Review report, state of Georgia, Secretary of State, year ended June 30, 1994

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

REVIEW REPORT STATE OF GEORGIA SECRETARY OF STATE YEAR ENDED JUNE 30, 1994

SECRETARY OF STATE - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTSAND SUPPLEMENTARY INFORMATION

EXHIBITS

FINANCIAL STATEMENTS

A COMBINED BALANCE SHEET (STATUTORY BASIS)

ALL FUND TYPES AND ACCOUNT GROUPS

2

B COMBINED STATEMENT OF CHANGES IN FUND BALANCES

(STATUTORY BASIS)

ALL FUND TYPES

5

C STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

BUDGET FUND

6

STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

COMPARED TO BUDGET

BUDGET FUND

D

"A" SECRETARY OF STATE

8

E

"B" REAL ESTATE COMMISSION

9

F STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS

STATE REVENUE COLLECTIONS FUND

G COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUNDS

12

H NOTES TO THE FINANCIAL STATEMENTS

13

SUPPLEMENTARY INFORMATION

I COMBINING BALANCE SHEET (STATUTORY BASIS)

BUDGET FUND

26

J COMBINING STATEMENT OF CHANGES IN FUND BALANCES

(STATUTORY BASIS)

BUDGET FUND

27

K COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

BUDGET FUND

28

L COMBINING BALANCE SHEET

FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUNDS

30

M COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUNDS

31

N COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

FIDUCIARY FUND TYPE - AGENCY FUNDS

32

SECRETARY OF STATE -TABLE OF CONTENTS-

SECTION I

FINANCIAL

SUPPLEMENTARY INFORMATION

SCHEDULES

SCHEDULE OF APPROVED BUDGET

1

"A" SECRETARY OF STATE

33

2

"B" REAL ESTATE COMMISSION

34

3 CASH AND CASH EQUIVALENTS

35

4 SCHEDULE OF FEDERAL REVENUES

36

5 SCHEDULE OF OTHER REVENUES RETAINED

37

6 SCHEDULE OF OTHER OPERATING EXPENSES

38

7 RECONCILIATION OF PER DIEM AND FEES

39

8 SUMMARY OF SALARIES, TRAVEL, AND PER DIEM AND FEES

40

SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS

SECTION I FINANCIAL

CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174
TAX RATIO (404) 656-0494

~cpa:rtmcut of J\uhits
254 WASHINGTON STREET, SW. ROOM 214
t-ilmtta, (ti>corgia 30334-8400
October 21, 1994

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

Honorable Zell Miller, Governor Members of the General Assembly of Georgia
and Honorable Max Cleland Secretary of State
INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have reviewed the accompanying financial statements (Exhibits A through H) of the Secretary of State 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 I, 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 Secretary of State.
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, with the exception ofthe matter described in the following paragraph, 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.
As more fully discussed in Section II, Findings and Improper or Questioned Costs, material discrepancies were noted in the equipment inventory records of the Secretary of State. Equipment inventory comprises the General Fixed Assets Account Group. We were unable to determine the effects these discrepancies may have on the financial statements.

94ARL-5

Our review was made for the purpose of expressing limited assurance that there were no material modifications that should be made to the financial statements in order for them to be in conformity with the basis of accounting described in Note 1. The accompanying supplementary information (Exhibits I through N and Schedules 1 through 8) is presented only for supplementary analysis purposes. Such information has been subjected to the inquiries and analytical procedures applied in the review of the financial statements and we are not aware of any material modifications that should be made thereto.
Respectfully submitted,
d/4//4
Claude L. Vickers State Auditor
CLV:jy 94ARL-5

FINANCIAL STATEMENTS - 1-

SECRETARY OF STATE COMBINED BALANCE SHEET (STATUTORY BASIS)
ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30, 1994

ASSETS
Cash and Cash Equivalents (See Schedule)
Accounts Receivable State Appropriation Federal Financial Assistance Other
Fixed Assets Equipment
Amount to be Provided for Payment of Accrued Compensated Absences Installment Purchase Commitments

GOVERlMENTAL FUlD TYPES

STATE

REVENUE

BUDGET

COLLECT IONS

$_--'-1.9..."""1'.:.3.:..2_,8.;.;..7
$ 2,267,927.15 1,203.89 472.90
$ 2,269,603.94

Total Assets

$ 2,269,603.94 $===19='=1=3=2-=8..,7

LIABILITIES AND FUND EQUITY
Liabilities Cash Overdraft Accounts Payable Payroll Withholdings Funds Held for Others Compensated Absences Installment Purchases
Total Liabilities
Fund Equity Investment in General Fixed Assets Fund Balances Reserved Archives Donations Federal Financial Assistance Rhodes Memorial Hall Restoration Taylor Fund Voter Registration and Education State Revenue Collections Fund Unreserved Designated Surplus Undesignated
Total Fund Equity

$ 161,705.81 1,599,166.63 0.00
$ 1,760,872.44
$ 6,756.10 97,137.36 5,832.22 5,425.25 0.00 $ 19,132.87
393,580.57
$ 508 I 731. 50 $ 19,132.87

Total Liabilities and Fund Equity

$ 2,269,603.94 $===19='=1=3=2-=8=7

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
The notes to the financial statements are an integral part of this statement.
- 2-

EXHIBIT "A"

FIDUCIARY FUND TYPES

EXPENDABLE

TRUST

AGENCY

ACCOUNT GROUPS

GENERAL

GENERAL

FIXED

LONG-TERM

ASSETS

DEBT

TOTALS (Memorandum Only) JUNE 30. 1994 JUNE 30, 1993

$ 1,650,504.07 $ 636,909.48

$ 2,306,546.42 $ 2.344.121. 63

$2,267,927.15$ 1,203.89 472.90
$ 2,269,603.94 $

431,255.93 0.00
361,043.64
792,299.57

$ 3,334,386.24

$ 3,334,386.24 $ 2,979,644.86

$ 1,431,621.46 $ 1,431,621.46 $ 1,268,324.25

0.00

0.00

35,555.00

$ 1,431,621.46 $ 1,431,621.46 $ 1,303,879.25

$ 1,650,504.07 $ 636,909.48 $ 3,334,386.24 $ 1,431,621.46 $ 9,342,158.06 $ 7,419,945.31

$ 636,909.48 $ 636,909.48

$ 161,705.81 $

0.00

1,599,166.63

737,240.50

0.00

821. 25

636,909.48

386,724.08

$ 1,431,621.46 1,431,621.46 1,268,324.25

0.00

0.00

35,555.00

$ 1,431,621.46 $ 3,829,403.38$ 2,428,665.08

$ 3,334,386.24

$ 3,334,386.24 $ 2,979,644.86

6,756.10 97,137.36
5,832.22 5,425.25
0.00 19,132.87

6,816.26 25,463.81
7,332.22
0.00 1,475.51 8,636.74

$ 1,650,504.07 $ 1,650,504.07

$ 3,334,386.24

393,580.57

362,122.13

1,650,504.07 1,599,788.70

$ 5,512,754.68 $ 4,991,280.23

$1,650,504.07 $ 636,909.48 $ 3,334,386.24 $ 1,431,621.46 $ 9,342,158.06 $ 7,419,945.31

- 3-

SECRETARY OF STATE
COMBINED STATEMENT OF CHANGES IN FUND BALANCES (STATUTORY BASIS) ALL FUND TYPES
YEAR ENDED JUNE 30, 1994

EXHIBIT "B"

FUND BALANCES - JULY 1

GOVERNMENTAL FUND TYPES

BUDGET

STATE REVENUE COLLECTIONS

FIDUCIARY FUND TYPE -------------
EXPENDABLE TRUST

TOTALS (Memorandum Only)
YEAR ENDED ---------------------------JUNE 30, 1994 JUNE 30, 1993

Reserved Unreserved
Designated Surplus
Undesignated

$ 41,087.80 $ 8,636.74

$ 49,724.54 $ 39,878.46

362,122.13

362,122.13 356,595.68 $1,599,788.70 1,599,788.70 1,598,870.03

$ 403,209.93 $ 8,636.74 $1,599,788.70$ 2,011,635.37 $1,995,344.17

ADDITIONS

Adjustments to Prior Year's Accounts Payable
Cash Receipts for the Year Exhibit "F"
Excess of Funds Available over Expenditures
Exhibit "C" Excess of Revenues over Expenditures
Exhibit "G" Reimbursement of Non-Budgeted Expenditures
Georgia State Financing and Investment
C01TJTiission Reimbursement of Prior Year's Expenditures

$ 75,467.91 $26,123,123.45
434,739.10 $
0.00 0.00

$ 75,467.91 $ 42,520.47

26,123,123.45 23,313,581.64

434,739.10 362,200.88

50,715.37

50,715.37

918.67

0.00 281,898.55

0.00

404.69

$ 510,207.01 $26,123,123.45 $ 50,715.37 $26,684,045.83 $24,001,524.90

DEDUCTIONS

Unreserved Fund Balance (Surplus) Returned to Office of Treasury and Fiscal
Services Year Ended June 30, 1992
Year Ended June 30, 1993 Adjustments to Prior Year's
Accounts Receivable Bank Reconciliations
Cash Disbursements for the Year Exhibit "F"
Non-Budgeted Expenditures Bond Sale Proceeds Paid to Various Vendors
Return of Donated Funds Reserved Fund Balance Carried Over from
Prior Year as Funds Available

$

0.00

362,122.13

0.00 0.00

$26,112,627.32

0.00 1,475.51

41,087.80

$ 404,685.44 $26,112,627.32

FUND BALANCES - JUNE 30

$

0.00 $ 356,595.68

362,122.13

0.00

0.00

463.61

0.00

1,452.50

26,112,627.32 23,310,689.64

0.00 1,475.51

281,898.55 0.00

41,087.80

34,133.72

------------- -------------

$26,517,312.76 $23,985,233.70
------------- -------------

(To Exhibit "A")

$ 508,731.50 $ 19,132.87 $1,650,504.07 $ 2,178,368.44 $ 2,011,635.37

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
The notes to the financial statements are an integral part of this statement.
- 5-

SECRETARY OF STATE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUN 30, 1994

EXHIBIT "C" Page 1

FUNDS AVAILABLE REVENUES
STATE APPROPRIATION General Appropriation Amended Appropriation Governor's Emergency Fund
Less: Lapsed Funds Total State Appropriation
FEDERAL REVENUES (See Schedule) OTHER REVENUES RETAINED (See Schedule)
Total Revenues CARRY-OVER FROM PRIOR YEAR
Transfer from Reserved Fund Balance Archives Donations Federal Financial Assistance Rhodes Memorial Hall Restoration Voter Registration Total Carry-Over from Prior Year
Total Funds Available
EXPENDITURES PERSONAL SERVICES
Salaries and Wages Employer's Contributions for:
F.I.C.A. Retirement Health Insurance Personal Liability Insurance Unemplorment Compensation Insurance Workers Compensation Insurance Assessments by Merit System Drug Testing
REGULAR OPERATING EXPENSES Motor Vehicle Expenses Supplies and Materials Repairs and Maintenance Utilities Rents (Other than Real Estate) Insurance and Bonding Other Operating Expenses (See Schedule) Extraordinary Expenditures Duplicating and Rapid Copy Publications and Printing
TRAVEL MOTOR VEHICLE PURCHASES

TOTALS YEAR ENDED
JUNE 30, 1994 JUNE 30, 1993

$25,172,233.00 $24,319,118.00

13,500.00 -401,443.00

_ _ __..._o....o."""o

30,000.00

$25,185,733.00 $23,947,675.00 13,500.00 300,000.00

$25,172,233.00 $23,647,675.00

89,350.33

24,621.34

1,707,669.08 1,285,745.56

$26.969.252.41 $24,958,041.90

$

6,816.26 $

0.00

25,463.81

34,133.72

7,332.22

0.00

1,475.51

0.00

$ 41 087.80 $ 34,133.72

$27,010,340.21 $24,992,175.62

$12,099,378.29 $11,548,461.77

858,206.02 1,868,315.06 1,476,626.61
49,725.00 12,742.00 100,805.00 48,963.66
1,126.32

822,549.58 1,795,020.00 1,410,133.87
33,117.00 14,031.00 107,063.00 49,531.11
948.00

$16,515,887.96 $15,780,855.33

$ 167,043.27 $ 161,412.37

846,966.66

774,223.00

328,208.69

291,360.42

9,135.47

9,238.06

13,693.40

10,751.77

91,221.00

65,791.00

716,279.19

624,783.32

0.00

3,000.00

49,477.89

54,333.32

381,077.85

327,952.36

$ 2,603,103.42 $ 2,322,845.62

$ 253,734.53 $ 192,690.38

$ 173,151.00 $ 220,373.00

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial Statements are an integral part of this statement.
- 6-

SECRETARY OF STATE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND
YEAR ENDED JUNE 30. 1994

EXHIBIT "C" Page 2

EXPENDITURES EQUIPMENT
Equipment Purchases Lease{Purchase of Equipment Renta of Equipment
COMPUTER CHARGES Other Costs Supplies and Materials Repairs and Maintenance Rents (Other than Real Estate) Other Operating Expenses (See Schedule) Software Equipment Equipment Purchases Per Diem, Fees and Contracts Per Diem and Fees Computer Billings, DOAS
REAL ESTATE RENTALS TELECOMMUNICATIONS PER DIEM. FEES AND CONTRACTS
Per Diem and Fees Contracts
OTHER ELECTION EXPENSES Personal Services Salaries and Wages Employer's Contribution for: F. I .C.A. Health Insurance Other Costs Supplies and Materials Repairs and Maintenance Utilities Rents (Other than Real Estate) Other Operating Expenses Duplicating and Rapid Copy Publications and Printing Travel Equipment Equipment Purchases Rental of Equipment Telecommunications Per Diem, Fees and Contracts Per Diem and Fees Contracts Total Other Total Expenditures
Excess of Funds Available over Expenditures

TOTALS YEAR ENDED JUNE 30. 1994 JUNE 30. 1993

$ 168,723.49 $ 190,379.01

38,921.92

13,451.76

18,843.13

10,343.94

$ 226,488.54 $ 214,174.71

$ 32,977.14$ 34,470.62

11,304.74

19,248.31

0.00

155.00

1,466.41

543.75

77,455.88

64,742.02

278,617.38

156,440.92

12,000.00

12,500.00

1,555,505.01 1,207,378.84

$ 1,969,326.56 $ 1,495,479.46

$ 2,450,566.69 $ 2,416,337.45

$ 392,242.21 $ 325,095.01

$1,205,754.52 $ 82,375.00
$1,288,129.52 $

982,872.41 2,000.00
984,872.41

$ 79,963.08$ 53,534.96

1,110.80 0.00

775. 68 -59.49

203,115.81 0.00 0.00 0.00 0.00 0.00
373,001.04 989.03

124,728.21 2,072.10 12.94 1,425.00 704.30 1,353.60
366,055.99 7,962.71

1,330.00 0.00
795.92

36,315.00 1,068.00 1,766.19

38,665.00 4,000.00

41,713.18 37,823.00

$ 702,970.68 $ 677,251.37

$26,575,601.11 $24,629,974.74

434,739.10

362,200.88

$27,010,340.21 $24,992,175.62

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial Statements are an integral part of this statement.
- 7-

SECRETARY OF STATE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
"A" SECRETARY OF STATE YEAR ENDED JUNE 30. 1994

EXHIBIT "D"

FUNDS AVAILABLE REVENUES
State Appropriation Federal Revenues Other Revenues Retained
CARRY-OVER FROM PRIOR YEAR Transfer from Reserved Fund Balance
EXPENDITURES Personal Services Regular Operating Expenses Travel Motor Vehicle Purchases Equipment Computer Charges Real Estate Rentals Telecommunications Per Diem, Fees and Contracts Election Expenses
Excess of Funds Available over Expenditures

BUDGET

ACTUAL

VARIANCE FAVORABLE
(UNFAVORABLE)

$23,365,252.00 $23,351,752.00 $ -13,500.00

13,060.00

89,350.33

76,290.33

1,892,680.00 1,689,037.38 -203,642.62

$25,270,992.00 $25,130,139.71 $ -140,852.29

0.00

41,087.80

41,087.80

$25,270,992.00 $25,171,227.51 $ -99,764.49

$15,429,769.00 $15,426,085.43 $

2,588,465.00 2,463,395.75

291,423.00

244,137.76

162,645.00

162,614.00

230,502.00

218,546.25

1,918,940.00 1,711,576.60

2,343,432.00 2,346,042.88

363,346.00

363,773.79

1,205,470.00 1,145,013.13

737,000.00

702,970.68

3,683.57 125,069.25
47,285.24 31. 00
11,955.75 207,363.40
-2,610.88 -427.79
60,456.87
34,029.32

$25,270,992.00 $24,784,156.27 $ 486,835.73

$ 387,071.24 $ 387,071.24

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement.
- 8-

SECRETARY OF STATE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
"B" REAL ESTATE COMMISSION YEAR ENDED JUNE 30, 1994

EXHIBIT "E"

FUNDS AVAILABLE REVENUES
State Appropriation Other Revenues Retained
EXPENDITURES Personal Services Regular Operating Expenses Travel Motor Vehicle Purchases Equipment Computer Charges Real Estate Rentals Telecommunications Per Diem, Fees and Contracts
Excess of Funds Available over Expenditures

BUDGET

ACTUAL

VARIANCE FAVORABLE
(UNFAVORABLE)

$ 1,820,481.00 $ 1,820,481.00 $

18,632.00

18,631.70

0.00 -0.30

$1,839,113.00$ 1,839,112.70$

-0.30

$ 1,093,946.00 $ 1,089,802.53 $ 4,143.47

162,600.00

139,707.67

22,892.33

16,000.00

9,596.77

6,403.23

11,000.00

10,537.00

463.00

16,850.00

7,942.29

8,907.71

253,455.00

257,749.96

-4,294.96

113,700.00

104,523.81

9,176.19

28,180.00

28,468.42

-288.42

143,382.00

143,116.39

265.61

------------- ------------- -------------

$1,839,113.00 $1,791,444.84 $ 47,668.16

$ 47,667.86 $ 47,667.86

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement.
- 9-

SECRETARY OF STATE STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS
STATE REVENUE COLLECTIONS FUND YEAR ENDED JUNE 30, 1994

EXHIBIT "F" Page 1

CASH RECEIPTS
STATE REVENUE COLLECTIONS
Corporations Regulation Division Business Services Charities Limited Partnership Fees Trademarks
Elections and Campaign Disclosure Division Commissions Elections State Campaign Financial Disclosure
Occupational Certification Division Licensing and Examining Board Fees Accountancy Architect Athletic Agents Athletic Trainers Auctioneers Barber Behavioral Science Chiropractics Construction Industry Cosmetology Dental Dietitians Engineer Forestry Funeral Geology Hearing Aid Landscape Architecture Librarian Medical Nursing Home Occupational Therapy Optician Optometry Pharmacy Physical Therapy Podiatry Polygraph Practical Nurse Private Detective Psychology Registered Nurse Speech Pathology Used Car Dealers Used Car Parts Veterinary Water and Waste Water Treatment
Internal Administration Division Georgia Laws Notary Public Fees

$ 6,023,642.07 37,645.00 115,145.00 38,540.50 $ 6,214,972.57
-------------

$

8,525.50

5,020.00

145,550.00

-------------

159,095.50

$ 767,868.00 189,400.00 8,150.00 31,170.00 148,733.50 83,201.50 220,370.00
68,280.00 1,262,272.75
2,017,794.62 873,205.75
45,030.00 148,069.00
73,265.00 444,015.00
84,010.20 48,427.00
30,094.00 38,171.62
3,062,900.00 132,414.50 80,546.00 20,679.00
185,435.00 223,190.00
247,320.00 50,720.00
1,102.00 126,620.00
364,227.00 54,660.00
350,259.50 36,220.00 568,140.00 155,002.00 63,100.00 136,352.50
-------------

12,440,415.44

$ 20,007.60 87,885.95
-------------

107,893.55

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
The notes to the financial statements are an integral part of this statement.
- 10 -

SECRETARY OF STATE STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS
STATE REVENUE COLLECTIONS FUND YEAR ENDED JUNE 30, 1994

EXHIBIT "F" Page 2

CASH RECEIPTS
STATE REVENUE COLLECTIONS
Real Estate Commission Georgia Land Sales Act Real Estate Appraiser Board Real Estate Appraiser Board/Educational Real Estate Licensing Fees Real Estate Schools and Instruction Real Estate Time Sharing Fees
Securities Regulation Division Cemetary Securities Fees
Total Cash Receipts CASH AND CASH EQUIVALENTS - JULY 1, 1993
DISBURSEMENTS
TRANSFERS
To Office of Treasury and Fiscal Services CASH AND CASH EQUIVALENTS - JUNE 30, 1994

$ 18,316.00 411,775.00 17,130.00
1,765,103.75 10,695.00 29,999.00$ 2,253,018.75
$ 62,940.00 4,884,787.64 4,947,727.64 $26,123,123.45 8,636.74
$26,131,760.19
$26,112,627.32 19,132.87
$26,131,760.19

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement.
- 11 -

SECRETARY OF STATE COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30, 1994

EXHIBIT "G"

REVENUES
--------
Auctioneers Recovery Fees Interest Income Real Estate Recovery Fees
Total Revenues
EXPENDITURES
------------
Court Settlements Educational Expenses
Contracts
Total Expenditures
Excess of Revenues over Expenditures FUND BALANCE JULY 1. 1993
-------------------------
FUND BALANCE JUNE 30, 1994

TOTALS YEAR ENDED JUNE 30, 1994 JUNE 30, 1993

$ 19,237.50 $ 21,300.00

52,812.69

54,573.03

80,427.22

72,586.13

------------- -------------

$ 152,477.41 $ 148,459.16
------------- -------------

$

5,000.00 $ 15,909.48

96,762.04

131,631.01

------------- -------------

$ 101,762.04 $ 147,540.49
------------- -------------

$ 50,715.37 $

918.67

1,599,788.70 1,598,870.03
------------- -------------

$1,650,504.07 $1,599,788.70
============= =============

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement.
- 12

SECRETARY OF STATE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "H"

NOTE 1: SUM:MARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY The Secretary of State, an organizational unit of the State of Georgia, is part of the executive branch of the government of the State of Georgia. The Agency is under the control and management of the Secretary of State, who is elected by the qualified voters of the State of Georgia.
The Secretary of State does not have authority to determine the amount of funding it will receive from the State of Georgia for any given fiscal year. Such authority is vested in the General Assembly of Georgia. The Agency also does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, the Secretary of State is included within the State of Georgia reporting entity for financial reporting purposes because ofthe significance ofits legal, operational and financial relationships with the State of Georgia. These reporting entity relationships are defined in Section 2100 of the Governmental Accounting Standards Board Codification of Governmental Accounting and Financial Reporting Standards.
FUND ACCOUNTING The Secretary of State uses funds and account groups 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. An account group, on the other hand, 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 net expendable available financial resources. Funds and account groups presented in the accompanying financial statements are as follows:
GOVERNMENTAL FUND TYPES
BUDGET FUND - The fund used to account for activities and functions as set forth in the Amended Appropriations Act of 1993-1994. The Budget Fund is similar in nature to a General Fund as identified in generally accepted accounting principles in that the Budget Fund is used to account for all activities except those required to be accounted for in some other fund.
STATE REVENUE COLLECTIONS FUND - The fund used to account for the collection of specific revenues ofthe State of Georgia as provided by statute or administrative action and the subsequent transfer of such funds to the Office of Treasury and Fiscal Services. This presentation differs from generally accepted accounting principles in that such activity should be included in the General Fund of the governmental organization.
FIDUCIARY FUND TYPES
EXPENDABLE TRUST FUNDS - The funds used to account for assets, revenues and expenditures utilized in accordance with the provisions of various trusts established by individual agreement, statute or administrative action. Expendable trust funds are used when both the principal and revenues earned on such principal may be expended for the purposes designated in the trust agreement.
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SECRETARY OF STATE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXIIlBIT "H"

NOTE I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FIDUCIARY FUND TYPES
AGENCY FUNDS - The funds used to account for assets held for use by other funds, governments, or individuals.
ACCOUNT GROUPS
GENERAL FIXED ASSETS - The account group used to account for fixed assets used in governmental fund type operations. Fixed assets purchased are recorded at historical cost. Donated fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded values. No depreciation has been provided on general fixed assets.
GENERAL LONG-TERM DEBT - The account group used to report the noncurrent portions of certain governmental long-term liabilities, such as claims, judgments and compensated absences, which will be paid from future resources.
BASIS OF ACCOUNTING MEASUREMENT FOCUS
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. Governmental funds and expendable trust 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 of these funds present increases (i.e., revenues) and decreases (i.e., expenditures) in net current assets.
GOVERNMENTAL FUND TYPES BUDGET FUND
Except as disclosed in the following paragraphs, 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 of the 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. Revenues that are accrued include primarily State appropriations, Federal grants and entitlements, and certain amounts earned under operating agreements with other parties. Further, the modified accrual basis of accounting calls for expenditures, other than accrued interest of general long-term debt, to be recorded when the related fund liability is incurred.
Contractual obligations for services which have not been performed and for goods which have not been
delivered at the end of the fiscal year are recognized as expenditures and liabilities in the accompanying
financial statements. This accounting practice causes expenditure-driven grant revenues to be accrued based

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SECRETARY OF STATE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXIIlBIT "H"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING GOVERNMENTAL FUND TYPES BUDGET FUND
in part on the unexecuted portion of contracts for goods and services. The recognition of encumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted by statutes and regulations ofthe State of Georgia, but is not consistent with generally accepted accounting principles, which provide for the recording of encumbrances as a reservation of fund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures determined in accordance with generally accepted accounting principles.
Prior period adjustments and certain other items are reported as additions to and deductions from fund balances ofthe Budget Fund in the accompanying financial statements. This presentation is in accordance with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, but differs from generally accepted accounting principles in that immaterial adjustments should be reported as current period revenues and expenditures.
STATE REVENUE COLLECTIONS FUND The State Revenue Collections Fund is maintained on the Cash Receipts and Disbursements basis of accounting as prescribed or permitted by statutes and regulations of the State of Georgia. This basis of accounting is defined as that method of accounting in which certain revenue and the related assets are recognized when received rather than when earned, and certain expenses are recognized when paid rather than when the obligation is incurred. The State Revenue Collections Fund, which should be included in the General Fund in accordance with generally accepted accounting principles, should be maintained on the modified accrual basis of accounting.
FIDUCIARY FUND TYPES EXPENDABLE TRUST FUNDS
Except as disclosed in the following paragraph, revenues and expenditures of Expendable Trust Funds are recorded 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 of the 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. Revenues that are accrued include primarily interest income and certain amounts earned under terms of the trust agreements. Expenditures are recorded when the related fund liability is incurred.

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SECRETARY OF STATE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXIIlBIT "H"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING FIDUCIARY FUND TYPES EXPENDABLE TRUST FUNDS
Contractual obligations for services which have not been performed and for goods which have not been delivered at the end of the fiscal year are recognized as expenditures and liabilities in the accompanying financial statements. The recognition of encumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, but is not consistent with generally accepted accounting principles, which provide for the recording of encumbrances as a reservation of fund balance.
AGENCY FUNDS The Agency Funds are custodial in nature in that assets are equally offset by liabilities to other funds, governmental units, or individuals. The modified accrual basis of accounting is utilized for recognizing assets and liabilities.
BUDGET
Appropriation allotments to the Secretary of State are on the basis ofbudgets submitted by the Agency and approved by the Legislature and the Governor. The budgets are compiled in the same manner as all State departments and expenditures are classified by budget unit object classes as provided in Act No. 608 of Georgia Laws 1993 (as approved April 28, 1993) and amended by Act No. 622 of Georgia Laws 1994 (as approved February 8, 1994), which is an appropriated budget and is referred to in these notes as the Amended Appropriations Act of 1993-1994.
CASH AND CASH EQUIVALENTS Cash and Cash Equivalents include demand deposits with banks and other financial institutions and cash management pools that have the general characteristics of demand deposit accounts in that the Agency may deposit additional cash at any time and also may withdraw cash at any time without prior notice or penalty.
INVENTORIES No inventories ofsupplies are reported in the current financial statements. Expendable supplies are recorded as expenditures at the time of purchase.
RESERVED FUND BALANCE Reserves represent those portions of fund equity not appropriable for expenditure or legally segregated for a specific future use. The following is a brief description of the reserves reflected in the accompanying financial statements:
ARCHIVES DONATIONS Funds received for this program represent donations received which are restricted for various Archives programs.
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SECRETARY OF STATE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXIIlBIT "H"

NOTE I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RESERVED FUND BALANCE
FEDERAL FINANCIAL ASSISTANCE The residual portion ofFederal financial assistance revenues not yet expended or encumbered. This amount is restricted for expenditure in future years. This accounting treatment differs from generally accepted accounting principles in that the unearned portion of Federal financial assistance should be reflected as deferred revenue.
RHODES MEMORIAL HALL RESTORATION Funds received for this program represent donations which are restricted for expenditures relating to Rhodes Memorial Hall.
TAYLOR FUND Funds received for this program represent donations received from the R. J. Taylor, Jr., Foundation which are restricted for expenditures relating to the preservation of Wilkes County tax records. Balances in this fund are reserved each year so that no part thereof will be deposited in the general treasury.
STATE REVENUE COLLECTIONS FUND The balance of revenues collected but not transmitted to the Office of Treasury and Fiscal Services at fiscal year end. These funds are required by the Official Code of Georgia Annotated to be transferred to the Office of Treasury and Fiscal Services and are not available for use by the Secretary of State.
COMPENSATED ABSENCES Compensated absences represent obligations of the Agency relating to employee's rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulating annual leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount will not be liquidated with expendable available financial resources. Funds are provided in the appropriation of funds each year to the Agency to cover the cost of annual leave paid to terminated employees.
The liability for compensated absences at year end is reported in the General Long-Term Debt Account Group for governmental funds.
MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the Combined Statements (Statutory Basis) are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations or changes in financial position in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.

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SECRETARY OF STATE NOTES TO THE FINANCIAL STATE:MENTS
JUNE 30, 1994

EXHIBIT "H"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 Agency 's financial position and operations. However, comparative data have not been presented in all statements because their inclusion would make certain statements unduly complex and difficult to understand.
NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVEST:MENTS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds of the State of Georgia cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral any one or more ofthe following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:
(1) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia.
(2) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia.
(3) 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.
(4) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia.
(5) Bonds, bills, certificates of indebtedness, notes, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States go\:'ernment 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.
(6) Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation.
As authorized in the Official Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted policies which allow agencies ofthe State of Georgia the option of exempting demand deposits from the collateral requirements.

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SECRETARY OF STATE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "H"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

CATEGORIZATION OF DEPOSITS For purposes of analysis of custodial credit risk, cash deposits consist of all bank balances which include demand deposits and/or interest bearing accounts. These bank balances are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk.

Category 1 - Amounts covered by depository insurance or collateralized with securities (at market value) held by the Agency or by its agent in the Agency's name.

Category 2 - Amounts collateralized with securities (at market value) held by the financial institution's trust department or agent in the Agency's name.

Category 3 - Amounts collateralized with securities (at market value) held by the financial institution or by its trust department or agent, but not in the Agency's name, and amounts uncollateralized.

Carrying Amount

Bank Balance

Risk Categories

2

3

Cash Deposits

$ 655 802.94 $ 4 613 977 94 $ 620 500.00 $ 43 245.26 $ 3,950 232,68

Investments are stated at cost. The carrying amount shown below is maintained in an investment pool by the Office of Treasury and Fiscal Services.

Type of Investment State Investment Pool

Carrying Amount

Market Value

$ 1,489,037.67 $ 1,489,037.67

NOTE 3: OPERATING LEASES

The Secretary of State has entered into certain agreements to lease real property and equipment which are classified as operating leases. These leases generally contain provisions that, at the expiration date of the original term ofthe lease, the Secretary of State has the option of renewing the lease on a year-to-year basis. Future minimum commitments for operating leases as of June 30, 1994, are listed below. Amounts are included only for multi-year leases and for cancellable leases for which an option to renew for the subsequent fiscal year has been exercised.

Fiscal Year Ending June 30

1995

$ 118 314,00

Expenditures for rental of real property and equipment under operating leases for the year ended June 30, 1994, totaled $96,126.40.

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SECRETARY OF STATE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "H"

NOTE 4: CHANGES IN GENERAL FIXED ASSETS

In accordance with the statutory definition of moveable personal property as defined in Official Code of Georgia Annotated Section 50-16-161, only those items with an acquisition cost of $1,000.00 or greater are reflected in the General Fixed Assets Account Group.

The following is a summary of changes of equipment in the General Fixed Assets Account Group during the fiscal year:

Balance July 1, 1993

$ 2,979,644.86

Additions Deductions

520,396.21 165,654.83

Balance June 30, 1994

$3,334.386 24

NOTE 5: GENERAL LONG-TERM DEBT

CHANGES IN GENERAL LONG-TERM DEBT A summary of changes in General Long-Term Debt for the year ended June 30, 1994, follows:

Compensated Absences

Balance July 1, 1993

$ 1,268,324.25

Additions Annual Leave Earned and Utilized (Net) Salaries Salary Related Fringe Benefits(*)
Deductions

61,560.99 101,736.22

Balance June 30, 1994

$1,431,621.46

Installment
Purchase Commitments

Total

$ 35,555.00 $ 1,303,879.25

35,555.00

61,560.99 101,736.22 35,555.00

$

0 00 $1,431,621.46

(*) Includes related fringe benefits applicable to compensated absences at July 1, 1993.

NOTE 6: DEFERRED COMPENSATION PLAN

The State of Georgia offers its employees a deferred compensation plan in accordance with Internal Revenue Code Section 457. The plan, available to employees of the State of Georgia and county health departments, permits such employees to defer a portion of their salary until future years. Participants choose the option or options in which they wish to participate. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts of compensation deferred under the plan, an 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 or rights ofthe State of Georgia subject only to the claims of the State's general creditors. Participant's rights

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SECRETARY OF STATE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "H"

NOTE 6: DEFERRED COMPENSATION PLAN
under the plan are equal to those of a general creditor of the State of Georgia in an amount equal to the fair market value ofthe deferred account of each participant. Financial information relative to the plan is presented in the financial report of the State Personnel Board - Merit System of Personnel Administration for the year ended June 30, 1994.
NOTE 7: RETIREMENT PLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA The Secretary of State participates in the Employees' Retirement System of Georgia, a single-employer, defined benefit pension plan. The Employees' Retirement System of Georgia was established by the General Assembly of Georgia for the purpose of providing retirement allowances for employees of the State of Georgia. The Retirement System is funded through a combination of employee and employer contributions. Employees are required to contribute a graduated percentage of annual compensation. Employer contributions are for a specified percentage of active member payroll determined annually by an actuarial valuation. During the year ended June 30, 1994, the Secretary of State contributed $1,868,315.06 to the Employees' Retirement System of Georgia. Participation in the Retirement System is not segregated by employee groups of individual governmental units and the Secretary of State has no further liability under the retirement system other than future employer contributions as established for each fiscal year. Information relative to the plan description, funding status and historical trends is presented in the financial report of the Employees' Retirement System of Georgia for the year ended June 30, 1994.
GEORGIA DEFINED CONTRIBUTION PLAN The State of Georgia also provides retirement coverage for temporary, seasonal, and part-time employees who are not eligible for membership in the Employees' Retirement System of Georgia referred to above through a single-employer defined contribution plan. The Georgia Defined Contribution Plan was established by the General Assembly of Georgia and is administered by the Board of Trustees of the Employees' Retirement System of Georgia. Covered employees are required to contribute 7.5% of their gross salary, with no matching contribution by the employer. A member who terminates employment may apply for a refund of contributions and interest. Benefits are based solely on the amount contributed by the employee plus investment earnings. Upon discretion ofthe Board of Trustees, members who leave employment with less than $3,500.00 credited to their account may be required to make a lump-sum withdrawal. Members are eligible to retire at the age of 65 with the option of receiving a periodic payment based on mortality tables and interest accumulation as adopted by the Board of Trustees of the Employees' Retirement System of Georgia. Information relative to the plan description and funding status is presented in the financial report of the Employees' Retirement System of Georgia for the year ended June 30, 1994.
NOTE 8: LEAVE POLICIES
Employees earn ten hours of sick leave each month with a maximum accumulation of ninety days. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination of employment.
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SECRETARY OF STATE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXHIBIT "H"

NOTE 8: LEAVE POLICIES
Employees earn annual leave ranging from ten to fourteen hours each month depending upon the employees' length of continuous State service with a maximum accumulation of forty five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. See Note 1 - Compensated Absences
Certain employees who retire with one hundred and twenty days or more of forfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System of Georgia.
NOTE 9: NONMONETARY TRANSACTIONS
The Georgia State Financing and Investment Commission (GSFIC), a unit of State government, is responsible for the issuance of state debt and for the investment and accounting for proceeds derived from the issuance of state debt. In addition, GSFIC is authorized to acquire and construct projects for the benefit of units of State government or to contract with units of State government for the construction or acquisition of capital outlay projects. During the fiscal year ended June 30, 1994, the Georgia State Financing and Investment Commission paid $561,062.54 to various vendors for approved projects related to the Secretary of State.
NOTE 10: CONTINGENCIES
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditures which are disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although the Secretary of State expects such amounts, if any, to be immaterial to its overall financial position.
Litigation, claims and assessments filed against the Secretary of State, 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 11: BONDING INFORMATION
The Secretary of State and all employees of the Secretary of State are bonded under a Public Employees Blanket Bond written by Employers Insurance of Wausau, 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 Agency 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 Agency 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.

- 22 -

SECRETARY OF STATE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1994

EXIIlBIT "H"

NOTE 11: BONDING INFORMATION
All employees of the Secretary of State 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 Agency to a maximum of$4,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees.

- 23 -

SUPPLEMENTARY INFORMATION
- 25 -

SECRETARY OF STATE COMBINING BALANCE SHEET (STATUTORY BASIS)
BUDGET FUND JUNE 30. 1994

EXHIBIT "I"

ASSETS
Cash and Cash Equivalents
Accounts Receivable State Appropriation Federal Financial Assistance Other

"A"
SECRETARY OF STATE

"8" REAL ESTATE COMMISSION

TOTAL

$ 36,968.08

$ 36,968.08

$ 2,001,443.51 $ 1,203.89 472.90

266,483.64$ 2,267,927.15 1,203.89 472.90

$ 2,003,120.30 $ 266,483.64 $ 2,269,603.94

Total Assets

$2,040,088.38$ 266,483.64 $ 2,306,572.02

LIABILITIES AND FUND EQUITY
---------------------------
Liabilities Cash Overdraft Accounts Payable
Total Liabilities
Fund Equity Fund Balances Reserved Archives Donations Federal Financial Assistance Rhodes Memorial Hall Restoration Taylor Fund Unreserved Designated Surplus
Total Fund Equity

$ 198,673.89 $ 198,673.89

$ 1,579,882.44

19,284.19 1,599,166.63

------------- ------------- -------------

$ 1,579,882.44 $ 217,958.08 $ 1,797,840.52
------------- ------------- -------------

$ 6,756.10 97,137.36 5,832.22 5,425.25

$ 6,756.10 97,137.36 5,832.22 5,425.25

345,055.01 $ 48,525.56

393,580.57

------------- ------------- -------------

$ 460,205.94 $ 48,525.56 $ 508,731.50
------------- ------------- -------------

Total Liabilities and Fund Equity

$ 2,040,088.38 $ 266,483.64 $ 2,306,572.02

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 26 -

SECRETARY OF STATE COMBINING STATEMENT OF CHANGES IN FUND BALANCES {STATUTORY BASIS)
BUDGET FUND YEAR ENDED JUNE 30. 1994

EXHIBIT "J"

FUND BALANCES - JULY 1 ----------------------
Reserved Unreserved
Designated Surplus
ADDITIONS
---------
Adjustments to Prior Year's Accounts Payable Excess of Funds Available over Expenditures
Exhibit "K"
DEDUCTIONS
----------
Unreserved Fund Balance (Surplus) Returned to Office of Treasury and Fiscal Services Year Ended June 30, 1993
Return of Donated Funds Reserved Fund Balance Carried Over from
Prior Year as Funds Available
FUND BALANCES - JUNE 30
-----------------------
(To Exhibit "III)

"A"
SECRETARY OF STATE
---------

"B" REAL ESTATE COMMISSION
-----------

TOTAL

$ 41,087.80

$ 41,087.80

269,686.38 $ 92,435.75

362,122.13

------------- ------------- -------------

$ 310,774.18 $ 92,435.75 $ 403,209.93
------------- ------------- -------------

$ 74,610.21 $

857.70 $ 75,467.91

387,071.24

47,667.86

434,739.10

------------- ------------- -------------

$ 461,681.45 $ 48,525.56 $ 510,207.01
------------- ------------- -------------

$ 269,686.38 $ 1,475.51

92,435.75 $ 362,122 .13 1,475.51

41,087.80

41,087.80

------------- ------------- -------------

$ 312,249.69 $ 92,435.75 $ 404,685.44
------------- ------------- -------------

$ 460,205.94 $ 48,525.56 $ 508,731.50
==--==--==--- -===-===-===- =--==========

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 27 -

SECRETARY OF STATE COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND
YEAR ENDED JUNE 30, 1994

EXHIBIT "K" Page 1

FUNDS AVAILABLE REVENUES
STATE APPROPRIATION General Appropriation Amended Appropriation
Less: Lapsed Funds Total State Appropriation
FEDERAL REVENUES OTHER REVENUES RETAINED (See Schedule)
Total Revenues CARRY-OVER FROM PRIOR YEAR
Transfer from Reserved Fund Balance Archives Donations Federal Financial Assistance Rhodes Memorial Hall Restoration Voter Registration Total Carry-Over from Prior Year

"A" SECRETARY OF STATE

"B" REAL ESTATE COMMISSION

TOTAL

$23,351,752.00 $1,820,481.00 $25,172,233.00

13,500.00 ------

13,500.00

$23,365,252.00 $ 1,820,481.00 $25,185,733.00

13,500.00 - - - - -

13,500.00

$23,351,752.00 $1,820,481.00 $25,172,233.00

89,350.33

89,350.33

1,689,037.38

18,631.70 1,707,669.08

$25,130,139.71 $1,839,112.70 $26,969,252.41

$

6,816.26

25,463.81

7,332.22

1 475.51

$ 41,087.80

$

6,816.26

25,463.81

7,332.22

1 475.51

$ 41 087.80

Total Funds Available

$25,171,227.51 $ 1,839,112.70 $27,010,340.21

EXPENDITURES PERSONAL SERVICES
Salaries and Wages Employer's Contributions for:
F. I. C. A. Retirement Health Insurance Personal Liability Insurance Unemplorment Compensation Insurance Workers Compensation Insurance Assessments by Merit System Drug Testing
REGULAR OPERATING Motor Vehicle Expenses Supplies and Materials Repairs and Maintenance Utilities Rents (Other than Real Estate) Insurance and Bonding Other Operating Expenses (See Schedule) Duplicating and Rapid Copy Publications and Printing
TRAVEL MOTOR VEHICLE PURCHASES EQUIPMENT
Equipment Purchases Lease{Purchase of Equipment Renta of Equipment

$11,296,436.68 $ 802,941.61 $12,099,378.29

801,008.35 1,742,432.17 1,377,082.25
46,125.00 12,106.00 100,805.00 48,963.66
1,126.32

57,197.67 125,882.89 99,544.36
3,600.00 636.00

858,206.02 1,868,315.06 1,476,626.61
49,725.00 12,742.00 100,805.00 48,963.66
1,126.32

$15,426,085.43 $ 1,089,802.53 $16,515,887.96

$ 146,203.57 $ 792,110.36 321,808.46 9,135.47 6,669.45 87,394.00 702,371.81 41,404.67 356,297.96
$ 2,463,395.75 $ $ 244,137.76 $ $ 162,614.00 $

20,839.70 $ 54,856.30 6,400.23
7,023.95 3,827.00 13,907.38 8,073.22 24,779.89

167,043.27 846,966.66 328,208.69
9,135.47 13,693.40 91,221.00 716,279.19 49,477.89 381,077.85

139,707.67 $ 2,603,103.42

9 596. 77 $ 253,734.53

10,537.00 $ 173,151.00

$ 162,052.98 $ 37,650.14 18,843.13
$ 218,546.25 $

6,670.51 $ 1,271.78 7,942.29 $

168,723.49 38,921.92 18,843.13 226,488.54

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 28 -

SECRETARY OF STATE COMBINING STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND
YEAR ENDED JUNE 30, 1994

EXHIBIT "K" Page 2

EXPENDITURES COMPUTER CHARGES
Other Costs Supplies and Materials Re~airs and Maintenance Ot er Operating Expenses (See Schedule)
Software Equipment
Equipment Purchases Per Diem, Fees and Contracts
Per Diem and Fees Computer Billings, DOAS
REAL ESTATE RENTALS TELECOMMUNICATIONS PER DIEM, FEES AND CONTRACTS
Per Diem and Fees Contracts
OTHER ELECTION EXPENSES Personal Services Salaries and Wages Em~loyer's Contribution for: . I .C.A. Other Costs Su~flies and Materials Pu ications and Printing Travel Equipment Equipment Purchases Telecommunications Per Diem, Fees and Contracts Per Diem and Fees Contracts Total Other Total Expenditures
Excess of Funds Available over Expenditures

"A" SECRETARY OF STATE

"B" REAL ESTATE COMMISSION

TOTAL

$ 28,181.76 $ 11,304.74 1,466.41 77,450.38
278,617.38
1,314,555.93 $ 1,711,576.60 $ $ 2,346,042.88 $ $ 363,773.79 $

4,795.38 $ 5.50

32,977.14 11,304.74
1,466.41 77,455.88

278,617.38

12,000.00

12,000.00

240,949.08 1,555,505.01

257,749.96 $ 1,969,326.56

104,523.81 $ 2,450,566.69

28,468.42 $ 392,242.21

$ 1,062,638.13 $ 82,375.00
$ 1,145,013.13 $

143,116.39 $ 1,205,754.52 82,375.00
143,116.39 $ 1,288,129.52

$ 79,963.08

$ 79,963.08

1,110.80

1,110.80

203,115.81 373,001.04
989.03

203,115.81 373,001.04
989.03

1,330.00 795.92

1,330.00 795.92

38,665.00 4 000.00

38,665.00 4,000.00

$ 702,970.68

$ 702,970.68

$24,784,156.27 $ 1,791,444.84 $26,575,601.11

387,071.24

47,667.86

434 .739 .10

$25,171,227.51 $ 1,839,112.70 $27,010,340.21

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 29 -

SECRETARY OF STATE COMBINING BALANCE SHEET FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUNDS
JUNE 30, 1994

EXHIBIT "L"

ASSETS Cash and Cash Equivalents
FUND EQUITY Fund Balances
Unreserved Undesignated

AUCTIONEERS RECOVERY
FUND

REAL ESTATE RECOVERY
FUND

TOTAL

$ 160,993.78 $1,489,510.29 $1,650,504.07
============= ============= =============

$ 160,993.78 $1,489,510.29 $1,650,504.07
============= ---====-===== =============

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 30 -

SECRETARY OF STATE COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
FIDUCIARY FUND TYPE - EXPENDABLE TRUST FUNDS YEAR ENDED JUNE 30, 1994

EXHIBIT "M"

REVENUES --------
Auctioneers Recovery Fees Interest Income Real Estate Recovery Fees
Total Revenues
EXPENDITURES
------------
Court Settlements Educational Expenses
Contracts
Total Expenditures
Excess of Revenues over Expenditures FUND BALANCE JULY 1' 1993
-------------------------
FUND BALANCE JUNE 30, 1994

AUCTIONEERS RECOVERY
FUND
-----------

REAL ESTATE RECOVERY
FUND
-----------

TOTAL

$ 19,237.50

$ 19,237.50

$ 52,812.69

52,812.69

80,427.22

80,427.22

------------- ------------- -------------

$ 19,237.50 $ 133,239.91 $ 152,477.41
------------- ------------- -------------

$ 5,000.00

$ 5,000.00

1,778.72 $ 94,983.32

96,762.04

------------- ------------- -------------

$ 6,778.72 $ 94,983.32 $ 101,762.04
------------- ------------- -------------

$ 12,458.78 $ 38,256.59 $ 50,715.37

148,535.00 1,451,253.70 1,599,788.70
------------- ------------- -------------

$ 160,993.78 $1,489,510.29 $1,650,504.07
============= -============ =============

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statement and Supplementary Information.
- 31 -

SECRETARY OF STATE COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30, 1994

EXHIBIT "N"

FUND
Appraiser Transfer Fund Donations
Archives Portrait Fund Election Qualifying Fees

ASSETS/

LIABILITIES

J-U-L-Y---1-' --1-9-9-3

ADDITIONS
---------

$

. 7,975.00 $ 74,500.00 $

DELETIONS
---------

ASSETS/ LIABILITIES JUNE 30, 1994
-------------

67,725.00 $ 14,750.00

352.29

352.29

0.00

378,396.79

243,762.69

622,159.48

------------- ------------- ------------- -------------

$ 386,724.08$ 318,262.69 $ 68,077.29 $ 636,909.48

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 32 -

SECRETARY OF STATE SCHEDULE OF APPROVED BUDGET
"A" SECRETARY OF STATE YEAR ENDED JUNE 30, 1994

SCHEDULE "1"

FUNDS AVAILABLE
---------------
REVENUES --------
State Appropriation Federal Revenues Other Revenues Retained
EXPENDITURES
Personal Services Regular Operating Expenses Travel Motor Vehicle Purchases Equipment Computer Charges Real Estate Rentals Telecommunications Per Diem, Fees and Contracts Election Expenses

ORIGINAL

AMENDED

BUDGET

APPROPRIATION APPROPRIATION ADJUSTMENTS

TOTAL

------------- ------------- -----------

$23,351,752.00 $ 13,500.00

$23,365,252.00

$ 13,060.00

13,060.00

879,000.00

1,013,680.00 1,892,680.00

------------- ------------- ------------- -------------

$24,230,752.00 $ 13,500.00 $1,026,740.00 $25,270,992.00

$15,429,769.00

$15,429,769.00

2,534,414.00 $

3,500.00 $ 50,551.00 2,588,465.00

206,350.00

10,000.00

75,073.00

291,423.00

154,064.00

8,581.00

162,645.00

179,667.00

50,835.00

230,502.00

1,217,775.00

701,165.00 1,918,940.00

2,344,377.00

-945.00 2,343,432.00

323,686.00

39,660.00

363,346.00

1,140,650.00

64,820.00 1,205,470.00

700,000.00

37,000.00

737,000.00

------------- ------------- ------------- -------------

$24,230,752.00 $ 13,500.00 $ 1,026,740.00 $25,270,992.00
============= ============= =---==---==-- ==-====-=====

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 33 -

SECRETARY OF STATE SCHEDULE OF APPROVED BUDGET "B" REAL ESTATE COMMISSION
YEAR ENDED JUNE 30. 1994

SCHEDULE "2"

FUNDS AVAILABLE
---------------
REVENUES --.------
State Appropriation Other Revenues Retained
EXPENDITURES
Personal Services Regular Operating Expenses Travel Motor Vehicle Purchases Equipment Computer Charges Real Estate Rentals Telecommunications Per Diem, Fees and Contracts

ORIGINAL

BUDGET

APPROPRIATION ADJUSTMENTS

TOTAL

------------- -----------

$ 1,820,481.00

$ 1,820,481.00

0.00 $ 18,632.00

18,632.00

------------- ------------- -------------

$ 1,820,481.00 $ 18,632.00 $ 1,839,113.00

$ 1,093,946.00 162,600.00 16,000.00 11,000.00 16,850.00 247,455.00 $ 113,700.00 26,180.00 132,750.00

$ 1,093,946.00

162,600.00

16,000.00

11,000.00

16,850.00

6,000.00

253,455.00

113,700.00

2,000.00

28,180.00

10,632.00

143,382.00

$1,820,481.00 $ 18,632.00$ 1,839,113.00
============= ============= =============

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 34 -

SECRETARY OF STATE CASH ANO CASH EQUIVALENTS
JUNE 30, 1994

SCHEDULE "3"

NONINTEREST BEARING ACCOUNTS
Bank South, N. A., Atlanta, Georgia
Carver State Bank, Savannah, Georgia
First Southern Bank, Lithonia, Georgia
First Union National Bank of Georgia, Atlanta, Georgia
NationsBank of Georgia, N. A., Atlanta, Georgia
Trust Company Bank, Atlanta, Georgia
Wachovia Bank of Georgia, N. A., Atlanta, Georgia
INTEREST BEARING ACCOUNTS
Funds on Deposit with Office of Treasury and Fiscal Services State Investment Pool

$ -161,344.67 20,500.00
160,993.7B 9,922.62
-11,291.70 622,159.48
14,863.43 $ 655,802.94
-------------
1,489,037.67
$ 2,144,840.61

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 35 -

SECRETARY OF STATE SCHEDULE OF FEDERAL REVENUES
YEAR ENDED JUNE 30, 1994

PROGRAM
Justice, U. S. Department of Seized and Forfeited Property Direct
National Archives and Records Administration National Historical Publications and Records Grant Direct
National Foundation on the Arts and the Humanities Institute of Museum Services Direct

CFDA NUMBER
N/A 89.003 45.301

SCHEDULE "4"
AMOUNT $ 82,036.44
1,203.89 6,110.00 $ 89,350.33
=============

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 36 -

SECRETARY OF STATE SCHEDULE OF OTHER REVENUES RETAINED
YEAR ENDED JUNE 30, 1994

SCHEDULE "5"

Certification, Transfers of Scores and Verification Corporate Information Tapes Donations-Archives Expedited Services Identification Card Replacement Inspection and Investigation Microfilms (Archives) Photocopies and Publications Rosters Sales and Services
Archives Supplies Patches Seminars Taylor Fund - Davis Collections Taylor Fund - Wilkes County Grant

"A" SECRETARY OF STATE
---------

"B" REAL ESTATE COMMISSION
-----------

TOTAL

$ 61,504.91 19,424.18 $ 552.69
1,102,882.00 4.00
212,233.83 21,493.06
116,006.75 134,893.96

$ 61,504.91

3,375.00

22,799.18

552.69

1,102,882.00

4.00

212,233.83

21,493.06

433.85

116,440.60

14,822.85

149,716.81

5,261.28 585.50 860.22
4,500.00 8,835.00
-----------...--

-------------

5,261.28 585.50 860.22
4,500.00 8,835.00
-------------

$1,689,037.38 $ 18,631.70$ 1,707,669.08

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 37 -

SECRETARY OF STATE SCHEDULE OF OTHER OPERATING EXPENSES
YEAR ENDED JUNE 30. 1994

SCHEDULE "6"

REGULAR OPERATING EXPENSES
Court Reporter Services and Transcripts Examinations and Testing Film Processing Mailing and Messenger Service Registration Fees Seminar Expense Subscriptions and Dues
COMPUTER CHARGES
Mailing and Messenger Service Seminar Expense Subscriptions and Dues

"A"
SECRETARY OF STATE

"8"
REAL ESTATE COMMISSION

TOTAL

$

6,281.43 $

1,234.20 $

7,515.63

462,905.85

462,905.85

32,769.90

414.46

33,184.36

59,948.20

8,163.76

68,111.96

41,722.05

1,725.00

43,447.05

8,320.88

8,320.88

90,423.50

2,369.96

92,793.46

------------- ------------- -------------

$ 702,371.81 $ 13,907.38 $ 716,279.19

$

23.25

418.50

1,024.66

$

1,466.41

$

23.25

418.50

1,024.66

$

1,466.41

============:::

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 38 -

Totals per Annual Supplement

Adjustments Feldman,

Steve

Totals per Report

SECRETARY OF STATE RECONCILIATION OF PER DIEM AND FEES
YEAR ENDED JUNE 30. 1994

SCHEDULE "7"

TYPE PAYMENT
Witness Expense

FEE AMOUNT

EXPENSE AMOUNT

TOTAL

$ 936,242.98$ 320,609.54 $1,256,852.52

-433.00

-433.00

------------- ------------- -------------

$ 936,242.98$ 320,176.54 $1,256,419.52

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 39 -

SECRETARY OF STATE SUMMARY OF SALARIES, TRAVEL, AND PER DIEM AND FEES
YEAR ENDED JUNE 30. 1994

SCHEDULE 811 11

BUDGET FUND
"A" SECRETARY OF STATE Regular Election Expenses
"B" REAL ESTATE COMMISSION Regular Computer Charges

SALARIES

TRAVEL

PER DIEM AND FEES

$11,296,436.68 $ 244,137.76 $ 1,062,638.13

79,963.08

989.03

38,665.00

------------- ------------- -------------

$11,376,399.76 $ 245,126.79 $ 1,101,303.13
------------- ------------- -------------

$ 802,941.61 $

9,596.77 $ 143,116.39

12,000.00

------------- ------------- -------------

$ 802,941.61 $

9,596.77 $ 155,116.39

------------- ------------- -------------

$12,179,341.37 $ 254,723.56 $ 1,256,419.52

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 40 -

SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS

SECRETARY OF STATE SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1994

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status offindings disclosed in the review report for the year ended June 30, 1993, is summarized below:

Audit Control Number

Status of Finding

478-93-01

See Audit Control Number 478-94-01

PRIOR YEAR/CURRENT YEAR

GENERAL FIXED ASSETS/PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Financial Statements Audit Control Number 478-94-01

The review report for the year ended June 30, 1993, noted deficiencies in the controls over general fixed assets. For the year under review, our examination included a review of the accounting procedures utilized by the Secretary of State in maintaining their State Property System. This review consisted of testing the inventory system for compliance with State equipment laws and regulations. In addition, procedures were completed to verify the accuracy of the total equipment inventory valuation contained in the inventory records, which comprises the General Fixed Assets Account Group.

A sample of 46 equipment items was selected to test the accuracy of the Secretary of State's equipment inventory system. Ofthe 46 equipment items selected for physical inspection, the following deficiencies were noted:

(1) Thirteen (13) items were located in locations other than the location indicated in the property inventory system.

(2) Five (5) items could not be located.

As a result of the discrepancies identified above, we were unable to determine the validity of the total equipment inventory valuation contained in the inventory records, which comprises the General Fixed Assets Account Group.

The Secretary of State should establish the necessary internal controls to ensure that equipment inventories are maintained in accordance with the provisions of the State Property System Manual.