Review report, Sapelo Island Heritage Authority, a component unit of the state of Georgia, year ended June 30, 1994

STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET
ATLANTA. GEORGIA 30334

REVIEW REPORT SAPELO ISLAND HERITAGE AUTHORITY
A COMPONENT UNIT OF THE STATE OF GEORGIA
YEAR ENDED JUNE 30, 1994

SAPELO ISLAND HERITAGE AUTHORITY - TABLE OF CONTENTS -

Page

INDEPENDENT ACCOUNTANT'S REPORT ON REVIEW OF FINANCIAL STATEMENTS

EXHIBITS

FINANCIAL STATEMENTS

A BALANCE SHEET (STATUTORY BASIS)

ALL FUND TYPES

2

B STATEMENT OF CHANGES IN FUND BALANCE

(STATUTORY BASIS)

GOVERNMENTAL FUND TYPE

3

C STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

BUDGET FUND

4

D NOTES TO THE FINANCIAL STATEMENTS

5

CLAUD!= L VICi<.ERS STATE AUDITOR (404) 656-2174
TAX RATIO (404) 656-0494

~epartmeut of J\units
254 WASHINGTON STREET, SW ROOM 214
J\tlanht, Qi;eorgia 30334-8400
July 22, 1994

FINANCIAL AUDITS (404) 656-2180
PROGRAM AUDITS (404) 656-2006

Honorable Zell Miller, Governor Members of the General Assembly of Georgia Members of the Sapelo Island Heritage Authority
INDEPENDENT ACCOUNTANT'S REPORT ON REVIEW OF FINANCIAL STATEMENTS
Ladies and Gentlemen:
We have reviewed the accompanying financial statements (Exhibits A through D) ofthe Sapelo Island Heritage Authority as of and for the year ended June 30, 1994, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. As described in Note 1, these financial statements were prepared on a prescribed basis of accounting that demonstrates compliance with the budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles. All information included in these financial statements is the representation of the management of the Sapelo Island Heritage Authority.
A review consists principally of inquiries of agency personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with the basis of accounting described in Note 1.
Respectfully submitted,

CLV:bh 94ARL-4X

~/-~
Claude L. Vickers State Auditor

FINANCIAL STATEMENTS - 1-

ASSETS
Accounts Receivable Other
FUND EQUITY
Fund Balance Unreserved Undesignated

SAPELO ISLAND HERITAGE AUTHORITY BALANCE SHEET (STATUTORY BASIS) ALL FUND TYPES JUNE 30 1 1994

EXHIBIT "A"

GOVERNMENTAL FUND TYPE BUDGET FUND
JUNE 30, 1994 JUNE 30, 1993

$ 194,500.00$ 194,500.00
============= =============

$ 194,500.00 $ 194,500.00
============= =============

See Independent Accountant's Report on Review of Financial Statements. The notes to the financial statements are an integral part of this statement.
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SAPELO ISLAND HERITAGE AUTHORITY STATEMENT OF CHANGES IN FUND BALANCE {STATUTORY BASIS!
GOVERNMENTAL FUND TYPE YEAR ENDED JUNE 30, 1994

EXHIBIT "8"

FUND BALANCE - JULY 1
Unreserved Undesignated
ADDITIONS
Excess of Funds Available over Expenditures Exhibit "C"
DEDUCTIONS
Unreserved Fund Balance Carried Over from Prior Year as Funds Available
FUND BALANCE - JUNE 30
(To Exhibit "A")

BUDGET FUND YEAR ENDED
JUNE 30, 1994 JUNE 30, 1993
$ 194,500.00$ 250,000.00
$ 194,500.00$ 194,500.00
$ 194,500.00 $ 250,000.00 $ 194,500.00$ 194,500.00

See Independent Accountant's Report on Review of Financial Statements. The notes to the financial statements are an integral part of this statement.
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SAPELO ISLAND HERITAGE AUTHORITY STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30. 1994

EXHIBIT "C"

FUNDS AVAILABLE REVENUES
None Reported CARRY-OVER FROM PRIOR YEAR
Transfer from Unreserved Fund Balance
Total Funds Available
EXPENDITURES CAP IT AL OUTLAY
Extraordinary Expenditure Bill Brasher Purchase of 4.0 Acres in Raccoon Bluff
Excess of Funds Available over Expenditures

TOTALS YEAR ENDED JUNE 30, 1994 JUNE 30, 1993

$

0.00 $

0.00

194,500.00 250,000.00
$ 194,500.00$ 250,000.00
============= =============

$

0.00 $ 55,500.00

194,500.00 194,500.00

$ 194,500.00$ 250,000.00

See Independent Accountant's Report on Review of Financial Statements. The notes to the financial statements are an integral part of this statement.
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SAPELO ISLAND HERITAGE AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXIIlBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY The Sapelo Island Heritage Authority, is an instrumentality of the State of Georgia and public corporation. The Authority was created in 1983 by an act of. the General Assembly of Georgia for the purpose of preservation of the culture in this endangered historical area. The Authority consists of three members, the Governor, the Commissioner of Natural Resources, and the Executive Director of the State Properties Commission. The Authority is assigned to the Department ofNatural Resources for administrative purposes only. The Sapelo Island Heritage Authority is considered a component unit of the State of Georgia and is included within the State of Georgia reporting entity for financial reporting purposes because of the significance of its legal, operational and financial relationships with the State of Georgia.
FUND ACCOUNTING The Sapelo Island Heritage Authority uses a fund to report on its financial position and the results of its operations determined in conformity with accounting practices prescribed or permitted by statutes and regulations ofthe State of Georgia. 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. The fund presented in the accompanying financial statements is as follows:
GOVERNMENTAL FUND TYPE
BUDGET FUND - The fund used to account for activities and functions of the Sapelo Island Heritage Authority. This presentation differs from generally accepted accounting principles in that such principles
provide that the Budget Fund of the Authority be accounted for as a Proprietary Fund Type - Enterprise
Fund. An Enterprise Fund is used to account for operations that are financed and operated in a manner similar to private business enterprises, where the intent is that costs of providing goods or services to the general public on a continuing basis are financed or recovered primarily through user charges or that periodic measurement of revenues earned and expenses incurred are appropriate for capital maintenance, public policy, accountability and other purposes.
BASIS OF ACCOUNTING MEASUREMENT FOCUS
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. Governmental funds should be accounted for using the current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues) and decreases (i.e., expenditures) in net current assets. Proprietary fund types should be accounted for on a flow of economic resources measurement focus, in which all assets and all liabilities are included on the balance sheet and associated revenues and expenses are recorded in the operating statements. In accordance with accounting practices prescribed or permitted by the State of Georgia, the Budget Fund utilizes the current financial resources measurement focus.

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SAPELO ISLAND HERITAGE AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "D"

NOTE I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING GOVERNMENTAL FUND TYPE BUDGETFUND
Units of government of the State of Georgia record their Budget Fund revenues and expenditures in accordance with the modified accrual basis of accounting. Under the modified accrual basis of accounting, 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 of the current period. The modified accrual basis ofaccounting calls for expenditures, other than accrued interest of general long-term debt, to be recorded when the related fund liability is incurred. The Budget Fund, which should be reflected as a Proprietary Fund Type - Enterprise Fund in accordance with generally accepted accounting principles, should be maintained on the accrual basis of accounting.
Certain adjustments are reported as additions to and deductions from fund balances of the Budget Fund in the accompanying financial statements. This presentation is in accordance with accounting practices prescribed or permitted by statutes and regulations ofthe State ofGeorgia, but differs from generally accepted accounting principles for proprietary fund types in that prior period fund balance should not be reported as current year funds available.
BUDGET A budget for the financial operations of the Sapelo Island Heritage Authority was not prepared by the Authority, therefore, the financial operations represent nonbudgeted financial activities.
INVENTORIES No inventories of supplies are reported in the current financial statements.
GENERAL FIXED ASSETS Accounting practices prescribed or permitted by the statutes and regulations of the State of Georgia do not require the value ofland deeded to the Authority by the State ofGeorgia and the cost of land acquired directly by the Authority to be recorded in the financial statements. This method of accounting for these fixed assets is not consistent with generally accepted accounting principles, which provide for the recording offixed assets in either a General Fixed Assets Account Group or as assets of the fund if used in the operations of a Proprietary Fund Type - Enterprise Fund.
COMPARATIVE DATA Comparative total data for the prior year have been presented in the accompanying financial statements in order to provide an understanding of changes in the Authority's financial position and operations.

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SAPELO ISLAND HERITAGE AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1994

EXIIlBIT "D"

NOTE 2: CONTINGENCIES
Litigation, claims and assessments filed against the Sapelo Island Heritage Authority, if any, are generally considered to be actions against the State of Georgia. Pursuant to the Official Code of Georgia Annotated, the Department of Administrative Services maintains a program of purchased insurance and self- insurance which provides coverage for such litigation, claims and assessments. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 1994.
NOTE 3: BONDING INFORMATION
The accounting records and other related data are maintained by certain employees of the Department of Natural Resources. These employees are bonded under a Public Employees Blanket Bond written by Employers Insurance ofWausau, their Bond No. 1450-00-110723, on which the premium was paid to October 1, 1994. Under this agreement the Public Employee Dishonesty Coverage insures the Department to a maximum of$1,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees. The Faithful Performance of Duty Coverage insures the Department to a maximum of $100,000.00 against loss sustained from failure ofits employees to perform faithfully their duties or to account properly for all monies and property received by virtue of their position or employment.
All employees of the Department of Natural Resources are also bonded under a Commercial Crime Policy written by the United States Fire Insurance Company, their Policy No. 626 011675 2, on which the premium was paid to October 1, 1994. Under this additional public employee dishonesty coverage, the policy insures the Department to a maximum of$4,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees.

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