SCREVEN-JENKINS REGIONAL LIBRARY
SYLVANIA, 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
SCREVEN-JENKINS REGIONAL LIBRARY - TABLE OF CONTENTS -
SECTION I
FINANCIAL
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
EXHIBITS
BASIC FINANCIAL STATEMENTS
DISTRICT-WIDE FINANCIAL STATEMENTS
A
STATEMENT OF NET ASSETS
1
B
STATEMENT OF ACTIVITIES
2
FUND FINANCIAL STATEMENTS
C
BALANCE SHEET
GOVERNMENTAL FUND
3
D
RECONCILIATION OF THE GOVERNMENTAL FUND BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
4
E
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE
GOVERNMENTAL FUND
5
F
RECONCILIATION OF THE GOVERNMENTAL FUND STATEMENT
OF REVENUES, EXPENDITURES AND CHANGES IN FUND
BALANCE TO THE STATEMENT OF ACTIVITIES
6
G
NOTES TO THE BASIC FINANCIAL STATEMENTS
7
SCHEDULES
REQUIRED SUPPLEMENTARY INFORMATION
1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
GENERALFUND
17
SUPPLEMENTARY INFORMATION
SCHEDULES OF REVENUE
2
STATE
18
3
FEDERAL
19
4
LOCAL
20
5 SCHEDULE OF SALARIES AND TRAVEL
21
SCREVEN-JENKINS REGIONAL LIBRARY - TABLE OF CONTENTS -
SECTION II FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION III 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
August 29, 2007
Honorable Sonny Perdue, Governor Members of the General Assembly Members of the Board of Regents of the University System of Georgia
and Director and Members of the Screven-Jenkins 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 ofthe governmental activities and the major fund (Exhibits A through G) of the Screven-Jenkins 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 ofcontents. These financial statements are the responsibility ofthe Screven-Jenkins 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 the major fund of the ScrevenJenkins 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
The Screven-Jenkins Regional Library has not presented Management's Discussion and Analysis that accounting principles generally accepted in the United States has determined is necessary to supplement, although not to be part of, the basic financial statements.
The Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on page 17 is not a required part of the basic financial statements but is supplementary information required by the accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods ofmeasurement and presentation ofthe required supplementary information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Screven-Jenkins 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,
RWH:gp 2006ARL-41
sell W. Hinton, CPA, CGFM State Auditor
SCREVEN-JENKINS REGIONAL LIBRARY
SCREVEN-JENKINS REGIONAL LIBRARY STATEMENT OF NET ASSETS JUNE 30, 2006
ASSETS Cash and Cash Equivalents Investments Accounts Receivable, Net
Federal Government Capital Assets
Library Collections Less: Accumulated Depreciation
Total Assets
LIABILITIES Accounts Payable Long-Term Liabilities
Due Within One Year Due in More Than One Year
Total Liabilities NET ASSETS Invested in Capital Assets, Net of Related Debt Unrestricted Total Net Assets
Total Liabilities and Net Assets
EXHIBIT"A"
GOVERNMENTAL ACTIVITIES
$
191,735
42,129
2,300
909,371 -6951549
$ ====44====9=19=86=
$
9,936
3,555 19 981
$
33472
$
213,822
2021692
$
416 514
$====4=4,..9=98=6=
The notes to the basic financial statements are an integral part of this statement.
-1-
SCREVEN-JENKINS REGIONAL LIBRARY STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2006
EXHIBIT"B"
EXPENSES
PROGRAM REVENUES
OPERATING
CHARGES FOR
GRANTS AND
SERVICES
CONTRIBUTIONS
NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS
GOVERNMENTAL ACTIVITIES
Current Services Public Services Technical Services Support Services Maintenance and Operations Information Technology
$ 212,272 $ 26,492 292,416 57,379 14,383
14,596 $
223,805 $ 19,584
26,129 -26,492 -292,416 -37,795 -14 383
Total Governmental Activities
$=====6=0=2=,=942 $
General Revenues Allotments from Participating Governments Investment Earnings Miscellaneous
14 596 $
243,389 $ ----'-34'--'-"'4'"-95"-'7-
$
364,247
2,775
20,365
Total General Revenues
$ _ _ _-'3-8~7=38~7-
Change in Net Assets
$
42,430
Net Assets - Beginning of Year
374084
Net Assets - End of Year
$ -===--=4=1=6=5=14..,
The notes to the basic financial statements are an integral part of this statement. -2-
SCREVEN-JENKINS REGIONAL LIBRARY BALANCE SHEET
GOVERNMENTAL FUND JUNE 30, 2006
ASSETS Cash and Cash Equivalents Investments Accounts Receivable, Net
Federal Government
Total Assets
LIABILITIES AND FUND BALANCE LIABILITIES
Accounts Payable FUND BALANCE
Unreserved Undesignated Reported in: General Fund
Total Liabilities and Fund Balance
EXHIBIT"C"
GENERAL FUND
$
191,735
42,129
2,300
$ =====2=3=6=1,.6..4..,...
$
9,936
226,228 $ ==2=3=6=1,=64=
The notes to the basic financial statements are an integral part of this statement. -3-
SCREVEN-JENKINS REGIONAL LIBRARY RECONCILIATION OF THE GOVERNMENTAL FUND BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30, 2006
EXHIBIT "D"
Total Fund Balance - Governmental Fund (Exhibit "C")
$
Amounts reported for Governmental Activities in the Statement of Net Assets are different because:
Capital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of:
Library Collections Accumulated Depreciation
Total Capital Assets
$
909,371
-695,549
Long-Term Liabilities are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-Term Liabilities at year-end consist of:
Compensated Absences
226,228
213,822 -23,536
Net Assets of Governmental Activities (Exhibit "A")
$ ===4=16=5=1=4
The notes to the basic financial statements are an integral part of this statement. -4 -
SCREVEN-JENKINS REGIONAL LIBRARY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
GOVERNMENTAL FUND 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
Total Expenditures
Net Change in Fund Balance
Fund Balance - Beginning
Fund Balance - Ending
GENERAL FUND
$
364,247
239,099
4,290
14,596
2,775
20,365
$
645,372
$
214,834
26,492
288,861
57,379
14 383
$
601,949
$
43,423
182,805
$ =====2=2=6'=2=28=
The notes to the basic financial statements are an integral part of this statement. -5-
SCREVEN-JENKINS REGIONAL LIBRARY RECONCILIATION OF THE GOVERNMENTAL FUND STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE TO THE STATEMENT OF ACTIVITIES JUNE 30, 2006
EXHIBIT"F"
Total Net Change in Fund Balance - Governmental Fund (Exhibit "E")
Amounts reported for Governmental Activities in the Statement of Activities are different because:
Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:
Capital Outlay Depreciation Expense
Excess of Capital Outlay over Expenditures
Compensated absences increases reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in Governmental Funds.
$
43,423
$
38,946
-36,384
2,562 -3,555
Change in Net Assets of Governmental Activities (Exhibit "B")
$===4=2=4=30=
The notes to the basic financial statements are an integral part of this statement. -6 -
SCREVEN-JENKINS REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "G"
Note 1: DESCRIPTION OF LIBRARY AND REPORTING ENTITY
REPORTING ENTITY
The Screven-Jenkins Regional Library (Library) operates pursuant to Official Code of Georgia Annotated Sections 20-5-40 through 20-5-59 to provide public library services with costs shared by participating local governmental agencies and grants from the State of Georgia.
The Library Board membership consists offive members serving on member County Library Boards who are appointed to the Regional Library Board by each County Library as specified in the by laws. The Library Board is without authority to determine the amount ofits funding, except by submission of budget requests to local governmental units from which the Library receives support and to the State of Georgia for State and Federal funding. Membership in the Library and participation in library services is at the discretion of each participating governmental agency. The Library Board has the power to designate management, the power to retain unreserved fund balances of local and other funds for continued operations and is the lowest level of oversight responsibility for the Library's operations. The Screven-Jenkins 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 ScrevenJenkins 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 of Activities presents a comparison between direct expenses and program revenues for each function of the Library's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the Library related to the administration and support of the Library's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
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.
-7-
SCREVEN-JENKINS REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT"G"
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Fund Financial Statements: The fund financial statements provide information about the Library's funds. Eliminations have been made to minimize the double counting of internal activities. The emphasis of fund financial statements is on major governmental funds.
The Library reports the following major governmental fund:
General Fund is the Library's primary operating fund. It accounts for all financial resources of the Library, except those resources required to be accounted for in another fund.
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 if they are collected within sixty days after year-end. Interest is considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for compensated absences, which are recognized as expenditures to the extent they have matured. 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.
-8-
SCREVEN-JENKINS REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "G"
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the Library to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Library in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Library to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate 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,
(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
-9-
SCREVEN-JENKINS REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "G"
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 ofthe 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
All
10 years 10 years
Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives.
Note 3: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. 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.
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,
- 10 -
SCREVEN-JENKINS REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "G"
Note 3: DEPOSITS AND INVESTMENTS
(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 $257,419. The amounts of the total bank balances are classified into four categories of custodial credit risk:
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
Bank Balance
1
$ 203,309
2
54,110
3
0
4
0
Total
$===2==5=='7,-41==9
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SCREVEN-JENKINS REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT"G"
Note 3: DEPOSITS AND INVESTMENTS
CATEGORIZATION OF INVESTMENTS Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event ofa failure ofthe counterparty to a transaction, the Library will not be able to recover the value ofthe investment or collateral securities that are in the possession of an outside party. The Library does not have a formal policy for managing custodial credit risk.
At June 30, 2006, the fair value ofthe Library's total investments was $10,000 and this entire amount consisted of a U.S. Treasury Bill.
Interest Rate Risk Interest rate risk is the risk that changes in interest rates ofdebt investment will adversely affect the fair value of an investment. The Library does not have a formal policy for managing interest rate risk.
At June 30, 2006, the Library's investment consisted of a U. S. Treasury Bill which had an investment maturity of less than one year.
Note 4: CAPITAL ASSETS
The following is a summary of changes in the Capital Assets during the fiscal year:
Governmental Activities Capital Assets Being Depreciated
Library Collections
Less Accumulated Depreciation for: Library Collections
Governmental Activity Capital Assets - Net
Balances
July 1. 2005
Increases
Balances Decreases June 30. 2006
$ 887,387 $
38,946 $
16,962 $ 909,371
676.127 -~3~6,=38~4
16,962
695,549
$ 211,260 $
2,562 $======0 $ 213.822
Current year depreciation expense by function is as follows:
Public Services
$=="'=36-,3"=8===4
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SCREVEN-JENKINS REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "G"
Note 5: 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 of loss associated with torts, assets and errors or omissions. The Library has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Library's insurance coverage in any of the past three years.
The Library has elected to self-insure for all losses related to acts of God. The Library has not experienced any losses related to this risk in the past three years.
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.
Changes in the unemployment compensation claims liability during the last two fiscal years are as follows:
2005 2006
Beginning of Year Liability
Claims and Changes in Estimates
Claims Paid
End ofYear Liability
$
0 $
2,231 $
2,231 $
0
$
0 $
2,111 $
2,111 $
0
The Library participates in the Association County Commissioners ofGeorgia-Selflnsured Workers' Compensation Fund, a public entity risk pool organized on July 1, 1982, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The Library pays an annual premium to the Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Fund with Safety National Casualty Corporation to provide coverage for potential losses by the Fund in excess of $600,000 loss per occurrence, up to $2,000,000.
The Library has purchased surety bonds to provide additional insurance coverage as follows:
Position Covered
Each Library Bond Treasurer All Other Employees
Amount
$
10,000
$ 200,000
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SCREVEN-JENKINS REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT"G"
Note 6: OPERATING LEASES
Screven-Jenkins Regional Library has entered into various leases as lessee for copying machines. These leases are considered for accounting purposes to be operating leases. Lease expenditures for the year ended June 30, 2006, for governmental funds amounted to $8,172. Future minimum lease payments for these leases are as follows:
Year Ending
Governmental Funds
2007
$
7,782
2008
1,946
Total Note 7: LONG-TERM DEBT
$====9-,7==2==8
COMPENSATED ABSENCES Compensated absences represent obligations ofthe Library relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. The Library uses the vesting method to compute compensated absences.
The changes in Long-Term Debt during the fiscal year ended June 30, 2006, were as follows:
Balance July 1, 2005
Governmental Funds
Compensated Absences (1)
$
19,981
Additions Annual Leave Earned
26,329
Deductions Annual Leave Utilized
22,774
Balance June 30, 2006
Portion of Long-Term Debt Due within One Year
$==2=3-,5=3==6 $_ _...,3,.5..5..-.-"-5
(1) The portion of Compensated Absences due within one year has been determined to be immaterial to the basic financial statements.
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SCREVEN-JENKINS REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006
EXHIBIT "G"
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%
$
28,265
$
25,380
$
27,586
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SCREVEN-JENKINS REGIONAL LIBRARY GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE 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
Net Change in Fund Balance
Fund Balance - Beginning
NONAPPROPRIATED BUDGETS
ORIGINAL
FINAL
ACTUAL AMOUNTS
$
380,852 $
380,852 $
364,247
239,099
239,099
239,099
1,990
1,990
4,290
25,494
25,494
14,596
4,239
4,239
2,775
328
328
20,365
$
652,002 $
652,002 $
645 372
$
214,835 $
214,835 $
214,834
26,493
26,493
26,492
288,376
288,376
288,861
57,865
57,865
57,379
14 382
14 382
14 383
$
601 951 $
601 951 $
601 949
$
50,051 $
50,051 $
43,423
0
0
182,805
Fund Balance - Ending
$
50 051 $
50 051 $======2=2=-6,=22==8=
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 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.
-17 -
SCREVEN-JENKINS 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
$
207,857
11,658
19 584
$ ====2=39='=09=9
See notes to the basic financial statements.
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SCREVEN-JENKINS 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 State Library Program
SCHEDULE "3"
GOVERNMENTAL FUND TYPE GENERAL FUND
$====4-29===0
See notes to the basic financial statements.
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SCREVEN-JENKINS REGIONAL LIBRARY SCHEDULE OF LOCAL REVENUE YEAR ENDED JUNE 30, 2006
LOCAL SOURCES Boards of Education Jenkins County Screven County County Governments Boards of Commissioners Jenkins Screven
SCHEDULE "4"
GOVERNMENTAL FUND TYPE GENERAL FUND
$
19,629
25,000
98,462 221 156
$
364 247
See notes to the basic financial statements.
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NAME
Bartley, Blank, Boyton, Bynes, Chance, Gainey, Gilbert, Kelly, Motto, Sasser, Seemueler, Wade, Ward, Waters, Watson, Weaver, Weinberger, Williams, Youles, Young,
Regina T. Sharon Genesis Jeremy Joanne R. WilmaT. Barbara W. Ebony Penny Kayla Jennifer Constance Rebecca C. Belinda S. Pauline B. Colby Wendy Lillian Kathryn E. Phillip
Totals per Report
SCREVEN-JENKINS REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2006
SCHEDULE "5"
TITLE CATEGORY
Technical Services Assistant Library Assistant Library Assistant Library Assistant Library Assistant Branch Manager Extension Assistant Library Assistant Library Assistant Library Assistant Library Assistant Library Assistant Business Manager Children's Program Coordinator Circulation Manager Library Assistant Director Library Assistant Assistant Director/Operations Manager Library Assistant
SALARIES
TRAVEL
$
18,274 $
41,597
1,341
3,372
4,019
17,284
19,275
4,294
3,845
180
625
8,182
12,803
22,079
21,549
3,824
67,656
3,551
64,332
10 161
17 237
303 75 11
61 141
58 1,785
303
$
328,243 $ ===2=9=9=1
See notes to the basic financial statements.
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SECTION II FINDINGS AND QUESTIONED COSTS
SCREVEN-JENKINS REGIONAL LIBRARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006
ACCOUNTING CONTROLS (OVERALL) Inadequate General Controls Reportable Condition Finding Control Number: FS-7242-06-01
Condition:
Our examination ofthe Library included a review ofgeneral controls related to their financial systems. We noted weaknesses in internal controls which we consider relevant to the Library's financial statements for the fiscal year ended June 30, 2006.
Criteria:
Policies and procedures should be in place to reasonably mitigate the risk of loss, manipulation or corruption of data due to internal or external threats.
Questioned Cost: NIA
Information:
Weaknesses in internal control over financial information systems were identified at the Library.
Cause:
Management did not implement proper policies and controls over disaster recovery and access to financial information systems.
Effect:
Without satisfactory controls in place, losses, changes or misuses of data could occur and possibly not be detected.
Recommendation:
Management should perform a complete risk assessment to identify internal and external threats that could cause loss, manipulation or corruption ofdata maintained in the financial information system. Policies and procedures should be developed and implemented to address the weaknesses.
CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS GENERAL LEDGER Inadequate Internal Control Procedures Reportable Condition - Material Weakness Finding Control Number: FS-7242-06-02
Condition:
The accounting procedures of the Library were insufficient to provide for adequate internal controls.
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.
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SCREVEN-JENKINS REGIONAL LIBRARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006
CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS GENERAL LEDGER Inadequate Internal Control Procedures Reportable Condition - Material Weakness Finding Control Number: FS-7242-06-02
Information:
While conducting test of controls, the following deficiencies were noted:
Cash and Cash Equivalents The bank reconciliation function was not separated from the record
keeping and check preparation functions. The bank reconciliations were not properly reviewed by an
administrator not directly connected with cash operations. The bank statements for all seven bank accounts were not reconciled to
the general ledger for ten of the twelve months under review. Rather than reconciling the bank statement balances to the general ledger balances the Library simply prepared a summary of activity as shown on the bank statements. Upon request, the June 2006 bank reconciliations were performed by the Library during audit field work. Two of these seven bank reconciliations were not properly reconciled to the general ledger balances. One bank reconciliation erroneously omitted a deposit in transit of$14,721.75 and the outstanding check list failed to include check numbers for all outstanding checks. A Certificate ofDeposit was understated by $546.66 due to errors when posting interest.
Revenues/Receivables/Receipts The deposit preparation function was not separated from the record
keeping and cash custody functions. Based on a review of eighty receipts the following deficiencies were
noted: 1. Six deposits were made fifteen to fifty-three days after the funds were receipted. 2. June 2006 cash receipts for $867.55 were not deposited in the bank nor recorded on the books until August 28, 2006. 3. Numerous receipts were not recorded in numerical sequence. The deposit and posting dates indicate receipts were possibly back dated.
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SCREVEN-JENKINS REGIONAL LIBRARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006
CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS GENERAL LEDGER Inadequate Internal Control Procedures Reportable Condition - Material Weakness Finding Control Number: FS-7242-06-02
4. Two receipts with numerical sequence dates of January 2006 were back dated to June 30, 2005. The receipts were each for $9,814.50. One receipt was "voided" and the other was "pending" according to computer generated copies of these receipts.
Expenditures/Liabilities/Disbursements The record keeping function was not separated from the check writing
and electronic transfer functions. Based on a review of forty-two vouchers, twenty-nine did not contain
purchase orders. One electronic vendor payment included a late fee of $79.50. The Library failed to provide adequate documentation to support
accounts payable.
General Ledger Based on a review of all manually prepared and approved journal
entries, the following deficiencies were noted: 1. All thirty-two journal entries lacked supporting documentation. 2. Two journal entry numbers were used for multiple journal entries. 3. Eight journal entries lacked adequate descriptions. 4. Dates on the journal entries were not in chronological order according to the numerical sequence.
The Library's beginning fund balance per the general ledger did not tie to the prior year's ending fund balance at closing. It appears that transactions are being posted to previous fiscal years that should be closed.
Numerous adjustments were made to the general ledger to record manual checks, various corrections, revenue, transfers and voided checks without journal entry documentation, journal entry reference numbers or management approval.
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SCREVEN-JENKINS REGIONAL LIBRARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006
CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURES/LIABILITIES/DISBURSEMENTS GENERAL LEDGER Inadequate Internal Control Procedures Reportable Condition - Material Weakness Finding Control Number: FS-7242-06-02
Cause:
These deficiencies were the result of management's decision to limit the number ofadministrative staffmade responsible for accounting functions and management's failure to ensure that internal controls were established, implemented and functioning.
Effect:
Errors and/or irregularities may not be detected in a timely manner.
Recommendation:
Management should implement procedures to ensure that the key accounting functions of custody, record keeping and authorization are separated and/or utilize management oversight for these incompatible activities. In addition, management should revise and monitor controls to provide reasonable assurance that transactions are processed according to established procedures.
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SECTION III MANAGEMENT'S RESPONSES
SCREVEN-JENKINS REGIONAL LIBRARY SCHEDULE OF MANAGEMENT'S RESPONSES
YEAR ENDED JUNE 30, 2006
Finding Control Number: FS-7242-06-01
We concur with this finding. The bookkeeper has contacted Fundware to see ifthere are procedures to ensure that data can not be lost, manipulated or corrupted. If there are procedures that can be implemented, the Director and Assistant Director will then begin the process of writing the necessary policies and procedures to ensure that there will not be a loss of data, manipulation or corruption of data. The new policy and procedure will be implemented as soon as possible. At the time of this writing we have not heard back from Fundware.
Finding Control Number: FS-7242-06-02
We concur with this finding. The bookkeeper and the Director have implemented a new procedure for the bank reconciliation function. After performing the reconciliation, the bookkeeper gives the bank statements to the Director for review and she will initial each statement reflecting her review. The bank statements have now been reconciled to the general ledger per the auditor's instructions. Each outstanding check list now has the numbers ofthe checks on the list. All future statements will be reconciled per auditor's instructions.
The CD interest of$546.66 has also been posted correctly. The procedures for bank reconciliations were implemented immediately, and are now in place.
All deposits are now made on a daily basis and entered into the financial accounting system (Fundware) in a timely manner. Each receipt number is recorded in numerical sequence. Three individuals are involved in the cash deposit process. One employee balances the cash drawer, prepares the deposit slip, and gives the cash to the Director. The Director verifies the amount of deposit and she, or another employee that she designates, takes the deposit to the bank. The deposit information is given to the bookkeeper to record in Fundware. This corrective action for handling deposits was implemented immediately.
Expenditure voucher packets will include sequential purchase order, packing slip, invoice and a copy of the check. This procedure was implemented July 2007.
The Director ensures that there will not be any future electronic payments to vendors, with the exception of payment to the Teacher's Retirement Plan.
New journal entry procedures have been implemented to ensure proper documentation, proper descriptions, and the Director will assign all journal entry numbers and will review and sign each journal entry before the bookkeeper can manually enter them into the Fundware system. No journal entries will be allowed to be entered on prior fiscal years, and that will ensure no change in beginning fund balances. The corrective action for journal entries began immediately.
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SCREVEN-JENKINS REGIONAL LIBRARY SCHEDULE OF MANAGEMENT'S RESPONSES
YEAR ENDED JUNE 30, 2006 Finding Control Number: FS-7242-06-02 Management has contacted a CPA to come in once a month to meet with the bookkeeper to advise on journal entries, to review trial balances and the general ledger. Management feels that this will ensure that proper controls and procedures are being implemented and will eliminate future control findings by the State Audit Department. This action was implemented in September, 2007. Contact Person: Wendy Weinberger, Director Phone: (912) 564-7526 Fax Number: (912) 564-7580 E-mail Address: wendyweinberger@sjrls.org
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