Audit report, Okefenokee Regional Library, Waycross, Georgia, year ended June 30, 1997

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AUDIT REPORT OKEFENOKEE REGIONAL LIBRARY
WAYCROSS, GEORGIA YEAR ENDED JUNE 30, 1997

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

OKEFENOKEE REGIONAL LIBRARY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL AND SPECIAL REVENUE FUNDS

5

D

COMBINED STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN FUND BALANCES

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUNDS

6

E

COMBINED STATEMENT OF CASH FLOWS

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUNDS

7

F NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

8

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

G

COMBINING BALANCE SHEET

16

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

17

CAPITAL PROJECTS FUND

I

COMBINING BALANCE SHEET

18

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

19

K

FIDUCIARY FUND TYPE

COMBINING BALANCE SHEET

NONEXPENDABLETRUSTFUNDS

20

SCHEDULES

SCHEDULE OF REVENUE

1

STATE

21

2

FEDERAL

22

OKEFENOKEE REGIONAL LIBRARY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

3 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAM

23

4 SCHEDULE OF SALARIES AND TRAVEL

24

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

SECTION I FINANCIAL

CLAUDE L. VICKERS
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
July 8, 1998

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Technical and Adult Education
and Director and Members of the Okefenokee 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-purpose fmCl.I1cial statements ofthe Okefenokee Regional Library, as of and for the year ended June 30, 1997, as listed in the table of contents. These general-purpose financial statements are the responsibility of the Okefenokee 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 fmancial 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 of this omission have not been determined, but are believed to be material.

97ARL-42

In our opinion, except for the effects on the general-purpose financial statements of the matter referred to in the third paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the Okefenokee Regional Library as of June 30, 1997, and the results of its operations and the cash flows of its nonexpendable trust funds for the year then ended, in conformity with generally accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Okefenokee Regional Library taken as a whole. The accompanying combining statements (Exhibits G through K) and the financial schedules (Schedules 1 through 4), 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. Such information has been subjected to the auditing procedures applied in the audit of the general-purpose fmancial 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,

CLV:gp 97ARL-42

Claude L. Vickers State Auditor

OKEFENOKEE REGIONAL LmRARY

OKEFENOKEE REGIONAL LIBRARY COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 1997

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

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

$

106,361.46 $

8,049.74 $

1,642,985.60

9,924.47

Total Assets

$

116,285,93 $

8,049.74 $====1,=64=2=,9=8::::5..6...=0

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Contracts Payable Retainages Payable Compensated Absences
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Endowment Corpus For Expired Grant Balances/Questioned Costs For State Capital Outlay Projects Unreserved Undesignated
Total Fund Equity

$

8,279.38 $

$

8,279.38 $

$

5,254.51

102,752.04 $

$

108,006.55 $

8,049.74 $

47,12 141,341.51
35,894.50

8,049.74 $

177,283.13

$ 0.00 0.00 $

1,465,582.47 120.00
1,465,702.47

Total Liabilities and Fund Equity

$

116,285.93 $

8,049.74 $ ====1,=64=2=,9..8.:=5.=6=0

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

EXHIBIT"A"

FIDUCIARY FUND TYPE NONEXPENDABLE TRUST FUNDS

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Only)

JUNE 30, 1997

JUNE 30, 1996

$

11,621.99

$ 1,769,018.79 $

131,401.77

104.60

10,029.07

18,327.58

$

17,957.43

17,957.43

19,509.89

$

11,726.59 $

17,957.43 $ 1,797,005.29 $ =====1=6,;,;9,=23=9=.2=4

$

16,376.24 $

7,340.21

141,341.51

11,760.17

35,894.50

$

17,957.43

17,957.43

19,509.89

$

17,957.43 $

211,569.68 $

38,610.27

$

8,943.02

2,783.57

$

11,726.59

$

8,943.02 $

5,254.51

1,465,582.47

105,655.61

$ 1,585,435.61 $

8,943.02 39.66
121,646.29 130,628.97

$

11,726.59 $

17,957.43 $ 1,797,005.29 $=====1=6,;,;9,2=3=9=.2=4

-3-

OKEFENOKEE REGIONAL LIBRARY

EXHIBIT "B"

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

YEAR ENDED JUNE 30.1997

FUND BALANCE JUNE 30

$ 108,006.55 $===0..0..:.0 $ 1,465,702.47 $ 1,573,709.02 $====1,;,;19=,0=9=2=.0=2

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

OKEFENOKEE REGIONAL LIBRARY

EXHIBIT "C"

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL

GENERAL AND SPECIAL REVENUE FUNDS

YEAR ENDED JUNE 30,1997

GENERAL FUND

BUDGET

ACTUAL

REVENUES

State Funds Federal Funds Other Funds

$ 392,904.64 $ 394,476.66 221,243.45 253,224.21

Total Revenues

$ 614,148.09 $ 647,700,87

EXPENDITURES

Current Program Services Circulation Administration Maintenance and Operations

$ 161,206.32 $ 156,312.80

3,432.88

5,506.95

425,094,84 436,808.17

54,901.00

59,998.76

Total Expenditures

$ 644,635.04 $ 658,626.68

Excess of Revenues over (under) Expenditures

$ -30,486,95 $ -10,925.81

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses

$ 33,131.00 -7,000.00

Total Other Financing Sources (Uses)

$ 26,131,00

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

-4,355.95 $ -10,925,81

FUND BALANCE JULY 1, 1996

121,738.44 118,932.36

Adjustments

-1,209.80

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 8,250,00 $ 8,250.00

19,000.00

19,000,00

$ 27,250.00 $ 27,250.00

$ 21,710,39 $ 19,661.83

2,714,61 2,825.00

3,552.53 4,035.64

$ 27,250,00 $ 27,250.00

$

0.00 $

0,00

$

0,00 $

0,00

0,01

0.00

FUND BALANCE JUNE 30,1997

$ 116,172.69 $ 108,006.55

$

0.01 $

0,00

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

OKEFENOKEE REGIONAL LIBRARY COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30,1997

EXHIBIT"D"

OPERATING REVENUES Donations
OPERATING EXPENSES Current Administration Library Books and Materials Operating Income (Loss)
NONOPERATING REVENUES Interest Earned Total Income (Loss)
FUND BALANCE JULY 1

BUNAT, FAIN
MEMORIAL FUND

ENDOWMENT FUNDS

WAYCROSS-

GEORGE UPFOLD WARE COUNTY

GATES STUDENT

LIBRARY

AWARD TRUST

MEMORIAL

FUND

TRUST FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30,1997 JUNE 30, 1996

$

0.00 $

0.00 $

0.00 $

0.00 $

77.89

$

0,00 $

$

0.00 $

0.00

$

0,00 $

612.57

440.63 $ -440.63 $

0.00 $ 0.00 $

440.63 $ -440.63 $

434,53 -356.64

419.54
-21.09 $
7,273.83

210.73
210.73 $
3,650.55

630,27
189.64 $
11,536,95

567.17 210.53 11,326.42

FUND BALANCE JUNE 30

$

612.57 $

7;,,;;,2_5.-2.7...4.. $ _ _-=3,.8...6...1....2..=8 $

11,726.59 $ _-..;,1.=1,,.,53_6...9...5...

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

OKEFENOKEE REGIONAL LIBRARY COMBINED STATEMENT OF CASH FLOWS FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUNDS
YEAR ENDED JUNE 30, 1997

EXHIBIT"E"

BUNAT. FAIN
MEMORIAL FUND

ENDOWMENT FUNDS

WAYCROSS-

GEORGE UPFOLD WARE COUNTY

GATES STUDENT

LIBRARY

AWARD TRUST

MEMORIAL

FUND

TRUST FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30, 1997 JUNE 30. 1996

Cash Flows from Operating Activities:

Donations Received

$

Cash Paid for Library Books and Materials

0.00 $

$ -440.63

0.00 $

0.00 $ -440.63

77.89 -434.53

Net Cash Provided (Used) by Operating Activities: $

0.00 $

-440.63 $

0.00 $

-440.63 $

-356.64

Cash Flows from Investing Activities: Interest Received on Investments

0.00

417.43

261.44

678.87

504.93

Net Increase(Decrease) in Cash

$

0.00 $

-23.20 $

261.44 $

238.24 $

148.29

Cash and Cash Equivalents - July 1

612.57

7,171.34

3,599.84

11,383.75

11,235.46

Cash and Cash Equivalents - June 30

$

612.57 $

7,148.14 $

3,861.28 $ 11,621.99 $

11,383.75

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

OKEFENOKEE REGIONAL LIBRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Okefenokee 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 departures from generally accepted accounting principles disclosed in these notes, the financial statements of the Library have been prepared in conformity with generally accepted accounting principles as applied to governmental units and unless otherwise disclosed in these notes, the financial statements present all fund types and account groups of the Library.
The Library Board consists of 15 members; 3 members appointed by Appling County Public Library Board, 3 members appointed by Alma/Bacon County Public Library Board, 3 members appointed by Clinch County Public Library Board, 3 members appointed by Pierce County Public Library Board and 3 members appointed by Waycross-Ware County Public Library Board. The Library Board is without authority to determine the amount of its funding, except by submission of budget requests to local governmental units from which the Library receives support and to the State of Georgia for State and Federal funding. Membership in the Library and participation in library services is at the discretion of each participating governmental agency. The Library 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 Okefenokee Regional Library is therefore determined to be a joint venture.
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.
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 and Other funds under control of the 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:

-8-

OKEFENOKEE REGIONAL LIBRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GOVERNMENTAL FUND TYPES - used to account for all or most of the Library's general activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the Library except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a Library.
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. The primary type of special revenue fund consists of proceeds received from State and Federal sources to accomplish specific objectives and are required to be accounted for separately.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
FIDUCIARY FUND TYPE - the trust funds used to account for assets held by a government unit in a trustee capacity for individuals, private organizations, other government units and/or other funds. These funds include:
NONEXPENDABLETRUSTFUNDS Buna T. Fain 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 used to purchase library books and materials for the Okefenokee Regional Library.
George Upfold Gates Student Award Trust Fund - the fund used to account for an endowment ofwhich the corpus is to be invested and preserved intact with the resultant income to be used to purchase publications of general and more or less permanent interest.
Waycross-Ware County Library Memorial Trust 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 used to support, improve and supplement library services.
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.
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OKEFENOKEE REGIONAL LIBRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
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:
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.
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.
BUDGET
The Okefenokee Regional Library's budget is a complete financial plan for the Library's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget 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 Department of Technical and Adult Education 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.
- 10-

OKEFENOKEE REGIONAL LIBRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
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 information 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.
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.
INTERFUND TRANSACTIONS
The Library has the following type of interfund transactions:
Reimbursements of expenditures/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 fmancial 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 of operations 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.

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OKEFENOKEE REGIONAL LIBRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1997

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 of insurance, or by collateral. The aggregate of the 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 of the amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(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 of any 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 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 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, 1997, the bank balances were $1,819,094.67. The amounts of the total bank balances are classified into three categories of credit risk:
Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Library or by the Library's agent in the Library's name.
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OKEFENOKEE REGIONAL LIBRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 2: DEPOSITS

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, 1997, as follows:

Risk Category

Bank Balance

1

$ 276,229.07

2

1,542,865.60

3

0.00

Total

$ 1.819,094.67

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 and natural disaster.

The Library has obtained commercial insurance for risk of loss associated with torts, assets and job related illness 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 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 discrimination. The Library has not experienced any losses related to these risks in the past three years.

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

Position Covered

Amount

Each Employee

$ 10,000.00

Note 4: GENERAL LONG-TERM DEBT

The changes in General Long-Term Debt during the fiscal year ended June 30, 1997, were as follows:

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OKEFENOKEE REGIONAL LIBRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

Note 4: GENERAL LONG-TERM DEBT

Compensated Absences

Balance July 1, 1996

$ 19,509.89

Deductions Annual Leave Earned and Utilized (Net)

1,552.46

Balance June 30, 1997

$ 17,957.43

Note 5: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the Library as of June 30, 1997, together with funding available:

Project

Unearned Executed Contracts

Funding Available From State

GSFIC Project 7942-96S-SB-005

$ 2.158,067.53 $ 1.400,000.00

The amounts described in this note are not reflected in the general purpose financial statements.

Note 6: CONTINGENT LIABILITIES

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

Note 7: ACCUMULATED EMPLOYEES' LEAVE

The Library's regular employees earn vacation leave according to their length of service ranging from one and one-quarter to one and three-quarter days per month with a maximum accumulation of 15 to 21 days. All unused vacation leave up to the maximum accumulation is paid to employees at their current rate ofpay upon retirement or termination of employment. See Note 1 - Compensated Absences

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OKEFENOKEE REGIONAL LIBRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1997

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 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% 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

1997 1996 1995

100% 100% 100%

$ 44,063.13 $ 39,678.82 $ 36,701.50

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OKEFENOKEE REGIONAL LIBRARY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1997

EXHIBIT"G"

ASSETS Cash and Cash Equivalents

LOTTERY PROGRAM

FEDERAL PROGRAM

TOTALS JUNE 30,1997 JUNE 30,1996

$

7,806.54 $

243.20 $

8,049.74 $===1=2=6.~4,,;,,1

LIABILITIES AND FUND EQUITY

LIABILITIES

Accounts Payable

$

FUND EQUITY

Fund Balances Unreserved Undesignated

7,806.54 $ 0.00

243.20 $

8,049.74 $

126.41

0.00

0.00

0.00

Total Liabilities and Fund Equity

$

7,806.54 $

243.20 $

8,049.74 $ ===1=2==6.=4=1

See notes to the general purpose financial statements.

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OKEFENOKEE REGIONAL LIBRARY

EXHIBIT "H"

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

SPECIAL REVENUE FUND

YEAR ENDED JUNE 30,1997

LOTTERY PROGRAM

FEDERAL PROGRAM

TOTALS YEAR ENDED JUNE 30, 1997 JUNE 30,1996

REVENUES

State Funds Federal Funds

$

8,250,00

$

8,250,00 $

6,008,00

$

19,000.00

19,000.00

19,660.40

Total Revenues

$

8,250.00 $

19,000.00 $

27,250.00 $ 25,668.40

EXPENDITURES

Current Program Services Administration Maintenance and Operations

$

8,250.00 $

11,411.83 $

19,661,83 $ 17,433.67

3,552.53

3,552.53

5,412,22

4,035.64

4,035.64

2,822.51

Total Expenditures

$

8,250.00 $

19,000.00 $

27,250,00 $ 25,668.40

Excess of Revenues over (under) Expenditures $

0,00 $

0.00 $

0.00 $

0.00

FUND BALANCE JULY 1

0,00

0.00

0.00

0.00

FUND BALANCE JUNE 30

$===~O;,;;;'O~O$====::;O;;,;;'O~O$===~O;,;;;'O~O$====0=.0=,=0

See notes to the general purpose financial statements.

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OKEFENOKEE REGIONAL LIBRARY COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 1997

EXHIBIT "I"

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets

APPLING COUNTY CONSTRUCTION
FUND

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION
PROJECT 7942-96S-SB-005

TOTALS JUNE 30,1997 JUNE 30, 1996

$

120.00 $ 1,642,865.60 $ 1,642,985,60 $

150,10

11,769.73

$

120.00 $ 1,642,865.60 $ 1,642,985.60 $===1=1:=,9=19=.8=3=

LIABILITIES AND FUND EQUITY

LIABILITIES

Accounts Payable Contracts Payable Retainages Payable

$

47.12 $

47,12

141,341.51

141,341.51 $

35,894.50

35,894,50

11,760.17

Total Liabilities

$

177,283.13 $

177,283.13 $

11,760.17

FUND EQUITY

Fund Balances Reserved For State Capital Outlay Projects Unreserved Undesignated

$ 1,465,582.47 $ 1,465,582.47 $

39.66

$

120.00

0.00

120.00

120.00

Total Fund EqUity

$

120,00 $ 1,465,582.47 $ 1,465,702.47 $

159,66

Total Liabilities and Fund EqUity

$

120.00 $ 1,642,865.60 $ 1,642,985,60 $===1=1;:,9=.19=.=83=

See notes to the general purpose financial statements.

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OKEFENOKEE REGIONAL LIBRARY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30.1997

EXHIBIT "J"

APPLING COUNTY CONSTRUCTION
FUND

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION
PROJECT 7942-96S-SB-005

TOTALS

YEAR ENDED

JUNE 30, 1997

JUNE 30,1996

REVENUES

State Funds Other Funds

$

600,000,00 $

600,000,00

$

0,00

1,275.498,25

1,275.498,25 $

111,858,58

Total Revenues

$

0,00 $ 1,875.498,25 $ 1,875.498,25 $

111,858,58

EXPENDITURES

Capital Outlay

Building and Building Improvements

$

0,00 $

409,955.44 $

409,955,44 $

111,838,92

Excess of Revenues over (under) Expenditures $

0,00 $ 1,465,542,81 $ 1,465,542,81 $

19,66

FUND BALANCE JULY 1

120,00

39,66

159.66

140.00

FUND BALANCE JUNE 30

$

120.00 $ 1,465,582.47 $ 1,465,702.47 $====1.5.9.=.6=6=

See notes to the general purpose financial statements.

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Cash and Cash Equivalents Accounts Receivable
Total Assets
FUND EQUITY Fund Balances
Reserved For Endowment Corpus
Unreserved Undesignated
Total Fund Equity

OKEFENOKEE REGIONAL LIBRARY COMBINING BALANCE SHEET
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUNDS JUNE 30, 1997

EXHIBIT"K"

BUNAT. FAIN
MEMORIAL FUND

ENDOWMENT FUNDS
GEORGE UPFOLD GATES STUDENT AWARD TRUST
FUND

WAYCROSSWARE COUNTY
LIBRARY MEMORIAL TRUST FUND

TOTALS JUNE 3D, 1997 JUNE 3D, 1996

$

7,148.14 $

3,861.28 $

612.57 $

11,621.99 $

11,383.75

104.60

104.60

153.20

$

7,252.74 $

3,861.28 $

612.57 $

11,726.59 $ ====11-.,5=3=6=.9=5

$

6,300.00 $

952.74

$

7,252.74 $

2,393.02 $ 1,468.26
3,861.28 $

250.00 $ 362.57

8,943.02 $ 2,783.57

8,943.02 2,593.93

612.57 $

11,726.59 $

11,536.95

See notes to the general purpose financial statements.

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OKEFENOKEE REGIONAL LIBRARY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1997

SCHEDULE "1"

AGENCY/FUNDING
GRANTS Georgia State Financing and Investment Commission Reimbursement on Construction Projects Technical and Adult Education, Georgia Department of Public Libraries Salaries and Travel Library Materials Maintenance and Operation Lottery Program Assistive Technology

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

$ 600,000.00 $

$ 294,318.66 53,379.00 46,779.00
-----$

8,250.00

TOTAL
600,000.00
294,318.66 53,379.00 46,779.00 8,250.00

$ 394,476.66 $ 8,250.00 $ 600,000.00 $ 1,002,726.66

See notes to the general purpose financial statements.

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OKEFENOKEE REGIONAL LIBRARY SCHEDULE OF FEDERAL REVENUE
YEAR ENDED JUNE 30.1997
AGENCY/FUNDING
GRANTS Education, U. S. Department of Through Georgia Department of Education Library Services and Construction Act Title I - Public Library Services Through Georgia Department of Technical and Adult Education Library Services and Construction Act Title I - Public Library Services

SCHEDULE "2"

GOVERNMENTAL FUND TYPE SPECIAL REVENUE FUND

$

3,000.00

16,000.00

$ =_==-===1=9,,;;,;00;;,;;;0,;,;.0.;.0

See notes to the general purpose financial statements.

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OKEFENOKEE REGIONAL LIBRARY SCHEDULE OF EXPENDITURES LOTIERY PROGRAM YEAR ENDED JUNE 30. 1997
EXPENDITURES Program Services Supplies Equipment
Total Expenditures

SCHEDULE "3"

ASSISTIVE TECHNOLOGY

$

1,986.00

6,264.00

$====8,=25:=0....0.==0

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

OKEFENOKEE REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 1997

SCHEDULE "4"

PERSONNEL

Anderson, Barnard, Bessonette, Britton, Bryson, Bush, Coleman, Dixon, Eames, Houston, Lightfoot, Moody, Noble, Pittman, Reese, Roberts, Schafer, Schmitz, Seaman, Smith, Smith, Steedley, StOCk, Summerlin, Suttlemyre, Taylor, Thatcher, Thomas, Welch, Williams, Wills, Wood, Yearty,

Cheryl Theressa Cheryl A, Sarah B, James C., III Juanita E, Wynell 0, AliceC. Melba P, Charles B, Rebecca Linda Kay Elaine D, Cherrie Doris F, Dianna J. Susan N, Donald E. Greg Dean Joanna S, Katherine Pamela M, Mary J. Maxine P, Glenda L. Vivian S, Freda Ann Sandra E. MaryW. Jane S. Elizabeth D. Helen M, Katie J, Irene D,

Total Cash Basis

Accruals June 30, 1996 June 30, 1997

POSITION
Substitute Substitute Substitute Librarian Circulation Clerk Branch Manager Assistant Clerk Substitute Librarian Branch Manager Librarian Clerk Substitute Clerk Substitute Director Bookmobile Clerk Librarian Youth Services Clerk Publicity and Volunteer Coordinator Substitute Substitute Librarian Technical Services Manager Assistant Clerk Branch Manager Payroll Clerk Office Manager Branch Manager Clerk Substitute Substitute Substitute

SALARIES

TRAVEL

$

976,77

82,13

415.25

37,671.40 $

12,739,73

13,730.40

7,300.44

63.75

44,982.00

13,187.92

36,049,00

3,031.69

24.44

8,853,68

1,350,33

44,572.00

10,038.23

31,721.20

6,260.58

11,857.82

102.13

171.00

44,272.00

8,226,36

5,659,76

13,391.13

14,081,64

12,175.63

10,551.88

2,810.33

743.38

616.25

7,13

142,83 246,50 186.20
3,697.99 27.00 192.00
117.18 87.25 80,50 84.25

$ 397,717.38 $

4,861.70

-148,50 82.02

$ 397,717,38 $===4=,=79=5=,2=.2

See notes to the general purpose financial statements.

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SECTION II FINDINGS AND QUESTIONED COSTS

OKEFENOKEE REGIONAL LIBRARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1997
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number 7942-93-01
The audit report for the year ended June 30, 1996, noted that the management of the Okefenokee 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 ofa General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, buildings, equipment and inexhaustible collections of 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 for all additions to and deletions from the General Fixed Assets Account Group.
CURRENT YEAR
EXPENDITURESILIABILITIESIDISBURSEMENTS Lack of Documentation for Expenditures Amount: $5,254.51 Finding Control Number 7942-97-01
Audit procedures disclosed seven journal entries which reclassified $5,254.51 of expenditures from the General Fund to the Special Revenue Fund - Library Services and Construction Act - Title I - Public Library Services (CFDA 84.034) without supporting documentation. This condition occurred because management failed to adhere to proper accounting treatment for federal grants, and charged expenditures to the program that were not directly for program purposes. The Georgia Department of Technical and Adult Education should review these charges to determine if they are allowable expenditures for this grant.
GENERAL LEDGER Failure to File Completion Reports Finding Control Number 7942-97-02
An examination of the Library's compliance with State and Federal reporting requirements disclosed that management failed to develop and file completion reports for State allotments, Lottery For Education grants, and the Library Services and Construction Act - Title I - Public Library Services (CFDA 84.034) Federal Program. This condition occurred because management failed to adhere to reporting requirements of the Georgia Department of Technical and Adult Education.
- 1-

OKEFENOKEE REGIONAL LIBRARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1997
CURRENT YEAR GENERAL LEDGER Failure to File Completion Reports Finding Control Nwnber 7942-97-02 Appropriate procedures should be implemented by the Library to ensure that completion reports are submitted by the required date. GENERAL LEDGER Inadequate Accounting Procedures Finding Control Nwnber 7942-97-03 For the year under review, the Library's accounting procedures were found to be insufficient to provide for adequate internal control over the journal entry process. Twenty-four journal voucher packages, as presented for examination, disclosed the following deficiencies:
(1) Twenty-two journal entries did not contain any supporting docwnentation or adequate explanation. (2) Twenty-three journal entries were made to the accounting records without proper authorization. In addition, a review of employee job duties disclosed that the journal entry preparation function was not adequately segregated from the general ledger function. These conditions were a result of management's failure to adequately monitor and docwnent journal entries. Appropriate procedures should be implemented by the Library to ensure that all journal entries are properly authorized and include adequate descriptions and supporting docwnentation.
- 2-