Audit report, Chatham-Effingham-Liberty Regional Library, a component unit of Chatham County, Georgia, year ended June 30, 1997

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AUDIT REPORT CHATHAM-EFFINGHAM-LIBERTY REGIONAL LIBRARY
A COMPONENT UNIT OF CHATHAM COUNTY, GEORGIA
YEAR ENDED JUNE 30, 1997
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

CRATRAM-EFFINGHAM-LIBERTY REGIONAL LIBRARY - TABLE OF CONTENTS-

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

EXlllBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINEDSTATEMENTS-OVERVffiW

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

COMBINED 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

SCHEDULES

SCHEDULE OF REVENUE

1

STATE

20

2

FEDERAL

21

3 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAM

22

4 SCHEDULE OF TRAVEL

23

CRATHAM-EFFINGRAM-LIDERTY REGIONAL LIDRARY - TABLE OF CONTENTS-
SECTION II FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

CLAUDE L. V leKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
July 20, 1998

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Technical and Adult Education
and Director and Members of the Chatham-Effingham-Liberty Regional Library Board
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMAnON
Ladies and Gentlemen:
We have audited the accompanying general-purpose financial statements ofthe Chatham-Effingham-Liberty Regional Library, a component unit of Chatham County, Georgia, as of and for the year ended June 30, 1997, as listed in the table of contents. These general-purpose financial statements are the responsibility of the Chatham-Effingham-Liberty Regional Library's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. 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. 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.
The aggregate effects on the general-purpose financial statements ofthis omission have not been determined, but are believed to be material.
97ARL-42

In our opinion, except for the effects on the general-purpose financial statements of the matter referred to in the third paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the Chatham-Effmgham-Liberty Regional Library as of June 30, 1997, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Chatham-Effingham-Liberty Regional Library taken as a whole. The accompanying combining statements (Exhibits E and F) and the financial schedules (Schedules 1 through 4), as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general-purpose fmancial statements and in our opinion is fairly presented in all material respects in relation to the general-purpose fmancial 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.

CLV:gp 97ARL-42

Claude L. Vickers State Auditor

eRATHAM-EFFINGRAM-LffiERTY REGIONAL LffiRARY

CHATHAM-EFFINGHAM-L1BERTY REGIONAL LIBRARY COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30,1997

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

$ 158,217.55 $

0.00 $

18,421.45

236,338.63

4,584,904,35

980.26

312,199.61

Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Accounts Payable Contracts Payable Retainages 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

$ 395,536.44 $
$ 395,536.44 $ $ 395,536.44 $ $ 395,536.44 $

0.00 $ ==4='::6,9;;.,;1::::.l5,=52=5,;,,;.4:::i:::1

$

262,245.60

29,138.40

$ _--=2==9~1,.=.:384:.:.:.:;,0=.0

$ 4,624,141.41

-=O.:.=.O~O

0.00

0.00 $ _--:.4l.:::,6=.24.:J.'1..:..4:..:.1.:..:.4~1

0.00 $ ======4!::,9=15;.:,,5;;;,;;2;;;:5,;.:.4;.;,,1

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 30,1997 JUNE 30, 1996

$

3,227.03

$

179,866.03 $

442,536.89

4,821,242.98

313,179.87

601.92

$

399,399.29

399,399.29

383,805.38

$

3,227.03 $

399,399.29 $ 5,713,688.17 $======8=26=,=944====:.1==9

$

76,294.55

$

262,245.60

29,138.40

$

399,399.29

399,399.29

383,805.38

$

399,399.29 $

690,783.29 $

460,099.93

$

.....;3::.!:,2=2:.:..7:.:;.0.=...3

$

.....;3;;.l:,2=2:.:..7.;.;:.0~3

$ 4,624,141.41 $

51,296.60

398,763.47

315,547.66

$ 5,022,904.88 $_---=3=6=6,.=...844.:..;.:.=.2:.:...6

$

3,227.03 $

399,399.29 $ 5,713,688.17 $====8:=26=,944=====.1=9

-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 30,1997

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 USES
Operating Transfer Out
Excess of Revenues over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
FUND BALANCE JUNE 30

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 837,133.42 $ 604,221.48
$ 1,441,354.90 $

17,550,00 $ 52,675.00

291,384.00 4,814,209.33

70,225.00 $ 5,105,593.33

$ 149,738.93 $ 66,427.00

47,058.82

3,798.00

245,478.48

324,900.66

29,656.75

$

532,748.52

$ 796,833.64 $ 70,225.00 $ 532,748.52

$ 644,521.26 $

0.00 $ 4,572,844.81

-561,313.07

$

83,208,19 $

312,328.25

0.00 $ 4,572,844.81

0.00

51,296,60

$ 395,536.44 $====O;,;;'O~O $ 4,624,141.41

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 30,1997 JUNE 30,1996

$ 1.146,067.42
52.675.00
5,418,430.81 $
$ 6,617.173.23 $

$ 1.146,067.42 $
52.675.00 20.73 5,418,451.54

815,384.60 51,213.33
873.772.19

20.73 $ 6,617.193.96 $ 1.740,370.12

$ 216.165.93 $
50,856.82 245,478.48 324.900.66
29.656.75 532,748.52
$ 1,399,807.16 $
$ 5,217.366.07 $

13.11 $

216.179.04 $
50.856.82 245,478.48 324,900.66
29,656.75 532,748.52

418,792.97 41,132.48
328,594.67 544,182.00
54,472.00 353.069.20

13.11 $ 1,399.820.27 $ 1,740.243.32

7.62 $ 5,217.373.69 $

126.80

-561.313.07
$ 4,656.053.00 $
363.624.85

-561.313.07

0.00

7.62 $ 4.656,060.62 $

3.219.41

366.844.26

126.80 366.717.46

$ 5.019,677.85 $

3,227.03 $ 5,022.904.88 $ 366.844.26

-5-

TIDS PAGE LEn BLAHK

CHATHAM-EFFiNGHAM-LIBERTY REGIONAL LIBRARY

EXHIBIT "C"

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL - (NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

YEAR ENDED JUNE 30,1997

FUND BALANCE JUNE 30, 1997

$ 206,568.74 $ 395,536.44

$

0.00 $ =====0;:;.0=0

The notes to the general purpose financial statements are an integral part of this statement. -7-

CHATHAM-EFFINGHAM-LIBERTY REGIONAL LIBRARY EXlllBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1997
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Chatham-Effingham-Liberty 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. With the exception of the departure from generally accepted accounting principles disclosed in these notes, the financial statements of the 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 Library Board consists of 14 members; 12 members appointed by Chatham County Board of Commissioners, 1 member appointed by Effingham County Library Board and 1 member appointed by Liberty County Library Board. The Library Board is without authority to determine the amount of its funding, except by submission ofbudget 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 Library Board has the power to designate management, the power to retain unreserved fund balances of local funds for continued 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 Chatham County, Georgia as defined by the Governmental Accounting Standards Board. Accordingly, the Chatham-Effingham-Liberty Regional Library is considered to be a component unit of Chatham County, Georgia for financial reporting purposes.
FUND ACCOUNTING
The Library uses funds and an account group to report on its fmancial 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. An account group is a financial 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 conform to generally accepted accounting principles, a General Fixed AssetsAccount Group should be maintained for reporting the cost of assets acquired by governmental fund types.
-8-

CHATHAM-EFFINGHAM-LIBERTY REGIONAL LmRARY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1997
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 financial 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 for individuals, private organizations, other government units and/or other funds. This fund includes:
EXPENDABLE TRUST FUND 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.
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 fmancial resources measurement focus. With this measurement focus, only current assets and current liabilities are generally included on the balance sheet. Operating statements of these funds present increases (Le., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
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CHATHAM-EFFINGHAM-LIBERTY REGIONAL LIBRARY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30. 1997
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Liabilities which are expected to be financed 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-Effingham-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 prepared in accordance with generally accepted accounting principles.
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 Department of Technical and Adult Education as a part ofthe 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.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits 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, orinsured State chartered building and loan associations.
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CHATHAM-EFFINGHAM-LffiERTY REGIONAL LIBRARY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1997
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Library are stated at cost. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Library to invest its funds. In selecting among avenues of 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,
(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 of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed, allotted funds from participating local governments, 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 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 financial statements.
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CHATHAM-EFFINGHAM-LIBERTY REGIONAL LIBRARY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1997
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 financial analysis. Data in these columns do not present financial 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. Certain adjustments have been made to the comparative data to conform to the current year presentation.
Note 2: DEPOSITS AND INVESTMENTS
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 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 ofthe 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 of the bonds for this purpose,
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CHATHAM-EFFINGHAM-LIBERTY REGIONAL LIBRARY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1997

Note 2: DEPOSITS AND INVESTMENTS

(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 Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 1997, the bank balances were $303,657.22. 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.
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, 1997, as follows:

Risk Category

Bank Balance

1

$ 170,218.44

2

133,438.78

3

0.00

Total

$ 303,657.22

CATEGORIZATION OF INVESTMENTS At June 30, 1997, the carrying amount of the Library's total investments was $4,821,242.98 and consisted entirely of funds in the Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services. This amount is not required to be categorized since the Library did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool does not provide for investment in derivatives or similar investments.

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CHATHAM-EFFINGHAM-LIBERTY REGIONAL LillRARY EXHIBIT liD" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1997

Note 3: RISK MANAGEMENT

The Library is exposed to various risks of loss 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, the Chatham-Effmgham-Liberty Regional Library has been determined to be a component unit of Chatham County, Georgia. The Chatham County Board of Commissioners has obtained commercial insurance for risk of loss 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-EffinghamLiberty Regional Library. The Liberty County Board of Commissioners has obtained commercial insurance for risk ofloss associated with assets for Liberty County Libraries participating in the Chatham-EffinghamLiberty Regional Library.

The Regional Library has obtained commercial insurance for the Effingham and Liberty County Libraries for risk of loss associated with job related illness 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.

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, which includes, among other risks, risks for sexual harassment and discrimination, and job related illness or injuries to employees. 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.

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

Position Covered

Amount

All Employees

$ 1,000,000.00

Note 4: GENERAL LONG-TERM DEBT

The changes in General Long-Term Debt during the fiscal year ended June 30, 1997, were as follows:

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CHATHAM-EFFINGHAM-LIBERTY REGIONAL LffiRARY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1997

Note 4: GENERAL LONG-TERM DEBT

Compensated Absences

Balance July 1, 1996

$ 383,805.38

Additions Leave Earned and Utilized (Net)

15,593.91

Balance June 30, 1997

$ 399.399.29

Note 5: OTHER FINANCIAL SUPPORT

In lieu of and/or in addition to direct financial support, during the year ended June 30, 1997, the following entities incurred operating expenditures for the Library's benefit:

Total

For Salary and Employer Contributions Chatham County Board of Commissioners
For Other Operating Expenditures Chatham County Board of Commissioners City of Port Wentworth Effingham County Board ofEducation Liberty County Board of Commissioners

$ 2,971,749.65
709,951.79 362.70
22,299.04 32.435.99

$ 3.736.799.17

Note 6: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the Library as of June 30, 1997, together with funding available:

Project

Unearned Executed Contracts

Funding Available From State

GSFIC 6252-96S-SB-001

$ 7.041.060.49 $ 1.708.616.00

The amounts described in this note are not reflected in the general purpose fmancial statements.

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CHATHAM-EFFINGHAM-LIBERTY REGIONAL LIBRARY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30,1997
Note 7: 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 expenditures which are disallowed under grant terms. The Library believes that such disallowances, if any, will be immaterial to its overall financial 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 oftotal 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 rate ofpay upon retirement or termination ofemployment.
The Library's non-professional employees can accrue compensatory time and are paid for all unused time, at their 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 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 fmancial audit report and a copy can be obtained from the Georgia Department ofAudits and Accounts.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Library who are covered by TRS are required by State statute to contribute 5% oftheir 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 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:
- 16-

CHATHAM-EFFINGHAM-LffiERTY REGIONAL LIBRARY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS
JUNE 30, 1997

Note 9: RETIREMENT PLANS
Fiscal Year 1997 1996 1995

Percentage Contributed
100% 100% 100%

Required Contribution
$ 241,698.42 $ 238,913.73 $ 238,419.74

- 17 -

CHATHAM-EFFiNGHAM-LIBERTY REGIONAL LIBRARY COMBINING BALANCE SHEET SPECIAL REVENUE FUND
JUNE 3D. 1997

EXHIBIT"E"

ASSETS Cash and Cash Equivalents

LOTTERY PROGRAM

$

0.00 $

FEDERAL PROGRAM

TOTALS
JUNE 30,1997 JUNE 30,1996

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

EXHIBIT "F"

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

SPECIAL REVENUE FUND

YEAR ENDED JUNE 30,1997

REVENUES
State Funds Federal Funds
Total Revenues
EXPENDITURES
Current Program Services Administration
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1

LOTTERY PROGRAM

FEDERAL PROGRAM

TOTALS YEAR ENDED JUNE 30,1997 JUNE 30, 1996

$ 17,550.00 $
$ 17,550,00 $

$ 52,675,00
52,675,00 $

17,550,00 $ 52,675.00
70,225,00 $

10,000,00 48,251.00
58,251,00

$ 13,752.00 $ 3,798.00

$ 17,550,00 $

$

0,00 $

0.00

52,675,00 $
52,675,00 $ 0.00 $ 0.00

66,427,00 $ 3,798,00
70,225.00 $ 0,00 $
0,00

43,909,11 14,341,89
58,251.00
0.00 0.00

FUND BALANCE JUNE 30

$

0.00 $

0,00 $

0.00 $====0...0.==0

See notes to the general purpose financial statements,

-19 -

CHATHAM-EFFINGHAM-L1BERTY REGIONAL LIBRARY SCHEDULE OF STATE REYENUE YEAR ENDED JUNE 30.1997

SCHEDULE "1"

AGENCYIFUNDING
GRANTS Financing and Investment Commission, Georgia State Reimbursement on Construction Projects
Technical and Adult Education, Georgia Department of Public Libraries Salaries and Travel Library Materials Maintenance and Operations Talking Book Centers Lottery Program Assistive Technology

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

$ 291,384.00 $

$ 411,475.42 187,168.00 182,568.00 55,922.00
_ _ _ _ _ $ _ _1:.;,7.&.:.5:,:5::;0.:,:::0=.0

TOTAL
291,384.00
411,475.42 187,168.00 182,568.00 55,922.00 17,550.00

$ 837,133.42 $

17.550.00 $ 291.384.00 $ 1,146,067.42

See notes to the general purpose financial statements.

-20 -

CHATHAM-EFFINGHAM-L1BERTY REGIONAL LIBRARY SCHEDULE OF FEDERAL REVENUE YEAR ENDED JUNE 30, 1997
AGENCY/FUNDING GRANT Education, U. S, Department of Through Georgia Department of Technical and Adult Education Library Services and Construction Act Title I - Public Library Services

SCHEDULE "2"
GOVERNMENTAL FUND TYPE SPECIAL REVENUE FUND

$

5_2,_67_5_.0_0

See notes to the general purpose financial statements.

- 21 -

CHATHAM-EFFiNGHAM-LIBERTY REGIONAL LIBRARY SCHEDULE OF EXPENDITURES LOTTERY PROGRAM YEAR ENDED JUNE 30,1997

SCHEDULE "3"

EXPENDITURES
Program Services Library Books and Materials Equipment
Administration Supplies

ASSISTIVE TECHNOLOGY

$

1,400.00

12,352.00

3,798.00

Total Expenditures

$=====17~,5=5=0=.O=0

See notes to the general purpose financial statements. - 22-

PERSONNEL
Andrews, Clayton, Dennis, Dickerson, Gloyd, Harrell, Helmly, Hill, Johnson, Langford, Lanier-Ehrler, Levy. Meadows, Nichols, Osen. Pope, Prokop, Robbins, Sigal. Spencer. Stewart, Stokes, Strong. Tate, Wixom,

CHATHAM-EFFiNGHAM-LIBERTY REGIONAL LIBRARY SCHEDULE OF TRAVEL
YEAR ENDED JUNE 30,1997
JoAnn H. WalterA. Delores LonR Patricia B. William L.
Brenda A.
WilliamT. WiliiamW. Janet C. Wanda Marie Barbara S. Agnes T. JUdyW. Heather L.
Ruth E.
Mary K. Catherine L. Ari Constance C.
Jutla A.
Linda F. Judith T. Petlina S. Sharon E.

SCHEDULE "4"

$

15.00

476.90

21.00

3.317.35

15.00

1.188.79

15.00

476.90

607.28

698.48

5.00

20.00

15.00

2,323.06

20.00

15.00

320.38

220.50

247.00

100.00

66.00

1,215.29

1,794.50

288.00

122.00

$

13.603.43

See notes to the general purpose financial statements.
- 23-

SECTION II FINDINGS AND QUESTIONED COSTS

CHATHAM-EFFINGHAM-LIBERTY REGIONAL LIBRARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Excessive Cash Balances Finding Resolved Finding Control Number 6252-96-01
The audit report for the year ended June 30, 1996, noted that 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 of Expenditures and Estimated Requirement for Grant Funds", were made in advance of immediate cash needs, resulting in the accumulation of excessive cash balances. For the year under review, it was noted that the Library implemented procedures to ensure that cash was not drawn in excess of needs.
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number 6252-93-01
The audit report for the year ended June 30, 1996, 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 fmancial 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.