PIEDMONT REGIONAL LIBRARY
WINDER, GEORGIA REPORT ON AUDIT OF THE FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2006
STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
Russell W. Hinton State Auditor
PIEDMONT REGIONAL LIBRARY - TABLE OF CONTENTS -
SECTION I
FINANCIAL
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
REQUIRED SUPPLEMENTARY INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
EXHIBITS
BASIC FINANCIAL STATEMENTS
DISTRICT-WIDE FINANCIAL STATEMENTS
A
STATEMENT OF NET ASSETS
1
B
STATEMENT OF ACTIVITIES
2
FUND FINANCIAL STATEMENTS
C
BALANCE SHEET
GOVERNMENTAL FUNDS
4
D
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
5
E
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES
GOVERNMENTAL FUNDS
6
F
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT
OF REVENUES, EXPENDITURES AND CHANGES IN FUND
BALANCES TO THE STATEMENT OF ACTIVITIES
7
G
NOTES TO THE BASIC FINANCIAL STATEMENTS
9
SCHEDULES
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
GENERAL FUND
19
PIEDMONT REGIONAL LIBRARY - TABLE OF CONTENTS -
SECTION I
FINANCIAL
SCHEDULES
SUPPLEMENTARY INFORMATION
SCHEDULES OF REVENUE
2
STATE
20
3
FEDERAL
21
4
LOCAL
22
5 SCHEDULE OF SALARIES AND TRAVEL
23
SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTION Ill FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION IV MANAGEMENT'S RESPONSES SCHEDULE OF MANAGEMENT'S RESPONSES
SECTION I FINANCIAL
Russell W. Hinton
STATE AUDITOR
(404) 656-2174
DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
May 25, 2007
Honorable Sonny Perdue, Governor Members of the General Assembly Members ofthe Board of Regents ofthe University System of Georgia
and Director and Members of the Piedmont 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 Piedmont Regional Library as of and for the year ended June 30, 2006, which collectively comprise the Library's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Piedmont Regional Library's management. Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes 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 Piedmont Regional Library, as of June 30, 2006, 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.
2006ARL-41
Management's Discussion and Analysis and the Schedule ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on pages i through v and page 19 are not a required part ofthe basic financial statements but are 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 of measurement and presentation of the 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 Piedmont Regional Library's basic financial statements. The accompanying supplementary information which consist ofSchedules 2 through 5, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe basic financial statements, and in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated section 50-6-24.
Respectfully submitted,
::3.::~p~n~j~ State Auditor
RWH:as 2006ARL-41
PIEDMONT REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006
This document is management's discussion and analysis of the Piedmont Regional Library financial activities for the year ended June 30, 2006.
Overview of Financial Statements
Piedmont Regional Library's statements are presented in three parts: government-wide financial statements, fund financial statements, and notes to the financial statements.
Government-wide Statements
Government-wide financial statements include the Statement ofNet Assets and the Statement of Activities. Government-wide statements provide information about the activities of the government as a whole and provide a long-term view of the government's finances. These statements are presented using the accrual basis of accounting. The accrual basis of accounting reports results of activities based on the occurrence of an economic event, regardless of the timing of revenue collection or payment of expenses. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g. accounts receivable).
The Statement of Net Assets presents the total assets and liabilities of the Library with the difference reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Library is improving or deteriorating.
The Statement of Activities presents information showing how the library's net assets changed during the most recent fiscal year. The Statement ofActivities presents governmental activity expenses in the following categories: Public Service (cost of providing branch services including library materials), Technical Services (costs of selecting and preparing library materials for public use), Support Services (administrative cost of providing library services), Maintenance and Operations (costs incurred for the maintenance of grounds facilities), and Information Technology (costs associated with providing access to electronic materials and services).
Program revenues include Charges for Services (fees charged to customers), Operating Grants and Contributions (State of Georgia and Federal grants used for library operations used to purchase capital assets).
General revenues include the contribution for library operations from "allotments from participating governments" (local funds), interest revenue, and miscellaneous revenue from donations.
As is evident from the Statement ofActivities, the majority of Library expenditures are paid from revenue provided by operating grants and "allotments from participating governments" representing the largest share.
Please see Exhibits "A" and "B" to review the government-wide financial statements.
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PIEDMONT REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been separated for specific activities or objectives. Piedmont Regional Library, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance related legal requirements.
The Library uses only three governmental funds: the general fund, the capital projects fund and the permanent fund. These funds are accounted for using the modified accrual basis of accounting. Under this basis of accounting, revenue is posted when amounts are both measurable and available to fund current operations. Expenditures are posted when amounts will be disbursed in the near future (typically within sixty days).
Notes to the Basic Financial Statements
The Notes to the Basic Financial Statements presented on Exhibit "G" provide additional information that is essential to the full understanding of data provided in the government-wide and fund financial statements.
Additional Information
Following the Notes to the Basic Financial Statements section is the Budgetary Comparison Schedule. This schedule is required supplementary information to the basic financial statements. The format used is similar to the Statement of Revenues, Expenditures and Changes in Fund Balances. This schedule shows the original budget adopted at the beginning of the fiscal year and the final adjusted budget. The final adjusted budget is compared to the actual revenues and expenditures.
Also presented are three schedules of Local, State and Federal Revenue. These schedules provide details of the grantor agencies and associated grants for the totals included on the Budgetary Comparison Schedule.
Financial Analysis Government-wide (accrual basis)
The Library's overall financial position and operations at the government-wide level for fiscal year 2006 compared to fiscal year 2005 is summarized as follows:
- 11 -
PIEDMONT REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006
Classification
Assets Current Assets Capital Assets, Net
Total Assets
Liabilities Current Liabilities
Net Assets Investment in Capital Assets Restricted Net Assets for Capital Projects Restricted for Permanent Funds Unrestricted Net Assets
Total Net Assets
Total Liabilities and Net Assets
Revenues Program Revenues: Operating Grants and Contributions Capital Grants and Contributions Charges for Services
Total Program Revenues
General Revenues: Government - Local Other General Revenues
Total General Revenues
Total Revenues
Program Expenses Public Services Technical Services Support Services Maintenance and Operations Information Technology
Total Expenses
Increase in Net Assets
Fiscal Year2006
Fiscal Year 2005
Increase (Decrease)
$ 491,329 445,212
$ 936,541
$ 216,807 525,587
$ 742,394
$ 274,522 -80.375
$ 194 147
$ 4,233 $ 14,858 $ -10,625
$ 445,212 251,495 2,200 233,401
$ 932,308
$ 936.541
$ 525,587 0
2,200 199 749
$ 727,536
$ 742,394
$ -80,375 251,495 0 33,652
$ 204,772
$ 194.147
$ 576,967 228,821 20,101
$ 825,889
$ 470,366 0
24.040
$ 494,406
$ 106,601 228,821 -3,939
$ 331,483
$ 287,887 -14 571
$ 273,316
$1,099,205
$ 267,620 11,242
$ 278,862
$ 773,268
$ 20,267 -25,813
$ -5,546
$ 325,937
$ 583,147 19,307
188,656 16,588 86,735
$ 894,433
$ 204,772
$ 446,233 1,960
196,193 8,965
84,127
$ 737,478
$ 35,790
$ 136,914 17,347 -7,537 7,623 2,608
$ 156,955
$ 168.982
- 111 -
PIEDMONT REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006
On June 30, 2006, the assets of Piedmont Regional Library exceeded its liabilities by $932,308. The most significant portion of net assets is the Library's investment in capital assets totaling $445,212. The Library uses the assets (furniture, equipment, books and collections) to provide services to library patrons, so they are not available to fund current operations. The total net assets restricted for construction-related projects are $251,495. Other restricted net asset amounts are $2,200 for permanent funds. The remaining amount available to fund future library operations is $233,401.
Total current asset increase was $274,522 excess operating cash mostly from revenue exceeding expenses.
The net balance of capital assets decreased due to deletions of capital assets during the fiscal year. Retirement of capital assets is considered in the annual budget and long-term budget planning.
Net assets showed an increase of $204,772. This is the net result of an increase in unrestricted net assets of $33,652 a decrease in investment in capital assets of $80,375 and an increase in restricted net assets for capital projects of $251,495. The change in unrestricted net assets includes all revenues and expenses unrelated to capital assets (equipment, books, and collections) or restricted funds.
Total revenues increased by $325,937, primarily as a result of increased donations from local agencies for the Auburn Building Projects. Total expenses increased by $156,955, primarily as a result of increased grant funding from different agencies.
Fund Level (modified accrual basis)
The Library's overall financial position and operations at the fund level for the current and prior year is summarized as follows:
Category
Fiscal Year 2006
Fiscal Year 2005
Difference
Total Assets Total Liabilities
$ 491,329 4,233
$ 216,807 14,858
$ 274,522 -10,625
Total Fund Balance
$ 487,096 $ 201,949 $ 285,147
Total Revenues
$1,155,024 $ 773,268 $ 381,756
Total Expenditures
$ 869,877 $ 761,666 $ 108,211
Total assets had a net increase of $274,522 due primarily to increased donations to restricted net assets for capital projects. The decrease in liabilities is due to the decrease in accounts payable at year-end.
- IV -
PIEDMONT REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006
General Fund Budgetary Variances The original and final budget for the Library's operations are presented in the Budgetary Comparison Schedule. The actual revenues were under budget by $3,277. This change is the result of several factors. Charges for services and miscellaneous revenue, such as payphone expense, copy fees, meeting room fees, and lost or damaged book charges decreased by $3,619. Capital Assets The Library's capital assets consist of furniture, equipment, and library materials. During the year, additional books were purchased. There were deletions of equipment and library books in this fiscal year. There was a decrease in capital assets, net of accumulated depreciation, of $80,375; depreciation expense of $69,515; and disposal of capital assets in the amount of $116,931. See Note 4, Capital Assets for details of activity. Economic Factors and Next Year's Budget The Library's financial position for next year is expected to remain stable. State Grant Funds are expected to increase due to state Legislative approvals for increases in salaries and materials. Local funding agencies are expected to match at least the level of funding from the previous year. There are no known facts, decisions, or conditions that are expected to have a significant effect on the Library's financial position (net assets) or result of operations (revenues, expenses, and other changes in net assets). Requests for Additional Information This financial report is designed to provide a general overview of Piedmont Regional Library's finances for our citizens, taxpayers, and governmental entities to which we are accountable. If you have additional questions about this report, please contact the Financial department at (770) 867-2762.
- V-
PIEDMONT REGIONAL LIBRARY
PIEDMONT REGIONAL LIBRARY STATEMENT OF NET ASSETS JUNE 30, 2006
ASSETS Cash and Cash Equivalents Investments Accounts Receivable, Net
Other Capital Assets
Equipment Library Collections Less: Accumulated Depreciation
Total Assets
LIABILITIES Accounts Payable Deposits and Deferred Revenues
Total Liabilities NET ASSETS Invested in Capital Assets, Net of Related Debt Restricted for Capital Projects Permanent Funds Unrestricted Total Net Assets
Total Liabilities and Net Assets
EXHIBIT"A"
GOVERNMENTAL ACTIVITIES
$
388,414
87,915
15,000
73,017 1,876,617 -1504422
$ ====9=3=6-=5=41=
$
215
4 018
$
4 233
$
445,212
251,495 2,200
233 401
$
932 308
$ ====9=3=6o:5=4=1
The notes to the basic financial statements are an integral part of this statement.
-1-
PIEDMONT REGIONAL LIBRARY STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2006
GOVERNMENTAL ACTIVITIES
Current Services Public Services Technical Services Support Services Maintenance and Operations Information Technology
Total Governmental Activities
General Revenues Allotments from Participating Governments Investment Earnings Miscellaneous
Total General Revenues
Change in Net Assets
Net Assets - Beginning of Year
EXPENSES
PROGRAM
CHARGES FOR SERVICES
$
583,147 $
19,307
188,656
16,588
86 735
$
894,433 $
20,101 20 101
Net Assets - End of Year
The notes to the basic financial statements are an integral part of this statement. -2-
EXHIBIT"B"
REVENUES OPERATING GRANTS AND
CONTRIBUTIONS
CAPITAL GRANTS AND CONTRIBUTIONS
NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS
$
366,578 $
210,389
$
576 967 $
228,821 $
228,821 $ $ $ $
32,353 -19,307 -188,656 193,801 -86 735
-68,544
287,887 8,765
-23 336
273 316
204,772
727 536
$ ====93=2...,,3=0=8
-3-
PIEDMONT REGIONAL LIBRARY BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2006
EXHIBIT"C"
ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Other
Total Assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable Deposits and Deferred Revenue
Total Liabilities
FUND BALANCES
Reserved for: Capital Projects Permanent Funds
Unreserved Designated for Self-Insurance Bookmobile Replacement Undesignated Reported in: General Fund Permanent Funds
Total Fund Balances
Total Liabilities and Fund Balances
GENERAL FUND
CAPITAL PROJECTS
FUND
PERMANENT FUNDS
TOTAL
$ 140,154 $ 82,094
15,000
247,874 $ 3,621
386 $ 2,200
388,414 87,915
15,000
$ 237,248 $ 251,495 $
2,586 $ 491,329
$
215
4 018
$ 4,233
$
215
4 018
$
4233
$
$ 30,000 24,000 179,015
251,495 $
$ 233,015 $ 251 495 $
$ 2,200
386 2,586 $
251,495 2,200
30,000 24,000
179,015 386
487,096
$ 237,248 $ 251,495 $
2,586 $ 491,329
The notes to the basic financial statements are an integral part of this statement. -4-
PIEDMONT REGIONAL LIBRARY RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30, 2006
EXHIBIT"D"
Total Fund Balances - Governmental Funds (Exhibit "C")
Amounts reported for Governmental Activities in the Statement of Net Assets are different because:
Capital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of:
Equipment Library Collections Accumulated Depreciation
Total Capital Assets
Net Assets of Governmental Activities (Exhibit "A")
$ 487,096
$
73,017
1,876,617
-1,504,422
445,212
$ 932,308
The notes to the basic financial statements are an integral part of this statement. -5-
PIEDMONT REGIONAL LIBRARY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2006
EXHIBIT"E"
REVENUES
Local Funds State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Public Services Technical Services Support Services Maintenance and Operations Information Technology Facilities Acquisition and Construction
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES {USES)
Transfers In Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance - Beginning
Fund Balance - Ending
GENERAL FUND
CAPITAL PROJECTS
FUND
PERMANENT FUNDS
TOTAL
$ 287,887 $ 572,317 4,650 20,101 4,120 29,944
$ 919,019 $
228,821
4,577 $ 2,539 235,937 $
$ 68
516,708 572,317
4,650 20,101
8,765 32,483
68 $ 1,155,024
$ 481,699 $ 19,307 184,615 16,588 86,668
$ 788,877 $
$ 130,142 $
2,382 $ 2,818
75,800 81,000 $ 154 937 $
0 $ 484,081 19,307 187,433 16,588 86,668 75,800
0 $ 869,877
68 $ 285,147
$ $ -81,000
$ -81,000 $ $ 49,142 $
183,873
81,000
81,000 235,937 $
15,558
$ 81,000 -81,000
$
0
68 $ 285,147
2 518
201,949
$ 233,015 $ 251,495 $===2=,5=86= $ 487,096
The notes to the basic financial statements are an integral part of this statement. -6-
PIEDMONT REGIONAL LIBRARY RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2006
EXHIBIT"F"
Total Net Change in Fund Balances - Governmental Funds (Exhibit "E")
$
Amounts reported for Governmental Activities in the Statement of Activities are different because:
Capital outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of capital assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:
Capital Outlay Depreciation Expense
Excess of Capital Outlay over Depreciation Expense
44,959 $ _ _....;-6:;,.;;9.,L,;5'-'1~5
In the Statement of Activities, only the gain on the sale of the equipment is reported, whereas in the Governmental Funds, the entire proceeds from the sale increase financial resources. Thus, the change in net assets differs from the change in fund balances by the carrying value of the equipment sold.
285,147
-24,556 -55 819
Change in Net Assets of Governmental Activities (Exhibit "B")
$ ===20=4=7=7=2
The notes to the basic financial statements are an integral part of this statement. -7-
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PIEDMONT REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT"G"
Note 1: DESCRIPTION OF LIBRARY AND REPORTING ENTITY
REPORTING ENTITY
The Piedmont 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.
The Library Board is comprised of 11 members which are also trustees ofthe member library which appointed them. The Library Board membership consists of 3 members appointed from the Banks County Library Board ofTrustees, 4 members appointed from the Barrow County Library Board of Trustees, and 4 members appointed from the Jackson County Library Board of Trustees. 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 ofGeorgia 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 Piedmont 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 Piedmont Regional Library.
Library-wide Statements: The Statement ofNet Assets and the Statement ofActivities display information about the financial activities ofthe overall Library. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through intergovernmental revenues and other nonexchange transactions.
The Statement ofActivities 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.
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PIEDMONT REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "G"
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Program revenues include (a) charges paid by the recipients ofgoods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues are presented as general revenues.
Fund Financial Statements: The fund financial statements provide information about the Library's funds. Eliminations have been made to minimize the double counting of internal activities. The emphasis of fund financial statements is on major governmental funds.
The Library reports the following major governmental funds:
General Fund is the Library's primary operating fund. It accounts for all financial resources of the Library, except those resources required to be accounted for in another fund.
Capital Projects Fund accounts for financial resources including grants from Federal and State sources to be used for the acquisition, construction or renovation of major capital facilities.
Permanent Funds - Lucille Nix Memorial Fund and Ted E. Roberts Book Fund are the funds used to account for endowments ofwhich the corpus is to be invested and preserved intact with the resultant income to be used exclusively for the purchase of library books.
BASIS OF ACCOUNTING
The basis ofaccounting determines when transactions are reported on the financial statements. The Library-wide governmental financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the Library gives (or receives) value without directly receiving (or giving) equal value in exchange, include grants and donations. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
The Library uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis ofaccounting. Under this method, revenues are recognized when measurable and available. The Library considers all revenues reported in the governmental funds to be available
- 10 -
PIEDMONT REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "G"
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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. Capital asset acquisitions are reported as expenditures in governmental funds.
The Library funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the Library's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. 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 author~zes 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 of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
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PIEDMONT REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "G"
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLES
Receivables consist ofamounts due from grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
CAPITAL ASSETS
Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time ofpurchase. On the Library-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method.
Capitalization thresholds and estimated useful lives of capital assets reported in the Library-wide statements are as follows:
Capitalization Policy
Estimated Useful Life
Equipment Library Collections
$
5,000
15 years
$
5,000
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 of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than
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PIEDMONT REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "G"
Note 3: DEPOSITS
110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13 .1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. At June 30, $36,685 ofdeposits were not secured by surety bond, insurance or collateral as specified above. The Library is working with the affected financial institutions to ensure appropriate levels of collateral are maintained for all of the Library's deposits.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(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, 2006, the bank balances were $559,466. The amounts of the total bank balances are classified into four categories of custodial credit risk:
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PIEDMONT REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "G"
Note 3: DEPOSITS
Category 1 - Cash that is insured (e.g., Federal Deposit 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 - Cash collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Library's name.
Category 4 - Uncollateralized.
The Library's deposits are classified by custodial credit risk category at June 30, 2006, as follows:
Custodial Credit Risk Category
1 2 3
4
Bank Balance
$ 358,195 0
164,586 36,685
Total Note 4: CAPITAL ASSETS
$=====5-59'='=,4=="6==6
The following is a summary of changes in the Capital Assets during the fiscal year:
Governmental Activities Capital Assets Being Depreciated
Equipment Library Collections
Less Accumulated Depreciation for: Equipment Library Collections
Total Governmental Activities
Balances July 1, 2005
Increases
Decreases
Balances June 30, 2006
$ 161,829 1,859,777 $
$ 44,959
88,812 $
73,017
28,119
1,876,617
61,255 1,434,764
$ 525,581 $
1,265 68,250
-24,556 $
32,993 28 119
29,527 1,474,895
55,819 $ 445,212
Current year depreciation expense by function is as follows:
Public Services Support Services
$
69,448
67
$==6=9-,5~1-5
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PIEDMONT REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT"G"
Note 5: RESTRICTED ASSETS
Endowments in which donors have stipulated as a condition ofthe gift instrument, that the principal is to be maintained inviolate and in perpetuity, and invested for the purpose ofproducing present and future income, which may be expended and contributions from local governments restricted for capital improvements are reported as restricted assets in the Statement of Net Assets because their use is limited by applicable contractual agreements or statutory provisions. Restricted assets at June 30, 2006, were as follows:
Capital Projects
Permanent Funds
Restricted Cash and Cash Equivalents: Capital Acquisitions
Restricted Investments Lucille Nix Memorial Fund Ted E. Roberts Book Fund Capital Acquisitions
$ 247,874
$
$
$
3,621
1,200 1,000
Note 6: INTERFUND TRANSFERS
Interfund transfers for the year ended June 30, 2006, consisted of the following:
Transfer to
Transfers From General Fund
Capital Projects
$==='='81-,0~0-0
Transfers are used to move funding from the General Fund to the Capital Projects Fund as required match or supplemental funding source for capital construction projects.
Note 7: 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 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 ofthe past three years.
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PIEDMONT REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT"G"
Note 7: RISK MANAGEMENT
The Library has elected to self-insure for all losses related to torts and acts of God. 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 is self-insured with regard to unemployment compensation claims. The Library accounts for claims within the General Fund with expenses/expenditures 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
$
20,000
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% 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
2006 2005 2004
100% 100% 100%
$
36,490
$
35,650
$
36,007
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PIEDMONT REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "G"
Note 9: AFFILIATED LIBRARIES DISCLOSURE
The Banks County Library, Commerce Public Library, Harold S. Swindle Library, Jefferson Public Library and Maysville Public Library are legally separate, tax exempt organizations who participate in shared activities with the Piedmont Regional Library. These affiliated libraries do not meet the criteria for reporting as either a component unit or related entity ofthe Piedmont Regional Library.
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PIEDMONT REGIONAL LIBRARY GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2006
SCHEDULE "1"
REVENUES
Local Funds State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Public Services Technical Services Support Services Maintenance and Operations Information Technology
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING USES
Other Uses
Net Change in Fund Balance
Fund Balance - Beginning
NONAPPROPRIATED BUDGETS
ORIGINAL
FINAL
ACTUAL AMOUNTS
$
288,021 $
287,887 $
471,575
572,317
4,650
19,300
20,371
2,000
3,778
33,293
$
780,896 $
922,296 $
287,887 572,317
4,650 20,101
4,120 29 944
919 019
$
473,832 $
488,462 $
19,388
21,443
190,432
194,232
16,532
16,532
92,340
94696
$
792,524 $
815,365 $
$
-11,628 $
106,931 $
481,699 19,307
184,615 16,588 86,668
788 877
130,142
-81,000
$
-11,628 $
25,931 $
0
0
-81 000 49,142 183,873
Fund Balance - Ending
$
-11,628 $
25,931 $ =====23=3=,0=15=
Notes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual
The accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.
See notes to the basic financial statements.
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PIEDMONT REGIONAL LIBRARY SCHEDULE OF STATE REVENUE
YEAR ENDED JUNE 30, 2006
AGENCY/FUNDING GRANTS Board of Regents of the University System of Georgia Office of Public Library Services Salaries Library Materials Maintenance and Operations
SCHEDULE "2"
GOVERNMENTAL FUND TYPE GENERAL FUND
$
313,713
48,215
210,389
$ ====57=2=,3=17....
See notes to the basic financial statements.
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PIEDMONT REGIONAL LIBRARY SCHEDULE OF FEDERAL REVENUE
YEAR ENDED JUNE 30, 2006
AGENCY/FUNDING GRANT Museum and Library Services, Institute of Through Board of Regents of the University System of Georgia Library Services and Technology Act Vacation Reading Program
SCHEDULE "3"
GOVERNMENTAL FUND TYPE GENERAL FUND
$ =======4=6=50=
See notes to the basic financial statements.
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PIEDMONT REGIONAL LIBRARY SCHEDULE OF LOCAL REVENUE
YEAR ENDED JUNE 30, 2006
SCHEDULE "4"
LOCAL SOURCES City Governments Auburn Bethlehem Braselton Carl Commerce Homer Hoschton Pendergrass Statham Talmo Winder County Boards of Education Banks County Barrow County Jackson County County Governments Boards of Commissioners Banks Barrow Jackson
GOVERNMENTAL FUND TYPES
CAPITAL
GENERAL
PROJECTS
FUND
FUND
TOTAL
$
34,627 $
228,821 $
263,448
800
800
400
400
800
800
800
800
3,740
3,740
400
400
400
400
15,472
15,472
400
400
34,600
34,600
3,874 55,080
9,538
3,874 55,080
9,538
3,740 48,216 75,000
3,740 48,216 75 000
$
287 887 $
228,821 $ ==5=1=6=7=08=
See notes to the basic financial statements.
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NAME
Conley, Stephanie
Deaton, Regina L. Davis, Robert A.
Fitzgerald, Patrick Graham, Margaret H. Greer, Elizabeth G. Guidotti, Patricia S. Harris, Harriet H. Holmes, Nancy M. Hoover, Anna R. Hubbard, Lisa K.
Jones, Nancy L.
Krebs, Jane G. Loomis, Harriette D. McIntyre, Jessica McKean, Katharine Miller, April M. Moore, Angela D. Page, Joyce F. Ray, Nancy C. Shipley, Mary Ann Spencer, Mary Hale Thompson, Michael W. Thompson, Rose S. Tuttle, George W.
Wood, Miriam L.
Totals per Report
PIEDMONT REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2006
SCHEDULE "5"
TITLE CATEGORY
Clerk Extension Services Library Manager Clerk Clerk Clerk Clerk Circulation Assistant Librarian Librarian Clerk Circulation Assistant Clerk Clerk Aide Extension Services Bookkeeper Aide Library Manager Director Clerk Library Manager Custodian Administrative Assistant Librarian Assistant Library Manager
SALARIES
TRAVEL
$
414
3,730
6,055
19,500 $
91
10,634
8,151
7,754
5,143
64,679
555
64,679
395
8,397
11,304
9,470
8,521
3,292
16,088
27,824
3,591
14,191
70,479
1,255
5,256
6,326
18,697
26,292
62,856
661
5 751
$
489 074 $ =====2=9=5=7
See notes to the basic financial statements.
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SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS
PIEDMONT REGIONAL LIBRARY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2006
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
FINDING CONTROL NUMBER AND STATUS
FS-6072-05-01
Previously Reported Corrective Action Implemented
SECTION III FINDINGS AND QUESTIONED COSTS
PIEDMONT REGIONAL LIBRARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS Uncollateralized Deposits Nonmaterial Noncompliance Finding Control Number: FS-6072-06-01
Condition:
As of June 30, 2006, the Library failed to meet State collateralization requirements.
Criteria:
Official Code of Georgia Annotated (O.C.G.A.) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate ofthe face value ofsuch 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 of the amount of deposit insurance.
Questioned Cost: NIA
Information:
At June 30, 2006, deposits in the amount of $36,685 were not secured by surety bond, insurance or collateral.
Cause:
Management failed to monitor the amount of collateral pledged to the Library's accounts.
Effect:
Noncompliance with respect to O.C.G.A. 45-8-12.
Recommendation:
The Library should implement adequate procedures to monitor the collateralization ofbank balances to ensure compliance at all times with State Laws governing deposits.
REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition Finding Control Number: FS-6072-06-02
Condition:
The accounting procedures of the Library were insufficient to provide for adequate controls over (1) Revenues/Receivables/Receipts; (2) Expenditures/ Liabilities/Disbursements; and (3) General Ledger.
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PIEDMONT REGIONAL LIBRARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition Finding Control Number: FS-6072-06-02
Criteria:
The Library's management is responsible for designing and maintaining internal controls that provide reasonable assurance that transactions are properly approved, documented, processed and reported.
Questioned Cost: NIA
Information:
(1) Revenues/Receivables/Receipts
A review of the open accounts receivable listing, provided by the Library, identified a receivable in the amount of $3,300 that was determined to have been received during the current year; however, the funds were improperly recorded and posted to the wrong account rather than closing the account receivable.
(2) Expenditures/Liabilities/Disbursements A review of the withholdings payable revealed a debit balance and numerous posting errors between the various withholding accounts. Withholdings in the amount of $15,448 were posted to the wrong account.
(3) General Ledger Interfund transfers of $81,000 were improperly posted. An audit adjustment to correct this error was made. The Library did not properly close out their general ledger at year end. As of the end of field work, the June 30, 2006, books had not been closed. The Library did not have adequate procedures in place to ensure that all journal entries made to the accounting records were approved and posted to the appropriate accounts. Audit adjustments were necessary to ensure that financial statements presented for audit were materially correct.
Cause:
These conditions occurred because of management's failure to implement adequate controls to ensure that revenues and expenditures were properly processed,journal entries were properly coded and posted to the appropriate accounts and that general ledger balances were correct and year-end procedures were being properly followed.
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PIEDMONT REGIONAL LIBRARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition Finding Control Number: FS-6072-06-02
Effect:
Without satisfactory accounting controls and procedures in place, the Library could place itself in a position where potential misappropriation of assets could occur. In addition, the lack of controls could impact reporting of its financial position and results of operations.
Recommendation:
Management should review accounting controls and procedures currently in place, identify weaknesses, and implement procedures relative to the above control categories to strengthen the internal controls over the accounting functions.
CAPITAL ASSETS Failure to Adequately Maintain Capital Assets Reportable Condition Finding Control Number: FS-6072-06-03
Condition:
The accounting procedures of the Library were insufficient to provide for adequate control over Capital Assets.
Criteria:
The Library's management is responsible for designing, implementing and monitoring internal controls that provide reasonable assurance that Capital Asset records are maintained in accordance with the Library's capitalization policies and generally accepted accounting principles.
Questioned Cost: NIA
Information:
Equipment deletions during the fiscal year of $30,775 were not removed from the Capital Asset records. An audit adjustment was proposed and made to correct the Capital Assets presentation for audit.
Cause:
The Library's management failed to implement satisfactory controls and procedures necessary to record and maintain accurate Capital Asset records.
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PIEDMONT REGIONAL LIBRARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CAPITAL ASSETS Failure to Adequately Maintain Capital Assets Reportable Condition Finding Control Number: FS-6072-06-03
Effect:
Without proper accounting controls and procedures in place, capital acquisitions, capital deletions, and depreciation expense could be inaccurately reported.
Recommendation:
The Library should review the accounting controls and procedures currently in place, identify weaknesses and design and implement procedures necessary to strengthen controls over Capital Assets. Additionally, the Library should review its Capital Assets records and make appropriate adjustments to ensure that the subsidiary records properly support activity reported on the general ledger.
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SECTION III MANAGEMENT'S RESPONSES
PIEDMONT REGIONAL LIBRARY SCHEDULE OF MANAGEMENT'S RESPONSES
YEAR ENDED JUNE 30, 2006
Finding Control Number: FS-6072-06-01
We concur with this finding. Management has contacted People's Bank regarding uncollateralized deposits. People's has corrected this error and admitted their mistake. As ofJuly 2007, this has been corrected and all deposits are fully collateralized. The Library will request semi-annual reports from People's Bank to verify sufficient collateralization levels. The Library will also verify appropriate levels of collateralization during those months when it is likely to have more funds in this account.
Finding Control Number: FS-6072-06-02
We concur with this finding.
(1) Revenues/Receivables/Receipts Management discovered that an accounts receivable entry was created, but not posted to the receivable account. To prevent this from occurring again, management will run an open accounts receivable report at month end.
(2) Expenditures/Liabilities/Disbursements This was due to part-time employees working between branches, therefore different accounts were affected. The posting errors were corrected as of August 2006. In the future when staffare asked to fill-in at other locations, accounts will be changed at time of payroll entry instead of a post-dated journal entry.
We agree that posting errors regarding withholdings payable were made. During fiscal year 2006, these errors were brought to management attention and were corrected forward, but not in arrears. We have corrected the process of invoice entry and these errors will not occur again.
(3) General Ledger The interfund transfer was deposited June 30, 2006, and the cash receipt was entered July 6, 2006, in error. The books were not closed out due to a recurring error which could not be resolved. The amount of this error ($30.65) will be resolved in order to close out fiscal year 2006. In the future, management will not allow unresolved issues to interfere with acceptable accounting practices, including closing out the fiscal year. The fiscal year 2006 books will be closed by August of 2007.
Management has implemented controls ensuring that these oversights in procedure do not recur. Procedures implemented ensure all journal entries were approved and posted appropriately. These changes were implemented by July 2006.
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PIEDMONT REGIONAL LIBRARY SCHEDULE OF MANAGEMENT'S RESPONSES
YEAR ENDED JUNE 30, 2006 Finding Control Number: FS-6072-06-03 We concur with this finding in part. The card catalog was partially sold in fiscal year 2006 so ofthe $13,235.00, which is the value, only of said value should be deleted from the fiscal year 2006 Assets. This amount is $3,308.75. The remaining portion of the card catalog was deleted in fiscal year 2007, and the remaining asset value amount ($9,926.25) will show on the fiscal year 2007 Asset Deletion List. With this change, the total amount of deleted items not removed from record should reflect $23,848.75. The other two items in question were recycled on April 6, 2006, and omitted from the removal list. The Computer Services Librarian, Regional Bookkeeper, and Regional Director will work closer together to assure this type of oversight is not repeated. Contact Person: Alan Harkness, Regional Director Phone: (770) 867-2762 Fax Number: (770) 867-7483 E-mail Address: aharkness@prlib.org
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