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

AUDIT REPORT CHEROKEE REGIONAL LIBRARY
LAFAYETTE, GEORGIA YEAR ENDED JUNE 30, 1994

CHEROKEE REGIONAL LIBRARY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS- OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

GOVERNMENTAL FUND TYPES

3

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - ACTUAL AND BUDGET

GOVERNMENTAL FUND TYPES

4

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

5

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

CAPITAL PROJECTS FUND

E

COMBINING BALANCE SHEET

12

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

13

SCHEDULES

1 ANALYSIS OF CASH AND CASH EQUIVALENTS

14

2 ACCOUNTS RECENABLE

15

SCHEDULE OF REVENUE

3

STATE

16

4

FEDERAL

17

5

LOCAL AND OTHER

18

6 SCHEDULE OF EXPENDITURES BY OBJECT

GOVERNMENTAL FUND TYPES

19

7 MEMBERSHIP OF LIBRARY BOARD

20

8 SCHEDULE OF SALARIES AND TRAVEL

21

CHEROKEE REGIONAL LIBRARY - TABLE OF CONTENTS -
SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
January 13, 1995

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members of the Cherokee Regional Library Board
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the general purpose financial statements (Exhibits A through D) ofthe Cherokee Regional Library, as of and for the year ended June 30, 1994, as listed in the table of contents_ These financial statements are the responsibility ofthe 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free ofmaterial 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 financial 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.

94ARL-42

The aggregate effects on the general purpose financial statements of this variance or omission has not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements ofthe matter referred to in the third paragraph, the general purpose financial statements present fairly, in all material respects, the financial position ofthe Cherokee Regional Library as of June 30, 1994, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements of the Cherokee Regional Library taken as a whole. The combining statements (Exhibits E and F) and the financial schedules (Schedules 1 through 8), 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 of the Cherokee Regional Library. Such information has been subjected to the auditing procedures applied in the audit ofthe 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 ofthis report has been filed as a permanent record in the office ofthe 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,
(74--~
Claude L. Vickers State Auditor
CLV:jy 94ARL-42

CHEROKEE REGIONAL LIBRARY -I-

ASSETS
Cash and Cash Equivalents Accounts Receivable

CHEROKEE REGIONAL LIBRARY COMBINED BALANCE SHEET
ALL FUND TYPES JUNE 30 1 1994

EXHIBIT "A"

GOVERNMENTAL FUND TYPES

GENERAL FUND

SPECIAL REVENUE
FUND

CAPITAL PROJECTS
FUND

TOTAL (Memorandum
Only)

$ 135,977.91 $ 5,131.37

474.26 $

0.00 $ 136,452.17 5,131.37

Total Assets
LIABILITIES AND FUND EQUITY
LIABILITIES Accounts Payable
FUND EQUITY
Fund Balances Unreserved Undesignated

$ 141,109.28$

474.26 $

0.00 $ 141,583.54

============= ============= ============= =============

$ 14,108.81 $

474.26

$ 14,583.07

127,000.47

0.00 $

0.00 127,000.47

Total Liabilities and Fund Equity $ 141,109.28$

474.26 $

0.00 $ 141,583.54

============= ============= ============= =============

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

CHEROKEE REGIONAL LIBRARY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 1994

EXHIBIT "B"

SPECIAL

CAPITAL

TOTAL

GENERAL

REVENUE

PROJECTS

(Memorandum

FUND

FUND

FUND

Only)

------------- ------------- ------------- -------------

REVENUES
--------

State Funds Federal Funds Local and Other Funds

$ 274,185.36 $ 87,500.00

$ 361,685.36

22,000.00

22,000.00

304,955.91

$

227.33

305,183.24

------------- ------------- ------------- -------------

Total Revenues

$ 601,141.27 $ 87,500.00 $

227.33 $ 688,868.60

------------- ------------- ------------- -------------

EXPENDITURES
------------

Current Program Services Circulation
Administration Maintenance and Operations Capital Outlay

$ 369,482.84 $ 70,000.00 $

20.59 $ 439,503.43

34,467.19

34,467.19

141,307.69

17,500.00

158,807.69

54,550.23

54,550.23

18,492.04

18,492.04

------------- ------------- ------------- -------------

Total Expenditures

$ 599,807.95 $ 87,500.00 $ 18,512.63 $ 705,820.58
------------- ------------- ------------- -------------

Excess of Revenues over (under) Expenditures $ 1,333.32 $

0.00 $ -18,285.30 $ -16,951.98

------------- ------------- ------------- -------------

OTHER FINANCING SOURCES (USES)
------------------------------

Operating Transfers In Operating Transfers Out

$

-30.72

-------------

$

30.72 $

30.72

-30.72

------------- -------------

Total Other Financing Sources (Uses)

$

-30.72

-------------

$

30.72 $

0.00

------------- -------------

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses

$

1,302.60 $

0.00 $ -18,254.58 $ -16,951.98

FUND BALANCE JULY 1
-------------------

125,697.87

0.00

18,254.58

143,952.45

------------- ------------- ------------- -------------

FUND BALANCE JUNE 30

$ 127,000.47 $

0.00 $

0.00 $ 127,000.47

============= ============= ============= =============

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

CHEROKEE REGIONAL LIBRARY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ACTUAL AND BUDGET - GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1994

EXHIBIT "C"

REVENUES
--------
State Funds Federal Funds Local and Other Funds
Total Revenues
EXPENDITURES
------------
Current Program Services Circulation Administration Maintenance and Operations
Capital Outlay
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
------------------------------
Other Sources Other Uses
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1, 1993
-------------------------

ACTUAL

VARIANCE

PER

FAVORABLE

EXHIBIT "B"

BUDGET

(UNFAVORABLE)

------------- ------------- -------------

$ 361,685.36 $ 371,022.08 $ -9,336.72

22,000.00

22,000.00

0.00

305,183.24 278,893.84

26,289.40

------------- ------------- -------------

$ 688,868.60 $ 671,915.92 $ 16,952.68
------------- ------------- -------------

$ 439,503.43 $ 410,722.79 $ -28,780.64

34,467.19

56,300.09

21,832.90

158,807.69 203,335.66

44,527.97

54,550.23

46,665.08

-7,885.15

18,492.04

-18,492.04

------------- ------------- -------------

$ 705,820.58 $ 717,023.62 $ 11,203.04
------------- ------------- -------------

$ -16,951.98 $ -45,107.70 $ 28,155.72
------------- ------------- -------------

$

30.72 $

30.72 $

0.00

-30.72

-30.72

0.00

------------- ------------- -------------

$

0.00 $

0.00 $

0.00

------------- ------------- -------------

$ -16,951.98 $ -45,107.70 $ 28,155.72

143,952.45 144,879.96

-927.51

------------- ------------- -------------

FUND BALANCE JUNE 30, 1994

$ 127,000.47 $ 99,772.26$ 27,228.21
============= ============= =============

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

CHEROKEE REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1994

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Cherokee 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 ofthe departure from generally accepted accounting principles disclosed in the following paragraphs, the financial statements of the Library have been prepared in conformity with generally accepted accounting principles as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting 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 government unit for financial 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". The Cherokee Regional Library is considered to be a related organization of the LaFayette-Walker County Public Library.
The Library Board consists ofeight members; three members appointed from the Dade County Library Board and five members appointed from the LaFayette-Walker 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 oflocal funds for continued operations and is the lowest level of oversight responsibility for the Library's operations.
While the LaFayette-Walker County Public Library Board appoints a majority of the Cherokee Regional Library's Board, the County Public Library is neither able to impose its will upon the Regional Library nor is there a financial benefit/burden relationship between the two boards, as defined by GASB.
The Cherokee Regional Library is located in LaFayette, Georgia, and serves Dade and Walker Counties.
FUND ACCOUNTING
The Library uses funds report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities.
A fund is a separate accounting entity with a self-balancing set of accounts.

- 5-

CHEROKEE REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1994

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 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, Local and Other funds under control ofthe Library, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds presented in this report are as follows:
GOVERNMENTAL FUND TYPES - used to account for all 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 traditionally provided by a Library.
SPECIAL REVENUE FUND - the fund used to account for the proceeds of the Lottery Program that is legally restricted to expenditures for specified purposes.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or constructiQn of major capital facilities.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental 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 of these funds present increases (i.e., 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.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds.
Governmental 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 of the current period. Those revenues considered susceptible to accrual are intergovernmental grants and investment income.
- 6-

CHEROKEE REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1994

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Expenditures are generally recognized when the related fund liability is incurred.

BUDGET

The Cherokee Regional Library has a legally authorized nonappropriated budget which is formally approved by the Board at the aggregate level. Budgets are prepared to provide a basis for funding operations and there is no legal prohibition regarding overexpenditure ofthe aggregate budget. The budget process begins when the Library administration prepares and submits a proposed budget to the Board for approval. After approval of the proposed budget by the Board, this final budget is then submitted to the Georgia Department of Education, Division ofPublic Library Services, as a part of the Library's Annual Application for State Aid.

The Library prepares its budget on the modified accrual basis, which is the same basis on which it presents its financial statements.

CASH AND CASH EQUIVALENTS

COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits (including certificates of deposit 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 ofallotted 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 financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

INTERFUND TRANSACTIONS

The Library has the following types 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.



Operating transfers are recorded for all interfund transactions other than reimbursements.

- 7-

CHEROKEE REGIONAL LIBRARY

EXIIlBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1994

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 ofthis data.:
Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral in an amount of not less than 110 percent of the 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 any one of or any combination ofthe following:
(I) 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 ofthe United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations of the counties or municipalities ofthe State of Georgia,
(5) Bonds ofany 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 Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
- 8-

CHEROKEE REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1994

Note 2: DEPOSITS

CATEGORIZATION OF DEPOSITS At June 30, 1994, the bank balances were $151,717.89. 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, 1994, as follows:
Risk Category 1 2
3
Total
Note 3: CONTINGENT LIABILITIES

Bank Balance
$ 100,000.00 0.00
51,717.89
$ 151,717.89

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 4: 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).

TRS provides service retirement, disability retirement and survivors benefits for its members. 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

- 9-

CHEROKEE REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATE1\.1ENTS

JUNE 30, 1994

Note 4: RETIRE1\.1ENT PLANS
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 of years 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 Library's payroll for employees covered by TRS for the year ended June 30, 1994, was $248,818.80~ total payroll was $279,077.19.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Library who are covered by TRS are required to pay 6% of their gross earnings to TRS. The Library makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees as advised by their independent actuary. At June 30, 1994, 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 1994 amounted to $44,314.67, of which $29,385.43 was made by the Library and $14,929.24 was made by employees. These contributions represented 11.81% (Library) and 6% (employees) of covered payroll.
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 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, 1993, was as follows:
- 10 -

CHEROKEE REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1994

Note 4: RETIREMENT PLANS

Total pension benefit obligation

$ 13,912,014,000.00

Net assets available for benefits, at cost

12,821,722,000.00

Unfunded pension benefit obligation

$ 1.090,292,000.00

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as ofJune 30, 1993. 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, 1994, were $521,550,000.00. The Library's contribution for the year ended June 30, 1994, of $29,385.43 was actuarially determined and represented .0056% of total contributions made by all participating employers.

Ten year historical trend information is presented in the 1994 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 5: RELATED PARTY TRANSACTIONS

Bookkeeping services for the Cherokee Regional Library are performed by Mrs. Judy I. Stoutenburg, wife of the Director ofthe Cherokee Regional Library. For the year ended June 30, 1994, the Library paid $18,116.76 for bookkeeping services, and this is reflected in the professional and technical services expenditures shown on Schedule "6" of this report. Although there is not a formal long-term contract for bookkeeping services with Mrs. Stoutenburg, the Board of Trustees has formally approved payments each year for the past seven years.

Note 6: SURETY BONDS

The Library Director, Mr. Brian H. Stoutenburg, is bonded in the amount of $10,000.00 with the Hartford Accident and Indemnity Company, Hartford, Connecticut, their Bond No. RN-4078163, on which premium was paid through February 1, 1995.

- 11 -

CHEROKEE REGIONAL LIBRARY COMBINING BALANCE SHEET CAPITAL PROJECTS FUND
JUNE 30, 1994

EXHIBIT "E"

ASSETS Cash and Cash Equivalents

19BB CONSTRUCTION
PROJECT
PROJECT 7462-90-S-001

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION
PROJECT 7462-91-SB-019

TOTALS

$

0.00 $

0.00 $

0.00

=============== =============== ============~

LIABILITIES AND FUND EQUITY
LIABILITIES
Fund Balance Unreserved Undesignated

$

0.00 $

0.00 $

0.00

=============== =============== =============

See notes to the general purpose financial statements. - 12 -

CHEROKEE REGIONAL LIBRARY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30. 1994

EXHIBIT "F"

REVENUES
--------
Local and Other Funds
EXPENDITURES
------------
Current Program Services Supplies
Capital Outlay Building and Building Improvements Equipment
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
-----------------------
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
-------------------

1988 CONSTRUCTION
PROJECT
PROJECT 7462-90-S-001

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION
PROJECT 7462-91-SB-019

TOTALS

$

161.13 $

66.20 $

227.33

--------------- --------------- -------------

$

5.00 $

15.59 $

20.59

223.00

6,638.26

6,861.26

10,408.81

1,221.97

11,630.78

--------------- --------------- -------------

$

10,636.81 $

7,875.82 $ 18,512.63

--------------- --------------- -------------

$ -10,475.68 $

-7,809.62 $ -18,285.30

30.72

30.72

--------------- --------------- -------------

$ -10,475.68 $

-7,778.90 $ -18,254.58

10,475.68

7,778.90

18,254.58

--------------- --------------- -------------

FUND BALANCE JUNE 30

$

0.00 $

0.00 $

0.00

=============== =============== =============

See notes to the general purpose financial statements. - 13 -

CHEROKEE REGIONAL LIBRARY ANALYSIS OF CASH AND CASH EQUIVALENTS
JUNE 30, 1994

SCHEDULE "1"

INTEREST BEARING ACCOUNTS

Cohutta Banking Company, LaFayette, Georgia
N.O.W. Account (2.65%) N.O.W. Account (2.875%) Certificate of Deposit No. 17366

(3.531%)

OTHER

Petty Cash

$ 25,612.80 97,561.11 13,178.26$ 136,352.17
100.00
$ 136,452.17
=============

See notes to the general purpose financial statements. - 14 -

CHEROKEE REGIONAL LIBRARY ACCOUNTS RECEIVABLE JUNE 30, 1994
Dade County Commissioners Local Government Allotment
Dade Democratic Committee Donation
Walker County Board of Education Local Government Allotment

SCHEDULE "2"

GOVERNMENTAL FUND TYPE GENERAL FUND
$ 2,475.00 573.00
2,083.37

$

5,131.37

=============

See notes to the general purpose financial statements. - 15 -

CHEROKEE REGIONAL LIBRARY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 1994

SCHEDULE "3"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Public Libraries Salaries and Travel Maintenance and Operation L1brary Materials Talking Book Centers Lottery Program Media Center and Library Equipment

GOVERNMENTAL FUND TYPES

GENERAL FUND

SPECIAL REVENUE FUND

TOTAL

$ 127,755.36 41,820.00 45,420.00 59,190.00
$

$ 127,755.36 41,820.00 45,420.00 59,190.00

87,500.00

87,500.00

$ 274,185.36$ 87,500.00$ 361,685.36
============= ============= =============

See notes to the general purpose financial statements. - 16 -

CHEROKEE REGIONAL LIBRARY SCHEDULE OF FEDERAL REVENUE YEAR ENDED JUNE 30. 1994
AGENCY/FUNDING
Education, U. S. Department of Through Georgia Department of Education Library Services and Construction Act Title I - Public Library Services

SCHEDULE "4"
GOVERNMENTAL FUND TYPE GENERAL FUND
$ 22,000.0.0
=============

See notes to the general purpose financial statements. - 17 -

CHEROKEE REGIONAL LIBRARY SCHEDULE OF LOCAL AND OTHER REVENUE
YEAR ENDED JUNE 30. 1994

SCHEDULE "5"

LOCAL SOURCES County Boards of Education Dade Walker
City Governments Chickmauga LaFayette Rossville Trenton
County Commissioners Dade Walker
OTHER SOURCES Donations Fines and Fees Insurance Proceeds Interest Earned Lost and Damaged Books Photocopy Sales Other

GOVERNMENTAL FUND TYPES

GENERAL FUND

CAPITAL PROJECTS
FUND

TOTAL

$ 17,525.00 25,000.00
3,500.00 49,000.00 30,000.00 6,775.00
29,700.00 67,519.47
36,025.73 6,773.16
23,151.27 4,362.35$ 258.50 4,359.18 1,006.25

$ 17,525.00 25,000.00

3,500.00 49,000.00 30,000.00 6,775.00

29,700.00 67,519.47

227.33

36,025.73 6,773.16 23,151.27 4,589.68 258.50 4,359.18 1,006.25

$ 304,955.91 $

227.33 $ 305,183.24

============= ============= =============

See notes to the general purpose financial statements. - 18 -

CHEROKEE REGIONAL LIBRARY SCHEDULE OF EXPENDITURES BY OBJECT
GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 1994

SCHEDULE 611 11

EXPENDITURES
------------
Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical Services Property Services Supplies Library Books and Materials Utilities Communications and Insurance Other Expenditures
Nonoperating Costs Equipment
Total Expenditures

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

------------- ------------- -------------

$ 279,077.19 76,591.71 4,940.35 18,454.43 53,712.64 13,368.86 92,184.59 35,577.35 18,246.94 2,028.78

$ 279,077.19 76,591.71 4,940.35 18,454.43 53,712.64 13,368.86 92,184.59 35,577.35 18,246.94 2,028.78

5,625.11 $ 87,500.00

93,125.11

------------- ------------- -------------

$ 599,807.95 $ 87,500.00$ 687,307.95
============= ============= =============

See notes to the general purpose financial statements. - 19 -

CHEROKEE REGIONAL LIBRARY MEMBERSHIP OF LIBRARY BOARD YEAR ENDED JUNE 30, 1994
BOARD MEMBER ADDRESS
Mrs. Jo Pope, Chairperson(*) 219 Lee Street Chickamauga, Georgia 30707
Miss Ellagene Baker(*) 406 North First Street LaFayette, Georgia 30728
Mrs. Kate Elliott (*) Route 2, Box 446 Trenton, Georgia 30752
Mrs. Marion Hutcheson(*) P. 0. Box 729 Rossville, Georgia 30741
Miss Leila Kimbrough(*) P. 0. Box 205 Trenton, Georgia 30752
Mrs. Laura O'Neal (*) Route 1, Box 66 Rising Fawn, Georgia 30738
Mr. Hill Pope(*) P. 0. Box 726 LaFayette, Georgia 30728
Mrs. Olive Wright(*) 509 West 13th Street Chickamauga, Georgia 30707
(*) Denotes Board Members Serving as of June 30, 1994

SCHEDULE "7"

See notes to the general purpose financial statements. - 20 -

CHEROKEE REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 1994

SCHEDULE "8"

PERSONNEL
---------
Bailey, Beene, Bradford, Bridges, Clark, Denton, Eubanks, Fitzpatrick, Giles, Goins, Johnson, Jones, Long, Mann, Manning, Mayes, McCallie, McMahan, Mullinax. Murphy, Napier, Oliver, Patacell, Presley, Roach, Robinson, Stoutenburg, Stubblefield, Suttles, Tinker, Tuggle, Winans, Wrinn, Young,

Joy T. Marvlyn I. Debra Margaret Bass Carmella Joy Lecia Marilyn Gail Brenda W. Valerie Michelle Betty K. Suzanne Hope R. Tanya Robert Tracy Diann Crystal Dana C. Danette Russell Hope Young Valinda Smith Wilma R. Juanita M. Michael Ashley F. Brian H. Charles H. Tischa A. April Loraine Melissa Leigh Glenda Wendy Hamilton Tasha C.

POSITION
--------
Library Assistnt Page Library Assistant Librarian Library Assistant Library Assistant TBC Manager Library Manager Library Assistant Page Library Assistant Page Library Assistant Page Librarian Page Page Page Library Assistant Librarian Childrens Librarian Manager Library Assistant Library Manager Library Manager Page Director Library Manager Page Page Page Library Assistant Library Assistant Page

SALARIES

TRAVEL

------------- -------------

$ 11,109.50 $

40.00

816.01

4,931.41

7,368.25

46.41

8,246.16

5,949.47

17,697.36

332 .3.0

4,801.59

514.25

3,285.28

2,779.51

1,534.26

2,964.39

40.00

654.51

37,372.80

462.85

87 .13

1,919.95

199.75

7,763.60

14.94

21,370.82

502.86

12,589.16

175.63

12,589.16

175.27

3,514.50

4,761.90

21,918.03

114.00

726.75

49,829.96

1,950.35

14,310.36

730.29

1,298.38

12.75

446.25

12,033.45

315.45

3,049.40

40.00

631.14

------------- -------------

$ 279,077.19 $ 4,940.35
============= =============

See notes to the general purpose financial statements. - 21 -

SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS

CHEROKEE REGIONAL LIBRARY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1994
PRIOR YEAR/CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL) Inadequate Separation ofDuties Audit Control Number 7462-93-01
The audit report for the year ended June 30, 1993, stated that the Library did not provide for adequate separation ofemployee duties in the petformance ofaccounting functions and related procedures. For the year under review, no improvement was noted regarding adequate separation ofduties. This deficiency was a result ofmanagement's decision to limit the number ofadministrative staffmade responsible for accounting functions. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree of internal control with existing staff.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Audit Control Number 7462-93-02
The audit report for the year ended June 30, 1993, noted that the management of the Cherokee 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. 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 implement and maintain a General Fixed Assets Account Group for inclusion in the accounting records. Subsidiary records should be established for land, buildings, equipment and inexhaustible collections and books owned by the Library. Detailed records should be maintained of all additions and deletions for each class of fixed assets that comprise this account group.
Note: The Cherokee Regional Library was provided an opportunity to include pertinent comments from the Library's management concerning these audit findings, conclusions and recommendations. The Library has elected not to provide comments for inclusion in this report.