MOUNTAIN 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

6

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

SCHEDULE OF REVENUE

I

STATE

14

2

FEDERAL

15

3

LOCAL

16

4 SCHEDULE OF SALARIES AND TRAVEL

17

SECTION II FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

1USSELL W. HINTON
STATE AUDITOR (404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W. Suite 214 Atlanta, Georgia 30334-8400
August 1, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members ofthe Board of Regents of the University System of Georgia
and Director and Members of the Mountain Regional Library Board

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

Ladies and Gentlemen:

We have audited the accompanying general-purpose financial statements ofthe Mountain Regional Library, as of and for the year ended June 30, 2002, as listed in the table ofcontents. These generalpurpose financial statements are the responsibility ofthe Mountain 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perfonn 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 ofthe 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 includ.ed to confonn to generally

accepted accounting principles.

'

2002ARL-42

The aggregate effect on the general-purpose financial statements ofthis variance or omission has not been determined, but is believed to be material.
In our opinion,except for the effects on the general-plllpose 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 of the Mountain Regional Library as of June 30, 2002, and the results of its operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Mountain Regional Library taken as a whole. The accompanying financial schedules (Schedules I through 4), 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 Mountain 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, except for the effect of the matter discussed in the third paragraph, such information is fairly stated, 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 ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated 'Section 506-24.
---..Respectfully submitted,

RWH:gp 2002ARL-42

Rus ell W. Hinton Sta e Auditor

MOUNTAIN REGIONAL LIBRARY

MOUNTAIN REGIONAL LIBRARY COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 3D, 2002

ASSETS Cash and Cash Equivalents Investments Accounts Receivable Amount to be Provided in Future Years for
Compensated Absences
Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Deferred Revenue Compensated Absences
Total Liabilities FUND EQUITY
Fund Balances Unreserved Undesignated
Total Liabilities and Fund Equity

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

$

121,139.75 $

648.60

30,000.00

$

151,139.75 $ ====64====8=.6=0

$

648.60

$

648.60

$ _ _...:.;15::...;1:..!...1:...=3~9.:..:..75=-

0.00

$

151,139.75 $====64===:8=.6=.0

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

EXHIBIT "A"

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

(Memorandum Only)

JUNE 3D, 2002

JUNE 3D, 2001

$

121,788.35 $

101,701.21

30,000.00

30,000.00

250.00

$

14,551.39

14,551.39

11,856.25

$

14,551.39 $

166,339.74 $===1=4=3!:i,8=07=.,.;,46;;,

$

$

1..:...4:..:.:,5:.:5~1.:.:::.3~9

$

14,551.39 $

648.60 $ 14,551.39
15,199.99 $

13,038.65 11,856.25
24,894.90

0.00

151,139.75

118,912.56

$

14,551.39 $

166,339.74 $==~1,.;,43;:;,,8;;;0;,;,7=.4==6

-3-

MOUNTAIN REGIONAL LIBRARY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2002

EXHIBIT "B"

GENERAL FUND

SPECIAL REVENUE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

REVENUES
State Funds Federal Funds Local Funds Other Funds
Total Revenues
EXPENDITURES

$ 319,660.50

$

$ 38,840.05

314,970.56

17,199.65

$ 651,830.71 $ 38,840.05 $

319,660,50 $ 38,840,05
314,970,56 17,199.65
690,670.76 $

302,476.55 69,226.64 270,945.17 17,971.68
660,620.04

Current Public Services Technical Services Support Services Maintenance and Operation Information Technology
Total Expenditures
Excess of Revenues over (under) Expenditures

$ 235,711.72 $ 13,416.31 $

24,984.25

324,968.23

1,301.40

32,576.21

25,485.45

$ 618,240.41 $ 40,203.16 $

$ 33,590.30 $ -1,363.11 $

249,128.03 $ 24,984.25
326,269.63 32,576,21 25,485.45
658,443.57 $
32,227.19 $

300,158.10 84,318.83
300,945.52 26,291,92 574.97
712,289.34
-51,669.30

OTHER FINANCING SOURCES (USES)

Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)

$ 1,363.11 $ $ -1,363.11
$ -1,363.11 $ 1,363.11 $

1,363.11 -1,363.11
0.00

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $

32,227.19 $

0.00 $

32,227.19 $

-51,669.30

FUND BALANCE JULY 1

118,912.56

0.00

118,912.56

170,581.86

FUND BALANCE JUNE 30

$ 151,139.75 $

0.00 $

151 ,139.75 $ ===1;,;1;,;8;;,;;,9:=1=2.=56=

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

MOUNTAIN REGIONAL LIBRARY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2002

EXHIBIT"C"

GENERAL FUND

BUDGET

ACTUAL

REVENUES

State Funds Federal Funds Local Funds Other Funds
Total Revenues
EXPENDITURES

$ 319,791.10 $ 319,660.50

314,870,56 4,716.56

314,970,56 17,199.65

$ 639,378.22 $ 651,830.71

Current Public Services Technical Services Support Services Maintenance and Operation Information Technology
Total Expenditures
Excess of Revenues over (under) Expenditures

$ 220,965.28 $ 235,711.72

25,804.97

24,984.25

357,167.97

324,968.23

35,440.00

32,576.21

$ 639,378.22 $ 618,240.41

$

0.00 $ 33,590.30

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses
Total Other Financing Sources (Uses)

$ -1,363.11 $ -1,363.11

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $
FUND BALANCE JULY 1, 2001

0.00 $ 32,227.19

0.00

118,912,56

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 25,600.00 $ 38,840.05 $ 25,600.00 $ 38,840.05

$ 25,600.00 $ 13,416.31

1,301.40

25,485.45

$ 25,600.00 $ 40,203.16

$

0.00 $ -1,363.11

$

1,363.11

$

1,363.11

$

0.00 $

0.00

0.00

0.00

FUND BALANCE JUNE 30, 2002

$==~O=.O;,;;"O $ 151,139.75

$

0.00 $==~O~.O~O

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

MOUNTAIN REGIONAL LIBRARY

EXHIBIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Mountain 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 ofthe departure from generally accepted accounting principles disclosed in these notes, the financial statements of the Library have been prepared in conformity with generally accepted accounting principles as applied to governmental units and unless otherwise disclosed in these notes, the financial statements present all fund types and account groups of the Library..
The Library Board consists of 14 members; 6 members appointed by Fannin County Library Board, 4 members appointed by Towns County Library Board and 4 members appointed by Union County Library Board. The Library Board is without authority to determine the amount of its 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 Mountain Regional Library is therefore 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 ofpurchase. 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 ofassets acquired by governmental fund types.
The general-purpose financial statements account for all State, Federal, Local and Other funds under control of the Library, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
- 6-

MOUNTAIN REGIONAL LIBRARY

EXHIBIT"D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note I: 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 of specific revenue sources that are legally restricted to expenditures for specified purposes. The primary type of special revenue fund consists ofproceeds received from State and Federal sources to accomplish specific objectives and are required to be accounted for separately.

ACCOUNT GROUP

GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for compensated absences.

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 ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.

Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. 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 ofaccounting under which:

Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the 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. The Library considers receivables collected within sixty days after year-end to be available and therefore susceptible to accrual. Nonexchange transactions, in which the Library gives (or receives) value without directly receiving (or giving) equal value in exchange, include intergovernmental grants and donations. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.

Expenditures are generally recognized when the related fund liability is incurred.

-7-

MOUNTAIN REGIONAL LIBRARY

EXHIBIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUDGET
The Mountain Regional Library's budget is a complete financial plan for the Library's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Library at the aggregate level. The budget for governmental funds was prepared in accordance with generally accepted accounting principles.
The budget process begins when the Library's administration prepares a tentative aggregated budget for the Board's approval. After approval ofthis 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 Board of Regents of the University System of Georgia 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 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 authorize the Library to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Library in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both 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 of Georgia 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:
(I) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
-8-

MOUNTAIN REGIONAL LIBRARY

EXHIBIT "0"

NOTES TO THE GENERAL-PURPOSEFINANCIAL STATEMENTS

JUNE 30, 2002 '

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(3) Obligations fully insured or guaranteed by the United States government or a United

States government agency,

.

(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) Repurch~se agreements, and

(8) Obligations of other political subdivisions of the State of Georgia.

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 of interfund transactions:

Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.

Operating transfers are recorded for all interfund transactions 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.

-9-

MOUNTAIN REGIONAL LIBRARY

EXHIBIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS

COLLATERALIZAnON OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction 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. OCGA Section 45-8-11 (b) 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 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 ofthe 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 ofdevelopment 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.

CATEGORIZAnON OF DEPOSITS

At June 30, 2002, the bank balances were $174,508.07. The amounts of the total bank balances are

classified-into three categories of credit risk:

.

- 10-

MOUNTAIN REGIONAL LIBRARY

EXHIBIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS

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, 2002, as follows:

Risk Category

Bank Balance

I

$ 122,876.82

2

51,631.25

3

0.00

Total

$ 174,508.07

Note 3: RISK MANAGEMENT

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

The Library has obtained commercial insurance for risk ofloss 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 acts of God. 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. The Library has not experienced any unemployment compensation claims during the last two years.

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

Position Covered

Amount

All Employees

$ 10,000.00

- 11 -

MOUNTAIN REGIONAL LIBRARY

EXHIBIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 4: GENERAL LONG-TERM DEBT

The changes in General Long-Tenn Debt during the fiscal year ended June 30, 2002, were as follows:

Compensated Absences

Balance July 1,2001

$

0.00

Retroactive Restatement of Prior Year Balances

11,856.25

Balance July 1,2001 - Restated

$ 11,856.25

Additions Annual Leave Earned and Utilized (Net)

2,695.14

Balance June 30, 2002

$ 14,551.39

Note 5: ACCUMULATED EMPLOYEES' LEAVE

The Library's full-time employees earn annual leave according to their length ofservice ranging from 10 to 20 days per year with a maximum accumulation of30 days. ,Part-time regular employees earn annual leave on a pro-rata basis. All unused leave is paid to employees, at their current rate of pay, upon retirement or tennination of employment. See Note 1 - Compensated Absences

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.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the 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:

- 12 -

MOUNTAIN REGIONAL LIBRARY

EXHIBIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 6: RETIREMENT PLANS
Fiscal Year 2002 2001 2000

Percentage Contributed
100% 100% 100%

Required Contribution
$ 35,111.19 $ 39,947.68 $ 37,856.61

- 13 -

--_._-._--~--------===-----

MOUNTAIN REGIONAL LIBRARY SCHEDULE OF STATE REVENUE
YEAR ENDED JUNE 30, 2002

SCHEDULE "1"

AGENCY/FUNDING
GRANTS Board of Regents of the University System of Georgia Office of Public Library Services Salaries Travel Library Materials Maintenance and Operation

GOVERNMENTAL FUND TYPE GENERAL FUND

$

257,385.51

5,800.00

30,766.99

25,708.00

$

319,660.50

See notes to the general-purpose financial statements. - 14-

MOUNTAIN REGIONAL LIBRARY SCHEDULE OF FEDERAL REVENUE
YEAR ENDED JUNE 30, 2002
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 Library Program

SCHEDULE "2"
GOVERNMENTAL FUND TYPE SPECIAL REVENUE FUND
$===~38~,8;:;,;4,;,;;;0;;,;;.0~5

See notes to the general-purpose financial statements. - 15-

MOUNTAIN REGIONAL LIBRARY SCHEDULE OF LOCAL REVENUE
YEAR ENDED JUNE 30, 2002
LOCAL SOURCES Boards of Education Fannin County Towns County Union County City Governments Blue Ridge Hiawassee McCaysville Morganton Young Harris County Governments Boards of Commissioners Fannin Towns Union

SCHEDULE "3"

GOVERNMENTAL FUND TYPE GENERAL FUND

$

56,007.45

46,116.61

38,121.87

1,000.00 500.00 500.00 200.00
2,000.00

56,007.45 50,998.72 63,518.46

$

314,970.56

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

MOUNTAIN REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2002

SCHEDULE "4"

NAME
Adams, Ash, Berdux, Brendle, Burchardt, Carney, Clark, Fatora, Foster, Haymore, Howell, Keys, Keys, Lynch, Nichols, Phillips, Pittman, Seabolt, Steigerwalt, Sutphin, Tallent, Vermilyea Watkins, Weaver, Willis, Wood,

Jenny WilmaB. Janice Mary Sue
Sandra L. Michele L.
Teddy P. Elaine K. Linda M. Teresa P. Donna W. Brittany Peggy A. Joann C. Betty Jean Deborah C. Vanessa Cynthia M. Elizabeth Dorothea J. Barbara Joyce June Nannette M. Carmen Sandra D.

TITLE CATEGORY
Library Assistant Librarian Library Assistant Library Assistant Library Assistant Library Assistant Processing Clark Circulation Clerk Children's Service Coordinator Director Assistant Director Library Assistant Bookmobile Driver Library Assistant Bookmobile Assistant Branch Manager Library Assistant Library Assistant Library Assistant Librarian Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant

Totals per Report

SALARIES

$

595.20

49,311.50 $

4,044.80

12,798.02

150.68

11,122.87

16,364.00

17,670.63

13,324.81

61,465.80

55,234.24

328,13

15,624.00

8,819.63

7,745.50

16,160.00

6,636.80

676.50

4,404.38

48,917.36

14,674.00

9,139.20

465.50

14,616.00

6,688.00

316.05

TRAVEL
463.60
30.00
10.00 51.27 30.00 1,762.77 3,723.27 1,810.43
10.00 10.00
199.00
124.76
90.00
10.00 10.00 10.00

$ 397,293.60 $

8,345.10

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

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SECTION II FINDINGS AND QUESTIONED COSTS

MOUNTAIN REGIONAL LIBRARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
PRIOR YEAR/CURRENT YEAR
CASH AND CASH EQUIVALENTS Inadequate Separation of Duties Finding Control Number: 7392-93-01
The audit report for the year ended June 30, 200 I, stated that the Library did not provide for adequate separation of employee duties in the performance of accounting functions and related procedures. For the year under review, our audit noted no improvement for separation of duties in the performance of the following accounting functions and related procedures:
(l) The check signing function was not separated from the cash disbursement function. In addition, prepared checks were not reviewed by someone other than the preparer before the signature was affixed.
(2) The deposit preparation function was not separated from the cash receipting function. No one independent of the cash and financial records prepares a listing of checks to be compared to the deposit ticket or cash journal.
(3) Reconciliation of the bank account is not performed by someone independent of the general ledger function.
These conditions were a result of management's decision to limit the number ofadministrative staff made responsible for accounting functions. The Library should review the accounting procedures in place, design procedures which would enhance segregation of duties relative to the above control functions and implement those procedures to strengthen the internal control over the accounting functions.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: 7392-93-02
The audit report for the year ended June 30, 2001, noted that the management of the Mountain Regional Library had chosen not to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. In the year under review, the Library did not establish a General Fixed Assets Account Group within the formal accounting records. This condition results in the general-purpose financial statements ofthe 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.