Audit report, Kinchafoonee Regional Library, Dawson, Georgia, year ended June 30, 1996

G.C\ A<600
~ R\
R'-\~
\<,':)3 \ctQS-C10
AUDIT REPORT KINCHAFOONEE REGIONAL LIBRARY
DAWSON, GEORGIA YEAR ENDED JUNE 30, 1996

KINCHAFOONEE REGIONAL LffiRARY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHffiITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

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

16

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

17

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

18

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

19

SCHEDULES

1 CASH AND CASH EQUIVALENTS

20

2 ACCOUNTS RECEIVABLE

21

SCHEDULE OF REVENUE

3

STATE

22

4

FEDERAL

23

5

OTHER

24

SCHEDULE OF EXPENDITURES BY OBJECT

6

GENERAL AND SPECIAL REVENUE FUNDS

25

7

LOTTERY PROGRAMS

26

8 MEMBERSHIP AND TRAVEL OF LIBRARY BOARD

27

9 SCHEDULE OF SALARIES AND TRAVEL

28

KINCHAFOONEE REGIONAL LIBRARY - TABLE OF CONTENTS -
SECTIONll FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
SECTION ill PERTINENT VIEWS OF RESPONSIBLE OFFICIALS PERTINENT VIEWS OF RESPONSIBLE OFFICIALS

SECTION I FINANCIAL

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

DEPARTl\fENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
January 28, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board ofEducation
and Director and Members of the Kinchafoonee Regional Library Board
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the general purpose financial statements (Exhibits A through D) of the Kinchafoonee Regional Library, as ofand 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general purpose financial statements, the Library's financial statements have been prepared using a certain accounting practice and policy which, in our opinion, varies in some respects from generally accepted accounting principles. This variance is described as follows:
* The general purpose financial statements of the Library did not contain a General Fixed Assets
Account Group to account for property, equipment and inexhaustible collections and books owned by the Library which should be included to conform to generally accepted accounting principles.
The aggregate effects on the general purpose financial statements of this omission have not been determined, but are believed to be material.

96ARL-42

In our opinion, except for the effects on the general purpose financial statements of the matter referred to in the third paragraph, the general purpose financial statements present fairly, in all material respects, the financial position of the Kinchafoonee 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.
Our audit was conducted for the purpose offorming an opinion on the general purpose financial statements of the Kinchafoonee Regional Library taken as a whole. The combining statements (Exhibits E through H) and the financial schedules (Schedules 1 through 9), 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 Kinchafoonee 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.
CLV:gp 96ARL-42

KINCHAFOONEE REGIONAL LIBRARY - 1-

K1NCHAfOQNEE REGIONAL LIBRARY COMBINED BALANCE SHEET
All FUND TYPES AND ACCOUNT GROUp
JUNE 30, 1996

EXHIBIT "A"

cash and Cash Equivalents
Accounts Receivable
Amount to be Provided In Future Years
For Payment of: capital Lease Agreements Compensated Absences

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL REVENUE PROJECTS

FUND

FUND

FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

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

$ 189,885,61 $ 1,799.90 $ 287,573,81

$ 479,259.32 $ 351,520,16

2,702.49

288,000,00

290.702,49

12,130.05

$

6,449.50

6,449.50

9,291.98

18,787,68

18,787,68

17,477.80

Total Assets

$ 192,588,10 $ 1,799,90 $ 575,573,81 $

25,237,18 $ 795,198,99 $ 390,419,99

LlABIL!T!ES AND FUND EaUITY

LIABIL!T!ES

Accounts Payable Contracts Payable Retainages Payable Deferred Revenue Capital Lease Agreements Compensated Absences

$ 13,100,78 $

1,799.90 $

213.36 69.800.42
9,651,30

$

Total Liabilities

$ 13,100,78 $ 1,799,90 $ 79,665,08 $

FUNDECUITY

Fund Balances Reserved For State Capital OuUay Projects Unreserved Designated for Affiliated Ubrary Accounts Undesignated

$ 66,898,61 112,588,71 $

$ 495,908.73

0,00

0,00

Total Fund Equity

$ 179,487,32 $

0,00 $ 495,908,73

$
6,449.50 18,787,68

15,114.04 $ 69.800,42 9,651.30
6,449,50 18,787,68

82,597.23 5,608,15
630,40 9,291.98 17,477,80

25,237.18 $ 119,802,94 $ 115,605.56

$ 495,908.73 $ 108,328.75

66,898.61 112,588,71

68,850,65 97,635.03

$ 675,396,05 $ 274,814,43

TotalLiabilitiesandFundEquity $ 192,588,10 $ 1,799,90 $ 575,573.81 $

25,237.18 $ 795,198,99 $ 390,419,99

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

K1NCHAFOQNEE REGIONAL LIBRARY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUNP BALANCES
Al..L GOVERNMENTAl.. FUND TYPES
YEAR ENDED JUNE 30 1996

EXHIBIT "a-

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENPITURES
Current Program Services Technical Services Circulation Administration Maintenance and Operations
Capital ouUay Debt Service
Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES <USES)
Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
ADJUSTMENTS
Asset Transfer To Lee County Public LIbrary System (See Note 1)

GENERAL FUND

SPECIAL REVENUE
FUND

CAPITAL PROJECTS
FUND

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

$ 305,440.90 $ 187,762.32
$ 493,203.22 $

10,629.00 $ 12,000.00
22,629.00 $

288,000.00 $ 304,363.07

604.069.90 $ 12,000.00
492,125.39

592,363,07 $ 1,108,195.29 $

504,737.88 14.000.00
324,749,69 .
843,487.57

$

45,994.53 $

54.400.82

61,01429

277,480,55

33,038.09

2,842.48 713,n

$ 475,484,48 $

$

17,718,74 $

22.575.33 53.67 $
22,629,00 $ 0.00 $

$
54.79 182.736.43
182,791.22 $ 409,571.85 $

68,569.86 $ 54,400.82 61,014.29 277.534.22 33,092.88 182,736.43
2,842.48 713.72
680,904.70 $
427,290.59 $

137,131.38 113.373.84 102,111.11 310,320.78
38.855.57 281,613.39
2.609.91 946,29
986,962,27
143,474.70

$

21,455.87

$

21,455,87

$

39.174.61 $

166,485.68

$

21,455.87

$ -21,455.87

-21,455.87

$ -21,455.87 $

0.00

0.00 $ 0.00

388,115.98 $ 108,328.75

427,290.59 $ 274,814.43

143,474.70 418,289.13

-26,172,97

536,00

-26,708.97

FUND BALANCE JUNE 30

$ 179,487.32 $

0.00 $ 495,908.73 $ 675,396,05 $ 274,814.43

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

6~~
Y6 '-\

KINCHAFOONEE 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 Technical Services Circulation Administration Maintenance and Operations
Debt Service
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Other Sources Other Uses
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1,1995
Adjustments

GENERAL FUND

BUDGET

ACTUAL

$ 291,140.47 $ 195,371.89
$ 486,512.36 $

305,440.90 187,762.32 493,203.22

$ 51,517.68 $ 45,994.53

56,666.35

54,400.82

65,386.60

61,014.29

260,442.59

2n,480.55

27,996.85

33,038.09

3,556.20

$ 462,010.07 $ 475,484.48

$ 24,502.29 $ 17,718.74

$ 51,333.25 $ -51,333.25

$

0.00 $

21,455.87 21,455.87

$ 24,502.29 $ 166,485.68 -26,624.67

39,174.61 166,485.68 -26,172.97

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$

630.40$ 10,629.00

12,000.00

12,000.00

$ 12,630.40 $ 22,629.00

$ 12,630.40 $ 22,575.33 9,998.60
53.67

$ 22,629.00 $ 22,629.00

$ -9,998.60 $

0.00

$ -9,998.60 $

0.00

630.70

0.00

FUND BALANCE JUNE 30, 1996

$ 164,363.30 $ 179,487.32

$ -9,367.90 $_==-.......0.....0..0=

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

KINCHAFOONEE REGIONAL LffiRARY

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Kinchafoonee Regional Library operates pursuant to Official Code of Georgia Annotated Sections 20-540 through 20-5-59 to provide public library services with costs shared by participating local governmental agencies and grants from the State of Georgia. With the exception ofthe departure from generally accepted accounting principles disclosed in these notes, the financial statements ofthe 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 ofthe 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 Kinchafoonee Regional Library is determined to be a joint venture.
The Library Board consists of 11 members; 2 members appointed from the Calhoun County Library Board, 2 members appointed from the Clay County Library Board, 2 members appointed from the Randolph County Library Board, 3 members appointed from the Terrell County Library Board and 2 members appointed from the Webster County Library Board. The 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 of Georgia for State and Federal funding. Membership in the Library and participation in library services is at the discretion of each participating governmental agency. The Board has the power to designate management, the power to retain unreserved fund balances oflocal funds for continued operations and is the lowest level of oversight responsibility for the Library's operations.
The Kinchafoonee Regional Library is located in Dawson, Georgia, and serves Calhoun, Clay, Randolph, Terrell and Webster Counties.
Effective July 1, 1995, the Kinchafoonee Regional Library no longer serves Lee County. Pursuant to the Official Code of Georgia Annotated Section 20-5-51, the Georgia Department of Education approved the creation of the Lee County Public Library System. Accordingly, the Lee County Library is reflected as a separate reporting entity for fiscal year ended June 30, 1996, and is not included in this report.
FUND ACCOUNTING
The Library uses funds and an account group 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.
- 6-

KINCHAFOONEE REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUM:MARY OF SIGNIFICANT ACCOUNTING POLICIES
A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets, which includes the Library's inexhaustible collections and books, are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Library. To conform to generally accepted accounting principles, a General Fixed 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 ofthe Library, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - used to account for all or most of the Library's general activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the Library except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a Library.
SPECIAL REVENUE FUND - the fund used to account for the proceeds 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 ofmajor capital facilities.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - used to account for material compensated absences and capital lease obligations not appropriately accounted for and recorded in other fund types.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities are generally included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
- 7-

KINCHAFOONEE REGIONAL LIBRARY

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1996

Note 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Those revenues considered susceptible to accrual are intergovernmental grants and investment income.
Expenditures are generally recognized when the related fund liability is incurred.
BUDGET
The Kinchafoonee 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 ofbudget 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 funding approval is received from all local funding agencies, the Board makes revisions as necessary and adopts the budget. The budget is then submitted to the Georgia Department of Education, Division ofPublic Library Services as a part of the Library's annual application for State aid. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofdeposits (including certificates of deposit, 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.
RECEIVABLES
Receivables consist of grant reimbursements due from a State grantor for expenditures made but not reimbursed, allotted funds from participating local governments, and other receivables disclosed from
- 8-

KINCHAFOONEE REGIONAL LIBRARY

EXlllBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
infonnation available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
COMPENSATED ABSENCES
Compensated absences represent obligations of the Library relating to employees' rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount is deemed immaterial to the general purpose financial statements.
INTERFUND TRANSACTIONS
The Library has the following types ofinterfund transactions:
Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
Residual equity transfers are recorded for nonrecurring or nonroutine permanent transfers ofequity.
Operating transfers are recorded for all interfund transactions other than residual equity transfers and . reimbursements.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles, nor is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Certain reclassifications have been made to the comparative data to conform to the current year classifications.
Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent of the public funds being secured after the deduction of the amount of deposit insurance. OCGA Section 45-8-11 provides an officer
- 9-

KINCHAFOONEE REGIONAL LffiRARY

EXIDBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 2: DEPOSITS
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,
the (2) Insurance on accounts provided by Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates ofindebtedness or other direct obligations ofthe United States or ofthe State of Georgia,
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations ofthe counties or municipalities of the State of Georgia,
(5) Bonds ofany public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations ofa 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 $509,960.24. 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 coilateralized with securities held by the pledging financial institution's trust department or agent in the Library's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Library's name.)

- 10 -

KINCHAFOONEE REGIONAL LffiRARY

EXHIBIT "0"

NOTES,TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1996

Note 2: DEPOSITS

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

Risk CategOIy

Bank Balance

1

$ 300,470.32

2

209,489.92

3

0.00

Total

$ 509,960.24

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, assets, errors or omissions and job related illness or injuries to employees. The Library has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Library's insurance coverage in any of the past three years.

The Library has elected to self-insure for all losses related to natural disasters. The Library has not experienced any losses 'related to this risk 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.

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

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

1995 1996

$

0.00 $

0.00 $

0.00 $

0.00

$

0.00 $

2,826.00 $

2,826.00 $

0.00

- 11 -

KINCHAFOONEE REGIONAL LffiRARY

EXIllBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1996

Note 4: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Kinchafoonee Regional Library has entered into various lease agreements as lessee for copiers. These
lease agreements qualifyas capital leases for accounting purposes and, therefore, have been recorded at the
present value ofthe future minimum lease payments as ofthe date of their inception.

The changes in General Long-Term Debt during the fiscal year ended June 30, 1996, were as follows:

Capital Leases

Compensated Absences

Balance July 1, 1995
Retroactive Restatement ofPrior Year Balances

$ 9,291.98 $ 21,795.10 f -4.317.30

Balance July 1, 1995 - Restated

$ 9,291.98 $ 17,477.80

Additions Leave Earned and Utilized (Net)

1,309.88

Deductions Payments

2.842.48

Balance June 30, 1996

$ 6 449.50 $ 18,787.68

At June 30, 1996, payments due, by fiscal year which includes principal and interest for these items, are as

follows:

.

Fiscal Year Ended June 30

Capital Leases

1997 1998 1999

$ 3,556.20 2,891.64 673.47

Total Principal and Interest

$ 7,121.31

Deduct: Imputed Interest

671.81

Net Present Value of Future Minimum Lease Payments

$ 6449.50

- 12 -

KlNCHAFOONEE REGIONAL LffiRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1996

Note 5: 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

Unearned Executed Contracts

Funding Available From State

7352-95S-SB-00I

$ 797,233.98 $ 672,00000

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

Note 6: CONTINGENT LIABILITIES

Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Library believes that such disallowances, if any, will be immaterial to its overall financial position.

Note 7: ACCUMULATED EMPLOYEES' LEAVB

FuIl-time employees may earn up to thirteen and one-third hours of personal leave each month depending on length of service. Personal leave can be carried over from year to year up to the amount earned in one year ofservice. Upon termination ofemployment, employees wil1 be paid at their current rate of pay for all unused personal leave up to the maximum accumulated. See Note 1 - Compensated Absences

Note 8: 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 ofservice 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.

- 13 -

KINCHAFOONEE REGIONAL LIBRARY

EXIDBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1996

Note 8: RETIREMENT PLANS

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 ofdisability or death.

Members become fully vested after ten years of service. Ifa 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 $260,711.34; total

payroll was $283,452.57.

.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Library who are covered by TRS are required by State statute to pay 5% of their gross earnings to TRS. The Library makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. At June 30, 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 $43,825.55, of which $30,789.89 was made by the Library and $13,035.66 was made by employees. These contributions represented 11.81% (Library) and 5% (employees) of covered payroll.

TRS FUNDING STATUS AND PROGRESS The amount of the total pension benefit obligation is based on a standardized measurement established by Statement NO.5 ofthe Governmental Accounting Standards Board (GASB) that, with some exceptions, must be used by a PERS. The standardized measurement is the actuarial present value of credited projected benefits. This valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date, and is adjusted for the effects of projected salary increases. A standardized measure of the pension benefit obligation was adopted by the GASB to enable readers of PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among other PERS and among other employers.

- 14 -

KINCHAFOONEE REGIONAL LIBRARY

EXHIBIT liD"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1996

Note 8: RETIREMENT PLANS

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 ofthe total pension benefit obligation is based on an actuarial valuation as of June 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$30,789.89 was actuarially determined and represented. 0051 % 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 9: SURETY BONDS

The employees ofthe Kinchafoonee Regional Library are bonded under a Public Employees Blanket Bond in the amount of$15,000.00 with the United States Fidelity and Guaranty Company, Baltimore, Maryland, their Bond No. 02-0060-11028-92-1, on which premium is paid through July 1, 1997.

- 15 -

K1NCHAFOONEE REGIONAL LIBRARY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30,1996

EXHIBIT-E-

ASSETS Cash and Cash Equivalents

LOTTERY PROGRAMS

LIBRARY SERVICES AND
CONSTRUCTION ACT TITLE I PUBLIC
LIBRARY SERVICES

TOTALS JUNE 30,1996 JUNE 30,1995

$

0,00 $

1,799.90 $

1,799.90 $ _ _.3.,.:,;,94.-0.-..94.

LIABILITIES AND FUND EQUITY

LIABILITIES

Accounts Payable Deferred Revenue

Total Liabilities

FUND EqUITY

Fund Balances

Unreserved

Undesignated

$

Total Liabilities and Fund Equity

$

$ $
0.00 0.00 $

1,799.90 $ 1,799.90 $

1,799.90 $ 1,799.90 $

3,310.54 630.40
3,940,94

0.00

0.00

0.00

1,799.90 $

1,799.90 $

3,-.94..0...9...4..

See notes to the general purpose financial statements.

- 16-

K1NCHAFOONEE 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 Program Services Technical Services Administration Maintenance and Operations
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1

LOTIERY PROGRAMS

LIBRARY SERVICES AND
CONSTRUCTION ACT TITLE I PUBLIC
LIBRARY SERVICES

TOTALS YEAR ENDED
JUNE 30,1996 JUNE 30, 1995

$

10,629.00

$

$

10,629.00 $

$ 12,000.00
12,000.00 $

10,629,00 $ 12,000.00
22,629,00 $

47,729,71 14,000,00
61,729.71

$

10,629.00 $

$

10,629.00 $

$

0.00 $

0.00

11,946.33 $ 53.67
12,000.00 $ 0.00 $ 0.00

22,575,33 $ 53.67
22,629,00 $ 0.00 $ 0.00

19,263.30 41,979.57
17.24 469,60
61,729.71
0.00
0.00

FUND BALANCE JUNE 30

$

0.00 $

0.00 $

0.00 $

0,;,;;.00,;.

See notes to the general purpose financial statements,

-17-

KINCHAFOONEE REGIONAL LIBRARY COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 1996

EXHIBIT -G"

Cash and Cash Equivalents Accounts Receivable

GEORGIA STATE FINANCING

AND INVESTMENT COMMISSION

PROJECT

PROJECT

PROJECT

7352-92-88-012 735295-88-001 735295S-88-005

TOTALS JUNE 30,1996 JUNE 30, 1995

$

0,00 $

220,367.17 $

6.7,206,64 $

287,573.81 $

1n,802,54

288,000,00

288,000,00

$

0,00 $

508.367,17 $

67,206,64 $

575,573,81 $

1n.802.54

LIABILITIES AND FUND EQUITY

LIABILITIES

Accounts Payable Contracts Payable Retainages Payable

Total Liabilities

FUND EgUITY

Fund Balances

Reserved

For State Capital Outlay Projects

Unreserved

Undesignated

$

Total Fund Equity

$

$

213,36

62,786.12 $

9,651,30

$

72.650,78 $

$ 7,014,30
7,014,30 $

213,36 $ 69,800.42 9.651.30
79.665,08 $

63,865.64 5,608.15
69,473,79

$ 0.00 0,00 $

435,716.39 $ 0,00
435,716,39 $

60,192.34 $ 0,00
60,192,34 $

495,908.73 $ 0.00
495,908.73 $

108,328.75 0,00
108,328.75

Total Liabilities and Fund Equity

$

0,00 $

508.367,17 $

67.206.64 $

575,573,81 $

1n,802.54

See notes to the general purpose financial statements.

-18 -

K1NCHAFOONEE REGIONAL LIBRARY COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITA!. PROJECTS FUNP YEAR ENPEP JUNE 30 1996

EXHIBIT'1i"

FUND BALANCE JUNE 30

$

0.00 $

435,716.39 $ _ _.;;60~!1=9;.;,2.;;;;34;;,$ 495.908.73 $

108,328.75

See notes to the general purpose financial statements.

-19-

KINCHAFOONEE REGIONAL LIBRARY CASH AND CASH EQUIVALENTS JUNE 30, 1996
INTEREST BEARING ACCOUNTS Bank of Dawson, Dawson, Georgia Certificates of Deposit No. 52655 (5.25%) No. 52656 (5.15%) N.O.W. Accounts (3.66%) Bank of Edison, Edison, Georgia Commercial Interest Checking (3.25%) Bank of Terrell, Dawson, Georgia N.O.W. Account (3.30%) Citizens Bank of Americus, Americus, Georgia Passbook Savings Account (2.50%) First State Bank and Trust Company, Albany, Georgia Commercial Savings Account (2.60%) N.O.W. Accounts (2.50%) Money Market Account (2.80%) First State Bank of Randolph County, Cuthbert, Georgia Certificate of Deposit No. 13728 (6.10%) N.O.W. Account (2.94%)
OTHER Petty Cash
See notes to the general purpose financial statements. - 20 -

SCHEDULE "1"
$ 28,359.93 2,763.98
263,990.04
3,464.66 45,287.13 1,81724 2,889.37 57,192.53 3,467.80
2,500.00 67,206.64 $ 478,939.32
320.00 $ 479,259.32

KINCHAFOONEE REGIONAL LIBRARY ACCOUNTS RECEIVABLE
JUNE 30, 1996

SCHEDULE "2"

Georgia State Financing and Investment Commission Reimbursement on Construction Projects
Local Support Arlington, City of Clay County Board of Commissioners
Various Sources Interest Earned

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

$

288,000.00 $

288,000.00

$

250.00

1,600.31

250.00 1,600.31

852.18

852.18

$

2,702.49 $

288,000.00 $ ======2.9..0.=,7=0=2=.4=9

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

KINCHAFOONEE REGIONAL LIBRARY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 1996

SCHEDULE "3"

AGENCYIFUNDING
GRANTS Education, Georgia Department of Public Ubraries Salaries and Travel Ubrary Materials Maintenance and Operations Lottery Programs Distant Learning Technology Installation
Financing and Investment Commission, Georgia State Reimbursement on Construction Projects

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 266,424.90 22,808.00 16,208.00
$

630.40 9,998.60

$ 266,424.90 22,808.00 16,208.00
630.40 9,998.60

_ _ _ _ _ $ 288,000.00

288,000.00

$ 305,440.90 $

10,629.00 $ 288,000.00 $ 604,069.90

See notes to the general purpose financial statements.

- 22 -

KINCHAFOONEE REGIONAL LIBRARY SCHEDULE OF FEDERAL REVENUE
YEAR ENDED JUNE 30. 1996
AGENCY/FUNDING GRANT Education, U. S. Department of Through Georgia Department of Education Ubrary Services and Construction Act Title I - Public Ubrary Services

SCHEDULE "4"
SPECIAL REVENUE
FUND
$ 12,000.00

See notes to the general purpose financial statements.

- 23-

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

SCHEDULE -5-

LOCAL SOURCES Boards of Education Calhoun County Clay County Randolph County Terrell County Webster County City Governments Arlington Cuthbert Dawson Edison Fort Gaines Morgan Preston County Governments Boards of Commissioners Calhoun Clay Randolph Terrell Webster
OTHER SOURCES Donations Fines and Fees Interest Earned Lost and Damaged Books Sales and Services Photocopy Sales Miscellaneous Other

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

$

6,000.00

3,194.40

6,200.00

17,000.00

5,450.16

3,000.00 15,000.00 15,430.00
3,000.00 9,601.92
500.00 1,000.00

$

6,000.00

3,194.40

6,200,00

17,000.00

5,450.16

3,000.00 15,000,00 15,430.00
3,000.00 9,601.92
500.00 1,000.00

18,000.00 19,203.72 19,575.03
15,429.96 $
2,961.00

300,374.85

18,000.00 19,203.72 19,575.03 315,804.81
2,961.00

12,698,23 4,076.52 6,644,18 57,84
3,403,24 336.12

3,985.25 2.97

12,698.23 4,076.52
10,629,43 57.84
3,403,24 336.12 2.97

$

187,762.32 $ 304,363.07 $ 492,125,39

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

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

SCHEDULE "6"

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

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

$ 283,452.57

$ 283,452.57

81,741.94

81,741.94

2,263.64

2,263.64

30.00 $

53.67

83.67

305.28

305.28

16,813.48

16,813.48

8,199.12

630.40

8,829.52

45,804.60

11,946.33

57,750.93

16,847.46

16,847.46

12,942.04

12,942.04

2,278.87

2,278.87

267.53

I

267.53

3,556.20 981.75

9,998.60

3,556.20 10,980.35

Total Expenditures

$ 475,484.48 $

22,629.00 $ 498,113.48

~ee notes to the general purpose financial statements. - 25 -

KINCHAFOONEE REGIONAL LIBRARY SCHEDULE OF EXPENDITURES BY OBJECT
LOTTERY PROGRAMS YEAR ENDED JUNE 30. 1996

SCHEDULE "7"

EXPENDITURES
Operating Costs Supplies
Nonoperating Costs Equipment

DISTANT LEARNING

TECHNOLOGY INSTALLATION

TOTAL

$

630.40

$

630.40

$

9,998.60

9,998,60

Total Expenditures

$

630.40 $

9,998.60 $ =====10:=,6=:2:=9::,0=0

See notes to the general purpose financial statements. - 26 -

KINCHAFOONEE REGIONAL LIBRARY MEMBERSHIP AND TRAVEL OF LIBRARY BOARD
YEAR ENDED JUNE 30. 1996
BOARD MEMBER ADDRESS
Mr. H. P. Smith, Chairman (*) P. O. Box 510 Dawson, Georgia 31742
Mr. Frank Drapalik, Vice-Chairman (*) 557 Frances Drive Dawson, Georgia 31742
Mrs. Edna Gay (*) Route 1, Box 447 Fort Gaines, Georgia 31751
Mrs. Myrna Goodwin (*) Route 2, Box 121 Weston, Georgia 31832
Mrs. Kathy Hicks (*) 1159 Lee Street Dawson, Georgia 31742
Mrs. Anne Moshell (*) 1005 College Street Cuthbert, Georgia 31740
Mrs. Laura Robinett (*) Shellman, Georgia 31786
Mr. Calvin Schramm (*) P. O. Box 68 Edison, Georgia 31746
Mrs. Clare Sharpe (*) P. O. Box 27 . Edison, Georgia 31746
Mrs. Priscilla Todd (*) P. O. Box 145 Fort Gaines, Georgia 31751

(*) Denotes Board Members Serving as of June 3D, 1996 Note: As of June 3D, 1996, one seat was vacant on the Board.

See notes to the general purpose financial statements.

- 27 -

SCHEDULE "8"

$

77.00

41.50

30.50 156.28

$

305.28

KINCHAFOONEE REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30. 1996

SCHEDULE -9-

PERSONNEL

Altman, Bishop, Bridges, Brown, Burnett, Cates, Childress, Cooper, Copeland, Gilbert, Harvey, Jenkins, Jones, Jones, Manry, Medders, Messer, Richardson, Roberts, Russell, Sealy, Smith, Smith, Thornton, Wiley,

Clara C. Pearlie A. Margaret P.
Clara I.
Donna S. Kaye G. Patricia M. LisaC. Claudia M. Jossie T. SonjiA. Martha R. Barbara A. Betty Helen M. MaryD. Frances P. Romaine Gladys E.
Sara L.
Barbara F. EllaM. Mattie Mae Lois Scharlotte L.

POSITION
Clerk Clerk Clerk Clerk Clerk Clerk Clerk Clerk Librarian Custodian Bookkeeper Clerk Clerk Clerk Librarian Librarian Librarian Clerk Clerk Director Clerk Custodian Custodian Clerk Librarian

SALARIES

TRAVEL

$

6,129.45

5,296.25

888.75

3,631.02

234.00

3,155.00

3,143.25

8,793.75

42,436.40 $

280.50

14,560.00

165.75

908.00

270.00

43,036.40

43,036.40

33,618.40

4,897.65

285.00

43,336.40

9,652.54

425.00

420.72

2,380.44

12,471.50

481.50 153.75
348.83 123.50 359.02
701.74 16.80
78.50

$

283,452.57 $===2=,2=:6=3=.6=4

See notes to the general purpose financial statements. - 28-

SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS

KINCHAFOONEE REGIONAL LffiRARY 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 Audit Control Number 7352-93-01
The audit report for the year ended June 30, 1995, noted that the management of the Kinchafoonee Regional Library chose 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 financial statements of the Library being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Library to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings, equipment and inexhaustible collections and books owned by the Library and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
ACCOUNTING CONTROLS (OVERALL) Inadequate Separation ofDuties Audit Control Number 7352-95-01
The audit report for the year ended June 30, 1995, stated that the Library did not provide for adequate separation ofemployee duties in the performance ofaccounting functions and related procedures. For the year under review, our audit noted no improvement regarding adequate separation of employee duties. This deficiency was a result ofmanagement's decision to limit the number of administrative staffmade responsible for accounting functions. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree ofinternal control with existing staff.

SECTIONTII PERTINENT VIEWS OF RESPONSIBLE OFFICIALS

KINCHAFOONEE REGIONAL LIBRARY PERTINENT VIEWS OF RESPONSIBLE OFFICIALS
YEAR ENDED JUNE 30. 1996
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Audit Control Number 7352-93-01
We concur with this recommendation, but due to current staffing limitations and budgetary considerations
prohibiting the hiring ofadditional staff: the Board/Director has decided not to pursue the recording ofgeneral
fixed assets on the financial statements.
ACCOUNTING CONTROLS (OVERALL) Inadequate Separation ofDuties Audit Control Number 7352-95-01
We concur with this finding; however, due to current staffing limitations and budgetary restraints, the hiring ofadditional staffat present is not feasible. The Board/Director has decided not to pursue the separation of duties within the current financial environment.