OCONEE REGIONAL LIBRARY
DUBLIN, GEORGIA REPORT ON AUDIT OF THE FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2007
STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
Russell W. Hinton State Auditor
OCONEE REGIONAL LIBRARY - TABLE OF CONTENTS -
SECTION I
FINANCIAL
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
EXHIBITS
BASIC FINANCIAL STATEMENTS
DISTRICT-WIDE FINANCIAL STATEMENTS
A
STATEMENTOFNETASSETS
1
B
STATEMENT OF ACTIVITIES
2
FUND FINANCIAL STATEMENTS
C
BALANCE SHEET
GOVERNMENTAL FUNDS
3
D
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
4
E
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES
GOVERNMENTAL FUNDS
5
F
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT
OF REVENUES, EXPENDITURES AND CHANGES IN FUND
BALANCES TO THE STATEMENT OF ACTIVITIES
7
G
NOTES TO THE BASIC FINANCIAL STATEMENTS
8
SCHEDULES
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
GENERAL FUND
19
SUPPLEMENTARY INFORMATION
SCHEDULES OF REVENUE
2
STATE
20
3
FEDERAL
21
4
LOCAL
22
5 SCHEDULE OF SALARIES AND TRAVEL
23
OCONEE REGIONAL LIBRARY - TABLE OF CONTENTS -
SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTION III FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION IV MANAGEMENT'S RESPONSES SCHEDULE OF MANAGEMENT'S RESPONSES
SECTION I FINANCIAL
Russell W. Hinton
STATE AUDITOR
(404) 656-2174
DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
August 29, 2008
Honorable Sonny Perdue, Governor Members of the General Assembly Members of the Board of Regents of the University System of Georgia
and Director and Members of the Oconee Regional Library Board
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying financial statements of the governmental activities, and each major fund (Exhibits A through G) ofthe Oconee Regional Library as ofand for the year ended June 30, 2007, which collectively comprise the Library's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Oconee Regional Library's management. Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness ofthe Library's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the Oconee Regional Library, as of June 30, 2007, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
2007ARL-41
The Oconee Regional Library has not presented Management's Discussion and Analysis that accounting principles generally accepted in the United States has determined is necessary to supplement, although not to be part of, the basic financial statements.
The Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on page 19 is not a required part of the basic financial statements but is supplementary information required by the accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods ofmeasurement and presentation ofthe required supplementary information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Oconee Regional Library's basic financial statements. The accompanying supplementary information which consist of Schedules 2 through 5, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe basic financial statements, and in our opinion, is fairly stated in all material respects in relation to the basic 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,
:Du_ .Ch Lu. ~
~ ~ t o n , CPA, CGFM State Auditor
RWH:as 2007ARL-41
OCONEE REGIONAL LIBRARY
OCONEE REGIONAL LIBRARY STATEMENT OF NET ASSETS
JUNE 30, 2007
ASSETS Cash and Cash Equivalents Investments Accounts Receivable, Net
Other Capital Assets
Equipment Library Collections Less: Accumulated Depreciation
Total Assets
LIABILITIES Long-Term Liabilities
Due Within One Year Due in More Than One Year
Total Liabilities NET ASSETS Invested in Capital Assets, Net of Related Debt Restricted for Permanent Funds Unrestricted Total Net Assets
Total Liabilities and Net Assets
EXHIBIT "A"
GOVERNMENTAL ACTIVITIES
$
215,037.00
398,736.00
40,074.00
420,602.00 3,444,219.00 -2,921,047.00
$ ===11=59=7~,6=2=1=.o=o
$
9,921.00
58,128.00
$
68 049.00
$
925,338.00
16,859.00 587 375.00
$
1,529,572.00
$ ==~1!='5=97:e,6=2=1=.0=0
The notes to the basic financial statements are an integral part of this statement. -1-
OCONEE REGIONAL LIBRARY STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2007
EXHIBIT "B"
EXPENSES
PROGRAM REVENUES
OPERATING
CHARGES FOR
GRANTS AND
SERVICES
CONTRIBUTIONS
NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS
GOVERNMENTAL ACTIVITIES
Current Services Public Services Technical Services Support Services Maintenance and Operations Information Technology Interest on Short-Term and Long-Term Debt
$ 919,004.00 $ 5,279.00
374,274.00 173,897.00 120,298.00
14041.00
87,047.00 $
561,877.00 $ 111,346.00
-270,080.00 -5,279.00
-374,274.00 -62,551.00
-120,298.00 -14 041.00
Total Governmental Activities
$ 1,606,793.00 $
87 047.00 $
673 223.00 $ _ _ _-.c....84-'6-'-,5_2_3._00-'--
General Revenues Allotments from Participating Governments Investment Earnings Miscellaneous
$
720,397.00
24,895.00
109 367.00
Total General Revenues
Change in Net Assets
$
8,136.00
Net Assets - Beginning of Year
1 521 436.00
Net Assets - End of Year
$ ===1,~5=29:!'=57=2=.o=o=
The notes to the basic financial statements are an integral part of this statement. -2-
OCONEE REGIONAL LIBRARY BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2007
EXHIBIT "C"
ASSETS Cash and Cash Equivalents Investments Accounts Receivable, Net
Other
Total Assets
LIABILITIES AND FUND BALANCES LIABILITIES
Deposits and Deferred Revenue FUND BALANCES
Reserved for: Permanent Funds
Unreserved Designated for Self-Insurance Designated for Roche Funds for Books and Materials Undesignated Reported in: General Fund Permanent Funds Total Fund Balances
Total Liabilities and Fund Balances
GENERAL FUND
PERMANENT FUND
TOTAL
$ 215,037.00 378,965.00 $
40 074.00
$ 19,771.00
215,037.00 398,736.00
40 074.00
$ 634,076.00 $
19 771.00 $ ===6=5=3=8=47=.o=o=
$
34 629.00
$
34 629.00
$
$
20,372.00
131,143.00
447,932.00
$ 599 447.00 $
16,859.00 $
2,912.00 19771.00 $
16,859.00
20,372.00 131,143.00
447,932.00 2 912.00
619 218.00
$ 634 076.00 $
19 771 .oo $ ======6=53===84=7=.o=o=
The notes to the basic financial statements are an integral part of this statement. -3-
OCONEE REGIONAL LIBRARY RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30, 2007
EXHIBIT"D"
Total Fund Balances - Governmental Funds (Exhibit "C")
Amounts reported for Governmental Activities in the Statement of Net Assets are different because:
Capital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of:
Equipment Library Collections Accumulated Depreciation
Total Capital Assets
Fines and Fees Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in Governmental Funds.
Long-Term Liabilities are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-Term Liabilities at year-end consist of:
Capital Leases Compensated Absences
Total Long-Term Liabilities
$ 619,218.00
$ 420,602.00 3,444,219.00 -2,921,047.00
943,774.00
34,629.00
$ -19,143.00 -48,906.00
-68,049.00
Net Assets of Governmental Activities (Exhibit "A")
$ 1,529,572.00
The notes to the basic financial statements are an integral part of this statement. -4-
OCONEE REGIONAL LIBRARY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2007
EXHIBIT"E"
REVENUES
Local Funds State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Public Services Technical Services Support Services Maintenance and Operations Information Technology
Debt Services Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Capital Leases
Net Change in Fund Balance
Fund Balance - Beginning
Fund Balance - Ending
GENERAL FUND
PERMANENT FUND
TOTAL
$ 720,397.00 651,765.00 21,458.00 87,047.00 24,194.00 $ 74 738.00
$ 1,579,599.00 $
$ 701.00
720,397.00 651,765.00 21,458.00
87,047.00 24,895.00 74 738.00
701.00 $ 1,580,300.00
$ 887,650.00 $ 5,279.00
373,859.00 173,897.00 120,298.00
3,999.00 $
891,649.00 5,279.00
373,859.00 173,897.00 120,298.00
11,477.00 1 282.00
11,477.00 1,282.00
$ 1,573,742.00 $ 3,999.00 $ 1577741.00
$
5,857.00 $ -3,298.00 $
2,559.00
10,367.00
10,367.00
$
16,224.00 $ -3,298.00 $
12,926.00
583,223.00
23,069.00
606,292.00
$ 599,447.00 $ 19 771.00 $ 619,218.00
The notes to the basic financial statements are an integral part of this statement. -5-
(This page left intentionally blank)
OCONEE REGIONAL LIBRARY RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2007
EXHIBIT"F"
Total Net Change in Fund Balances - Governmental Funds (Exhibit "E")
Amounts reported for Governmental Activities in the Statement of Activities are different because:
Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:
Capital Outlay Depreciation Expense
Excess of Depreciation Expense over Capital Outlay
Fines and Fees Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in Governmental Funds.
Some of the Capital Assets acquired this year were financed with capital leases. In Governmental Funds, a capital lease arrangement is considered a source of financing, but in the Statement of Net Assets, the lease obligation is reported as a Long-Term Liability.
Repayment of Long-Term Debt is reported as an expenditure in Governmental Funds, but the repayment reduces Long-Term Liabilities in the Statement of Net Assets. In the current year, these amounts consist of:
Capital Lease Payments
Some items reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in Governmental Funds. These activities consist of:
Increase in Compensated Absences
Change in Net Assets of Governmental Activities (Exhibit "B")
$
12,926.00
$ 180,988.00 -213,016.00
-32,028.00 34,629.00
-10,367.00
11,477.00
-8,501.00 $ ==8='=13=6=.o=o
The notes to the basic financial statements are an integral part of this statement. -7-
OCONEE REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007
EXHIBIT "G"
Note 1: DESCRIPTION OF LIBRARY AND REPORTING ENTITY
REPORTING ENTITY
The Oconee Regional Library operates pursuant to Official Code ofGeorgia Annotated Sections 205-40 through 20-5-59 to provide public library services with costs shared by participating local governmental agencies and grants from the State of Georgia.
The Library Board is comprised of 12 members, which are also trustees of the member library, which appointed them. The Library Board membership consists of 4 members appointed from the Laurens County Library Board, 2 members appointed from the Johnson County Library Board, 2 members appointed from the Treutlen County Library Board, 3 members appointed from the Washington County Library Board, and 1 member appointed from the Glascock County Library Board. The Library Board is without authority to determine the amount of its funding, except by submission of budget request to local governmental units from which the Library receives support and to the State of Georgia for State and Federal flow through 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 therefore determined to be a joint venture.
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The Library's basic financial statements are collectively comprised of the Library-wide financial statements, fund financial statements and notes to the basic financial statements of the Oconee Regional Library.
Library-wide Statements: The Statement ofNet Assets and the Statement ofActivities display information about the financial activities ofthe overall Library. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through intergovernmental revenues and other nonexchange transactions.
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the Library's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the Library related to the administration and support of the Library's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
-8-
OCONEE REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007
EXHIBIT "G"
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Program revenues include (a) charges paid by the recipients ofgoods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues are presented as general revenues.
Fund Financial Statements: The fund financial statements provide information about the Library's funds. Eliminations have been made to minimize the double counting of internal activities. The emphasis of fund financial statements is on major governmental funds. All remaining governmental funds are aggregated and reported as nonmajor funds.
The Library reports the following major governmental funds:
General Fund is the Library's primary operating fund. It accounts for all financial resources of the Library, except those resources required to be accounted for in another fund.
Permanent Fund - is the fund used to account for the Wilson Memorial 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 the purchase of science books.
BASIS OF ACCOUNTING
The basis ofaccounting determines when transactions are reported on the financial statements. The Library-wide governmental financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the Library gives (or receives) value without directly receiving (or giving) equal value in exchange, include grants and donations. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
The Library uses funds 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.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The Library considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Interest is considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for
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OCONEE REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007
EXHIBIT "G"
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
compensated absences, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of acquisitions under capital leases are reported as other financing sources.
The Library funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the Library's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Official Code of Georgia Annotated Section 45-8-14 authorizes the Library to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Library in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. 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 of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
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OCONEE REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007
EXHIBIT"G"
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLE
Receivables consist ofamounts due from grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed, fines and fees charged to patrons and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the basic financial statements do include any amounts which would necessitate the need for an allowance for uncollectible receivables.
CAPITAL ASSETS
Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time ofpurchase. On the Library-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method.
Capitalization thresholds and estimated useful lives of capital assets reported in the Library-wide statements are as follows:
Capitalization Policy
Estimated Useful Life
Equipment Library Collections
$ 5,000.00 3 to 15 years
All
10 years
Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives.
NET ASSETS
The Library's net assets in the Library-wide Statements are classified as follows:
Invested in capital assets, net of related debt - This represents the Library's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt.
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OCONEE REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007
EXHIBIT "G"
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Restricted net assets - These represent resources for which the Library is legally or contractually obligated to spend resources for continuation of permanent funds in accordance with restrictions imposed by external third parties.
Unrestricted net assets - Unrestricted net assets represent resources derived from grants and contributions not restricted to specific programs, charges for services, and miscellaneous revenues. These resources are used for transactions relating to the general operations of the Library, and may be used at the discretion of the Library to meet current expenses for those purposes.
FUND BALANCES RESERVED
Reserves represent those portions of fund balance equity that are legally segregated for a specific future use.
UNRESERVED - DESIGNATED Designated fund balances represent tentative plans for future use of financial resources.
Note 3: 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 of insurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance.
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 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,
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OCONEE REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007
EXHIBIT "G"
Note 3: DEPOSITS
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds 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 or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 2007, the bank balances were $703,221.00. The amounts of the total uninsured bank balances are classified into three categories of custodial credit risk:
Category 1 - Uncollateralized Category 2 - Cash collateralized with securities held by the pledging financial institution, or Category 3 - Cash collateralized with securities held by the pledging financial institution's
trust department or agent but not in the Library's name.
The Library's deposits are classified by custodial credit risk category at June 30, 2007, as follows:
Custodial Credit Risk Category
Bank Balance
I
$
0.00
2
282,429.00
3
0.00
Total
$ 282,429.00
Note 4: ACCOUNTS RECEIVABLE
Accounts receivable consisted of the following at June 30, 2007:
Fines and Fees Less: Allowance for Doubtful Accounts
$ 110,409.00 70,335.00
Net Accounts Receivable
$ 40,074.00
- 13 -
OCONEE REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007
EXHIBIT"G"
Note 5: CAPITAL ASSETS
The following is a summary of changes in the Capital Assets during the fiscal year:
Capital Assets Being Depreciated Equipment Library Collections
Less Accumulated Depreciation for: Equipment Library Collections
Governmental Activity Capital Assets - Net
Balances
July 1. 2006
Increases
Decreases
Balances June 30, 2007
$ 387,026.00 $ 33,576.00
$ 420,602.00
3,362,023.00 147,412.00 $ 65,216.00 3,444,219.00
265,354.00 2,507.893.00
31,619.00 181,397.00
296,973.00 65,216.00 2,624,074.00
$ 215,802.0Q $ -32,028.QQ $
Q,QQ $ 2~3,11~.QQ
Capital assets being acquired under capital leases as of June 30, 2007, are as follows:
Governmental Funds
Equipment Less: Accumulated Depreciation
$ 45,810.00 29,387.00
$ 16,423.00
Current year depreciation expense by function is as follows:
Public Services Support Services
$ 212,601.00 415.00
$ 213,016.00
Note 6: RISK MANAGEMENT
The Library is exposed to various risks ofloss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation.
The Library has obtained commercial insurance for risk of loss associated with torts, assets, and errors or omissions. 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.
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OCONEE REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007
EXHIBIT "G"
Note 6: RISK MANAGEMENT
The Library has elected to self-insure for all losses related to acts of God. The Library has not experienced any losses related to this risk in the past three years.
The Library is self-insured with regard to unemployment compensation claims. In connection with this program, a self-insurance reserve has been established within the General Fund by the Library. The Library accounts for claims with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. The Library paid $4,352.00 in unemployment claims in 2007. No claims were paid in 2006.
The Library participates in the Association County Commissioners of Georgia-Self Insured Workers' Compensation Fund, a public entity risk pool organized on July 1, 1982, to develop, implement and administer a program of workers' 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 $1,000,000.00 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
All Employees
$ 100,000.00
Note 7: LONG-TERM DEBT
CAPITAL LEASES The Oconee Regional Library has entered into various lease agreements as lessee for copiers and a printer. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value ofthe future minimum lease payments as ofthe date oftheir inception.
COMPENSATED ABSENCES Compensated absences represent obligations of the Library relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. Typically, the General Fund is the fund used to liquidate this long-term debt. The Library uses the vesting method to compute compensated absences.
The changes in Long-Term Debt during the fiscal year ended June 30, 2007, were as follows:
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OCONEE REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007
EXHIBIT "G"
Note 7: LONG-TERM DEBT
Governmental Funds
Capital
Compensated
Leases
Absences ( 1)
Total
Balance July 1, 2006
$ 20,253.00 $ 40,405.00 $ 60,658.00
Additions Capital Leases Annual Leave Earned
10,367.00
32,472.00
10,367.00 32,472.00
Deductions Annual Leave Utilized Debt Retired
11,477.00
23,971.00
23,971.00 11,477.00
Balance June 30, 2007
$ 19,143.00 $ 48,906.00 $ 68,049.00
Portion of Long-Term Debt Due within One Year
$ 9,921.00 $
0.00 $ 9,921.00
(1) The portion of Compensated Absences due within one year has been determined to be immaterial to the basic financial statements.
At June 30, 2007, payments due by fiscal year which includes principal and interest for these items are as follows:
Fiscal Year Ended June 30
Ca12ital Leases
Princi12al
Interest
2008 2009 2010
$ 9,921.00 $ 1,132.00
5,630.00
518.00
3,592.00
119.00
Total Principal and Interest
$ 19,143.00 $ 1,769.00
Note 8: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA {TRS)
TRS PLAN DESCRIPTION Substantially all librarians and clerical personnel employed by regional and county libraries are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and
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OCONEE REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007
EXHIBIT "G"
Note 8: RETIREMENT PLANS
survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Library who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Library makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 9.28% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:
Fiscal Year
Percentage Contributed
Required Contribution
2007 2006 2005
100% 100% 100%
$ 68,711.00 $ 62,205.00 $ 62,129.00
Note 9: AFFILIATED LIBRARIES DISCLOSURE
The Johnson County Library, Laurens County Library, Treutlen County Library, Washington County Library, and Glascock County Library are legally separate, tax exempt organizations who participate in shared activities with the Oconee Regional Library. These affiliated libraries do not meet the criteria for reporting as either a component unit or related entity of the Oconee Regional Library.
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OCONEE REGIONAL LIBRARY GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2007
SCHEDULE "1"
REVENUES
Local Funds State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Public Services Technical Services Support Services Maintenance and Operations Information Technology
Debt Service
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES}
Other Sources Other Uses
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance - Beginning
NONAPPROPRIATED BUDGETS
ORIGINAL
FINAL
ACTUAL AMOUNTS
$
718,937.00 $
718,937.00 $
720,397.00
644,422.00
644,422.00
651,765.00
21,458.00
36,590.00
36,590.00
87,047.00
4,500.00
4,500.00
24,194.00
3,650.00
3,650.00
74,738.00
$ 1,408,099.00 $ 1,408,099.00 $ 1,579,599.00
$
915,774.00 $
915,774.00 $
887,650.00
4,500.00
4,500.00
5,279.00
298,849.00
298,849.00
373,859.00
87,863.00
87,863.00
173,897.00
104,283.00
104,283.00
120,298.00
12,759.00
$ 1,411,269.00 $ 1,411,269.00 $ 1,573,742.00
$
-3 170.00 $
-3170.00 $
5,857.00
$
10,026.00 $
10,026.00 $
10,367.00
-6,856.00
-6,856.00
$
3170.00 $
3170.00 $
10 367.00
$
0.00 $
0.00 $
16,224.00
0.00
0.00
583,223.00
Fund Balance - Ending
$
0.00 $
o.oo $ ===5=99..,,4=4=7=.o=o
Notes to the Schedule of Revenues. Expenditures and Changes in Fund Balances Budget and Actual
The accompanying schedule of revenues. expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.
See notes to the basic financial statements.
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OCONEE REGIONAL LIBRARY SCHEDULE OF STATE REVENUE
YEAR ENDED JUNE 30, 2007
AGENCY/FUNDING
GRANTS Board of Regents of the University System of Georgia Office of Public Library Services Salaries Library Materials Maintenance and Operations Talking Book Centers
SCHEDULE "2"
GOVERNMENTAL FUND TYPE GENERAL FUND
$
382,502.00
83,430.00
92,789.00
93,044.00
$ =====65=1=,7=6=5.=0=0
See notes to the basic financial statements.
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OCONEE REGIONAL LIBRARY SCHEDULE OF FEDERAL REVENUE
YEAR ENDED JUNE 30, 2007
AGENCY/FUNDING GRANT Museum and Library Services, Institute of Through Board of Regents of the University System of Georgia Library Services and Technology Act State Library Program Family Literacy Program
SCHEDULE "3"
GOVERNMENTAL FUND TYPE GENERAL FUND
$ =====2=1=,4=5=8=.0=0
See notes to the basic financial statements.
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OCONEE REGIONAL LIBRARY SCHEDULE OF LOCAL REVENUE
YEAR ENDED JUNE 30, 2007
LOCAL SOURCES Boards of Education Johnson County Treutlen County Washington County City Governments Dublin Soperton Wrightsville County Governments Boards of Commissioners Laurens Johnson Treutlen
SCHEDULE "4"
GOVERNMENTAL FUND TYPE GENERAL FUND
$
8,627.00
6,748.00
2,027.00
223,774.00 5,600.00 7,600.00
448,730.00 11,058.00 6,233.00
$ ======72=0..,3.=9=7=.0=0
See notes to the basic financial statements.
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OCONEE REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2007
SCHEDULE "5"
NAME
Baker, Brown, Brumbelow, Chambless, Couey, Daniel, Daughety, Dugas, Edwards, Flanders, Fortner, Hall, Kerr, Lawrence, Mason, Mathew, Moore, Northrop, Page, Porter, Randall, Rooks, Sethna, Stanley, Thomas, Thomas, Trotter, Ward, Warren, Whatley-Willcox, White, Woodburn, Young, Jr.,
Patsy Beverly Dana Virginia Bradford Wanda Leard Wilfred Julius Robin Marolyn Lugine Glenda Virgil Mattie Sally Jan Julia Elizabeth Inman Vernell Kay Amy Candace Artiffany Mary Lu Robert Cristina Monica Joy Christine Elizabeth Chris Michael D.
Totals per Report
TITLE CATEGORY
Circulation Clerk Reference Librarian Head of Reference Special Projects Bookkeeper TBC Manager Director TBC Assistant Circulation Clerk Heritage Center Branch Manager Circulation Clerk Branch Manager Reference Librarian Head of Circulation Children's Assistant Circulation Clerk Reference Assistant Circulation Clerk Genealogy Assistant Reference Clerk Children's Librarian Circulation Clerk Reference Clerk TBC Assistant Circulation Clerk Head of Reference Circulation Clerk Head of Genealogy Librarian TBC Manager/Business Manager Assistant Director IS Assistant/Circulation Clerk
SALARIES
TRAVEL
$
6,162.49
43,924.62
26,425.19
19,194.08 $
126.93
18,312.03
10,096.69
625.25
92,501.72
885.10
8,401.80
2,452.32
1,683.14
14,514.66
38.80
31,827.00
12,746.54
86.30
45,459.00
29,004.24
136.62
20,211.84
18,220.80
4,427.41
5,108.87
259.88
380.00
43,149.42
160.20
12,517.04
3,165.00
13,202.75
53.85
22,960.08
265.74
19,280.77
11,030.25
31,096.32
564.75
31,541.64
164.19
79,387.60
364.45
23,722.20
1,162.55
$
702,932.14 $ ==4=,0=6=9=.9=8
See notes to the basic financial statements.
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SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS
OCONEE REGIONAL LIBRARY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2007
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
FINDING CONTROL NUMBER AND STATUS
FS-6872-06-01
Previously Reported Corrective Action Implemented
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
SECTION III FINDINGS AND QUESTIONED COSTS
OCONEE REGIONAL LIBRARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2007
The auditor is required to communicate to management and those charged with governance control deficiencies identified during the course of the financial statement audit that, in the auditor's judgment, constitute significant deficiencies or material weakness.
A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affect the Oconee Regional Library's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the Oconee Regional Library's financial statements that is more than inconsequential will not be prevented or detected by the Oconee Regional Library's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement ofthe financial statements will not be prevented or detected by the Oconee Regional Library's internal control.
Any identified deficiencies in internal controls that we did not consider to be significant deficiencies and/or material weaknesses have been communicated to management and those charged with governance within a separate management letter dated August 29, 2008. Internal control deficiencies identified during the course of this engagement that were considered to be significant deficiencies and/or material weaknesses are presented below:
EXPENDITURES/LIABILITIES/DISBURSEMENTS GENERAL LEDGER Inadequate Internal Controls Significant Deficiency Finding Control Number: FS-6872-07-01
Condition:
The accounting procedures of the Library were insufficient to provide for adequate internal controls.
Criteria:
The Library's management is responsible for designing and maintaining internal controls that provide reasonable assurance that transactions are processed according to established procedures.
Questioned Cost: NIA
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OCONEE REGIONAL LIBRARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2007
EXPENDITURES/LIABILITIES/DISBURSEMENTS GENERAL LEDGER Inadequate Internal Controls Significant Deficiency Finding Control Number: FS-6872-07-01
Information:
An examination of the internal accounting control procedures over expenditures/liabilities/disbursements and general ledger revealed the following deficiencies:
Twenty-six out of the seventy-nine vouchers tested did not contain proper approval.
Journal entries are not approved by the Director.
Cause:
These deficiencies were the result of the Library's failure to ensure established controls were functioning as designed. The Library did not consistently adhere to the controls that have been implemented.
Effect:
Errors and/or irregularities may not be detected in a timely manner.
Recommendation:
Management should revise and monitor controls to provide reasonable assurance that transactions are processed according to established procedures. In addition, Management should ensure that all expenditures and journal entries have appropriate approval.
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SECTION IV MANAGEMENT'S RESPONSES
OCONEE REGIONAL LIBRARY SCHEDULE OF MANAGEMENT'S RESPONSES
YEAR ENDED JUNE 30, 2007
Oconee Regional Library's responses to the findings described below were not audited and accordingly, we express no opinion on it.
Finding Control Number: FS-6872-07-01
We concur with this finding. Since the post audit review in June 2008, the Library Director immediately established a new review process ofall invoices and journal entries. Invoices are now reviewed, approved, and initialed by the Director before payment is initiated. A listing ofall journal entries is attached to the folder containing the journal entry detail sheets and is reviewed, approved, and initialed by the Director.
Contact Person: Leard Daughety, Director Phone: (478) 272-5710 Fax: (478) 272-0524 E-mail Address: ldaughety@ocrl.org