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

OCONEE REGIONAL LIBRARY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXIllBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL AND SPECIAL REVENUE FUNDS

5

D

STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN FUND BALANCES

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

6

E

STATEMENT OF CASH FLOWS

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

7

F NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

8

ADDmONAL FINANCIAL INFORMATION

SCHEDULES

1 SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION ....

16

SCHEDULE OF REVENUE

2

STATE

17

3

FEDERAL

18

4

LOCAL

19

5 SCHEDULE OF SALARIES AND TRAVEL

20

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

SECTION I FINANCIAL

RUSSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
July 27, 1999

Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe State Board of Technical and Adult Education
and Director and Members ofthe Oconee Regional Library Board
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE
FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying general putpOse financial statements ofthe Oconee Regional Library, as of and for the year ended June 30, 1998, as listed in the table of contents. These general purpose financial statements are the responsibility of the Oconee Regional Library's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
AS described in the notes to the general purpose financial statements, the Library's financial statements have been prepared using a certain accounting practice and policy which, in our opinion, varies in some respects from generally accepted accounting principles. This variance is described as follows:
* The general 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 has not been determined, is believed to be material.

98ARL-42A

In our opinion, except for the effects on the general purpose financial statements of the matter referred to in the third para~aph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Oconee Regional Library as of June 30, 1998, and the results of its operations and the cash flows of its nonexpendable trust fund for the year then ended, in conformity with generally accepted accounting principles.
The year 2000 supplementary information on Schedule "1" is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally ofinquiries ofmanagement regarding the methods ofmeasurement and presentation ofthe supplementary information. However we did not audit the information and do not express an opinion on it. In addition, we do not provide assurance that Oconee Regional Library is or will become year 2000 compliant, that the Library's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Oconee Regional Library does business are or will become year 2000 compliant.
Our audit was performed for the purpose of forming an opinion on the general purpose financial statements of the Oconee Regional Library taken as a whole. The accompanying financial schedules (Schedules 2 through 5), as listed in the table of contents, are presented for purposes of additional analysis and are not a required part ofthe general purpose financial statements. 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 of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,

RWH:jb 98ARL-42A

Russell W. Hinton State Auditor

OCONEE REGIONAL LIBRARY

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets

OCONEE REGIONAL LIBRARY COMBINED BALANCE SHEET
ALL FUND TYPES JUNE 30.1998

GOVERNMENTAL FUND

SPECIAL

GENERAL

REVENUE

FUND

FUND

$ 136,523.73 $

0.00

40,177.20

3,046.38

$ 179,747.31 $=======0:=,0=0

Total Liabilities and Fund Equity

$ 179,747.31 $======0=,0=0

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

EXHIBIT "A"

TYPES CAPITAL
PROJECTS FUND

FIDUCIARY FUND TYPES
TRUST FUND

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

$

0.00

$ 136,523.73 $ 1,106,229.23

$

16,611.57

56,788.77

53,076.02

3,046.38

17,650.00

$

0.00 $

16,611.57 $ 196,358.88 $ 1,176,955.25

$

17,650.00

$

19,314.93

34,984.08

119,918.70

315,905.58

$

19,314.93 $ 488,458.36

$

14,770.56

$

13,279.14

13,279.14 $

12,818.24

553,002.56

$

--:.;0.=00;:..

3,332.43

15,099.46 133,894.79

14,244.70 108,431.39

$

0.00 $

16,611.57 $ 177,043.95 $ 688,496.89

$

0.00 $

16,611.57 $ 196,358.88 $ 1,176,955.25

-3-

OCONEE REGIONAL LIBRARY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30,1998

EXHIBIT"B"

GENERAL FUND

SPECIAL REVENUE
FUND

CAPITAL PROJECTS
FUND

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

REVENUES

State Funds Federal Funds Local Funds Other Funds

$

633,962,47

$ 330,109,00 $

964,071.47 $ 2,809,544,37

$ 10,100,00

10,100,00

20,386,85

545,269,22

59,854,21

605,123,43

485,812,71

67,679,05

70,357,18

138,036,23

669,000,92

Total Revenues

$ 1,246,910,74 $ 10,100,00 $ 460,320,39 $ 1,717,331.13 $ 3,984,744.85

EXPENDITURES

Current Program Services Technical services Circulation Administration Maintenance and Operations
capital OuUay

$

566,393,19

$

566,393.19 $

452,706.06

121,919,94

121,919,94

112,410.83

93,116.26

93,116.26

97,692.26

315,516,70 $ 10,100,00

325,616.70

304,661.65

109,336,83

109,336.83

58,793.76

$ 1,013,322.95

1,013,322,95

3,488,052.20

Total Expenditures

$ 1,206,282.92 $ 10,100,00 $ 1,013,322.95 $ 2.229,705.87 $ 4,514,316.76

Excess of Revenues over (under) Expenditures $

40,627,82 $

0,00 $ -553,002,56 $ -512,374,74 $

-529,571,91

FUND BALANCE JULY 1 - Restated (See Note 1)

119,804,56

0.00

553,002.56

672,807.12

1,202,379.03

FUND BALANCE JUNE 30

$

160,432.38 $

0.00 $

0.00 $

160,432.38 $

6.7..2.,.80.7...1...2.

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

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

EXHIBIT "C"

GENERAL FUND

BUDGET

ACTUAL

REVENUES

State Funds Federal Funds Local Funds Other Funds

$ 636,870,49 $ 633,962,47

638,589,04 51,780,64

545,269.22 67,679,05

Total Revenues

$ 1,327,240.17 $ 1,246,910.74

EXPENDITURES

Current Program Services Technical Services Circulation Administration Maintenance and Operations

$ 573,953,40 $ 566,393.19

121,198,44

121,919.94

102,979,23

93,116,26

404,029,66 315,516,70

115,453.44

109,336.83

Total Expenditures

$ 1,317,614.17 $ 1,206,282,92

Excess of Revenues over (under) Expenditures

$ 9,626.00 $ 40,627.82

OTHER FINANCING USES

Other Uses

-9,626,00

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

$

0,00 $ 40,627.82

FUND BALANCE JULY 1. 1997 - Restated (See Note 1)

200,741.23

119,804.56

Adjustments

-3,360.09

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 27,750,00 $ 10,100,00 $ 27,750.00 $ 10,100,00

$ 10,100,00 $ 10,100,00

$ 10,100.00 $ $ 17,650.00 $

10,100.00 0.00

$ 17,650.00 $

0,00

0.00

0.00

-17,650.00

FUND BALANCE JUNE 30, 1998

$ 197,381.14 $ 160,432.38

$

0.00 $ =====........0.=.0==0

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

OCONEE REGIONAL LIBRARY

EXHIBIT "0"

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

YEAR ENDED JUNE 30, 1998

OPERATING REVENUES None Recorded
OPERATING EXPENSES None Recorded Operating Income (Loss)
NONOPERATING REVENUES Interest Earned Total Income (Loss)
FUND BALANCE JULY 1

WILSON MEMORIAL
FUND

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

$

0.00 $

0.00 $

0,00

$

0,00 $

0.00 $

0.00

$

0.00 $

0.00 $

0.00

921.80

$

921.80 $

15,689.77

921.80 921.80 $ 15,689.77

1,180.65 1,180.65 14,509.12

FUND BALANCE JUNE 30

$ 16,611.57 $

16,611.57 $.======1=5=,6=8=9.=77=

The notes to the general purpose financial statements are an integral part of this statement. -6-

OCONEE REGIONAL LIBRARY COMBINED STATEMENT OF CASH FLOWS FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND
YEAR ENDED JUNE 30,1998

EXHIBIT"E"

Cash Flows from Operating Activities: No Operating Activities Recorded
Cash Flows from Investing Activities: Proceeds from Maturity of Investment Interest Received on Investments Purchase of Investment
Net Increase in Cash
Cash and Cash Equivalents - July 1

WILSON MEMORIAL
FUND

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

$

0,00 $

0.00 $

0.00

$

15,689.77 $

921.80

-16,611,57

$

0,00 $

$

0,00 $

15,689,77 $ 921.80
-16,611,57
0.00 $
0.00 $

14,509.12 1,180,65
-15,689,77
0,00
0,00

Cash and Cash Equivalents - June 30

$

0,00 $

0.00 $=========0,=00=

The notes to the general purpose financial statements are an integral part of this statement. -7-

OCONEE REGIONAL LmRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

ruNE 30. 1998

Note 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Oconee Regional Library (Library) operates pursuant to Official Code of Georgia Annotated Sections 20-5-40 through 20-5-59 to provide public library services with costs shared by participating local governmental agencies and grants from the State of Georgia. With the exception of the 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 and unless otherwise disclosed in these notes, the financial statements present all fund types and account groups of the Library.
The Library Board consists of 16 members; 4 members appointed by the Laurens County Library Board, 3 members appointed by the Johnson County Library Board, 3 members appointed by the Treutlen County Library Board, 3 members appointed by the Washington County Library Board and 3 members appointed by the Wheeler County Library Board. The Library 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 ofGeorgia for State and Federal funding. Membership in the Library and participation in library services is at the discretion of each participating governmental agency. The Library Board has the power to designate management, the power to retain unreserved fund balances of local and other funds for continued operations and is the lowest level of oversight responsibility for the Library's operations. The Oconee Regional Library is determined to be a joint venture.
FUND ACCOUNTING
The Library uses funds 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 related to certain governmental functions or activities.
A fund is a separate accounting entity with a self-balancing set ofaccounts.
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 pUlpose financial statements account for all State, Federal, Local and Other funds under control ofthe Library, in compliance with generally accepted accounting principles applicable to gov~enta1 units, unless otherwise disclosed in these notes. Funds 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:
-8-

OCONEE REGIONAL LIBRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL FUND - the fund used to account for all financial resources of the Library except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a Library.
SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. The primary type of special revenue fund consists of proceeds received from State and Federal sources to accomplish specific objectives and are required to be accounted for separately.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction ofmajor capital facilities.
FIDUCIARY FUND TYPES - the trust fund used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. This fund includes:
NONEXPENDABLE TRUST FUND Wilson Memorial Fund - the fund used to account for an endowment of which the corpus is to be invested and preserved intact with the resultant income to be evenly split between an addition to principal and a transfer to the General Fund.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities are generally included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds.
Nonexpendable trust funds are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and liabilities associated with the operation of these funds are included on the balance sheet. Operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets.
Governmental funds are accounted for using the modified accrual basis of accounting under which:

-9-

OCONEE REGIONAL LffiRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

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 detennined 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.

The accrual basis of accounting, as required by generally accepted accounting principles, is utilized by the nonexpendable trust funds. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred.

RESTATEMENT OF PRIOR YEAR FUND BALANCE

In prior years, the activities ofthe Johnson County Library and the Truetlen County Library were not reported in the Oconee Regional Library's financial statements at July 1, 1997, the Johnson County Library and the Truetlen County Library, had a fund balance of$8,663.27 and $14,478.28, respectively. For fiscal year 1998, these funds have been reported as part of the General Fund. The fund balance at July 1, 1997, has been restated as appropriate.

BUDGET

The Oconee 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 ofthis tentative budget by the Board, copies are sent to all local funding agencies. After funding approval is received from all local funding agencies, the Board makes revisions as necessary and adopts the budget. The budget is then submitted to the Department of Technical and Adult Education as a part ofthe Library's annual application for State aid. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year end.

CASH AND CASH EQUIVALENTS

COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Library to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.

-10 -

OCONEE REGIONAL LIBRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Library in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Both participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Library to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofretum shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States .government agency,
(4) Obligations of any corporation ofthe United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office ofTreasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisio~ of the State of Georgia.
RECEIVABLES
Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed, allotted funds from participating local governments, and other receivables disclosed from infonnation available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

-11-

OCONEE REGIONAL LffiRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES
RESERVE FOR ENCUMBRANCES
This reserve constitutes the unperformed portion of purchase orders, contracts and other commitments for goods and services at year end. Encumbrances outstanding are reported as a reservation of fund balance and do not constitute expenditures or liabilities in the current year because the commitments will be honored during the subsequent year.
INTERFUND TRANSACTIONS
The Library has the following types ofinterfund transactions:
Reimbursements ofexpenditures/expenses initially made from a fund that are properly applicable to another fund are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses 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, results ofoperations or cash flows 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. Certain reclassifications have been made to the comparative data to conform to the current year classifications.
Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code ofGeorgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone ofor 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,
-12 -

OCONEE REGIONAL LffiRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 2: DEPOSITS

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

(4) Bonds~ bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,

(5) Bonds 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,

(6) Industrial revenue bonds and bonds of development authorities created by the laws of the 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 C~edit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 1998, the bank balances were $280,744.17. The amounts ofthe total bank balances are classified into three categories ofcredit risk:

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

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

Risk Category

Bank Balance

1

$ 169,360.48

2

0.00

3

111.383.69

Total

$ 280.744.17

- 13 -

OCONEE REGIONAL LffiRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 3: RISK MANAGEMENT

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

The Library has obtained commercial insurance for risk ofloss associated with torts and assets. The Library has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Library's insurance coverage in any of the past three years.

The Library has elected to self-insure for all losses related to natural disaster. In addition, the Library has elected to self-insure for errors or omissions, which includes, among other risks, risks for sexual harassment and discrimirui.tion. The Library has not experienced any losses related to these risks in the past three years.

The Library is self-insured with regard to unemployment compensation claims. The Library accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated. The Library has not experienced any unemployment compensation claims during the last two years.

The Library participates in the Association County Commissioners of Georgia-Self Insured Workers' Compensation Fund, a public entityrisk pool organized on July 1, 1982 to develop, implement and administer a program ofworkers' compensation self-insurance for its member organizations. The Library pays an annual premium to the Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Fund with Safety National Casualty Corporation to provide coverage for potential losses by the Fund in excess of$450,000.00 loss per occurrence, up to $2,000,000.00.

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

Position Covered

Amount

A l l Employees

$ 100,000.00

Note 4: OPERATING LEASES

The Library has committed under various leases for copiers and a postage meter. These leases are considered for accounting purposes to be operating leases. Lease expenditures for the year ended June 30, 1998, amounted to $2,349.00. Future minimum lease payments for these leases are as follows:

YearEndinK

Amount

1999

$ 1.780.00

- 14-

OCONEE REGIONAL LIBRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1998

Note 5: CONTINGENT LIABILITIES

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

Note 6: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all librarians and clerical personnel employed by regional and county libraries are covered by the Teachers Retirement System ofGeorgia (TRS), which is a cost-sharing multiple employer defined benefit penSion plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System ofGeorgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department ofAudits and Accounts.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Library who are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. The Library makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

1998 1997 1996

100% 100% 100%

$ 70,565.18 $ 62,513.40 $ 56,305.99

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OCONEE REGIONAL LmRARY

SCHEDULE "1"

SCHEDULE OF REQUIRED SupPLEMENTARY INFORMATION

YEAR 2000 DISCLOSURES

YEAR ENDED ruNE 30. 1998

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

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

OCONEE REGIONAL LIBRARY SCHEDULE OF STATE REVENUE
YEAR ENDED JUNE 30,1998

SCHEDULE "2"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

GRANTS Community Affairs, Department of Local Assistance Grant

$

15,000.00 $ 15,000.00

Technical and Adult Education, Georgia Department of Public Libraries Salaries Travel Library Materials Regular Governor's Incentive Program Talking Books Center Maintenance and Operation

$ 353,160.49 3,891.98
53,329.00 113,441.00 63,411.00 46,729.00

353,160.49 3,891.98
53,329.00 113,441.00 63,411.00 46,729.00

Georgia State Financing and Investment Commission Reimbursement for Construction Projects

315,109.00 315,109.00

$ 633,962.47 $ 330,109.00 $ 964,071.47

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

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

SCHEDULE "3"
GOVERNMENTAL FUND TYPE SPECIAL REVENUE FUND
$====10=,=10=0=,0:.=0

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

OCONEE REGIONAL LIBRARY SCHEDULE OF LOCAL REVENUE
YEAR ENDED JUNE 30,1998

SCHEDULE "4"

LOCAL SOURCES Boards of Education Johnson County Truetlen County City Governments Dublin Soperton Wrightsville County Governments Boards of Commissioners Johnson Laurens Truetlen

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

$

3,785.00

5,760.00

$ 3,785.00
5,760.00

193,498,98 $
3,000.00 4,333.32

15,000.00

208,498.98 3,000.00 4,333.32

7,958.04 323,473,92
3,459.96

44,854.21

7,958.04 368,328.13
3,459.96

$

545,269.22 $ 59,854,21 $ 605,123.43

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

OCONEE REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 1998

SCHEDULE "5"

NAME

Akins, Coleman, Dillard, Fortner, Gryzenia, Green, Hall, Hall, Hilburn, Hilliard, Hogan, Jolley, Kerr, Mack-Brown, Mathew, Miller, Northrop, O'Neal, Oxford, Schrader, Snellgrove, Southwood, Summey, Sweat, Thomas, Walker, Warren; Whatley-Wilcox, Wiggins, Williams, Williams, Williams, Wills, Woodburn,

Harold T, Donna Abbie Marolyn Melanie S. Susan R. Lugine
Shirley A. Connie R.
Patricia Virginia C. Ellen B. Glenda Ina
Beverly A.
Sally Lesley L JuliaS, Lenton F. Patricia Luticia L. Blondell R. JudyM. Jane L. Edith GailR. Linda C. JoyS. Christian Mattie K. Erica N, Linda R. Susan S. Sonya D. Chris C.

Accruals June 30, 1998

TITLE CATEGORY
Reference Librarian Technical Services Librarian Assistant Director Branch Assistant Manager Children's Assistant Branch Manager Custodian/Security Business Manager Circulation Clerk Reference Librarian Branch Services Librarian Reference Librarian Branch Manager Patron Accounts Manager Children's Assistant Circulation Clerk Reference Assistant Circulation Clerk Circulation Clerk Children's Librarian Shelver Library Clerk for the Blind Reference Librarian Branch Manager Reference Librarian Library Assistant Automation Assistant Librarian Circulation Desk Manager Children's Assistant LBPH Manager Director Circulation Clerk Automation Specialist

SALARIES

TRAVEL

$

9,886.50

40,854.80 $

20.00

40,501.96

16.06

1,083,00

1,793,36

7,536.50

23,203.19

720,00

24,170.04

197,97

3,888.50

45,544,00

77.75

48,280.40

40.50

5,988.80

2,895,00

18,225.00

6,422.00

9,903,45

7,201.26

1,239.85

4,784.00

28,130,52

7.58

5,092.49

3,681,74

25,459.20

477.00

5,850.00

35,734.44

42.50

17,069.01

20,609.88

3,919.50

16,961,40

13,50

1,438.29

17,567.64

268.27

61,664.72

1,127.41

1,375,50

47,077.20

169.75

$

595,033.14 $ 3,178.29

25.25

Totals per Report
See notes to the general purpose financial statements,
- 20-

$

595,033.14 $ 3,203.54

SECTIONll FlNDINGS AND QUESTIONED COSTS

OCONEE REGIONAL LffiRARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 1998
PRIOR YEAR
CASH AND CASH EQUNALENTS Uncollateralized Deposits Finding Resolved Finding Control Number: 6872-97-01
The audit report for the year ended June 30, 1997, stated that the Library failed to have its bank balances fully collateralized as provided for by the Official Code of Georgia Annotated Section 45-8-12. For the year under review, the library's bank balances were fully collateralized.
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: 6872-93-02
The audit report for the year ended June 30, 1997, noted that management ofthe Oconee Regional Library chose not to maintain a system-wide General Fixed Assets Account Group within the fonnalaccounting records as required by generally accepted accounting principles. In the year under review, the Library did not establish a system-wide General Fixed Assets Account Group within the fonnal accounting records. This condition results in the general purpose financial statements of the Library being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Library to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, buildings, equipment and inexhaustible collections and books owned by the Library and should include, but 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.