SOUTHWEST GEORGIA REGIONAL LIBRARY
BAINBRIDGE, GEORGIA REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2007
STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
Russell W. Hinton State Auditor
SOUTHWEST GEORGIA REGIONAL LIBRARY - TABLE OF CONTENTS -
SECTION I
FINANCIAL
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
REQUIRED SUPPLEMENTARY INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
EXHIBITS
BASIC FINANCIAL STATEMENTS
DISTRICT-WIDE FINANCIAL STATEMENTS
A
STATEMENT OF NET ASSETS
I
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
7
G
NOTES TO THE BASIC FINANCIAL STATEMENTS
8
SCHEDULES
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE - BUDGET AND ACTUAL
GENERAL FUND
17
SOUTHWEST GEORGIA REGIONAL LIBRARY - TABLE OF CONTENTS -
SECTION I
FINANCIAL
SCHEDULES
SUPPLEMENTARY INFORMATION
SCHEDULES OF REVENUE
2
STATE
18
3
FEDERAL
19
4
LOCAL
20
5 SCHEDULE OF SALARIES AND TRAVEL
21
SECTION II FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION I FINANCIAL
Russell W. Hinton
STATE AUDITOR
(404) 656-2174
DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
October 21, 2008
Honorable Sonny Perdue, Governor Members ofthe General Assembly Members ofthe Board of Regents ofthe University System of Georgia
and Director and Members ofthe Southwest Georgia 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) ofthe Southwest Georgia Regional Library as ofand for the year ended June 30, 2007, which collectively comprise the Library's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Southwest Georgia 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 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness ofthe Library's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 Southwest Georgia Regional Library, as of June 30, 2007, 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.
2007ARL-41
Management's Discussion and Analysis and the Schedule ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on pages i through vi and page 17 are not a required part of the basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States ofAmerica. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Southwest Georgia 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,
{i)4k
ell W. Hinton, CPA, CGFM State Auditor
RWH:as 2007ARL-41
SOUTHWEST GEORGIA REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007
MANAGEMENT'S DISCUSSION AND ANALYSIS
Management's discussion and analysis of the financial performance of the Southwest Georgia Regional Library System is intended to provide the readers of these financial statements with an overview and analysis of the financial activities for the fiscal year ended June 30, 2007.
FINANCIAL HIGHLIGHTS
The assets of the Library exceeded its liabilities as of June 30, 2007, by $3,094,154. The Library's net assets increased by $84,623 for the year ended June 30, 2007. As of June 30, 2007, total net assets consisted of $2,356,028 invested in capital assets and
$738,126 unrestricted. As of June 30, 2007, the Library's governmental funds reported ending fund balance of
$714,188, an increase of $133,557 in comparison with the prior year.
OVERVIEW OF FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the Library's basic financial statements. The Library's basic financial statements comprise three components: I) Government-wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements.
Government-wide financial statements: The Government-wide financial statements are designed to provide readers with a broad overview of the Library's finances, in a manner similar to a private-sector business.
The statement ofnet assets presents information on all of the Library's assets and liabilities, with the difference between the two reported as net assets. Over time, increases and decreases in net assets may serve as a useful indicator of whether the financial position of the Library is improving or deteriorating.
The statement of activities presents information showing how the Library's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless ofthe timing ofrelated cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods, such as earned but unused vacation leave.
Both of the Government-wide financial statements distinguish functions of the Library that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges. The governmental activities of the Library include culture and education.
SOUTHWEST GEORGIA REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007
Fund financial statements: A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Library, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the Library are governmental funds.
Governmental funds: Governmental funds are used to account for essentially the same functions reported as governmental activities in the Government-wide financial statements. However, unlike the Government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances ofspendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near term financing requirements.
Because the focus of governmental funds is narrower that that of the Government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the Government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balance provide a reconciliation to facilitate this comparison between governmentalfunds and governmental activities.
The Library maintains one governmental fund, the general fund, which is considered a major fund.
The Library adopts an annual appropriated budget for its general fund. A budgetary comparison statement has been provided for the general fund to demonstrate compliance with this budget.
Notes to the basic financial statements: The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of the Library, assets exceeded liabilities by $3,094,154 at the close of the most recent fiscal year.
11
SOUTHWEST GEORGIA REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007
Table 1 Net Assets
Governmental Activities
Fiscal
Fiscal
Year 2007
Year 2006
Assets Current and Other Assets Accounts Receivable - Other (Net) Capital Assets
$
710,369 $
594,783
66,300
2,356,028
2,463,225
Total Assets
$ 3,132,697 $ 3,058,008
Liabilities Current and Other Liabilities Long-Term Liabilities
$
14,152
$
38.543
34,325
Total Liabilities
$
38,543 $
48 477
Net Assets Invested in Capital Assets, Net of Related Debt Unrestricted
$ 2,356,028 $ 2,463,225
738,126
546,306
Total Net Assets
$ 3,094.154 $ 3,009.531
Governmental Activities: Governmental activities increased the Library's net assets by $84,623. Key elements of this increase are as follows:
lll
SOUTHWEST GEORGIA REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007
Table 2 Change in Net Assets
Revenues Program Revenues: Charges for Services Operating Grants and Contributions General Revenues: Allotments from Participating Governments Interest Revenue Other
Governmental Activities
Fiscal
Fiscal
Year 2007
Year 2006
$
55,556 $
35,488
438,742
409,289
625,051 21,529 52,890
570,171 12,853 68.573
Total Revenues
$ 1,193.768 $ 1,096.374
Program Expenses Public Services Technical Services Support Services Maintenance and Operations Information Technology
$
614,993 $
557,484
54,212
22,938
363,935
381,435
103,896
141,860
17.686
7 219
Total Expenses
$ 1,154.722 $ 1.110,936
Increase (Decrease) in Net Assets
$
39.046 $
-14.562
Net Assets, Beginning of Year (Previously Reported)
Restatement Adjustment
$ 3,009,531 $ 3,024,093 45 577
Net Assets, Beginning of Year (Restated)
$ 3,055,108 $ 3,024,093
Net Assets, End of Year
$ 3,094.154 $ 3,009.531
FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS
The Library uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
GOVERNMENTAL FUNDS
The focus of the Library's governmental funds is to provide information on near term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the
lV
SOUTHWEST GEORGIA REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007
Library's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year.
The general fund is the operating fund of the Library. At the end of the current fiscal year, unreserved fund balance of the general fund was $714,188.
The fund balance of the Library's governmental funds increased by $133,557 during the current fiscal year. The key factor in this growth is as follows:
Revenues increased by $97,394, or 8.89% during the current fiscal year
CAPITAL ASSETS
Capital Assets
The Library's investment in capital assets for its governmental activities as of June 30, 2007, amounts to $2,356,028 (net of accumulated depreciation). This investment in capital assets includes land, buildings and improvements, equipment, and library collections. The total decrease in the Library's investment in capital assets for the current fiscal year was 4.36 percent.
Table 4 Capital Assets (Net of Depreciation)
Governmental Activities
Fiscal
Fiscal
Year 2007
Year 2006
Land Buildings Equipment Library Collections
$
35,345 $
35,345
1,484,721
1,553,182
57,290
73,604
778,672
801,094
Total
$ 2,356,028 $ 2,463,225
GENERAL FUND BUDGETING HIGHLIGHTS
The Library makes funding requests of the city, county and board of education local governments in the Decatur, Miller and Seminole counties of which the Library serves. These funding requests are consolidated into the annual operating budget. The budget includes proposed expenditures and the means of financing them. The Library's operating budget was revised during the year to reflect funding actually provided from funding governments and expenditures that can reasonably be made from those funds. A budgetary comparison statement has been provided in the required supplementary information section of this report to demonstrate compliance with this budget.
V
SOUTHWEST GEORGIA REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2007
Total revenues were $32,979 over the final budget, which represents approximately a 2.88% increase. This increase is primarily attributable to approximately $20,459 increase in revenues from fines and service fees and $21,529 in investment earnings. Actual expenditures were $99,922 under the final budget.
LONG-TERM DEBT
As of June 30, 2007, the Library's only reported Long-Term Debt consisted of compensated absences.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
The management of the Library prepares funding requests for each of its funding agents. These requests include cost of continued operations and any new programs the Library is requesting in the next fiscal year. These requests are consolidated into the Library's operating budget. The State requires local funding agencies to, at a minimum, match the level of funding from the previous year. This requirement provides some protection from volatile economic factors for the Library. Once funding is approved by the funding agents, an operating budget is prepared and approved by the board. In or around midyear, a budget adjustment or amendment may be made to more accurately reflect expenditures and approved funding from the funding agents.
As a result of an economic decline, State and local funding of libraries have been stagnant and declining State revenue and reductions in local funding is anticipated for both the 2008-2009 fiscal year. Despite these challenges, the Southwest Georgia Regional Library System is financially strong and even though we do not see a quick turnaround in the economic slowdown, we remain optimistic about the ability of the Library to continue to provide quality services to our patrons.
The Library plans capital improvements as future capital needs arise. Facility repair and maintenance needs and new equipment will be added as they are required. The Library regularly monitors anticipated capital outlay needs.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the Library's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to Ms. Susan Whittle, 301 South Monroe Street, Bainbridge, Georgia 39819.
VI
SOUTHWEST GEORGIA REGIONAL LIBRARY
SOUTHWEST GEORGIA REGIONAL LIBRARY STATEMENT OF NET ASSETS
JUNE 30, 2007
ASSETS Cash and Cash Equivalents Accounts Receivable - Other
Less: Allowance for Doubtful Accounts Capital Assets
Land Buildings and Building Improvements Equipment Library Collections Less: Accumulated Depreciation
Total Assets
LIABILITIES Long-Term Liabilities
Due in More Than One Year NET ASSETS
Invested in Capital Assets, Net of Related Debt Unrestricted
Total Net Assets
Total Liabilities and Net Assets
EXHIBIT"A"
GOVERNMENTAL ACTIVITIES
$
710,369
76,250
-9,950
35,345 2,631,392
243,213 3,060,626 -3,614 548
$ ====3,=13=2=,6=9=7
$ _ _ _ _38~5_4_3
$
2,356,028
738,126
$ _ _ _3=~09'--4"'-1,~5-"-4
$ ====3,=13=2=,6=9=7
The notes to the basic financial statements are an integral part of this statement. - 1-
SOUTHWEST GEORGIA REGIONAL LIBRARY STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2007
EXHIBIT"B"
EXPENSES
PROGRAM REVENUES
OPERATING
CHARGES FOR
GRANTS AND
SERVICES
CONTRIBUTIONS
NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS
GOVERNMENTAL ACTIVITIES
Current Services Public Services Technical Services Support Services Maintenance and Operations Information Technology
Total Governmental Activities
$
614,993 $
54,212
363,935
103,896
17686
1,154,722 $
55,556 $ 55 556 $
344,094 $
90,648 4000
-215,343 -54,212 -363,935 -13,248 -13 686
438 742 $ _ _ _ _-_66_0...._,4-'2_4
General Revenues Allotments From Participating Governments Investment Earnings Miscellaneous Revenue
Total General Revenues
$
625,051
21,529
52890
$ _ _ _ _6""9""9.,_4;.;,7.aa.0
Change in Net Assets
$
39,046
Net Assets - Beginning of Year (Restated)
3,055.108
Net Assets - End of Year
$ ==--3..,094,_1.,.54_
The notes to the basic financial statements are an integral part of this statement. -2-
SOUTHWEST GEORGIA REGIONAL LIBRARY BALANCE SHEET
GOVERNMENTAL FUND JUNE 30, 2007
ASSETS Cash and Cash Equivalents Accounts Receivable - Other
Less: Allowance for Doubtful Accounts
Total Assets
LIABILITIES AND FUND BALANCE LIABILITIES
Deferred Revenue FUND BALANCE
Unreserved Designated for Affiliates Undesignated Reported in: General Fund Total Fund Balance
Total Liabilities and Fund Balance
EXHIBIT "C"
GENERAL FUND
$
710,369
76,250
-9 950
$ ====7=7=6=6=6=9
$
62 481
$
240,879
473 309
$
714 188
$ ====7=76=6=6=9
The notes to the basic financial statements are an integral part of this statement. -3-
SOUTHWEST GEORGIA REGIONAL LIBRARY RECONCILIATION OF THE GOVERNMENTAL FUND BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30, 2007
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:
Land Buildings and Building Improvements Equipment Library Collections Accumulated Depreciation
Total Capital Assets
$
35,345
2,631,392
243,213
3,060,626
-3,614,548
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
Fines and Fees Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the governmental funds.
714,188
2,356,028 -38,543 62 481
Net Assets of Governmental Activities (Exhibit "A")
$ ==3====09=4=1=54=
The notes to the basic financial statements are an integral part of this statement. -4 -
SOUTHWEST GEORGIA REGIONAL LIBRARY
EXHIBIT "E"
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
GOVERNMENTAL FUND
YEAR ENDED JUNE 30, 2007
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
$
625,051
421,609
17,132
38,653
21,529
52 890
$
1 176,864
$
504,969
54,212
362,198
103,896
18,032
$
1,043,307
$
133,557
580 631
$ =====71=4=,1=8=8
The notes to the basic financial statements are an integral part of this statement. -5 -
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SOUTHWEST GEORGIA REGIONAL LIBRARY RECONCILIATION OF THE GOVERNMENTAL FUND STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE TO THE STATEMENT OF ACTIVITIES JUNE 30, 2007
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 Depreciation Expense
$ 133,739 -240,936
Some items 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. These activities consist of:
Increase in Compensated Absences
Fines and Fees Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the governmental funds.
133,557
-107,197 -4,217 16 903
Change in Net Assets of Governmental Activities (Exhibit "B")
$ ===3=9=0=46=
The notes to the basic financial statements are an integral part of this statement. -7 -
SOUTHWEST GEORGIA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007
EXHIBIT"G"
Note 1: DESCRIPTION OF LIBRARY AND REPORTING ENTITY
REPORTING ENTITY
The Southwest Georgia 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 is comprised of 12 members which are also trustees ofthe member library which appointed them. The Library Board membership consists of6 members appointed from the Decatur County Library Board, 3 members appointed from the Miller County Library Board, and 3 members appointed from the Seminole County Library Board. The Library Board is without authority to determine the amount ofits funding, except by submission ofbudget requests to local governmental units from which the Library receives support and to the State of Georgia for State and Federal flow through funding. Membership in the Library and participation in library services is at the discretion 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 Southwest Georgia 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 Southwest Georgia Regional Library.
Library-wide Statements: The Statement ofNet Assets and the Statement ofActivities display information about the financial activities of the overall Library. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through intergovernmental revenues and other nonexchange transactions.
The Statement ofActivities presents a comparison between direct expenses and program revenues for each function of the Library's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the Library related to the administration and support ofthe Library's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
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SOUTHWEST GEORGIA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007
EXHIBIT "G"
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues are presented as general revenues.
Fund Financial Statements: The fund financial statements provide information about the Library's funds. Eliminations have been made to minimize the double counting of internal activities. The emphasis of fund financial statements is on major governmental funds.
The Library reports the following major governmental fund:
General Fund is the Library's primary operating fund. It accounts for all financial resources of the Library.
BASIS OF ACCOUNTING
The basis of accounting determines when transactions are reported on the financial statements. The Library-wide governmental financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the Library gives (or receives) value without directly receiving (or giving) equal value in exchange, include grants 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.
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SOUTHWEST GEORGIA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007
EXHIBIT "G"
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Library funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the Library's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
RESTATEMENT OF PRIOR YEAR NET ASSETS
For fiscal year 2007, the Library restated prior year Net Assets due to the omission of uncollected fines and fees receivables earned in prior years. The result is an increase in Net Assets at July 1, 2006, of $45,577. This change is in accordance with generally accepted accounting principles.
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. Official Code of Georgia Annotated Section 45-8-14 authorizes the Library to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
RECEIVABLES
Receivables consist ofamounts due from grant reimbursements due on Federal, State, or other grants for expenditures made but not reimbursed, fines and fees from patrons and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the basic financial statements do include amounts which would necessitate the need for an allowance for uncollectible receivables.
CAPITAL ASSETS
Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time ofpurchase. On the Library-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method. During the fiscal year under review, no events or changes in circumstances affecting a capital asset that may indicate impairment were known to the Library.
Capitalization thresholds and estimated useful lives of capital assets reported in the Library-wide statements are as follows:
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SOUTHWEST GEORGIA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007
EXHIBIT "G"
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Capitalization Policy
Estimated Useful Life
Land Buildings Equipment Library Collections
All
NIA
$
5,000 20 to 40 years
$
5,000 5 to 20 years
All
10 years
Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives.
NET ASSETS
The Library's net assets in the Library-wide Statements are classified as follows:
Invested in capital assets, net of related debt - This represents the Library's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component in capital assets, net of related debt.
Unrestricted net assets - Unrestricted net assets represent resources derived from grants and contributions not restricted to specific programs, charges for services, and miscellaneous revenues. These resources are used for transactions relating to the general operations ofthe Library, and may be used at the discretion of the Library to meet current expenses for those purposes.
Note 3: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 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,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
- 11 -
SOUTHWEST GEORGIA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007
EXHIBIT "G"
Note 3: 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 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 Horne Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Horne Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 2007, the bank balances were $778,724. The uninsured bank balances are classified into three categories of custodial credit risk:
Category 1 - Uncollateralized. Category 2 - Cash collateralized with securities held by the pledging financial institution Category 3 - Cash collateralized with securities held by the pledging financial institution's
trust department or agent but not in the Library's name.
The Library's deposits are classified by custodial credit risk category at June 30, 2007, as follows:
Custodial Credit Risk Category
Bank Balance
1
$
0
2
652,376
3
0
Total
$==6==52...,,3==7==6
- 12 -
SOUTHWEST GEORGIA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007
EXHIBIT "G"
Note 4: CAPITAL ASSETS
The following is a summary of changes in the Capital Assets during the fiscal year:
Balances July 1, 2006
Increases
Decreases
Balances June 30, 2007
Governmental Activities
Capital Assets, Not Being Depreciated:
Land
$
35 345 $
0 $
0 $
35 345
Capital Assets Being Depreciated Buildings and Improvements Equipment Library Collections
$ 2,631,392 243,213
3,088,873 $
133,739 $
$ 161,986
2,631,392 243,213
3,060,626
Less Accumulated Depreciation for: Buildings and Improvements Equipment Library Collections
1,078,210 169,609
2,287,779
68,461 16,314 156,161
161,986
1,146,671 185,923
2,281,954
Total Capital Assets, Being Depreciated, Net $ 2,427,880 $ -107 197 $
0 $ 2,320,683
Governmental Activity Capital Assets - Net $ 2,463,225 $ -107 197 $
0 $ 2,356,028
Current year depreciation expense by function is as follows:
Public Services Support Services Information Technology
$ 235,545 1,737 3 654
Note 5: RISK MANAGEMENT
$==24==0-,9;;;3a=6
The Library is exposed to various risks ofloss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation.
The Library has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions, job related illness or injuries to employees and acts of God, excluding floods and earthquakes. The Library has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Library's insurance coverage in any ofthe past three years.
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.
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SOUTHWEST GEORGIA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007
EXHIBIT "G"
Note 5: RISK MANAGEMENT
Changes in the unemployment compensation claims liability during the last two fiscal years are as follows:
2006 2007
Beginning of Year Liability
Claims and Changes in Estimates
$
0 $
0 $
$
0 $
620 $
Claims Paid
EndofYear Liability
0 $
0
620 $
0
The Library has purchased a surety bond to provide additional insurance coverage as follows:
Position Covered
Amount
All Employees
$ 100,000
Note 6: LONG-TERM DEBT
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, 2007, were as follows:
Balance July 1, 2006
Governmental Funds
Compensated Absences ( 1)
$
34,325
Additions Annual Leave Earned
33,328
Deductions Annual Leave Utilized
29,110
Balance June 30, 2007
$===38-,5'"=4=3
(1) The portion of Compensated Absences due within one year has been determined to be immaterial to the basic financial statements.
- 14 -
SOUTHWEST GEORGIA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007
EXHIBIT"G"
Note 7: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
TRS PLAN DESCRIPTION Substantially all librarians and clerical personnel employed by regional and county libraries are covered by the Teachers Retirement System of Georgia {TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Library who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Library makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 9.28% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:
Fiscal Year
Percentage Contributed
Required Contribution
2007 2006 2005
100% 100% 100%
$
43,263
$
43,867
$
46,120
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SOUTHWEST GEORGIA REGIONAL LIBRARY GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2007
SCHEDULE "1"
REVENUES
Local Funds State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Public Services Technical Services Support Services Maintenance and Operations Information Technology
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Other Sources Other Uses
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance - Beginning
NONAPPROPRIATED BUDGETS
ORIGINAL
FINAL
ACTUAL AMOUNTS
$
623,694 $
409,622
$ 1,033,316 $
627,694 $ 421,609
18,732 18,194
57656
1 143 885 $
625,051 421,609
17,132 38,653 21,529 52 890
1,176,864
$
460,324 $
22,621
437,245
106,812
6 314
$ 1,033,316 $
$
0 $
560,343 $ 54,212
376,738 107,703 44233
1,143,229 $
656 $
504,969 54,212
362,198 103,896
18 032
1,043,307
133 557
$
167,828 $
-167,828
$
0 $
$
0 $
580,631
167,828 -167,828
0 656 $ 580,631
133,557 580 631
Fund Balance - Ending
$
580,631 $
581,287 $ ======7=14=1=8=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 accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.
See notes to the basic financial statements.
- 17 -
SOUTHWEST GEORGIA REGIONAL LIBRARY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2007
AGENCY/FUNDING
GRANTS Board of Regents of the University System of Georgia Office of Public Library Services Salaries Library Materials Maintenance and Operations Talking Book Centers
SCHEDULE "2"
GOVERNMENTAL FUND TYPE GENERAL FUND
$
224,755
35,289
90,648
70 917
$ ====4=2=1=6=09=
See notes to the basic financial statements.
- 18 -
SOUTHWEST GEORGIA REGIONAL LIBRARY SCHEDULE OF FEDERAL REVENUE YEAR ENDED JUNE 30, 2007
AGENCY/FUNDING GRANTS Museum and Library Services, Institute of Through Board of Regents of the University System of Georgia Library Services and Technology Act Literacy Materials Grant State Vacation Reading Program
SCHEDULE "3"
GOVERNMENTAL FUND TYPE GENERAL FUND
$
12,475
4657
$ ====1=7*1=3=2
See notes to the basic financial statements.
- 19 -
SOUTHWEST GEORGIA REGIONAL LIBRARY SCHEDULE OF LOCAL REVENUE YEAR ENDED JUNE 30, 2007
SCHEDULE "4"
LOCAL SOURCES City Government Bainbridge County Boards of Education Decatur County Miller County Seminole County County Governments Boards of Commissioners Decatur Miller
GOVERNMENTAL FUND TYPE GENERAL FUND
$ 365,367 91,707 162,975
1
5 000
$ ======62=5 =05=1
See notes to the basic financial statements.
- 20 -
SOUTHWEST GEORGIA REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 2007
SCHEDULE "5"
NAME
TITLE CATEGORY
SALARIES
BOWEN
MARY ELIZABETH SUBSTITUTE LIBRARY ASSISTANT
$
BRASWELL
REBECCAJ.
LIBRARY ASSISTANT
BURKE
CAROL B.
SUBSTITUTE LIBRARY ASSISTANT
BUSH
THOMAS L.
LIBRARIAN CHILDREN AND YOUTH SERVICES
CHAPMAN
MANDYM.
SYSTEM ANALYST
CHESTNUT
CATHY J.
LIBRARY ASSISTANT
CORDEIRO
CATHERINE
LIBRARY ASSISTANT
CROSS
DEANNAF.
LIBRARY ASSISTANT
EASOM
JULIAM.
CUSTODIAN
EDMONDS
RHONDA R.
ASSISTANT BRANCH MANAGER
FOULK
MARY SHARON
SUBSTITUTE LIBRARY ASSISTANT
FREEMAN
ARLENE L.
LIBRARY ASSISTANT
FRYER
WILLIAM MARTIN LIBRARY ASSISTANT
GINGRAS
ANNE ELIZABETH LIBRARY ASSISTANT
GRIFFIN
MERCER MAX
BOOKMOBILE DRIVER
GRIMSLEY
SUSAN B.
BRANCH LIBRARY MANAGER
HEARD
EARNESTINE J.
LIBRARY ASSISTANT
HUTCHINS
KATHY BROWN
TALKING BOOK CENTER SUPERVISOR
HUTCHINS
LAURA LEIGH
LIBRARY ASSISTANT
JENKINS
SAMUEL A.
LIBRARY ASSISTANT
JONES
BERTHA MAE
SUBSTITUTE LIBRARY ASSISTANT
KARNES
SHARON SUE
TECH SERVICES CATALOGING COORDINATOR
KARNES
TERRYW.
BOOKMOBILE ASSISTANT
KEATON
FERRELL C.
SUBSTITUTE LIBRARY ASSISTANT
KLINE
ROBERT PAUL
LIBRARY ASSISTANT
LEWIS
SHARON REBECCA LIBRARY ASSISTANT
LINDSEY
TAMMYC.
TALKING BOOK CENTER ASSISTANT
LOCKE
DEBORAH ANN
CHILDREN'S LIBRARY ASSISTANT
MOCK
LYNDAJ.
SUBSTITUTE LIBRARY ASSISTANT
RICKETSON MARIAK.
SUBSTITUTE LIBRARY ASSISTANT
ROBERTS
TAMMY R.
SUBSTITUTE LIBRARY ASSISTANT
SHEPPARD
AMANDAD.
SUBSTITUTE LIBRARY ASSISTANT
SMITH
JUDY MARIE
BRANCH LIBRARY MANAGER
SUDDERTH
SHELLEY R.
LIBRARY ASSISTANT
THORNTON
CAROL D.
LIBRARY ASSISTANT
VANSTONE
CATHERINE
LIBRARIAN TECHNOLOGY AND DEVELOPMENT
WARD
MARGIEW.
BOOKKEEPER
WELLS
SUZANNE S.
SUBSTITUTE LIBRARY ASSISTANT
WHIDDON
VALERIE J.
LIBRARY ASSISTANT
WHITTLE
SUSAN S.
DIRECTOR
WORTHINGTON DEBORAH
SECRETARY/ASSISTANT BOOKKEEPER
624 177 769 59,312 $ 21,063 4,867 11,224 3,037 8,405 15,604 1,687 14,444 277 5,162 3,168 17,325 13,364 20,915 5,550 6,080 1,949 22,422 10,045 324 6,096 23,442 5,757 9,671 4,888 347 597 105 27,165 15,536 16,853 43,299 23,017 432 201 81,551 21 578
TRAVEL 2,863 657 12 1,316 19
77 2,707
880 7,279
395
Totals per Report
$
528,329 $-========16=,2=0=5
See notes to the basic financial statements.
21
SECTION II FINDINGS AND QUESTIONED COSTS
SOUTHWEST GEORGIA REGIONAL LIBRARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2007
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported.