Troup-Harris-Coweta Regional Library, LaGrange, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2007

TROUP-HARRIS-COWETA REGIONAL LIBRARY
LAGRANGE, 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

TROUP-HARRIS-COWETA 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 FUNDS

3

D

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET ASSETS

4

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

5

F

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THE STATEMENT OF ACTIVITIES

6

G

NOTES TO THE BASIC FINANCIAL STATEMENTS

7

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL FUND

17

TROUP-HARRIS-COWETA 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 1, 2008

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 of the governmental activities and each major fund (Exhibits A through G) of the Troup-Harris-Coweta Regional Library as of and for the year ended June 30, 2007, which collectively comprise the Library's basic financial statements as listed in the table ofcontents. These financial statements are the responsibility ofthe Troup-HarrisCoweta 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 ofthe governmental activities and each major fund ofthe Troup-HarrisCoweta 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 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,
M1:k
Rus 11 W. Hinton, CPA, CGFM State Auditor
RWH:as 2007ARL-41

TROUP-HARRIS-COWETA REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2007
This document is management's discussion and analysis of the Troup-Harris-Coweta financial activities for the year ended June 30, 2007.
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 Service (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.
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 financerelated legal requirements.
- I-

TROUP-HARRIS-COWETA REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2007
The Library uses only one governmental fund for primary operations: 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 $1,369,246 reported on the Balance Sheet: Governmental Fund is reconciled to the total ending net assets of $5,343,956 reported on the Statement ofNet 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 $242,183 reported on the Statement ofRevenues, Expenditures, and Changes in Fund Balance is reconciled to the net increase in net assets of $278,490 reported on the Statement of Activities. The difference in the change repo1ied 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.
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.
- 11 -

TROUP-HARRIS-COWETA REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2007

Also presented are the following schedules - Schedule of State Revenue, Schedule of Federal Revenue, and a Schedule ofLocal Revenue. These schedules provide details of the Local Funds, State Funds, and Federal Funds included as revenues in the Statement ofRevenues, Expenditures and Changes in Fund Balances. 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 Balances.

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:

Assets Current Assets Capital Assets, Net
Total Assets
Liabilities Deferred Revenue Long-Term Liabilities
Total Revenues
Net Assets Invested in Capital Assets Restricted Unrestricted
Total Net Assets
Total Liabilities and Net Assets

Table 1 Net Assets

Governmental Activities

Fiscal

Fiscal

Net

Year2007

Year2006

Change

$1,373,939 4,026.694
$ 5.400.633

$ 1,127,063 3,990.031
$ 5,117.094

$ 246,876 36.663
$ 283,539

$ 2,264 54.413
$ 56.677

$ 51.628 $ 51.628

$ 2,264 2,785
$ 5,049

$4,026,694 3,883
1,313.379
$5,343.956
$5,400.633

$3,990,031 3,883
1,071.552
$5,065.466
$ 51l1Z109~

$ 36,663 0
241.827
$ 278.490
$ 283,539

- 111 -

TROUP-HARRIS-COWETA REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2007

Table 2 Change in Net Assets

Revenues Program Revenues: Charges for Services
Operating Grants

Governmental Activities

Fiscal

Fiscal

Year 2007

Year2006

Net Change

$ 67,989 724,848

$ 52,298 603,716

$ 15,691 121,132

Total Program Revenues
General Revenues: Local Government Allotments Investment Earnings Miscellaneous

$ 792,837
$ 643,821 88,610 125,631

$ 656,014
$ 606,049 47,348 34,908

$ 136,823
$ 37,772 41,262 90,723

Total General Revenues

$ 858,062

$ 688,305

$ 169,757

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

$ 1,650,899
$ 633,793 165,438 423,601 121,901 27,676

$1,344.319
$ 546,595 122,050 389,363 129,062 5 943

$ 306.580
$ 87,198 43,388 34,238 -7,161 21,733

Total Expenses

$1,372,409

$ 1,193,013

$ 179.396

Change in Net Assets

$ 278,490

$ 151,306

$ 127,184

Beginning Net Assets

5,065,466

4,914,160

151,306

Ending Net Assets

$5,343.956

$5,065,466

$ 278,42Q

At June 30, 2007, the assets of Troup-Harris-Coweta exceeded its liabilities by $5,343,956. The most significant portion of net assets is the Library's investment in net capital assets totaling $4,026,694. 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 $1,313,379.

Total current assets consisting of cash and investments increased $246,876 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 $2,785 higher than fiscal year 2006 because of a salary increase which raised the amount of withholding. Long-Term liability was $51,628 in fiscal year 2006 and $54,413 in fiscal year 2007. Employees cannot carry forward more than 240 hours a year annual leave.

- IV -

TROUP-HARRIS-COWETA REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2007

Net assets showed an increase of $278,490. This is the net result of an increase in unrestricted net assets of $241,827 and an increase in investment in capital assets of $36,663. The change in unrestricted net assets includes all revenues and expenses unrelated to capital assets.

Total general revenues increased $169,757 as a result of increased funding from Troup County and investments. State funding increased by $91,478 because there was a professional vacancy for several months in fiscal year 2006 in a state-paid position and in fiscal year 2007, the state legislature appropriated a $2 million grant to public libraries to purchase materials. Total expenses increased by $40,432 as the professional position was filled for the entire fiscal year and the additional materials money was expended.

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:

Total Assets Total Liabilities
Total Fund Balance
Total Revenues
Total Expenditures

Table 3 Assets and Fund Balance
Fiscal Year 2007
$ 1,373,939 4 693
$ 1,369,246
$1,625,574
$ 1,383,391

Fiscal Year 2006
$1,127,063 0
$1,127,063
$1,344,319
$1,204,604

Difference $ 246,876
4 693 $ 242,183 $ 281,255 $ 178,787

Total assets and fund balance had a net increase of $242,183 due to excess revenues over expenditures for the year.

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 were higher than originally anticipated.

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.

- V-

TROUP-HARRIS-COWETA REGIONAL LIBRARY MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2007
Capital Asset and Long-Term Debit 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 $103,118. Depreciation net of disposals totaled $66,455. See the Capital Assets Note in the Notes to the Basic Financial Statements for details of activity. Long-Term Liabilities remained the same. 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. 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 wants 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 expenses and approved funding from the funding agents. 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.
- VI -

TROUP-HARRIS-COWETA REGIONAL LIBRARY

TROUP-HARRIS-COWETA REGIONAL LIBRARY STATEMENT OF NET ASSETS JUNE 30, 2007

EXHIBIT"A"

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable
Federal Government Other Less: Allowance for Doubtful Accounts Capital Assets Land Buildings and Building Improvements Equipment Library Collections Less: Accumulated Depreciation
Total Assets
LIABILITIES
Deposits and Deferred Revenues Long-Term Liabilities
Due in More Than One Year
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Restricted for
Permanent Fund Unrestricted
Total Net Assets
Total Liabilities and Net Assets

GOVERNMENTAL ACTIVITIES

$

1,159,410

206,733

2,321 16,865 -11,390

100,000 2,894,208
105,168 2,557,460 -1,630,142

$ ====5,=40=0=,6=3=3

$

2,264

54413

$

56677

$

4,026,694

3,883 1,313,379

$

5,343,956

$ ====5,=40=0=,6=3=3

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, 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

$

633,793 $

165,438

423,601

121,901

27676

67,989 $

591,409 $ 133,439

25,605 -165,438 -423,601
11,538 -27 676

Total Governmental Activities

1,372,409 $

67989 $

724 848 $ _ _ _ _-5'-'-7-'-9"",5""'72~

General Revenues Allotments From Participating Governments Investment Earnings Miscellaneous Revenue

$

643,821

88,610

125 631

Total General Revenues

$ _ _ _ _8_5_8_,0_6_2

Change in Net Assets

$

278,490

Net Assets - Beginning of Year

5,065,466

Net Assets - End of Year

$====5=3=4=3=9=5,..6

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

TROUP-HARRIS-COWETA REGIONAL LIBRARY BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2007

EXHIBIT"C"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Federal Government Other Less: Allowance for Doubtful Accounts
Total Assets
LIABILITIES AND FUND BALANCES LIABILITIES
Deposits and Deferred Revenue FUND BALANCES
Unreserved Undesignated Reported in: General Fund Permanent Fund Total Fund Balances
Total Liabilities and Fund Balances

GENERAL FUND

PERMANENT FUND

TOTAL

$ 1,155,527 $
206,733
2,321 16,865 -11,390

3,883 $

1,159,410 206,733
2,321 16,865 -11,390

$ 1,370,056 $

3,883 $ 1,373,939

$

4 693

$

4,693

$ 1,365,363 $
$ 1,365,363 $

$
3 883
3 883 $

1,365,363 3,883
1,369,246

$ 1,370,056 $

3,883 $ 1,373,939

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

TROUP-HARRIS-COWETA REGIONAL LIBRARY RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30, 2007

EXHIBIT"D"

Total Fund Balances - Governmental Funds (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

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 to do provide current financial resources are not reported as revenues in the governmental funds.

$
100,000 2,894,208
105,168 2,557,460 -1,630,142

1,369,246
4,026,694 -54,413 2429

Net Assets of Governmental Activities (Exhibit "A")

$ =====5,=34=3=,9=5=6

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 BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2007

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 Balances
Fund Balances - Beginning
Fund Balances - Ending

GENERAL FUND

PERMANENT FUND

TOTAL

$

643,822 $

687,044

37,804

65,559

88,610

102 735

$

1 625 574 $

0 $ 0 $

643,822 687,044
37,804 65,559 88,610 102 735
1 625 574

$

648,615 $

165,893

418,929

122,278

27 676

$

1,383,391 $

$

242,183 $

1,123,180

$

1,365,363 $

0 $
0 $ 0 $ 3 883

648,615 165,893 418,929 122,278 27676
1,383,391
242,183
1 127 063

3 883 $ ==1=3=6=9=2=46=

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

TROUP-HARRIS-COWETA REGIONAL LIBRARY RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2007

EXHIBIT"F"

Total Net Change in Fund Balances - Governmental Funds (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

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.

Donated Library Materials that do not provide current financial resources are not reported in the funds.

$
138,355 -124,588

242,183
13,767 -2,785 2,429 22,896

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

$ ===2=78=,4=9=0

The notes to the basic financial statements are an integral part of this statement. -6 -

TROUP-HARRIS-COWETA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

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 ofsix members which are also trustees ofthe member library which appointed them. The Library Board membership consists offour 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 ofGeorgia for State and Federal flow through funding. Membership in the Library and participation in library services is at the discretion ofeach 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 ofthe overall Library. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through intergovernmental revenues and other nonexchange transactions.
The Statement 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 of the Library's programs, such as office and maintenance personnel and accounting) are not allocated to programs.

-7-

TROUP-HARRIS-COWETA 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 ofgoods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues are presented as general revenues.
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 funds:
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.
Permanent Fund - Troup-Harris-Coweta Regional Library Emergency Fund is the fund used to account for an endowment of which the corpus is to be invested and preserved intact with the resultant income to be used exclusively whenever emergencies arise in the Library for the purpose of keeping the Library open continuously.
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.
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TROUP-HARRIS-COWETA 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.
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 ofGeorgia 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.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Library in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Library to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofretum 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

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TROUP-HARRIS-COWETA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "G"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(8) Obligations of other political subdivisions of the State of Georgia.

RECEIVABLES

Receivables consist ofamounts due from grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed, 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 ofthe assets is not capitalized. Depreciation is computed using the straight-line method.

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

Capitalization Policy

Estimated Useful Life

Land Buildings and Improvements Equipment Library Collections

$ 5,000

NIA

$ 5,000

75 years

$ 5,000 6 to 40 years

$ 5,000

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 of invested in capital assets, net of related debt.

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TROUP-HARRIS-COWETA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT"G"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Restricted net assets - These represent resources for which the Library is legally or contractually obligated to spend resources for endowment and permanent funds in accordance with restrictions imposed by external third parties.
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 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 ofinsurance, or by collateral. The aggregate ofthe face value ofsuch 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,
(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

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TROUP-HARRIS-COWETA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "G"

Note 3: DEPOSITS AND INVESTMENTS

(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, 2007, the bank balances were $1,250,592. The amounts of the total 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, or 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

0

3

1,150,592

Total

$ 1,150.592

CATEGORIZATION OF INVESTMENTS At June 30, 2007, the fair value of the Library's total investments was $206,733 and this entire amount consisted of common stock which was insured or registered, by 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:

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TROUP-HARRIS-COWETA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT"G"

Note 4: CAPITAL ASSETS

Balances July 1, 2006

Increases

Decreases

Balances June 30. 2007

Governmental Activities

Capital Assets, Not Being Depreciated:

Land

$ 100,000 $

0 $

0 $ 100.000

Capital Assets Being Depreciated Buildings and Improvements Equipment Library Collections

$ 2,894,208 105,168
2,454,342 $

161,251 $

$ 58,133

2,894,208 105,168
2,557,460

Less Accumulated Depreciation for: Buildings and Improvements Equipment Library Collections

385,893 75,221
1.102,573

38,590 5,579
80 419

58,133

424,483 80,800
1,124,859

Total Capital Assets, Being Depreciated, Net $ 3,890,031 $

36,663 $

0 $ 3,926,694

Governmental Activity Capital Assets - Net $ 31290,031 $

36,663 $

Q $ 4,026,624

Current year depreciation expense by function is as follows:

Public Services

Note 5: RISK MANAGEMENT

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

The Library has obtained commercial insurance for risk 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.

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

Each Employee

$

15,000

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TROUP-HARRIS-COWETA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "G"

Note 6: LONG-TERM DEBT

COMPENSATED ABSENCES Compensated absences represent obligations of the 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:

Governmental Funds
Compensated Absences (1)

Balance July 1, 2006

$

51,628

Additions Annual Leave Earned

41,750

Deductions Annual Leave Utilized

38,965

Balance June 30, 2007

$==-54=4=-1~3

(1) The portion of Compensated Absences due within one year has been determined to be immaterial to the basic financial statements.

Note 7: SUBSEQUENT EVENTS

As of July 1, 2007, the Coweta County Library is no longer part of the Troup-Harris-Coweta Regional Library System. Coweta County Library has recognized Eastside Library Board as the official county Library Board.

Note 8: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all librarians and clerical personnel employed by regional and county libraries are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

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TROUP-HARRIS-COWETA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2007

EXHIBIT "G"

Note 8: RETIREMENT PLANS

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%

$

54,773

$

50,891

$

56,450

Note 9: AFFILIATED LIBRARIES DISCLOSURE

The Newnan/Coweta Public Library, Grantville Public Library and Senoia Area Library are legally separate, tax exempt organizations who participate in shared activities with the Troup-Harris-Coweta Regional Library. These affiliated libraries do not meet the criteria for reporting as either a component unit or related entity of the Troup-Harris-Coweta Regional Library.

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TROUP-HARRIS-COWETA REGIONAL LIBRARY

SCHEDULE "1"

GENERAL FUND

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL

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 Capital Outlay
Total Expenditures
Net Change in Fund Balance
Fund Balance - Beginning

NONAPPROPRIATED BUDGETS

ORIGINAL

FINAL

ACTUAL AMOUNTS

$

644,143 $

644,143 $

643,822

687,044

687,044

687,044

37,804

62,058

62,058

65,559

88,610

102,735

$

1,393,245 $

1,393,245 $

1,625,574

$

550,191 $

550,191 $

648,615

173,596

173,596

165,893

396,665

396,665

418,929

155,171

155,171

122,278

4,750

4,750

27,676

112,872

112,872

$

1,393,245 $

1,393,245 $

1,383,391

$

0 $

0 $

242,183

0

0

1,123,180

Fund Balance - Ending

$======0 $======0 $====1,=36=5=,3=6=3

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 -

TROUP-HARRIS-COWETA REGIONAL LIBRARY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2007

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Board of Regents of the University System of Georgia Office of Public Library Services Salaries Library Materials Maintenance and Operations

GOVERNMENTAL FUND TYPE GENERAL FUND

$

412,983

140,622

133 439

$ ======68=7=0=4=4

See notes to the basic financial statements.

- 18 -

TROUP-HARRIS-COWETA REGIONAL LIBRARY SCHEDULE OF FEDERAL REVENUE YEAR ENDED JUNE 30, 2007

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 Vacation Reading Program

GOVERNMENTAL FUND TYPE GENERAL FUND
$ ====3=7=8=0=4

See notes to the basic financial statements.

- 19 -

TROUP-HARRIS-COWETA REGIONAL LIBRARY SCHEDULE OF LOCAL REVENUE YEAR ENDED JUNE 30, 2007

SCHEDULE "4"

LOCAL SOURCES Boards of Education Harris County Troup County City Government LaGrange County Governments Boards of Commissioners Harris County Troup County

GOVERNMENTAL FUND TYPE GENERAL FUND

$

3,490

11,454

40,000

138,872 450 006

$ ====6=4=3=,8=2=2

See notes to the basic financial statements.

- 20 -

NAME
Adams, Kathryn Ann Allen, Margaret T. Bass, James E. Collier, Leslie J. Cosper, Horace Eugene Cotton, Lawanda Ann Davis, Ellen A. Delano, Y'Vonnie D. Gay, Patricia L. Godwin, Megan M. Gottshall, Jane C. Guida, Patricia A. Hester, Charlotte D. Huff, Pamela W. Jones, Genia M. Marino, Debra J. Ostendorf, JoEllen Paulk, Lexie A. Phillips, Brenda C. Smith, Brenda Dianne Smith, Tammy S. Stevens, Dottie F. Wells, Sandra M. Wheeler, Betty C. Wiggins, Jennifer P. Williams, Jackie D. Williams, Tonya Walker Zens, Clare P.
Totals per Report

TROUP-HARRIS-COWETA REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 2007

SCHEDULE "5"

TITLE CATEGORY
Bookmobile Clerical Branch Manager Clerical Part-Time Custodian Clerical Clerical Part-Time Library Assistant Children's Librarian Library Assistant Branch Manager Clerical Bookkeeper Reference Librarian Shelver Part-Time Clerical Director Clerical Part-Time Clerical Part-Time Clerical Clerical Part-Time Library Assistant Associate Clerical Custodian Technical Services Part-Time Clerical Clerical Branch Director

SALARIES

TRAVEL

$

21,117 $

154

24,884

106

63,184

320

6,661

8,017

17,139

424

9,107

64,462

905

17,139

14,772

7,524

29,120

567

60,597

190

4,564

41,850

454

86,245

5,102

3,786

6,992

21,128

4,268

4,872

8,906

7,087

8,310

20,488

57

25,461

278

65 062

$

653 166 $ ======8 1=3=3

See notes to the basic financial statements.

- 21 -

SECTION II FINDINGS AND QUESTIONED COSTS

TROUP-HARRIS-COWETA REGIONAL LIBRARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2007
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported.