Audit report, Sequoyah Regional Library, component unit of Cherokee County Board of Commissioners, year ended June 30, 1996

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AUDIT REPORT SEQUOYAH REGIONAL LIBRARY
COMPONENT~TOFCHEROKEECOUNTY
BOARD OF COMMISSIONERS YEAR ENDED JUNE 30, 1996

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

SEQUOYAH REGIONAL LIDRARY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL AND SPECIAL REVENUE FUNDS

5

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

7

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

16

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

17

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

18

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

19

SCHEDULES

1 CASH AND CASH EQUIVALENTS

20

2 ACCOUNTS RECEIVABLE

21

SCHEDULE OF REVENUE

3

STATE

22

4

OTHER

23

SCHEDULE OF EXPENDITURES BY OBJECT

5

GENERAL AND SPECIAL REVENUE FUNDS

24

6

LOTTERY PROGRAM

25

7 MEMBERSHIP OF LIDRARY BOARD

26

8 SCHEDULE OF SALARIES AND TRAVEL

27

SEOUOYAH REGIONAL LIBRARY -TABLE OF CONTENTS-
SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
SECTION ill PERTINENT VIEWS OF RESPONSffiLE OFFICIALS PERTINENT VIEWS OF RESPONSffiLE 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
February 6, 1998

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Director and Members of the Sequoyah Regional Library Board
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the general purpose fmancial statements (Exhibits A through D) of the Sequoyah Regional Library, a component unit of Cherokee County Board of Commissioners, as of and for the year ended June 30, 1996, 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose fmancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fmancial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general purpose fmancial statements, the Library's financial statements have been prepared using a certain accounting practice and policy which, in our opinion, varies in some respects from generally accepted accounting principles. This variance is described as follows:
* The general purpose financial statements of the Library did not contain a General Fixed Assets
Account Group to account for property, equipment and inexhaustible collections and books owned by the Library which should be included to conform to generally accepted accounting principles.
The aggregate effects on the general purpose fmancial statements of this variance or omission have not been determined, but are believed to be material.
96ARL-42

In our opinion, except for the effects on the general purpose financial statements of the matter referred to in the third paragraph, the general purpose financial statements present fairly, in all material respects, the financial position of the Sequoyah Regional Library as of June 30, 1996, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
Our' audit was conducted for the purpose of forming an opinion on the general purpose financial statements ofthe Sequoyah Regional Library taken as a whole. The combining statements (Exhibits E through H) and the financial schedules (Schedules 1 through 8), as listed in the table of contents, are presented for purposes of additional analysis and are not a required part ofthe general purpose fmancial statements of the Sequoyah 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,
~
Claude L. Vickers State Auditor
CLV:cm 96ARL-42

SEQUOYAH REGIONAL LffiRARY - 1-

SEQUOYAH REGIONAL LIBRARY COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 1996

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

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

$ 505,201.77 $

0.00 $

101,764.60

5,425.00

16,199.00

Total Assets

$ 510,626.77 $

0.00 $ ==1=1~7,=96=3=.6=0

Total Liabilities and Fund Equity

$ 510,626.77 $

0.00 $==1=1~7,=96=3=.6=0

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

EXHIBIT "A"

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS (Memorandum Only) JUNE 30,1996 JUNE 30, 1995

$

606,966.37 $ 1,034,493.30

21,624.00

53,384.00

$

46,866.89

46,866.89

44,490.66

$

46,866.89 $

675,457.26 $ 1,132,367.96

$

14,561.24 $

20,073.16

68,186.50

192,018.00

16,199.00

51,434.00

$

46,866.89

46,866.89

44,490.66

$

46,866.89 $

145,813.63 $

308,015.82

$

3,454.50

$

33,578.10

404,488.63

46,165.17 449,900.36

42,329.82 374,079.19

$

529,643.63 $

824,352.14

$

46,866.89 $

675,457.26 $ 1,132,367.96

-3-

SEQUOYAH REGIONAL LIBRARY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30,1996

EXHIBIT "B"

FUND BALANCE JUNE 30

$ 496.065.53 $

0,00 $

33.578.10 $

529,643.63 $ ===8=24....3..5.=:2,;,1;"=,:4

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

TJUS PAGE LEFT BLAHK

SEQUOYAH REGIONAL LIBRARY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 1996

EXHIBIT"C"

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Program Services Technical Services Circulation Administration Maintenance and Operations
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Other Sources
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1. 1995
Adjustments

GENERAL FUND

BUDGET

ACTUAL

$ 418,917.78 $ 418,916,95 1,285,390,00 1,452,614.38
$ 1,704,307.78 $ 1,871 ,531.33

$ 561,980.89 $ 66,713.68 352,644.86 510,414.57 292,987.00

558,018,17 100,006.34 373,561.16 510,608.78 249,680.36

$ 1,784,741.00 $ 1,791,874.81

$ -80,433,22 $ 79,656.52

$ 80,435.00

$

1.78 $

374,079.19

-1,950.00

79,656.52 416,409.01

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 10,000.00 $ 18,000.00
$ 18,000.00 $ 10,000.00

$ 18,000.00 $

3,280.82

10,173.68

$ 18,000.00 $ 13,454,50

$

0.00 $

-3,454.50

$

0.00 $

-3,454.50

173,68

3,454.50

FUND BALANCE JUNE 30. 1996

$ 372,130.97 $ 496,065.53

$

173,68 $ ......==-_.0....0..=. =0

The notes to the general purpose financial statements are an integral part of this statement. - 5-

SEOUOYAH REGIONAL LffiRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Sequoyah Regional 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. With the exception of the departure from generally accepted accounting principles disclosed in these notes, the financial statements of the Library have been prepared in conformity with generally accepted accounting principles as applied to governmental units and unless otherwise disclosed in these notes, the financial statements present all fund types and account groups of the Library. 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 governmental 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 Sequoyah Regional Library is determined to be a component unit of Cherokee County Board of Commissioners.
The Library Board consists often members; six members appointed by Cherokee County Library Board, two members appointed by Gilmer County Library Board and two members appointed by Pickens 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 of Georgia for State 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.
The Sequoyah Regional Library is located in Canton, Georgia, and serves Cherokee, Gilmer and Pickens Counties.
FUND ACCOUNTING
The Library uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities.
A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.

-7-

SEQUOYAH REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General Fixed Assets, which includes the Library's inexhaustible collections and books, are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Library. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
The general purpose financial statements account for all State and Other funds under control of the Library, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
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 ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. The primary type of special revenue fund consists of proceeds received from State sources to accomplish specific objectives and are required to be accounted for separately.
CAPITAL PROJECTS FUND - the fund used to account for fmancial resources to be used for the acquisition or construction of major capital facilities.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - used to account for material compensated absences not appropriately accounted for and recorded in other fund types.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities are generally included on the balance sheet. 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.
-8-

SEOUOYAH REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Governmental fimds 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 fimd liability is incurred.
BUDGET
The Sequoyah Regional Library's budget is a complete fmancial plan for the Library's fiscal year and is based upon estimates of expenditures together with probable fimding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental fimds is prepared by fimd, fimction and object. The legal level of budget control was established by the Library at the aggregate level. The budget for governmental fimds was prepared in accordance with generally accepted accounting principles.
The budget process begins when the Library's administration prepares a tentative aggregated budget for the Board's approval. After approval ofthis tentative budget by the Board, copies are sent to all local fimding agencies. After fimding approval is received from all local fimding agencies, the Board makes revisions as necessary and adopts the budget. The budget is then submitted to the Georgia Department of Education, Division of Public Library Services as a part ofthe Library's annual application for State aid. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year end.
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
Receivables consist of grant reimbursements due from State and other grantors for expenditures made but not reimbursed, allotted fimds from participating local governments, 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.

- 9-

SEOUOYAH REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 of interfund transactions:
Reimbursements of expenditures 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 fmancial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present fmancial 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.
Note 2: DEPOSITS
COLLATERALIZAnON OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone of or any combination of the following:
(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,

- 10-

SEQUOYAH REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1996

Note 2: DEPOSITS

(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 ofthe 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 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, 1996, the bank balances were $684,429.01. The amounts ofthe total bank balances are classified into three categories of credit risk:

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Library or by the Library's agent in the Library's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Library's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Library's name.)

The Library's deposits are classified by risk category at June 30, 1996, as follows:

Risk Category

Bank Balance

1

$ 290,630.11

2

0.00

3

393,798.90

Total

$ 684.429.01

- 11 -

SEQUOYAH REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 3: RISK MANAGEMENT

The Library is exposed to various risks ofloss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; and natural disaster.

The Library has obtained commercial insurance for risk of loss associated with torts, assets, errors or omissions and job related illness or injuries to employees. The Library has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Library's insurance coverage in any of the past three years.

The Library has elected to self-insure for all losses related to natural disaster. The Library has not experienced any losses related to this risk in the past three years.

Note 4: GENERAL LONG-TERM DEBT

The changes in General Long-Term Debt during the fiscal year ended June 30, 1996, were as follows:

Compensated Absences

Balance July 1, 1995

$ 44,490.66

Additions Leave Earned and Utilized (Net)

2.376.23

Balance June 30, 1996

$ 46.866.89

Note 5: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the Library as of June 30, 1996, together with funding available:

Project

Unearned Executed Contracts

Funding Available From State

6282-95S-SB-0 10

$ 677.455.01 $ 786.181.00

The amounts described in this note are not reflected in the general purpose fmancial statements.

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SEQUOYAH REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1996

Note 6: ACCUMULATED EMPLOYEES' LEAVE
Full~time employees with up to ten years service shall accrue vacation leave of 1 1/4 days per month for each month worked. The Library Director and full-time employees with ten (l0) years service with the Sequoyah Regional Library will be granted twenty (20) days annually. In case of termination of employment, payment, at the current rate of pay, shall be made up to the maximum accumulation of twenty (20) days for unused accrued annual vacation leave. See Note 1 - Compensated Absences
Note 7: 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).
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 of service 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 ofyears of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution of the 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 ofdeath 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, 1996, was $923,218.17; total payroll was $992,420.40.
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
- 13 -

SEOUOYAH REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 7: RETIREMENT PLANS

Board of Trustees in accordance with State statute and as advised by their independent actuary. At June 30, 1996, 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 1996 amounted to $155,192.98, of which $109,031.92 was made by the Library and $46,161.06 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 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, 1995, was as follows:

Total pension benefit obligation

$ 17,442,607,000.00

Net assets available for benefits, at cost

15,857,066,000.00

Unfunded pension benefit obligation

$ 1.585.541,000.00

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as ofJune 30, 1995. 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, 1996, were $607,275,000.00. The Library's contribution for the year ended June 30, 1996, of $1 09,031.92 was actuarially determined and represented .0180% of total contributions made by all participating employers.

Ten year historical trend information is presented in the 1996 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.

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SEOUOYAH REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 8: SURETY BONDS
All employees of the Sequoyah Regional Library are bonded in the amount of $150,000.00 with the All America Insurance Company, Vanwerk, Ohio, their Bond No. 7835163, on which premium was paid through March 29, 1997.

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SEQUOYAH REGIONAL LIBRARY COMBINING BALANCE SHEET SPECIAL REVENUE FUND
JUNE 3D, 1996

EXHIBIT"E"

ASSETS Cash and Cash Equivalents

LOTIERY PROGRAM

LIBRARY SERVICES AND
CONSTRUCTION ACT TITLE I PUBLIC LIBRARY
SERVICES

TOTALS
JUNE 30,1996 JUNE 30,1995

$

0.00 $

0.00 $

0,00 $===4,=37=4=.5==0

LIABILITIES AND FUND EQUITY

LIABILITIES

Accounts Payable

FUND EQUITY

Fund Balances

Reserved

For Continuation of Federal Programs

Unreserved

Undesignated

$

Total Fund Equity

$

0.00 $ 0.00 $

$ _ _----:9;;;:2;.::.0:.::;.0.::,.0

0,00 $ 0,00 $

$

3,454,50

--=.;0,;.::.0.::,.0

0.00

0,00 $ _ _.=.!3,.:.;454;..:.:.:,5,.:.0

Total Liabilities and Fund Equity

$

0,00 $

0,00 $

0,00 $===4=,3=7=4,=5=0

See notes to the general purpose financial statements.

-16 -

SEQUOYAH REGIONAL LIBRARY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30,1996

EXHIBIT "F"

REVENUES
State Funds Federal Funds
Total Revenues
EXPENDITURES
Current Program Services Technical Services Administration
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1

LOTTERY PROGRAM

LIBRARY SERVICES AND
CONSTRUCTION ACT TITLE I PUBLIC LIBRARY
SERVICES

TOTALS YEAR ENDED JUNE 30,1996 JUNE 30,1995

$

10,000,00 $

$

10,000,00 $

0,00 $ 0,00 $

10,000,00 $ 10,000,00 $

10,730,13 18,000,00
28,730,13

$

$

10,000.00

$

10,000.00 $

$

0,00 $

0.00

3,280,82 $ 173.68
3,454.50 $ -3,454,50 $ 3,454.50

3,280,82 $ 10,173,68 13,454,50 $ -3,454.50 $ 3,454,50

14,545,50 5,218.50 5,511.63
25,275.63
3,454.50
0.00

FUND BALANCE JUNE 30

$

0.00 $

0.00 $

0,00 $ ===3,=454==:.5=,=0

See notes to the general purpose financial statements.

-17 -

SEQUOYAH REGIONAL LIBRARY COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30,1996

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Accounts Receivable

GEORGIA STATE FINANCING

AND INVESTMENT COMMISSION

PROJECT

PROJECT

6282-94S-SB-003 6282-95S-SB-010

TOTALS JUNE 30, 1996 JUNE 30,1995

$

10,929.72 $

90,834.88 $

101,764,60 $

605,126,63

16,199,00

16,199.00

51,434.00

Total Assets

$

10,929,72 $

107,033.88 $

117,963,60 $ ==o==6;,;;,56~,=56;,;;,0;:;.6.3..

LIABILITIES AND FUND EQUITY

LIABILITIES

Accounts Payable Contracts Payable Retainages Payable

Total Liabilities

FUND EQUITY

Fund Balances

Reserved

For State Capital Outlay Projects

$

Unreserved

Undesignated

Total Fund Equity

$

$

8,620,00

$

68,186.50 $

68,186,50

192,018,00

16,199,00

16,199.00

51 ,434,00

$

84,385.50 $

84,385.50 $

252,072.00

10,929.72 $ 0.00
10,929.72 $

22,648,38 $ 0.00
22,648.38 $

33,578.10 $ 0.00
33,578.10 $

404,488.63 0.00
404,488.63

Total Liabilities and Fund Equity $

10,929.72 $

107,033.88 $

117,963.60 $=====6;,;;,56,;,0,;;;,;56;,;;,0;:;.6.3..

See notes to the general purpose financial statements.

-18-

SEQUOYAH REGIONAL LIBRARY COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30,1996

EXHIBIT"H"

REVENUES
State Funds Other Funds
Total Revenues EXPENDITURES
Capital Outlay Building and Building Improvements Equipment
Total Expenditures Excess of Revenues over (under) Expenditures FUND BALANCE JULY 1
Residual Equity Transfer

GEORGIA STATE FINANCING

AND INVESTMENT COMMISSION

PROJECT

PROJECT

6282-94S-SB-003 6282-95S-SB-010

TOTALS

YEAR ENDED

JUNE 30,1996

JUNE 30,1995

$

42,950,00 $

16,199,00 $

59,149,00 $

900,891.00

9,180,10

229,068,33

238,248,43

250,403.45

$

52,130.10 $

245,267,33 $

297,397,43 $ 1,151,294.45

$

279,697,35 $

165,991,66

$

445,689,01 $

$

-393,558.91 $

404,488.63

222,618.95 $
222,618,95 $ 22,648.38 $ 0,00

502,316,30 $ 165,991.66 668,307.96 $ -370,910.53 $ 404,488.63

767,956.33 17,174.07
785,130,40 366,164.05
56,173.50 -17,848.92

FUND BALANCE JUNE 30

$

10,929,72 $

22,648.38 $

33,578,10 $ ===4=04=.4=8=8:.=.6=3

See notes to the general purpose financial statements,

- 19-

SEQUOYAH REGIONAL LIBRARY CASH AND CASH EQUIVALENTS
JUNE 3D, 1996
INTEREST BEARING ACCOUNTS
Bank of Canton, Canton, Georgia
N. O. W. Account (3.00%)
Bank of Ellijay, Ellijay, Georgia
N. O. W. Account (Variable)
Bank of North Georgia, Canton, Georgia
Commercial Checking Account (Variable)
Jasper Banking Company, Jasper, Georgia
Commercial Checking Accounts (3.00%)
Regions Bank, Ball Ground, Georgia
Commercial Checking Account (Variable)

SCHEDULE "1"
$ 435,357.52 8,335.82
46,165.17 26,272.98 90,834.88 $ 606,966.37

See notes to the general purpose financial statements.

- 20 -

SEQUOYAH REGIONAL LIBRARY ACCOUNTS RECEIVABLE JUNE 30, 1996

SCHEDULE "2"

Canton, City of Library Services
Cherokee County Law Library Library Services
Financing and Investment Commission, Georgia State Reimbursement on Construction Projects
Gilmer County Board of Commissioners Library Services
Gilmer County Board of Education Library Services

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

$

500.00

$

4,500,00

TOTAL 500,00
4,500.00

$ 375,00 50,00

16,199,00

16,199.00 375,00 50,00

$

5,425,00 $

16,199.00 $====2=1,=62=:4=.0:=0

See notes to the general purpose financial statements.

- 21 -

SEQUOYAH REGIONAL LIBRARY SCHEDULE OF STATE REVENUE
YEAR ENDED JUNE 30,1996

SCHEDULE "3"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

GRANTS Education, Georgia Department of Public Libraries Salaries and Travel Library Materials Maintenance and Operations Lottery Program Technology Installation

$ 250,408,95 86,554.00 81.954,00
$

10,000.00

$ 250,408,95 86,554.00 81.954.00
10.000.00

Financing and Investment Commission, Georgia State Reimbursement on Construction Projects

_ _ _ _ _ $_--=.59=..!...:..14.:..:9;.:,::.0~0

59,149.00

$ 418,916.95 $ 10,000.00 $ 59,149.00 $ 488,065.95

See notes to the general purpose financial statements.

- 22 -

SEQUOYAH REGIONAL LIBRARY SCHEDULE OF OTHER REVENUE
YEAR ENDED JUNE 30. 1996

SCHEDULE "4"

LOCAL SOURCES Boards of Education Cherokee County Gilmer County City Governments Canton East Ellijay Ellijay Jasper Woodstock County Government Boards of Commissioners Cherokee Gilmer Pickens
OTHER SOURCES Book Sales Cherokee County Law Library Fund Fines and Fees Gifts and Memorials Interest Earned Lost Books Photocopy Sales Other

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

$

125,000.00

5,600.00

6,000.00 1,500.00 3,000.00 1,500.00 15,000.00

$ 125,000.00 5,600.00
6,000.00 1,500.00 3,000.00 1,500.00 15,000.00

924,000.00 $ 102,789.94 84,127.62

226,190.67 4,844.81

1,150,190.67 102,789.94 88,972.43

665.43 27,000.00 78,061.07 21,164.95 15,226.82
7,110.70 24,905.72
9,962.13

7,212.95

665.43 27,000.00 78,061.07 21,164.95 22,439.77
7,110.70 24,905.72
9,962.13

$ 1,452,614.38 $ 238,248.43 $ 1,690,862.81

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

SEQUOYAH REGIONAL LIBRARY SCHEDULE OF EXPENDITURES BY OBJECT GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30. 1996

SCHEDULE "5"

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

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

$ 992,420.40
273,256.86 4,150.12
11,950.50
46,180.29 $
172,462.79 111,663.35
94,787.78 62,640.38
7,256.76 774.63

$
173.68 3,280.82

992,420.40 273,256.86
4,150.12 11,950.50 46,353.97 175,743.61 111,663.35 94,787.78 62,640.38
7,256.76 774.63

14,330.95

10,000.00

24,330.95

$ 1,791,874.81 $

13,454.50 $ 1,805,329.31

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

SEQUOYAH REGIONAL LIBRARY SCHEDULE OF EXPENDITURES BY OBJECT
LOTTERY PROGRAM YEAR ENDED JUNE 30. 1996
EXPENDITURES Nonoperating Costs Equipment

SCHEDULE "6"
TECHNOLOGY INSTALLATION $==~10;;.:.'0;;;.;;0;.;;;0:;;;.0.;;;,,0

See notes to the general purpose financial statements. - 25 -

SEQUOYAH REGIONAL LIBRARY MEMBERSHIP OF LIBRARY BOARD
YEAR ENDED JUNE 30. 1996
BOARD MEMBER ADDRESS
Mr. Jack Whitmire, Chairperson (*) P. O. Box 786 Canton, Georgia 30114
Mr. Dan Westmoreland, Vice-Chairperson (*) 26 Logan Street Ellijay, Georgia 30540
Mr. Lawton Baggs (*) 399 Stephens View Road Jasper, Georgia 30143
Ms. Ruth Caudell (*) Route 10, Box 6090 Ellijay, Georgia 30540
Mr. Glenn Hubbard (*) P. O. Box 193 Woodstock, Georgia 30188
Mr. Joel Langford (*) P. O. Box 158 Waleska, Georgia 30183
Ms. Joan Lumpkin (*) 4940 Cumming Highway Canton, Georgia 30114
Ms. Dawn Odum (*) 3116 Waterford Court Woodstock, Georgia 30188
Ms. Helen Spears (*) P. O. Box 1024 Canton, Georgia 30114
Ms. Hettie Young (*) 290 Indian Forest Jasper, Georgia 30143
(*) Denotes Board Members Serving as of June 30, 1996

SCHEDULE "7"

See notes to the general purpose financial statements.

- 26 -

SEQUOYAH REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 1996

SCHEDULE "8"

PERSONNEL

Adam, Austin, Beavers, Biehl, Blackwell, Blom, Bowman, Bryan, Cape, Carter, Clayton, Cooper, Coyle, Crawford, Crowley, Edwards, Farnham, Fasett, Ferguson, Gailey, Garland, Garner, Gazaway, Gibson, Gingles, Gunter, Hammond, Heinsch, Henry, Hitt, Holliman, Hollingsworth, Hornsby, Hughes, Hundall, Ingle, Jackson, Johnson, Johnson, Jones, Kearns, Kicker,

Joan H. Dana C. Shandel Brenda E. PeggyW. Jayette R.
Cathy A.
Anne
Lauren A.
Rita B. Shirley J. Amanda B. John D. LoisT. Mary
Betty A. Cindy A.
MargaretA. Donna Janice L. Glenda S. Kathleen VickiM. Michael Martha Georgia
Gail K.
Carla M. Elaine M. Carol P. Sherry J. D. Karen Mary Alice Juanita S. Katherine R. EmmaL. Heather L. Kenneth Mary Ellen Natalie B. Patricia A. Nanette B.

POSITION

SALARIES

TRAVEL

Director

$

Children's Assistant

Page

Children's Coordinator

Reference Assistant

Page

Circulation Assistant

Children's Coordinator

Circulation Assistant

Page

Branch Manager

Page

Technical Processes Coordinator

Reference Coordinator

Law Library Manager

Page

Page

Technical Processes Assistant

Computer Coordinator

Branch Manager

Reference Coordinator

Circulation Assistant

Circulation Manager

Page

Page

Page

Circulation Assistant

Page

Children's Coordinator

Page

Circulation Assistant

Technical Process Assistant

Children's Coordinator

Branch Manager

Page

ReferencellLL Coordinator

Page

Maintenance

Reference Librarian

Children's Coordinator

Development Director

Children's Librarian

52,234.84 $ 1,414.30 4,607.38
14,386.64 15,080.04
1,452.50 14,040.00 13,693.36 13,693.36
2,531.25 20,280.00
3,436.25 22,884.00 16,119.96 11,429.34
365.00 636.63 14,559.96 27,039.96 20,280.00 17,506.64 13,519.98 19,283.31 455.00 4,578.13 3,075.00 14,559.96 3,652.50 4,545.00 592.27 14,040.00 7,298.00 6,999.00 21,840.00 725.82 16,640.04 5,757.01 23,916.00 42,436.40 1,074.00 450.00 42,436.40

1,418.13 14.55 93.14
212.71 40.75 93.14 93.13
622.89 93.14
184.14
93.14
340.03 93.14

- 27-

SEQUOYAH REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30.1996

SCHEDULE "8"

PERSONNEL

Kilburn, Knighton, Kosins, Lathem, Lawson, Lindsey, Lively, Long, Marcussen, McPherson, Metzer, Miller, Murphy, Neal, Oliver, Poor, Roach, Roberts, Robinson, Simpson, Slaughter, Smith, Southard, Stancil, Stephens, Stolz, Summers, Troup, Van Note, Warren, Warren, Watson, Wehunt, White, Wood, Zaic, Zuger, Zumbrunnen,

Linda G. AliceF. Cheryl S. Margaret S. JoeiT. SusanW. Karen Catherine W. Cathy R. P. Renea
Joyce A.
Miriam E. Margene E. Valerie E. JamesW. Marie H. MaryAnn Lowana H.
Paula A.
Jody Carmen T. Patricia Christy R. Janis M. SueM. M. Virginia Anita D. Jacquelyn W. Marilyn Anne M. Karen L. Wanda D. Martha E. Susan E. Lee Ann RoseM. Nancy M. Donna H.

POSITION
Children's Coordinator Children's Coordinator Reference Coordinator Assistant Director Page Reference Coordinator Page Page Circulation Manager Page Law Library Manager Page Circulation Assistant Page Circulation Assistant Circulation Assistant Children's Coordinator Circulation Assistant Receptionist Reference Coordinator Children's Coordinator Bookmobile Manager Children's Assistant Circulation Manager Bookkeeper Circulation Assistant Branch Librarian Page Page Reference Assistant Circulation Manager Page Page Branch Librarian Page Bookmobile Assistant Page Circulation Assistant

See notes to the general purpose financial statements. - 28-

SALARIES

TRAVEL

$

24,960.00 $

11,138.36

15,600.00

36,399.60

862.50

15,543.42

4,570.14

92.50

16,119.96

2,920.00

5,120.01

2,961.30

13,356.18

1,465.00

4,428.00

15,859.98

2,682.16

14,040.00

15,079.80

15,859.98

15,080.04

15,600.00

9,136.00

17,685.36

28,080.00

12,739.98

38,903.20

1,252.50

4,348.38

15,080.04

15,600.00

2,367.77

245.00

43,036.40

2,877.50

10,512.00

3,018.77

2,253.34

93.13 7.58
249.64 91.74
10.00 201.86
104.14

$

992,420.40 $===4.:l:':::.;15=0=.1=.2

SECTIONll FINDINGS AND IMPROPER OR QUESTIONED COSTS

SEQUOYAH REGIONAL LIBRARY SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1996
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Audit Control Number 6261-93-01
The audit report for the year ended June 30, 1995, noted that the management of the Sequoyah Regional Library had chosen not to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. In the year under review, the Library did not establish a General Fixed Assets Account Group within the formal accounting records. This condition results in the general purpose financial statements of the Library being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Library to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, buildings, equipment and inexhaustible collections and books owned by the Library and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.

SECTION ill PERTINENT VIEWS OF RESPONSffiLE OFFICIALS

SEQVOYAH REGIONAL LIBRARY PERTINENT VIEWS OF RESPONSIBLE OFFICIALS
YEAR ENDED JUNE 30, 1996
GENERAL FIXED ASSETS Faih,rre to Maintain General Fixed Assets Account Group Audit Control Number 6261-93-01
Libraries do not have established procedures to follow to maintain general fixed assets. Quote from memo dated 1/23/93 to library directors from DPLS:
"An inquiry was made to the GASB in an effort to obtain further guidance related to this topic.
Representatives from the GASB indicated that this issue is presently under deliberation and that guidance will be forthcoming. For this reason, I would recommend to all libraries currently considering including collections in a General Fixed Assets Account Group to postpone this decision until this new guidance is available."
As of 2/26/98 libraries have not received any directions regarding inventory of fixed assets. We were currently in the process of establishing guidelines to follow that would permit us to have a complete inventory but were advised it would be cheaper to wait for new bookkeeping system.