Audit report, Kinchafoonee Regional Library, Dawson, Georgia, year ended June 30, 1998

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AUDIT REPORT KINCHAFOONEE REGIONAL LffiRARY
DAWSON, GEORGIA YEAR ENDED JUNE 30, 1998
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

KINCHAFOONEE REGIONAL LIBRARY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED 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

7

ADDmONAL FINANCIAL INFORMATION

SCHEDULES

1 SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

16

SCHEDULE OF REVENUE

2

STATE

17

3

FEDERAL

18

4

LOCAL

19

5 SCHEDULE OF SALARIES AND TRAVEL

20

SECTIONll FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
July 15, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board of Technical and Adult Education
and Director and Members ofthe Kinchafoonee Regional Library Board
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE
FINANCIAL STATEMENTS AND SupPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements of the Kinchafoonee Regional Library, as of and for the year ended June 30, 1998, as listed in the table of contents. These general purpose financial statements are the responsibility of the Kinchafoonee Regional Library's management. Our responsibility is to express an opinion on these general purpose 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 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 pmpose 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 has not been determined, but is believed to be material.

98ARL-42A

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 referred to above present fairly, in all material respects, the financial position ofthe Kinchafoonee Regional Library as of June 30, 1998, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
The year 2000 supplementary information on Schedule "1" is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries ofmanagement regarding the methods ofmeasurement and presentation ofthe supplementary information. However we did not audit the information and do not express an opinion on it. In addition, we do not provide assurance that Kinchafoonee Regional Library is or will become year 2000 compliant, that the Library's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Kinchafoonee Regional Library does business are or will become year 2000 compliant.
Our audit was performed for the purpose of forming an opinion on the general purpose financial statements ofthe Kinchafoonee Regional Library taken as a whole. The accompanying financial schedules (Schedules 2 through 5), 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. Such information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in our opinion is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press ofthe State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
t.el.-J...
Russell W. Hinton State Auditor
RWH:jb 98ARL-42A

KINCHAFOONEE REGIONAL LmRARY

KINCHAFOONEE REGIONAL LIBRARY COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30,1998

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Amount to be Provided in Future Years For Payment of: Capital Lease Agreements Compensated Absences

GOVERNMENTAL FUND

SPECIAL

GENERAL

REVENUE

FUND

FUND

$ 191,559.84 $

0.00

36,964,56

2,300.12

Total Assets

$ 230,824.52 $=====0=:.0=0

Total Liabilities and Fund Equity

$ 230,824.52 $==:::;::::==0='0=0=

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

EXHIBIT "A"

TYPES CAPITAL
PROJECTS FUND

$

77,474.15

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS
(Memorandum Only)
JUNE 30,1998 JUNE 30,1997

$ 269,033.99 $ 387,120.58

36,964.56

2,400.00

2,300.12

98,400.43

$

644.56

644.56

3,353.72

20,110.31

20,110.31

18,746.03

$

77,474.15 $====2:=0,=75==:4=.8::::::7 $ 329,053.54 $ 510,020.76

$

532.50

5,029.29

$

$

5,561.79 $

$
644.56 20,110.31 20,754.87 $

12,795.65 $ 5,029.29
644.56 20,110.31
38,579.81 $

70,922.59 4,348.38 53,318.00 3,353.72 18,746.03
150,688.72

$

71,912.36

0.00

$

71,912.36

$

1,965.29

$

71,912.36

140,583.86

69,321.03 149,240.34
$ 290,473.73 $

74,631.59 142,151.30
359,332.04

$

77,474.15 $====20=,7=54=.=87= $ 329,053.54 $ 510,020.76

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KINCHAFOONEE REGIONAL LIBRARY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BAlANCES
All GOVERNMENTAl FUND TYPES YEAR ENDED JUNE 30, 1998

EXHIBIT"B"

FUND BALANCE JUNE 30

$ 218.561.37 $

0.00 $

71,912.36 $

290,473.73 $===3=59=.3=3=2;,;;;.0.4..

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

KINCHAFOONEE REGIONAL LIBRARY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE"30, 1998

EXHIBIT"C"

REVENUES
State Funds Federal Funds Local 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. 1997
Adjustments

GENERAL FUND

BUDGET

ACTUAL

$

366,927.08 $

409,001.04

187,826.24 61,754.70

182,143.94 40,679.46

$

616,508.02 $

631,824.44

$

49,368.25 $

81,660.80

63,163.40

61,842.64

70,482.65

80,415.95

342,706.10

344,875.99

63,698.33

58,358.94

2,891.64

$

589,418.73 $

630,045.96

$

27,089.29 $

1,n8.48

$

54,087.10

-54,087.15

$

-0.05

$

27,089.24 $

1,n8.48

216,782.89

216,782.89

517.70

FUND BALANCE JUNE 30. 1998

$

244,389.83 $

218,561.37

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$

6,000.00 $ 10,100.00

$

6,000.00 $ 10,100.00

$

134.00 $

1,965.29

10,100.00

10,100.00

$ 10,234.00 $ 12,065.29 $ -4,234.00 $ -1,965.29

$ -4,234.00 $ -1,965.29

6,065.29

1,965.29

$

1,831.29 $ _ _..._0..0..0.

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

KINCHAFOONEE REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Kinchafoonee Regional Library (Library) operates pursuant to Official Code of Georgia Annotated Sections 20-5-40 through 20-5-59 to provide public library services with costs shared by participating local governmental agencies and grants from the State of Georgia. With the exception of the departures from generally accepted accounting principles disclosed in these notes, the financial statements ofthe Library have been prepared in confonnity with generally accepted accounting principles as applied to governmentalcUnits and unless otherwise disclosed in these notes, the financial statements present all fund types and account groups of the Library.
The Library Board consists of 10 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 1 member 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 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 Kinchafoonee Regional Library is determined to be a joint venture.
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.
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 bythe 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:

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KJNCHAFOONEE REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 ofspecific 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 (Le., revenues and other financing sources) and decreases (Le., 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. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General ~ng-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 (Le., 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.
Expenditures are generally recognized when the related fund liability is incurred.
-8-

KINCHAFOONEE REGIONAL LffiRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES
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 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 Department of Technical and Adult Education as a part ofthe 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
COMPOSmON OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Library to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Library in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with. a maturity at purchase of one year or less are reported at amortized cost. Participating interest-earning contracts and money market investments with a maturity at purchase greater than one year and equity investments are reported at fair value. The Official Code ofGeorgia Annotated Section 36-83-4 authorizes the Library to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State ofGeorgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
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KINCHAEOONEE REGIONAL LffiRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1998

Note 1; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLES
Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed, allotted funds from participating local governments, and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
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 type 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.
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

-10 -

KINCHAFOONEE REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SlJM1\1ARY OF SIGNIFICANT ACCOUNTING POLICIES
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 confonn to the current year classifications.
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code ofGeorgia 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 ofthe public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone of or any combination ofthe 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 ofindebtedness or other direct obligations ofthe United States or ofthe State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities ofthe State of Georgia,
(5) Bonds ofany public authority created by the laws ofthe State ofGeorgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose,
(6) Industrial revenue bonds and bonds ofdevelopment authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates ofindebtedness, 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 Intennediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

- 11 -

KINCHAFOONEE REGIONAL LffiRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1998

Note 2: DEPOSITS AND INVESTMENTS

CATEGORIZATION OF DEPOSITS At June 30, 1998, the bank balances were $328,222.98. The amounts ofthe total bank balances are classified into three categories of credit risk:

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Library or by the Library's agent in the Library's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Library's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Library's name.)

The Library's deposits are classified by risk category at June 30, 1998, as follows:

Risk Category

Bank Balance

1

$ 270,406.39

2

57,816.59

3

0.00

Total

$ 328.222.9

CATEGORIZATION OF INVESTMENTS At June 30, 1998, the fair value ofthe Library's total investments was $3,340.65 consisting ofcommon stock held by the Library in the Library's name.

Note 3: RISK MANAGEMENT
o
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; 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 ofthe past three years.

The Library has elected to self-insure for a1110sses related to natural disaster. The Library has not experienced any losses related to this risk in the past three years.

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KINCHAFOONEE REGIONAL LffiRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 3: RISK MANAGEMENT

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:

1997 1998

Beginning of Year Liability

Claims and Changes in Estimates

$

0,00 $

114.00 $

$

0,00 $

0.00 $

Claims Paid

End ofYear Liability

114,00 $

0.00

0,00 $

0,00

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

Position Covered

Amount

Director Bookkeeper

$ 15,000.00 $ 15,000.00

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 qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception.

The changes in General Long-Term Debt during the fiscal year ended June 30, 1998, were as follows:

Capital Leases

Compensated Absences

Balance July 1, 1997

$ 3,353.72 $ 18,746.03

Additions Leave Earned and Utilized (Net)

1,364.28

Deductions Payments
Balance June 30, 1998

2.709.16 $===644:1::::::::=::.5~6 $ 20.110.31 .

- 13 -

KINCHAFOONEE REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1998

Note 4: GENERAL LONG-TERM DEBT

At June 30, 1998, payments due, by fiscal year which includes principal and interest for these items, are as follows:

Fiscal Year Ended June 30

Capital Leases

1999

$

673.47

Deduct: Imputed Interest

28.91

Net Present Value ofFuture Minimum Lease Payments
Note 5: CONTINGENT LIABILITIES

$,=====64=4l:::.5::6

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 6: ACCUMULATED EMPLOYEES' LEAVE

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

Note 7: 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 ofGeorgia (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 ofAudits and Accounts.

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KINCHAFOONEE REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

ruNE 30. 1998

Note 7: RETIREMENT PLANS

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Library who are covered by TRS are required by State statute to contribute 5% oftheir 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. The required employer contribution rate is 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

1998 1997 1996

100% 100% 100%

$ 37,955.85 $ 34,580.60 $ 30,789.89

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KINCHAFOONEE REGIONAL LffiRARY

SCHEDULE "1"

SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

YEAR 2000 DISCLOSURES

YEAR ENDED JUNE 30. 1998

At June 30, 1998, the Kinchafoonee Regional Library had no outstanding contractual commitments for the purpose ofmaking computer systems and other electronic equipment year 2000 compliant. The year 2000 issue is the result ofshortcomings in many electronic data processing systems and other equipment that make operations beyond year 1999 troublesome. The year 2000 issue is of primary concern for the Library's financial accounting system.. The following stages have been identified as necessary to implement a year 2000 compliant systems.
Awareness Stage - Encompasses establishing a budget and project plan for dealing with the year 2000 Issue.
Assessment Stage - The actual process ofidentifying all of its systems and individual components of the systems to check for compliance.
Remediation Stage - When changes are made to systems and equipment.
ValidationfTesting Stage - The process of ensuring that the changes made to systems and equipment will produce a year 2000 compliant system.
It will be necessary for the Library to progress through all four of these stages for each computer and/or electronic system, not already year 2000 compliant, in order to assure that these systems will not be adversely affected. As ofJune 30, 1998, the financial accounting system was determined to be at the Awareness Stage.
The Library's financial accounting software (GENESIS) and hardware (Wang VS) is owned by the State (Georgia Department ofEducation). These systems have been determined to be critical to the Library's ability to successfully conduct operations. As ofJune 30, 1998, the State had not contracted for the remediation of either the Wang VS operating system or the GENESIS accounting software. In the subsequent period, the Georgia Department of Education remediated the Wang VS operating system and the updated operating system was installed at all GENESIS sites as ofDecember 9, 1998. The Georgia Department of Education has remediated the GENESIS software and conducted tests at nine pilot sites. The remediated GENESIS software has been provided to all libraries currently utilizing the GENESIS accounting software.

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

KINCHAFOONEE REGIONAL LIBRARY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30,1998
AGENCY/FUNDING
GRANTS Technical and Adult Education, Georgia Department of Public Libraries Salaries Travel Library Materials Regular Governor's Reading Incentive Program Maintenance and Operations

SCHEDULE "2"

GOVERNMENTAL FUND TYPE GENERAL FUND

$

328,769.04

5,550.00

23,276.00 34,730.00 16,676.00

$

409,001.04

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

KINCHAFOONEE REGIONAL LIBRARY SCHEDULE OF FEDERAL REVENUE
YEAR ENDED JUNE 30, 1998
AGENCY/FUNDING GRANT Education, U, S, Department of Through Georgia Department of Technical and Adult Education Library Services and Construction Act Title I - Public Library Services

SCHEDULE "3"
GOVERNMENTAL FUND TYPE SPECIAL REVENUE FUND
$===1=0=,1=0=0,=00=

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

KINCHAFOONEE REGIONAL LIBRARY SCHEDULE OF LOCAL REVENUE YEAR ENDED JUNE 30,1998
LOCAL SOURCES Boards of Education Calhoun County Clay County Randolph County Terrell County Webster County City Governments Arlington Cuthbert Dawson Edison Fort Gaines Leary Morgan Preston County Governments Boards of Commissioners Calhoun Clay Randolph Terrell Webster

SCHEDULE "4"

GOVERNMENTAL FUND TYPE GENERAL FUND

$

6,000,00

3,194.40

5,254.08

22,000.00

4,800.00

3,000.00 20,500.00 20,430,00
3,000.00 9,601,92
600,00 550,00 1,000,00

18,000.00 19,203.72 24,725.04 17,323.78
2,961,00

$

182,143.94

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

KINCHAFOONEE REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30.1998

SCHEDULE "5"

NAME
Altman, Barbary, Baxter, Bishop, Bridges, Brown, Cooper, Copeland, Dunn, Harvey, Ingram, Jenkins, Jones, Manry, Medders, Messer, Montalvo, Powell, Ray, Reynolds, Roberts, Russell, Sealy, Smith, Wiley,

Clara C. Willie Bell Elizabeth A. PearlieA. Margaret P. Clara I. Lisa C. ClaudiaM. Jimmye Lucy Sonji A. Martha Martha R. Betty J. Helen M. MaryD. Frances P. Shurell A. Cassandra A. Joanne TeresaW. Gladys E.
Sara L.
Barbara F. Mattie Mae
Scharlotte L.

Totals per Report

TITLE CATEGORY
Clerk Custodian Clerk Clerk Clerk Clerk Clerk Librarian Clerk Bookkeeper Clerk Clerk Clerk Librarian Librarian Librarian Clerk Clerk Clerk Clerk Clerk Director Clerk Custodian Librarian

SALARIES

TRAVEL

$

6,934.51 $

602.56

1,879.75

11,034.60

1,184.53

1,024.85

9,491.46

47,680.40

3,429.90

15,891.00

137.76

288.40

3,829.03

53,606.57

48,280.40

40,532.40

885.80

2,840.23

4,132.88

528.00

144.20

48,580.40

11,536.80

118.45

34,225.20

62.40
19.40
33.00 367.05
17.44 15.00 48.00 551.00 95.00 488.00
64.97
956.93 11.25
361.75

$

348,820.08 $======23,=09=1=.1=9

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

SECTIONll FINDINGS AND QUESTIONED COSTS

KlNCHAFOONEE REGIONAL LffiRARY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1998
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: 7352-93-01
The audit report for the year ended June 30, 1997, noted that the management ofthe 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 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.