Audit report, Flint River Regional Library, Griffin, Georgia, year ended June 30, 1996

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AUDIT REPORT FLINT RIVER REGIONAL LIBRARY
GRIFFIN, GEORGIA YEAR ENDED JUNE 30, 1996
- - - ~ ~ ------

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

FLINT RIVER REGIONAL LffiRARY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES

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

5

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

6

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

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

16

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

17

SCHEDULES

1 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

18

2 CASH AND CASH EQUIVALENTS

19

SCHEDULE OF REVENUE

3

STATE

20

4

OTHER

21

SCHEDULE OF EXPENDITURES BY OBJECT

5

GENERAL AND SPECIAL REVENUE FUNDS

22

6

LOTTERY PROGRAM

23

7 MEMBERSHIP OF LIBRARY BOARD

24

8 SCHEDULE OF SALARIES AND TRAVEL

25

FLINT RIVER REGIONAL LIBRARY - TABLE OF CONTENTS -
SECTION II COMPLIANCE COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS
SECTION III INTERNAL CONTROL REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
SECTION V PERTINENT VIEWS OF RESPONSIBLE OFFICIALS PERTINENT VIEWS OF RESPONSIBLE OFFICIALS

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
June 26, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board ofEducation
and Director and Members of the Flint River Regional Library Board
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
Ladies and Gentlemen:
We have audited the general purpose financial statements (Exhibits A through D) of the Flint River Regional Library, as of and for the year ended June 30, 1996, as listed in the table of contents. These financial statements are the responsibility of the Library's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and the standards for financial and compliance audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and the provisions of the Office of Management and Budget Circular A-128, "Audits of State and Local Governments". Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general purpose 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.
96ARL-44

The aggregate effects on the general purpose financial statements of this variance or omission have not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements of the matter referred to in the third paragraph, the general purpose financial statements present fairly, in all material respects, the financial position ofthe Flint River Regional Library as of June 30, 1996, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated June 26, 1997, on our consideration of the Library's internal control structure and a report dated June 26, 1997, on its compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements ofthe Flint River Regional Library taken as a whole. The combining statements (Exhibits E through H) and the financial schedules (Schedules 1 through 8 which includes the Schedule of Federal Financial Assistance), as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the Flint River Regional Library. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
A copy 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.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:gp 96ARL-44

FLINT RIVER REGIONAL LIBRARY - 1-

FLINT RIVER REGIONAL LIBRARY COMBINED BALANCE SHEET ALL FUND TYPES JUNE 30,1996

EXHIBIT-N

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL REVENUE

PROJECTS

FUND

FUND

FUND

TOTALS (Memorandum Only) JUNE 30,1996 JUNE 30,1995

$

0.00 $ 2,6n.94 $ 1,818,417.65 $ 1,821,095.59 $ 2,173,242.00

106,032.00

$

0.00 $ 2,sn.94 $ 1,818,417.65 $ 1,821,095.59 $ 2,279,274.00

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft Contracts Payable Retainages Payable

$ 17,210.36

Total Uabilities

$ 17,210.36

FUND EQUITY

Fund Balances

Reserved

For Continuation of Federal Programs

$

For State Capital Outlay Projects

Unreserved Deficit Undesignated

$
$ -17,210.36 0.00

Total Fund Equity

$ -17,210.36 $

$

17,210.36

$ 406,589.99

406,589.99

139,370.00

139,370.00 $ 106,032,00

$ 545,959.99 $ 563,170.35 $ 106,032.00

2,6n.94

$

2,6n.94 $

7,565.61

$ 1,272,457.66 1,272,457.66 2,136,080.64

2,6n.94 $ 1,272,457.66 $ 1,275,135.60 $ 2,143,646.25

-17,210.36

0.00

0.00

0.00

29,595.75

2,6n.94 $ 1,272,457.66 $ 1,257,925.24 $ 2,173,242.00

Total Uabilities and Fund EqUity $

0.00 $ 2,6n.94 $ 1,818,417.65 $ 1,821,095.59 $ 2,279,274.00

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

FLINT RIVER REGIONAL LIBRARY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1996

EXHIBIT"B"

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Program Services Administration
Capital Outlay
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1 Restated(See Note 1)

GENERAL FUND

SPECIAL REVENUE
FUND

CAPITAL PROJECTS
FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30, 1996 JUNE 30, 1995

$ 700,558,30 $ 10,000,00 $ 1,800,965.00 $ 2,511,523,30 $ 1,747,549,51

24,000,00

24,000.00

32,000.00

374,783.07

28,755.57

403,538.64

2,631,355.61

$ 1,075,341.37 $ 34,000.00 $ 1,829,720.57 $ 2,939,061.94 $ 4,410,905.12

$ 279,339.06

$ 279,339.06 $ 252,183.59

842,808.42 $ 38,887.67

881,696.09

828,791.10

$ 2,693,343.55

2,693,343.55

1,252,102.05

$ 1,122,147.48 $ 38,887.67 $ 2,693,343.55 $ 3,854,378.70 $ 2,333,076.74

$ -46,806.11 $ -4,887.67 $ -863,622.98 $ -915,316.76 $ 2,On,828.38

29,595.75

7,565.61

2,136,080.64

2,173,242.00

95,413.62

FUND BALANCE JUNE 30

$

-17,210.36 $ 2,6n.94 $ 1,272,457.66 $ 1,257,925.24 $ 2,173,242.00

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

THIS PAGE LEFT BLAHK

FLINT RNER REGIONAL LIBRARY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30,1996

EXHIBITC

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Program Services Administration
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Other Sources
Excess of Revenues and Other Financing Sources over (under) Expendroures
FUND BALANCE JULY 1,1995

GENERAL FUND

BUDGET

ACTUAL

$ 672,3n.00 $ 700,558.30

315,693.00

374,783.07

$ 988,070.00 $ 1,075,341.37

$ 241,815.00 $ 279,339.06

807,905,00

842,808.42

$ 1,049,720.00 $ 1,122,147.48

$ -61,650.00 $ -46,806.11

$ 61,650.00 $

0,00

$

0.00 $ -46,806.11

39,395.83

29,595.75

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 10,000.00

$ 32,000.00

24,000.00

$ 32,000.00 $ 34,000.00

$ 32,000.00 $ 38,887.67

$ 32,000.00 $ 38,887.67

$

0.00 $ -4,887.67

$

0.00 $ -4,887.67

7,565.61

7,565.61

FUND BALANCE JUNE 30, 1996

$ 39,395.83 $ -17,210.36

$

7,565.61 $ _ _2...,._6n_.94_

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

FLINT RIVER REGIONAL LffiRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Flint River 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 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 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 governmental 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 of the above criteria, the Flint River Regional Library is determined to be a joint venture.
The Library Board consists of six members; one member appointed by Butts County Library Board, one member appointed by Fayette County Library Board, one member appointed by Griffin-Spalding County Library Board, one member appointed by Lamar County Library Board, one member appointed by Monroe County Library Board and one member appointed by Pike County Library Board. The Board is without authority to determine the amount of its funding, except by submission of budget requests to local governmental units from which the Library receives support and to the State of Georgia for State and Federal funding. Membership in the Library and participation in library services is at the discretion of each participating governmental agency. The Board has the power to designate management, the power to retain unreserved fund balances of local funds for continued operations and is the lowest level of oversight responsibility for the Library's operations.
The Flint River Regional Library is located in Griffin, Georgia, and serves Butts, Fayette, Lamar, Monroe, Pike and Spalding Counties.
FUND ACCOUNTING
The Library uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities.
A fund is a separate accounting entity with a self-balancing set of accounts.

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FLINT RIVER REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: 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 confonn to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
The general purpose financial statements account for all State, Federal and Other funds under control of the Library, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds 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 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 and financial reporting treatment applied to a fund is detennined 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:

-7-

FLINT RIVER REGIONAL LffiRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: 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 ofthe current period. Those revenues considered susceptible to accrual are intergovernmental grants and investment income.
Expeilditures are generally recognized when the related fund liability is incurred.
RESTATEMENT OF PRIOR YEAR FUND BALANCE
In prior years, the interest revenue for the General Operating bank account was not allocated between the General Fund and the Capital Projects Fund resulting in the Capital Projects Fund - Fund Balance being understated in the amount of$9,872.58 at June 30, 1995. The fund balances at July 1, 1995 for the General Fund and the Capital Projects Fund have been restated as appropriate.
BUDGET
The Flint River 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 Georgia Department of Education, Division of Public Library Services as a part of the Library's annual application for State aid. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofdeposits (including savings and N.O.W. accounts) in authorized financial institutions. Georgia Laws authorize the Library to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.

-8-

FLINT RIVER REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

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 fmancial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate fmancial 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.
Note 2: DEPOSITS
COLLATERALIZAnON OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction of the 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 of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by tne laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
-9-

FLINT RIVER REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1996

Note 2: DEPOSITS

(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, 1996, the bank balances were $1,874,762.47. The amounts of the 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 fmancial institution, or by its trust department or agent but not in the Library's name.)

The Library's deposits are classified by risk category at June 30, 1996, as follows:

Risk Category

Bank Balance

1

$ 168,035.80

2

1,706,726.67

3

0.00

Total

$ 1.874,762.47

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.

The Library has obtained commercial insurance for risk of loss associated with torts and assets. The Library has neither significantly reduced coverage for these risks nor mcurred losses (settlements) which exceeded the Library's insurance coverage in any of the past three years.

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FLINT RIVER REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1996

Note 3: RISK MANAGEMENT

The Library has elected to self-insure for all losses related to natural disaster. In addition, the Library has elected to self-insure for errors or omissions, which includes, among other risks, risks for sexual harassment and discrimination. The Library has not experienced any losses related to these risks 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 expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. The Library has not experienced any unemployment compensation claims during the last two years.

The Library participates in the Association County Commissioners of Georgia-Self Insured Workers' Compensation Fund, a public entity risk pool organized on July 1, 1982 to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The Library pays an annual premium to the Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Fund with Safety National Casualty Corporation to provide coverage for potential losses by the Fund in excess of $450,000.00 loss per occurrence, up to $2,000,000.00.

Note 4: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the Library as of June 30, 1996, together with funding available:

Project
7262-94-SB-005 7262-94S-SB-00 1

Unearned Executed Contracts

Funding Available From State

$

378.22

673,924.24 $ 199,904.00

$ 674,302.46 $ 199,904.00

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

Note 5: 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.

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FLINT RIVER REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 6: 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 of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number of years 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 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, 1996, was $565,187.85; total payroll was $568,414.08.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Library who are covered by TRS are required by State statute to pay 5% of their gross earnings to TRS. The Library makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. At June 30, 1996, the TRS Library employer contribution rate was 11.81 %. The interest rate assumption (rate of return on investments) was 7.50%.
Total contributions made during fiscal year 1996 amounted to $95,008.02, of which $66,748.70 was ma<ie by the Library and $28,259.32 was made by employees. These contributions represented 11.81 % (Library) and 5% (employees) of covered payroll.

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FLINT RIVER REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 6: RETIREMENT PLANS

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.:concem basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among other PERS and among other employers.

Total unfunded pension benefit obligation ofTRS as of June 30, 1995, was as follows:

Total pension benefit obligation

$ 17,442,607,000.00

Net assets available for benefits, at cost

15,857,066,000.00

Unfunded pension benefit obligation

$ 1,585,541,000.00

The measurement of the total pension benefit obligation is based on an actuarial valuation as ofJune 30, 1995, Net assets available to pay pension benefits were valued as of the same date. TRS does not make separate measurements of assets and pension benefit obligation for individual employers.

Total contributions from all employers to TRS for fiscal year ended June 30, 1996, were $607,275,000.00. The Library's contribution for the year ended June 30, 1996, of $66,748.70 was actuarially determined and represented .0109% of total contributions made by all participating employers.

Ten year historical trend information is presented in the 1996 TRS Component Unit Financial Report. This information is useful in assessing TRS's accumulation of sufficient assets to pay pension benefits as they become due.

Note 7: SURETY BONDS

The Library Director, Mr. Walter H. Murphy, is bonded in the amount of $20,000.00 with the American Manufacturers Mutual Insurance Company, Long Grove, Illinois, their Bond No. 3SE-877-866-00, on which premium was paid through July 1, 1996.

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FLINT RIVER REGIONAL LIBRARY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1996

EXHIBIT -E"

ASSETS Cash and Cash Equivalents

LOTTERY PROGRAM

LIBRARY SERVICES AND
CONSTRUCTION ACT TITLE I PUBLIC
LIBRARY SERVICES

TOTALS JUNE 30,1996 JUNE 30,1995

$

0.00 $

2,677.94 $

2,677.94 $ _ _,;,,:7':,;,;56;,;;;5~.6_1

FUND EQUITY

Fund Balances

Reserved

For Continuation of Federal Programs

$

Unreserved

Undesignated

$

....;;0.;....00_

2,677.94 $ 0.00

2,677.94 $ 0.00

7,565.61 0,00

Total Fund Equity

$

0.00 $

2,677.94 $

2,677.94 $ _ _..;7.:.;,56--.5';,;;6.1.

See notes to the general purpose financial statements.

- 14-

FLINT RIVER REGIONAL LIBRARY COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND
YEAR ENDED JUNE 30,1996

EXHIBIT-P

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

LOTIERY PROGRAM

LIBRARY SERVICES AND
CONSTRUCTION ACT TITLE I PUBLIC LIBRARY
SERVICES

TOTALS YEAR ENDED
JUNE 30. 1996 JUNE 30.1995

$

10.000.00

$

$

10.000.00 $

$ 24.000.00
24,000.00 $

10,000.00 $ 24,000.00
34.000.00 $

1,100.00 32.000.00
33.100.00

$

10,000.00 $

$

0.00 $

0.00

28,887.67 $ -4.887.67 $ 7.565.61

38,887.67 $ -4,887.67 $ 7.565.61

25,534.39 7,565.61
0.00

FUND BALANCE JUNE 30

$

0.00 $

2,Sn.94 $

2,S77.94 $ _ _.7.....5.6._5.-.6.1.

See notes to the general purpose financial statements.

- 15-

FLINT RIVER REGIONAL LIBRARY COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30.1996

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets

GEORGIA STATE FINANCING

AND INVESTMENT COMMISSION

PROJECT

PROJECT

7262-94-SB-Q05 7262-94S-SB-001

TOTALS

JUNE 30,1996

JUNE 30,1995

$

142,919.51 $

1,675,498.14 $ 1,818,417.65 $ 2,136,080.64

106,032.00

$

142,919.51 $

1,675,498.14 $ 1,818,417.65 $ 2,242,112.64

LIABILITIES AND FUND EQUITY

LIABILITIES

Contracts Payable

$

Retainages Payable

Total Uabilities

$

FUND EqUITY

Fund Balances

Reserved

For State Capital Outlay Projects

$

Unreserved

Undesignated

Total Fund Equity

$

110,814.78 $ 3,000.00
113,814.78 $

295,n5.21 $
136,370.00
432,145.21 $

406,589.99 139,370.00 $
545,959.99 $

106,032.00 106,032.00

29,104.73 $ 0.00
29,104.73 $

1,243,352.93 $ 0.00
1,243,352.93 $

1,272,457.66 $ 0.00
1,272,457.66 $

2,136,080.64 0.00
2,136,080.64

Total Liabilities and Fund Equity

$

142,919.51 $

1,675,498.14 $ 1,818,417.65 $ 2,242,112.64

See notes to the general purpose financial statements.

-16 -

FLINT RIVER REGIONAL LIBRARY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30,1996

EXHIBIT W

REVENUES
State Funds Other Funds
Total Revenues
EXPENDITURES
Capital Outlay Land and Land Improvements Building and Building Improvements
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1

GEORGIA STATE FINANCING

AND INVESTMENT COMMISSION

PROJECT

PROJECT

7262-94-SB-005 7262-94S-SB-001

TOTALS YEAR ENDED JUNE 30,1996 JUNE 30,1995

$

1,825.00 $

1,799,140.00 $ 1,800,965.00 $ 1,076,746.00

3,695.29

25,060.28

28,755.57

2,304,195.79

$

5,520.29 $

1,824,200.28 $ 1,829,720.57 $ 3,380,941.79

$

17,231.31

$

460,634.08 $

2,232,709.47 $ 2,693,343.55

1,234,870.74

$

460,634.08 $

2,232,709.47 $ 2,693,343.55 $ 1,252,102.05

$

-455,113.79 $

-408,509.19 $ -863,622.98 $ 2,128,839.74

484,218.52

1,651,862.12

2,136,080.64

7,240.90

FUND BALANCE JUNE 30

$

29,104.73 $

1,243,352.93 $ 1,272,457.66 $ 2,136,080.64

See notes to the general purpose financial statements.

- 17-

FLINT RIVER REGIONAL LIBRARY SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
YEAR ENDED JUNE 30, 1996

FUNDING AGENCY PROGRAM/GRANT
Education, U. S. Department of Through Georgia Department of Education Library Services and Construction Act Title I - Public Library Services Basic Grant 1994 Carry-Over 1995 Carry-Over

CFDA NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.034 84.034 $

$ 24,000.00

7,565.61 21,322.06

Total Federal Financial Assistance

$

24,000.00 $===2:::::i8,=88=:7=.6:=7

The Library had no major programs as defined by the Single Audit Act of 1984.

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

FLINT RIVER REGIONAL LIBRARY CASH AND CASH EQUIVALENTS
JUNE 30.1996

SCHEDULE "2"

INTEREST BEARING ACCOUNTS
First National Bank of Griffin, Griffin, Georgia
Money Market Account (2.55%)
First Union National Bank of Georgia, Griffin, Georgia
Commercial Checking Accounts (Variable)
Griffin Federal Savings Bank, Griffin, Georgia
N.O.W. Account (3.00%)
OTHER
Petty Cash

$

47,485.22

1,754,811.93

1,515.58 $ 1,803,812.73

72.50

$ 1,803,885.23

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

FLINT RIVER REGIONAL LIBRARY SCHEDULE OF STATE REVENUE
YEAR ENDED JUNE 30,1996

SCHEDULE "3"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Public Libraries Salaries and Travel Library Materials Maintenance and Operations Lottery Program Technology Installation
Financing and Investment Commission, Georgia State Reimbursement on Construction Projects

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 465,492.30 121,333.00 113,733.00
$ 10,000.00

$ 465,492.30 121,333.00 113,733.00
10,000.00

_ _ _ _ $ 1,800,965.00 1,800,965.00

$ 700,558.30 $ 10,000,00 $ 1,800,965.00 $ 2,511,523.30

See notes to the general purpose financial statements,

- 20 -

FLINT RIVER REGIONAL LIBRARY SCHEDULE OF OTHER REVENUE
YEAR ENDED JUNE 30, 1996

SCHEDULE -4-

LOCAL SOURCES Boards of Education Pike County Griffin-Spalding County
City Governments Peachtree City Tyrone
County Governments Boards of Commissioners Fayette Lamar Monroe Pike Spalding
Public Libraries Barnesville-Lamar County Butts County Monroe County
OTHER SOURCES Donations Fines and Fees Interest Earned Interlibrary Loan Charges Microfilm Sales Photocopy Sales Processing Services Sale of Surplus Equipment Vending Sales Other

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

$

2,196.00

7,500.00

105,562.80 13,877.48

$

2,196.00

7,500.00

105,562.80 13,877.48

45,062.27 2,682.00
13,539.00 6,392.00
115,378.00

45,062.27 2,682.00
13,539.00 6,392.00
115,378.00

7,950.00 21,462.00
1,780.00

7,950.00 21,462.00
1,780.00

4,547.65 10,959.57
1,707.13 $ 185.85 464.65
5,019.82 2,576.00
500.00 826.10 4,614.75

28,755.57

4,547.65 10,959.57 30,462.70
185.85 464.65 5,019.82 2,576.00 500.00 826.10 4,614.75

$

374,783.07 $ 28,755.57 $ 403,538.64

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

FLINT RIVER REGIONAL LIBRARY SCHEDULE OF EXPENDITURES BY OBJECT GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30. 1996

SCHEDULE "5"

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

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

$ 568,414.08 160,745.77 $
2,149.17 40.00
19,082.03 3,975.41 9,335.84
279,339.06 47,867.49 4,521.86 1,332.20 614.75

$
685.61 8,040.06
191.00

568,414.08 161,431.38
2,149.17 8,080.06 19,082.03 3,975.41 9,526.84 279,339.06 47,867.49 4,521.86 . 1,332.20
614.75

24,729.82

29,971.00

54,700.82

Total Expenditures

$ 1,122,147.48 $

38,887.67 $ 1,161,035.15

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

FLINT RIVER REGIONAL LIBRARY SCHEDULE OF EXPENDITURES BY OBJECT
LOTTERY PROGRAM YEAR ENDED JUNE 30, 1996
EXPENDITURES Nonoperating Costs Equipment

SCHEDULE "6"
TECHNOLOGY INSTALLATION
$ ======1O~!O=O=O='O==O

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

FLINT RIVER REGIONAL LIBRARY MEMBERSHIP OF LIBRARY BOARD
YEAR ENDED JUNE 30.1996
BOARD MEMBER ADDRESS
Mr. Richard W. Watkins, Chairman (*) 169 Dempsey Avenue Jackson, Georgia 30233
Mr. Richard E. Anderson (*) P. O. Box 601 Zebulon, Georgia 30295
Mrs. Sara Goza (*) 1300 Goza Road Fayetteville, Georgia 30214
Dr. E. H. Harris (*) P. O. Box 257 Barnesville, Georgia 30204
Mr. Ed Henderson (*) 724 West Taylor Street Griffin, Georgia 30223
Mr. Robert C. Hill (*) P. O. Box 238 Bolingbroke, Georgia 31004
(*) Denotes Board Members Serving as of June 30, 1996

SCHEDULE "7"

See notes to the general purpose financial statements. - 24 -

FLINT RIVER REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 1996

SCHEDULE "8"

PERSONNEL

Barker, Brooks, Brumbalow, Dupree, Farris, Marshall, Millican, Murphy, Parham, Pryor, Rivers, Simpkins, Snell Terrell, Tingen, White, Wooten, Worley,

Lynette P. Yvonne N. J. Rochelle AnnC. Jeanne J. Vickie W. E. Evans Walter H. M. Marsha Patricia B. Michele Lee Karen Christeen Kathleen M. James D. Belinda Norris Joanne

POSITION
Data Entry Operator Data Processing Assistant Secretary to Business Office Public Services Ubrarian Head Cataloger Public Services Librarian Public Services Ubrarian Director Children's Ubrarian Secretary Library Page Public Services Librarian Head Reference Librarian Administrative Assistant/Courier Coordinator, Public Services Public Services Assistant Public Services Librarian Public Services Assistant

SALARIES

$

17,900.76

18,975.12

18,144.00 $

28,610.00

45,636.80

37,703.20

31,748.80

88,667.12

39,472.10

20,864.16

3,226.23

28,446.05

43,598.12

30,928.92

40,758.38

15,648.96

42,436.40

15,648.96

TRAVEL
35.15 9.64
36.12 1,591.53
87.43 8.45
20.00
360.85

$

568,414.08 $===2=,:::::14=9==:,1==7

See notes to the general purpose financial statements. - 25-

SECTION II COMPLIANCE

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

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta. Georgia 30334-8400
June 26, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board ofEducation
and Director and Members of the Flint River Regional Library Board
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Flint River Regional Library as of and for the year ended June 30, 1996, and have issued our report thereon dated June 26, 1997. This report was qualified for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
Compliance with laws, regulations, contracts, and grants applicable to Flint River Regional Library is the responsibility of the Library's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of the Library's compliance with certain provisions oflaws, regulations, contracts, and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that are required to be reported herein under Government Auditing Standards.

96CRL-10

This report is intended for the infonnation of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a ma~ter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:gp 96CRL-IO

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

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
June 26, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe Flint River Regional Library Board

SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REOUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Flint River Regional Library as of and for the year ended June 30, 1996, and have issued our report thereon dated June 26, 1997. This report was qualified for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

We have applied procedures to test the Flint River Regional Library's compliance with the following requirements applicable to the Federal financial assistance program, which is listed in the Schedule of Federal Financial Assistance, for the year ended June 30, 1996:

(1) Political Activity

(5) Allowable Costs/Cost Principles

(2) Civil Rights

(6) Audit Follow-Up/Resolution

(3) Cash Management

(7) Administrative Requirements

(4) Federal Financial Reports

Our procedures were limited to the applicable procedures described in the Office of Management and Budget's "Compliance Supplement for Single Audits of State and Local Governments" and other additional procedures as deemed necessary. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Flint River Regional Library's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion.

96CRL-70

Material instances ofnoncompliance consist of failures to follow the general requirements that caused us to conclude that the misstatements resulting from those failures are material to the Federal financial assistance programs. The results of our tests of compliance disclosed a material instance of noncompliance that is described in the Schedule of Findings and Improper or Questioned Costs.
We considered this material instance of noncompliance in forming our opinion on whether the Flint River Regional Library general purpose financial statements are presented fairly, in all material respects, in conformity with generally accepted accounting principles, and this report does not affect our report dated June 26, 1997, on those financial statements.
Except as described above, the results of our procedures to determine compliance indicate that, with respect to the items tested, the Flint River Regional Library, complied, in all material respects, with the requirements listed in the second paragraph of this report, and with respect to items not tested, nothing came to our attention that caused us to believe that the Library had not complied, in all material respects with those requirements. Additionally, the results of our procedures disclosed an immaterial instance of noncompliance with those requirements which is also described in the Schedule of Findings and Improper or Questioned Costs.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:gp 96CRL-70

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 26, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members of the Flint River Regional Library Board
SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REOUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Flint River Regional Library as of and for the year ended June 30, 1996, and have issued our report thereon dated June 26, 1997. This report was qualified for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
In connection with our audit of the fiscal year 1996 general purpose financial statements of the Flint River Regional Library and with our consideration of the Library's control structure used to administer Federal financial assistance programs, as required by Office of Management and Budget (OMB) Circular A-128, "Audits of State and Local Governments", we selected certain transactions applicable to the nonmajor Federal financial assistance program for the year ended June 30, 1996. As required by OMB Circular A-128, we have performed auditing procedures on the selected transactions to test compliance with the requirements goverrung:
Types of Services Allowed or Unallowed
Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Flint River Regional Library's compliance with these requirements. Accordingly, we do not express such an opinion.
With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Flint River Regional Library had not complied, in all material respects, with those requirements.
96CRL-120

This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a mat~er of public record.
Respectfully submitted,
~
Claude L. Vickers State Auditor
CLV:gp 96CRL-120

SECTION III INTERNAL CONTROL

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

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
June 26, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board ofEducation
and Director and Members ofthe Flint River Regional Library Board
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Flint River Regional Library as of and for the year ended June 30, 1996, and have issued our report thereon dated June 26, 1997. This report was qualified for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards, and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
The management ofthe Flint River Regional Library is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation ofgeneral purpose financial statements in accordance with generally accepted accounting principles. Because ofinherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.
96ICL-3

In planning and performing our audit of the general purpose financial statements of the Flint River Regional Library for the year ended June 30, 1996, we obtained an understanding ofthe internal control structure. With respect to the internal control structure, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an 0plllion.
We noted a certain matter involving the internal control structure and its operation that we consider to be a reportable condition under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements.
As described in the Schedule ofFindings and Improper or Questioned Costs, a reportable condition was noted in the following control category:
General Fixed Assets
A material weakness is a reportable condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.
Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that the reportable condition disclosed above is also considered to be a material weakness.
This condition was considered in determining the nature, timing, and extent of the procedures to be performed in our audit ofthe Flint River Regional Library's financial statements and this report does not affect our report thereon dated June 26, 1997.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,

CLV:gp 96ICL-3

Claude L. Vickers State Auditor

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

DEPARTMENT OF AUDITS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
June 26, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members of the Flint River Regional Library Board
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Flint River Regional Library as of and for the year ended June 30, 1996, and have issued our report thereon dated June 26, 1997. This report was qualified for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of Office of Management and Budget (OMB) Circular A-128, "Audits of State and Local Governments". Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
In planning and performing our audit for the year ended June 30, 1996, we considered the internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and to report on the internal control structure in accordance with OMB Circular A-128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to Federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated June 26, 1997.
The management ofthe Flint River Regional Library is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The obje~tives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are'
96ICL-13

executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that Federal financial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors, irregularities or instances of noncompliance may nevertheless occur and not be detected. Also, projection of any evaluation ofthe structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness ofthe design and operation of policies and procedures may deteriorate.

For the purposes of this report, we have classified the sigDificant internal control structure policies and procedures used in administering Federal financial assistance programs in the following control categories:

GENERAL REQUIREMENTS

SPECIFIC REQUIREMENTS

(I) Political Activity (2) Civil Rights (3) Cash Management (4) Federal Financial Reports

(1) Types of Services Allowed or Unallowed
(2) Reporting
(3) Applicable Special Tests and Provisions

(5) Allowable Costs/Cost Principles (6) Audit Follow-UplResolution

(4) Other Requirement Claims for Advances and Reimbursements

(7) Administrative Requirements

For all of the internal control structure categories listed above, we obtained an understanding of the design ofrelevant policies and procedures and whether they have been placed in operation, and we assessed control risk.

During the year ended June 30, 1996, the Flint River Regional Library had no major Federal financial assistance programs and expended all of its total Federal financial assistance under the following nonmajor Federal financial assistance program:

Library Services and Construction Act Title I - Public Library Services

We performed tests of controls, as required by OMB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with general requirements and specific requirements as described above that are applicable to the aforementioned nonmajor Federal financial assistance program. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion.

96ICL-13

Our consideration of the internal control structure policies and procedures used in administering Federal financial assistance would not necessarily disclose all matters in the internal control structure that might constitute material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a condition in which the design or operation' of one or more of the internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a Federal financial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control structure and its operation that we consider to be material weaknesses as defined above.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:gp 96ICL-13

SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS

FLINT RIVER REGIONAL LIBRARY SCHEDULE OF FINDINGS AND IMPROPER OR OUESTIONED COSTS
YEAR ENDED JUNE 30, 1996
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Wealmess Audit Control Number 7262-93-01
The audit report for the year ended June 30, 1995, noted that the management of the Flint River 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 ofa General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, 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.
CURRENT YEAR
GENERAL LEDGER Deficit Fund Balance Financial Statements Nonmaterial Noncompliance Audit Control Number 7262-96-01
At June 30, 1996, the Flint River Regional Library - General Fund had a deficit balance of $17,210.36. This deficit resulted from an audit adjustment made to correct the allocation of $37,945.66 in interest income (earned in fiscal years 1995 and 1996) between the General Fund and Capital Projects Fund. Appropriate action should be taken by the Library to eliminate this deficit.
CASH MANAGEMENT Excessive Cash Balances Federal Financial Assistance Nonmaterial Noncompliance Audit Control Number 7262-96-02
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 Requirements for Grant Funds", were made in advance of immediate cash needs, resulting in the accumulation of excessive cash balances. During fiscal year 1996, the program
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FLINT RIVER REGIONAL LIBRARY SCHEDULE OF FINDINGS AND IMPROPER OR OUESTIONED COSTS
YEAR ENDED JUNE 30, 1996
CURRENT YEAR
CASH MANAGEMENT Excessive Cash Balances Federal Financial Assistance Nonmaterial Noncompliance Audit Control Number 7262-96-02
had an average cash balance of $6,915.24 with excessive ending monthly cash balances in eight months. Procedures should be implemented to minimize the time elapsing between the transfer of funds from the Georgia Department of Education and disbursement of such funds by the Library.
AHMINISTRATIVE REQUIREMENTS Allowable Costs/Cost Principles Federal Financial Assistance Material Noncompliance . Amount: $19,499.00 Audit Control Number 7262-96-03
During the year under review, the Flint River Regional Library received a federal grant of $32,000.00 for a Computerized Learning Laboratory Project funded under the Library Services and Construction Act - Title I - Public Library Services Program (CFDA 84.034). Audit tests performed on this grant revealed $19,499.00 was expended for the purpose of replacing an existing delivery van.
Even though this expenditure was approved in advance by the Grantor (Division ofLibrary Services, Georgia Department of Education ), the expenditure does not appear to be a proper expenditure of Federal fmancial assistance funds in accordance with allowable cost criteria defined in Office of Management Budget Circular A-87, which states, in part:
"Costs must be necessary and reasonable for proper and efficient administration of the grant programs, be allocable thereto under these principles, and except as specifically provided herein, not be a general expense required to carry out the overall responsibilities of State, local or federally-recognized Indian tribal governments."
In addition, 34 CFR 770.10 requires Title I funds to be used for projects with objectives that are to plan, establish, extend or improve public library services. The use of Title I funds to replace an existing van constitutes a maintenance expenditure and does not meet the stated objectives for projects funded under Public Library Services grants.
The Division of Public Library Services ofthe Georgia Department of Technical and Adult Education should make a further determination as to the allowability of this expenditure based on grant regulations and appropriate OMB cost principles. Any portion of the cost deemed allowable should be prorated to the grant on a usage basis. The portion of this expenditure unrelated to the grant should be refunded to the Division of Public Library Services.
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FLINT RIVER REGIONAL LIBRARY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1996 CURRENT YEAR
ADMINISTRATIVE REQUIREMENTS
Allowable Costs/Cost Principles Federal Financial Assistance Material Noncompliance Amount: $19,499.00 Audit Control Number 7262-96-03 Note: Qn July 1, 1996, the Division of Public Library Services was transferred from the Georgia Department ofEducation to the Georgia Department of Technical and Adult Education.
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SECTION V PERTINENT VIEWS OF RESPONSIBLE OFFICIALS

FLINT RIVER REGIONAL LffiRARY PERTINENT VIEWS OF RESPONSffiLE OFFICIALS
YEAR ENDED JUNE 30, 1996
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 7262-93-01
It should be noted that the GENESIS accounting system provided by the GA DOE for use by regional libraries does not include a General Fixed Assets Account Group. It should also be noted that the Flint River Regional Library Board does not own any land or buildings. Equipment records are maintained on inventory cards which are audited annually by State Auditors. All books owned by the Library are accounted for in the Library's circulation control database.
GENERAL LEDGER Deficit Fund Balance Financial Statements Nonmaterial Noncompliance Audit Control Number 7262-96-01
The auditor's adjustment for FY 96 based on certificate ofjournal entries dated 6-25-97 has been made to the accounting records of the system for FY 97 to eliminate the General Fund deficit.
ADMINISTRATIVE REQUIREMENTS Allowable Costs/Cost Principles Federal Financial Assistance Material Noncompliance Amount: $19,499.00 Audit Control Number 7262-96-03
This finding should be removed. The van was not a maintenance expenditure. It was an equipment expenditure. It has been approved by The Division of Public Library Services of the Georgia Department of Technical and Adult Education. The van transports personnel from the regional headquarters to deliver, load, pickup and return weekly computer tapes that are necessary to improve system-wide computerization. It meets the stated objectives for projects funded under Public Library Services grants.
Note: The Flint River Regional Library has elected not to provide comments for inclusion in this report other than the above.