Audit report, Northeast Georgia Regional Library, Clarkesville, Georgia, year ended June 30, 1996

GA A?;OO
. RI
R4b N5 " I Q 9 5 - c('{,
AUDIT REPORT NORTHEAST GEORGIA REGIONAL LIBRARY
CLARKESVILLE, GEORGIA YEAR ENDED JUNE 30, 1996
- - - _.._ - -
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

NORTHEAST GEORGIA REGIONAL LffiRARY - 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

3

C

STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL AND SPECIAL REVENUE FUNDS

4

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

5

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

14

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

15

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

16

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

17

SCHEDULES

1 CASH AND CASH EQUNALENTS

18

2 ACCOUNTS RECEIVABLE

19

SCHEDULE OF REVENUE

3

STATE

20

4

FEDERAL

21

5

OTHER

22

SCHEDULE OF EXPENDITURES BY OBJECT

6

GENERAL AND SPECIAL REVENUE FUNDS

23

7

LOTTERY PROGRAM

24

NORTHEAST GEORGIA REGIONAL LIBRARY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

8 MEMBERSHIP OF LIBRARY BOARD

25

9 SCHEDULE OF SALARIES AND TRAVEL

26

SECTIONll FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS

SECTIONllI PERTINENT VIEWS OF RESPONSIBLE OFFICIALS PERTINENT VIEWS OF RESPONSIBLE OFFICIALS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
April 18, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe Northeast Georgia 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 Northeast Georgia 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 variance or 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 ofthe Northeast Georgia Regional Library as ofJune 30, 1996, and the results ofits 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 ofthe Northeast Georgia 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 Northeast Georgia Regional Library. 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 ofthis 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,

CLV:dt 96ARL-42

Claude L. Vickers State Auditor

NORTHEAST GEORGIA REGIONAL LIBRARY
- 1-

NORTHEAST GEORGIA REGIONAL LIBRARY COMBINED BALANCE SHEET
r'lL FUNP 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 Compensated Absences

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

$ 51,321.18 $

1,558.64 $ 474.91321

97.02

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

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

$ 527,793.03 $

96,178,30

97.02

$

19.467.34

19,467.34

18.123,67

Total Assets

$ 51.41820 $

1,558.64 $ 474,91321 $

19,467,34' $ 547,357,39 $ 114,301,97

LlABlLmES AND FUND EqUITY

LlABILmES

Accounts Payable

$

Contracts Payable

Retainages Payable

Compensated Absences

Total Liabilities

$

FUND EqUITY

Fund Balances

Reserved

For Continuation of Federal Program

For State Capital Outlay Projects

Unreserved

Undesignated

$

Total Fund Equity

$

1,52927
1,529.27
$ 49,888,93 49,888,93 $

$ 87,781,96 41,259.07 $
$ 129,041.03 $

1,558.64
$ 345,8n.18

0,00

0.00

1,558.64 $ 345,8n,18

Total Liabilities and Fund Equity $ 51,418,20 $

1,558.64 $ 474,913.21 $

$
19,467.34 19,467,34 $

1.52927 $ 87,781.96 41,259,07 19,467,34
150,037.64 $

3,222,66
18,123.67 21,346.33

$

1,558.64

345,8n.18 $

49,888.93

$ 397,319.75 $

42,855.95 50,099.69 92,955,64

19,467,34 $ 547,357,39 $ 114,301,97

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

NORTHEAST GEORGIA REGIONAL LIBRARY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
. ALL GOVERNMENTAL FUND TYPES YEAR ENDEP JUNE 30,1996

EXHIBIT-B-

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Program Services Technical Services CirCUlation Administration Maintenance and Operations
Capital Outlay
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1

GENERAL FUND

SPECIAL REVENUE
FUND

CAPITAL PROJECTS
FUND

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

$ 340,197.90 $ 124.02
115,896.98
$ 456,218,90 $

10,000,00 $ 17,000.00

354,000,00 $ 404,388,94

704,197.90 $ 17,124.02
520,285,92

27,000,00 $ 758,388,94 $ 1,241,607.84 $

324,624.88 21,240.97
179,875.02
525,740.87

$ 183,303,67 $ 54,129.24 18,783.25 162,014.06 20,750.48
$ 438,980,70 $
$ 17,238,20 $
32,650.73

25,441,36

$

$ 472,821,67

25,441,36 $ 472,821.67 $

1,558,64 $ 285,567.27 $

0.00

60,304.91

208,745,03 $ 54,129.24 18,783,25 162,014,06 20,750.48 472,821.67
937,243.73 $
304,364,11 $
92,955,64

179,811.63 69,034.05 24,235.54 147,112,16 11,510,98 36,747.97
468,452,33
57,288,54
35,667.10

FUND BALANCE JUNE 30

$ 49,888,93 $

1,558,64 $ 345,872.18 $ 397,319,75 $

92,955.64

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

NORTHEAST GEORGIA 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
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Other Sources
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1. 1995

GENERAL FUND

BUDGET

ACTUAL

$ 340,197.84 $ 100,229,00
$ 440,426.84 $

340,197.90 124.02
115,896,98
456,218,90

$ 181 ,982.37 $ 54,130.34 20,960,00
165,917.38 18,625.00

183,303.67 54,129.24 18,783.25 162,014.06 20,750.48

$ 441,615.09 $ 438,980.70

$ -1,188.25 $ 17,238.20

12,740.00

$ 11,551,75 $ 17,238,20

32,650.73

32,650.73

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 10,000.00 $ 10,000,00

17,000.00

17,000,00

$ 27,000.00 $ 27,000,00

$ 17,000.00 $ 25,441.36 10,000.00

$ 27,000.00 $ 25,441,36

$

0,00 $

1,558.64

$

0.00 $

1,558.64

0.00

0.00

FUND BALANCE JUNE 30,1996

$ 44,202.48 $ 49,888.93

$ ===0=.00= $ =====1,==558====,64=

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

NORTHEAST GEORGIA REGIONAL LffiRARY

EXIDBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note"1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Northeast Georgia Regional Library operates pursuant to Official Code of Georgia Annotated Sections 20-5-40 through 20-5-59 to provide public library services with costs shared by participating local governmental agencies and grants from the State of Georgia. With the exception of the departure from generally accepted accounting principles disclosed in these notes, the financial statements of the Library have been prepared in conformity with generally accepted accounting principles as applied to governmental units and unless otherwise disclosed in these notes, the financial statements present all fund types and an account group of the Library. The Governmental Accounting Standards Board (GASB) is the accepted standardsetting body for establishing governmental accounting and financial reporting principles.
The more significant ofthe 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 Northeast Georgia Regional Library is determined to be a joint venture.
The Library Board consists ofsixteen members; four members appointed by Habersham County Library Board, four members appointed by Rabun County Library Board, four members appointed by Stephens County LibraryBoard and four members appointed by White County Library Board. The Board is without authority to determine the amount of its funding, except by submission of budget requests to local governmental units from which the Library receives support and to the State of Georgia for State and Federal funding. Membership in the Library and participation in library services is at the discretion of each participating governmental agency. The Board has the power to designate management, the power to retain unreserved fund balances oflocal funds for continued operations and is the lowest level of oversight responsibility for the Library's operations.
The Northeast Georgia Regional Library is located in Clarkesville, Georgia, and serves Habersham, Rabun, Stephens and White Counties.
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.

- 5-

NORTHEAST GEORGIA REGIONAL LffiRARY

EXIllBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General Fixed Assets, which includes the Library's inexhaustible collections and books, are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Library. To confonn to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
The general purpose financial statements account for all State, Federal and Other funds under control 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.
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.
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-Tenn Debt Account Group.
- 6-

NORTHEAST GEORGIA REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1996

Note"1: SUM:MAR.Y OF SIGNIFICANT ACCOUNTING POLICIES
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 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.
BUDGET
The Northeast Georgia 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 Georgia Department of Education, Division ofPublic Library Services 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
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits (including certificates of deposit 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. 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.

- 7-

NORTHEAST GEORGIA REGIONAL LffiRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SlTh1MARY OF SIGNIFICANT ACCOUNTING POLICIES
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 ofthis obligation as this amount is deemed immaterial to the general purpose financial statements.
INTERFUND TRANSACTIONS
The Library has the following type of interfund transactions:
Reimbursements of expenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose 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 ofthis data.
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 ofthe face value of such surety bond
and the market value of securities pledged shall be equal to not less than 11 percent of the public funds being secured after the deduction of the amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,

- 8-

NORTHEAST GEORGIA REGIONAL LffiRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1996

Note"2: DEPOSITS

(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the 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 of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use ofthe honds for this purpose,

(6) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State of Georgia, and

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation ofthe 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 $561,180.07. The amounts of the total bank balances are classified into three categories of credit risk:

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities . held by the Library or by the Library's agent in the Library's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Library's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging 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, 1996, as follows:

Risk Category

Bank Balance

1

$ 239,032.74

2

322,147.33

3

0.00

Total

$ 561.180.07

- 9-

NORTHEAST GEORGIA REGIONAL LffiRARY

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1996

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 ofloss associated with torts, assets, job related illness or injuries to employees and natural disaster. 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 errors or omissions, which includes, among other risks, risks for sexual harassment and discrimination. The Library has not experienced any losses related to these risks in the past three years.

The Library is self-insured with regard to unemployment compensation claims. The Library accounts for
claims within the General Fund with expenditure and liability being reported when it is probable that a loss has
occurred, and the amount ofthat 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

$

0.00 $

20.00 $

20.00 $

0.00

1996

$

0.00 $

0.00 $

0.00 $

0.00

Note 4: GENERAL LONG-TERM DEBT

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

Compensated Absences

Balance July 1, 1995

$ 18,123.67

Additions Leave Earned and Utilized (Net)

1.343.67

Balance June 30, 1996

$ 19467.34

- 10 -

NORTHEAST GEORGIA REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1996

Note"5: SIGNIFICANT CO:M:MITMENTS

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

6682-95S-SB-006

$ 522.559.59 $ 826,000.00

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

The Library's personnel earn up to twenty days of annual leave each year depending on the years of service with a maximum accumulation offorty-five days. Employees are paid for unused accumulated annual leave up to the maximum accumulation upon retirement or termination of employment. See Note 1 - Compensated Absences

Nme8: RETIREMENTPLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION All full-time librarians and clerical personnel employed by regional and county libraries are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer public employee retirement system (PERS).

TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. A member is eligible for service retirement after 30 years of service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number ofyears 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.

- 11 -

NORTHEAST GEORGIA REGIONAL LmRARY

EXHIBIT liD"

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 of disability or death.
Members become fully vested after ten years of service. If a member teiminates 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 $249,895.80; total payroll was $257,959.80.
TRS CONTRmUTIONS 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 $42,007.54, of which $29,512.74 was made by the Library and $12,494.80 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.

- 12 -

NORTHEAST GEORGIA REGIONAL LffiRARY

EXHIBIT "D"

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 $29,512.74 was actuarially determined and represented .0048% 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 Library Director, Mr. G. Emerson Murphy, is bonded in the amount of $10,000.00 with the Western Surety Company, Sioux Falls, South Dakota, their Bond No. 18231663, on which premium is paid through June 30, 1997.

- 13 -

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

EXHIBITE"

ASSETS Cash and Cash Equivalents
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Program Unreserved Undesignated

LOTTERY PROGRAM

LIBRARY SERVICES AND
CONSTRUCTION ACT TITLE I PUBLIC LIBRARY
SERVICES

TOTALS JUNE 30,1996 JUNE 30,1995

$

0,00 $

1,5.5.8..,64_. $.. 1,558.64 $ 1OO

.;;;O,;,;;'OO~

$

$

....;;O,;.;;;,OO~

1,558.64 $ 0.00

1,558.64 0.00 $

....;;O,;.;;;.OO~

Total Fund Equity

$

0.00 $

1,558.64 $

1,558.64 $

..0...0..0.

See notes to the general purpose financial statements.

-14 -

NORTHEAST GEORGIA 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
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1

LOTTERY PROGRAM

LIBRARY SERVICES AND
CONSTRUCTION ACT TITLE I PUBLIC
LIBRARY SERVICES

TOTALS YEAR ENDED
JUNE 30, 1996 JUNE 30, 1995

$ , 10,000.00 $

$

10,000.00 $

$ 17,000.00
17,000.00 $

10,000.00 17,000.00 $
27,000.00 $

21,218.47 21,218.47

$

10,000.00 $

$

10,000.00 $

$

0.00 $

0.00

15,441.36 $
15,441.36 $ 1,558.64 $
0.00

25,441.36 $
25,441.36 $ 1,558.64 $
0.00

4,218.47 17,000.00 21,218.47
0.00 0.00

FUND BALANCE JUNE 30

$

0.00 $

1,558.64 $

1,558.64 $

0..0..0..

See notes to the general purpose financial statements.

- 15-

Cash and Cash Equivalents

NORTHEAST GEORGIA REGIONAL LIBRARY COMBINING BALANCE SHEET CAPITAL pROJECTS FUND JUNE 30 1996

EXHIBIT"G"

REGULAR

GEORGIA STATE FINANCING

AND INVESTMENT COMMISSION

PROJECT

PROJECT

6682-95S-S8-006

668296S-88-003

$

0.00 $

422,147.33 $

TOTALS JUNE 30,1996 JUNE 30,1995
474,913.21 $ _ _.;;60.:.1,.304:;,;;,;,;;;.9;,;.1

LIABILITIES AND FUND EQUITY

L1ABILIT!ES

Contracts PlIyabie

$

Retainages Payable

Total liabilities

$

FUNPEQUJIY

Fund Balances

Reserved

For State Capital OUtlay Projects

Unreserved

Undesignated

$

Total Fund Equity

$

0.00 $ 0.00 $
$ 0.00 0.00 $

87,781.96 $ 41,259.07 129,041.03 $
293,106.30 $ 0.00
293,106.30 $

0.00 $ 0.00 $

87,781.96 41,259.07
129,041.03

52,765.88 $ 0.00
52,765.88 $

345.872.18 $ 0.00
345,872.18 $

42,855.95 17,448.96 60,304.91

Total liabilities and Fund Equity $

0.00 $

422,147.33 $

52,765.88 $

474,913.21 $

6.0.,.3.0...4...9...' .

See notes to the general purpose financial statements.

16 -

tjORTHEAST GEORGIA REGIONAL UBBARY COMBltjltjG STATEMEt:fT Of REVENUES, EXPEtjDlTURES AND CHANGES IN fUND BALAtjCES
CAPITAL pROJECTS fUtjD yEAR ENDED JUNE 30. 1996

EXHIBIT "Ii"

fUND BALANCE JUNE 30

$

0,00 $

293,106.30 $

52,765,88 $

345,872.18 $ _-==60=.,304==-=,9=..1

See notes to the general purpose financial statements,

-17 -

NORTHEAST GEORGIA REGIONAL LIBRARY CASH AND CASH EQUIVALENTS JUNE 30. 1996

SCHEDULE "1"

INTEREST BEARING ACCOUNTS
Community Bank and Trust, Cornelia, Georgia
N.O.W. Account (3.00%)
Rabun County Bank, Clayton, Georgia
Certificates of Deposit No. 852538014 (5.00%) No. 852538022 (4.00%)
N.O.W. Account (2.90%)
Regions Bank, Cornelia, Georgia
N.O.W. Account (Variable)
OTHER
Petty Cash

$ 422,147.33
10,458.98 15,147.95 27,158.95
52,n9.82 $ 527,693.03
100.00
$ 527,793.03

See notes to the general purpose financial statements.

- 18 -

NORTHEAST GEORGIA REGIONAL LIBRARY ACCOUNTS RECEIVABLE JUNE 30, 1996
Education, Georgia Department of LSCA- Title III Interlibrary Cooperation and Resource Sharing

SCHEDULE "2"
GOVERNMENTAL FUND TYPE GENERAL FUND
$===~9=7=,O~2

See notes to the general purpose financial statements.

- 19 -

NORTHEAST GEORGIA 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 Program
Technology Installation
Georgia State Financing and Investment Commission Reimbursement on Construction Projects

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 243,171.90 51.313.00 45,713.00
$

10,000.00

$ 243,171.90 51,313.00 45,713.00
10,000.00

- - - - - $ 354,000.00

354,000.00

$ 340,197.90 $

10,000.00 $ 354,000.00 $ 704,197.90

See notes to the general purpose financial statements.

- 20 -

NORTHEAST GEORGIA REGIONAL LIBRARY SCHEDULE OF FEDERAL REVENUE YEAR ENDED JUNE 30, 1996

SCHEDULE "4"

AGENCYIFUNDING
SUB-GRANTS Education, U. S. Department of Through Georgia Department of Education Library Services and Construction Act Title I - Public Library Services Title III - Interlibrary Cooperation and Resource Sharing

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 17,000.00 $ 17,000.00

$

1=2;..;..4.=02:::;.

124,02

$

124.02 $ 17,000.00 $ 17,124.02

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

NORTHEAST GEORGIA REGIONAL LIBRARY SCHEDULE OF OTHER REVENUE . YEAR ENDED JUNE 30,1996

SCHEDULE "5"

LOCAL SOURCES Boards of Education Habersham County Stephens County White County City Government Clarkesville County Government Board of Commissioners Habersham Public Ubrary Rabun County
OTHER SOURCES Book Sales Donations Fines and Fees Interest Earned Lost and Damaged Books Photocopy Sales Other

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

$

4,500.00

4,500.00

2,400.00

7,000.00

$

4,500.00

4,500.00

2,400.00

7,000.00

81,829.00 $ 345,000.00

2,400.00

49,088.00

426,829.00 51,488.00

1,309.05 3,175.61 3,611.26 1,991.66
166.14 1,455.70 1,558.56

357.00 9,943.94

1,309.05 3,532.61 3,611.26 11,935.60
166.14 1,455.70 1,558.56

$

115,896.98 $ 404,388.94 $ 520,285.92

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

NORTHEAST GEORGIA 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 Property Services Supplies Library Books and Materials Utilities Communications and Insurance Dues and Fees Other Expenditures
Nonoperating Costs Equipment

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

$ 257;959.80
78,632.21 4,006.92 342.58
11,542.20 5,470.19
55,790.09 $
9,046.05 11,903.32
1,580.00 2,707.34

$
15,441.36

257,959.80 78,632.21 4,006.92 342.58 11,542.20 5,470.19 71,231.45 9,046.05 11,903.32 1,580.00 2,707.34

10,000.00

10,000.00

Total Expenditures

$ 438,980.70 $

25,441.36 $ 464,422.06

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

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

SCHEDULE '7"
TECHNOLOGY INSTALLATION $ ===1=0&,0=:00:=,0==0

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

BOARD MEMBER ADDRESS
Ms. Elena Shirley, Chairman (*) Route 2, Box 2341 Clayton, Georgia 30525
r) Mr. Edward Ariail
P. O. Box 154 Clarkesville, Georgia 30523
Mr. Don Bell (*) Route 1 Tiger, Georgia 30576
Ms. Sue Blalock (*) P. O. Box 597 Cleveland, Georgia 30528
Mr. Thad Bynum (*) P. O. Box 1853 Clayton, Georgia 30525
Ms. Helen DeLaotche (*) Route 3, Box 332 Toccoa, Georgia 30577
Ms. Mary Garrison (*) P. O. Box 229 Cornelia, Georgia 30531
Mr. Carey Highsmith (*) Route 7, Box 7013 Cleveland, Georgia 30528
Ms. Betty Lawson (*) Route 5, Box 68 Toccoa, Georgia 30577
Ms. Rowena Lovell (*) P. O. Box 805 Clarkesville, Georgia 30523
Ms. Katheryne Lunsford (*) P. O. Box 518 Clarkesville, Georgia 30523
Ms. Loris Mann (*) P. O. Box 91 Helen, Georgia 30545

NORTHEAST GEORGIA REGIONAL LIBRARY MEMBERSHIP OF LIBRARY BOARD YEAR ENDED JUNE 30.1996

SCHEDULE -8"

Ms. Ola Masters (*) P. O. Box 257 Helen, Georgia 30545
Ms. Martha Rumsey r)
P. O. Box 422 Clayton, Georgia 30525
Ms. Lida Sims (*) 803 East Doyle Street Toccoa, Georgia 30577
Mr. Lou Tatum Route 5, Box 5006 Clarkesville, Georgia 30523
Ms. Connie Worley 132 Addington Drive Toccoa, Georgia 30577
Ms. Olivia Wright (*) 102 Oak Creek Circle Toccoa, Georgia 30577

(*) Denotes Board Members Serving as of June 30, 1996 See notes to the general purpose financial statements.

- 25 -

NORTHEAST GEORGIA REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 1996

SCHEDULE "9"

PERSONNEL

Brown,

William M.

Greer,

DorothyW.

Head,

Elizabeth Ann

Kilpatrick,

Lynn

Murphy,

G. Emerson

Porterfield,

Lila

Shinkle,

John L.

Vickery,

Sarah E.

Wall,

HollyN.

POSITION Bookmobile Bookkeeper Technical Services Clerk Circulation/Reference Librarian Director Technical Services Librarian Librarian/Extension Services Youth Services Librarian Circulation Clerk

SALARIES

$

15,276,00

8,064.00

17,136.00

43;036.40 $

45,494.80

37,703.20

42,436.40

35,829.00

12,984.00

TRAVEL
94,50 2,656.42
36.25 1,219.75

$

257,959.80 $ ===4::!:,0=0=:6=.9=:::2

See notes to the general purpose financial statements.

- 26-

SECTIONll FINDINGS AND IMPROPER OR QUESTIONED COSTS

NORTHEAST GEORGIA REGIONAL LffiRARY

SCHEDULE OF FINDINGS AND IMPROPER OR OUESTIONED COSTS

.

YEAR ENDED JUNE 30. 1996

."
PRIOR YEAR/CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL) Inadequate Separation ofDuties Audit Control Number 6682-93-01
The audit report for the year ended June 30, 1995, stated that the Library did not provide for adequate separation ofemployee duties in the perfonnance ofaccounting functions and related procedures for all funds. For the year under review, our audit noted no improvement regarding adequate separation of employee duties. This deficiency was a result of management's decision to limit the number of administrative staff made responsible for accounting. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree of internal control with existing staff.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Audit Control Number 6682-93-02
The audit report for the year ended June 30, 1995, noted that the management of the Northeast Georgia 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 of a 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.

SECTION ill PERTINENT VIEWS OF RESPONSffiLE OFFICIALS

NORTHEAST GEORGIA REGIONAL LIBRARY PERTINENT VIEWS OF RESPONSIBLE OFFICIALS
YEAR ENDED JUNE 30. 1996
ACCOUNTING CONTROLS (OVERALL) Inadequate Separation ofDuties Audit Control Number 6682-93-01
We concur with this finding, however due to current budgetary constraints, the Board is unable to hire the additional staff required to clear this finding. The Board feels it has provided .for the most appropriate assignment ofduties with the number of personnel available to perform the accounting functions. With staff limitations, this finding can not be totally resolved.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Audit Control Number 6682-93-02
We concur with this recommendation. Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staffthe Board has decided not to pursue the recording of general fixed assets on the financial statements.