Audit report, Ocmulgee Regional Library, Eastman, Georgia, year ended June 30, 1995

GA
ASOO
.Ri
R4b 02
1994 _q.;-
STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET ATLANTA. GEORGIA 30334

AUDIT REPORT OCMULGEE REGIONAL LIBRARY
EASTMAN, GEORGIA YEAR ENDED JUNE 30, 1995

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

ALL GOVERNMENTAL FUND TYPES

3

C

STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL AND SPECIAL REVENUE FUNDS

5

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

6

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

14

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

15

SCHEDULES

1 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

16

2 CASH AND CASH EQUIVALENTS

17

SCHEDULE OF REVENUE

3

STATE

18

4

LOCAL AND OTHER

19

SCHEDULE OF EXPENDITURES BY OBJECT

5

GOVERNMENTAL FUND TYPES

20

6

LOTTERY PROGRAMS

21

7 MEMBERSHIP OF LIBRARY BOARD

22

8 SCHEDULE OF SALARIES AND TRAVEL

23

OCMULGEE REGIONAL LIBRARY - TABLE OF CONTENTS -
SECTION II 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 III 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

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 2, 1996

Honorable Zell Miller, Governor Members of the 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, 1995, as listed in the table of contents. These financial statements are the responsibility ofthe 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 of Management 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:
* 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.
95ARL-44

The aggregate effects on the general purpose financial statements of this 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, 1995, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated February 2, 1996, on our consideration of the Board's internal control structure and a report dated February 2, 1996, on its compliance with laws and regulations.
Our audit was conducted for the purpose offorming an opinion on the general purpose financial statements of the Ocmulgee Regional Library taken as a whole. The combining 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 of the general purpose financial statements of the Ocmulgee Regional Library. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office of the State Auditor and made available to the press ofthe State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Rz;~

CLV:cm 95ARL-44

Claude L. Vickers State Auditor

OCMULGEE REGIONAL LIBRARY -I-

~M!.!1..GEI; BEGIONAL Ll~MBY QQMBINl;Q BALANCE SHEET
&.L El,!Nl:l D'.PfS ANQ AQCQUNT ~RQ!.!P
J!,!NE 30, 1995

EXHIBIT"A"

~ Cash and Cash Equivalents
Accounts R~ble
Amount to be Provided in Future Years For Payment of Compensated Absences

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

$

3,628.75 $

7,623.80

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS (Memorandum On~} JUNE 301 1995 JUNE 30, 1994

$

11,252.55 $

123,169.42

1,924.35

$

97 877.67

97,877.67

70,773.78

Total Assets

$

3,628.75 $

7.623.80 $

97877.67 $

109,130.22 $

195,867.55

LIABl!.ITIE ~Q F!,!NQ EQUITY

LIABIUTIE

Accounts Payable

$

Salaries Payable

Deferred Revenue

Compensated Absences

Total Liabilities

$

E!.!NQ EO!.!IJY

Fund Balances

Reserved

For Continuation of Federal Programs

Unreserved

Undesignated

$

Total Fund Equity

$

Total Liabilities and Fund Equity $

367.20 $
367.20 $
$ 3261.55 3261.55 $
3,628.75 $

1,565.76 $
1,565.76 $
6,058.04 6,058.04 7,623.80 $

$
97877.67 97 877.67 $

367.20 1,565.76
$ 97,877.67
99,810.63 $

95,141.05 70,773.78
165,914.83

$

6,058.04 $

14,012.59

3,261.55

15,940.13

$

9,319.59 $

29,952.72

97 877.67 $

109,130.22 $

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
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1995

EXHIBIT "8"

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

GENERAL FUND

SPECIAL REVENUE
FUND

TOTALS

{Memorandum On~

YEAR ENDED

JUNE 301 1995

JUNE 3011994

$ 358,500.03 $ 100,976.05 $ 66,575.65
128,306.43
$ 4861806.46 $ 1671551.70 $

459,476.08 $ 66,575.65 128,306.43
6541358.16 $

348,117.59 86,724.35 125A51.92
5601293.86

$ 130,365.03 $

33,355.31 $

41,249.54

98,291.70

3,576.58

210,150.83

138,574.36

19 427.94

$ 499,485.04 $ 1751506.25 $

$ -12,678.58 $

-7,954.55 $

151940.13

141012.59

163,720.34 $ 41,249.54 101,868.28 348,725.19 191427.94
674,991.29 $
-20,633.13 $
29,952.72

160,449.37 40,524.11 96,346.46 252,828.90 111872.80
562,021.64
-1,727.78
311680.50

FUND BALANCE JUNE 30

$

3,261.55 $

6,058.04 $

9,319.59 $ ___2_9_,_9_5_2.1...,2

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

OCMULGEE REGIONAL LIBRARY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30. 1995

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, 1994
FUND BALANCE JUNE 30. 1995

GENERAL FUND

BUDGET

ACTUAL

$ 361,254.49 $ 125,625.13
$ 486,879.62 $

358,500.03 128,306.43 486,806.46

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 100,976.05

$ 88,700.00

66,575.65

$ 88,700.00 $ 167,551.70

$ 130,021.10 $ 40,608.83 90,539.69
208,256.51 22,570.78
$ 491,996.91 $
$ -5,117.29 $
15,965.13

130,365.03 41,249.54 98,291.70 210,150.83 19,427.94
499,485.04
-12,678.58
15,940.13

- - - - - $ 10,847.84 $

3,261.55

$ 40,561.72 $ 33,355.31

3,587.36 139,567.62

3,576.58 138,574.36

$ 183,716.70 $ 175,506.25

$ -95,016.70 $ -7,954.55

109,029.29

14,012.59

$ 14,012.ss s _ _s_,_058_.04_

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

OCMULGEE REGIONAL LIBRARY

EXIIlBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEl\ffiNTS

JUNE 30, 1995

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 of the departure from generally accepted accounting principles disclosed in these notes, the financial statements ofthe Library have been prepared in conformity with generally accepted accounting principles as applied to governmental units. 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 of the above criteria, the Ocmulgee Regional Library is determined to be a joint venture.
The Library Board consists of ten 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 Wilcox County Library Board. The Board is without authority to determine the amount of its funding, except by submission ofbudget requests to local governmental units from which the Library receives support and to the State of Georgia for State and Federal funding. Membership in the Library and participation in library services is at the discretion of each participating governmental agency. The Board has the power to designate management, the power to retain unreserved fund balances of local 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 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.

- 6-

OCMULGEE REGIONAL LIBRARY

EXIIlBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1995

Note I: SillvfMARY 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 of assets 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 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

EXIIlBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 1: 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 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 Ocmulgee 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 ofthe 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 of the Library's annual application for state aid. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofdeposits (including savings and N.O.W. accounts) in authorized financial institutions. Georgia Laws authorize the Library to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
COMPENSATED ABSENCES
Compensated absences represent obligations of the Library relating to employees' rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount is deemed immaterial to the general purpose financial statements.

- 8-

OCMULGEE REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INTERFUND TRANSACTIONS
The Library has the following type ofinterfund transactions:
Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose :financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles, nor is such data 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 ofsecurities pledged shall be equal to not less than 110 percent of the public funds being secured after the deduction of the amount of deposit insurance. OCGA Section 45-8-11 provides an officer 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,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates ofindebtedness or other direct obligations ofthe United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds ofany public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
- 9-

OCMULGEE REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 2: DEPOSITS
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations 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 Banlc, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banlcs, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS
At June 30, 1995, the bank balances were $34,580.89. The bank balances were entirely covered by Federal depository insurance.
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 illnesses or injuries to employees; natural disaster; and unemployment compensation.
The Library has obtained commercial insurance for risk of loss associated with torts, assets and job related illnesses or injuries to employees. The Library has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Library's insurance coverage in any ofthe past three years.
The Library has elected to self-insure for all losses related to errors or omissions, which includes, among other risks, risks for sexual harassment and discrimination. The Library has not experienced any losses related to errors or omissions in the past three years.
The Library has elected to self-insure for all losses related to natural disasters. The Library has not experienced any losses related to natural disasters 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 expenditures and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated. There were no claims paid during the last two fiscal years.

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OCMULGEE REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 4: GENERAL LONG-TERM DEBT

The changes in General Long-Term Debt during the fiscal year ended June 30, 1995, were as follows:

Balance July 1, 1994 Additions
Leave Earned and Utilized (Net) Balance June 30, 1995 Note 5: CONTINGENT LIABILITIES

Compensated Absences
$ 70,773.78
27,103.89 $ 97 877 67

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

Note 6: ACCUMULATED EMPLOYEES' LEAVE

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 7: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

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

TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. A member is eligible for service retirement after 30 years of service, regardless of age, or after 10 years ofservice and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number of years of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death.

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OCMULGEE REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 7: 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 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, 1995, was $322,862.79; total payroll was $352,733.81.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Library who are covered by TRS are required by State statute to pay 5% of their gross earnings to TRS. The Library makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. At June 30, 1995, 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 1995 amounted to $54,273.39, of which $38,130.07 was made by the Library and $16,143.32 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.

Total unfunded pension benefit obligation ofTRS as ofJune 30, 1994, was as follows:

Total pension benefit obligation Net assets available for benefits, at cost Unfunded pension benefit obligation

$ 15,313,743,000.00 14,254,785,000.00
$ 1,058,958 000 00

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OCMULGEE REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATE:MENTS

JUNE 30, 1995

Note 7: RETIREMENT PLANS
The measurement ofthe total pension benefit obligation is based on an actuarial valuation as of June 30, 1994. 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, 1995, were $565,117,811.00. The Library's contribution for the year ended June 30, 1995, of $38,130.07 was actuarially determined and represented .0067% of total contributions made by all participating employers.
Ten year historical trend information is presented in the 1995 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 8: SURETY BONDS
The Library Director, Mr. David C. WIison, 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, 1995.

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OCMULGEE REGIONAL LIBRARY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1995

EXHIBITE

ASSETS cash and cash Equivalents Accounts Receivable
Total Assets

LOTTERY PROGRAMS

LIBRARY SERVICES AND

CONSTRUCTION ACT

TITLE I

TITLE VI

PUBLIC

LIBRARY

LIBRARY

LITERACY

SERVICES

PROGRAM

TOTALS JUNE 30, 1995 JUNE 30, 1994

$

0.00 $ 7,200.00 $

423.80 $

7,623.80 $

109,153.64

124.35

s_ _ _o_.oo= s 7,200.00 $

423.80 $

7,623.80 $_=1=09=,277==99=

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft Salaries Payable Deferred Revenue

Total Liabilities

FUND EQUITY

Fund Balances

Reserved

For Continuation of Federal Programs

Unreserved

Undesignated

$

Total Fund Equity

$

$ 1,565.76 $ 1,565.76

$ 0.00 0.00 $

5,634.24 $ 0.00
5,634.24 $

$

124.35

$

1,565.76

95,141.05

$

1,565.76 $

95,265.40

423.80 $ 0.00
423.80 $

6,058.04 $ 0.00
6,058.04 $

14,012.59 0.00
14,012.59

Total Liabilities and Fund Equity

$

0.00 $ 7,200.00 $

423.80 $

7,623.80 $ 109,2TT.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. 1995

EXHIBIT"P

LOTTERY PROGRAMS

LIBRARY SERVICES AND

CONSTRUCTION ACT

TITLEI

TITLE VI

PUBLIC

LIBRARY

LIBRARY

LITERACY

SERVICES

PROGRAM

TOTALS YEAR ENDED JUNE 30, 1995 JUNE 30, 1994

REVENUES
State Funds Federal Funds

$ 100,976.05 $ 31,000.00 $

$ 35,575.65

100,976.05 $ 66,575.65

9,858.95 86,724.35

Total Revenues

$ 100,976.05 $ 31,000.00 $

35,575.65 $

167,551.70 $

96,583.30

EXPENDITURES

Current Program Services Circulation Administration

$ $ 100,976.05

18,374.55 $ 3,576.58 17,427.22

14,980.76 $ 20,171.09

33,355.31 $ 3,576.58
138,574.36

32,931.41 4,573.14 60,932.86

Total Expenditures

$ 100,976.05 $ 39,378.35 $

35,151.85 $

175,506.25 $

98,437.41

Excess of Revenues over (under) Expenditures $

0.00 $ -8,378.35 $

423.80 $

-7,954.55 $

-1,854.11

FUND BALANCE JULY 1

0.00

14,012.59

0.00

14,012.59

15,866.70

FUND BALANCE JUNE 30

$

0.00 $ 5,634.24 $

423.80 $

6,058.04 $

14,012.59

See notes to the general purpose financial statements.

-15-

QCMULGEE REGIONAL LIBRARY SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
YEAR ENDED JUNE 30. 1995

SCHEDULE 1

FUNDING AGENCY PROGRAM/GRANT
Education. U. S. Department of Direct Library Services and Construction Act Title VI - Library Literacy Program 1994Grant 1995Grant
Through Georgia Department of Education Library Services and Conetruction Act Title I - Public Library Services 1994 Institutions Grant 1994 Carry-Over Basic Grant 1995 Institutions Grant

CFDA NUMBER

AWARDS IN PERIOD

FEDERAL FUNDS RECEIVED IN PERIOD(NET OF REFUNDS)

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.167 84.167 $

$ 35,000.00

84.034 84.034 84.034

19,000.00 24,000.00

10,700.00 $ 25,000.00

10,575.65 $ 25,000.00

10,575.65 24,576.20

19,000.00 12,000.00

19,000.00 12,000.00

14,012.59 19,000.00
6,365.76

Total Federal Financial Assistance

$ 78,000.00 $

66,700.00 $ 66,575.65 $

74,530.20

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 CASH AND CASH EQUIVALENTS
JUNE 30, 1995
INTEREST BEARING ACCOUNTS
Citizens Bank and Trust, Eastman, Georgia
Money Market Account (3.20%) N.O.W. Account (2.60%) Passbook Savings Account (3.20%)

SCHEDULE "2"

$

2,524.04

7,266.67

1,461.84

$ 11,252.55

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

OCMULGEE REGIONAL LIBRARY SCHEDULE OF STATE REVENUE
YEAR ENDED JUNE 30. 1995

SCHEDULE "3"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Public Libraries Salaries and Travel Library Materials Maintenance and Operations other State Programs Governor's Emergency Funds (1) Lottery Programs Distant Leaming Media Center and Library Equipment
Georgia Public Telecommunications Commission Lottery Program Distant Leaming

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 279,598.03 37,751.00 31,151.00
10,000.00
$

$ 279,598.03 37,751.00 31,151.00

10,000.00

1,100.00 95,141.05

1,100.00 95,141.05

4,735.00

4,735.00

$ 358,500.03 $ 100,976.05 $ 459,476.08

(1) The purpose of these funds is for the M. E. Roden Memorial Library renovation project.

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

OCMULGEE REGIONAL LIBRARY SCHEDULE OF LOCAL AND OTHER REVENUE
JUNE 30, 1995

SCHEDULE "4"

LOCAL SOURCES Boards of Education Bleckley County Dodge County Telfair County Wilcox County
City Governments Cochran Eastman
County Governments Board of Commissioners Bleckley Dodge Telfair Wilcox
Public Libraries Bleckley County Dodge County Pulaski County Telfair County Wilcox County
OTHER SOURCES Donations Interest Earned Interlibrary Loan Fees Photocopy Sales Sales of Assets Other

GOVERNMENTAL FUND TYPE GENERAL FUND

$

900.00

11,695.44

4,961.44

2,061.64

4,168.36 10,155.20

4,218.36 10,383.00
4,962.00 4,445.28
33,391.00 10,025.28
7,742.16 6,773.05 5,440.90
1,007.79 2,344.03
165.25 222.00 2,500.00 744.25

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

$====12=8=,3=0=6.=4=3

OCMULGEE REGIONAL LIBRARY SCHEDULE OF EXPENDITURES BY OBJECT
GOVERNMENTAL FUND TYPES JUNE 30, 1995

SCHEDULE "5"

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

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

$ 318,183.78 $
88,187.10 9,842.41 116.40
21,681.97 6,230.44
38,460.54 8,887.86 641.00

34,550.03 $
9,657.80 1,097.63
2,244.08 15,595.19
1,141.61 185.00

352,733.81 97,844.90 10,940.04 116.40 21,681.97 8,474.52 54,055.73 10,029.47 826.00

7,253.54

111,034.91

118,288.45

Total Expenditures

$ 499,485.04 $ 175,506.25 $ 674,991.29

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

EXPENDITURES
Nonoperating Costs Equipment

OCMULGEE REGIONAL LIBRARY SCHEDULE OF EXPENDITURES BY OBJECT
LOTTERY PROGRAMS YEAR ENDED JUNE 30, 1995

SCHEDULE "6"

DISTANT LEARNING

MEDIA CENTER
AND
LIBRARY EQUIPMENT

G.P.T.C. DISTANT LEARNING

TOTAL

$

1,100.00 $

95,141.05 $

4,735.00 $

100,976.05

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

OCMULGEE REGIONAL LIBRARY MEMBERSHIP OF LIBRARY BOARD
YEAR ENDED JUNE 30, 1995
BOARD MEMBER ADDRESS
Mrs. Mildred Mccranie, Chairperson (*) 600 9th Avenue Eastman, Georgia 31023
Mrs. Gwen Adams (*) 304 Church Street Abbeville, Georgia 31001
Mr. Earl Cannon (*) Route 2, Box 1220 Abbeville, Georgia 31001
Mrs. Carotine Conner (*) 108 Clark Drive Hawkinsville, Georgia 31036
Mr. H. Frederick Mullis(*) 506 Creighton Street Eastman, Georgia 31023
Mrs. Joan Padgett(*) P. 0. Box 133 Cochran, Georgia 31014
Mr. E. C. Ryals, Ill (*) 1006 Redbud Road McRae, Georgia 31055
Mrs. Mary Lynde Way (*) McCormick Avenue Hawkinsville, Georgia 31036
Mrs. R. K. White (*) Route 2, Box 4-B McRae, Georgia 31055
Mrs. Marjorie Wimberly (*) Route 1, Box 2205 Jim Wimberly Road Cochran, Georgia 31014
(*) Denotes Board Members Serving as of June 30, 1995

See notes to the general purpose financial statements.

- 22 -

SCHEDULE '7"

OCMULGEE REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 1995

SCHEDULE "8"

PERSONNEL

Akins, Cranford, Durr, Flowers, Gay, Graham, Harrell, Johnson, Johnson, Jones, Kersey, Morgan, Noles, Richards, Sheffield, Smith, Weeks, Welch, Whigham, Wilson, Wrights,

HaroldT. Beth L. Betty J. Johnny Carolyn Kerrie E. Lewis E. Jennifer Nelle. Elaine M. Evelyn Jane Harris Jr. EmilyS. Stephen F. Christy M. Barbara LisaH. Dorothy R. John S.
David C.
Kathy

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

SALARIES

TRAVEL

$

14,152.00 $

3,408.51

43,497.60

8,105.99

14,734.10

136.00

34,451.20

998.75

5,031.00

2,275.00

5,247.21

35,466.60

8,332.46

40,129.80

3,837.77

15,284.64

153.00

19,350.03

30,659.20

58,397.60

9,085.35

88.62 219.19
359.99
374.39 993.93
719.63 934.29 7,250.00

$

352}33.81 $===10=,9=4=0=.0=4

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 2, 1996

Honorable Zell Miller, Governor Members of the 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, 1995, and have issued our report thereon dated February 2, 1996. 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 ofour tests disclosed no instances of noncompliance that are required to be reported herein under Government Auditing Standards.

95CRL-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:cm 95CRL-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 2, 1996

Honorable Zell Miller, Governor Members of the 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 of the Ocmulgee Regional Library as of and for the year ended June 30, 1995, and have issued our report thereon dated February 2, 1996. 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 of Federal Financial Assistance, for the year ended June 30, 1995:

(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 ofManagement 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 of which 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.

95CRL-50

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 of this report. 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. However, the results of our procedures disclosed an immaterial instance of noncompliance with those requirements, which is 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.

CLV:cm 95CRL-50

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 2, 1996

Honorable Zell Miller, Governor Members of the 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, 1995, and have issued our report thereon dated February 2, 1996. 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 1995 general purpose financial statements of the Ocmulgee Regional Library and with our consideration of the Library's control structure used to administer Federal financial assistance programs, as required by Office of Management and Budget (0MB) Circular A-128, "Audits of State and Local Governments", we selected certain transactions applicable to certain nonmajor Federal :financial assistance programs for the year ended June 30, 1995. 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 of which is the expression of an opinion on the Ocmulgee Regional Library's compliance with this requirement. Accordingly, we do not express such an opinion.
With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirement listed in the second paragraph. With respect to items not tested, nothing

95CRL-120

came to our attention that caused us to believe that the Ocmulgee Regional Library had not complied, in all material respects, with that requirement.
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:cm 95CRL-120

SECTION III 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 2, 1996

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, 1995, and have issued our report thereon dated February 2, 1996. 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 the 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.
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 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 of the design and operation of policies and procedures may deteriorate.
In planning and performing our audit of the general purpose financial statements of the Ocmulgee Regional Library for the year ended June 30, 1995, we obtained an understanding of the internal control structure. With
95ICL-3

respect to the internal control structure, we obtained an understanding ofthe design of relevant policies and
procedures and whether they have been placed in operation, and we assessed control risk in order to detennine
our auditing procedure for the purpose of expressing our opinion on the general purpose financial statements and not to provide an opinion on the internal control structure. 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 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:
(1) 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 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 perfonning 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 both ofthe reportable conditions disclosed above are also considered to be material weaknesses.

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 February 2, 1996.

,

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,
c!~~
Claude L. Vickers
State Auditor

CLV:cm 95ICL-3

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 2, 1996

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe 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 of the Ocmulgee Regional Library as of and for the year ended June 30, 1995, and have issued our report thereon dated February 2, 1996. 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 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.
In planning and performing our audit for the year ended June 30, 1995, 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 2, 1996.
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,
95ICL-16

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 of the 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, 1995, the Ocmulgee Regional Library had no major Federal financial assistance
programs and expended 53% of its total Federal financial assistance under the following nonmajor Federal financial assistance program:

Library Services and Construction Act Title I - Public Library Services

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

95ICL-16

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 ofCertified 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 described in the Schedule ofFindings and Improper or Questioned Costs, reportable conditions were noted in the following control categories:
(I) Cash Management
(2) 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, the following control category includes a reportable condition that is also considered to be material weakness:
Administrative Requirements
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,

CLV:cm 95ICL-16

Claude L. Vickers State Auditor

SECTIONN FINDINGS AND IMPROPER OR QUESTIONED COSTS

OCMULGEE REGIONAL LIBRARY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1995
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Time and Attendance Records Not Utilized Federal Financial Assistance Finding Resolved Audit Control Number 6452-94-02
The audit report for the year ended June 30, 1994, stated that a review of salaries and fringe benefits charged to the Public Library Services - Title I Program (CFDA 84.034) and Library Literacy Program - Title VI Program (CFDA 84.167) were not supported by time and attendance records, resulting in a questioned cost of$47,605.77. Appropriate internal controls were established by the Library to ensure that all salary charges for employees involved in split funded projects are supported by personnel activity reports or equivalent documentation. Documentation was provided to the Georgia Department ofEducation for review and in a letter dated November 11, 1995, the Georgia Department ofEducation determined the records to be adequate and, as a result, a request for reclaim of funds was not made.
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, 1994, stated that the Library did not provide for adequate separation ofemployee duties in the performance of accounting functions and related procedures. In the year under review, no improvement regarding adequate separation of employee duties was noted. 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 "1" of this report are affected by this finding.

OCMULGEE REGIONAL LIBRARY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1995
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General 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, 1994, 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, the Library did not establish a General Fixed Assets Account Group within the formal accounting records. This
condition results in the general purpose financial statements of the Library being incomplete and not in
accordance with generally accepted accounting principles. Appropriate action should be taken by the Library to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings, equipment and inexhaustible collections and books owned by the Library and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
CASH MANAGEMENT Excessive Cash Balances Federal Financial Assistance Reportable Condition Nonmaterial Noncompliance Audit Control Number 6452-94-01
The audit report for the year ended June 30, 1994, stated that a review of cash management procedures for the Title I - Public Library Services Program (CFDA 84.034) disclosed that cash draws utilizing DE For 0147, "Quarterly Report ofExpenditures and Estimated Requirements for Grant Funds", were made in advance of immediate cash needs, resulting in the accumulation of excessive cash balances. For the year under review, audit test ofcash management procedures again revealed excessive cash balance accumulations by the Library. During fiscal year 1995, the program had an average cash balance of$6,238.45 with excessive ending monthly
cash balances in nine 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 ofEducation and disbursement of such funds by the Library.
Note: The Ocmulgee Regional Library was provided an opportunity to include pertinent comments from the Library's management concerning these audit findings, conclusions and recommendations. The Library has elected not to provide comments for inclusion in this report.