOYEE Andrews, Beckmann, Bell, Betts, Bland, Bryson, Churchill, Elkins, Estes, Gloyd, Harlan, Harrell, Harris, Haywood, Helmly, Hill, Johnson, Langford, Lanier-Ehrler, Lewis, Meadows, Morgan, Morrill, Myers, Nichols, Osen, Prokop, Robertson, Ryan, Sharpe, Spencer, Stafford, Stokes, Stokes, Strong, Tate, Walsh, Wilhelm, Wilson, Wixom, Joann H. Cheryl A. Naomi R. Laura A. Patty L. Natalia M. Sara E. Barbara P. SharonW. Patricia B. Irma R. William L. Monique S. Sonya S. BrendaA. MichaelT. WilliamW. Janet C. Wanda Marie Emestine R. Agnes T. DianeC. Kimberly C. Janet E. JudyW. Heather L. Mary K. Kathleen Linda B. Melva J. Constance C. Cathy J. Linda F. Phillip B. Judith T. Pettina S. Martha E. Diane B. TinaM. Sharon E. Adjustment DeKalb County Board of Commissioners On-Behalf Payments See notes to the general purpose financial statements. - 30- SALARIES TRAVEL $ 170.44 60.00 99.00 17.50 10.00 70.10 71.00 68.03 83.25 110.50 1,271.76 935.38 155.50 47.80 99.00 11.50 533.50 1,265.15 99.00 116.50 99.00 14.90 384.96 2,358.60 1,196.94 99.00 1,606.40 71.00 126.25 170.44 75.50 442.26 657.00 116.00 108.41 52.00 154.00 92.00 99.00 581.00 $ 13,799.57 $ 2,543,154.64 $ 2,543,154.64 $ 13,799.57 CHATHAM-EFFiNGHAM-LIBERTY REGIONAL LIBRARY MEMBERSHIP OF LIBRARY BOARD YEAR ENDED JUNE 30.1996 SCHEDULE "10" BOARD MEMBER ADDRESS Mrs. Joel James, Chairman (*) P. O. Box 60873 Savannah, Georgia 31420 Mr. Ted Albert (*) 12 Pepper Bush Circle Savannah, Georgia 31411 Ms. Sara Banks (*) 220 East 44th Street Savannah, Georgia 31405 Ms. Alice Bennett (*) 503 West 9th Street Rincon, Georgia 31326 Ms. Debra J. Brook (*) P. O. Box 23089 Savannah, Georgia 31403-3089 Ms. Peggy F. Edmunds (*) 4924 Pineland Drive Savannah, Georgia 31405 Ms. Carolyn Floyd (*) Route 1, Box 23 Hinesville, Georgia 31313 Ms. Kay A. Ford (*) 74 Main Street Garden City, Georgia 31408 Mr. Charles Hutchinson (*) 1 Hutchinson Subdivision Bloomingdale, Georgia 31302 Mr. Sam H. Jospin (*) 208 Lee Boulevard Savannah, Georgia 31405 Ms. Kaye Kole (*) 219 East Jones Street Savannah, Georgia 31401 (*) Denotes Board Members Serving as of June 30, 1996 See notes to the general purpose financial statements. - 31 - Ms. Jean McCorkle (*) 8403 Royal Oak Drive Savannah, Georgia 31406 Mr. Michael Terry (*) 2104 Drayton Street Savannah, Georgia 31401 Mr. Oscar L. White (*) P. O. Box 22251 Savannah, Georgia 31403 SECTION II COMPLIANCE CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 July 2, 1997 Honorable Zell Miller, Governor Members ofthe General Assembly Members of the State Board of Education and Director and Members ofthe Chatham-EffIngham-Liberty Regional Library COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Ladies and Gentlemen: We have audited the general purpose financial statements of the Chatham-Effingham-Liberty Regional Library as of and for the year ended June 30, 1996, and have issued our report thereon dated July 2, 1997. This report was qualified for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. Compliance with laws, regulations, contracts, and grants applicable to Chatham-Effingham-Liberty Regional Library is the responsibility of the Library's management. As part of obtaining reasonable assurance about whether the general purpose fmancial statements are free of material misstatement, we performed tests of the Library's compliance with certain provisions of laws, regulations, contracts, and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported herein under Government Auditing Standards. 96CRL-I0 This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record. Respectfully submitted, CLV:gp 96CRL-IO Claude L. Vickers State Auditor CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 July 2, 1997 Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board of Education and Director and Members ofthe Chatham-Effingham-Liberty Regional Library SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS Ladies and Gentlemen: We have audited the general purpose financial statements of the Chatham-Effingham-Liberty Regional Library as of and for the year ended June 30, 1996, and have issued our report thereon dated July 2, 1997. This report was qualified for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We have applied procedures to test the Chatham-Effingham-Liberty Regional Library's compliance with the following requirements applicable to each of its Federal financial assistance programs, which are listed in the Schedule of Federal Financial Assistance, for the year ended June 30, 1996: (l) Political Activity (5) Allowable Costs/Cost Principles (2) Civil Rights (6) Audit Follow-Up/Resolution (3) Cash Management (7) Administrative Requirements (4) Federal Financial Reports Our procedures were limited to the applicable procedures described in the Office of Management and Budget's "Compliance Supplement for Single Audits of State and Local Governments" and other additional procedures as deemed necessary. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Chatham-Effingham-Liberty Regional Library's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion. 96CRL-50 With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that the Chatham-Effingham-Liberty Regional Library had not complied, in all material respects, with those requirements. However, the results of our procedures disclosed an immaterial instance of noncompliance with those requirements, which is described in the Schedule of Findings and Improper or Questioned Costs. This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record. Respectfully submitted, ff~ Claude L. Vickers State Auditor CLV:gp 96CRL-50 CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 July 2, 1997 Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board of Education and Director and Members ofthe Chatham-Effingham-Liberty Regional Library SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS Ladies and Gentlemen: We have audited the general purpose financial statements of the Chatham-Effingham-Liberty Regional Library as of and for the year ended June 30, 1996, and have issued our report thereon dated July 2, 1997. This report was qualified for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose fmancial statements. In connection with our audit of the fiscal year 1996 general purpose financial statements of the ChathamEffingham-Liberty Regional Library and with our consideration of the Library's control structure used to administer Federal financial assistance programs, as required by Office of Management and Budget (OMB) Circular A-128, "Audits of State and Local Governments", we selected certain transactions applicable to certain nonmajor Federal financial assistance programs for the year ended June 30, 1996. As required by OMB Circular A128, we have performed auditing procedures on the selected transactions to test compliance with the requirements governing: (l) Types of Services Allowed or Unallowed (2) Applicable Special Tests and Provisions Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Chatham-Effingham-Liberty Regional Library's compliance with these requirements. Accordingly, we do not express such an opinion. With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Chatham-EffIngham-Liberty Regional Library had not complied, in all material respects, with those requirements. 96CRL-120 This report is intended for the infonnation of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record. Respectfully submitted, ~~ Claude L. Vickers State Auditor CLV:gp 96CRL-120 SECTION III INTERNAL CONTROL CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 July 2,1997 Honorable Zell Miller, Governor Members ofthe General Assembly Members of the State Board of Education and Director and Members of the Chatham-Effmgham-Liberty Regional Library REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Ladies and Gentlemen: We have audited the general purpose financial statements of the Chatham-Effingham-Liberty Regional Library as of and for the year ended June 30, 1996, and have issued our report thereon dated July 2, 1997. This report was qualified for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with generally accepted auditing standards, and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. The management of the Chatham-Effingham-Liberty Regional Library is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. 96ICL-3 In planning and performing our audit of the general purpose financial statements of the Chatham-EffinghamLiberty Regional Library for the year ended June 30, 1996, we obtained an understanding of the internal control structure. With respect to the internal control structure, we obtained an understanding of the design ofrelevant policies and procedures and whether they have been placed in operation, and we assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion. We noted a certain matter involving the internal control structure and its operation that we consider to be a reportable condition under standards established by the American Institute of Certified Public Accountants. A reportable condition involves matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose fmancial statements. As described in the Schedule ofFindings and Improper or Questioned Costs, a reportable condition was noted in the following control category: General Fixed Assets A material weakness is a reportable condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their . assigned functions. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that the reportable condition disclosed above is also considered to be a material weakness. This condition was considered in determining the nature, timing, and extent ofthe procedures to be performed in our audit ofthe Chatham-Effmgham-Liberty Regional Library's financial statements and this report does not affect our report thereon dated July 2, 1997. This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record. Respectfully submitted, CLV:gp 96ICL-3 Claude L. Vickers State Auditor CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 July 2, 1997 Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board of Education and Director and Members of the Chatham-EffIngham-Liberty Regional Library SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS Ladies and Gentlemen: We have audited the general purpose financial statements of the Chatham-EffIngham-Liberty Regional Library as of and for the year ended June 30, 1996, and have issued our report thereon dated July 2, 1997. This report was qualified for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of Office of Management and Budget (OMB) Circular A-l28, "Audits of State and Local Governments". Those standards and OMB Circular A-l28 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. In planning and performing our audit for the year ended June 30, 1996, we considered the internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose fmancial statements and to report on the internal control structure in accordance with OMB Circular A-l28. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to Federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated July 2, 1997. The management of the Chatham-Effingham-Liberty Regional Library is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, 96ICL-13 but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that Federal financial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors, irregularities or instances of noncompliance may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. For the purposes of this report, we have classified the significant internal control structure policies and procedures used in administering Federal financial assistance programs in the following control categories: GENERAL REQUIREMENTS SPECIFIC REQUIREMENTS (1) Political Activity (2) Civil Rights (3) Cash Management (4) Federal Financial Reports (1) Types of Services Allowed or Unallowed (2) Reporting (3) Applicable Special Tests and Provisions (5) Allowable Costs/Cost Principles (6) Audit Follow-Up/Resolution (4) Other Requirement Claims for Advances and Reimbursements (7) Administrative Requirements For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk. During the year ended June 30, 1996, the Chatham-EffIngham-Liberty Regional Library had no major Federal financial assistance programs and expended 94% of its total Federal financial assistance under the following nonmajor Federal financial assistance program: Library Services and Construction Act Title I - Public Library Services We performed tests of controls, as required by OMB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with general requirements and specific requirements as described above that are applicable to the aforementioned nonmajor Federal financial assistance programs. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion. 96ICL-13 Our consideration of the internal control structure policies and procedures used in administering Federal fmancial assistance would not necessarily disclose all matters in the internal control structure that might constitute material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a Federal fmancial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control structure and its operation that we consider to be material weaknesses as defined above. This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record. Respectfully submitted, ~~ Claude L. Vickers State Auditor CLV:gp 96ICL-13 SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS CHATHAM-EFFINGHAM-LIDERTY REGIONAL LIBRARY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30, 1996 PRIOR YEAR AUDIT FOLLOW-UPIRESOLUTION Inadequate Separation of Duties Financial Statements Federal Financial Assistance Finding Resolved Audit Control Number 6252-94-01 The audit report for the year ended June 30, 1995, stated that the Library did not provide for adequate separation of employee duties in the performance ofaccounting functions and related procedures for all funds. For the year under review, the Library implemented changes in the separation of employee duties such that appropriate internal controls were in effect. PRIORYEMVCURRENTYEAR GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 6252-93-01 The audit report for the year ended June 30, 1995, noted that the management of the Chatham-EffinghamLiberty Regional Library had chosen not to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. In the year under review, the Library did not establish a General Fixed Assets Account Group within the formal accounting records. This condition results in the general purpose financial statements of the Library being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Library to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings, equipment and inexhaustible collections and books owned by the Library and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group. - 1- CHATRAM-EFFINGHAM-LIBERTY REGIONAL LIBRARY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30, 1996 CURRENT YEAR CASH MANAGEMENT Excessive Cash Balances Federal Financial Assistance Nonmaterial Noncompliance Audit Control Number 6252-96-01 A review of cash management procedures for the Library Services and Construction Act - Title I - Public Library Services Program (CFDA 84.034) disclosed that cash draws utilizing DE form 0147, "Quarterly Report ofExpenditures and Estimated Requirement for Grant Funds", were made in advance of immediate cash needs, resulting in the accumulation of excessive cash balances. During fiscal year 1996, the program had an average cash balance of $5,798.50 with excessive ending monthly cash balances in six months. The excessive cash balances are a result of management's faihll'e to adequately forecast the cash needs of the program. Procedures should be implemented to minimize the time elapsing between the transfer of funds from the Georgia Department of Education and disbursement of such funds by the Library. Note: The Chatham-Effmgham-Liberty Regional Library was provided an opportunity to include pertinent comments from the Library's management concerning these audit fmdings, conclusions and recommendations. The Library has elected not to provide comments for inclusion in this report. -2-