Audit report, Uncle Remus Regional Library, Madison, Georgia, year ended June 30, 1998

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AUDITREPORT UNCLEREMUS REGIONAL LmRARY
MADISON, GEORGIA YEARENDED JUNE 30, 1998
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

UNCLE REMUS REGIONAL LmRARY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXIDBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUNDTYPES ANDACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUNDBALANCES

ALL GOVERNMENTAL FUNDTYPES

4

C,

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUNDBALANCES-BUDGET ANDACTUAL

GENERAL AND SPECIAL REVENUE FUNDS

5

D NOTESTO THE GENERAL PURPOSE FINANCIAL STATEMENTS

6

ADDmONAL FINANCIAL INFORMATION

INDIVIDUAL FUND STATEMENT

E

FIDUCIARY FUNDTYPES

STATEMENT OF CHANGES IN ASSETS ANDLIABillTIES

AGENCY FUND

14

SCHEDULES

1 SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

15

SCHEDULE OF REVENUE

2

STATE

16

3

FEDERAL

17

4

LOCAL

18

5 SCHEDULE OF SALARIES AND TRAVEL

19

SECTIONll 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
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
July 28, 1999

Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe State Board of Technical and Adult 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
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements of the Uncle Remus Regional Library, as of and for the year ended June 30, 1998, as listed in the table of contents. These general purpose financial statements are the responsibility of the Uncle Remus Regional Library's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose 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.
The aggregate effects on the general purpose financial statements ofthis variance or omission have not been determined, but are believed to be material.

98ARL-42A

In our opinion, except for the effects on the general purpose financial statements of the matter referred to in the third paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Uncle Remus Regional Library as of June 30, 1998, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.

The year 2000 supplementary information on Schedule "1" is not a required part of the basic financial

statements but is supplementary information required by the Governmental Accounting Standards Board. We

have applied certain limited procedures, which consisted principally of inquiries ofmanagement regarding

the methods ofmeasurement and presentation ofthe supplementary information. However we did not audit

the information and do not express an opinion on it. In addition, we do not provide assurance that Uncle

Remus Regional Library is or will become year 2000 compliant, that the Library's year 2000 remediation

efforts will be successful in whole or in part, or that parties with which Uncle Remus Regional Library does

business are or will become year 2000 compliant.

.

Our audit was performed for the purpose offorming an opinion on the general purpose financial statements of the Uncle Remus Regional Library taken as a whole. The accompanying individual fund statement (Exhibit E) and the financial schedules (Schedules 2 through 5), as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in our opinion, except for the effects of the matter discussed in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose 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, asprovided for by Official Code of Georgia Annotated Section 50-6-24.

Respectfully submitted,
I().~
Russell W. Hinton
State Auditor

RWH:jb 98ARL-42A

UNCLE REMUS REGIONAL LmRARY

UNCLE REMUS REGIONAL LIBRARY COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30,1998

ASSETS Cash and Cash Equivalents Investments Held by Trustee Accounts Receivable Amount to be Provided in Future Years
For Payment of Capital Lease Agreements

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

$ 213,490.81 $

0.00

67,421.93

Total Assets

$ 280,912.74 $=======0.=00=

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Expired Grant Balances Payable Deferred Compensation Plan Capital Lease Agreements
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Program Unreserved Undesignated
Total Fund Equity

$ 194,069.64 $ 194,069.64

$

86,843.10 $

0.00

$

86,843.10 $

0.00

Total Liabilities and Fund Equity

$ 280,912.74 $=====0=.00=

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

EXHIBIT "A"

FIDUCIARY FUND TYPE
AGENCY FUND

$

34,387.54

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS (Memorandum Only) JUNE 30, 1998 JUNE 30,1997

$

213,490.81 $

36,647.58

34,387.54

22,442.01

67,421.93

57,536.53

$

2,299.39

2,299.39

6,575.46

$

34,387.54 $

2,299.39 $

317,599.67 $ ======1=2=3=,=2=0=1==.5=8==

$

194,069.64 $

28,547.54

56.35

$

34,387.54

34,387.54

22,442.01

$

2,299.39

2,299.39

6,575.46

$

34,387.54 $

2,299.39 $

230,756.57 $

57,621.36

$----"""""""..;..0;.;0.0...
$ - - - - = =0.-00-

$

472.49

$--86=,84~3.1~0

65,107.73

$

= = = - 86,843.10 $ _ _65,580.22

$

34,387.54 $

2,299.39 $

317,599.67 $====1=23=,=20=1=.5=8=

-3-

UNCLE REMUS REGIONAL LIBRARY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30.1998

EXHIBIT wBw

FUND BALANCE JUNE 30

$

86.843.10 $

0.00 $

86,843.10 $

65-.,:5-..8;,0;,.;2;;2;_

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

UNCLE REMUS REGIONAL LIBRARY COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 1998

EXHIBITC

GENERAL FUND

BUDGET

ACTUAL

REVENUES

State Funds Federal Funds Local Funds Other Funds

$ 613,136.00 $ 647,183.50

707,424.00 27,340.00

700,235.01 70,712.77

Total Revenues

$ 1,347,900.00 $ 1,418,131.28

EXPENDITURES

Current Program Services Technical Services Circulation Administration Maintenance and Operations
Debt Service Principal Interest

$ 476,261,22 $ 350,024.53

192,006.00

260,213.65

36,073.00

35,980,83

603,406.00

631,130.54

97,492.00

114,315.52

4,276.07 454.77

Total Expenditures

$ 1,405,238.22 $ 1,396,395.91

Excess of Revenues over (under) Expenditures

$

-57,338.22 $

21,735.37

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses

$ 247,776.00
-247,776.00

Total Other Financing Sources (Uses)

$

0.00

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $

-57,338,22 $

21,735.37

FUND BALANCE JULY 1. 1997

65,107.73

65,107.73

Adjustments

-894,77

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 7,500.00 $

12,700.00

$ 7,500.00 $

12;700.00

$ 1,572.49 $
7,500.00 4,100.00

1,572.49
7,500.00 4,100,00

$ 13,172.49 $ $ -5,672.49 $

13,172.49 -472.49

$ -5,672.49 $
528.84

-472,49 472,49

FUND BALANCE JUNE 30, 1998

$

6,874.74 $_.....8.6..,.8..4..3...1..0..

$ -5,143.65 $

..0.....0..0...

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

UNCLE REMUS REGIONAL LmRARY

EXHIBIT liD"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Uncle Remus Regional Library (Library) operates pursuant to Official Code of Georgia Annotated Sections 20-5-40 through 20-5-59 to providepublic libraryservices with costs sharedby participating local governmental agencies and grants from the State of Georgia With the exception of the departure from generally accepted accounting principles disclosed in thesenotes, the financial statements ofthe Library have beenprepared in conformity with generally accepted accounting principles as appliedto governmental.units and unless otherwise disclosedin these notes, the financial statements present all fund types and account groups ofthe Library.
The Library Board consists of 36 members; 6 members appointed by the GreeneCounty LibraryBoard, 6 members appointed by the Hancock County Library Board, 6 members appointed by the Jasper .County Library Board, 6 members appointed by the Morgan CountyLibraryBoard, 6 members appointed by the PutnamCountyLibrary Boardand 6 members appointed by the Walton CountyLibraryBoard. The Library Boardis withoutauthority to determine the amountof its funding, exceptby submission ofbudget requests to localgovernmental units fromwhichthe Library receives support andto the Stateof Georgia for State and Federal funding. Membership in the Libraryand participation in libraryservices is at the discretionof each participating governmental agency. The LibraryBoardhas the power to designate management, the power to retain unreservedfund balancesoflocal and other funds for continued operations and is the lowest level of oversight responsibility for the Library's operations. The Uncle Remus Regional Library is therefore determined to be a joint venture.
FUND ACCOUNTING
The Library uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certaingovernmental functions or activities.
A fund is a separate accounting entitywith a self-balancing set of accounts. An accountgroup is a financial reporting device designedto provide accountability for certainassets and liabilities that are not recordedin the funds because they do not directlyaffectexpendable available financial resources.
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 presentlymaintained by the Library. To conform to generally accepted accounting principles, a General Fixed AssetsAccount Group shouldbe maintained for reporting the cost of assets acquired by governmental fund types.
The general purposefinancial statements account for all State, Federal, Localand Other funds under control ofthe Library, in compliance with generally accepted accounting principles applicable to governmental units, unlessotherwise disclosed in thesenotes. Funds andthe account group presented in thisreportare as follows:
-6-

UNCLEREMUS REGIONAL LmRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES
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 requiredto be accounted for in anotherfund. Thesetransactions relateto resources obtained and used for servicesprovided by a Library.
SPECIAL REVENUE FUND- the fundused to account for the proceeds of specificrevenue sourcesthat are legally restricted to expenditures for specified purposes. The primarytype of special revenue fund consists of proceeds receivedfrom State and Federal sources to accomplish specificobjectives and are required to be accounted for separately.
FIDUCIARY FUND TYPE - the trust fundusedto account for assets held by a government unit in a trustee capacity or as an agentfor individuals, privateorganizations, othergovernment units and/orotherfunds. This fund includes:
AGENCY FUND - the fund used to account for assets held for other funds, governments, or individuals.
ACCOUNT GROUP
GENERAL LONG-TERM DEBTACCOUNT GROUP - usedto account for capital leaseobligations not appropriately accountedfor and recorded in other fund types.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment appliedto a fund is determined by its measurement focus. All governmental funds are accounted for usinga currentfinancial resources measurement focus. With this measurement focus, only current assets and currentliabilities 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 currentassets. Their reported fund balance is considereda measure ofavailablespendable resources.
Liabilities which are expectedto be financed from available spendable resources are reported as liabilities in the governmental funds. Otherliabilities, whicharenot expected to be financed from availablespendable resources, are reported in the General Long-Term Debt AccountGroup.
Agencyfunds are purely custodialin nature and do not involvemeasurement ofresults of operations.
Governmental funds are accounted for using the modifiedaccrual basis of accounting under which:

-7-

UNCLE REMUS REGIONAL LffiRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES
Revenues are recognized.when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined. and "available" means collectible within the current period or soon enough thereafter to be used. to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are intergovernmental grants and investment income.
Expenditures are generally recognized when the related 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 ofthe budget at any level. The budget for all governmental funds is prepared.by fund, function and object. The legal level ofbudget control was established. by the Library at the object level. The budget for governmental funds was prepared in accordance with generally accepted accounting principles.
The budget process begins when the Library's administration prepares a tentative aggregated. budget for the Board's approval. After approval ofthis tentative budget by the Board, copies are sent to all local 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 Department of Technical and Adult Education as a part ofthe Library's annual application for State aid The Board may increase or decrease the budget at any time during the year. All unexpended.budget authority lapses at fiscal year end.
CASH AND CASH EQUIVALENTS
COMPOSmON OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Library to deposit its funds in one or more solvent banks, insured.Federal savings and loan associations, or insured. State chartered building and loan associations.
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

-8-

UNCLE REMUS REGIONAL LmRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES
RECEIVABLES
Receivables consistofgrantreimbursements due on Federal, Stateor othergrants for expenditures made but not reimbursed, allotted funds from participating local governments, and other receivables disclosed from information available. Receivables arerecorded wheneitherthe assetor revenue recognition criteriahas been met. Receivables recorded on the general purpose financial statements do not include any amountswhich would necessitatethe need for an allowance for uncollectible receivables.
INTERFUND TRANSACTIONS
The Libraryhas the following type ofinterfundtransactions:
Reimbursements ofexpenditures initially madefrom a fundthat are properly applicable to anotherfund 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 arecaptioned "Memorandum Only" to indicate that they arepresentedonlyto facilitate financial analysis. Datain thesecolumns do not presentfinancial 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 ofthis data.
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS
Official Code ofGeorgiaAnnotated(OCGA) Section45-8-12 providesthat there shall not be on deposit at any time in any depositoryfor a time longerthan ten days a sum of moneywhich has not been securedby suretybond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such suretybond andthe marketvalueofsecurities pledged shall be equal to not lessthan 110 percentofthe publicfunds being secured afterthe deduction ofthe amount ofdepositinsurance. OCGASection 45-8-11 provides an officer holdingpublic fundsmay, in his discretion, waivethe requirement for security in the case of operatingfunds placed in demand deposit checkingaccounts.
Acceptable securityfor deposits consistsofanyone ofor any combination ofthe following:
(1) Suretybond signedby a suretycompany dulyqualified and authorized to transactbusiness within the State ofGeorgia,
(2) Insuranceon accounts providedby the FederalDepositInsurance Corporation,

-9-

UNCLE REMUS REGIONAL LffiRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 2: DEPOSITS AND INVESTMENTS

(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations ofthe 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 ofany public authority created by the laws ofthe State ofGeorgia, 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 ofindebtedness, or other obligations ofa subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association,

CATEGORIZATION OF DEPOSITS At June 30, 1998, the bank balances were $228,564,96, The amounts ofthe total bank balances are classified into three categories of credit risk:

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

The Library's deposits are classified by risk category at June 30, 1998, as follows:

Risk Categmy

Bank Balance

1

$ 100,000.00

2

128,564.96

3

0.00

Total

$ 228,564.96

-10 -

UNCLE REMUS REGIONAL LffiRARY

EXHIBIT "D"

NOTES TO THE GENERALPURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 2: DEPOSITS AND INVESTMENTS

CATEGORIZATION OF INVESTMENTS At June 30, 1998, the fair value of the Library'stotal investments was $34,387.54 and this entire amount is categorized as Unclassified - Deferred Compensation Plan pooled investments.

Note 3: RISK MANAGEMENT

The Libraryis exposedto variousrisks ofloss relatedto torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; natural disaster; and unemployment compensation.

The Library has obtained commercial insurance for risk of loss associated with torts, assets, errors or omissionsandjob related illnessor injuriesto employees. However,the error or omissionspolicy excludes coverage for sexual harassment and discrimination. The Libraryhas neither significantlyreduced coverage for these risks nor incurred losses (settlements) which exceededthe Library's insurance coverage in any of the past three years.

The Libraryhas electedto self-insure for all lossesrelatedto naturaldisaster. TheLibraryhas 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 claimswithin the General Fund with expenditure and liabilitybeing reported when it is probable that a loss has occurred, and the amountofthat loss can be reasonably estimated. The Libraryhas not experienced any unemploymentcompensation claims during the last two years.

The Library has purchased a surety bond to provide additionalinsurancecoverageas follows:

Position Covered

Amount

Library Director

$ 50,000.00

Note 4: GENERAL LONG-TERM DEBT

CAPITAL LEASES The UncleRemus RegionalLibraryhas enteredinto a leaseagreement as lesseefor an automobile. This lease agreement qualifies as a capital lease for accounting purposes and, therefore, have been recorded at the present value ofthe future minimum lease paymentsas of the date of their inception.

The changes in General Long-TermDebt during the fiscal year ended June 30,1998, were as follows:

-11-

UNCLE REMUS REGIONAL LmRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

ruNE 30, 1998

Note 4: GENERAL LONG-TERM DEBT

Balance July 1, 1997

Capital Leases
$ 6,575.46

Deductions Payments
. Balance June 30, 1998

4,276.07 $ 2,299.39

At June 30, 1998, payments due, by fiscal year which includes principal and interest for these items, are as follows:

Fiscal Year Ended June 30
1999 Principal and Interest
Deduct: Imputed Interest

Capital Leases
$ 2,365.42
66.03

Net Present Value ofFuture Minimum Lease Payments

$ 2,299.39

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, available to all Library employees, permits them to defer a portion oftheir salary until future years, The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency,

All amounts of compensation 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 ofthe Library (without being restricted to the provisions of benefits under the plan), subject only to the claims of the Library's general creditors, Participants' rights under the plan are equal to those of general creditors of the Library in an amount equal to the fair market value ofthe deferred account for each participant.

-12 -

UNCLE REMUS REGIONAL LIBRARY

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 6: DEFERRED COMPENSATION PLAN

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 will use the assets to satisfy the claims of general creditors in the future.

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 Substantially alllibrarlans and clerical personnel employed by regional and county libraries are covered by the Teachers Retirement System ofGeorgia (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 ofAudits and Accounts.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Library who are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. The Library makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year
1998 1997 1996

Percentage Contributed
100% 100% 100%

Required Contribution
s 73,603.63 s 73,754.99 s 66,621.22

-13 -

UNCLE REMUS REGIONAL LIBRARY STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUND YEAR ENDED JUNE30,1998

EXHIBIT -E"

LIABILITIES Deferred Compensation Plan

$

22,442.01 $

11,990.53 $

45.00 $ _ _.....3..4..,.3..8.;,7;".,,5;;;4;;,..,

See notesto the generalpurpose financial statements.

-14-

UNCLE REMUS REGIONAL LmRARY

SCHEDULE "1"

SCHEDULE OF REQUIRED SUPPLEMENTARY lNFORMATION

YEAR 2000 DISCLOSURES

YEAR ENDED JUNE 30. 1998

At June 30, 1998, the Uncle Remus Regional Libraryhad no outstandingcontractual commitments for the purpose of making computer systems and other electronicequipmentyear 2000 compliant. The year 2000 issue is the result ofshortcomings in many electronic data processing systems and other equipment that make operations beyond year 1999 troublesome. The year 2000 issue is of primary concern for the Library's financial accounting system. The following stageshavebeenidentified as necessary to implement a year2000 compliant systems.
Awareness Stage - Encompasses establishing a budgetand project plan for dealing with the year.2000 issue.
Assessment Stage - The actual process ofidentifying all of its systems and individual components of the systems to check for compliance.
Remediation Stage - When changes are made to systems and equipment.
"
Validationffesting Stage - The process of ensuringthat the changesmade to systems and equipment will produce a year 2000 compliant system.
It will be necessary for the Library to progress through all four of these stages for each computer and/or electronic system,not alreadyyear2000 compliant, in orderto assurethat these systems will not be adversely affected. As ofJune 30, 1998,the financial accounting systemwas determined to be at the Awareness Stage.
The Library's financial accounting software (GENESIS) and hardware (Wang VS) is owned by the State (GeorgiaDepartmentofEducation). Thesesystems havebeendetermined to be criticalto the Library's ability to successfully conductoperations. As ofJune 30, 1998, the State had not contractedfor the remediation of either the Wang VS operating system or the GENESIS accounting software. In the subsequent period, the Georgia Department of Education remediated the Wang VS operating system and the updated operating systemwas installed at all GENESIS sites as ofDecember9, 1998. The GeorgiaDepartment ofEducation has remediated the GENESIS software and conductedtests .at nine pilot sites. The remediated GENESIS software has been provided to all libraries currentlyutilizing the GENESIS accounting software.

See notes to the general purpose financial statements. -15 -

UNCLE REMUS REGIONAL LIBRARY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30.1998
AGENCY/FUNDING
GRANTS Technical and Adult Education, Georgia Department of Public Libraries Salaries . Travel Library Materials Regular Governor's Reading Incentive Program Maintenance and Operation

SCHEDULE "2"

GOVERNMENTAL FUND TYPE GENERAL FUND

$

377,781.50

9,530.00

71,299.00 124,874.00
63,699.00

$

647,183.50

See notes to the general purpose financial statements. -16-

UNCLE REMUS REGIONAL LIBRARY SCHEDULE OF FEDERAL REVENUE
YEAR ENDED JUNE 30. 1998
AGENCY/FUNDING GRANT Education, U. S. Department of Through GeorgiaDepartment of Technical and Adult Education LibraryServices and Construction Act TItle I - Public LibraryServices

SCHEDULE "3"
GOVERNMENTAL FUND TYPE SPECIAL REVENUE FUND
12,700.00

See notes to the general purpose financial statements. -17 -

UNCLE REMUS REGIONAL LIBRARY SCHEDULE OF LOCAL REVENUE
YEAR ENDED JUNE 30, 1998
Local Sources City Governments Eatonton Greensboro Loganville Monroe Monticello Siloam Social Circle Sparta Union Point Woodville County Boards of Education Greene Hancock Jasper Putnam Walton County Governments Boards of Commissioners Greene Hancock Jasper Morgan Putnam Walton

SCHEDULE n4n

GOVERNMENTAL FUND TYPE GENERAL FUND

$

15,000,00

16,018,28

38,114,92

70,000,00

26,691,63

1,250,00

5,500,00

28,640,14

10,214,00

2,092,00

21,450.00 29,679.00 33,034.00 39,320.00 10,000.00

36,100.00 27,000,00 33,034,00 107,000.04 37,747,00 112,350,00

$

700,235,01

See notes to the general purpose financial statements,
-18-

UNCLE REMUS REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30,1998

SCHEDULE "5"

NAME

TITLE CATEGORY

Alexander, Allen, Andrews, Brinson, Burston, Cannon, Cooper, Craft, Crawford, Crook, Dennis, Eidson, Fitch, Gornto, Green, Greer, Gurley, Hallman, Harrison, Hillman, Jessup, Joslyn, Kadhum, Lewis, Lundy, May, McCafferty, McElhenney, McGlauchlen, McGuire, Meeks,
Mix,
Mullins, Paul, Rary, Reese, Richardson, Rigsby, Rigsby, Rogers, Schaefer, Scoggins, Shuman, Stevens, Summers,

Mary Sue Linda Rossandra Martha Edith Ellen Mary Joan Carolyn Donna Patricia Gladys Christopher Steven Louvine Beth Natalie Cathy Elizabeth Mamie Dorothy Mauriel AnaJ Laurie Annie Charles Sharon Pam Janis Marian Karen Nita Timothy Suzanne Kathleen Dorethea B Jackie James H Peggy Cheryl SteveW Ellen D Robin Mary Ruth

Branch Manager Branch Associate Branch Associate Approved Substitute Custodian Tech Services Senior Librarian Technical Services Associate Branch Associate Administrative Assistant Branch Associate Branch Manager Branch Associate Bookkeeper Delivery Services Associate Custodian Branch Manager Approved Substitute Approved Substitute Branch Manager Branch Associate Branch Associate Approved Substitute Reference Ser Senior Librarian Approved Substitute Branch Associate ComputerlTech Ser Senior Lib Branch Associate Approved Substitute Technical Services Associate Branch Associate Branch Manager Branch Associate Custodian Assistant Director Branch Associate Branch Library Clerk Branch Manager Custodian/Delivery Branch Associate Library Development Senior Lib Director Approved Substitute AcqlTech Services Associate Custodian Branch Associate

See notes to the general prurpose financial statements.

,.19 -

SALARIES

$

11,720.81

2,320.51

3,825.18

1,346.68

1,473.96

3,021.82

12,789.00

1,464.75

28,770.96 $

10,449.27

17,015.02

3,564.00

25,480.08

16,380.00

5,474.04

13,481.79

1,526.99

1,104.17

13,644.50

2,564.71

4,564.01

63.10

47,271.00

50.00

5,265.60

43,402.92

2,369.07

181.13

11,000.04

7,076.27

18,318.20

12,107.85

3,585.00

50,580.00

11,621.32

183.15

16,116.00

195.00

8,527.35

24,367.20

63,635.04 .

1,072.33

9,594.00

2,121.80

2,975.19

TRAVEL
133.75 74.10 283.75 14.50 142.00
79.05 1,196.27
205.00 73.38 87.00
427.85 5,895.99

UNCLE REMUS REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 1998

SCHEDULE "5"

NAME

Taylor, Thomas, Upham, Walton, Ward, West, Whetsone, Williams, Williamson,

Shirley Tamela LoisN SaraJo Gloria Penny Dianne M Ann Elizabeth

Total Cash Basis

Accrual
June 30,1997

TITLE CATEGORY
Branch Manager Adult/Special Ser Senior Lib Tech Services Senior Librarian Branch Associate Special Services Associate Approved SUbstitute Branch Associate Branch Associate Approved Substitute

SALARIES

$

22,732.70 $

45,999.00

60,438.96

278.95

16,750.08

1,485.38

304,19

4,529.07

2,245.43

$ 678,424,57 $

TRAVEL
96.90 127.50 1,213.41 40.00
10,090.45

-852.72

Totals per Report

$ 678,424.57 $ =======..9.:,!:2i=3=7=,=7=3=

See notes to the general prurpose financial statements.
-20-

SECTION II FINDINGS AND QUESTIONED COSTS

UNCLEREMUS REGIONAL LIDRARY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1998
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain GeneralFixed Assets AccountGroup Finding ControlNumber: 6752-93-03
The auditreport for the year endedJune 30, 1997, noted that the management ofthe Uncle Remus Regional Libraryhad chosen not to maintain a system-wide General Fixed Assets AccountGroup within the formal accounting records as required by generally accepted accounting principles. In the year under review, the Library did not establish a General FixedAssets Account Group withinthe 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 shouldbe takenby the Library to establish accounting controls andprocedures toprovide formaintenance ofa General FixedAssetsAccount Group. These subsidiary records shouldinclude an inventory ofland, buildings, equipment and inexhaustible collections and books owned by the Libraryand shouldinclude, but may not be limited to, date acquired, acquisition cost, estimated replacement cost,location anddescription. Detailed records shouldbe maintained of all additions and deletionsto the General Fixed AssetsAccountGroup.