PINE MOUNTAIN REGIONAL LIBRARY MANCHESTER, GEORGIA REPORT ON AUDIT OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2004 STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS Russell W. Hinton State Auditor PINE MOUNTAIN 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 STATEMENT OF NET ASSETS 3 B STATEMENT OF ACTIVITIES 4 FUND FINANCIAL STATEMENTS C BALANCE SHEET GOVERNMENTAL FUNDS 5 D RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS 6 E STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS 7 F RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES 9 G NOTES TO THE BASIC FINANCIAL STATEMENTS 10 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 LOCAL 21 4 SCHEDULE OF SALARIES AND TRAVEL 23 PINE MOUNTAIN 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 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 June 29, 2005 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 Pine Mountain 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) of the Pine Mountain Regional Library as of and for the year ended June 30, 2004, which collectively comprise the Library's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Pine Mountain 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 of America. 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 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 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 Pine Mountain Regional Library, as of June 30, 2004, 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. 2004ARL-41 The Pine Mountain 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. As discussed in Note 2 to the basic financial statements, during fiscal year 2004, the Library completed a comprehensive inventory of its capital assets for inclusion in the basic financial statements. This change is in accordance with generally accepted accounting principles. As described in Note 2, the Pine Mountain Regional Library has implemented a new financial reporting model as required by provisions of Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, as of June 30, 2004. 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 Pine Mountain Regional Library's basic financial statements. The accompanying supplementary information which consist ofSchedules 2 through 4, 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 ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code of Georgia Annotated section 506-24. Respectfully submitted, RWH:as 2004ARL-41 State Auditor PINE MOUNTAIN REGIONAL LIBRARY PINE MOUNTAIN REGIONAL LIBRARY STATEMENT OF NET ASSETS JUNE 30, 2004 ASSETS Cash and Cash Equivalents Investments Capital Assets Equipment Library Collections Less: Accumulated Depreciation Total Assets NET ASSETS Invested in Capital Assets, Net of Related Debt Restricted for Permanent Fund Unrestricted Total Net Assets EXHIBIT"A" GOVERNMENTAL ACTIVITIES $ 157,126 9,729 617,812 2,063,749 -1,103, 156 $ ======1:!:7=4=5=26=0= $ 1,578,405 3,318 163,537 $ ===1=7=4=5=26=0= The notes to the basic financial statements are an integral part of this statement. -3- PINE MOUNTAIN REGIONAL LIBRARY STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30 2004 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 Total Governmental Activities $ 361,615 $ 21,627 374,274 61,801 2 259 821 576 $ 22,527 $ 22 527 $ 341,116 $ 36,928 2,028 -21,627 -374,274 -24,873 -2 259 378 044 $ _ _ _ _-4.;.;:2:...:1.,_,0:...:0;_;;5_ General Revenues Allotments from Participating Governments Investment Earnings Miscellaneous $ 416,616 745 4 732 Total General Revenues $ _ _ _ _4.:..:2=:2'1.:0:..:9:..=3c... Change in Net Assets $ 1,088 Net Assets - Beginning of Year (Restated) 1 744172 Net Assets - End of Year The notes to the basic financial statements are an integral part of this statement. -4- ASSETS Cash and Cash Equivalents Investments Total Assets FUND BALANCES Reserved For Permanent Fund Unreserved Undesignated Reported in: General Fund Total Fund Balances PINE MOUNTAIN REGIONAL LIBRARY BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2004 EXHIBIT"C" GENERAL FUND PERMANENT FUND TOTAL $ 153,808 $ 9,729 3,318 $ 157,126 9,729 $ 163 537 $ 3 318 $ ===16=6:!:8=5=5 $ $ _ _.;...:16=3=5=37'- $ 163 537 $ 3,318 $ 3,318 163,537 3 318 $ ==.,;,16;;;;;6;,;,;8;;,;;5~5 The notes to the basic financial statements are an integral part of this statement. -5- PINE MOUNTAIN REGIONAL LIBRARY RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS JUNE 30. 2004 EXHIBIT"D" Total Fund Balance - Governmental Fund (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 $ 617,812 2,063,749 -1, 103,156 166,855 1,578,405 Net Assets of Governmental Activities (Exhibit "A") $ =====1,=74=5=,2=6=0 The notes to the basic financial statements are an integral part of this statement. -6- PINE MOUNTAIN REGIONAL LIBRARY STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30. 2004 EXHIBIT "E" REVENUES Local Funds State Funds Charges for Services Investment Earnings Miscellaneous Total Revenues EXPENDITURES Current Public Services Technical Services Support Services Maintenance and Operations Information Technology Total Expenditures Net Change in Fund Balances Fund Balances - Beginning (Restated) Fund Balances - Ending GENERAL FUND PERMANENT FUND TOTAL $ 416,616 378,044 22,527 723 $ 4,732 $ 822,642 $ $ 22 22 $ 416,616 378,044 22,527 745 4,732 822,664 $ 303,229 $ 21,627 374,274 61,801 2,259 $ 763,190 $ $ 59,452 $ 104,085 0 0 $ 22 $ 3,296 303,229 21,627 374,274 61,801 2,259 763,190 59,474 107,381 $ 163 537 $ 3 318 $ ===16=6=8=5=5 The notes to the basic financial statements are an integral part of this statement. -7- PINE MOUNTAIN REGIONAL LIBRARY RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30. 2004 EXHIBIT"F" Total Net Change in Fund Balance - Governmental Fund (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 $ 59,474 $ 6,090 -64 476 -58 386 Change in Net Assets of Governmental Activities (Exhibit "B") $ =====1=,0=8=8 The notes to the basic financial statements are an integral part of this statement. -9- PINE MOUNTAIN REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "G" Note 1: DESCRIPTION OF LIBRARY AND REPORTING ENTITY REPORTING ENTITY The Pine Mountain 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. The Library Board consists of seven members; three members appointed by Meriwether County Library Board, two members appointed by Upson County Library Board, one member appointed by Talbot County Library Board and one member appointed by Taylor County 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 flow through funding. Membership in the Library and participation in library services is at the discretion ofeach 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 Pine Mountain 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 Pine Mountain Regional Library. Library-wide Statements: The Statement ofNet Assets and the Statement ofActivities display information about the financial activities of the 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 ofthe Library's programs, such as office and maintenance personnel and accounting) are not allocated to programs. - 10 - PINE MOUNTAIN REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "G" Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Program revenues include (a) charges paid by the recipients of goods 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. The Library reports the following major governmental fund: 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 - Hightower Memorial Library Fund is the fund used to account for and endowment ofwhich the corpus is to be invested and preserved intact with the resultant income to be used for maintenance or repair ofthe Hightower Memorial Library building and property. BASIS OF ACCOUNTING The basis of accounting 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. Revenue from grants 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 ofaccounting. 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 claims and judgments, and 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. - 11 - PINE MOUNTAIN REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "G" Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. RESTATEMENT OF PRIOR YEAR FUND BALANCE - GENERAL FUND In prior years, the financial activities of the Library's Federal Programs and Capital Projects were reported as Special Revenue Fund and Capital Projects Fund, respectively. These funds had a combined fund balance of $606 at July 1, 2003. For fiscal year 2004, these funds have been reported as part of the General Fund. General Fund Balance July 1, 2003 $ 103,479 Add Funds Consolidated with General Fund: Capital Projects 606 General Fund Balance July 1, 2003 (Restated) $==='.:1:=04-,0=8'==5 CHANGES IN ACCOUNTING PRINCIPLES The Pine Mountain Regional Library has implemented a new financial reporting model as required by provisions of Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, as of June 30, 2004. The provisions ofGASB Statement No. 34 require the inclusion ofa Statement ofNet Assets. The elements comprising Net Assets - Beginning include the following: General Fund (Restated) July 1, 2003 Permanent Funds $ 104,085 3 296 Governmental Funds (Restated) July 1, 2003 Capital Assets Accumulated Depreciation $ 107,381 2,718,294 -1,081,503 Net Assets Beginning (See Exhibit "B") $ 1,744.172 - 12 - PINE MOUNTAIN REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "G" Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. Georgia Laws OCGA 45-8-14 authorize 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 of return 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, (7) Repurchase agreements, and (8) Obligations of other political subdivisions of the State of Georgia. 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 - 13 - PINE MOUNTAIN REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "G" Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 Collection $ 1,000 5 to 10 years $ 100,000 10 years Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives. 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 ofmoney 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. If a 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. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts. Acceptable security for deposits consists of 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, - 14 - PINE MOUNTAIN REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT"G" Note 3: DEPOSITS (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 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, 2004, the bank balances were $212,755. 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. 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, 2004, as follows: Risk Category Bank Balance 1 $ 114,726 2 98,029 3 0 Total $====2==12='=,7==5==5 Note 4: CAPITAL ASSETS The following is a summary of changes in the Capital Assets during the fiscal year: - 15 - PINE MOUNTAIN REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "G" Note 4: CAPITAL ASSETS Capital Assets Being Depreciated Equipment Library Collection Less Accumulated Depreciation for: Equipment Library Collection Governmental Activity Capital Assets - Net Balances July 1, 2003 Increases Decreases Balances June 30, 2004 $ 617,812 2,100,482 $ 6,090 $ $ 617,812 42,823 2,063,749 491,876 589,627 $ 1,636,791 $ 58,668 5 808 -58,386 $ 42,823 550,544 552,612 0 $ 1,578,405 Current year depreciation by function is as follows: Governmental Funds Public Services $==="=64~4"'=!,7~6 Note 5: RESTRICTED ASSETS Permanent Funds are reported as restricted assets in the Statement ofNet Assets. Restricted assets at June 30, 2004, were as follows: Permanent Fund Restricted For Hightower Memorial Library Fund $,=====3-31_8 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 ofloss associated with torts, assets, errors or omissions and job related illness or injuries to employees. However, the errors or omissions policy excludes coverage for sexual harassment and discrimination. 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 acts of God. The Library has not experienced any losses related to this risk in the past three years. - 16 - PINE MOUNTAIN REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "G" Note 6: RISK MANAGEMENT The Library is self-insured with regard to unemployment compensation claims. The Library accounts for claims within the same fund that the employee's salary and benefits were paid. Claims are accounted for with expenditure and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated. The Library has not experienced any unemployment compensation claims during the last two years. The Library has purchased a surety bond to provide additional insurance coverage as follows: Position Covered Amount All Employees $ 50,000 Note 7: 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% 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 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: Fiscal Year Percentage Contributed Required Contribution 2004 2003 2002 100% 100% 100% $ 39,182 $ 39,848 $ 37,089 - 17 - PINE MOUNTAIN REGIONAL LIBRARY GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL YEAR ENDED JUNE 30, 2004 SCHEDULE "1" REVENUES Local Funds State Funds Charges for Services Investment Earnings Miscellaneous Total Revenues EXPENDITURES Current Public Services Technical Services Support Services Maintenance and Operations Information Technology Total Expenditures Net Change in Fund Balance Fund Balance - Beginning (Restated) NONAPPROPRIATED BUDGETS ORIGINAL FINAL ACTUAL AMOUNTS $ 407,875 $ 407,875 $ 416,616 376,587 376,587 378,044 15,428 15,428 22,527 767 767 723 2,500 2,500 4,732 $ 803,157 $ 803 157 $ 822,642 $ 334,458 $ 334,458 $ 303,229 93,150 93,150 21,627 294,146 294,146 374,274 81,761 81,761 61,801 2 664 2664 2 259 $ 806 179 $ 806,179 $ 763,190 $ -3,022 $ -3,022 $ 59,452 0 0 104,085 Fund Balance - Ending $ -3 022 $ -3 022 $ =====16=3,.;;5,;;,;37~ 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. - 19 - PINE MOUNTAIN REGIONAL LIBRARY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2004 AGENCY/FUNDING GRANTS Board of Regents of the University System of Georgia Office of Public Library Services Salaries Travel Library Materials Maintenance and Operations SCHEDULE "2" GOVERNMENTAL FUND TYPE GENERAL FUND $ 317,840 469 22,807 36,928 $ =====3=78:e'=04=4= See notes to the basic financial statements. - 20 - PINE MOUNTAIN REGIONAL LIBRARY SCHEDULE OF LOCAL REVENUE YEAR ENDED JUNE 30. 2004 LOCAL SOURCES City Governments Butler Geneva Greenville Junction City Manchester Reynolds County Boards of Education Meriwether County Talbot County Taylor County Thomason-Upson County County Governments Boards of Commissioners Meriwether Talbot Taylor Upson SCHEDULE "3" GOVERNMENTAL FUND TYPE GENERAL FUND $ 19,055 618 27,334 600 37,286 14,000 13,818 23,175 7,592 16,038 60,568 25,000 20,600 150,932 $ ======4=16=6=1=6 See notes to the basic financial statements. - 21 - PINE MOUNTAIN REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 2004 SCHEDULE "4" NAME Alford Alonza Barron Blount Braddy Brown Brown Bulloch Cole Copeland Fineran Fogarty Foster Frye Gee Hamler Harrell Harris Hauf Holmes Hortman Ingram Jenkins Jones Jones Jordon Kilby Knight Louder Marshall Moncrief Parker Phipps Rakhshani Rasbury Robinson Rodriguez Sapp Smalley Thomas Townsend Willis Kenneth Claudia Norman Brenda G. Shirley Sheree M. Shirley PeggyS. Kerrie D. Sarah A. Charlene E. Shirley Doris H. Renee Charles B. Angela D. Tresa Johnnie P. Linda M. Geraldine 8. Melinda Christine G. Carolyn M. Norma T. Paul A. Brenda G. Cynthia S. Carol D. Shirley M. Yvonnne Connie Dorothy A. EmilyJ. Carla Diane Kaye. Maxine Wanda Johnnie P. Lorraine Bonita J. Terri M. Shamona Totals per Report TITLE CATEGORY Custodian Circulation Clerk Circulation Clerk Circulation Clerk Administrative Assistant Circulation Clerk Circulation Clerk Administrative Assistant Assistant Branch Manager Custodian Circulation Clerk Branch Manager Circulation Clerk Circulation Clerk Director Technical Services Assistant Branch Manager Branch Manager Circulation Clerk Branch Manager Circulation Clerk Assistant Branch Manager Circulation Clerk Circulation Clerk Branch Manager Circulation Clerk Extension Coordinator Circulation Clerk Assistant Branch Manager Custodian Branch Manager Circulation Clerk Page Administrative Assistant Circulation Clerk Children Assistant Custodian Custodian Library Technology Coordinator Technical Services Coordinator Youth Services Coordinator Bookmobile Driver II SALARIES TRAVEL $ 4,417 2,938 149 12,702 $ 10 3,200 3,850 4,834 815 13,142 3,821 9,736 16,550 2,128 350 64,669 137 12,942 6,961 60 8,257 2,952 16,732 4,278 16,458 1,672 181 7,017 1,048 52,672 215 10,649 3,888 2,633 5,828 5,378 24 5,653 19,776 1,643 82 2,524 349 43,437 5 56,190 167 46,486 686 10 600 $ 489,587 $======1:!:3=0=4 See notes to the basic financial statements. - 23- SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS PINE MOUNTAIN REGIONAL LIBRARY AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2004 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FS-6992-93-02 Previously Reported Corrective Action Implemented