Audit report, Ocmulgee Regional Library, Eastman, Georgia, year ended June 30, 1994

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STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET ATLANTA. GEORGIA 30334

AUDIT REPORT OCMULGEE REGIONAL LIBRARY
EASTMAN, GEORGIA YEAR ENDED JUNE 30, 1994

OCMULGEE REGIONAL LIBRARY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

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

GOVERNMENTAL FUND TYPES

3

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - ACTUAL AND BUDGET

GOVERNMENTAL FUND TYPES

5

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

6

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

SCHEDULES

1 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

16

2 ANALYSIS OF CASH AND CASH EQUIVALENTS

17

3 ACCOUNTS RECEIVABLE

18

SCHEDULE OF REVENUE

4

STATE

19

5

LOCAL AND OTHER

20

6 SCHEDULE OF EXPENDITURES BY OBJECT

GOVERNMENTAL FUND TYPES

21

7 MEMBERSHIP OF LIBRARY BOARD

22

8 SCHEDULE OF SALARIES AND TRAVEL

23

OCMULGEE REGIONAL LIBRARY - TABLE OF CONTENTS -
SECTION IT COMPLIANCE COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS
SECTION ill INTERNAL CONTROL REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
SECTIONV 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
February 21, 1995

Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe Ocmulgee Regional Library Board
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
Ladies and Gentlemen:
We have audited the general purpose financial statements (Exhibits A through D) ofthe Ocmulgee Regional Library, as of and for the year ended June 30, 1994, 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 and the standards for financial and compliance audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and the provisions of the Office ofManagement and Budget Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 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:

94ARL-45

* 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 ofthis variance or omission have not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements ofthe matter referred to in the third paragraph, the general purpose financial statements present fairly, in all material respects, the financial position ofthe Ocmulgee Regional Library as ofJune 30, 1994, and the results ofits operations for the year then ended, in conformity with generally accepted accounting principles.
As discussed in Note 1 to the general purpose financial statements, for fiscal year 1994, the Library recorded a liability for compensated absences within the general purpose financial statements. This change is in accordance with generally accepted accounting principles.
Our audit was conducted for the purpose offorming an opinion on the general purpose financial statements ofthe Ocmulgee Regional Library taken as a whole. The combining and individual fund statements (Exhibits E and F) and the financial schedules (Schedules 1 through 8 which includes the Schedule ofFederal Financial Assistance), as listed in the table of contents, are presented for purposes of additional analysis and are not a required part ofthe general purpose financial statements ofthe Ocmulgee 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 ofthe 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,
~~~
Claude L. Vickers State Auditor
CLV:jy 94ARL-45

OCMULGEE REGIONAL LIBRARY - 1-

OCMULGEE REGIONAL LIBRARY COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP
JUNE 30, 1994

EXHIBIT "A"

ASSETS Cash and Cash Equivalents Accounts Receivable Amount to be Provided in Future Years
For Payment of Compensated Absences
Total Assets

GOVERNMENTAL FUND TYPES ACCOUNT GROUP

---------------------------- -------------

SPECIAL

GENERAL

TOTAL

GENERAL

REVENUE

LONG-TERM

(Memorandum

FUND

FUND

DEBT

Only)

------------- ------------- ------------- -------------

$ 14,140.13 $ 109,029.29

$ 123,169.42

1,800.00

124.35

1,924.35

$ 70,773.78

70,773.78

------------- ------------- ------------- -------------

$ 15,940.13 $ 109,153.64$ 70,773.78$ 195,867.55
============= ============= ============= =============

LIABILITIES AND FUND EQUITY

LIABILITIES

Deferred Revenue Compensated Absences
Total Liabilities
FUND EQUITY

$ 95,141.05

$ 95,141.05

$ 70,773.78

70,773.78

------------- ------------- -------------

$ 95,141.05 $ 70,773.78 $ 165,914.83
------------- ------------- -------------

Fund Balances Reserved For Continuation of Federal Programs Unreserved Undesignated
Total Fund Equity

$ 14,012.59
$ 15,940.13
------------- -------------
$ 15,940.13 $ 14,012.59
------------- -------------

$ 14,012.59 15,940.13
$ 29,952.72

Total Liabilities and Fund Equity $ 15,940.13$ 109,153.64 $ 70,773.78$ 195,867.55
============= ============= ============= =============

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

OCMULGEE REGIONAL LIBRARY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 1994

EXHIBIT "B"

REVENUES
--------
State Funds Federal Funds Local and Other Funds
Total Revenues
EXPENDITURES
------------
Current Program Services Technical Services Circulation Administration Maintenance and Operations
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1
-------------------
FUND BALANCE JUNE 30

SPECIAL

TOTAL

GENERAL

REVENUE

(Memorandum

FUND

FUND

Only)

------------- ------------- -------------

$ 338,258.64 $ 9,858.95$ 348,117.59

86,724.35

86,724.35

125,451.92

125,451.92

------------- ------------- -------------

$ 463,710.56 $ 96,583.30 $ 560,293.86
------------- ------------- -------------

$ 127,517.96 $ 32,931.41 $ 160,449.37

40,524.11

40,524.11

91,773.32

4,573.14

96,346.46

191,896.04

60,932.86

252,828.90

11,872.80

11,872.80

------------- ------------- -------------

$ 463,584.23 $ 98,437.41 $ 562,021.64
------------- ------------- -------------

$

126.33 $ -1,854.11 $ -1,727.78

15,813.80

15,866.70

31,680.50

------------- ------------- -------------

$ 15,940.13 $ 14,012.59$ 29,952.72
============= ============= =============

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

OCMULGEE REGIONAL LIBRARY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ACTUAL AND BUDGET - GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1994

EXHIBIT "C"

REVENUES
--------
State Funds Federal Funds Local and Other Funds
Total Revenues
EXPENDITURES
------------
Current Program Services Technical Services Circulation Administration Maintenance and Operations
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1, 1993
-------------------------
FUND BALANCE JUNE 30, 1994

ACTUAL

VARIANCE

PER

FAVORABLE

EXHIBIT "B"

BUDGET

(UNFAVORABLE)

------------- ------------- -------------

$ 348,117.59 $ 338,258.64 $ 9,858.95

86,724.35

36,800.00

49,924.35

125,451.92 122,644.88

2,807.04

------------- ------------- -------------

$ 560,293.86 $ 497,703.52 $ 62,590.34
------------- ------------- -------------

$ 160,449.37 $ 157,802.17 $ -2,647.20

40,524.11

40,023.05

-501.06

96,346.46

86,259.79 -10,086.67

252,828.90 214,745.53 -38,083.37

11,872.80

11,872.94

0.14

------------- ------------- -------------

$ 562,021.64 $ 510,703.48 $ -51,318.16
------------- ------------- -------------
$ -1,727.78 $ -12,999.96 $ 11,272.18

31,680.50

0.00

31,680.50

------------- ------------- -------------

$ 29,952.72$ -12,999.96 $ 42,952.68
============= ============= =============

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

OCMULGEE REGIONAL LIBRARY

EXI-IlBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1994

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Ocmulgee 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 ofthe departures from generally accepted accounting principles disclosed in the following paragraphs, the financial statements of the Library have been prepared in conformity with generally accepted accounting principles as applied to governmental units. The . Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles.
The more significant of the Library's accounting policies are described below.
REPORTING ENTITY
In evaluating how to define the government 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 ofthe above criteria, the Ocmulgee Regional Library is determined to be a joint venture.
The Library Board consists often members; two members appointed by the Bleckley County Library Board, two members appointed by the Dodge County Library Board, two members appointed by the Pulaski County Library Board, two members appointed by the Telfair County Library Board and two members appointed by the WIicox County Library Board. The Board is without authority to determine the amount ofits funding, except by submission ofbudget requests to local governmental units from which the Library receives support and to the State of Georgia for State and Federal funding. Membership in the Library and participation in library services is at the discretion of each participating governmental agency. The Board has the power to designate management, the power to retain unreserved fund balances oflocal funds for continued operations and is the lowest level of oversight responsibility for the Library's operations.
The Ocmulgee Regional Library is located in Eastman, Georgia, and serves Bleckley, Dodge, Pulaski, Telfair, and Wilcox Counties.
FUND ACCOUNTING
The Library uses funds and an account group to report on its financial position and the results ofits operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions relatedto certain governmental functions or activities.
A fund is a separate accounting entity with a self-balancing set ofaccounts. 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.

- 6-

OCMULGEE REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1994

Note I: 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 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 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 traditionally 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 of proceeds 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 - used to account for material compensated absences 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 ofthese funds present increases (i.e., revenues) and decreases (i.e., expenditures) 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 of accounting under which:

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OCMULGEE REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1994

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Those revenues considered susceptible to accrual are intergovernmental grants and investment income.
Expenditures are generally recognized when the related fund liability is incurred.
BUDGET
Ocmulgee Regional Library has a legally authorized nonappropriated budget which is formally approved by the Board at the aggregate level. Budgets are prepared to provide a basis for funding operations and there is no legal prohibition regarding overexpenditure of the aggregate budget. The budget process begins when the Library administration prepares and submits a proposed budget to the Board for approval. After approval of the proposed budget by the Board, copies are sent to all local funding agencies. After funding approval is received from all local funding agencies, the Board will make any necessary adjustments and adopt the budget. This final budget is then submitted to the Georgia Department of Education, Division of Public Library Services, as a part ofthe Library's Annual Application for State Aid.
The Library prepares its budget on the modified accrual basis, which is the same basis on which it presents its financial statements.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofdeposits (including savings accounts and N.0.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 Federal grantors for expenditures made but not reimbursed and allotted funds from participating local governments. 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.

- 8-

OCMULGEE REGIONAL LIBRARY

EXIIlBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1994

Note 1: SUMMARY 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.
For fiscal year 1994, the Library began recording the dollar value of accumulated compensated absences at June 30 in the General Long-Term Debt Account Group. This is a change in accounting principle.
INTERFUND TRANSACTIONS
The Library has the following type 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.
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.
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 in an amount of 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 of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,

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OCMULGEE REGIONAL LIBRARY

EXIIlBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATE:MENTS

JUNE 30, 1994

Note 2: DEPOSITS

(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,

(3) Bonds, bills, notes, certificates ofindebtedness or other direct obligations of the United States or ofthe State of Georgia,

(4) Bonds, bills, notes, certificates ofindebtedness or other obligations ofthe 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 of development authorities created by the laws ofthe State of Georgia, and

(7) Bonds, bills, notes, certificates ofindebtedness, 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 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, 1994, the bank balances were $150,377.52. 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, 1994, as follows: Risk Category 1 2 3 Total

Bank Balance $ 100,000.00
0.00 50,377.52 $ 150,377.52

- 10 -

OCMULGEE REGIONAL LIBRARY

EXIIlBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1994

Note 3 RISK MANAGEMENT

The Library has established a limited risk management program for Unemployment Compensation. Estimated claims are budgeted by management based upon experience. During fiscal year 1994, a total of $2,450.00 was paid in claims.

Note4: GENERALLONG-TERMDEBT The changes in General Long-Term Debt during the fiscal year ended June 30, 1994, were as follows:

Balance July 1, 1993
Retroactive Restatement ofPrior Year Balances
Additions Annual Leave Earned and Utilized (Net) Salaries and Wages Salary- Related~ringe Benefits
Balance June 30, 1994
Note 5: SIGNIFICANT COMMITMENTS

Compensated Absences

$

0.00

64,502.28

5,825.82 445.68
$ 70,773 78

At June 30, 1994, the Library had encumbrances in the amount of$95,141.05 for the unperformed portion of purchase orders, contracts and other commitments for goods and services associated with the Lottery Programs. The Georgia Department of Education has funding available to the Library in an amount equal to these encumbrances. The revenues and expenditures associated with these encumbrances will be recognized in the subsequent fiscal year. Encumbrances outstanding do not constitute expenditures or liabilities in the current year because these commitments will be honored during the subsequent year. These encumbrances are identified by Lottery Program as follows:

Media Center and Library Equipment

$ 95,141.05

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.

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OCMULGEE REGIONAL LIBRARY

EXIIlBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATE1\1ENTS

JUNE 30, 1994

Note 7: ACCUMULATED EMPLOYEES LEAVE
It is the Regional Library's policy to provide up to 20 days per year of vacation leave for the Director. All other full-time personnel accrue up to 15 work days per year. Employees will be paid, at their current rate of pay, for all accumulated unused vacation leave earned upon retirement or termination. See Note 1 Compensated Absences
Note 8: RETIRE1\1ENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
TRS PLAN DESCRIPTION All full-time librarians and clerical personnel employed by regional and county libraries are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer public employee retirement system (PERS).
TRS provides service retirement, disability retirement and survivors benefits for its members. A member is eligible for service retirement after 30 years of service, regardless of age, or after IO 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 of years of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distnbution ofthe member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
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 terminates with less than ten years of service, no vesting of employee contributions occurs, but the member's contributions are refunded with interest.
The Library's payroll for employees covered by TRS for the year ended June 30, 1994, was $307,773.49; total payroll was $335,857.33.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Library who are covered by TRS are required to pay 6% of their gross earnings to TRS. The Library makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees as advised by their independent actuary. At June 30, 1994, the TRS Library employer contribution rate was 11.81%. The interest rate assumption (rate of return on investments) was 7.50%.
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OCMULGEE REGIONAL LIBRARY

EXIIlBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1994

Note 8: RETIREMENT PLANS

Total contributions made during fiscal year 1994 amounted to $54,814.62 ofwhich $36,348.06 was made by the Library and $18,466.56 was made by employees. These contributions represented 11.81% (Library) and 6% (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.

Total unfunded pension benefit obligation ofTRS as of June 30, 1993, was as follows:

Total pension benefit obligation

$ 13,912,014,000.00

Net assets available for benefits, at cost

12,821,722,000.00

Unfunded pension beRefit obligation

$ 1,090,292.000 00

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as ofJune 30, 1993. 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, 1994, were $521,550,000.00. The Library's contribution for the year ended June 30, 1994, of $36,348.06 was actuarially determined and represented .0069% oftotal contributions made by all participating employers.

Ten year historical trend information is presented in the 1994 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. David C. Wtlson, is bonded in the amount of$30,000.00 with the St. Paul Property and Liability Insurance Company, St. Paul, Minnesota, their Bond No. 400HX1507, on which premium was paid through August 21, 1994.

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OCMULGEE REGIONAL LIBRARY COMBINING BALANCE SHEET
SPECIAL REVENUE FUND JUNE 30. 1994

EXHIBIT "E"

ASSETS
Cash and Cash Equ;valents Accounts Rece;vable

LOTTERY PROGRAM

LIBRARY SERVICES AND CONSTRUCTION ACT

TITLE I PUBLIC LIBRARY SERVICES

TITLE VI LIBRARY LITERACY PROGRAM

TOTAL

$ 95,141.05 $ 14,012.59 $

$ 109,153.64

124.35

124.35

Total Assets

$ 95,141.05 $ 14,012.59 $

124.35 $ 109,277.99

============= ============= ============= =============

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft Deferred Revenue

$
$ 95,141.05

$ 95,141.05

$

FUND EQUITY

Fund Balances

Reserved

For Continuation of Federal Programs

Unreserved

Undesignated

$

$
0.00

14,0la.59 0.00 $

Total Fund Equity

$

0.00 $ 14,012.59 $

124.35 $

124.35 95,141.05

124.35 $ 95,265.40

$
0.00

14,012.59 0.00

0.00 $ 14,012.59

Total Liabilities and Fund Equity $ 95,141.05 $ 14,012.59 $

124.35 $ 109,277.99

============= ============= ============= =============

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

OCMULGEE REGIONAL LIBRARY COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30. 1994

EXHIBIT "F"

LOTTERY PROGRAM

LIBRARY SERVICES AND CONSTRUCTION ACT

TITLE I PUBLIC LIBRARY SERVICES

TITLE VI LIBRARY LITERACY PROGRAM

TOTAL

REVENUES

State Funds Federal Funds

$ 9,858.95

$ 9,858.95

$ 54,000.00$ 32,724.35

86,724.35

Total Revenues

$ 9,858.95 $ 54,000.00$ 32,724.35$ 96,583.30

EXPENDITURES

Current Program Services Circulation Administration
Total Expenditures

$ 20,352.32 $ 12,579.09 $ 32,931.41

4,573.14

4,573.14

$ 9,858.95

28,061.95

23,011.96

60,932.86

------------- ------------- ------------- -------------

$ 9,858.95 $ 52,987.41 $ 35,591.05 $ 98,437.41

Excess of Revenues over (under) Expenditures $ FUND BALANCE JULY 1

0.00 $ 0.00

1,012.59 $ 13,000.00

-2,866.70 $ 2,866.70

-1,854.11 15,866.70

FUND BALANCE JUNE 30

$

0.00 $ 14,012.59 $

0.00 $ 14,012.59

============= ============= ============= =============

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

OCMULGEE REGIONAL LIBRARY SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
YEAR ENDED JUNE 30. 1994

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
--------------
Education, U. S. Department of Direct Library Services and Construction Act Title VI - Library Literacy Program 1993 Grant 1994 Grant Through Georgia Department of Education Library Services and Construction Act Title I - Public Library Services 1992 Carry-Over Canpetitive Grant 1992 Carry-Over Developmental Grant 1993 Institutional Grant 1993 Carry-Over Basic Grant 1994 Institutional Grant

CFDA Nlf,IBER

FEDERAL FUNDS

RECEIVED IN

FEDERAL

AWARDS

PERIOD (NET REVENUE EXPENDITURES

IN PERIOD OF REFUNDS) IN PERIOD IN PERIOD

------------- ------------- ------------- -------------

84.. 167

$ 11,300.00 $ 8,300.00$ 11,166.70

84.167 $ 35,000.00

24,300.00

24,424.35

24,424.35

84.034 84.034 84.034 84.034 84.034

13,000.00

4,000.00

4,000.00

4,000.00

4,000.00

13,000.00

13,000.00

13,000.00

13,000.00

19,000.00

19,000.00

19,000.00

19,000.00

18,000.00

18,000.00

18,000.00

3,987.41

------------- ------------- ------------- -------------

Total Federal Financial Assistance

$ 89,000.00$ 89,600.00$ 86,724.35$ 88,578.46
============ ============ ============ =========

The Library had no major programs as defined by the Single Audit Act of 1984.

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

OCMULGEE REGIONAL LIBRARY ANALYSIS OF CASH AND CASH EQUIVALENTS
JUNE 30, 1994

INTEREST BEARING ACCOUNTS

Citizens Bank and Trust, Eastman, Georgia
N.O.W. Account (2.60%) N.O.W. Account (2.96%) Passbook Savings Account

(3.00%)

SCHEDULE "2"
$ 116,366.58 5,252.78 1,550.06
$ 123,169.42
=============

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

OCMULGEE REGIONAL LIBRARY ACCOUNTS RECEIVABLE JUNE 30, 1994

SCHEDULE "3"

Education, U. S. Department of Library Services and Construction Act Title VI - Library Literacy Program
Wilcox County Library Library Services

GOVERNMENTAL FUND TYPES

GENERAL FUND

SPECIAL REVENUE FUND

TOTAL

$ $ 1,800.00

124.35 $

124.35

1,800.00

$ 1,800.00 $

124.35 $ 1,924.35

============= ============= =============

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

OCMULGEE REGIONAL LIBRARY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 1994

SCHEDULE "4"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Public Libraries Salaries and Travel Library Materials Maintenance and Operations Other State Programs Teachers' Retirement Teachers' Health Insurance Lottery Program Media Center and Library Equipment

GOVERNMENTAL FUND TYPES

GENERAL FUND

SPECIAL REVENUE FUND

TOTAL

$ 224,352.80 37,751.00 31,151.00
25,964.60 19,039.24
$

$ 224,352.80 37,751.00 31,151.00

25,964.60 19,039.24

9,858.95

9,858.95

$ 338,258.64$

9,858.95$ 348,117.59

============= ============= =============

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

OCMULGEE REGIONAL LIBRARY SCHEDULE OF LOCAL AND OTHER REVENUE
YEAR ENDED JUNE 30. 1994
LOCAL SOURCES Boards of Education Bleckley County Dodge County Telfair County Wilcox County
City Governments Cochran Eastman
County Governments Boards of Commissioners Bleckley Dodge Telfair Wilcox
Public Libraries Bleckley County Dodge County Roden, M. E., Memorial Library (Pulaski County) Telfair County Wilcox County
OTHER SOURCES Donations Interest Earned Interlibrary Loan Fees Photocopy Sales Other

SCHEDULE "5"

GOVERNMENTAL FUND TYPE
GENERAL FUND

$

900.00

11,695.44

4,961.74

1,661.64

3,618.36 8,355.20

3,618.36 10,383.00 4,362.00 3,845.28
34,519.72 12,419.56
7,742.16 6,973.33 7,103.02
311. 52 1,720.34
825.50 138.00 297.75

$ 125,451.92
=============

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

OCMULGEE REGIONAL LIBRARY SCHEDULE OF EXPENDITURES BY OBJECT
GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 1994

SCHEDULE "6"

EXPENDITURES
Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical Services Property Services Supplies Library Books and Materials Communication and Insurance Other Expenditures
Nonoperating Costs Equipment
Total Expenditures

GENERAL FUND

SPECIAL REVENUE FUND

TOTAL

$ 297,512.70$ 85,569.30 11,187.16 798.12 11,615.83 7,055.22 37,965.20 9,598.06 1,186.14

38,344.63 $ 9,261.14 2,640.41
2,018.41 15,039.26
634.59 755.47

335,857.33 94,830.44 13,827.57
798.12 11,615.83 9,073.63 53,004.46 10,232.65 1,941.61

1,096.50

29,743.50

30,840.00

------------- ------------- -------------

$ 463,584.23$ 98,437.41 $ 562,021.64
============= ============= =============

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

OCMULGEE REGIONAL LIBRARY MEMBERSHIP OF LIBRARY BOARD YEAR ENDED JUNE 30. 1994
BOARD MEMBER ADDRESS
Mrs. Mildred Mccranie, Chairperson(*) 600 Ninth Avenue Eastman, Georgia 31023
Mr. Earl Cannon(*) Route 2, Box 191 Abbeville, Georgia 31001
Mrs. Carolyn Dillard Route 2, Box 384 Cochran, Georgia 31014
Mrs. Doris Griffin 1104 Lynn P1ace Cochran, Georgia 31014
Mr. Robert Herndon(*) 1111 Honeysuckle Lane McRae, Georgia 31055
Mrs. Laura Kelly(*) 139 Forest Hill Circle Hawkinsville, Georgia 31036
Mrs. Mary Mann(*) Route 1 Pineview, Georgia 31071
Mr. Freddie Mullis(*) 304 Oak Street Eastman, Georgia 31023
Mrs. Gwen Nelson(*) P. 0. Box 209 McRae, Georgia 31055
Mrs. Grace Phillips(*) Route 2, Box 5 Cochran, Georgia 31014
Mrs. Mary Lynde Way(*) McCormick Avenue Hawkinsville, Georgia 31036
Mrs. Marjorie Wimberly(*) Route 1, Jim Wimberly Road Cochran, Georgia 31014
(*) Denotes Board Members Serving as of June 30, 1994
See notes to the general purpose financial statements.
- 22 -

SCHEDULE "7"

PERSONNEL
---------
Akins, Durr, Flowers, Gay, Graham, Harrell, Johnson, Johnson, Jones, Kersey, Morgan, Richards, Smith, Thompson, Welch, Whigham, Wilson, Wright,

OCMULGEE REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30. 1994

SCHEDULE "8"

Harold T. Betty Jean Johnny Carolyn T. Kerri E.
Lewis E.
Jennifer Nell C. Elaine M. Evelyn Jane Harris, Jr. Stephen F. Barbara Kim Dorothy R. John S. David C. Kathy

POSITION
--------
Assistant Director Assistant Director Custodian Extension Services Librarian Clerk Audio-Visual Librarhn Clerk Branch Manager Children's Librarian Branch Manager Technical Services Librarian Circulation Librarian Branch Manager Clerk Literacy Coordinator Consultant Director Assistant Branch Manager

SALARIES

TRAVEL

------------- -------------

$ 41,406.80 $

558.11

41,406.80

498.14

10,208.04

15,775.02

1,270.78

32,150.40

293.28

1,521.51

4,680.00

5,160.00

5,036.60

33,909.20

330.15

38,272.80

1,088.74

14,696.88

1,028.51

19,636.35

627.59

6,000.00

393.12

54,581.72

10,038.44

9,115.92

------------- -------------

$ 335,857.33 $ 13,827.57

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

SECTION II COMPLIANCE

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 21, 1995

Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe Ocmulgee Regional Library Board
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Ocmulgee Regional Library as of and for the year ended June 30, 1994, and have issued our report thereon dated February 21, 1995. This report was qualified for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General ofthe United States. 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.
Compliance with laws, regulations, contracts, and grants applicable to Ocmulgee Regional Library is the responsibility of the Library's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of the Library's compliance with certain provisions oflaws, regulations, contracts, and grants_ However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion.
The results of our tests indicate that, with respect to the items tested, the Ocmulgee Regional Library complied, in all material respects, with the provisions referred to in the preceding paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Library had not complied, in all material respects, with those provisions.
94CRL-10

This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,

CLV:jy 94CRL-10

Claude L. Vickers State Auditor

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 21, 1995

Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Director and Members of the Ocmulgee Regional Library Board

SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS

Ladies and Gentlemen:

We have audited the general purpose financial statements ofthe Ocmulgee Regional Library as of and for the year ended June 30, 1994, and have issued our report thereon dated February 21, 1995. This report was qualified for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

We have applied procedures to test the Ocmulgee Regional Library's compliance with the following requirements applicable to each of its Federal financial assistance programs, which are listed in the Schedule ofFederal Financial Assistance, for the year ended June 30, 1994:

(1) Political Activity

(5) Allowable Costs/Cost Principles

(2) Civil Rights

(6) Drug-Free Workplace Act

(3) Cash Management

(7) Audit Follow-Up/Resolution

(4) Federal Financial Reports

(8) Administrative Requirements

Our procedures were limited to the applicable procedures described in the Office of Management and Budget's "Compliance Supplement for Single Audits ofState and Local Governments" and other additional procedures as deemed necessary. Our procedures were substantially less in scope than an audit, the objective ofwhich is the expression of an opinion on the Ocmulgee Regional Library's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion.

94CRL-70

Material instances of noncompliance consist offailures to follow the general requirements that caused us to conclude that the misstatements resulting from those failures are material to the Federal financial assistance programs. The results of our tests of compliance disclosed a material instance of noncompliance that is described in the Schedule ofFindings and Improper or Questioned Costs.
We considered the material instance of noncompliance in forming our opinion on whether the Ocmulgee Regional Library's general purpose financial statements are presented fairly, in all material respects, in conformity with generally accepted accounting principles, and this report does not affect our report dated February 21, 1995, on those financial statements.
Except as described above, the results of our procedures to determine compliance indicate that, with respect to the items tested, the Ocmulgee Regional Library complied, in all material respects, with the requirements listed in the second paragraph of this report, and with respect to items not tested, nothing came to our attention that caused us to believe that the Board had not complied, in all material respects with those requirements. Additionally, the results of our procedures disclosed an immaterial instance of noncompliance with those requirements which is also described in the Schedule of Findings and Improper or Questioned Costs.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:jy 94CRL-70

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 21, 1995

Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe Ocmulgee Regional Library Board
SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Ocmulgee Regional Library as of and for the year ended June 30, 1994, and have issued our report thereon dated February 21, 1995. This report was qualified for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
In connection with our audit of the fiscal year 1994 general purpose :financial statements of the Ocmulgee Regional Library and with our consideration of the Library's internal control structure used to administer Federal financial assistance programs, as required by Office ofManagement and Budget (0MB) Circular A-
128, "Audits ofState and Local Governments", we selected certain transactions applicable to certain nonmajor
Federal financial assistance programs for the year ended June 30, 1994. As required by 0MB Circular A-128, we have performed auditing procedures on the selected transactions to test compliance with the requirements governing:
Types of Services Allowed or Unallowed
Our procedures were substantially less in scope than an audit, the objective ofwhich is the expression of an opinion on the Ocmulgee Regional Library's compliance with these requirements. Accordingly, we do not express such an opinion.

94CRL-120

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph. With respect to items not tested, nothing
came to our attention that caused us to believe that the Ocmulgee Regional Library had not complied, in all
material respects, with those requirements.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
t:7~~
Claude L. Vickers State Auditor
CLV:jy 94CRL-120

SECTION ill INTERNAL CONTROL

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 21, 1995

Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe Ocmulgee Regional Library Board
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Ocmulgee Regional Library as of and for the year ended June 30, 1994, and have issued our report thereon dated February 21, 1995. This report was qualified for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial_ statements.
We conducted our audit in accordance with generally accepted auditing standards, and Government Auditing Standards, issued by the Comptroller General of theUnited States. 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.
In planning and performing our audit of the general purpose financial statements of the Ocmulgee Regional Library for the year ended June 30, 1994, we considered the internal control structure in order to determine our auditing procedures for the purpose ofexpressing our opinion on the general purpose financial statements and not to provide assurance on the internal control structure.
The management ofthe Ocmulgee Regional Library is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation ofgeneral purpose :financial statements in accordance with generally accepted accounting principles. Because
94ICL-3

ofinherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to risk that procedures may become inadequate because of changes in conditions or that the effectiveness ofthe design and operation of policies and procedures may deteriorate.

For the purposes of this report, we have classified the significant internal control structure policies and procedures in the following categories:

(I) Cash and Cash Equivalents

(5) Employee Compensation

(2) Revenue/Receivables./R.eceipts

(6) General Ledger

(3) Procurement

(7) General Fixed Assets

(4) Expenditures/Liabilities/ Disbursements

For all ofthe internal control categories listed above, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk.

We noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements.

As described in the Schedule ofFindings and Improper or Questioned Costs, reportable conditions were noted in the following control categories:

(I) Accounting Controls (Overall)

(2) General Fixed Assets

A material weakness is a reportable condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.

Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that all ofthe reportable conditions disclosed above are also considered to be material weaknesses.

94ICL-3

These conditions were considered in determining the nature, timing, and extent of the procedures to be performed in our audit ofthe Ocmulgee Regional Library's financial statements and this report does not affect our report thereon dated Februa.ry 21, 1995.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~~
Claude L. Vickers State Auditor
CLV:jy 94ICL-3

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 21, 1995

Honorable Zell Miller, Governor Members ofthe General Assembly Members of the State Board ofEducation
and Director and Members of the Ocmulgee Regional Library Board
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
Ladies and Gentlemen:
We have audited the general purpose financial statements ofthe Ocmulgee Regional Library as ofand for the year ended June 30, 1994, and have issued our report thereon dated February 21, 1995. This report was qualified for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of Office of Management and Budget (0MB) Circular A-128, "Audits ofState and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement and about whether the Ocmulgee Regional Library complied with laws and regulations, noncompliance with which would be material to a Federal financial assistance program.
In planning and performing our audit for the year ended June 30, 1994, we considered the Library's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the Library's general purpose financial statements and to report on the internal control structure in accordance with 0MB Circular A-128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to Federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated February 21, 1995.
94ICL-16

The management ofthe Ocmulgee Regional Library is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that Federal financial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors, irregularities, or instances of noncompliance may nevertheless occur and not be detected. Also, projection ofany evaluation ofthe structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness ofthe design and operation of policies and procedures may deteriorate.

For the purpose of this report, we have classified the significant internal control structure policies and procedures used in administering Federal financial assistance programs in the following control categories:

GENERAL REQUIREMENTS

SPECIFIC REQUIREMENTS

(I) Political Activity (2) Civil Rights (3) Cash Management (4) Federal Financial Reports

(I) Types of Services Allowed or Unallowed
(2) Reporting
(3) Applicable Special Tests and Provisions

(5) Allowable Costs/Cost Principles (6) Drug-Free Workplace Act

(4) Other Requirement Claims for Advances and Reimbursements

(7) Audit Follow-Up/Resolution

(8) Administrative Requirements

For all of the internal control structure categories listed above, we obtained an understanding ofthe design of relevant policies and procedures and determined whether they have been placed in operation, and we assessed control risk.

During the year ended June 30, 1994, the Ocmulgee Regional Library had no major Federal financial assistance programs and expended 60% ofits total Federal financial assistance under the following nonmajor Federal financial assistance program:

Library Services and Construction Act Title I - Public Library Services

94ICL-16

We performed tests of controls, as required by 0MB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with general requirements, and specific requirements, as described above that are applicable to the aforementioned nonmajor Federal financial assistance program. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion.
We noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control structure that, in our judgment, could adversely affect the Library's ability to administer Federal financial assistance programs in accordance with applicable laws and regulations.
As descnbed in the Schedule ofFindings and Improper or Questioned Costs, reportable conditions were noted in the following control categories:
(I) Cash Management
(2) Allowable Costs/Cost Principles
(3) Administrative Requirements
A material weakness is a reportable condition in which the design or operation of one or more ofthe internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a Federal financial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.
Our consideration of the internal control structure policies and procedures used in administering Federal financial assistance would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, as described in the Schedule ofFindings and Improper or Questioned Costs, we noted reportable conditions that we believe to be material weaknesses in the following control categories:
(I) Allowable Costs/Cost Principles
(2) Administrative Requirements
94ICL-16

This report is intended solely for the use ofmanagement, the Federal cognizant audit agency and other Federal grantor agencies and should not be used for any other purpose. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,
L~
Claude L. Vickers State Auditor
CLV:jy 94ICL-16

SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS

OCMULGEE REGIONAL LIBRARY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1994
PRIOR YEAR/CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation ofDuties Reportable Condition -Material Weakness Audit Control Number 6452-93-01
The audit report for the year ended June 30, 1993, stated that the Library did not provide for adequate separation ofemployee duties in the performance 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 functions. 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.
Note: All Federal financial assistance programs listed in the Schedule of Federal Financial Assistance, Schedule "l" ofthis report are affected by this finding.
GENERAL FIXED ASSETS Failure to Maintain Gene~al Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 6452-93-02
The audit report for the year ended June 30, 1993, noted that the management of the Ocmulgee 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, no action was taken by management to establish this account group. 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 implement and maintain a General Fixed Assets Account Group for inclusion in the accounting records. Subsidiary records should be established for land, buildings, equipment, and collections owned by the Library. Detailed records should be maintained ofall additions and deletions for each class offixed assets that comprise this group.

OCMULGEE REGIONAL LIBRARY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1994

CURRENT YEAR

CASH MANAGEMENT Excessive Cash Balances Federal Financial Assistance Reportable Condition Nonmaterial Noncompliance Audit Control Number 6452-94-01

A review of cash management procedures for the Library Services and Construction Act, Title I - Public Library Services Program (CFDA 84.034) disclosed that cash draws utilizing DE form 0147, "Quarterly Report of Expenditures and Estimated Requirement for Grant Funds", were made in advance ofimmediate cash needs, resulting in the accumulation of excessive cash balances. During fiscal year 1994, the program had an average cash balance of $5,989.91 with excessive ending monthly cash balances in ten months. The excessive cash balances are a result of management's failure to adequately forecast the cash needs of this program. Procedures should be implemented to minimize the time elapsing between the transfer of funds from the Georgia Department of Education and disbursement of such funds by the Library.

ALLOWABLE COSTS/COST PRINCIPLES

Time and Attendance Records Not Utilized

Federal Financial Assistance

Reportable Condition - Material Weakness

Material Noncompliance

Amount: $47,605.77

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Audit Control Number 6452-94-02

A review of salaries and fringe benefits charged to the Public Library Services - Title I Program (CFDA
84.167) and Library Literacy Program -Title VI Program (CFDA 84.034) revealed that expenditures in the amount of $47,605.77 were not supported by time and attendance records as required by Office of Management and Budget Circular A-87. Salary charges to Federal programs should be based on actual time worked by employees.

This condition was caused by management's failure to comply with Federal regulations regarding the maintenance of adequate time and attendance records.

Appropriate internal controls should be established by the Library to insure that all salary charges of employees involved in Federal and/or State projects be based on actual hours worked. The Georgia Department of Education should review this matter to determine if a reclaim of funds is appropriate.

SECTIONV PERTINENT VIEWS OF RESPONSIBLE OFFICIALS

OCMULGEE REGIONAL LIBRARY PERTINENT VIEWS OF RESPONSIBLE OFFICIALS
YEAR ENDED JUNE 30, 1994
ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation ofDuties Reportable Condition - Material Weakness Audit Control Number 6452-93-01
We concur with this finding. However, we are attempting to resolve the matter by assigning personnel to accomplish different functions in order to obtain appropriate separation of duties.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 6452-93-02
We concur with this finding. It is our understanding that the State of Georgia (Appropriate Agency) is in the process of developing a plan/model that all libraries within the State can use to resolve this matter.
CASH MANAGEMENT Excessive Cash Balances Federal Financial Assistance Reportable Condition Nonmaterial Noncompliance Audit Control Number 6452-94-01
We concur with this finding. We feel this is a matter of timing. We are currently developing strategies to streamline the process of paying for goods and services in a more timely manner.
ALLOWABLE COSTS/COST PRINCIPLES Time and Attendance Records Not Utilized Federal Financial Assistance Reportable Condition - Material Weakness Material Noncompliance Amount: $47,605.77 Audit Control Number 6452-94-02
We concur with this finding. However, it was our understanding based on information from our previous year audit, that LSCA grant proposals, inter-agency correspondence and project completion reports; local management reports and Board reviews; along with our regular attendance and absentee records provided enough documentation to demonstrate that adequate time payable at a reasonable rate was spent on each grant in the planning, preparation, implementation, evaluation, record-keeping and administration of each project to insure the overall integrity of each individual grant. Nonetheless, we have re-introduced detailed timekeeping forms that will be used henceforth by each person involved with a particular grant. This more detailed time-keeping procedure should resolve the matter.