Audit report, Sara Hightower Regional Library, Rome, Georgia, year ended June 30, 1995

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1994-95
STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET ATLANTA. GEORGIA 30334

AUDIT REPORT SARA IBGHTOWER REGIONAL LIBRARY
ROME, GEORGIA YEAR ENDED JUNE 30, 1995

SARA HIGHTOWER REGIONAL LIBRARY
- TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS-OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUPS

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

3

C

STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL AND SPECIAL REVENUE FUNDS

4

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

5

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

14

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

15

SCHEDULES

1 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

16

2 CASH AND CASH EQUIVALENTS

17

3 ACCOUNTS RECEIVABLE

18

SCHEDULE OF REVENUE

4

STATE

19

5

LOCAL AND OTHER

20

SCHEDULE OF EXPENDITURES BY OBJECT

6

GOVERNMENTAL FUND TYPES

21

7

LOTTERY PROGRAM

22

8 MEMBERSHIP OF LIBRARY BOARD

23

9 SCHEDULE OF SALARIES AND TRAVEL

24

SARA HIGHTOWER REGIONAL LIBRARY
- TABLE OF CONTENTS -
SECTION IT COMPLIANCE COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS
SECTION III INTERNAL CONTROL REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
SECTIONV PERTINENT VIEWS OF RESPONSIBLE OFFICIALS PERTINENT VIEWS OF RESPONSIBLE OFFICIALS

SECTION I FINANCIAL

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
August 2, 1996

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members of the Sara Hightower Regional Library Board
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARYINFORMATIONSCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
Ladies and Gentlemen:
We have audited the general purpose financial statements (Exhibits A through D) of the Sara Hightower Regional Library, as of and for the year ended June 30, 1995, as listed in the table of contents. These financial statements are the responsibility of the Library's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and the standards for financial and compliance audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and the provisions of the Office of Management and Budget Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose 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.
In our opinion, the general purpose financial.statements present fairly, in all material respects, the financial position ofthe Sara Hightower Regional Library as of June 30, 1995, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated August 2, 1996, on our consideration of the Library's internal control structure and a report dated August 2, 1996, on its compliance with laws and regulations.
95ARL-45*

As discussed in Note I to the general purpose financial statements, during fiscal year 1995, the Library completed a comprehensive inventory of its general fixed assets for inclusion in the general purpose financial statements. This change is in accordance with generally accepted accounting principles.
Our audit was conducted for the purpose offorming an opinion on the general purpose financial statements ofthe Sara Hightower Regional Library taken as a whole. The combining statements (Exhibits E and F) and the financial schedules (Schedules I through 9 which includes the Schedule ofFederal Financial Assistance), as listed in the table of contents, are presented for purposes of additional analysis and are not a required part ofthe general purpose financial statements ofthe Sara Hightower Regional Library. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,

CLV:jy 95ARL-45*

Claude L. Vickers State Auditor

SARA HIGHTOWER REGIONAL LIBRARY - 1-

~ C8sh and C8sh Equivalents
Accounts Receivable
Amount to be Prowled in Future Years For Payment cl Compensated Ab&ences
GeneralFilled Assets Equipment Inexhaustible Collections and Books

~Ba Hl~HTOWER R~IONAL Ll~RY I.QMalt:ll;Q ~~~!;; ~l;;fil
& El,!t:IQ D'.el;;S ANQ ACCOUNT gRQ!.!~ JUN!; 30 1995

EXHIBIT"A"

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

$ 186,525.95

3,374.62 $

5,746.07

ACCOUNT GROUPS

GENERAL

GENERAL

FIXED

LONG-TERM

ASSETS

DEBT

TOTALS {Memorandum On!1} JUNE 30, 1995 JUNE 30, 1994

$ 186,525.95 $ 226,294.11

9,120.69

10,771.68

$

30,887.75

30,887.75

31;588.13

$ 1,455,305.79 3,345,663.30

1,455,305.79 '3,345,663.30

1,377,699.69 3,192,126.31

Total Assets

$ 189,900.57 $

5746.07 $ 4,800,969.09 S

30887.75 $ 5,027,503.48 $ 4,838,479.92

Ll!BILIII~ M::11:! El.!t:11:! !;QUID'.

LIABILITI~

C8sh OW!rdralt Accounts Payable Compensated Ab&ences

$

$

17,209.42

Total Liabilitie&

$

17,209.42 $

EYt:11:! 1;au1n:

Fund Balances lnYeStment in General Fixed Assets Reserved For Continuation cl Federal Programs Unreserwd Undesignated

$ 172,691.15 $

Total Fund Equity

$ 172,691.15 $

Total Liabilitie& and Fund Equity

$ 189,900.57 $

5,654.84 91.23 $

5 746.07

$

$ 4,800,969.09

0.00 0.00 $

4,800,969.09

5 746.07 $ 4,800,969.09 $

$ 30 887.75 30887.75 $

5,654.84 17,300.65 $ 30,887.75
53,843.24 $

90,477.68 31 588.13
122,065.81

$ 4,800,969.09 $ 4,569,826.00

0.86

172,691.15

146,587.25

$ 4,973,660.24 $ 4 716 414.11

30887.75 $ 5,027,503.48 $ 4,838,479.92

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

SARA HIGHTOWER REGIONAL LIBRARY

EXHIBIT "8"

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

YEAR ENDED JUNE 30, 1995

GENERAL FUND

SPECIAL REVENUE
FUND

TOTALS {Memorandum Onll}
YEAR ENDED
JUNE 30, 1995 JUNE 30, 1994

REVENUES

State Funds Federal Funds Local and Other Funds

$ 410,204.80 $ 608.80
1,292,065.32

1,100.00 $ 97,403.44

411,304.80 $ 98,012.24
1,292,065.32

496,546.94 114,705.89 1,204,279.30

Total Revenues

$ 1,702,878.92 $

98,503.44 $ 1,801,382.36 $ 1,815,532.13

EXPENDITURES

Current Program Services Technical Services Circulation Administration Maintenance and Operations
Capital Outlay

$ 742,356.69 $ 109,092.94 337,718:55 206,548.06 228,554.78 52,504.00

97,404.30 $ 1,100.00

839,760.99 $ 109,092.94 337,718.55 207,648.06 228,554.78 52,504.00

820,482.27 104,687.29 339,938.42 294,833.27 226,210.68

Total Expenditures

$ 1,676,775.02 $

98,504.30 $ 1,775,279.32 $ 1?86,151.93

Excess of Revenues over (under) Expenditures $

26,103.90 $

-0.86 $

26,103.04 $

29,380.20

FUND BALANCE JULY 1

146,587.25

0.86

146,588.11

117,207.91

FUND BALANCE JUNE 30

$ 172,691.15 $

0.00 $ 172,691.15 $ 146,588.11

The notes to the general purpose financial statements are an integral part of this statement. -3-

SARA HIGHTOWER REGIONAL LIBRARY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 1995

EXHIBITc

REVENUES
State Funds Federal Funds Local and Other Funds
Total Revenues
EXPENDITURES
Current Program Services Technical Services Circulation Administration Maintenance and Operations
Capital Outlay
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1, 1994
FUND BALANCE JUNE 30, 1995

GENERAL FUND

BUDGET

ACTUAL

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 435,184.80 $ 410,204.80 608.80
11247,348.00 1,292,065.32
$ 1,682,532.80 $ 1,702,878.92

$

1,100.00 $

1,100.00

95,178.53

97,403.44

$ 96,278.53 $ 981503.44

$ 756,348.07 $ 109,394.90 355,401.84 250,607.81 236,852.00

742,356.69 109,092.94 337,718.55 206,548.06 228,554.78
52,504.00

$ 1,708,604.62 $ 1,676,ns.02

$ -26,071.82 $ 26,103.90

146,587.25

146,587.25

$ 120,515.43 $ 172,691.15

$ 97,384.67 $ 97,404.30

1,100.00

1,100.00

$ 98,484.67 $ 98,504.30

$ -2,206.14 $

-0.86

0.86

0.86

--=-- $ -2,205.28 $

0.00

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

SARA HIGHTOWER REGIONAL LIBRARY

EXHIBIT D 11 11

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 1: SUM:MARY OF SIGNIFICANT ACCOUNTING POLICIES
The Sara Hightower Regional Library operates pursuant to Official Code ofGeorgia Annotated Sections 20-540 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 financial statements ofthe Library have been prepared in conformity with generally accepted accounting principles as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles.
The more significant of the Library's accounting policies are described below.
REPORTING ENTITY
In evaluating how to define the government unit for financial reporting purposes, management has considered the criteria set forth in GASB Codification of Governmental Accounting and Financial Reporting Standards, Section 2100, "Defining the Financial Reporting Entity". Based upon the application of the above criteria, the Sara Hightower Regional Library is determined to be a jointly governed organization.
The Library Board consists of 16 members; 11 members appointed from the Floyd County Library Board and 5 members appointed from the Polk County Library Board. The 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 funding. Membership in the Library and participation in library services is at the discretion of each participating governmental agency. The Board has the power to designate management, the power to retain unreserved fund balances of local funds for continued operations and is the lowest level of oversight responsibility for the Library's operations.
Although the Floyd County Library Board appoints a voting majority ofthe Sara Hightower Regional Library's governing board, the appointed board members have no continuing relationship with the entity. No single governmental agency has oversight responsibility or managerial control over the Library, nor is any of the participating governments responsible for funding a deficit of the Library. Accordingly, the Library's financial statements are not included in the financial statements of any other reporting entity.
The Sara Hightower Regional Library is located in Rome, Georgia, and serves Floyd and Polk Counties.
FUND ACCOUNTING
The Library uses funds and account groups 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.
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SARA IIlGHTOWER REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATE:MENTS

JUNE 30, 1995

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The general purpose 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. Funds and account groups presented in this report are as follows:
GOVERNMENTAL FUND TYPES - used to account for all or most of the Library's general activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the Library except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a Library.
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources 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.
ACCOUNT GROUPS
GENERAL FIXED ASSETS ACCOUNT GROUP - used to account for all general fixed assets acquired by the Library which includes equipment and inexhaustible collections and books. The Floyd County Board of Commissioners owns the land and buildings utilized in the operations of the Library.
GENERAL LONG-TERM DEBT ACCOUNT GROUP - used to account for material compensated absences.
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. 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.

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SARA HIGHTOWER REGIONAL LIBRARY

EXfilBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
BUDGET
The Sara Hightower Regional Library's budget is a complete financial plan for the Library's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Library at the aggregate level. The budget for governmental funds was prepared in accordance with generally accepted accounting principles.
The budget process begins when the Library's administration prepares a tentative aggregated budget for the Board's approval. After approval of this tentative budget by the Board, copies are sent to all local funding agencies. After funding approval is received from all local funding agencies, the Board makes revisions as . necessary and adopts the budget. The budget is then submitted to the Georgia Department of Education, Division ofPublic Library Services as a part of the Library's annual application for state aid. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofdeposits (including N.O.W. accounts) in authorized financial institutions. Georgia Laws authorize the Library to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
RECEIVABLES
Receivable~ consist ofgrant reimbursements due from Federal, State or other grantors 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 general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

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SARA HIGHTOWER REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL FIXED ASSETS
During fiscal year 1995, the Library completed a comprehensive inventory of its General Fixed Assets for inclusion in the general purpose financial statements. General fixed assets purchased, including capital outlay costs, are recorded as expenditures in the various funds at the time of purchase. All purchased general fixed assets are valued at cost where historical records are available and at estimated historical cost where no historical records exist. Donated general fixed assets are recorded at fair market value as of the date donated. Disposals are deleted at recorded cost. No depreciation has been provided on General Fixed Assets. This change is in accordance with generally accepted accounting principles.
COMPENSATED ABSENCES
Compensated absences represent obligations of the Library relating to employees' rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount is deemed immaterial to the general purpose financial statements.
INTERFUND TRANSACTIONS
The Library has the following type ofinterfund transactions:
Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose 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 or results of operations in conformity with generally accepted accounting principles, nor is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this 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 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 ofinsurance, or by collateral. The aggregate of the face value of such surety bond

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SARA HIGHTOWER REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 2: DEPOSITS
and the market value ofsecurities pledged shall be equal to not less than 110 percent of the public funds being secured after the deduction of the amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of 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 ofthe State of Georgia,
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 1995, the bank balances were $229,049.39. 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.)
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SARA lllGHTOWER REGIONAL LIBRARY

EXlllBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 2: DEPOSITS

The Library's deposits are classified by risk category at June 30, 1995, as follows:
Risk Category 1
2 3
Total
Note 3: GENERAL FIXED ASSETS

Bank Balance $ 100,000.00
129,049.39 0.00
$ 229,049.39

A summary of changes in the General Fixed Assets Account Group during the fiscal year are as follows:

Eguipment

Inexhaustible Collections and Books

Total

Balance July 1, 1994

$

0.00 $

0.00 $

0.00

Retroactive Restatement ofPrior Year Balances

1,377,699.69 3,192,126.31 4,569,826.00

Balance July 1 , 1994 Restated

$ 1,377,699.69 $ 3,192,126.31 $ 4,569,826.00

Additions

77,606.10 153,536.99

231,143.09

Balance June 30, 1995

$ 1,455 305,79 $3,345,663.30 $4,800,969.09

Note 4: 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 illnesses or injuries to employees; natural disaster; and unemployment compensation.

The Library has obtained commercial insurance for risk of loss associated with torts, assets and job related illnesses or injuries to employees. The Board 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.

The Library has elected to self-insure for all losses related to errors or omissions, which includes, among other risks, risks for sexual harassment and discrimination. Additionally, the Library has elected to self-insure for all losses related to natural disaster. The Library has not experienced any losses related to these risks in the past three years.

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SARA IDGHTOWER REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 4: RISK MANAGEMENT

The Library is self-insured with regard to unemployment compensation claims. The Library accounts for claims within the General Fund with expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. The Library has not experienced any unemployment compensation claims during the last two fiscal years.

Note 5: GENERAL LONG-TERM DEBT

The changes in General Long-Term Debt during the fiscal year ended June 30, 1995, were as follows:

Compensated Absences

Balance July 1, 1994

$ 31,588.13

Additions Leave Earned and Utilized (Net)

-700.38

Balance June 30, 1995

$ 30 887 75

Note 6: CONTINGENT LIABILITIES

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

Note 7: ACCUMULATED EMPLOYEES' LEAVE

The Library's professional personnel accumulate annual leave to a maximum of30 days based upon the number ofyears ofemployment and professional training. Annual leave is maintained on a calendar year basis and all unused annual. leave at December 31 each year is forfeited. Employees who terminate employment will be paid for accumulated unused annual leave in the year oftermination. See Note 1- Compensated Absences

Note 8: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION All full-time 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 public employee retirement system (PERS).

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SARA HIGHTOWER REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 8: RETIREMENT PLANS
TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. A member is eligible for service retirement after 30 years of service, regardless of age, or after 10 years ofservice and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number of years of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution ofthe member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement benefits also include disability and death benefits. A disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service retirement allowance or a disability retirement allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of 10 years of service) and compensation up to the time of disability or death.
Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employee contributions occurs, but the member's contributions are refunded with interest.
The Library's payroll for employees covered by TRS for the year ended June 30, 1995, was $884,617.77; total payroll was $946,136.35.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Library who are covered by TRS are required by State statute to pay 5% of their gross earnings to TRS. The Library makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. At June 30, 1995, the TRS Library employer contribution rate was 11.81%. The interest rate assumption (rate of return on investments) was 7.50%.
Total contributions made during fiscal year 1995 amounted to $148,704.30, of which $104,473.17 was made by the Library and $44,231.13 was made by employees. These contributions represented 11. 81 % (Library) and 5% (employees) of covered payroll.
TRS FUNDING STATUS AND PROGRESS The amount of the total pension benefit obligation is based on a standardized measurement established by Statement No. 5 ofthe Governmental Accounting Standards Board (GASB) that, with some exceptions, must be used by a PERS. The standardized measurement is the actuarial present value of credited projected benefits. This valuation method reflects the present value of estimated pension benefits that will be paid in

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SARA HIGHTOWER REGIONAL LIBRARY

EXIIlBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1995

Note 8: RETIREMENT PLANS

future years as a result of employee services performed to date, and is adjusted for the effects of projected salary increases. A standardized measure of the pension benefit obligation was adopted by the GASB to enable readers of PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among other PERS and among other employers.

Total unfunded pension benefit obligation ofTRS as of June 30, 1994, was as follows:

Total pension benefit obligation

$15,313,743,000.00

Net assets available for benefits, at cost

14,254,785,000.00

Unfunded pension benefit obligation

$ 1.058,958,000.00

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as ofJune 30, 1994. Net assets available to pay pension benefits were valued as of the same date. TRS does not make separate measurements of assets and pension benefit obligation for individual employers.

Total contributions from all employers to TRS for fiscal year ended June 30, 1995, were $565,117,811.00. The Library's contribution for the year ended June 30, 1995, of $104,473.17 was actuarially determined and represented .018% of total contributions made by all participating employers.

Ten year historical trend information is presented in the 1995 TRS Component Unit Financial Report. This information is useful in assessing TRS's accumulation of sufficient assets to pay pension benefits as they become due.

Note 9: SURETY BONDS

The Library Director, Ms. Elizabeth A. Collins and all employees of Sara Hightower Regional Library are bonded in the amount of$10,000.00 with the Harleysville ~ Atlantic Insurance Company, Greensboro, North Carolina, their Bond No. :MPA 8A 06 35, on which premium was paid through June 30, 1996.

- 13 -

~ Cash and Cash Equivalents Accounts Receivable
Total Assets

Se& l:!l!a!:IIQWEB Bt;glQNAL Ll!;!RARY QQM!:!11::ilNg BALANQI; St::!Ela
seEQIAL B~N!,,!E F!,,!!::il2
J!,,!NE30 1995

EXHJBIT"E"

LOTTERY PROGRAM

LIBRARY SERVICES AND

CONSTRUCTION ACT

TITLE I

TITLEVI

PUBLIC

LIBRARY

LIBRARY

LITERACY

SERVICES

PROGRAM

$

0.00 $

0.00

TECHNOLOGY RELATED
ASSISTANCE FOR INDMDUALS
WITH DISABILITIES
ACT TITLE! TECHNOLOGY ASSISTANCE PROGRAM

TOTALS JUNE 30, 1995 JUNE 301 1994

$

0.00 $ 38,645.13

$

2,207.37 $

3,538.70

5,746.07

5,633.97

$

0.00 $

0.00 $

2,207.37 $

3,538.70 $

5,746.07 $ 44,279.10

L!ABII.ITIES A!';!Q F!,,!NQ !;QUITY

LIABILITIES

Cash Overdraft Accounts Payable

Total Liabilities

FUND EQUITY

Fund Balances

Reserved

For Continuation of Federal Programs

Unreserved

Undesignated

$

Total Fund Equity

$

Total Liabilities and Fund Equity

$

0.00 $ 0.00 $
0.00 $

$ $
0.00 $ 0.00 $ 0.00 $

2,207.37 $ 2,207.37 $
0.00 $ 0.00 $ 2,207.37 $

3,447.47 $ 91.23
3,538.70 $

5,654.84 $ 91.23
5,746.07 $

5,096.41 39,181.83
44,278.24

$

0.86

0.00 $

0.00

0.00

0.00 $

0.00 $

0.86

3,538.70 $

5,746.07 $ 44,279.10

See notes to the general purpose financial statements.

-14-

SARA HIGHTOWER REGIONAL LIBRARY
COMBINING STATEMENT OF RE){ENUES. EXPENDITURES AND CHANGES IN FUND BAL.ANCES
SPECIAL REVENUE FUND
YEAR ENDED JUNE 30 1995

EXHIBIT "F"

REVENUES
State Funds Federal Funds

LOTTERY PROGRAM

LIBRARY SERVICES AND

CONSTRUCTION ACT

TITLEI

TITLE VI

PUBLIC

LIBRARY

LIBRARY

LITERACY

SERVICES

PROGRAM

TECHNOLOGY RELATED
ASSISTANCE FOR INDMDUALS
WITH DISABILITIES
ACT TITLEI TECHNOLOGY ASSISTANCE PROGRAM

TOTALS YEAR ENDED JUNE 3011995 JUNE 30. 1994

$ 1,100.00 $ 16,000.00 $

32,905.06 $

$ 48,498.38

1,100.00 $ 87,500.00

971403.44

114,705.89

Total Revenues

$ 1,100.00 $ 16,000.00 $

32,905.06 $

48,498.38 $ 981503.44 $ 202,205.89

EXPENDITURES
Current Program Service& Administration

$ 16,000.00 $ $ 1,100.00

32,905.92 $

48,498.38 $

97,404.30 $ 126,309.00

11100.00

75,896.03

Total Expenditures

$

Excess or Revenues over (under) Expenditures $

1,100.00 $ 0.00 $

16,000.00 $ 0.00 $

32,905.92 $ -0.86 $

48,498.38 $ 0.00 $

98,504.30 $ -0.86 $

202,205.03 0.86

FUND BALANCE JULY l

0.00

0.00

0.86

0.00

0.86

0.00

FUNQ BALANCE JUNE 30

$

0.00 $

0.00 $

0.00 $

0.00 $

0.00 $

0.86

See notes to the general purpose financial statements.

-15-

SARA HIGHTOWER REGIONAL LIBRARY
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE . YEAR ENDED JUNE 30.1995

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Education, U. S. Department of Direct Library Services and Construction Act Title VI - Library Literacy Program 1993Grant 1995Grant Through Georgia Department of Education Library Services and Construction Act Title I - Public Library Services 1995 Basic Grant Title Ill - Interlibrary Cooperation and Resource Sharing 1995 Contract Through Georgia Department of Human Resources Technology Related Assistance for Individuals with Disabilities Act Title I - Technology Assistance Program Tools for Life 427-93-31624 427-93-51580

CFDA NUMBER

AWARDS IN PERIOD

FEDERAL FUNDS RECEIVED IN PERIOD(NET OF REFUNDS}

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.167 84.167 $

$ 34,861.00

84.034 84.035

16,000.00 608.80

10,948.00 $ 19,749.69

10,948.00 $ 21,957.06

10,948.86 21,957.06

16,000.00 608.80

16,000.00 608.80

16,000.00 608.80

84.224 84.224

51,000.00

13,227.32 37,366.33

7,593.35 40,905.03

7,593.35 40,905.03

Total Federal Financial Assistance

$ 102,469.80 $

97,900.14 $ 98,012.24 $

98,013.10

The Library had no major programs as defined by the Single Audit Act of 1984.

See notes to the general purpose financial statements.

16

SARA HIGHTOWER REGIONAL LIBRARY CASH AND CASH EQUIVALENTS JUNE 30, 1995
INTEREST BEARING ACCOUNTS First Rome Bank, Rome, Georgia N.O.W. Account (2.84%)
OTHER Petty Cash

SCHEDULE "2"

$

180,581.11

290.00 $ ==1=80=,8=7=1.=1=1

See notes to the general purpose financial statements. - 17 -

SARA HIGHTOWER REGIONAL LIBRARY ACCOUNTS RECEIVABLE JUNE 30. 1995

SCHEDULE "3"

Coosa Valley Technical Institute Library Adult Literacy Program Use of Telephone
Education, U. S. Department of Title VI - Library Literacy Program
Human Resources, Georgia Department of Title 1- Technology Assistance Program

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

3,332.62

42.00

$

3,332.62

42.00

$

2,207.37

2,207.37

3,538.70

3,538.70

$

3,374.62 $

5,746.07 $ =====9=,1=2=0=.6=9=

See notes to the general purpose financial statements. - 18 -

SARA HIGHTOWER REGIONAL LIBRARY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1995

SCHEDULE "4"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Public Libraries Salaries and Travel Library Materials Talking Book Centers Maintenance and Operations Lottery Program Distant Leaming

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

176,881.80

$

69,967.00

96,989.00

66,367.00

------ $--------- 1,100.00

176,881.80 69,967.00 96,989.00 66,367.00
1,100.00

$

410,204.80 $

1,100.00 $ ==4=1=1'==30=4=.8=0

See notes to the general purpose financial statements. - 19 -

SARA HIGHTOWER REGIONAL LIBRARY SCHEDULE OF LOCAL AND OTHER REVENUE
YEAR ENDED JUNE 30, 1995

SCHEDULE "5"

LOCAL SOURCES Boards of Education Floyd County Polk County Rome, City of City Governments Cave Spring Cedartown Rockmart Rome County Governments Boards of Commissioners Floyd Polk
OTHER SOURCES Automatic Door Installation Floyd County Board of Commissioners Donations Books and Materials Children's Summer Program Friends of Library Program Literacy Program Special Needs Center Talking Book Center Fines and Fees Interest Earned Library Adult Literacy Program Coosa Valley Technical Institute Lost and Damaged Books Rent Sales Photocopy Services Laminating Fees Video Services
See notes to the general purpose financial statements.
- 20 -

GOVERNMENTAL FUND TYPES GENERAL FUND

$

7,500.00

7,000.00

7,500.00

5,216.58 23,504.52 25,167.00 400,000.00

628,458.00 70,744.00

15,000.00
4,398.12 2,530.00 16,188.00 1,045.00 1,331.60 1,149.48 30,330.38 6,847.90
9,980.00 1,920.50 7,373.99
12,799.92 1,893.33 4,187.00

$ -=====1=,=2=9=2=,=0=6=5=.3=2=

SARA HIGHTOWER REGIONAL LIBRARY SCHEDULE OF EXPENDITURES BY OBJECT
GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1995

SCHEDULE "6"

EXPENDITURES
Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical Services Property Services Supplies Library Books and Materials Utilities Communications and Insurance Other Expenditures
Nonoperating Costs Building and Building Improvements Equipment

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

$

898,197.56 $

249,692.15

7,978.91

395.50

105,265.33

35,830.38

151,746.48

107,274.51

40,602.14

1,746.71

52,504.00 25,541.35

47,938.79 $ 12,991.68 1,930.58 13,976.29
3,883.36 1,790.51
1,611.92 10.00
14,371.17

946,136.35 262,683.83
9,909.49 14,371.79 105,265.33 39,713.74 153,536.99 107,274.51 42,214.06
1,756.71
52,504.00 39,912.52

Total Expenditures

$

1,676,775.02 $

98,504.30 $ ==::::::i1'=77=5=,2=7==9=.3=2

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

SARA HIGHTOWER REGIONAL LIBRARY SCHEDULE OF EXPENDITURES BY OBJECT
LOTTERY PROGRAM YEAR ENDED JUNE 30, 1995

SCHEDULE "7"

EXPENDITURES
Nonoperating Costs Equipment

DISTANT LEARNING
$-=====1=,1=0=0=.o_o

See notes to the general purpose financial statements.
- 22 -

SARA HIGHTOWER REGIONAL LIBRARY MEMBERSHIP OF LIBRARY BOARD YEAR ENDED JUNE 30, 1995

SCHEDULE Nau

BOARD MEMBER ADDRESS
Mr. Sam Vincent, Chairman (*) 306 Ridgedale Drive Silver Creek, Georgia 30173
Mr. Larry B. Atwell (*) 508 East Second Street Rome, Georgia 30161
Mr. Frank Baulding (*) 439 Bluff Street Rockmart, Georgia 30153
Mr. Bobby Burch (*) 106 Peachtree Road Rockmart, Georgia 30153
Mr. James J. Carter, Jr. (*) 612 South College Street Cedartown, Georgia 30125
Mr. Paul Carter (*) 319 East 3rd Avenue Rome, Georgia 30161
Dr. Jackie Collins (*) 171 Chatmon Road, N. E. Rome, Georgia 30161
Mr. Jim Davis (*) 1355 Horseleg Creek Road, S. W. Rome, Georgia 30165
Mrs. Emma Lee Highnote (*) P. 0. Box266 Cave Spring, Georgia 30124

Mr. Steve Holder 820 Jones Avenue Rockmart, Georgia 30153
Mr. Warren Jones (*) 10 Belmont Avenue Rome, Georgia 30165
Mr. Clinton Lester (*)
P. 0. Box268
Cedartown, Georgia 30125
Ms. Callie Martin (*) 1401 East 1st Street Rome, Georgia 30161
Mr. Kenneth McElwee
P. 0. Box268
Cedartown, Georgia 30125
Mr. Robert Noble (*) 421 Cunringham Road Rome, Georgia 30161
Mr. Robert Steinbruegge (*) 6 Lenox Circle Rome, Georgia 30161
Mr. Leon Wade(*) (1) 22 Westwood Circle Rome, Georgia 30161
Mr. Bert Wood (*) 558 West John Hand Road Cedartown, Georgia 30125

(*) Denotes Board Members Serving as of June 30, 1995 (1) Deceased subsequent to June 30, 1995

See notes to the general purpose financial statements.

- 23 -

SARA HIGHTOWER REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 1995

SCHEDULE"9"

PERSONNEL

Anderson, Amos, Appley, Barnett, Billingsley, Blalock, Bouchard, Bridges, Broome, Brown, Caldwell, Carlson, Childers, Cleveland, Collins, Cook, Copeland, Davidson, Davis, Dollar, Doyle, Duncan, Early, Evans, Evans, Fancher, Floyd, Fordham, Foster, Frasier, Frazier, Gentry, Gibbons, Gilbert, Greeson, Harmison, Hightower, Johnson, Johnston, Johnston, Jones, Keith,

Susan F. Patricia Cook Janet A Albert M. Gwen M. Leslie D. Harvey Jane C. Sandra J. Brandy L. Melanie E. Susan M. Martha 8. Sharon Carruth Elizabeth A JulieM. Lana J. Joann P. Jennifer L. Edward Lee, Jr. James D. Martha S. Judy D. Barbara P. James David Janet Sue Linda A Jason Glen Mary A. Krista Leigh Edna Sue Teresa A. Mary B. Anne E. Virginia M. Jennifer J. Carolyn C. AliceV. Patricia A. Victoria Jamie P. Shirley T.

POSITION
Literacy Library Assistant PIT Reference Library Specialist Branch library Assistant Building Superintendent Special Collections Assistant Library Aide Video Technician Circulation Library Assistant Library Aide Library Aide Adult Services library Specialist Library Specialist Audio Visual Assistant Children's Department Assistant Director Library Aide Library Aide Branch Manager library Aide Building Superintendent Reference Librarian Technical Services Assistant Circulation Assistant Children's library Specialist Reference Specialist Library Aide Data Maintenance librarian Library Aide Circulation Assistant library Aide Talking Book Supervisor Children's Library Assistant Video Assistant Bookmobile Supervisor PIT Office Assistant Library Assistant Talking Book Assistant Library Assistant Branch Manager Video library Asssistant Library Aide Technical Services Supervisor

SALARIES

TRAVEL

$

3,662.75

4,223.36

13,669.62

15,295.28

13,129.86

55.08

15,490.44 $

15,993.86

16,338.90

673.63

28,492.14

17,486.53

15,208.44

15,978.36

49,169.60

1,926.33

131.75

19,522.14

1,094.39

10,671.12

39,829.80

19,907.40

131129.86

27,344.70

25,437.60

9,019.11

13,083.85

1,317.50

13,129.86

821.31

4,268.72

12,358.12

18,475.02

15,869.43

4,905.00

3,010.29

16,787.28

13,955.10

9,686.46

11,895.00

191.25

21,960.96

9.00 43.50 163.72 444.10
352.58 1,291.88
170.42
263.27
424.12 20.98 79.83
36.66 9.00
9.00 68.88
9.00 7.56

See notes to the general purpose financial statements.

- 24 -

SARA HIGHTOWER REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 1995

SCHEDULE "9"

PERSONNEL

Kent, Kinzer, Lackey, Lockley, Loggins, Machan, Maloof, Mathis, McDaniel, Mills, Moore, Morris, Owen, Parise, Penn, Redmond, Reeber, Reid, Ridgeway, Rouse, Sexton-Cooley, Shealy, Skeen, Smith, Thomas, Thrasher, Treadway, Wallace, Wheeler, Whelchel, Whelchel, Wilkerson, Williamson, Winston,

Takysha R. Jacqueline D. Diane E. Millie Perry L. Sandra J. Carrol F. Jennifer JanetW. Diana C. Brent Burlene H. WileyC. Angela Zina A Amy Brumbelow Patricia R. James Phil Jeannie I. Christina Westfall Susan D. Melissa E. Joyce A Amyl. Angela Lee Deborah S. Eleanor Deana M. Mary Ann Leila Elizabeth Leila Susan Sandra F. Katherine Shirley E.

Total Cash Basis

Accruals June 30, 1994 June 30, 1995

POSITION
Library Aide Special Collections Specialist Audio Visual Supervisor Reference Specialist Video Library Assistant Branch Manager Literacy Director Library Aide Branch Library Assistant Administrative Assistant Library Aide Talking Book Specialist Associate Director Video Intern Technical Services Assistant Library Aide Library Aide Talking Book Assistant Branch Library Assistant Library Assistant Circulation Librarian Library Aide Bookkeeper Audio Visual Library Assistant Library Aide Children's Library Assistant Talking Book Aide Literacy Aide Library Assistant Library Aide Library Aide Library Assistant Library Aide Audio Visual/Reference Assistant

SALARIES

TRAVEL

$

1,129.45

27,442.20 $

22,535.46

18,720.90

807.84

20,329.74

22,395.00

3,236.38

4,352.48

27,658.89

2,486.64

11,035.01

28,441.04

330.99

16,522.20

357.00

2,746.51

15,294.54

3,954.32

11,895.00

32,934.78

2,462.66

26,062.68

3,954.32

4,570.01

1,717.02

3,416.54

22,382.26

14,528.10

5,316.74

89.25

19,918.98

17.00

12,497.22

40.00 128.98 1,013.17 290.38
66.50 76.37
8.50 427.65
9.00 2,449.27
8.50
1,890.60
9.00

$ 946,136.35 $

9,821.42

0.00 0.00

-25.00 113.07

See notes to the general purpose financial statements.

-25-

$ 946,136.35 $ ===9=1=,9=0=9=.4=9

SECTION II COMPLIANCE

L. CLAUDE VICKERS
STATE AUDITOR
(404) 856-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
August 2, 1996

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board ofEducation
and Director and Members of the Sara Hightower Regional Library Board
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements ofthe Sara Hightower Regional Library as ofand for the year ended June 30, 1995, and have issued our report thereon dated August 2, 1996.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
Compliance with laws, regulations, contracts, and grants applicable to Sara Hightower Regional Library is the responsibility of the Library's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of the Library's compliance with certain provisions oflaws, regulations, contracts, and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion.
The results ofour tests disclosed no instances of noncompliance that are required to be reported herein under Government Auditing Standards.

95CRL-10

This report is intended for the information of management, the Federal cognizant audit agency and other Federal granter agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
L~
Claude L. Vickers State Auditor
CLV:jy 95CRL-10

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF-AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
August 2, 1996

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe Sara Hightower Regional Library Board

SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Sara Hightower Regional Library as of and for the year ended June 30, 1995, and have issued our report thereon dated August 2, 1996.

We have applied procedures to test the Sara Hightower Regional Library's compliance with the following requirements applicable to each of its Federal financial assistance programs, which are listed in the Schedule ofFederal Financial Assistance, for the year ended June 30, 1995:

(1) Political Activity

(5) Allowable Costs/Cost Principles

(2) Civil Rights

(6) Drug-Free Workplace Act

(3) Cash Management

(7) Audit Follow-Up/Resolution

(4) Federal Financial Reports

(8) Administrative Requirements

Our procedures were limited to the applicable procedures described in the Office of Management and Budget's "Compliance Supplement for Single Audits of State and Local Governments" and other additional procedures as deemed necessary. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Sara Hightower Regional Library's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion.

95CRL-40

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not tested, nothing came to our attention that caused us to believe that the Sara Hightower Regional Library had not complied, in all material respects, with those requirements.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,

CLV:jy 95CRL-40

Claude L. Vickers State Auditor

CLAUDE L. VICKERS
STATE AUOllOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
August 2, 1996

Honorable Zell Miller, Governor Members ofthe General Assembly Members of the State Board ofEducation
and Director and Members of the Sara Hightower Regional Library Board

SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Sara Hightower Regional Library as of and for the year ended June 30, 1995, and have issued our report thereon dated August 2, 1996.

In connection with our audit ofthe fiscal year 1995 general purpose financial statements of the Sara Hightower Regional Library and with our consideration of the Library's control structure used to administer Federal financial assistance programs, as required by Office of Management and Budget (0MB) Circular A-128, "Audits of State and Local Governments", we selected certain transactions applicable to certain nonmajor Federal financial assistance programs for the year ended June 30, 1995. As required by 0MB Circular A-128, we have performed auditing procedures on the selected transactions to test compliance with the requirements govemmg:

(1) Types of Services Allowed or Unallowed

(2) Eligibility

Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Sara Hightower Regional Library's compliance with these requirements. Accordingly, we do not express such an opinion.

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Sara Hightower Regional Library had not complied, in all material respects, with those requirements.

95CRL-120

This report is intended for the information of management, the Federal cognizant audit agency and other

Federal granter agencies. This restriction is not intended to limit the distribution of this report which is a

matter ofpublic record.

dly submitted,

CLV:jy 95CRL-120

Claude L. Vickers State Auditor

SECTION III INTERNAL CONTROL

CLAUDE L. VICKERS
STAlE AUDllOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
August 2, 1996

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board ofEducation
and Director and Members of the Sara Hightower Regional Library Board
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements ofthe Sara Hightower Regional Library as of and for the year ended June 30, 1995, and have issued our report thereon dated August 2, 1996.
We conducted our audit in accordance with generally accepted auditing standards, and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
The management of the Sara Hightower Regional Library is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation ofgeneral purpose financial statements in accordance with generally accepted accounting principles. Because ofinherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.

95ICL-3

In planning and performing our audit of the general purpose financial statements of the Sara Hightower Regional Library for the year ended June 30, 1995, we obtained an understanding of the internal control structure. With respect to the internal control structure, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk in order to determine our auditing procedures for the purpose ofexpressing our opinion on the general purpose financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion.
We noted a certain matter involving the internal control structure and its operation that we consider to be a reportable condition under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements.
As described in the Schedule ofFindings and Improper or Questioned Costs, a reportable condition was noted in the following control category:
Accounting Controls (overall)
A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.
Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that the reportable condition disclosed above is also considered to be a material weakness.
This condition was considered in determining the nature, timing, and extent of the procedures to be performed in our audit ofthe Sara Hightower Regional Library's financial statements and this report does not affect our report thereon dated August 2, 1996.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,

CLV:jy 95ICL-3

~//~
Claude L. Vickers State Auditor

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
August 2, 1996

Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Director and Members ofthe Sara Hightower Regional Library Board
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Sara Hightower Regional Library as of and for the year ended June 30, 1995, and have issued our report thereon dated August 2, 1996.
We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of Office of Management and Budget (0MB) Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
In planning and performing our audit for the year ended June 30, 1995, we considered the Library's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the Library's general purpose financial statements and to report on the internal control structure in accordance with 0MB Circular A-128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to Federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated August 2, 1996.
The management of the Sara Hightower Regional Library is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are
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executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that Federal financial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors, irregularities, or instances of noncompliance may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.

For the purpose of this report, we have classified the significant internal control structure policies and procedures used in administering Federal financial assistance programs in the following control categories:

GENERAL REQUIREMENTS

SPECIFIC REQUIREMENTS

(1) Political Activity (2) Civil Rights (3) Cash Management (4) Federal Financial Reports

(1) Types of Services Allowed or Unallowed
(2) Eligibility
(3) Matching, Level ofEffort, and/or Earmarking

(5) Allowable Costs/Cost Principles

(4) Reporting

(6) Drug-Free Workplace Act (7) Audit Follow-Up/Resolution (8) Administrative Requirements

(5) Applicable Special Tests and Provisions
(6) Other Requirement Claims for Advances and Reimbursements

For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and determined whether they have been placed in operation, and we assessed control risk.

During the year ended June 30, 1995, the Sara Hightower Regional Library had no major Federal financial assistance programs and expended 50% ofits total Federal financial assistance under the following nonmajor Federal financial assistance program:

Technology Related Assistance for Individuals with Disabilities Act Title I - Technology Assistance Program Tools for Life

We performed tests 9f controls, as required by 0MB Circular A-128, to evaluate the effectiveness of the
design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with general requirements and specific requirements as

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described above that are applicable to the aforementioned nonmajor program. Our procedures were less in

scope than would be necessary to render an opinion on these internal control structure policies and procedures.

Accordingly, we do not express such an opinion.



We noted a certain matter involving the internal control structure and its operation that we consider to be a reportable condition under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control structure that, in our judgment, could adversely affect the Library's ability to administer Federal financial assistance programs in accordance with applicable laws and regulations.

As described in the Schedule ofFindings and Improper or Questioned Costs, a reportable condition was noted in the following control category:

Administrative Requirements

A material weakness is a reportable condition in which the design or operation ofone or more ofthe internal control structure elements does not reduce to a relatively low level the risk that noncompliance .with laws and regulations that would be material to a Federal financial assistance program may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.

Our consideration of the internal control structure policies and procedures used in administering Federal financial assistance would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that the reportable condition described above is also considered to be a material weakness.

This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies and should not be used for any other purpose. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.

Respectfully submitted,

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Claude L. Vickers State Auditor

SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS

SARA HIGHTOWER REGIONAL LIBRARY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1995
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Failure to Maintain General Fixed Assets Account Group Financial Statements Finding Resolved Audit Control Number 6572-93-02
The audit report for the year ended June 30, 1994, noted that the Library did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. For the year under review, the Library has established a General Fixed Assets Account Group within the formal accounting records.
PRIOR YEAR/CURRENT YEAR
ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS -Federal Financial Assistance Inadequate Separation ofDuties Reportable Condition - Material Weakness Audit Control Number 6572-93-01
The audit report for the year ended June 30, 1994, stated that the Library did not provide for adequate separation ofemployee duties in the performance ofaccounting functions and related procedures. For the year under review, our audit noted no improvement regarding adequate separation of employee duties for all funds. This deficiency was a result of management's decision to limit the number of administrative staff made responsible for accounting functions. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree of control with existing staff.
(Note: All Federal assistance programs listed in the Schedule ofFederal Financial Assistance, Schedule "I" of this report are affected by this finding.)

SECTIONV PERTINENT VIEWS OF RESPONSIBLE OFFICIALS

SARA 1-IlGHTOWER REGIONAL LIBRARY PERTINENT VIEWS OF RESPONSIBLE OFFICIALS
YEAR ENDED JUNE 30, 1995
ACCOUNTING CONTROLS (OVERALL) - F'mancial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation ofDuties Reportable Condition - Material Weakness Audit Control Number 6572-93-01
The Library has separated the duties ofaccounting functions and related procedures as much as a limited staff allows. With such staff limitations this finding cannot be totally resolved.