WEST GEORGIA REGIONAL LIBRARY CARROLLTON, GEORGIA REPORT ON AUDIT OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2004 STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS Russell W. Hinton State Auditor WEST GEORGIA REGIONAL LIBRARY - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION EXHIBITS BASIC FINANCIAL STATEMENTS DISTRICT-WIDE FINANCIAL STATEMENTS A STATEMENT OF NET ASSETS 3 B STATEMENT OF ACTIVITIES 4 FUND FINANCIAL STATEMENTS C BALANCE SHEET GOVERNMENTAL FUNDS 5 D RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS 6 E STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS 7 F RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES 8 G STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS 9 H NOTES TO THE BASIC FINANCIAL STATEMENTS 10 SCHEDULES REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND 19 SUPPLEMENTARY INFORMATION SCHEDULES OF REVENUE 2 STATE 20 3 FEDERAL 21 4 LOCAL 22 5 SCHEDULE OF SALARIES AND TRAVEL 23 WEST GEORGIA REGIONAL LIBRARY - TABLE OF CONTENTS - SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS SECTION I FINANCIAL Russell W. Hinton STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 October 5, 2005 Honorable Sonny Perdue, Governor Members of the General Assembly Members of the Board of Regents of the University System of Georgia and Director and Members of the West Georgia Regional Library Board INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION Ladies and Gentlemen: We have audited the accompanying financial statements of the governmental activities and each major fund (Exhibits A through H) of the West Georgia Regional Library as of and for the year ended June 30, 2004, which collectively comprise the Library's basic financial statements as listed in the table ofcontents. These financial statements are the responsibility ofthe West Georgia Regional Library's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position ofthe governmental activities and each major fund ofthe West Georgia Regional Library, as ofJune 30, 2004, and the respective changes in financial position thereoffor the year then ended in conformity with accounting principles generally accepted in the United States of America. 2004ARL-41 The West Georgia Regional Library has not presented Management's Discussion and Analysis that accounting principles generally accepted in the United States has determined is necessary to supplement, although not to be part of, the basic financial statements. As discussed in Note 2 to the basic financial statements, during fiscal year 2004, the Library completed a comprehensive inventory of its capital assets for inclusion in the basic financial statements. This change is in accordance with generally accepted accounting principles. As described in Note 2, the West Georgia Regional Library has implemented a new financial reporting model as required by provisions ofGovernmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, as of June 30, 2004. The Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on page 19 is not a required part of the basic financial statements but is supplementary information required by the accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods ofmeasurement and presentation ofthe required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the West Georgia Regional Library's basic financial statements. The accompanying supplementary information which consist ofSchedules 2 through 5, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe basic financial statements, and in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code of Georgia Annotated section 506-24. Respectfully submitted, RWH:as 2004ARL-41 ~i--atu!I~ Russell W. Hinton State Auditor WEST GEORGIA REGIONAL LIBRARY WEST GEORGIA REGIONAL LIBRARY STATEMENT OF NET ASSETS JUNE 30. 2004 ASSETS Cash and Cash Equivalents Investments Accounts Receivable, Net Local Capital Assets Land Buildings Equipment Library Collections Less: Accumulated Depreciation Total Assets NET ASSETS Invested in Capital Assets, Net of Related Debt Unrestricted Total Net Assets EXHIBIT"A" GOVERNMENTAL ACTIVITIES $ 508,602 2,757 15,971 127,811 1,656,085 84,146 7,816,991 -5,985,225 $ ===4=2=2=7=1,=38= $ 3,699,808 527 330 $===4=2=2=7=1=38= The notes to the basic financial statements are an integral part of this statement. -3- WEST GEORGIA REGIONAL LIBRARY STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30. 2004 EXHIBIT"B" EXPENSES PROGRAM REVENUES OPERATING CHARGES FOR GRANTS AND SERVICES CONTRIBUTIONS NET (EXPENSES) REVENUES AND CHANGES IN NET ASSETS GOVERNMENTAL ACTIVITIES Current Services Public Services Technical Services Support Services Maintenance and Operations Facilities Acquisition and Construction Total Governmental Activities $ 726,072 $ 130,211 636,079 86,506 13 506 1,592,374 $ 43,045 $ 43 045 $ 674,738 $ 231,597 -8,289 -130,211 -636,079 145,091 -13 506 906 335 $ ------=6...::42::,,.=_99=-4'- General Revenues Allotments from Participating Governments Investment Earnings Miscellaneous $ 711,497 1,373 59 329 Total General Revenues $ _ _ ____.:_7.:.;72:::...:,:19,,,9::.... Change in Net Assets $ 129,205 Net Assets - Beginning of Year 4 097 933 Net Assets - End of Year $ ====4.;;2..,27..i,;.13=8= The notes to the basic financial statements are an integral part of this statement. -4- ASSETS Cash and Cash Equivalents Investments Accounts Receivable, Net Local Government Total Assets FUND BALANCES Unreserved Undesignated Reported in: General Fund Capital Projects Total Fund Balances WEST GEORGIA REGIONAL LIBRARY BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30. 2004 EXHIBIT"C" GENERAL FUND CAPITAL PROJECTS TOTAL $ 502,897 $ 2,757 15 971 5,705 $ 508,602 2,757 15 971 $ 521,625 $ 5 705 $ ===5=27~,3=3=0 $ 521,625 $ - - - - - $ _ _ _--=5"-'7--=0-=-5 521,625 5 705 $ 521,625 $ 5 705 $===52=7=,3=3=0 The notes to the basic financial statements are an integral part of this statement. -5- WEST GEORGIA REGIONAL LIBRARY RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS JUNE 30. 2004 EXHIBIT"D" Total Fund Balances - Governmental Fund (Exhibit "C") Amounts reported for Governmental Activities in the Statement of Net Assets are different because: Capital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of: Land Buildings Equipment Library Collections Accumulated Depreciation Total Capital Assets Net Assets of Governmental Activities (Exhibit "A") $ 527,330 $ 127,811 1,656,085 84,146 7,816,991 -5,985,225 3,699,808 $ ====!4,=22=7=1' =3=8 The notes to the basic financial statements are an integral part of this statement. -6- WEST GEORGIA REGIONAL LIBRARY STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30. 2004 EXHIBIT"E" REVENUES Local Funds State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous Total Revenues EXPENDITURES Current Public Services Technical Services Support Services Maintenance and Operations Facilities Acquisition and Construction Total Expenditures Net Change in Fund Balance Fund Balance - Beginning Fund Balance - Ending GENERAL FUND CAPITAL PROJECTS TOTAL $ 700,732 $ 901,982 4,353 43,045 1,352 59,329 $ 1,710,793 $ 10,765 $ 21 10 786 $ 711,497 901,982 4,353 43,045 1,373 59,329 1,721,579 $ 743,924 130,211 636,079 86,506 $ $ 1,596,720 $ $ 114,073 $ 407,552 $ 13506 13 506 $ -2,720 $ 8425 743,924 130,211 636,079 86,506 13,506 1,610,226 111,353 415 977 $ 521,625 $ 5 705 $ ===52=7=,3=3=0 The notes to the basic financial statements are an integral part of this statement. -7- WEST GEORGIA REGIONAL LIBRARY RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2004 EXHIBIT"F" Total Net Change in Fund Balance - Governmental Fund (Exhibit "E") Amounts reported for Governmental Activities in the Statement of Activities are different because: Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are: Capital Outlay $ Depreciation Expense Excess of Depreciation Expense over Capital Outlay $ 520,888 -503,036 111,353 17 852 Change in Net Assets of Governmental Activities (Exhibit "B") $ ===12=9=,2=0=5 The notes to the basic financial statements are an integral part of this statement. -8- WEST GEORGIA REGIONAL LIBRARY STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30, 2004 ASSETS Cash and Cash Equivalents LIABILITIES Funds Held for Others EXHIBIT"G" AGENCY FUNDS $ ====17=7= $ =======1=77= The notes to the basic financial statements are an integral part of this statement. -9- WEST GEORGIA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30. 2004 EXHIBIT"H" Note 1: DESCRIPTION OF LIBRARY AND REPORTING ENTITY REPORTING ENTITY The West Georgia Regional Library (Library) operates pursuant to Official Code of Georgia Annotated Sections 20-5-40 through 20-5-59 to provide public library services with costs shared by participating local governmental agencies and grants from the State of Georgia. The Library Board consists of thirteen members; three members appointed by Carroll County Library Board, four members appointed by Douglas County Library Board, two members appointed by Haralson County Library Board, two members appointed by Heard County Library Board and two members appointed by Paulding County Library Board. The Library Board is without authority to determine the amount of its funding, except by submission of budget requests to local governmental units from which the Library receives support and to the State ofGeorgia for State and Federal flow through funding. Membership in the Library and participation in library services is at the discretion of each participating governmental agency. The Library Board has the power to designate management, the power to retain unreserved fund balances of local and other funds for continued operations and is the lowest level of oversight responsibility for the Library's operations. The West Georgia Regional Library is therefore determined to be a joint venture. Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The Library's basic financial statements are collectively comprised of the Library-wide financial statements, fund financial statements and notes to the basic financial statements ofthe West Georgia Regional Library. Library-wide Statements: The Statement ofNet Assets and the Statement ofActivities display information about the financial activities of the overall Library, except for fiduciary activities. Eliminations have been made to minimize the double counting ofinternal activities. Governmental activities generally are financed through intergovernmental revenues and other nonexchange transactions. The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the Library's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the Library related to the administration and support ofthe Library's programs, such as office and maintenance personnel and accounting) are not allocated to programs. - 10 - WEST GEORGIA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT"H" Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Program revenues include (a) charges paid by the recipients ofgoods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues are presented as general revenues. Fund Financial Statements: The fund financial statements provide information about the Library's funds, including fiduciary funds. Eliminations have been made to minimize the double counting ofinternal activities. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds. The Library reports the following major governmental funds: General Fund is the Library's primary operating fund. It accounts for all financial resources of the Library, except those resources required to be accounted for in another fund. Capital Projects Fund accounts for financial resources to be used for the acquisition, construction or renovation of major capital facilities. The Library reports the following fiduciary fund type: Agency funds account for assets held by the Library as an agent for various funds, governments or individuals. BASIS OF ACCOUNTING The basis ofaccounting determines when transactions are reported on the financial statements. The Library-wide governmental and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless ofwhen the related cash flows take place. Nonexchange transactions, in which the Library gives (or receives) value without directly receiving (or giving) equal value in exchange, include grants and donations. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. The Library uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis ofaccounting. Under this method, revenues are recognized when measurable - 11 - WEST GEORGIA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT"H" Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES and available. The Library considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Interest is considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred. Capital asset acquisitions are reported as expenditures in governmental funds. The Library funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the Library's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues. CHANGES IN ACCOUNTING PRINCIPLES The West Georgia Regional Library has implemented a new financial reporting model as required by provisions of Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, as of June 30, 2004. The provisions ofGASB Statement No. 34 require the inclusion of a Statement ofNet Assets. The elements comprising Net Assets - Beginning include the following: General Fund July 1, 2003 Capital Projects Fund $ 407,552 8,425 Governmental Funds July 1, 2003 Capital Assets Accumulated Depreciation $ 415,977 9,515,211 -5,833,255 Net Assets Beginning (See Exhibit "B") $ 4!097!933 CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the Library to deposit its funds in one or more solvent banks or insured Federal savings and loan associations. - 12 - WEST GEORGIA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30. 2004 EXHIBIT"H" Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INVESTMENTS COMPOSITION OF INVESTMENTS Investments made by the Library in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Library to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following: (1) Obligations issued by the State of Georgia or by other states, (2) Obligations issued by the United States government, (3) Obligations fully insured or guaranteed by the United States government or a United States government agency, (4) Obligations of any corporation of the United States government, (5) Prime banker's acceptances, (6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services, (7) Repurchase agreements, and (8) Obligations of other political subdivisions of the State of Georgia. RECEIVABLES Receivables consist ofamounts due from grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. CAPITAL ASSETS Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time ofpurchase. On the Library-wide financial statements, all purchased - 13 - WEST GEORGIA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT"H" Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives ofthe assets is not capitalized. Depreciation is computed using the straight-line method. Capitalization thresholds and estimated useful lives of capital assets reported in the Library-wide statements are as follows: Capitalization Policy Estimated Useful Life Land Buildings and Improvements Equipment Library Collections $ 10,000 NIA $ 10,000 20 to 60 years $ 10,000 8 to 20 years All 5 to 15 years Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives. Note 3: DEPOSITS COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13 .1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-1 l(b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts. Acceptable security for deposits consists of any one 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, - 14 - WEST GEORGIA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT"H" Note 3: DEPOSITS (3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, (4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities ofthe State of Georgia, (5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose, (6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and (7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. CATEGORIZATION OF DEPOSITS At June 30, 2004, the bank balances were $614,058. The amounts of the 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 by the 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, 2004, as follows: Risk Category Bank Balance 1 $ 102,934 2 511,124 3 0 Total $==a=6==14-,0=5='=8 - 15 - WEST GEORGIA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT"H" Note 4: CAPITAL ASSETS The following is a summary of changes in the Capital Assets during the fiscal year: Balances July 1, 2003 Increases Decreases Balances June 30, 2004 Governmental Activities Capital Assets, Not Being Depreciated: Land $ 127,811 $ 127,811 Capital Assets Being Depreciated Buildings Equipment Library Collections $ 1,656,085 84,146 7,647,169 $ 520,888 $ $ 351,066 1,656,085 84,146 7,816,991 Less Accumulated Depreciation for: Buildings Equipment Library Collections 491,251 62,867 5,279,137 28,577 6,647 467,812 351,066 519,828 69,514 5,395,883 Total Capital Assets, Being Depreciated, Net $ 3,554,145 $ 17,852 $ 0 $ 3,571,997 Governmental Activity Capital Assets - Net $ 3,681.956 $ 17,852 $ 0 $ 3,699.808 Current year depreciation expense by function is as follows: Governmental Funds Public Services Note 5: RISK MANAGEMENT $====5==!03-,0=3=6 The Library is exposed to various risks ofloss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation. The Library has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions 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 of the past three years. The Library has elected to self-insure for all losses related to acts of God. The Library has not experienced any losses related to this risk in the past three years. - 16 - WEST GEORGIA REGIONAL LIBRARY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT"H" Note 5: RISK MANAGEMENT The Library is self-insured with regard to unemployment compensation claims. The Library accounts for claims within the General Fund with expenditures 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 fiscal years. The Library has purchased a surety bond to provide additional insurance coverage as follows: Position Covered Amount All Employees $ 50,000 Note 6: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION Substantially all librarians and clerical personnel employed by regional and county libraries are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Library who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Library makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: Fiscal Year Percentage Contributed Required Contribution 2004 2003 2002 100% 100% 100% $ 61,494 $ 56,448 $ 59,442 - 17 - WEST GEORGIA REGIONAL LIBRARY GENERAL FUND SCHEDULE OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL YEAR ENDED JUNE 30. 2004 SCHEDULE "1" REVENUES Local Funds State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous Total Revenues EXPENDITURES Current Public Services Technical Services Support Services Maintenance and Operations Total Expenditures Net Change in Fund Balance Fund Balance - Beginning NONAPPROPRIATED BUDGETS ORIGINAL FINAL ACTUAL AMOUNTS $ 624,543 $ 624,543 $ 700,732 853,258 853,258 901,982 41,600 41,600 4,353 34,700 34,700 43,045 1,352 11 458 11 458 59329 $ 1,565,559 $ 1,565,559 $ 1710793 $ 913,315 $ 913,315 $ 743,924 225,470 225,470 130,211 500,524 500,524 636,079 172,003 172 003 86,506 $ 1,811,312 $ 1,811,312 $ 1,596,720 $ -245,753 $ -245,753 $ 114,073 384,321 384 321 407 552 Fund Balance - Ending $ 138,568 $ 138,568 $===5=2=1=,6=25= Notes to the Schedule of Revenues. Expenditures and Changes in Fund Balances Budget and Actual The accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements. See notes to the basic financial statements. -19- WEST GEORGIA REGIONAL LIBRARY SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2004 AGENCY/FUNDING GRANTS Board of Regents of the University System of Georgia Office of Public Library Services Salaries Travel Library Materials Maintenance and Operations SCHEDULE "2" GOVERNMENTAL FUND TYPE GENERAL FUND $ 513,347 3,750 153,288 231 597 $ =======9=0=1,=98=2= See notes to the basic financial statements. - 20- WEST GEORGIA REGIONAL LIBRARY SCHEDULE OF FEDERAL REVENUE YEAR ENDED JUNE 30, 2004 AGENCY/FUNDING GRANTS Museum and Library Services, Institute of Through Board of Regents of the University System of Georgia Library Services and Technology Act State Library Program Materials Grants General Technology Grants Humanities, National Endowment for the Direct Promotion of the Humanities Public Programs SCHEDULE "3" GOVERNMENTAL FUND TYPE GENERAL FUND $ 2,026 1,327 1 000 $======4=,3=5=3 See notes to the basic financial statements. - 21 - LOCAL SOURCES Boards of Education City of Bremen Carroll County City of Carrollton Douglas County Haralson County Heard County Paulding County City Governments Bowdon Bremen Buchanan Carrollton Douglasville Villa Rica County Governments Boards of Commissioners Carroll Cleburne, Alabama Douglas Haralson Heard Paulding WEST GEORGIA REGIONAL LIBRARY SCHEDULE OF LOCAL REVENUE YEAR ENDED JUNE 30. 2004 SCHEDULE "4" GOVERNMENTAL FUND TYPES CAPITAL GENERAL PROJECTS FUND FUND TOTAL $ 1,573 13,353 3,462 9,999 3,754 3,165 11,000 4,300 37,876 7,700 171,004 3,500 1,637 $ 1,573 13,353 3,462 9,999 3,754 3,165 11,000 4,300 37,876 7,700 171,004 3,500 1,637 128,000 2,600 200,500 $ 27,738 44,821 24 750 10,765 128,000 2,600 211,265 27,738 44,821 24,750 $ 700 732 $ 10765 $===7=11=64=9=7 See notes to the basic financial statements. - 22 - NAME Ayers, Brown, Gammons, Cooper, Davenport, Delaney, Dunmire, Elom, Eubanks, Garrett, Gentry, Grant, Goodson, Gunnells, Harrison, Harton, Hill, Holt, Howell, Jenkins, Jones, Kesler, Lambert, McClure-Walker, Milstead, Mote, Pearce, Perry, Phillips, Scoggins, Smith, Stamps, Stanley, Terry, Tewksbury, Ward, Warmoth, Zander, Mary Sue Carol S. AnnG. James P. Monica Cynthia D. Cary A. Vince Laurie A. JenniferC. Jana Joshua Martha G. Christy Alicia Jacine Jean Machelle Lynn B. Harold G. BettyW. Teresa G. Jason R. Mildred E. Shirley Jennifer D. Deborah J. Sheila S. Jessica J.C. Sandra Kay Cynthia Jean L. Sara Mack A. Roni L. Kanea S. Stephanie Ellen Totals per Report WEST GEORGIA REGIONAL LIBRARY SCHEDULE OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 2004 SCHEDULE "5" TITLE CATEGORY SALARIES TRAVEL Processing Clerk $ Acquisitions Clerk Processing Supervisor Director Library Clerk Acquisitions Clerk Network Librarian Courier Driver Extension Svcs Librarian Library Clerk Buchanan Library Branch Manager Library Clerk Librarian Special Projects Library Clerk Bookmobile Clerk Library Clerk Heard County Library Branch Manager Library Clerk Courier Driver Library Clerk Storyteller/Children Library Clerk Heard County Library Clerk Library Clerk Reference Librarian Library Clerk Library Clerk Buchanan Clerk Courier Driver Douglas County Coordinator DOL Rehab Employee, Library Clerk ILL, Bookmobile Clerk Buchanan Library Clerk Custodian Assistant Director Office Manager/Bookkeeper Library Clerk Reference Librarian 19,756 54,282 $ 23,402 76,545 311 25,141 50,872 3,497 50,872 15,906 6,336 336 55,590 1,673 22,556 5,345 20,586 13,724 5,187 4,608 13,687 3,641 6,040 13,724 25,235 5,905 5,285 943 678 58,975 124 16,665 1,287 8,708 61,575 28,437 2,398 2692 53 1,576 11 1,886 153 979 24 189 20 13 27 484 470 27 35 $ 712,524 $======5=9=47= See notes to the basic financial statements. - 23- SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS WEST GEORGIA REGIONAL LIBRARY AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2004 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS 6222-93-02 6222-03-01 Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented