GA AgOD oRI R4-.{, V5 " IQQS-(1lo AUDITREPORT UNCLEREMUSREGIONAL LffiRARY MADISON, GEORGIA YEAR ENDEDJUNE 30, 1996 STATE OF GEORGIA DEPARTMENT OF AUDITS 254 WASHINGTON STREET ATLANTA. GEORGIA 30334 UNCLE REMUS REGIONAL LIBRARY - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS ANDSUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE EXHIBITS GENERAL PURPOSE FINANCIAL STATEMENTS COMBINED STATEMENTS - OVERVIEW A COMBINED BALANCE SHEET ALL FUND TYPES ANDACCOUNT GROUP 2 B COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES 3 C STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET ANDACTUAL GENERAL ANDSPECIAL REVENUE FUNDS 4 D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 5 ADDITIONAL FINANCIAL INFORMATION COMBINING ANDINDNIDUAL FUND STATEMENTS SPECIAL REVENUE FUND E COMBINING BALANCE SHEET 14 F COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 15 G FIDUCIARY FUND TYPE STATEMENT OF CHANGES INASSETS AND LIABILITIES AGENCY FUND 16 SCHEDULES 1 SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE 17 2 CASH AND CASH EQUIVALENTS 18 3 ACCOUNTS RECEIVABLE 19 SCHEDULE OF REVENUE 4 STATE 20 5 OTHER 21 UNCLE REMUS REGIONAL LffiRARY - TABLE OF CONTENTS - SECTION I FINANCIAL ADDITIONAL FINANCIAL INFORMATION SCHEDULES SCHEDULE OF EXPENDITURES BY OBJECT 6 GOVERNMENTAL FUND TYPES 22 7 LOTTERY PROGRAMS 23 8 MEMBERSHIP OF LffiRARY BOARD 24 9 SCHEDULE OF SALARIES ANDTRAVEL 27 SECTIONll COMPLIANCE COMPLIANCE REPORT BASED ON ANAUDIT OF THEFINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS SINGLE AUDIT REPORT ON COMPLIANCE WITH THEGENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS SECTION III INTERNAL CONTROL REPORT ONINTERNAL CONTROL STRUCTURE INACCORDANCE WITH GOVERNMENT AUDITING STANDARDS SINGLE AUDIT REPORT ON THEINTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS UNCLE REMUS REGIONAL LffiRARY - TABLE OF CONTENTS - SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS ANDIMPROPER OR QUESTIONED COSTS SECTION I FINANCIAL CLAUDE L. VICKERS STATEAUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 April 9, 1997 Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board of Education and Director and Members of the Uncle Remus Regional Library Board INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE Ladies and Gentlemen: We have audited the general purpose financial statements (ExhibitsA through D) of the Uncle Remus Regional Library, as of and for the year ended June 30, 1996, as listed in the table of contents. These financial statements are the responsibility of the Library's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and the standards for financial and compliance audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and the provisions of the Office of Management and Budget Circular A-128, "Audits of State and Local Governments". Those standards and OMB Circular A-128 requir:e that we plan and perform the audit to obtain reasonable assurance about whether the general purpose 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 opinion. As described in the notes to the general purpose financial statements, the Library's.financial statements have been prepared using a certain accounting practice and policy which, in our opinion, varies in some respects from generally accepted accounting principles. This variance is described as follows: * The general purpose financial statements of the Library did not contain a General Fixed Assets Account Group to account for property, equipment and inexhaustible collections and books owned by the Library which should be included to conform to generally accepted accounting principles. 96ARL-44 The aggregateeffects on the general purpose financial statements ofthis variance or omission have not been determined, but are believed to be material. In our opinion, except for the effects on the general purpose financial statements of the matter referred to in the third paragraph, the general purposefinancial statements presentfairly, in all material respects, the financial position ofthe UncleRemusRegional Library as ofJune 30, 1996, and the results ofits operations for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated April 9, 1997, on our consideration ofthe Library's internal control structure and a report dated April 9, 1997, on its compliance with laws and regulations. Our audit was conducted for the purpose offorming an opinion on the general purpose financial statements of the Uncle Remus Regional Library taken as a whole. The combining and individual fund statements (Exhibits E through G) and the financial schedules (Schedules 1 through 9 which includes the Schedule of Federal Financial Assistance), as listed in the tableofcontents, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the Uncle Remus Regional Library. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. A copy ofthis report has been filed as a permanent recordin 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, CLV:dt 96ARL-44 Claude L. Vickers State Auditor UNCLE REMUS REGIONAL LIBRARY - 1- The notes to the general purpose financial statements are an integral part of this statement. 2 UNCLE REMUS REGIONAL LIBRARY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30,1996 EXHIBIT-B- REVENUES State Funds Federal Funds Other Funds Total Revenues EXPENDITURES Current Program Services Technical Services Circulation Administration Maintenance and Operations Debt Service Principal Interest Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES Capital Leases Excess of Revenues and Other Financing Sources over (under) Expenditures FUND BALANCE JULY 1 GENERAL FUND SPECIAL REVENUE FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30,1996 JUNE 30,1995 $ 504,499,51 $ 547.29 714,814.45 $ 1,219,861.25 $ 11,100.00 $ 25,407.24 515,599.51 $ 25,954.53 714,814.45 480,220,31 28,447.15 674,329.21 36,507.24 $ 1,256,368.49 $ 1,182,996.67 $ 342,787.39 $ 214,471.03 18,091.27 500,326.73 105,046.77 8,343.13 1,585.31 $ 1,190,651,63 $ $ 29,209.62 $ 36,507.24 $ 379,294.63 $ 214,471.03 18,091.27 500,326.73 105,046.77 374,185.19 195,556.20 15,152.15 . 491,159.80 83,518.61 8,343.13 1,585.31 13,789.34 2,677.20 36,507.24 $ 1,227,158.87 $ 1,176,038.49 0.00 $ 29,209.62 $ 6,958.18 $ 29,209.62 $ 72,972.88 19,118.01 0.00 $ 0.00 29,209.62 $ 72,972.88 26,076.19 46,896.69 FUND BALANCE JUNE 30 $ 102,182.50 $ 0.00 $ 102,182.50 $ _ _.7;.;2;;;1,;9;;'7;"2;;;.';8';;8';;;' The notes to the general purpose financial statements are an integral part of this statement. -3- UNCLE REMUS REGIONAL LIBRARY STATEMENTOF REVENUES, EXPENDITURES AND CHANGESIN FUND BALANCES BUDGETAND ACTUAL GENERALAND SPECIALREVENUE FUNDS YEAR ENDED JUNE 30,1996 EXHIBIT-C REVENUES StateFunds Federal Funds Other Funds Total Revenues EXPENDITURES Current Program Services Technical Services Circulation Administration Maintenance and Operations Debt Service Principal Interest Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES(USES) OtherSources other Uses Total other Financing Sources (Uses) Excess of Revenues and other Financing Sources over(under) Expenditures and other Financing Uses FUND BALANCEJULY 1. 1995 Adjustments GENERALFUND BUDGET ACTUAL $ 505,822,00 $ '504,499,51 547.29 681,067.54 714,814.45 $' 1,186,889.54 $ 1,219,861.25 $ 364,876,38 $ 342,787.39 212,823.00 214,471.03 23,600.00 18,091.27 557,405.04 500,326.73 101,158.00 105,046.n 8,343.13 1,585.31 $ 1,259,862.42 $ 1,190,651.63 $ -72,972.88 $ 29,209.62 $ 247,768.00 -247,768.00 $ 0.00 $ -72,972.88 $ 83,742.82 -10,769.94 29,209.62 72,972.88 FUND BALANCEJUNE 30,1996 $ 0.00 $ 102,182.50 SPECIAL REVENUE FUND BUDGET ACTUAL $ 10,000,00 $ 11,100.00 24,000.00 25,407.24 $ 34,000.00 $ 36,50724 $ 35,954.41 $ 36,507.24 $ 35,954.41 $ 36,507.24 $ -1,954.41 $ 0.00 $ -1,954.41 $ 0.00 -3,989.24 0.00 $ -5,943.65 $ =="""""=0=.0=0 The notesto the general purpose financial statements are an integral partof this statement. -4- UNCLEREMUS REGIONAL LffiRARY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30.1996 Note"1: SlJMl...1ARY OF SIGNIFICANT ACCOUNTING POLICIES TheUncle Remus Regional Library operates pursuant to Official Codeof Georgia Annotated Sections 20-5-40 through 20-5-59 to provide public library services with costs shared by participating local governmental agencies and grants from the State of Georgia. Withthe exception ofthe departure from generally accepted accounting principles disclosed in these notes, the financial statements ofthe Library have been preparedin conformity with generally accepted accounting principles as applied to governmental units and unless otherwise disclosed in these notes, the financial statements present all fund types and account groups of the Library. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reportingprinciples. The more significant ofthe Library's accounting policies are described below. REPORTING ENTITY In evaluating howto define the governmental unitfor financial reporting purposes, management has considered the criteria setforth in GASB Codification of Governmental Accounting and Financial Reporting Standards, Section 2100, "Defining the Financial Reporting Entity". Based upon the application of the above criteria, the UncleRemusRegional Library is determined to be a joint venture. The Library Board consists of 36 members; 6 members appointed by the Greene County Library Board, 6 members appointed bythe Hancock County Library Board, 6 members appointed bythe Jasper CountyLibrary Board, .6 members appointed by the Morgan CountyLibrary Board, 6 members appointed by the Putnam County Library Board and6 members appointed by the Walton County Library Board. The Board is without authority to determine the amount of its funding, except by submission of budget requests to local governmental units from which the Library receives support and to the State of Georgiafor State and Federal funding. Membership in the Library andparticipation inlibrary services is at the discretion of each participating governmental agency. The Board has the power to designate management, the power to retain unreserved fund balances oflocal funds for continued operations and is the lowest level of oversight responsibility for the Library's operations. The Uncle Remus Regional Library is located in Madison, Georgia, and serves Greene, Hancock, Jasper, Morgan, Putnam and Walton Counties. FUND ACCOUNTING TheLibrary usesfunds andan account group to reporton its financial position and the results ofits operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certaingovernmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources. - 5- UNCLE REMUS REGIONAL LffiRARY EXHIBIT "0" NOTES TO THE GENERAL PURPOSE FINANCIAL STATE:MENTS JUNE 30. 1996 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General Fixed Assets, which includes the Library's inexhaustible collections and books, are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Library. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types. The general purpose financial statements account for all State, Federal and Other funds under control ofthe Library, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows: GOVERNMENTAL FUND TYPES - used to account for all or most of the Library's general activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources of the Library except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a Library. SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. The primary type of special revenue fund consists of proceeds received from State and Federal sources to accomplish specific objectives and are required to be accounted for separately. FIDUCIARY FUND TYPE - the trust fund used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. This fund includes: AGENCY FUND - the fund used to account for assets held for individuals. ACCOUNT GROUP GENERAL LONG-TERM DEBT ACCOUNT GROUP - used to account for material capital lease obligations not appropriately accounted for and recorded in other fund types. BASIS OF ACCOUNTING The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities are generally included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources. - 6- UNCLEREMUS REGIONAL LffiRARY EXHIBIT "D" NOTES TO THE GENERAL PURPOSEFINANCIAL STATEMENTS JUNE 30, 1996 ." Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Liabilities which are expectedto be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group. Agency funds are purely custodial in nature and do not involve measurement of results of operations. Governmental funds are accounted for usingthe modified accrual basis of accounting under which: Revenues are recognized when susceptible to accrual (i.e., whenthey becomeboth measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soonenough thereafter to be used to payliabilities of the current period. Those revenues considered susceptible to accrual are intergovernmental grants and investment income. Expenditures are generally recognized whenthe related fund liability is incurred. Agency funds are accounted for using the modified accrual basis of accounting in recognizing assets and liabilities. BUDGET The Uncle Remus Regional Library's budget is a complete financial plan for the Library's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared byfund, function and object. The legal level of budget controlwas established by the Library at the object level. The budget for governmental funds was prepared in accordance with generally accepted accounting principles. Thebudget process begins when the Library's administration prepares a tentative aggregated budget for the Board's approval. After approval of this tentativebudget by the Board, copies are sent to all local funding agencies. After funding approval is received from all local funding agencies, the Board makes revisions as necessary and adopts the budget. The budget is then submitted to the GeorgiaDepartment of Education, Division of Public Library Services as a part of the Library's annual application for State aid. The Board may increase or decrease the budget at anytime during the year. All unexpended budget authority lapses at fiscal year end. CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cashequivalents consist of deposits (including N.O.W. accounts) in authorized financial institutions. Georgia Lawsauthorize the Library to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations. - 7- UNCLE REMUS REGIONAL LmRARY EXIllBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1996 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INVESTMENTS HELD BY TRUSTEE Investments held by trustee consist of contributions from employees who have elected to participate in the Library's deferred compensation plan. See Note 6 - Deferred Compensation Plan RECEIVABLES Receivablesconsist ofgrant reimbursements due from State or other grantors for expenditures made but not reimbursed, allotted funds from participating local governments, and other receivables disclosed from informationavailable. Receivablesare recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. INTERFUND TRANSACTIONS The Library has the following type of interfund transactions: Reimbursements of expenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed. MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitatefinancial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles, nor is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Note 2: DEPOSITS 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 of the face value of such surety bond and the market value of securitiespledged shall be equal to not less than 110 percent of the public funds being secured after the deduction of the amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts. - 8- UNCLE REMUS REGIONAL LffiRARY EXlllBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1996 Note"2: DEPOSITS AND INVESTMENTS Acceptable security for deposits consists of anyone of or any combination ofthe 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 ofthe State of Georgia, (4) Bonds, bills, notes, certificatesofindebtedness or other obligations ofthe counties or municipalities of the State of Georgia, (5) Bonds ofany public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose, (6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and (7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligationsissued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. CATEGORIZATION OF DEPOSITS At June 30, 1996, the bank balances were $96,749.04. The bank balances were entirely covered by Federal depository insurance. CATEGORIZATION OF INVESTMENTS At June 30, 1996, the carrying amount of the Library's total investments was $12,977.14 and this entire amount is categorized as Unclassified - Deferred Compensation Plan pooled investments. The market value of these investments was $12,977.14. Note 3: RISK MANAGEMENT The Library is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; natural disaster; and unemployment compensation. - 9- UNCLE REMUS REGIONAL LffiRARY EXIDBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1996 Note 3: RISK MANAGEMENT The Library has obtained commercial insurance for risk of loss associated with torts, assets, errors or omissions and job related illness or injuries to employees. The Library has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Library's insurance coverage in any ofthe past three years. The Library has elected to self-insure for alllosses related to natural disaster. The Library has not experienced any losses related to natural disaster in the past three years. . The Library is self-insured with regard to unemployment compensation claims. The Library accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. The Library has not experienced any unemployment compensation claims during the last two years. Note 4: GENERALLONG-TERMDEBT CAPITAL LEASES The Uncle Remus Regional Library has entered into various lease agreements as lessee for office equipment and automobiles. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value ofthe future minimum lease payments as ofthe date of their inception. The changes in General Long-Term Debt during the fiscal year ended June 30, 1996, were as follows: Capital Leases Balance July 1, 1995 Deductions Balance June 30, 1996 $ 20,079.03 8.343.13 $ 11.735.90 - 10 - UNCLE REMUS REGIONAL LffiRARY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1996 ." Note 4: GENERAL LONG-TERM DEBT At June 30, 1996, payments due, by fiscal year which includes principal and interest for these items, are as follows: Fiscal Year Ended June 30 Capital Leases 1997 1998 1999 $ 5,860.77 4,730.88 2,759.58 Total Principal and Interest $ 13,351.23 Deduct: Imputed Interest 1.615.33 Net Present Value ofFuture Minimum Lease Payments $ 11.73590 Note 5: CONTINGENT LIABILITIES Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Library believes that such disallowances, if any, will be immaterial to its overall financial position. Note 6: DEFERRED COMPENSATION PLAN The Library offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, availableto allLibrary employees, permits them to defer a portion of their salary until future years. The deferred compensation is not availableto employees until termination, retirement, death or unforeseeable emergency. All amounts ofcompensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property or rights are (until paid or made available to the employee or other beneficiary) solely the property and rights of the Library (without being restricted to the provisions ofbenefits under the plan), subject only to the claims ofthe Library's general creditors. Participants' rights under the plan are equal to those ofgeneral creditors ofthe Library in an amount equal to the fair market value ofthe deferred account for each participant. It is the opinion ofthe Library that the Library has no liability for losses under the plan but does have the duty of due care that would be required of an ordinary prudent investor. The Library believes it is unlikely that it ~ill use the assets to satisfy the claims of general creditors in the future. - 11 - UNCLE REMUS REGIONAL LffiRARY EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1996 Note 6: DEFERRED COMPENSATION PLAN Investments are managed by the plan's trustee, The Variable Annuity Life Insurance Company. Under this plan, participants select from an investment option, or combination ofinvestment options, determined by the Library. Note 7: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION All full-time librarians and clerical personnel employed by regional and county libraries are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer public employee retirement system (PERS). TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. A member is eligible for service retirement after 30 years of service, regardless of age, or after 10 years ofservice and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number ofyears of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death. Retirement benefits also include disability and death benefits. A disabled member or surviving spouse is entitled to receive annuallyan amount equal to the member'sservice retirement benefit or disability retirement, whichever is greater. The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service retirement allowance or a disability retirement allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of 10 years of service) and compensation up to the time of disability or death. Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employee contributions occurs, but the member's contributions are refunded with interest. The Library's payroll for employeescovered by TRS for the year ended June 30, 1996, was $564,108.69; total payroll was $622,068.48. TRS CONTRffiUTIONS REQUIRED AND MADE Employees of the Library who are covered by TRS are required by State statute to pay 5% of their gross earnings to TRS. The Library makes monthly employer contributions to TRS at rates adopted by the ~ Board ofTrustees in accordance with State statute and as advised by their independent actuary. At June 30, 1996, the TRS Library employer contribution rate was 11.81%. The interest rate assumption (rate ofretum on investments) was 7.50%. - 12 - , UNCLE REMUS REGIONAL LffiRARY , . EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1996 Note" 7: RETIREMENT PLANS Total contributions made during fiscal year 1996 amounted to $94,826.97, of which $66,621.22 was made by the Library and $28,205.75 was made by employees. These contributions represented 11.81% .(Library) and 5% (employees) of covered payroll. TRS FUNDING STATUS AND PROGRESS The amount of the total pension benefit obligation is based on a standardized measurement established by Statement NO.5 ofthe GovernmentalAccounting Standards Board (GASB) that, with some exceptions, must be used by a PERS. The standardized measurement is the actuarial present value of credited projected benefits. This valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date, and is adjusted for the effects of projected salary increases. A standardized measure of the pension benefit obligation was adopted by the GASB to enable readers of PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefitswhen due, and make comparisons among other PERS and among other employers. Total unfunded pension benefit obligation ofTRS as of June 30, 1995, was as follows: Total pension benefit obligation $ 17,442,607,000.00 Net assets available for benefits, at cost 15,857,066,000.00 Unfunded pension benefit obligation $ 1.585,541.000 00 The measurement ofthe total pension benefit obligation is based on an actuarial valuation as of June 30, 1995. Net assets available to pay pension benefits were valued as of the same date. TRS does not make separate measurements of assets and pension benefit obligation for individual employers. Total contributions from all employers to TRS for fiscal year ended June 30, 1996, were $607,275,000.00. The Library's contribution for the year ended June 30, 1996, of $66,621.22 was actuarially determined and represented .0109% of total contributions made by all participating employers. Ten year historical trend information is presented in the 1996 TRS Component Unit Financial Report. This information is useful in assessing TRS's accumulation of sufficient assets to pay pension benefits as they become due. Note 8: SURETY BONDS The Library Director, Mr. Steve Schaefer, is bonded in the amount of $50,000.00 with the Cincinnati Insurance Company, Cincinnati" Ohio, their Bond No. 8603213, on which premium was paid through September 20, 1996. - 13 - UNCLE REMUS REGIONAL LIBRARY COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30.1996 ASSETS Cash and Cash Equivalents Accounts Receivable LOTTERY PROGRAMS LIBRARY SERVICES AND CONSTRUCTION ACT TITLE I PUBLIC LIBRARY SERVICES TOTALS JUNE 30,1996 JUNE 30,1995 $ 0.00 $- 0.00 $ 0.00 - . . ; . . - - - - $------==..:;.2:,.3.9;6..;4;8.. 2,396.48 3,989.24 $ 0.00 $ 2,396.48 $ 2,396.48 $ _ _~ 3,9~ 89.2_ 4 LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Total Uabilities FUND EQUITY Fund Balances Unreserved Undesignated $ Total Liabilities and Fund Equity $ $ $ 0.00 0.00 $ 2,396.48 $ 2,396.48 $ 2,396.48 $ 2,396.48 $ 3,738.54 250.70 3,989.24 0.00 0.00 0.00 2,396.48 $ 2,396.48 $ _ _.3...,.9...89.2_4 .. See notes to the general purpose financial statements. -14 - UNCLE REMUS REGIONAL LIBRARY COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUND YEAR ENDED JUNE 30.1996 EXHIBIT -F" REVENUES State Funds Federal Funds Total Revenues EXPENDITURES Current Program Services Administration Total Expenditures Excess of Revenues over (under) Expenditures FUND BALANCE JULY 1 LOTTERY PROGRAMS LIBRARY SERVICES AND CONSTRUCTION ACT TITLE I PUBLIC LIBRARY SERVICES TOTALS YEAR ENDED JUNE 30, 1996 JUNE 30,1995 s , 11,100.00 $ $ 11,100.00 $ $ 25,407.24 25,407.24 $ s 11,100.00 25,407.24 36,507.24 $ , 3,264.91 28,242.08 31,506.99 s 11,100.00 $ $ 11,100.00 $ $ 0.00 $ 0.00 s 25,407.24 s 25,407.24 0.00 $ 0.00 s 36,507.24 36,507.24 $ 0.00 $ 0.00 28,242.08 3,264.91 31,506.99 0.00 0.00 FUND BALANCE JUNE 30 s s 0.00 0.00 $ 0.00 $ 0.00 ..,;,;,;~ See notes to the general purpose financial statements. -15 - UNCLE REMUS REGIONAL LIBRARY STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUND TYPE AGENCY FUND YEAR ENDED JUNE 30, 1996 LIABILITIES Deferred Compensation Plan $ 5.214.55 $ 7.762,59 $ 0.00 $ 12..9...n..,.1..4... See notesto the general purpose financial statements. -16- UNCLE REMUS REGIONAL LIBRARY SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE YEAR ENDED JUNE 30, 1996 SCHEDULE "1" '\; FUNDING AGENCY PROGRAM/GRANT Education, U. S, Department of Through Georgia Department of Education Ubrary Services and Construction Act Title I - Public Ubrary Services Basic Grant 1996 Grant Title III - Interlibrary Cooperation and Resource Sharing 1996 Contract Total Federal Financial Assistance CFDA NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD 84.034 $ 25,407.24 $ 84.035 547.29 25,407.24 (1) $ 25,954.53 $ ==::=:!2:=5,=4=07=.2=4= The Ubrary had no major programs as defined by the Single Audit Act of 1984. (1) Expenditures on this program do not require reporting of expenditures. . See notes to the general purpose financial statements. -17- INTERESTBEARINGACCOUNT Bank of Madison, Madison, Georgia N.O.W. Account (3.00%) UNCLE REMUS REGIONALLIBRARY CASH AND CASH EQUIVALENTS JUNE 30, 1996 SCHEDULE "2" $ 50,808.98 See notesto the general purposefinancial statements. - 18 - UNCLE REMUS REGIONAL LIBRARY ACCOUNTS RECEIVABLE JUNE 30,1996 SCHEDULE "3" City Governments Local Support Eatonton Greensboro Loganville Monticello Siloam White Plains County Governments Boards of Commissioners Local Support Greene Jasper Putnam Education, Georgia Department of Federal Program Library Services and Construction Act Title I - Public Library Services GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND TOTAL $ 3,750.00 210.00 7,423.00 2,470.00 666.00 666.00 $ 3,750.00 210.00 7,423.00 2,470.00 666.00 666.00 19,735.00 9,878.00 16,713.50 19,735.00 9,878.00 16,713.50 - - - - - - - $------"'~..:2;,.3;9.6..4.;8.~ 2,396.48 $ 61,511.50 $ 2,396.48 $ ===::::a=63=,9=0=7.=98= See notes to the general purpose financial statements. - 19 - UNCLE REMUS REGIONAL LIBRARY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1996 SCHEDULE "4" AGENCY/FUNDING GRANTS Education, Georgia Department of Public Ubraries Salaries and Travel Library Materials Maintenance and Operations Lottery Programs Distant Learning Technology Installation GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE FUND FUND TOTAL $ 380,349.51 65,875.00 58,275.00 $ $ 380,349.51 65,875.00 58,275.00 1,100.00 10,000.00 1,100.00 10,000.00 $ 504,499.51 $ 11,100.00 $ 515,599.51 See notes to the general purpose financial statements. - 20 - UNCLE REMUS REGIONAL LIBRARY SCHEDULE OF OTHER REVENUE YEAR ENDED JUNE 30, 1996 LOCAL SOURCES City Governments Eatonton Greensboro Loganville Monroe Monticello Siloam Social Circle Sparta Union Point White Plains Woodville County Boards of Education Greene Hancock Jasper Putnam Walton County Governments Boards of Commissioners Greene Hancock Jasper Morgan Putnam Walton OTHER SOURCES Donations Fines and Fees Interest Earned Lost and Damaged Books Photocopy Sales Other See notes to the general purpose financial statements. - 21 - SCHEDULE "5" GOVERNMENTAL FUND TYPE GENERAL FUND $ 15,000.00 14,721.22 28,786.91 60,000.00 29,640.00 1,166.00 5,473.00 25,910.00 8,453.50 1,166,00 1,749.00 20,000.00 25,355.00 29,634.00 33,427.00 20,000.00 36,100.00 28,350.00 29,634.00 99,999.96 33,427.00 90,000.00 40,306.77 26,225.75 2,422.44 2,359.34 3,569,40 1,938.16 $ = = = 7=1.4..,.8...1=4=.45= UNCLE REMUS REGIONAL LIBRARY SCHEDULE OF EXPENDITURES BY OBJECT GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 1996 SCHEDULE"6" EXPENDITURES Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical Services Property Services Supplies Ubrary Books and Materials Utilities Communications and Insurance Dues and Fees Other Expenditures Nonoperating Costs Principal and Interest Equipment GENERAL FUND SPECIAL REVENUE FUND TOTAL $ 622,068.48 213,587.83 10,928.05 6,482.4.6 32,344.12 30,167.92 110,465.30 $ 70,152.28 58,766.07 9,250.78 72427 $ 25,407.24 622,068.48 213,587.83 10,928.05 6,482.46 32,344.12 30,167.92 135,872.54 70,152.28 58,766.07 9;250.78 724.27 9,928.44 15,785.63 11,100.00 9,928.44 26,885.63 Total Expenditures $ 1,190,651.63 $ 36,507.24 $ 1,227,158.87 See notesto the generalpurpose financial statements. - 22 - EXPENDITURES Nonoperating Costs Equipment UNCLE REMUS REGIONAL LIBRARY SCHEDULE OF EXPENDITURES BY OBJECT LOTTERY PROGRAMS YEAR ENDED JUNE 30, 1996 SCHEDULE '7" DISTANT LEARNING TECHNOLOGY INSTALLATION TOTAL $ 1,100,00 $ 10,000,00 $==~11~,10~0,0~0 See notes to the general purpose financial statements. - 23 - BOARD MEMBER ADDRESS Mr. William Riley,Chairman (*) 108 Aspenwood Court,S.E. Emomon,~gia31024 Mr. Bill Bacon(*) P. O. Box 1197 Loganville, Georgia 30249 Ms. Carol Bramlett (*) 1420 SibleySchool Road Greensboro, Georgia 30642 Ms. Nan Burks (*) 515 Branham Circle SocialCircle, Georgia 30279 Ms. Anita Carson 1720 Veasy Road Greensboro, Georgia 30642 Ms. GladysClayton (*) Route3, Box 110 Sparta, Georgia 31087 Ms. Cathryn Cook (*) 353 East BroadStreet Sparta, Georgia 31087 Ms. GraceCook (*) 1331 CooksCove Woodville, Georgia 30669 Ms. Joy Denham (*) 104 ThunderTrail, N.E. Eatonton, Georgia 31024 Ms. LindaErvin (*) 304 West MarionStreet Eatonton, Georgia 31024 Mr. Lewis Gossette (*) P.O. Box 658 Greensboro, Georgia 30642 Mr. Marvin Gude(*) P.O. Box 28 Monticello, Georgia 31064 Ms. Pam Hendrix(*) P.O. Box 816 Madison, Georgia 30650 Ms. Catherine Hill (*) Route1, Box 183 Sparta. Georgia 31087 UNCLE REMUS REGIONALLIBRARY MEMBERSHIPOF LIBRARYBOARD YEAR ENDED JUNE 30. 1996 24 - SCHEDULE"8" BOARD MEMBER ADI3RESS Ms. Susan Holmes(*) 692 College Street Monticello, Georgia 31064 Ms. Cordelia Jackson (*) 837 Powerton Avenue Sparta, Georgia 31087 Ms. Ann Jones (*) P.O. Box 408 Loganville, Georgia 30249 Ms. Maxie G. Jones (*) 1018 Pearl Street Madison, Georgia 30650 Ms. Annette Kinsey (*) 308 Crestview Monroe, Georgia 30655 Mr. Ralph Martin (*) 1251 Old WoodvilleRoad Union Point, Georgia 30699 Ms. Margaret McElheney(*) P.O. Box 404 Monticello, Georgia 31064 Ms. Imogene McHugh (*) 954 Williams Street Madison, Georgia 30650 Ms. Decie Miller (*) 310 Walton Street Monroe, Georgia 30655 Ms. Awanna Norton(*) 510 Myrtle Street Sparta, Georgia 31087 Ms. Cynthia Oslund 405 West BroadStreet Greensboro, Georgia 30642 Ms. Carolyn Parker(*) 1470 Dogwood Drive Greensboro, Georgia 30642 Ms. Daisy Reese(*) 904 Milledgeville Highway Devereux, Georgia 31087 Ms. Janie Reid (*) 103 BeachAvenue Eatonton, Georgia 31024 UNCLE REMUS REGIONALLIBRARY MEMBERSHIPOF LIBRARYBOARD YEAR ENDED JUNE 30.1996 - 25 - SCHEDULE "8" UNCLE REMUS REGIONAL LIBRARY MEMBERSHIP OF LIBRARY BOARD YEAR ENDED JUNE 30.1996 BOARD MEMBER ADDRESS Mr. Andrew Thompson (*) P.O. Box 224 Monticello, Georgia 31064 Ms. Norma Thornton C*) 312 North East Street Greensboro, Georgia 30642 Mr. Thomas Vogel C*) Route 1, Box 485 Monticello, Georgia 31064 Mr. Ruben Walker C*) 3541 Seven Islands Road Madison, Georgia 30650 Ms. Lilla Welch (*) 1211 Heidi Trail Buckhead, Georgia 30625 Ms. Shelby Welch C*) P.O. Box 675 Social Circle, Georgia 30279 Mr. Marshall Williams 613 Foster Street Madison, Georgia 30650 Ms. Angie Willis C*) P.O. Box 415 Monticello, Georgia 31064 Note: As of June 30, 1996, three vacant positions had not been filled. C*) Denotes Board Members Serving as of June 30, 1996 SCHEDULE -8" See notes to the general purpose financial statements. - 26 - UNCLE REMUS REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 1996 SCHEDULE "9" PER"SONNEL Alexander, Anderson, Arseneau, Barrio, Brinson, Burston, Cooper, Craft, Crawford, Crook, Dennis, Duffy, Fitch, Gornto, Green, Green, Greer, Hamby, Harrison, Hillman, Hallman, Kadhum, Lundy, Mallory, McCelhenney, McGlaughlen, McGuire, Meeks, Mix, Paul, Rary, Reese, Richardson, Rigsby, Rigsby, Schaefer, Shuman, Smoker, Stephens, Summers, Taylor, Thomas, Upham, Mary S. ShirleyW. Michael Elena J. Martha I. Edith MaryG. Joan T. Carolyn Donna S. Patricia Mary Shannon Christopher Stephen L. Louvine MurialA. Elizabeth Donna E. Elizabeth J. Mamie L. Cathy R. AnaJ. Annie R. Earleen D. Pamela D. Janis R. Marion Karen K. Vivian J. Suzanne B. KathleenW. Dorethea B. Jackie Denise James H. Margaret Steve Robin L. Doris B. Mary RuthA. Shirley L. Tamela M. LoisN. POSITION SALARIES TRAVEL Branch Library Manager $ Maintenance Librarian Librarian Branch Library Substitute Branch Library Substitute Processing Clerk Branch Library Associate Administrative Assistant Branch Library Associate Branch Library Manager Librarian Associate Bookkeeper MaintenancelDelivery Maintenance Processing Clerk Branch Library Manager Branch librarY Associate Branch Library Manager Branch Library Associate Branch Library Associate Librarian Branch Library Associate Clerk Branch Library Associate Branch Library Manager Branch Library Associate Branch Library Manager Branch Library Associate Librarian Branch Library Associate Substitute Library Associate Branch Library Manager Delivery Branch Library Associate Director Acquisitions Associate Branch Library SubstiMe Custodian Branch Library Substitute Branch Library Manager Librarian Librarian - 27- 10,311.01 $ 599.85 31,424.00 40,204.80 5,790.49 1,339.18 11,599.92 3,271.00 26,076.00 9,321.99 14,492.58 31,777.70 22,000,08 13,500.00 4,927.08 322.50 9,578.52 148.99 11,115.00 2,994.62 743.75 41,303.20 4,423.75 297.50 256.03 9,327.00 7,541.66 16,009.00 9,597.39 44,434.84 9,630.30 1,531.29 11,493.38 504.50 7,293.75 57,100.20 6,971.59 772.83 1,934.40 1,984.37 21,396.10 40,204.80 53,828.20 16.38 1,148.97 389.38 19.32 71.15 136.00 313.25 48.88 17.01 1,085.32 233.76 26.00 1,041.73 106.80 3,769.47 73.45 1,214.80 920.14 UNCLE REMUS REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 1996 SCHEDULE "9" PERSONNEL Walton, Ward, Williams, Williams, Wojick, Sara J. Gloria Ann Ann Unda J. Laura A. Total Cash Basis Accrual June 30, 1995 POSITION Branch Ubrary Associate Interlibrary Loan Associate Branch Ubrary Associate Branch Ubrary Manager Branch Ubrary Associate SALARIES $ 2,173.55 14,000.04 $ 4,033,75 . 2,161,01 324.99 $ 622,068.48 $ TRAVEL 313.25 10,945.06 -17.01 $ 622,068.48 $ ==:::i::::::1:!0:=,9=2=8=.=0=5= See notes to the general purpose financial statements. - 28- SECTIONll COMPLIANCE CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 April 9, 1997 Honorable Zell Miller, Governor Members ofthe General Assembly Members of the State Board of Education and Director and Members of the Uncle Remus Regional Library Board COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Ladies and Gentlemen: We have audited the general purpose financial statements of the Uncle Remus Regional Library as of and for the year ended June 30, 1996, and have issued our report thereon dated April 9, 1997. This report was qualified for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. Compliance with laws, regulations, contracts, and grants applicable to Uncle Remus Regional Library is the responsibility of the Library's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of the Library's compliancewith certain provisions oflaws, regulations, contracts, and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported herein under Government Auditing Standards. 96CRL-10 This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record. " Respectfully submitted, CLV:dt 96CRL-IO Claude L. Vickers State Auditor CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 April 9, 1997 Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board ofEducation and Director and Members of the Uncle Remus Regional Library Board SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REOUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS Ladies and Gentlemen: We have audited the general purpose financial statements of the Uncle Remus Regional Library as of and for the year ended June 30, 1996, and have issued our report thereon dated April 9, 1997. This report was qualified for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We have applied procedures to test the Uncle Remus Regional Library's compliance with the following requirements applicable to each of its Federal financial assistance programs, which are listed in the Schedule ofFederal Financial Assistance, for the year ended June 30, 1996: (I) Political Activity (5) Allowable Costs/Cost Principles (2) Civil Rights (6) Audit Follow-Up/Resolution (3) Cash Management (7) Administrative Requirements (4) Federal Financial Reports Our procedures were limited to the applicable procedures described in the Office of Management and Budget's "Compliance Supplement for Single Audits of State and Local Governments" and other additional procedures as deemed necessary. Our procedures were substantially less in scope than an audit, the objective of which is the expression ofan opinion on the Uncle Remus Regional Library's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion. 96CRL-40 With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph ofthis report. With respect to items not tested, nothing came to our attention that caused us to believe that Uncle Remus Regional Library had not complied, in all material respects, with those requirements. This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record. Respectfully submitted, CLV:dt 96CRL-40 Claude L. Vickers State Auditor CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 April 9, 1997 Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board ofEducation and Director and Members of the Uncle Remus Regional Library Board SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REOUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS Ladies and Gentlemen: We have audited the general purpose financial statements of the Uncle Remus Regional Library as of and for the year ended June 30, 1996, and have issued our report thereon dated April 9, 1997. This report was qualified for a departure from generallyaccepted accounting principles, as identified in the auditor's report on the general purpose financial statements. In connection with our audit ofthe fiscal year 1996 general purpose financial statements of the Uncle Remus Regional Library and with our consideration of the Library's control structure used to administer Federal financial assistance programs, as required by Office of Management and Budget (OMB) Circular A-128, "Audits of State and Local Governments", we selected certain transactions applicable to certain nonmajor Federal financial assistance programs for the year ended June 30, 1996. As required by OMB Circular A-128, we have performed auditing procedures on the selected transactions to test compliance with the requirements governmg: Types of Services Allowed or Unallowed Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Uncle Remus Regional Library's compliance with these requirements. Accordingly, we do not express such an opinion. 96CRL-120 With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph. With respect to items not tested, nothing came to our attention that caused us to believe that the Uncle Remus Regional Library had not complied, in all material respects, with those requirements. This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record. Respectfully submitted, ~ Claude L. Vickers State Auditor CLV:dt 96CRL-120 SECTION ill INTERNAL CONTROL CLAUDE L. VICKERS STATE AUOIlOA (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street. S.W., Suite 214 Atlanta, Georgia 30334-8400 April 9, 1997 Honorable Zell Miller, Governor Members ofthe General Assembly Members ofthe State Board ofEducation and Director and Members of the Uncle Remus Regional Library Board REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Ladies and Gentlemen: We have audited the general purpose financial statements of the Uncle Remus Regional Library as of and for the year ended June 30, 1996, and have issued our report thereon dated April 9, 1997. This report was qualifiedfor a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with generally accepted auditing standards, and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. The management of the Uncle Remus Regional Library is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation ofgeneral purpose financial statements in accordance with generally accepted accounting principles. Because ofinherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. 96ICL-3 In planning andperforming our audit of the general purpose financial statements of the Uncle RemusRegional Library for the yearended June30, 1996, we obtained an understanding of the internal control structure. With respect to the internal control structure, we obtained an understanding ofthe design of relevant policies and procedures andwhether theyhave beenplaced in operation, andwe assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opiruon. We noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified PublicAccountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operationofthe internal control structure that, in our judgment, could adversely affectthe entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements. As described inthe Schedule ofFindings andImproper or Questioned Costs, reportable conditions were noted in the following control categories: (1) Accounting Controls (Overall) (2) General Fixed Assets A material weakness is a reportable condition in which the design or operation of one or more ofthe specific internal control structure elements doesnot reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purposefinancial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that the reportable conditions disclosed above are also considered to be material weaknesses. These conditions were considered in determining the nature, timing, and extent of the procedures to be performed in our audit of the Uncle RemusRegional Library's financial statements and this report does not affect our report thereon dated April 9, 1997. 96ICL-3 This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record. Respectfully submitted, CLV:dt 96ICL-3 Claude L. Vickers State Auditor CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 April 9, 1997 Honorable Zell Miller, Governor Members of the General Assembly Members ofthe State Board ofEducation and Director and Members of the Uncle Remus Regional Library Board SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS Ladies and Gentlemen: We have audited the general purpose financial statements of the Uncle Remus Regional Library Board as of and for the year ended June 30, 1996, and have issued our report thereon dated April 9, 1997. This report was qualified for a departure from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of Office of Management and Budget (OMB) Circular A-128, "Audits of State and Local Governments". Those standards and OMB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. In planning and performing our audit for the year ended June 30, 1996, we considered the Library's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the Library's general purpose financial statements and to report on the internal control structure in accordance with OMB Circular A-128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to Federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated April 9, 1997. The management of the Uncle Remus Regional Library is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The 96ICL-15 objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that Federal financial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors, irregularities, or instances of noncompliance may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. For the purpose of this report, we have classified the significant internal control structure policies and procedures used in administering Federal financial assistance programs in the following control categories: GENERAL REQUIREMENTS SPECIFIC REQUIREMENTS (1) Political Activity (2) Civil Rights (3) Cash Management (1) Types of Services Allowed or Unallowed (2) Applicable Special Tests and Provisions (4) Federal Financial Reports (5) Allowable Costs/Cost Principles (6) Audit Follow-UpIResolution (7) Administrative Requirements For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and determined whether they have been placed in operation, and we assessed control risk. During the year ended June 30, 1996, the Uncle Remus Regional Library had no major Federal financial assistance programs and expended 98% of its total Federal financial assistance under the following nonmajor Federal financial assistance program: Library Services and Construction Act - Title I Public Library Services We performed tests of controls, as required by OMB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with general requirements and specific requirements as 96ICL-15 described above that are applicable to the aforementioned nonmajor program. Our procedureswere less in scope than would be necessary to render an opinion on theseinternal control structure policies and procedures. Accordingly, we do not express such an opinion. We noted a certainmatter involving the internal control structure and its operationthat we considerto be a reportable conditionunder standards established by the American Institute of Certified PublicAccountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the Library's ability to administer Federal financial assistance programs in accordance with applicable laws and regulations. As described in the Schedule ofFindings andImproper or Questioned Costs, a reportable condition was noted in the following control category: Administrative Requirements A material weakness is a reportable condition in whichthe design or operation of one or more of the internal control structure elements doesnot reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a Federal financial assistance program mayoccur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control structure policies and procedures used in administering 'Federal financial assistance would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that the reportable condition described above is also considered to be a material weakness. This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantoragencies and should not be usedfor anyotherpurpose. This restriction is not intended to limit the distribution of this report whichis a matter of public record. Respectfully submitted, CLV:dt 96ICL-15 Claude L. Vickers State Auditor SECTION IV FINDINGS ANDIMPROPER OR QUESTIONED COSTS UNCLE REMUS REGIONAL LmRARY SCHEDULE OF FINDINGS AND IMPROPER OR OUESTIONED COSTS YEAR ENDED JUNE 30. 1996 PRI"OR YEAR/CURRENT YEAR GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 7042-93-01 The audit report for the year ended June 30, 1995, noted that the management of the Uncle Remus Regional Library had chosen not to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. In the year under review, the Library did not establish a General Fixed Assets Account Group within the formal accounting records. This condition results in the general purpose financial statements of the Library being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Library to establishaccounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiaryrecords should include an inventory ofland, buildings, equipment and inexhaustible collections and books owned by the Library and should include, but may not be limited to, date acquired, acquisition cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group. ACCOUNTING CONTROLS (OVERALL) - Financial Statements ADMINISTRATIVE REQUIREMENTS - Federal Financial Assistance Inadequate Separation ofDuties Reportable Condition - Material Weakness Audit Control Number 7042-94-01 The audit report for the year ended June 30, 1995, stated that the Library did not provide for adequate separation of employee duties in the performance ofaccounting functions and related procedures for all funds. For the year under review, our audit noted no improvementregarding adequate separation of employee duties. This deficiency was a result of management's decision to limit the number of administrative staff made responsible for accounting functions. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree of internal control with existing staff Note: All Federal financial assistance programs listed in the Schedule of Federal Financial Assistance, Schedule "1" of this report are affected by this finding. Note: The Uncle Remus Regional Library was provided an opportunity to include pertinent comments from the Library's management concerning these audit findings, conclusions and recommendations. The Library has elected not to provide comments for inclusion in this report.