Audit report, Okefenokee Regional Library, Waycross, Georgia, year ended June 30, 1998

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AUDIT REPORT

OKEFENOKEE REGIONAL LmRARY

WAYCROSS, GEORGIA

I

YEAR ENDED JUNE 30, 1998

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

OKEFENOKEE REGIONAL LmRARY - 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

9

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

18

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

19

I

FIDUCIARY FUND TYPE

COM:aINING BALANCE SHEET

20

SCHEDULES

1 SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

21

SCHEDULE OF REVENUE

2

STATE

22

3

FEDERAL

23

4

LOCAL

24

5 SCHEDULE OF SALARIES AND TRAVEL

25

OKEFENOKEE REGIONAL LIBRARY - TABLE OF CONTENTS -
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
August 17, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board ofTechnical and Adult Education
and Director and Members ofthe 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 financial statements ofthe Okefenokee Regional Library, as of and for the year ended June 30, 1998, as listed in the table of contents. These general pwpose financial statements are the responsibility of the Okefenokee Regional Library's management. Our responsibility is to express an opinion on these general pwpose 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 pwpose 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 pwpose 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.

98ARL-42A

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 ofthe Okefenokee Regional Library as ofJune 30, 1998, 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.
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 of inquiries ofmanagement regarding the methods of measurement 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 Okefenokee 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 Okefenokee 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
ofthe Okefenokee Regional Library taken as a whole. The accompanying combining statements (Exhibits G through 1) and the 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 of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in our opinion, except for the effects of the matter discussed in the third paragraph, such information 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

R ssell W. Hinton State Auditor

OKEFENOKEE REGIONAL LIBRARY

OKEFENOKEE REGIONAL LIBRARY COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30,1998

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

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$

44,854.21 $

1,205.02 $

246,842.21

99,220.18

1,683.83

Total Assets

$

145,758,22 $

1,205.02 $ ======24...6"*,8;;,;4;.;;;2=.2=1

LIABILITIES AND FUND EQUITY

LIABILITIES

Accounts Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Compensated Absences

$

8,459.63

1,889,29 $

Total Liabilities

$

10.348,92 $

FUND EQUITY

Fund Balances

Reserved

For Endowment Corpus

For Expired Grant Balance/Questioned Cost

$

5,254,51

For State Capital Outlay Projects

Unreserved

Undesignated

130,154.79 $

Total Fund Equity

$

135,409.30 $

Total Liabilities and Fund Equity

$ 145,758.22 $

1,205.02
$
1,205.02 $

1,174,92 88,294,55
89,469.47

$
0.00
0.00 $

157,252.74 120.00
157,372.74

1,205.02 $ =====2.4.6."*,84;;,;;.;;;2=.2.1..

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

EXHIBIT "A"

FIDUCIARY FUND TYPE NONEXPENDABLE TRUST FUNDS

$

1,255.66

10,809.02

98.17

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

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

$

294,157.10 $ 1,659,244.94

110,029.20

109,773.85

1,782.00

10,029.07

$

11,663.64

11,663.64

17,957.43

$

12,162.85 $

11,663.64 $

417,631.94 $ 1,797,005.29

$

8,459.63 $

16,376.24

3,094.31

1,174.92

141,341.51

88,294.55

35,894.50

$

11,663.64

11,663.64

17,957.43

$

11,663.64 $

112,687.05 $

211,569.68

$

8,943.02

3,219.83

$

12,162.85

$

8,943.02 $

8,943.02

5,254.51

5,254.51

157,252.74

1,465,582.47

133,494.62

105,655.61

$

304,944.89 $ 1,585,435.61

$

12,162.85 $

11,663.64 $

417,631.94 $ 1,797,005.29

-3-

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

EXHIBIT-B-

FUND BALANCE JUNE 30

$ 135,409.30 $

0.00 $

157,372.74 $

292,782.04 $ 1,573,709.02

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

OKEFENOKEE 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 RC"

REVENUES
State Funds Federal Funds Local Funds Other Funds
Total Revenues
EXPENDITURES
Current Program Services Technical Services Circulation Administration Maintenance and Operations
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING USES
Other Uses
Excess of Revenues over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1, 1997
Adjustments

GENERAL FUND

BUDGET

ACTUAL

$ 418,969,44 $ 495',561,17

284,380,96 59,348.04

235,957,04 47,316,27

$ 762,698.44 $ 778,834.48

$ 194,407.09 $ 253,539,75

67820

3,929,22

13,845,26

469,869.44

418,261,57

64,783,00

65,785.15

$ 733,666.95 $ 751,431,73

$

29,031.49 $

27,402,75

$ -17,656,46

$

11,375,03 $

27,402,75

108,006,34

108,006.55

-5,443,04

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 13,100,00 $

11,894,98

$ 13,100,00 $

11,894,98

$

6,900.00 $

6,898.31

2,000,00 4,200,00

$ 13,100,00 $

$

0.00 $

4,996.67 11,894,98
0,00

$

0,00 $

0,00

0,21

0,00

-1,205.22

FUND BALANCE JUNE 30, 1998

$ 113,938.33 $ 135,409,30

$ -1,205.01 $ -=======0;,;,;,0..0..

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 30,1998

EXHIBITWDW

OPERATING REVENUES None Recorded
OPERATING EXPENSES Current Administration Library Books and Materials Operating Income (Loss)
NONOPERATING REVENUES Interest Eamed 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 30.1998 JUNE 30.1997

$

0.00 $

0.00 $

0.00 $

0.00 $

0.00

$

0,00 $

$

0,00 $

35.17

$

35.17 $

612,57

0,00 $ 0.00 $
401.09 401.09 $ 7.252.74

0,00 $ 0.00 $

0.00 $ 0.00 $

440.63 -440.63

0.00 $ 3.861.28

436.26 436.26 $ 11.726,59

630.27 189.64 11.536.95

FUND BALANCE JUNE 30

$

64;",;,;,7.7...4. $

$ 7;.:.6_5_3_,8~3

3.861.28 $

12.162.85 $

1,;,:1.,;,;7.26.;,;;;.5-.9

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, 1998

EXHIBITE

Cash Flows from Operating Activities: Cash Paid for Library Books and Materials
Cash Flows from Investing Activities: Interest Received on Investments Interest Added to Investments
Net Increase in Cash Cash and Cash Equivalents - 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. 1998 JUNE 30.1997

$

0.00 $

0.00 $

0.00 $

0.00 $

-440.63

$

35.17 $

-35.17

$

0.00 $

$

0.00 $

$

0.00 $

407.52 $
407.52 $ 407.52 $ 848.14 $

0.00 $
0.00 $ 0.00 $ 0.00 $

442.69 $ -35.17
407.52 $ 407.52 $ 848.14 $

678.87
678.87 238.24 609.90

Cash and Cash Equivalents - June 30

$

0.00 $

1.255.66 $

0.00 $

1.255.66 $

848.14

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

OKEFENOKEE REGIONAL LffiRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Okefenokee Regional Library (Library) operates pursuant to Official Code ofGeorgia 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 confonnity 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 ofthe 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 detennine the amount of its funding, except by submission ofbudget requests to local governmental units from which the Library receives support and to the State of Georgia for State and Federal funding. Membership in the Library and participation in library services is at the discretion of each participating governmental agency. The 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 ofoversight 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 pUIpose financial statements account for all State, Federal, Local and Other funds under control ofthe Library, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:

-9-

OKEFENOKEE REGIONAL LmRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1998

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 toresources 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 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:
NONEXPENDABLE TRUST FUNDS 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 ofwhich 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 LffiRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

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 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.
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OKEFENOKEE REGIONAL LffiRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1998

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.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Library in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported atcost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. 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 ofreturn shall be the objective, given equivalent conditions ofsafety 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 subdivisions ofthe 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 government~, and other receivables disclosed from infonnation available. Receivables are recorded when either the asset or revenue recognition criteria has been
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OKEFENOKEE REGIONAL LillRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES
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 TRANSACTION
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 pUIpose 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 of insurance, or by collateral. The aggregate of the 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 of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requiremeilt 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:

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OKEFENOKEE REGIONAL LffiRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 2: DEPOSITS
(1) Surety bond signed by a surety company dilly 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 ofany public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose,
(6) Industrial revenue bonds and bonds ofdevelopment 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, 1998, the bank balances were $499,023,20, The amounts ofthe total bank balances are classified into three categories of credit risk:
Category 1 - Cash that is insured (e,g" Federal depository insurance) or collateralized with securities held by the Library or by the Library's agent in the Library's name,
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Library's name,
Category 3 - Uncollateralized deposits, (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Library's name,)
The Library's deposits are classified by risk category at June 30, 1998, as follows:

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OKEFENOKEE REGIONAL LmRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 2: DEPOSITS

Risk CategOly

Bank Balance

1

$ 314,383.18

2

163,552.21

3

21.087.81

Total

$ 499,023.20

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 arid 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 a surety bond to provide additional insurance coverage as follows:

Position Covered

Amount

Each Employee

$ 30,000.00

Note 4: GENERAL LQNG-TERM DEBT

The changes in General Long-Term Debt during the fiscal year ended June 30, 1998, were as follows:

Compensated Absences

Balance July 1, 1997

$ 17,957.43

Deductions Annual Leave Earned and Utilized (Net)

6,293.79

Balance June 30, 1998

$ 11.663.64

- 15 -

OKEFENOKEE REGIONAL LffiRARY

EXHlBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

NQte 5: SIGNIFICANT COMMITMENTS

The fQllQwing is an analysis Qf significant Qutstanding cQnstructiQn Qr renQvatiQn CQntracts executed by the Library as QfJune 30, 1998:

Project

Unearned Executed CQntracts

GSFIC PrQject 7942-96S-SB-005

$ 2.490.38

The amQunt described in this nQte is nQt reflected in the general purpQse financial statements.

NQte 6: CONTINGENT LIABILITIES

AmQunts received Qr receivable principally frQm the Federal gQvernment are subject tQ audit and review by grantQr agencies. This CQuld result in requests fQr reimbursement tQ the grantQr agency fQr any expenditures which are disallQwed under grant terms. The Library believes that such disallQwances, if any, will be immaterial tQ its Qverall financial pQsitiQn.

NQte 7: ACCUMULATED EMPLOYEES' LEAVB

The Library's regular emplQyees earn vacatiQn leave accQrding tQ their length Qfservice ranging frQm Qne and Qne-quarter tQ Qne and three-quarter days per mQnth with a maximum accumulatiQn Qf 15 ~d 21 days. All unused vacatiQn leave up tQ the maximum accumulatiQn is paid tQ emplQyees at their current rate Qfpay upQn retirement Qr terminatiQn Qf emplQyment. See Note 1 - Compensated Absences

NQte 8: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all librarians and clerical persQnnel emplQyed by regiQnal and CQunty libraries are cQvered by the Teachers Retirement System QfGeorgia (TRS), Which is a CQst-sharing multiple emplQyer defined benefit pensiQn plan. TRS prQvides service retirement, disability retirement and survivQrs benefits fQr its members in accQrdance with State statute. The Teachers Retirement System: Qf GeQrgia issues a separate stand alQne financial audit repQrt and a CQPY can be Qbtained frQm the GeQrgia Department QfAudits and ACCQunts.

TRS CONTRmUTIONS REQUIRED AND MADE EmplQyees Qfthe Library whQ are CQvered by TRS are required by State statute tQ cQntribute 5% Qftheir grQSS earnings tQ TRS. The Library makes mQnthly emplQyer cQntributiQns tQ TRS at rates adQpted by the TRS BQard QfTrustees in accQrdance with State statute and as advised by their independent actuary. The required emplQyer cQntributiQn rate is 11.81% and emplQyer cQntributiQns fQr the current fiscal year and the preceding twQ fiscal years are as fQllQws:

- 16-

OKEFENOKEE REGIONAL LffiRARY

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

WNE30.1998

Note 8: RETIREMENT PLANS
Fiscal Year
1998 1997 1996

Percentage Contributed
100% 100% 100%

Required Contribution
$ 42,303.70 $ 44,063.13 $ 39,678.82

- 17-

OKEFENOKEE REGIONAL LIBRARY COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 1998

EXHIBIT-G-

ASSETS Cash and Cash Equivalents

LOCAL

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

TOTALS

JUNE 30,1998

JUNE 30,1997

$

120.00 $

246,722.21 $

246,842.21 $ 1,642,985.60

LIABILITIES AND FUND EQUITY

LIABILITIES

Accounts Payable Contracts Payable Retainages Payable

Total Liabilities

FUND EQUITY

Fund Balances

Reserved

For State Capital Outlay Projects

Unreserved

Undesignated

$

Total Fund EqUity

$

Total LIabilities and Fund EqUity

$

$

47.12

$

1,174.92 $

1,174.92

141,341.51

88,294.55

88,294.55

35,894.50

$

89,469.47 $

89,469.47 $

177,283.13

$
120.00
120.00 $

157,252.74 $
0.00
157,252.74 $

157,252.74 $
120.00
157,372.74 $

1,465,582.47 120.00
1,465,702,47

120.00 $

246,722.21 $

246,842.21 $ 1,642,985.60

See notes to the general purpose financial statements.

-18 -

OKEFENOKEE REGIONAL LIBRARY COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30.1998

EXHIBIT"H"

LOCAL

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION
PROJECT 7942-96S-S8-005

TOTALS

YEAR ENDED

JUNE 30,1998

JUNE 30,1997

FUND BALANCE JUNE 30

$

120.00 $

157,252.74 $

157,372.74 $

1,465,702.47

See notes to the general purpose financial statements.

-19 -

OKEFENOKEE REGIONAL LIBRARY COMBINING BALANCE SHEET FIDUCIARY FUND TYPE JUNE 30 1998

EXHIBIT "I"

Cash and Cash Equivalents Investments Accounts Receivable

NONEXPENDABLE TRUST FUNDS

WAYCROSS-

BUNAT.

GEORGE UPFOLD

WARE COUNTY

FAIN

GATES STUDENT

LIBRARY

MEMORIAL

AWARD TRUST

MEMORIAL

FUND

FUND

TRUST FUND

TOTALS

JUNE 30,1998

JUNE 30,1997

$

1,255.66

$

1,255.66 $

848.14

$

647.74

6,300.00 $

3,861.28

10,809.02

10,773.85

98.17

98.17

104.60

Total Assets

$

647.74 $

7,653.83 $

3,861.28 $

12,162.85 $

1.1.10:,7,;2,.6..,5.9.

FUND EQUITY

Fund Balances

Reserved

For Endowment Corpus

$

Unreserved

Undesignated

250.00 $ 397.74

6,300.00 $ 1,353.83

2,393.02 $ 1,468.26

8,943.02 $ 3,219.83

8,943.02 2,783.57

Total Fund Equity

$

647.74 $

7,653.83 $

3,861.28 $

12,162.85 $

11..,7..2.6...5..9.

See notes to the general purpose financial statements.

20

OKEFENOKEE REGIONAL LffiRARY

SCHEDULE "1"

SCHEDULE OF REQUIRED SupPLEMENTARY INFORMATION

YEAR 2000 DISCLOSURES

YEAR ENDED JUNE 30. 1998

At June 30, 1998, the Okefenokee 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 of identifying all of its systems and individual components of the systems to check for compliance.
Remediation Stage - When changes are made to systems and equipment.
ValidationiTesting 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 all libraries currently utilizing the GENESIS accounting software.

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

OKEFENOKEE REGIONAL LIBRARY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30.1998

SCHEDULE "2"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

GRANTS

Georgia State Financing and Investment Commission

Reimbursement on Construction Projects

Technical and Adult Education, Georgia Department of

Public Libraries

~~~

$

Travel

Library Materials

Regular

Governor's Reading Incentive Program

Maintenance and Operations

$ 1,400,000.00 $
291,627.46 5,550.00
52,297.23 98,906.48 47,180.00

TOTAL
1,400,000.00
291,627.46 5,550.00
52,297.23 98,906.48 47,180.00

$

495,561.17 $

1,400,000.00 $

1,895,561.17

See notes to the general purpose financial statements.

- 22-

OKEFENOKEE 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 SelVices and Construction Act Title I - Public Library SelVices

SCHEDULE 03"
GOVERNMENTAL FUND TYPE SPECIAL REVENUE FUND
$ ===~1..;.;1,~89=4=,9~8

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

OKEFENOKEE REGIONAL LIBRARY SCHEDULE OF LOCAL REVENUE YEAR ENDED JUNE 30,1998
LOCAL SOURCES Boards of Education Appling County Bacon County Clinch County Pierce County Ware County City Governments Alma Blackshear Homerville Waycross County Governments Boards of Commissioners Appling Bacon Clinch Pierce Ware

SCHEDULE "4"

GOVERNMENTAL FUND TYPE GENERAL FUND

$

5,675.00

11,929,00

8,850.00

3,750.00

10,000,00

10,712,16 8,850,00 8,850.00
46,000.00

37,699.92 5,736.72 8,820.83 7,250.04
61,833.37

$

235,957.04

See notes to the general purpose financial statements. - 24-

OKEFENOKEE REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30.1998

SCHEDULE "5"

Totals per Report
See notes to the general purpose financial statements.
- 25-

$

394,832.34 $===6::::!:,=10=4=o2=9

SECTION II FINDINGS AND QUESTIONED COSTS

OKEFENOKEE REGIONAL LmRARY
SCHEDULE OF FlNDlNGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1998
PRIOR YEAR
EXPENDITURESILIABILITIESIDISBURSEMENTS Lack ofDocumentation for Expenditures Amount: $5,254,51 Finding Control Number: 7942-97-01
The audit report for the year ended June 30, 1997, noted that audit procedures disclosed sevenjournal entries which reclassified $5,254.51 of expenditures from the General Fund to the Special Revenue Fund - Library Service and Construction Act - Title I - Public Library Services (CFDA 84,034) without supporting documentation, In the year under review, the Library did not obtain documentation to determine ifthese were allowable expenditures for this grant. 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 pmposes, The Georgia Department ofTechnical and Adult Education should review these charges to determine if they are allowable expenditures for this grant.
AUDIT FOLLOW-UP/RESOLUTION Failure to File Completion Reports Finding Resolved Finding Control Number: 7942-97-02
The audit report for the year ended June 30, 1997 noted that the Library 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. During the year under review, procedures were implemented to develop and file completion reports in a timely manner.
AUDIT FOLLOW-UP/RESOLUTION Inadequate Accounting Procedures Finding Resolved Finding Control Number: 7942-97-03
The audit report for the year ended June 30, 1997 noted that the Library's accounting procedures were found to be insufficient to provide for adequate internal control over the journal entry process. During the year under review, procedureswere implemented to provide for adequate internal control over the journal entry process.
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, 1997, noted that the management ofthe Okefenokee Regional Library had chosen not to maintain a system-wide General Fixed Assets Account Group within the formal
- 1-

OKEFENOKEE REGIONAL LffiRARY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED ruNE 3D. 1998
PRIOR YEAR/CURRENT YEAR GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: 7942-93-01 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 collection 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.
-2-