Flint River Regional Library, Griffin, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2006

FLINT RIVER REGIONAL LIBRARY
GRIFFIN# GEORGIA REPORT ON AUDIT OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30# 2006
STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
Russell W. Hinton State Auditor

FLINT RIVER REGIONAL LIBRARY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

EXHIBITS

BASIC FINANCIAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET ASSETS

I

B

STATEMENT OF ACTIVITIES

2

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUND

3

D

RECONCILIATION OF THE GOVERNMENTAL FUND BALANCE SHEET

TO THE STATEMENT OF NET ASSETS

4

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCE

GOVERNMENTAL FUND

5

F

RECONCILIATION OF THE GOVERNMENTAL FUND STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCE TO THE STATEMENT OF ACTIVITIES

6

G

NOTES TO THE BASIC FINANCIAL STATEMENTS

7

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

I SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL

GENERALFUND

15

FLINT RIVER REGIONAL LIBRARY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

SCHEDULES

SUPPLEMENTARY INFORMATION

SCHEDULES OF REVENUE

2

STATE

16

3

FEDERAL

17

4

LOCAL

18

5 SCHEDULE OF SALARIES AND TRAVEL

19

SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
April 11, 2007

Honorable Sonny Perdue, Governor Members ofthe General Assembly Members ofthe Board of Regents of the University System of Georgia
and Director and Members of the Flint River Regional Library Board
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying financial statements ofthe governmental activities and the major fund (Exhibits A through G) of the Flint River Regional Library as of and for the year ended June 30, 2006, which collectively comprise the Library's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Flint River Regional Library's management. Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the 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 opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and the major fund of the Flint River Regional Library, as of June 30, 2006, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.

2006ARL-41

Management's Discussion and Analysis and the Schedule ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on pages i through v and page 15 are not a required part ofthe basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Flint River Regional Library's basic financial statements. The accompanying supplementary information which consist ofSchedules 2 through 5, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe basic financial statements, and in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated section 50-6-24.
Respectfully submitted,
~~~~-~
~Jsell W. Hinton, CPA, CGFM State Auditor
RWH:as 2006ARL-41

FLINT RIVER REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006
Management's discussion and analysis of the financial performance of the Flint River Regional Library (the "Library") is intended to provide readers of the Library's financial statements with an overview of the Library's financial activities for the fiscal year ending June 30, 2006. Please read it in conjunction with the Library's financial statements, which follow this section.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the Library's basic financial statements. The Library's basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. This report also contains other supplemental information in addition to the basic financial statements themselves.
Government-Wide Financial Statements and Financial Analysis
The government-wide financial statements are designed to provide readers with a broad overview of the Library's finances, in a manner similar to a private-sector business.
The statement of net assets presents information on all of the Library's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Library is improving or deteriorating. Such change may result from many factors, including those not under the Library's control, such as the facility conditions, required programs, funding reductions, and other causes.
The statement of activities presents information showing how the Library's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods.
Net assets increase when revenues exceed expenses. Increase to assets without a corresponding increase to liabilities results in increased net assets, which indicates an improved financial position. Net assets may serve over time as a useful indicator of the Library's financial position. At the close of fiscal year 2006, the Library's net assets totaled $3,036,159.
Fund Financial Statements: A fund is a grouping of related accounts that is used to maintain control over resources that have been separated for specific activities or objectives. The Library uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. All of the funds of the Library are considered governmental funds.
Governmental Funds: are used to account for essentially the same functions .reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, these fund statements are reported using the modified
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FLINT RIVER REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006

accrual basis of accounting, which measures cash and all other financial assets that can be readily converted to cash. Such information may be useful in evaluating a government's near-term financing requirements. The General Fund is the Library's primary operating fund. It accounts for all financial resources of the Library.

Notes to the Basic Financial Statements: The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements.

The perspective of the Statement of Net Assets is of the Library as a whole. Table 1 provides a summary of the Library's net assets for fiscal year 2006 compared to fiscal year 2005.

Table 1 Net Assets

Governmental Activities

Fiscal

Fiscal

Year 2006

Year 2005

Assets Cash and Cash Equivalents Capital Assets, Net

$ 879,836 2,156,388

$ 733,851 2.152,638

Total Assets

$ 3,036,224 $ 2,886,489

Liabilities Accounts Payable

$

65 $

10 949

Net Assets Invested in Capital Assets Unrestricted

$ 2,156,388 879,771

$ 2,152,638 722.902

Total Net Assets

$ 3,036,159 $ 2,875.540

The net assets of a governmental entity may serve as an indicator of the entity's financial position. The "Summary Schedule" above shows an increase in net assets for the year ending June 30, 2006.

Table 2 shows the changes in net assets for fiscal year 2006 compared to the changes for fiscal year 2005.

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FLINT RIVER REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006

Table 2 Change in Net Assets

Revenues Program Revenues: Charges for Services Operating Grants and Contributions

Governmental Activities

Fiscal

Fiscal

Year 2006

Year 2005

$

38,574 $

23,634

957,244

904,290

Total Program Revenues

$ 995,818 $ 927,924

General Revenues: Allotments from Participating Governments $ Investment Earnings Miscellaneous

604,113 $ 32,228 28,372

539,843 13,936 14,000

Total General Revenues

$ 664,713 $ 567,779

Total Revenues

$ 1,660,531 $ 1,495,703

Program Expenses Current Services Pupil Services Technical Services Support Services Maintenance and Operations Information Technology

$ 1,155,433 45,311 183,718 115,450

$ 1,124,770 43,479 161,099 135,029 3,608

Total Expenses

$ 1,499,912 $ 1,467,985

Increases in Net Assets

$ 160,612 $

27.718

Financial Analysis of the Library's Funds

State funding comprised 57.1% of the Library's total revenue for fiscal year 2006. Local Funds for Regional Services were $604,113 in fiscal year 2006. This represents only an increase of $64,270 over the previous year. Local Funds comprise 36.4% of Library revenues. Federal Revenues comprise 0.6% of Library revenues. Other revenues are those that are self-generated. Fines, fees for lost books, donations, investment earnings and other miscellaneous revenue totaled $99,174 in fiscal year 2006, as compared to $51,570 in fiscal year 2005. This is largely due to increased interest rates, as well as higher circulation of materials which resulted in a larger amount collected in fines and fees for lost books. Self-generated revenues comprised 5.9% of Library revenues in fiscal year 2006.

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FLINT RIVER REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006

The net change in fund balance for the Library's General Fund was an increase from the prior year in the amount of $67,028. This increase was due to actual expenditures being less than the approved budget while revenues remained essentially as anticipated. The Library managed to decrease personnel costs by multi-tasking staff and by leaving some vacant positions unfilled. Additional savings were accomplished by reducing general operating expenditures. The Library did not have to use fund balance to cover actual expenditures as originally budgeted.
There was an increase in the level of the State Revenue Funds from the prior year. State Funds were $904,290 in fiscal year 2005 and $947,644 in fiscal year 2006. The State Revenue Funds include state grants to be used in specific amounts for Personnel, Materials, and System Support Services (formerly Maintenance and Operations). The Library expends all State and Federal Funds by year end or other designated funding period, since these funds must be returned if not used.

Economic Factors and Next Year's Budget
The Library's financial position for next year is expected to remain stable. State Grant Funds are expected to increase due to State Legislative approvals for increases in salaries and materials. Local funding agencies are expected to match at least the level of funding from the previous year. Preliminary budget information forecasts approximately a 5% increase for fiscal year 2007. There are no currently known facts, decisions, or conditions that are expected to have a significant effect on the Library's financial position (net assets) or results of operations (revenues, expenses and other changes in net assets).

Capital Assets

At the end of 2006, the Library had $2,156,388 in capital assets net of accumulated depreciation. This included equipment and Library collections. Additions to capital assets during 2006 included additions to the Equipment and Library Collections.

Table 3 Capital Assets at June 30

Governmental Activities

Fiscal

Fiscal

Year 2006

Year 2005

Equipment Library Collections

$

65,859 $

51,859

8,184,364

8,013,013

Total Assets

$ 8,250,223 $ 8,064,872

Less: Accumulated Depreciation

6,093,835

5,912.234

Capital Assets - Net

$ 2,156.388 $ 2,152.638

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FLINT RIVER REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006 Budgetary Highlights The Library Board approves an annual budget in June for the following fiscal year that begins in July. The adopted budget included expenditures of $1,524,624 and was not significantly amended during the year. Actual expenditures for personnel services were less than budgeted due to unfilled positions throughout the year. The net change in fund balance was $156,869, which was carried forward to fiscal year 2007 for materials and operational expenditures. Contacting the Library's Financial Manager The financial statements are designed to provide a general overview of the Library's finances. Questions concerning any of the information provided should be addressed to the Executive Director, Flint River Regional Library, 800 Memorial Drive, Griffin, Georgia 30223.
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FLINT RIVER REGIONAL LIBRARY

FLINT RIVER REGIONAL LIBRARY STATEMENT OF NET ASSETS JUNE 30, 2006
ASSETS Cash and Cash Equivalents Capital Assets
Equipment Library Collections Less: Accumulated Depreciation
Total Assets
LIABILITIES Accounts Payable
NET ASSETS Invested in Capital Assets, Net of Related Debt Unrestricted
Total Net Assets
Total Liabilities and Net Assets

EXHIBIT"A"

GOVERNMENTAL ACTIVITIES

$

879,836

65,859 8,184,364 -6,093,835

$ ======3=,0=36.,2;;;;;2...,4

$

65

$

2,156,388

879 771

$

3,036,159

$ =======3=,0=36=,2=2==4

The notes to the basic financial statements are an integral part of this statement. -1-

FLINT RIVER REGIONAL LIBRARY STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2006

EXHIBIT"B"

EXPENSES

PROGRAM REVENUES

OPERATING

CHARGES FOR

GRANTS AND

SERVICES

CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS

GOVERNMENTAL ACTIVITIES

Current Services Public Services Technical Services Support Services Maintenance and Operations

$ 1,155,433 $ 45,311 183,718 115.450

38,574 $

826,187 $ 131 057

-290,672 -45,311
-183,718 15607

Total Governmental Activities

1,499.912 $

38 574 $

957 244 $ -----"'-504'-=,0-'-94-'--

General Revenues Allotments from Participating Governments Investment Earnings Miscellaneous
Total General Revenues

$

604,113

32,228

28372

s _ _ _.....;::6~64.:.:.,.71""'3~

Change in Net Assets

$

160,619

Net Assets - Beginning of Year

2.875.540

Net Assets - End of Year

$ ===-=-=3.,..0,..36.,...,15.,.9=

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

FLINT RIVER REGIONAL LIBRARY BALANCE SHEET
GOVERNMENTAL FUND JUNE 30, 2006
ASSETS Cash and Cash Equivalents
LIABILITIES AND FUND BALANCE LIABILITIES
Accounts Payable FUND BALANCE
Unreserved Undesignated
Total Liabilities and Fund Balance

EXHIBIT"C"
GENERAL FUND
$==8=7=9=,8=36=

$

65

879 771 $ ==8=7=9=,8=36=

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

FLINT RIVER REGIONAL LIBRARY RECONCILIATION OF THE GOVERNMENTAL FUND BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30, 2006

EXHIBIT"D"

Total Fund Balance - Governmental Fund (Exhibit "C")
Amounts reported for Governmental Activities in the Statement of Net Assets are different because:
Capital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of:
Equipment Library Collections Accumulated Depreciation
Total Capital Assets

$

879,771

$

65,859

8,184,384

-6,093,835

2,156,388

Net Assets of Governmental Activities (Exhibit "A")

$ 3,036,159

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

FLINT RIVER REGIONAL LIBRARY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
GOVERNMENTAL FUND YEAR ENDED JUNE 30, 2006

EXHIBIT"E"

REVENUES
Local Funds State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Public Services Technical Services Support Services Maintenance and Operations
Total Expenditures
Net Change in Fund Balance
Fund Balance - Beginning
Fund Balance - Ending

GENERAL FUND

$

604,113

947,644

9,600

38,574

32,228

28,372

$ 1,660,531

$ 1,159,183 45,311 183,718 115,450

$ 1,503,662

$

156,869

722,902

$ =====8=7=9=7=71=

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

FLINT RIVER REGIONAL LIBRARY RECONCILIATION OF THE GOVERNMENTAL FUND STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE TO THE STATEMENT OF ACTIVITIES JUNE 30, 2006

EXHIBIT"F"

Total Net Change in Fund Balance - Governmental Fund (Exhibit "E")

Amounts reported for Governmental Activities in the Statement of Activities are different because:

Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:

Capital Outlay

$

Depreciation Expense

Excess of Depreciation Expense over Capital Outlay

$
324,599 -320,849

156,869 3750

Change in Net Assets of Governmental Activities (Exhibit "B")

$ ===16=0=,6===19=

The notes to the basic financial statements are an integral part of this statement. -6-

FLINT RIVER REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "G"

Note 1: DESCRIPTION OF LIBRARY AND REPORTING ENTITY
REPORTING ENTITY
The Flint River Regional Library (Library) operates pursuant to Official Code ofGeorgia 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.
The Library Board is comprised ofsix members which are also trustees ofthe member library which appointed them. The Library Board membership consists ofone member appointed from the Butts County Library Board, one member appointed from the Fayette County Library Board, one member appointed from the Griffin-Spalding County Library Board, one member appointed from the Lamar County Library Board, one member appointed from the Monroe County Library Board, and one member appointed from the Pike County Library Board. The Library Board is without authority to determine the amount ofits funding, except by submission ofbudget requests to local governmental units from which the Library receives support and to the State ofGeorgia for State and Federal flow through funding. Membership in the Library and participation in library services is at the discretion of each participating governmental agency. The Library Board has the power to designate management, the power to retain unreserved fund balances of local and other funds for continued operations and is the lowest level of oversight responsibility for the Library's operations. The Flint River Regional Library is therefore determined to be a joint venture.
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The Library's basic financial statements are collectively comprised of the Library-wide financial statements, fund financial statements and notes to the basic financial statements of the Flint River Regional Library.
Library-wide Statements: The Statement ofNet Assets and the Statement ofActivities display information about the financial activities ofthe overall Library. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through intergovernmental revenues and other nonexchange transactions.
The Statement ofActivities presents a comparison between direct expenses and program revenues for each function of the Library's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the Library related to the administration and support ofthe Library's programs, such as office and maintenance personnel and accounting) are not allocated to programs.

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FLINT RIVER REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT"G"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Program revenues include (a) charges paid by the recipients ofgoods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues are presented as general revenues.
Fund Financial Statements: The fund financial statements provide information about the Library's funds. Eliminations have been made to minimize the double counting of internal activities. The emphasis of fund financial statements is on major governmental funds.
The Library reports the following major governmental fund:
General Fund is the Library's primary operating fund. It accounts for all financial resources of the Library, except those resources required to be accounted for in another fund.
BASIS OF ACCOUNTING
The basis ofaccounting determines when transactions are reported on the financial statements. The Library-wide governmental financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the Library gives (or receives) value without directly receiving (or giving) equal value in exchange, include grants and donations. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
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.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis ofaccounting. Under this method, revenues are recognized when measurable and available. The Library considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Interest is considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred. Capital asset acquisitions are reported as expenditures in governmental funds.
The Library funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the Library's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
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FLINT RIVER REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT"G"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the Library to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.

CAPITAL ASSETS

Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time ofpurchase. On the Library-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value ofassets or materially extend the useful lives ofthe assets is not capitalized. Depreciation is computed using the straight-line method.

Capitalization thresholds and estimated useful lives of capital assets reported in the Library-wide statements are as follows:

Capitalization Policy

Estimated Useful Life

Equipment Library Collections

$ All if collection exceeds$

5,000 100,000

7 to 10 years 10 years

Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives.

Note 3: DEPOSITS

COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate ofthe 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 ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13 .1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance.

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FLINT RIVER REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT"G"

Note 3: DEPOSITS
Acceptable security for deposits consists of any one 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 the laws of the 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 ofthe 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 or 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, 2006, the bank balances were $987,792. The amounts of the total bank balances are classified into four categories of custodial credit risk:
Category 1 - Cash that is insured (e.g., Federal Deposit 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 - Cash collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Library's name.
Category 4 - Uncollateralized.
The Library's deposits are classified by custodial credit risk category at June 30, 2006, as follows:

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FLINT RIVER REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT"G"

Note 3: DEPOSITS

Custodial Credit Risk Category

Bank Balance

1

$ 100,000

2

887,792

3

0

4

0

Total Note 4: CAPITAL ASSETS

$====9"'=87-,7-=9==2

The following is a summary of changes in the Capital Assets during the fiscal year:

Governmental Activities Capital Assets Being Depreciated
Equipment Library Collections
Less Accumulated Depreciation for: Equipment Library Collections
Governmental Activity Capital Assets - Net

Balances July 1, 2005

Increases

Balances Decreases June 30, 2006

$

51,859 $

8,013,013

14,000 310,599 $

$

65,859

139,248

8,184,364

50,616 5,861,618
$ 2,152.638 $

2,643 318.206
3.750 $

139,248

53,259 6,040.576

0 $ 2,156.388

Current year depreciation expense by function is as follows:

Public Services

Note 5: RISK MANAGEMENT

The Library is exposed to various risks ofloss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation.

Spalding County Government provides insurance coverage for the risk ofloss associated with assets for the Library operations within their county.

The Library has elected to self-insure for all losses related to acts of God. The Library has not experienced any losses related to this risk in the past three years.

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FLINT RIVER REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT"G"

Note 5: RISK MANAGEMENT

The Library is self-insured with regard to unemployment compensation claims. The Library accounts for claims within the General Fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated. The Library has not experienced any losses related to these risks in the past three years.

The Library participates in the Association County Commissioners of Georgia - Interlocal Risk Management Agency, a public entity risk pool organized on October 1, 1987 to provide coverage for member property, automobile, general liability, law enforcement liability, public officials' liability, crime and boiler and machinery exposures for its member organizations. The Library pays an annual premium to the Agency for its property, automobile, general liability, public official's liability, crime and boiler and machinery liability insurance coverage. Additional insurance coverage is provided through an agreement by the Agency with United States Fidelity and Guaranty Company to provide coverage for potential losses by the Agency in excess of $450,000 loss per occurrence, up to $2,000,000.

The Library participates in the Association County Commissioners ofGeorgia-Selflnsured 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 $600,000 loss per occurrence, up to $2,000,000.

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

Position Covered

Amount

All Employees

$

50,000

Note 6: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all librarians and clerical personnel employed by regional and county libraries are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

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FLINT RIVER REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT"G"

Note 6: RETIREMENT PLANS

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Library who are covered by TRS are required by State statute to contribute 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. The required employer contribution rate is 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2006 2005 2004

100% 100% 100%

$

66,459

$

65,905

$

66,474

Note 7: AFFILIATED LIBRARIES DISCLOSURE

The Barnesville-Lamar County Library, Fayette County Public Library, J. Joel Edwards Public Library, Jackson-Butts County Public Library, Monroe County Library, Peachtree City Library and Tyrone Public Library are legally separate, tax exempt organizations who participate in shared activities with the Flint River Regional Library. These affiliated libraries do not meet the criteria for reporting as either a component unit or related entity of the Flint River Regional Library.

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FLINT RIVER REGIONAL LIBRARY GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2006

SCHEDULE "1"

REVENUES
Local Funds State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Public Services Technical Services Support Services Maintenance and Operations
Total Expenditures
Net Change in Fund Balance
Fund Balance - Beginning

NONAPPROPRIATED BUDGETS

ORIGINAL

FINAL

ACTUAL AMOUNTS

$

620,169 $

620,169 $

604,113

947,644

947,644

947,644

9,600

9,600

9,600

27,583

27,583

38,574

32,228

32,228

32,228

23,307

23,307

28,372

$

1,660,531 $

1,660,531 $

1,660,531

$

1,178,996 $

1,178,996 $

1,159,183

45,310

45,310

45,311

183,718

183,718

183,718

116,600

116,600

115,450

$

1,524,624 $

1,524,624 $

1,503,662

$

135,907 $

135,907 $

156,869

132,922

132,922

722,902

Fund Balance - Ending

$

268,829 $ .....,_-=87;.;;9.i.,7...,71=

Notes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual
The accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.

See notes to the basic financial statements.

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FLINT RIVER REGIONAL LIBRARY SCHEDULE OF STATE REVENUE
YEAR ENDED JUNE 30, 2006
AGENCY/FUNDING GRANTS Board of Regents of the University System of Georgia Office of Public Library Services Salaries Library Materials Maintenance and Operations

SCHEDULE "2"

GOVERNMENTAL FUND TYPE GENERAL FUND

$

722,749

93,838

131,057

$

947 644

See notes to the basic financial statements.

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FLINT RIVER REGIONAL LIBRARY SCHEDULE OF FEDERAL REVENUE
YEAR ENDED JUNE 30, 2006
AGENCY/FUNDING GRANT Museum and Library Services, Institute of Through Board of Regents of the University System of Georgia Library Services and Technology Act State Vacation Reading Program

SCHEDULE "3"
GOVERNMENTAL FUND TYPE GENERAL FUND
$====9=6=0=0

See notes to the basic financial statements.

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FLINT RIVER REGIONAL LIBRARY SCHEDULE OF LOCAL REVENUE
YEAR ENDED JUNE 30, 2006
LOCAL SOURCES City Governments Barnesville Peachtree City Tyrone County Boards of Education Griffin-Spalding County Pike County County Governments Boards of Commissioners Butts Fayette Monroe Pike Spalding Public Libraries Lamar County Monroe County Pike County

SCHEDULE "4"

GOVERNMENTAL FUND TYPE GENERAL FUND

$

12,065

108,875

27,100

5,000 2,866

27,474 170,809 27,402
11,276 199,249
8,450 2,737
810

$ ====s...o...4..,1=1=3

See notes to the basic financial statements.

-18 -

NAME
Corley, Linda A. Goodman, Lynette Harrison, Jennifer Kimbrel, Adam S. Marshall, Natalie Marshall, Vicki W. Millican, Earle Evans Murphy, Walter H. Parham, M. Marsha Snell, Christeen M. Tingen, James D. Trautwein, Patricia W. Turner, Ann Upole, John D. White, Belinda A. Williams, Daniel C.
Totals per Report

FLINT RIVER REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2006

SCHEDULE "5"

TITLE CATEGORY
Head of Acquisitions Technical Services Assistant Library Page Library Page Public Services Librarian Technical Services Librarian Public Services Librarian Director Children's Librarian Branch Manager Coordinator, Public Services Library Page Public Services Librarian Library Page Public Services Assistant Public Services Librarian

SALARIES

TRAVEL

$

47,721 $

27,066

4,318

2,146

41,597

61,356

55,656

127,973

62,679

63,285

63,285

30,906

57,326

2,369

23,049

57,326

75
4,135 297 40

$

See notes to the basic financial statements.

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SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

FLINT RIVER REGIONAL LIBRARY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2006

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
'
FINDING CONTROL NUMBER AND STATUS

FS-7262-05-01

Previously Reported Corrective Action Implemented

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

No matters were reported.