GA. A?ioo . RI Ri.t'3
D;i.. 1994-95
STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET ATLANTA. GEORGIA 30334

AUDIT REPORT DALTON REGIONAL LIBRARY
DALTON, GEORGIA YEAR ENDED JUNE 30, 1995

DALTON 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

ALL GOVERNMENTAL FUND TYPES

3

C

STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL AND SPECIAL REVENUE FUNDS

4

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

5

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

14

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

15

SCHEDULES

1 CASH AND CASH EQUIVALENTS

16

2 INVESTMENTS

17

3 ACCOUNTS RECENABLE

18

SCHEDULE OF REVENUE

4

STATE

19

5

FEDERAL

20

6

LOCAL AND OTHER

21

SCHEDULE OF EXPENDITURES BY OBJECT

7

GOVERNMENTAL FUND TYPES

22

8

LOTTERY PROGRAMS

23

9 MEMBERSHIP OF LIBRARY BOARD

24

10 SCHEDULE OF SALARIES AND TRAVEL

25

DALTON 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
August 13, 1996

Honorable Zell Miller, Governor Members ofthe General Assembly Members of the State Board ofEducation
and Director and Members of the Dalton 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) of the Dalton Regional Library, as of and for the year ended June 30, 1995, 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. 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 certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are 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 Library did not report the deferred compensation plan assets and liabilities within the general purpose financial statements. To conform to generally accepted accounting principles, these amounts should be included in the general purpose financial statements.
95ARL-42

The aggregate effects on the general purpose financial statements of these variances or omissions 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 financial statements present fairly, in all material respects, the financial position ofthe Dalton Regional Library as ofJune 30, 1995, and the results ofits operations for the year then ended, in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose offorming an opinion on the general purpose financial ~tatements of the Dalton Regional Library taken as a whole. The combining statements (Exhibits E and F) and the financial schedules (Schedules 1 through 10), 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 Dalton Regional Library. Such information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and, in our opinion, except for the effects ofthe matters discussed in the third paragraph, such information 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 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.
=x::~

CLV:cm 95ARL-42

Claude L. Vickers State Auditor

DALTON REGIONAL LIBRARY - 1-

DALTON REGIONAL LIBRARY COMBINED BALANCE SHEET
ALL FUND JYPES JUNE 30. 1995

~ Cash and Cash Equivalents Investments Accounts Receivable

GOVERNMENTAL FUND lYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTALS
{Memorandum Onb1
JUNE 3011995 JUNE 3011994

$

3,514.70

$

3,514.70 $

104,039.47

30.305.42

30.305.42

28.483.79

191854.58 $

1,983.01 $

500.00

221337.59

51481.52

Total Assets

$

53,674.70 $

1,983.01 $

500.00 $

56,157.71 $

138,004.78

LIAE!ILIIJ~S ANQ FUNQ EQUIJY

LIAl;!ILIIJES

Cash Overdraft

Accounts Payable

$

Salaries Payable

Expired Grant Balances Payable

Deferred Revenue

Total Liabilities

$

FUND EOUIJY

Fund Balances

Reserved

For Continuation of Federal Program

Unreserved

Undeslgnated

$

Total Fund Equity

$

$ 2,932.38 14,402.88 171335.26 $
36,339.44 $ 361339.44 $

1.983.01 $
1,983.01 $
0.00 $ 0.00 $

$ 500.00
500.00 $

1,983.01 3,432.38 $ 14,402.88
191818.27 $

598.54 2,924.00 2,246.49 8413n.01
901146.10

0.00 $ 0.00 $

$ 361339.44 361339.44 $

1,150.49 46z708.19 47,858.68

Total Liabilities and Fund Equity $

53,674.70 $

1,983.01 $

500.00 $

56,157.71 $

138,004.78

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

DALTON REGIONAL LIBRARY COMBINED STATEMENT Of REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 1995

EXHIBrre

GENERAL FUND

SPECIAL REVENUE
FUND

CAPITAL PROJECTS
FUND

TOTALS
{Memorandum On~} YEAR ENDED
JUNE 3011995 JUNE 3011994

REVENUES

State Funds Federal Funds Local and other Funds

$ 522,919.51 $ 321.53
2041598.75

95,4n.07 17,423.01
$

$ 51174.88

618,396.58 $ 17,744.54
2091773.63

551,983.86 23,934.88 2081947.76

Total Revenues

$ 7'Z11839.79 $ 1121900.08 $

51174.88 $

8451914.75 $

7841866.50

EXPENDITURES

Current Program Services Technical Services Circulation Administration Maintenance and Operations

$ 329,414.14 $ 114,049.69

51,827.86

TT,006.12

184,955.19

$

951006.11

$ 5,174.88

443,463.83 $ 51,827.86 TT,006.12 190,130.07 951006.11

341,372.56 49,489.76 82,663.01
232,851.02 941693.29

Total Expenditures

$ 7381209.42 $ 1141049.69 $

51174.88 $

8571433.99 $

8011069.64

Excess of Revenues over (under) Expenditures

$ -101369.63 $

-11149.61 $

0.00 $

-111519.24 $

-161203.14

Qil:.IEB FINAt:!C!N~ SQURCES {USES)

Operating Transfers In Operating Transfers Out

$

0.88

$

-0.88

$

0.88

-0.88

Total Other Financing Sources

(Uses)

$

0.88 $

-0.88

$

0.00

Excess of Revenues and Other Financing

Sources over (under) Expenditures

and other Financing Uses

$

-10,368.75 $

-1,150.49 $

0.00 $

-11,519.24 $

-16,203.14

FUND 1;3ALANCE JULY 1

46.708.19

11150.49

0.00

471858.68

64.061.82

fUND E!ALANCE JUNE 30

$

361339.44 $

0.00 $

0.00 $

361339.44 $

471858.68

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

DALTON REGIONAL LIBRARY
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 1995

EXHIBIT c-

REVENUES
State Funds Federal Funds Local and Other Funds
Total Revenues
EXPENDITURES
Current Program Services Technical Services Circulation Administration Maintenance and Operations
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, 1994

GENERAL FUND

BUDGET

ACTUAL

$ 541,455.00 $ 208,200.00
$ 749,655.00 $

522,919.51 . 321.53
2041598.75
7'27,839.79

$ 302,675.70 $ 53,725.00 86,540.90
221,368.24 87,975.00

329,414.14 51,827.86 77,006.12 184,955.19 951006.11

$ 752,284.84 $ 738,209.42

$ -2,629.84 $ -101369.63

$

0.88

$

0.88

$ -2,629.84 $ -10,368.75

471362.00

46,708.19

FUND BALANCE JUNE 30, 1995

$ 44,732.16 $ 36,339.44

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$

1,100.00 $ 95,477.07

22,115.89

17,423.01

$ 23,215.89 $ 112,900.08

$ 116,692.11 $ 114,049.69

$ 116,692.11 $ 114,049.69 $ -931476.22 $ -11149.61

$

-0.88

$

-0.88

$ -93,476.22 $ 85,527.56

-1,150.49 1,150.49

----- $ -7,948.66 $

0.00

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

DALTON REGIONAL LIBRARY

EXHIBIT D 11 11

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Dalton 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 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". Based upon the application ofthe above criteria, the Dalton Regional Library is determined to be a joint venture.
The Library Board consists of nine members; four members appointed by the Dalton-Whitfield County Library Board, two members appointed by the Catoosa County Library Board, two members appointed by the Gordon County Library Board and one member appointed by the Murray 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.
The Dalton Regional Library is located in Dalton, Georgia, and serves Catoosa, Gordon, Murray and Whitfield Counties.
FUND ACCOUNTING
The Library uses funds to report on its financial position and the results ofits 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-

DALTON REGIONAL LIBRARY

EXIDBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

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 provided by a Library.
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific 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.
BASIS OF ACCOUNTING
The accounting andfinancial 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:

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DALTON REGIONAL LIBRARY

EXIIlBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
Expenditures are generally recognized when the related fund liability is incurred.
BUDGET
The Dalton Regional Library's budget is a complete financial plan for the Library's fiscal year and is based upon estimates ofexpenditures 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 Georgia Department of Education, Division ofPublic 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.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits (including certificates of deposit) 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.
INVESTMENTS
COMPOSITION OF INVESTMENTS Donated investments are stated at fair value as ofthe date donated.
RECElVABLES
Receivables consist ofgrant reimbursements due from Federal, State or other grantors 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 financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
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DALTON REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INTERFUND TRANSACTIONS
The Library has the following types ofinterfund transactions:
Reimbursements ofexpenditures 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.
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 AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe 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 ofdeposit insurance. OCGA Section 45-8-11 provides an officer holding public iqnds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one ofor any combination ofthe following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State ofGeorgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates ofindebtedness or other direct obligations of the United States or ofthe State ofGeorgia,
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations ofthe counties or municipalities ofthe State of Georgia,

- 8-

DALTON REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 2: DEPOSITS AND INVESTMENTS
(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,
(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, 1995, the bank balances were $73,420.23. The bank balances were entirely covered by Federal depository insurance.
CATEGORIZATION OF INVESTMENTS At June 30, 1995, the carrying amount of the Library's total investments was $30,305.42 and this entire amount consisted of Common Stock which was registered in the Library's name. The market value of these investments was $48,454.57.
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 illnesses or injuries to employees; natural disaster; and unemployment compensation.
The Library has obtained commercial insurance for risk of loss associated with torts, assets and job related illnesses or injuries to employees. The Library has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Library's insurance coverage in any of the past three years.
The Library has obtained commercial insurance for errors and omissions, however the policy excludes coverage for sexual harassment and discrimination claims. The Library has not experienced any losses related to errors or omissions in the past three years.
The Library has elected to self-insure for all losses related to natural disaster. The Library has not experienced any losses related to natural disaster in the past three years.
The Library is self-insured with regard to unemployment compensation claims. The Library accounts for claims within the General Fund with expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.
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DALTON REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 3: RISK MANAGEMENT

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

Beginning ofYear Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

1994

$

0.00 $

0.00 $

0.00 $

0.00

1995

$

0.00 $

524.00 $

524.00 $

0.00

Note 4: 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 5: RELATED PARTY TRANSACTIONS

The Dalton Regional Library entered into a purchase agreement with Multiprise, Incorporated, a commercial and amateur radio business located in Orange Park, Florida. This agreement was for the purpose of purchasing equipment specified in the Library's purchase orders that were submitted to Multiprise. During the period May 26, 1994 through November 29, 1994, the Library purchased computer, radio and media equipment from
Multiprise with State Lottery Program funds totaling $108,006.90. These purchases were handled for
Multiprise by their principal agent, Mr. Laurin Cavender. Mr. Cavender is the son ofMrs. Eugenia Cavender, Director of Dalton Regional Library. During the prior fiscal period, other purchases in the amount of $4,399.41 were made by the Library for other computer equipment, software and supplies from Telesensor,
which is also a business represented by Mr. Cavender. The nature ofthe relationship and business transactions
disclosed above are considered to be related party transactions which are specifically disclosed as required by generally accepted accounting principles.

Note 6 : DEFERRED COMPENSATION PLAN

The Library offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 4S7. The plan, available to all Library employees, permits them to defer a portion of their salary
until future years. The deferred compensation is not available to employees until termination, retirement, death
or unforeseeable emergency.

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DALTON REGIONAL LIBRARY

ExmBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 6 : DEFERRED COMPENSATION PLAN
All amounts ofcompensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property or rights are (until paid or made available to the employee or other beneficiary) solely the property and rights ofthe Library (without being restricted to the provisions ofbenefits under the plan), subject only to the claims ofthe Library's general creditors. Participants' rights under the plan are equal to those ofgeneral creditors ofthe Library in an amount equal to the fair market value ofthe deferred account for each participant.
It is the opinion ofthe Library that the Library has no liability for losses under the plan but does have the duty ofdue care that would be required of an ordinary prudent investor. The Library believes it is unlikely that it will use the assets to satisfy the claims ofgeneral creditors in the future.
The Library has designated an independent plan administrator to operate and maintain the plan. The assets and liabilities of the plan are not reflected in these financial statements. To conform to generally accepted accounting principles, these amounts should be recorded in the general purpose financial statements.
Note 7: 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 in accordance with State statute. A member is eligible for service retirement after 30 years of service, regardless ofage, or after 10 years ofservice and attainment ofage 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 of the 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 IO years of service) and compensation up to the time of disability or death.

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DALTON REGIONAL LIBRARY

EXIIlBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 7: RETIREMENT PLANS

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, 1995, was $336,578.93; total payroll was $369,631.42.

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 ofTrustees in accordance with State statute and as advised by their independent actuary. At June 30, 1995, the TR.S 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 1995 amounted to $56,579.02, of which $39,749.95 was made by the Library and $16,829.07 was made by employees. These contributions represented I 1.81% (Library) and 5% (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 ofJune 30, 1994, was as follows:

Total pension benefit obligation

$ 15,313,743,000.00

Net assets available for benefits, at cost

14,254,785,000.00

Unfunded pension benefit obligation

$ 1,058.958.000,00

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as ofJune 30, 1994. Net assets available to pay pension benefits were valued as of the same date. TRS does not make separate measurements ofassets and pension benefit obligation for individual employers.

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DALTON REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 7: RETIREMENT PLANS
Total contributions from all employers to TRS for fiscal year ended June 30, 1995, were $565,117,811.00. The Library's contribution for the year ended June 30, 1995, of $39,749.95 was actuarially determined and represented .0070% of total contributions made by all participating employers.
Ten year historical trend information is presented in the 1995 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 8: SURETY BONDS
Mrs. Eugenia Cavender, Library Director through June 7, 1995, was bonded in the amount of $20,000.00 with the Ohio Casualty Insurance Company, Hamilton, Ohio, their Bond No. 3-061-628.
The Library Director, Mr. Joe B. Forsee, effective June 12, 1995, and all employees of the Library are covered under a blanket bond in the amount of $20,000.00 with the Ohio Casualty Insurance Company, Hamilton, Ohio, their Bond No. 3-061-628, on which premium was paid through February 16, 1996.

- 13 -

DALTON REGIONAL LIBRARY COMBINING BALANCE SHEET
SPECIAL REVENUE FUND
JUNE 30, 1995

EXHIBIT "E"

ASSETS Cash and Cash Equivalents Acc:ounts Receivable
Total Assets

LOTTERY PROGRAMS

LIBRARY SERVICES AND CONSTRUCTION
ACT TITLE! PUBLIC LIBRARY SERVICES

TOTALS
JUNE 30, 1995 JUNE 30, 1994

$

84,3n.01

$ 1,100.00 $

883.01 $ _ _ _1__,9_8_3_.0_1

2,115.89

$ 1,100.00 $

883.01 $

1,983.01 s _ _ _as_._4e_2_.ee_

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs Unreserved Undesignated
Total Fund Equity

$ 1,100.00 $ $ 1,100.00 $

$

0.00 $

$

0.00 $

Total Liabilities and Fund Equity

$ 1,100.00 $

883.01 $ 883.01 $

1,983.01 $ 1,983.01 $

965.40 84,3n.01
85,342.47

0.00 $ 0.00 $
883.01 $

$ 0.00 0.00 $

1,150.49 0.00
1,150.49

1,983.01 s___as_,4_e_2_.ee_

See notes to the general purpose financial statements.

-14-

DALTON REGIONAL LIBRARY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 1995

EXHIBIT "P'

REVENUES
State Funds Federal Funds
Total Revenues
EXPENDITURES
Current Program Services Circulation
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers Out
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1

LOTTERY PROGRAMS

LIBRARY SERVICES AND CONSTRUCTION
ACT TITLE I PUBLIC LIBRARY SERVICES

TOTALS YEAR ENDED JUNE 30, 1995 JUNE 30, 1994

$ 95,477.07 $
$ 95,477.07 $

$ 17,423.01
17,423.01 $

95,477.07 $ 17,423.01
112,900.08 $

28,122.93 23,934.88
52,057.81

$ 95,477.07 $

$ 95,477.07 $

$

0.00 $

$

0.00 $

0.00

18,572.62 $
18,572.62 $ -1,149.61 $

114,049.69 $
114,049.69 $ -1,149.61 $

47,326.06 3,934.88
51,260.94
796.87

-0.88
-1,150.49 $ 1,150.49

-0.88
-1,150.49 $ 1,150.49

796.87 353.62

FUND BALANCE JUNE 30

$

0.00 $

0.00 $

----- 0.00 $

1,150.49

See notes to the general purpose financial statements.

-15-

DALTON REGIONAL LIBRARY CASH AND CASH EQUIVALENTS
JUNE 30, 1995
NONINTEREST BEARING ACCOUNT Wachovia Bank of Georgia, Dalton, Georgia
INTEREST BEARING ACCOUNTS Wachovia Bank of Georgia, Dalton, Georgia Certificate of Deposit No. 6058478 (3.93%)
OTHER Petty Cash

SCHEDULE 1

$

-344.59

1,78228

94.00

------ $

1,531.69

See notes to the generalpurpose financial statements. - 16 -

DALTON REGIONAL LIBRARY
INVESTMENTS JUNE 30, 1995
STOCK Wachovia Corporation 1444.6896 Shares of Common Stock (Market Value $48,454.57)

SCHEDULE "2"
$ 30,305.42

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

DALTON REGIONAL LIBRARY ACCOUNTS RECEIVABLE JUNE 30, 1995

SCHEDULE "3"

Calhoun-Gordon County Library Fines and Fees Newsletter Fees Reimbursements for Supplies and Materials
Catoosa County Board of Commissioners Construction Consultant
Catoosa County Library Bookmobile Service
City of Dalton Board of Commissioners Local Support
City of Dalton Board of Education Bookmobile Service
Clearwater Library Fines and Fees
Education, Georgia Department of Federal Program Library Services and Construction Act Title I - Public Library Services Lottery Program Distant Learning Public Libraries Salaries and Travel
Fort Oglethorpe Library Books and Materials
Friends of the Library Reimbursement for Postage Books and Materials
Murray County Board of Education Bookmobile Service
Murray County Library Newsletter Fees
Ringgold Library Books and Materials

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$

589.58

84.70

4,499.68

$

589.58

84.70

4,499.68

$

500.00

500.00

1,500.00

1,500.00

5,416.66

5,416.66

600.00

600.00

6.00

6.00

$ 3,513.04

883.01 1,100.00

1,169.91

58.56 1,370.97

600.00

76.23

369.25

883.01 1,100.00 3,513.04
1,169.91
58.56 1,370.97
600.00
76.23
369.25

$ 19,854.58 $

1,983.01 $

500.00 $ 22,337.59

See notes to the general purpose financial statements.

- 18 -

DALTON REGIONAL LIBRARY SCHEDULE OF STATE REVENUE
YEAR ENDED JUNE 30, 1995

SCHEDULE ",r

AGENCY/FUNDING
GRANTS Education, Georgia Department of Public Libraries Salaries and Travel Library Materials Maintenance and Operations Lottery Programs Distant Leaming Media Center and Library Equipment

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

296,295.51

116,112.00

110,512.00

$

$ 296,295.51 116,112.00 110,512.00

1,100.00 94,377.07

1,100.00 94,377.07

$

522,919.51 $

95,477.07 $ 618,396.58

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

DALTON REGIONAL LIBRARY SCHEDULE OF FEDERAL REVENUE
YEAR ENDED JUNE 30, 1995

SCHEDULE "5"

AGENCY/FUNDING
Education, U. S. Department of Through Georgia Department of Education Library Services and Construction Act Trtle I - Public Library Services Trtle Ill - Interlibrary Cooperation and Resources Sharing

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$
$ ------- 321.53

17,423.01 $

17,423.01 321.53

$ ====32=1.5=3 $

17,423.01 $ 17,744.54

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

DALTON REGIONAL LIBRARY SCHEDULE OF LOCAL AND OTHER REVENUE
YEAR ENDED JUNE 30, 1995

SCHEDULE "6"

LOCAL SOURCES Boards of Education Catoosa County Dalton, City of Murray County Whitfield County
City Government Dalton
County Governments Boards of Commissioners Catoosa Whitfield
Public Libraries Calhoun-Gordon County Catoosa County Murray County
OTHER SOURCES Dividends Donations Fines and Fees Lost and Damaged Books Photocopy Sales Other

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

$

3,000.00

1,200.00

1,200.00

100.00

64,999.93

$

3,000.00

1,200.00

1,200.00

100.00

64,999.93

$ 70,100.00

5,000.00

6,000.00 1,601.53
750.00

1,821.63 17,841.89 13,633.20
1,648.95 2,063.96 18,637.66

174.88

5,000.00 70,100.00
6,000.00 1,601.53
750.00
1,821.63 17,841.89 13,633.20
1,648.95 2,063.96 18,812.54

$ 204,598.75 $

5,174.88 $ 209,773.63

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

DALTON REGIONAL LIBRARY SCHEDULE OF EXPENDITURES BY OBJECT
GOVERNMENTAL FUND TYPES
YEAR ENDED JUNE 30, 1995

SCHEDULE '7"

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

GENERAL FUND

SPECIAL REVENUE
FUND

CAPITAL PROJECTS
FUND

TOTAL

$ 369,631.42 96,122.77 3,484.16 11,830.20 $ 45,827.37 7,888.89
122,815.69 32,317.14 34,993.25 1,087.50 11,905.03

3,315.24 $ 609.25
14,361.93
286.20

306.00

95.477.07

$ 5,174.88

369,631.42 96,122.77 3,484.16 20,320.32 45,827.37 8,498.14
137,177.62 32,317.14 34,993.25 1,087.50 12,191.23

95.783.07

Total Expenditures

$ 738,209.42 $ 114,049.69 $

5,174.88 $ 857,433.99

.See notes to the general purpose financial statements.

- 22 -

EXPENDITURES
Nonoperating Costs Equipment

DALTON REGIONAL LIBRARY SCHEDULE OF EXPENDITURES BY OBJECT
LOTTERY PROGRAMS YEAR ENDED JUNE 30, 1995

SCHEDULE a

DISTANT LEARNING

MEDIA CENTER AND
LIBRARY EQUIPMENT

TOTAL

$

1,100.00 $

94,377.07 $===95=,4=7=7=.0=7

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

DALTON REGIONAL LIBRARY MEMBERSHIP OF LIBRARY BOARD
YEAR ENDED JUNE 30, 1995

BOARD MEMBER ADDRESS
Mr. Leslie Waycaster, Chairman (*) 130 W. King Street Dalton, Georgia 30720
Ms. Joyce Brownlee (*) 135 Devonwood Drive Calhoun, Georgia 30701
Ms. Sylvia Brumbelow (*) 184 Dogwood Drive, S. W. Calhoun, Georgia 30701
Ms. Edna Jo Butler 1034 North Long Avenue Chatsworth, Georgia 30705
Ms. Dale Cook (1) 1602 Beverly Drive Dalton, Georgia 30720
Ms. Karen Daniel (*) Route 6, East Sharon Circle Ringgold, Georgia 30736
Mr. W. W. Fincher(*) 615 Green Road Chatsworth, Georgia 30705
Dr. Norma Gordon (*) 751 Nelson-Kyle Road Dalton, Georgia 30721
Mr. Harvey Halman(*) 220 Westerly Drive Dalton, Georgia 30720
Ms. Beverly Whitfield (*) 1903 Villa Way Dalton, Georgia 30720

(*) Denotes Board Members Serving as of June 30, 1995

Note: (1)

Deceased prior to June 30, 1995 As of June 30, 1995, position was vacant

See notes to the general purpose financial statements.

- 24 -

SCHEDULE "9"

DALTON REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 1995

SCHEDULE "1 O"

PERSONNEL

Armstrong, Brewer, Cavender, Cody, Cook, Duke, Dunn, Flood, Forsee, Gledhill, Harmon, Hart, Hoole, Jones, Jr., Lankford, Litton, Macon, McMahon, Osborn, Pearce, Roberts, Scott,

Carolyn Kimberly Eugenia Sara Elizabeth Mary Ann Betty Jean Dorothy Nancy Joan Joe B. Sharon Julia K. Glenda Martha D. Charles Mary Linda Deborah P. Connie Elizabeth Sheila Dana Barbara J.

Total Cash Basis

Accruals June 30, 1994

POSITION
Librarian Bookkeeper Director Extensions Librarian Shelver Processing Clerk Clerk Clerk Director Secretary Librarian Clerk Librarian Custodian Shelver Librarian Librarian Clerk Clerk Clerk Clerk Shelver

SALARIES

TRAVEL

$

26,548.67 $

14,031.77

43,156.45

29,998.80

1,507.71

6,185.40

16,017.12

15,066.84

2,347.92

5,802.92

28,276.20

2,200.00

41,631.60

10,041.20

59.50

41,631.60

40,097.60

15,088.92

11,641.80

4,765.80

12,412.64

4,044.96

507.42 235.73 433.96
993.96 182.51
9.70 1,106.34
7.81
6.73

$

372,555.42 $

3,484.16

-2,924.00

0.00

$

369,631.42 $ ===3::::i:,4=8=4=.1=6

See notes to the general purpose financial statements.

-25-

SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS

DALTON REGIONAL LIBRARY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1995
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Improper Expenditure Finding Resolved Audit Control Number 7552-94-02
The audit report for the year ended June 30, 1994, noted that the Library made an improper expenditure of $42.75 from the Library Services and Construction Act, Title I - Public Library Services Program (CFDA 84.034). For the year under review, the Library refunded this amount from the General Fund to the Georgia Department ofEducation.
AUDIT FOLLOW-UP/RESOLUTION Voucher Sample Exceptions Finding Resolved Audit Control Number 7552-94-03
The audit report for the year ended June 30, 1994, noted that an audit sample ofexpenditure vouchers revealed that two vouchers did not contain supporting documentation. For the year under review, an audit sample was performed to test the validity and accuracy ofthe expenditure transactions of the Library and the results of the test revealed that all transactions selected were adequately documented. In addition, the Library strengthened its internal controls to ensure that all expenditures are reviewed for accuracy and proper documentation prior to payment and recording in the financial records.
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Asset Account Group Audit Control Number 7552-93-01
The audit report for the year ended June 30, 1994, noted that the management of the Dalton Regional Library had chosen not to maintain a system-wide General Fixed Asset 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 Asset Account Group. These subsidiary records include an inventory of 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-

DALTON REGIONAL LIBRARY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1995
PRIOR YEAR/CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL) Inadequate Separation ofDuties Audit Control Number 7552-94-01
The audit report for the year ended June 30, 1994, noted 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 in adequate separation of employee duties was noted. This deficiency was a result of management's decision to limit the number of administrative staff made responsible for accounting functions. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree ofinternal control with existing staff
PROCUREMENT Inadequate Purchasing Procedures Audit Control Number 7552-94-04
The audit report for the year ended June 30, 1994, noted that the Dalton Regional Library was awarded a State Lottery Program grant of $122,500.00 to purchase computer and media equipment. As a prerequisite to the grant award, the Library developed a Technology Plan for the library system. The Library agreed to preconditioned assurances in implementing the Technology Plan which was subsequently approved by the Georgia Department ofEducation, Division ofLibrary Services. Our audit of the business transactions conducted by the Library revealed that prudent business practices were not followed involving Lottery Program funds. In addition, related party transactions existed, as disclosed in Note 5 of this report, between the Library Director, Mrs. Eugenia Cavender and her son Mr. Laurin Cavender.
During the year under review, the Library ceased all business transactions with Mr. Laurin Cavender and Mrs. Eugenia Cavender resigned as Director of the Library effective June 7, 1995. Our report for the 1994 fiscal year noted that the Library had purchased sixteen (16) two-way radios, one antenna tower and other related radio equipment as approved in the Technology Plan. However, the intent and purpose of this equipment was not specific in the Technology Plan as to the implementation and benefit to the Library system. A review was requested ofthe Georgia Department ofEducation to determine if this equipment is capable of accomplishing the goals of the Library. As of the date of this audit, the Georgia Department of Education has not recommended a resolution regarding the disposition ofthe radio equipment.
-2-