Troup-Harris-Coweta Regional Library, LaGrange, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2005

TROUP-HARRIS-COWETA REGIONAL LIBRARY
LAGRANGE, GEORGIA REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2005
STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
Russell W. Hinton State Auditor

TROUP-HARRIS-COWETA REGIONAL LIBRARY - TABLE OF CONTENTS -

FINANCIAL

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

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

EXHIBITS

BASIC FINANCIAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET ASSETS

1

B

STATEMENT OF ACTIVITIES

2

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL 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

1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCE - BUDGET AND ACTUAL

GENERAL FUND

17

SUPPLEMENTARY INFORMATION

SCHEDULES OF REVENUE

2

STATE

18

3

FEDERAL

19

4

LOCAL

20

5 SCHEDULE OF SALARIES AND TRAVEL

21

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
July 3, 2006

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 Troup-Harris-Coweta 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 Troup-Harris-Coweta Regional Library as of and for the year ended June 30, 2005, which collectively comprise the Library's basic financial statements as listed in the table of contents. These financial statements are the responsibility ofthe Troup-Harris-Coweta 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 ofthe governmental activities and the major fund ofthe Troup-HarrisCoweta Regional Library, as of June 30, 2005, 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.

2005ARL-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 ofinquiries ofmanagement 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 Troup-Harris-Coweta 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,
~w.~
Russell W. Hinton State Auditor
RWH:as 2005ARL-41

TROUP-HARRIS-COWETA REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2005
This document is management's discussion and analysis of the Troup-Harris-Coweta financial activities for the year ended June 30, 2005.
Overview of Financial Statements
Troup-Harris-Coweta's statements are presented in three parts: government-wide financial statements, fund financial statements, and Notes to the Basic Financial Statements.
Government-wide Statements
Government-wide financial statements include the Statement ofNet Assets and the Statement of Activities. Government-wide statements provide information about the activities of the government as a whole and provide a long-term view of the government's finances. These statements are presented using the accrual basis of accounting. The accrual basis of accounting reports results of activities based on the occurrence of an economic event, regardless of the timing of revenue collections or payment of expenses. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g. compensated absences).
The Statement of Net Assets presents the total assets and liabilities of the Library with the difference reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Library is improving or deteriorating.
The Statement ofActivities presents information showing how the Library's net assets changed during the most recent fiscal year. The Statement of Activities presents governmental activity expenses in the following categories: Public Services (costs of providing branch services including library materials), Technical Services (costs of selecting and preparing library materials for public use), Support Services (administrative costs of providing library services), Maintenance and Operations (costs incurred for the maintenance of grounds and facilities), and Information Technology (costs associated with providing access to electronic materials and services).
Program revenues include Charges for Services (fees charged to customers) and Operating Grants and Contributions (State of Georgia and Federal grants used for library operations).
General revenues include the allotments for Library operations from Troup County and Harris County Boards of Education, the City of LaGrange, and Troup County and Harris County governments, investment earnings, and miscellaneous revenue from donations.
As is evident from the Statement ofActivities, the Library expenditures are primarily funded by allotments from the participating governments and operating grants and contributions.
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TROUP-HARRIS-COWETA REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2005
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. Troup-Harris-Coweta, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance related legal requirements.
The Library uses only one governmental fund: the general fund. This fund is accounted for using the modified accrual basis of accounting. Under this basis of accounting, revenue is posted when amounts are both measurable and available to fund current operations. Expenditures are posted when amounts will be disbursed in the near future (typically within sixty days).
Because the focus of the fund financial statements is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds (in the fund financial statements) 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.
The fund balance of $987,348 reported on the Balance Sheet: Governmental Fund is reconciled to the total ending net assets of $4,914,160 reported on the Statement of Net Assets. The difference in these is due to the following: capital assets are not financial resources and are not reported in the funds and compensated absences are not due and payable in the current period and therefore are not reported as liabilities in the funds. See Reconciliation ofthe Governmental Funds Balance Sheet to the Statement ofNet Assets for specific amounts.
In addition, the net increase in fund balance of $145,268 reported on the Statement ofRevenues, Expenditures, and Changes in Fund Balance is reconciled to the net increase in net assets of $114,625 reported on the Statement ofActivities. The difference in the change reported in the funds and the government-wide statements results from the following: the fund financial statements report capital outlays as expenditures at the time of purchase, while the governmentwide statement allocates the cost of capital assets over time through depreciation expense and compensated absences expenses that do not require the use of current financial resources are not recognized in the fund financial statements, but are recognized in the government-wide statements. See the Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities, for the actual amounts.
Notes to the Basic Financial Statements
The Notes to the Basic Financial Statements follow the financial statements and provide additional information that is essential to the full understanding of data provided in the government-wide and fund financial statements.
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TROUP-HARRIS-COWETA REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2005

Additional Information

Following the Notes to the Basic Financial Statements section is the Schedule of Revenues, Expenditures and Changes in Fund Balance, Budget and Actual. This schedule is required supplementary information to the basic financial statements. The format used is similar to the Statement ofRevenues, Expenditures and Changes in Fund Balances. This schedule shows the original budget adopted at the beginning of the fiscal year and the final adjusted budget, which includes any changes to the budget during the fiscal year. The final budget is compared to the actual revenues and expenditures.

Also presented are the following schedules - Schedule of State Revenue, Schedule of Federal Revenue, and a Schedule ofLocal Government Funds revenue. These schedules provide details of the Local Funds, State Funds, and Federal Funds included as revenues in the Statement of Revenues, Expenditures and Changes in Fund Balance. A Schedule of Salaries and Travel is presented and includes annual salary and travel by position. These amounts are included in the total expenditures by function in the Statement ofRevenues, Expenditures and Changes in Fund Balance.

Financial Analysis

Government-wide (accrual basis) The Library's overall financial position and operations at the government-wide level for the past two years is summarized as follows:

Table 1 Net Assets

Governmental Activities

Fiscal

Fiscal

Net

Year 2005 Year2004

Change

Assets Current Assets Capital Assets, Net
Total Assets

$ 987,348 3,978,438
$4,965.786

$ 842,080 4,013,911
$4,855.991

$ 145,268 -35,473
$ 109.795

Liabilities Long-Term Liabilities

$ 51,626 $ 56,456 $ -4,830

Net Assets Invested in Capital Assets Unrestricted
Total Net Assets
Total Liabilities and Net Assets

$3,978,439 935,721
$4,914,160
$4,965.786

$4,013,911 785,624
$4,799,535
$4,855.991

$ -35,472 150,097
$ 114,625
$ 109.795

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TROUP-HARRIS-COWETA REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2005

Table 2 Change in Net Assets

Revenues Program Revenues: Charges for Services Operating Grants

Governmental Activities

Fiscal

Fiscal

Net

Year 2005

Year2004

Change

$ 48,620 607,723

$ 29,866 $ 18,754

671,768

-64,045

Total Program Revenues

$ 656,343 $ 701,634 $ -45,291

General Revenues: Local Government Allotments Investment Earnings Miscellaneous

$ 588,601 18,051 62,730

$ 550,586 $ 38,015

6,874

11,177

83,829

-21,099

Total General Revenues

$ 669,382 $ 641,289 $ 28,093

Total Revenues

$1,325,725 $1,342,923 $ -17,198

Program Expenses Public Services Technical Services Support Services Maintenance and Operations Information Technology

$ 564,739 114,891 407,907 117,763 5,800

$ 566,838 $ 119,928
463,503 114,588 41,839

-2,099 -5,037 -55,596 3,175 -36,039

Total Expenses

$1,211,100 $ 1,306,696 $ -95,596

Change in Net Assets

$ 114,625 $ 36,227 $ 78,398

Beginning Net Assets

4,799,535

4,763,308

36,227

Ending Net Assets

$4,914.160 $4,799.535 $ 114,625

At June 30, 2005, the assets of Troup-Harris-Coweta exceeded its liabilities by $4,914,160. The most significant portion of net assets is the Library's investment in net capital assets totaling $3,978,439. The Library uses the assets (a building, furniture, equipment, books, and collections) to provide services to library customers, so they are not available to fund current operations. The remaining amount available to fund future library operations is $935,721.

Total current assets consisting of cash and investments increased $145,268 as a result of the excess revenues over expenses for the year.

The net balance of capital assets decreased due to depreciation exceeding the value of assets added.

Long-term liability is the long-term portion of compensated absences. The balance is lower in 2005 due to the payout of a long-term employee's leave in May 2005. This payout, along with other leave usage, exceeded leave balances earned during the year.

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TROUP-HARRIS-COWETA REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2005

Net assets showed an increase of $114,625. This is the net result of an increase in unrestricted net assets of $150,097 and a decrease in investment in capital assets of $35,472. The change in unrestricted net assets includes all revenues and expenses unrelated to capital assets.

Total revenues decreased $17,198, primarily as a result of a one-time Federal grant (approximately $43,000) received in 2004 to record an oral history of the community, and net budget cuts for the State operating grants totaling $23,617. Donations for 2005 increased as the result of the community responding to the State budget reductions. Total expenses decreased by $95,596, primarily as a result of expenditures incurred in fiscal year 2004 for a one-time grant recording an oral history of the area, decreased usage of the library bookmobile, and computer hardware and software purchases made in 2004.

Fund Level (modified accrual basis) The Library's overall financial position and operations at the fund level for the past two years is summarized as follows:

Table 3 Governmental Activities

Total Cost of Services

Fiscal

Fiscal

Year 2005 Year 2004

Net Change

Total Assets Total Liabilities
Total Fund Balance Total Revenues Total Expenditures

$ 987,348 0
$ 987,348
$1,325,725 $1,180,457

$ 842,080 0
$ 842,080 $1,342,923
$ 1,256,953

$ 145,268 0
$ 145,268 $ -17 198
$ -76 496

Total assets and fund balance had a net increase of $145,268 due to excess revenues over expenditures for the year.

The revenue and expenditure decreases were due to the same reasons as described for the Statement of Activities.

General Fund Budgetary Variances

The original and final budget for the Library's operations is presented on the Schedule of Revenues, Expenditures and Changes in Fund Balance, Budget and Actual. The original and final revenue budgets were the same. However, the actual revenue for the year differed from that budgeted as a result of the following - Investment Earnings and Miscellaneous Revenue are not budgeted due to the unpredictable nature of the revenue, and the actual revenues received from local and state sources were higher than originally anticipated.

-V-

TROUP-HARRIS-COWETA REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2005 The original and final expenditure budgets were the same but differed from actual expenditures. As revenue was received exceeding the amount originally budgeted, additional expenditures were incurred. Capital Asset and Long-term Debt Activity The Library's capital assets consist of a building, furniture, equipment, and library materials. During the year, additional library materials were purchased. The net increase in capital assets before depreciation is $47,948. Depreciation net of disposals totaled $83,421. See the Capital Assets Note in the Notes to the Basic Financial Statements for details of activity. Long-term liabilities decreased by $4,830. This liability represents the long-term portion of compensated absences. Compensated absences are amounts owed to employees for leave accrued that would be paid at the point of separation. See the Notes to the Basic Financial Statements for Long-Term Debt activity. Requests for Additional Information This financial report is designed to provide a general overview of Troup-Harris-Coweta's finances for our citizens, taxpayers, and governmental entities to which we are accountable. If you have any additional questions about this report, please contact the Library Director at 706882-7784.
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TROUP-HARRIS-COWETA REGIONAL LIBRARY

TROUP-HARRIS-COWETA REGIONAL LIBRARY STATEMENT OF NET ASSETS JUNE 30, 2005
ASSETS Cash and Cash Equivalents Investments Capital Assets
Land Buildings Equipment Library Collections Less: Accumulated Depreciation
Total Assets
LIABILITIES Long-Term Liability
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

$

820,239

167,109

100,000 2,894,208
101,370 2,404,434 -1 521 574

$ ===4=9=6=5=7=86===

$ _ _ _ _5_1-6_26_

$

3,978,439

935 721

$ _ _ _4cc,;9'-'1...;..4-.;.16-"-0'-

$ ===4=9=6=5=7=86=

The notes to the basic financial statements are an integral part of this statement. -1-

TROUP-HARRIS-COWETA REGIONAL LIBRARY STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2005

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

$ 564,739 $ 114,891 407,907 117,763 5 800
$ 1,211,100 $

General Revenues Allotments from Participating Governments Investment Earnings Miscellaneous

48,620 $

524,667 $

83,056

=========== 48 620 $

607 723 $

$

8,548 -114,891 -407,907
-34,707 -5 800
-554,757
588,601 18,051 62 730

Total General Revenues

$

669 382

Change in Net Assets

$

114,625

Net Assets - Beginning of Year

4 799 535

Net Assets - End of Year

$

4 914160

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

TROUP-HARRIS-COWETA REGIONAL LIBRARY BALANCE SHEET
GOVERNMENTAL FUND JUNE 30, 2005
ASSETS Cash and Cash Equivalents Investments
Total Assets
FUND BALANCE Unreserved
Undesignated Reported in: General Fund

EXHIBIT"C"

GENERAL FUND

$

820,239

167 109

$ ===98=7=,3=4==8

$ ===98=7=,3=48=

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

TROUP-HARRIS-COWETA REGIONAL LIBRARY RECONCILIATION OF THE GOVERNMENTAL FUND BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30, 2005

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 Equipment Library Collections Accumulated Depreciation
Total Capital Assets

$ 100,000 2,894,208 101,370 2,404,434 -1,521,574

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

987,348 3,978,438

Net Assets of Governmental Activities (Exhibit "A")

$ ==4=,9=1=4=1,6=0=

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

TROUP-HARRIS-COWETA REGIONAL LIBRARY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
GOVERNMENTAL FUND YEAR ENDED JUNE 30, 2005

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

$

588,601

604,423

3,300

48,620

18,051

62 730

$ 1,325,725

$

534,096

114,891

407,907

117,763

5 800

$ 1 180 457

$

145,268

842 080

$ ==9=8=7=3=48=

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

(This page left intentionally blank)

TROUP-HARRIS-COWETA REGIONAL LIBRARY RECONCILIATION OF THE GOVERNMENTAL FUND STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE TO THE STATEMENT OF ACTIVITIES JUNE 30, 2005

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 Depreciation Expense over Capital Outlay

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:

Decrease in Compensated Absences

$
74,423 -109,896

145,268
-35,473 4830

Change in Net Assets of Governmental Activities (Exhibit "B")

$ ==1=1=4,=62=5=

The notes to the basic financial statements are an integral part of this statement. -7-

TROUP-HARRIS-COWETA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2005

EXHIBIT "G"

Note 1: DESCRIPTION OF LIBRARY AND REPORTING ENTITY
REPORTING ENTITY
The Troup-Harris-Coweta Regional Library (Library) operates pursuant to Official Code ofGeorgia Annotated Sections 20-5-40 through 20-5-59 to provide public library services with costs shared by participating local governmental agencies and grants from the State of Georgia.
The Library Board is comprised often members which are also trustees ofthe member library which appointed them. The Library Board membership consists of four members appointed from the Coweta Cooperating Library Board of Trustees, four members appointed from the Troup County Board ofTrustees and two members appointed from the Harris County Library Board. The Library Board is without authority to determine the amount of its funding, except by submission of budget requests to local governmental units from which the Library receives support and to the State 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 Troup-Harris-Coweta 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 ofthe Troup-HarrisCoweta 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 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.

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TROUP-HARRIS-COWETA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2005

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, 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

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TROUP-HARRIS-COWETA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2005

EXHIBIT "G"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
restricted and unrestricted net assets available to finance the program. It is the Library's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the Library to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Library in nonparticipating interest-earning contracts (such as certificates 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 and equity investments 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 return 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.

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TROUP-HARRIS-COWETA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2005

EXHIBIT "G"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CAPITAL ASSETS

Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time ofpurchase. On the Library-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method.

Capitalization thresholds and estimated useful lives of capital assets reported in the Library-wide statements are as follows:

Capitalization Policy

Estimated Useful Life

Land Buildings Equipment Library Collections

$

5,000

NIA

$

5,000

75 years

$

5,000 6 to 10 years

$

5,000

10 years

Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives.

Note 3: DEPOSITS 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 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,

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TROUP-HARRIS-COWETA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2005

EXHIBIT "G"

Note 3: DEPOSITS AND INVESTMENTS

(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, 2005, the bank balances were $897,661. 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, 2005, as follows:

Custodial Credit Risk Category

Bank Balance

1

$ 100,000

2

0

3

797,661

4

0

Total

$====8-97-,6'='6==1

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TROUP-HARRIS-COWETA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2005

EXHIBIT "G"

Note 3: DEPOSITS AND INVESTMENTS

CATEGORIZATION OF INVESTMENTS At June 30, 2005, the fair value of the Library's total investments was $167,109 and this entire amount consisted ofcommon stock which was insured or registered, or securities held by the Library or the Library's agent in the Library's name.

Note 4: CAPITAL ASSETS

The following is a summary of changes in the Capital Assets during the fiscal year:

Balances July 1, 2004

Increases

Decreases

Balances June 30, 2005

Governmental Activities

Capital Assets, Not Being Depreciated:

Land

$ 100,000 $

0 $

0 $ 100,000

Capital Assets Being Depreciated Buildings Equipment Library Collections

$ 2,894,208 101,370
2,356,486 $

74,423 $

$ 26,475

2,894,208 101,370
2,404,434

Less Accumulated Depreciation for: Buildings Equipment Library Collections

308,716 87,142
1,042,295

38,590 4,794
66,512

26,475

347,306 91,936
1,082,332

Total Capital Assets, Being Depreciated, Net $ 3,913,911 $

-35 473 $

0 $ 3,878,438

Governmental Activity Capital Assets - Net $ ~.013,211 $

-35,473 $

Q $ 3,21!U38

Current year depreciation expense by function is as follows:

Public Services Note 5: RISK MANAGEMENT

$===1==09-,8=9=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. 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.

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TROUP-HARRIS-COWETA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2005

EXHIBIT"G"

Note 5: RISK MANAGEMENT

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

The Library has purchased a surety bond to provide additional insurance coverage as follows:

Position Covered

Amount

All Employees

$

15,000

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, 2005, were as follows:

Governmental Funds
Compensated Absences (1)

Balance July 1, 2004

$

56,456

Deductions Annual Leave Utilized

4.830

Balance June 30, 2005

$===51=,6=2=6

(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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TROUP-HARRIS-COWETA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2005

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 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2005 2004 2003

100% 100% 100%

$ 56,450 $ 55,842 $ 54,826

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TROUP-HARRIS-COWETA REGIONAL LIBRARY GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2005

SCHEDULE "1"

REVENUES
Local Funds State Funds Federal Funds Charges for SeNices Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Public SeNices Technical SeNices Support SeNices Maintenance and Operations Information Technology
Total Expenditures
Net Change in Fund Balance
Fund Balance - Beginning

NONAPPROPRIATED BUDGETS

ORIGINAL

FINAL

ACTUAL AMOUNTS

$

427,669 $

427,669 $

588,601

600,928

600,928

604,423

3,300

26,000

26,000

48,620

18,051

62 730

$

1054597 $

1054597 $

1,325,725

$

335,907 $

335,907 $

534,096

123,041

123,041

114,891

472,383

472,383

407,907

120,281

120,281

117,763

2 985

2 985

5800

$

1054597 $

1 054 597 $

1 180 457

$

0 $

0 $

145,268

0

0

842 080

Fund Balance - Ending

$

0 $

0 $ ======9=8=7-=3=48=

Notes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual
The accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.

See notes to the basic financial statements.

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TROUP-HARRIS-COWETA REGIONAL LIBRARY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2005
AGENCY/FUNDING
GRANTS Board of Regents of the University System of Georgia Office of Public Library Services Salaries Travel Library Materials Maintenance and Operations

SCHEDULE "2"

GOVERNMENTAL FUND TYPE GENERAL FUND

$

446,825

2,250

72,292

83,056

$

604 423

See notes to the basic financial statements.

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TROUP-HARRIS-COWETA REGIONAL LIBRARY SCHEDULE OF FEDERAL REVENUE
YEAR ENDED JUNE 30, 2005

SCHEDULE "3"

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

GOVERNMENTAL FUND TYPE GENERAL FUND
$=====3=3=00=

See notes to the basic financial statements.

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TROUP-HARRIS-COWETA REGIONAL LIBRARY SCHEDULE OF LOCAL REVENUE YEAR ENDED JUNE 30, 2005
LOCAL SOURCES Boards of Education Harris County Troup County City Government LaGrange County Governments Harris Troup

SCHEDULE "4"

GOVERNMENTAL FUND TYPE GENERAL FUND

$

3,490

11,454

40,000

135,676 397 981

$ ======5-=8=8=6=01==

See notes to the basic financial statements.

- 20-

NAME
Adams, Kathryn Ann Allen, Erin Shawan Allen, Margaret T. Anderson, Issac Jeffery Bennett, Frank J. Bennett, Ruth L. Cosper, Horace Eugene Cotton, Lawanda Ann Davis, Elaine R.
Davis, Ellen A.
Delano, Yvonne D. Gay, Patricia L. Godwin, Megan Gottshall, Jane C. Graffagnino, Ann M. Guida, Patricia
Haire, Lucinda A.
Hester, Charlotte D. Holmes, Crystal D. Huff, Pamela W. Justice, Theresa Michiko Ledford, Jo Ellen Marino, Debra J. Ostendorf, JoEllen Palmer, Nancy Lea Smith, Brenda Dianne Stevens, Dottie F. Tucker, Anthony Wells, Sandra Wheeler, Betty C. Williams, Jackie D. Williams, Tonya Walker Zeiger, Carrie C. Zens, Clare P.
Totals per Report

TROUP-HARRIS-COWETA REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 2005

SCHEDULE "5"

TITLE CATEGORY
Bookmobile Clerical Part-Time Clerical Security Part-Time Information Technology Librarian Clerical Part-Time Custodian Clerical Clerical Part-Time Clerical Part-Time Library Assistant Children's Librarian Library Assistant Branch Manager Branch Assistant Clerical Clerical Bookkeeper Clerical Reference Librarian Clerical Part-Time Clerical Part-Time Clerical Director Library Assistant Clerical Library Assistant Associate Clerical Clerical Custodian Clerical Clerical Branch Director Branch Director

SALARIES

$

19,714

533

23,230

3,400

63,524

4,920

7,308

16,000

9,576 $

6,991

8,851

60,467

8,000

13,791

16,816

6,270

274

26,000

844

55,767

5,453

600

34,594

80,231

7,359

19,724

4,536

954

4,292

7,308

19,127

20,984

61,067

61 067

TRAVEL
131 430
177 76
274 2,838
58 16

$

679,572 $====4=0=0=0

See notes to the basic financial statements.

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