Review report, state of Georgia, State Soil and Water Conservation Commission, year ended June 30, 1996

GA
A~oo , R\ S<Od.
\CjctS-Cf~
REVIEW REPORT STATE OF GEORGIA STATE SOIL AND WATER CONSERVATION COMMISSION YEAR ENDED JUNE 30, 1996

STATE SOIL AND WATER CONSERVATION COMMISSION - TABLE OF CONTENTS -

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

EXInBITS

FINANCIAL STATEMENTS

A COMBINED BALANCE SHEET (STATUTORY BASIS)

ALL FUND TYPES AND ACCOUNT GROUPS

2

B STATEMENT OF CHANGES IN FUND BALANCES

(STATUTORY BASIS)

GOVERNMENTAL FUND TYPE

3

C STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

BUDGET FUND

4

D STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

COMPARED TO BUDGET

BUDGET FUND

7

E NOTES TO THE FINANCIAL STATEMENTS

8

SUPPLEMENTARY INFORMATION

SCHEDULES

1 SCHEDULE OF APPROVED BUDGET

20

2 CASH AND CASH EQUIVALENTS

21

3 SCHEDULE OF FEDERAL REVENUES

22

4 SCHEDULE OF OTHER OPERATING EXPENSES

23

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

24

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
November 5, 1996

Honorable Zell Miller, Governor Members of the General Assembly of Georgia Members of the State Soil and Water Conservation Commission
and Honorable F. Graham Liles, Jr., Executive Director
INDEPENDENT ACCOUNTANTIS COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have reviewed the accompanying financial statements (Exhibits A through E) of the State Soil and Water Conservation Commission as of and for the year ended June 30, 1996, 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, ~hich 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 State Soil and Water Conservation Commission.
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.
OUf review was made for the purpose ofexpressing 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 (Schedules 1 through 5) is

96ARL-4

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,
~
Claude L. Vickers State Auditor
CLV:dt 96ARL-4

FINANCIAL STATEMENTS -I-

STATE SOIL AND WATER CONSERVATION COMMISSION COMBINED BALANCE SHEET (STATUTORY BASIS) ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30 1996

EXHIBIT "A"

ASSETS
Cash and Cash Equivalents (See Schedule)
Accounts Receivable State Appropriation Federal Financial Assistance
Fixed Assets Equipment
Amount to be Provided for Payment of Accrued Compensated Absences Installment Purchase Commitments
Total Assets
LIABILITIES AND FUND EQUITY
Liabilities Accounts Payable Contracts Payable Compensated Absences Installment Purchases
Total Uabilities
Fund Equity Investment in General Fixed Assets Fund Balances Reserved Federal Financial Assistance Unreserved Designated Surplus
Total Fund Equity
Total Uabilities and Fund Equity

GOVERNMENTAL FUND TYPE BUDGET

ACCOUNT GROUPS

GENERAL

GENERAL

FIXED

LONG-TERM

ASSETS

DEBT

TOTALS (Memorandum Only) JUNE 30, 1996 JUNE 30, 1995

$

300.00

$

300.00 $

300.00

$

290,465.74

154,143.19

$

444.608.93

$ 236,907.65

$ 290,465.74 $ 154,143.19
$ 444,608.93 $
$ 236,907.65 $

152,771.39 40,867.74
193,639.13
184,808.31

$

75,450.87 .$

75,450.87 $

0.00

0.00

$

75,450.87 $

75,450.87 $

71,584.74 909.04
72,493.78

$

444,908.93 $ 236,907.65 $

75,450.87 $ 757,267.45 $

451,241.22

$

441,254.24

0.00

$

441,254.24

$ 441,254.24 $

35,541.15

0.00

126,617.38

$

75,450.87

75,450.87

71,584.74

0.00

0.00

909.04

$

75,450.87 $ 516,705.11 $

234,652.31

$ 236,907.65

$ 236,907.65 $

184,808.31

$

0.00

0.00

28,691.76

3,654.69

$

3,654.69 $ 236,907.65

3,654.69 $ 240,562.34 $

3,088.84 216,588.91

$

444,908.93 $ 236,907.65 $

75,450.87 $ 757,267.45 $

451,241.22

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

STATE SOIL AND WATER CONSERVATION COMMISSION STATEMENT OF CHANGES IN FUND BALANCES (STATUTORY BASIS)
GOVERNMENTAL FUND TYPE YEAR ENDED JUNE 30, 1996

EXHIBIT"B"

FUND BALANCES - JULY 1
Reserved Unreserved
Designated Surplus
ADDITIONS Adjustments to Prior Year's Accounts Payable Excess of Funds Available over Expenditures Exhibit "C"
DEDUCTIONS Unreserved Fund Balance (Surplus) Returned to Office of Treasury and Fiscal Services Year Ended June 30, 1994 Year Ended June 30, 1995 Reserved Fund Balance Carried Over from Prior Year as Funds Available
FUND BALANCES - JUNE 30 (To Exhibit "A")

BUDGET FUND YEAR ENDED JUNE 30, 1996 JUNE 30, 1995

$

28,691,76 $

68,984.12

3,088.84

30,175.38

$

31,780.60 $

99,159.50

$

378,00 $

208.00

3,276.69

31,572.60

$

3,654.69 $

31,780.60

$

0,00 $

30,175.38

3,088,84

0.00

28,691.76

68,984.12

$

31,780.60 $

99,159.50

$

3,654.69 $

31,780.60

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. -3-

STATE SOIL AND WATER CONSERVATION COMMISSION STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30, 1996

EXHIBIT"C"

FUNDS AVAILABLE
REVENUES
STATE APPROPRIATION General Appropriation Amended Appropriation
Less: Lapsed Funds
Total State Appropriation
FEDERAL REVENUES (See Schedule)
OTHER REVENUES RETAINED Insurance Recoveries Witness Fees Total Other Revenues Retained
Total Revenues
CARRY-OVER FROM PRIOR YEAR
Transfer from Reserved Fund Balance Federal Financial Assistance

TOTALS YEAR ENDED JUNE 30, 1996 JUNE 30, 1995

$ 2,182,494.00 $ -90,000.00

$ 2,092,494.00 $ 76,083.00

$ 2,016,411.00 $

$

287,255.86 $

1,926,187.00 0.00
1,926,187.00 89,491.00
1,836,696.00
335,437.95

$

0.00 $

0.00

$

0.00 $

$ 2,303,666.86 $

6,200.00 25.00
6,225.00
2,178,358.95

28,691.76

68,984.12

Total Funds Available

$ 2,332,358.62 $ 2,247,343.07

EXPENDITURES
PERSONAL SERVICES
Salaries and Wages Employer's Contributions for:
F.I.C.A. Retirement Health Insurance Personal Uability Insurance Unemployment Compensation Insurance Workers' Compensation Insurance
REGULAR OPERATING EXPENSES
Motor Vehicle E>lpenses Supplies and Materials Repairs and Maintenance Utilities Rents (Other than Real Estate) Insurance and Bonding Other Operating Expenses (See Schedule) Publications and Printing Equipment Purchases
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.
-4-

$

737,465.79 $

53,658.38 112,358.76
92,183.25 4,800.00 177.00 3,025.00

$_..1:,0.0c3,:6.68=.=18~ $

717,852.89
51,726.09 112,406.77
89,731.63 5,400.00 318.00 3,191.00
980,626.38

$

17,389.47 $

.65,310.84

11,854.00

8,285.50

1,206.00

77,763.00

7,751.35

147,076.71

3,439.36

340,076.23 $

11,977.12 69,975.03 11,872.39
6,518.08 817.50
87,646.00 5,121.16
133,580.21 2,260.15
329,767.64

STATE SOIL AND WATER CONSERVATION COMMISSION STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
BUDGET FUND YEAR ENDED JUNE 30,1996

EXHIBIT"C"

EXPENDITURES TRAVEL MOTOR VEHICLE PURCHASES EQUIPMENT
Equipment Purchases Lease/Purchase of Equipment Rental of Equipment
COMPUTER CHARGES 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 COUNTY CONSERVATION GRANTS Per Diem, Fees and Contracts Contracts Total Expenditures
Excess of Funds Available over Expenditures

TOTALS YEAR ENDED JUNE 30, 1996 JUNE 30, 1995

$

34,060.09 $

$

26,942.88 $

34,048.69 38,194.95

$

0.00 $

940.00

9,101.34

$

10,041.34 $

834.35 2,820.00 8,443.92
12,098.27

$

2,317.99 $

2,261.78

13,348.59

2,674.58

280.00 477.84

0.00 1,178.84

$

16,424.42 $

6,115.20

$

89,463.00 $

80,442.00

$

19,038.26 $

17,726.33

$

132,892.53 $

354,938.77

$

487,831.30 $

149,552.17 186,453.92
336,006.09

$

301,536.23 $

$ 2,329,081.93 $

3,276.69

380,744.92 2,215,770.47
31,572.60

$ 2,332,358.62 $ 2,247,343.07

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-

STATE SOIL AND WATER CONSERVATION COMMISSION STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
YEAR ENDED JUNE 30, 1996

EXHIBIT"D"

EXPENDITURES
Personal Services Regular Operating Expenses Travel Motor Vehicle Purchases Equipment Computer Charges Real Estate Rentals Telecommunications Per Diem, Fees and Contracts County Conservation Grants
Excess of Funds Available over Expenditures

$ 2,408,449.00 $ 2,332,358.62 $

-7;..;6;..:.:,O9O;..;;..;;;..;.;;.38~

$ 1,066,149.00 $ 1,003,668.18 $

341,331.00

340,076.23

41,628.00

34,060.09

26,950.00

26,942.88

11,910.00

10,041.34

16,556.00

16,424.42

90,591.00

89,463.00

19,090.00

19,038.26

490,244.00

487,831.30

304,000.00

301,536.23

62,480.82 1,254.77 7,567.91 7.12 1,868.66 131.58 1,128.00 51.74 2,412.70 2,463.77

$ 2,408,449.00 $ 2,329,081.93 $ _ _..;.7..;;.9':.;.36.;..7.;.;.0..;..7

$

3,276.69 $ _ _.....3. .,2.7..6..6...9.

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-

STATE SOIL AND WATER CONSERVAnON COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996

EXHIBIT"E"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY The State Soil and Water Conservation Commission, an organizational unit of the State of Georgia, is part of the executive branch ofthe government ofthe State ofGeorgia. Five (5) District Soil and Water Supervisors, appointed by the Governor, serve as members ofthe State Soil and Water Conservation Commission.
The State Soil and Water Conservation Commission 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 Commission also does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, the State Soil and Water Conservation Commission 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 ofthe Governmental Accounting Standards Board Codification of Governmental Accounting and Financial Reporting Standards.
FUND ACCOUNTING The State Soil and Water Conservation Commission uses a fund 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 of the State of Georgia. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number offunds are maintained consistent with legal and managerial requirements. Account groups are a reporting device used to account for certain assets and liabilities of the governmental funds. not recorded directly in those funds. The fund and account groups presented in the accompanying financial statements are as follows:
GOVERNMENTAL FUND TYPE
BUDGET FUND - The fund used to account for activities and functions as set forth in the Amended Appropriations Act of 1995-1996. The Budget Fund is similar in nature to a General Fund as defined 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.
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 cost or at estimated historical cost if historical cost is not practically determinable. 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.

-8-

STATE SOIL AND WATER CONSERVATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30.1996

EXHIBIT"E"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FUND ACCOUNTING
ACCOUNT GROUPS
GENERAL FIXED ASSETS The cost of normal maintenance and repairs that do not add to the value ofthe asset or materially extend assets' lives are not included in the General Fixed Assets Account Group. Material improvements adding to the value or useful life of the assets are included in the General Fixed Assets Account Group.
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 ~hould be accounted for using the flow of current financial resources measurement focus. With this measurement focus, operating statements present increases and decreases in net current assets and unreserved fund balance is a measure ofavailable spendable resources. In accordance with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, .the Budget Fund remits its unreserved fund balance (surplus) to the Office ofTreasury and Fiscal Services in the subsequent fiscal year.
GOVERNMENTAL FUND TYPE BUDGETFUND
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 ofaccounting, revenues are recognized when susceptible to accrual (Le., when they are "measurable and available"). "Measurable" means the amount of the transaction can be determined and Iiavailable" means collectible within the current period or soon enough thereafter to pay liabilities of the current period. Revenues that are accrued include primarily State appropriations and Federal grants and entitlements. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on general long-term debt which is recognized when due, and certain compensated absences, claims and judgements which are recognized when the obligations are expected to be liquidated with expendable available financial . resources.
Contractual obligations for goods and services which have not been received 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, 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 of the State of Georgia, but is not consistent with generally accepted accounting principles, which provide for the recording of encumbrances
-9-

STATE SOIL AND WATER CONSERVATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996

EXHIBIT "E"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING GOVERNMENTAL FUND TYPE BUDGET FUND
as a reservation offund 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 ofthe State of Georgia, but differs from generally accepted accounting principles in that immaterial adjustments should be reported as current period revenues and expenditures.
BUDGET Appropriation allotments to the State Soil and Water Conservation Commission are on the basis of a budget submitted by the Commission and approved by the Legislature and the Governor. The budget is adopted on a basis consistent with accounting practices prescribed or permitted by statutes and regulations ofthe State ofGeorgia and is compiled in the same manner as all State departments. Expenditures are classified by budget unit object classes as provided in Act No. 476 of Georgia Laws 1995 (as approved April 21, 1995) and amended by Act No. 513 ofGeorgia Laws 1996 (as approved February 16, 1996). This budget is considered to be an appropriated budget and is referred to in these notes as the Amended Appropriations Act of 19951996.
Overexpenditure of a budget unit object class, except for the "common object classes", included in the Commission's final amended budget is in violation of Section 54 of the 1995-1996 Amended Appropriations Act. Expenditures ofno more than 102% of the stated amount for each common object class are authorized by Section 54. However, the total expenditure for the group of common object classes may not exceed the sum of the stated amounts for the separate object classes of the group. The common object classes include Personal Services, Regular Operating Expenses, Travel, Motor Vehicle Purchases, Equipment, Computer Charges, Real Estate Rentals, Telecommunications and Postage.
CASH AND CASH EQUIVALENTS Cash and cash equivalents consist of currency on hand.
INVENTORIES No inventories of supplies are reported in these financial statements. Expendable supplies are recorded as expenditures at the time of purchase.
UNRESERVED FUND BALANCE In accordance with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, the Budget Fund's unreserved fund balance is remitted to the Office of Treasury and Fiscal Services in the subsequent fiscal year as surplus. This amount of unexpended general appropriations is designated for reappropriation by the State in subsequent years.
- 10 -

STATE SOIL AND WATER CONSERVATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30.1996

EXHIBIT "E"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
COMPENSATED ABSENCES Compensated absences represent obligations of the Commission 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 ecorded in the individual funds for the current portion ofthis 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 Commission 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 Balance Sheet (Statutory Basis) are captioned "Memorandum Only" because they do not represent consolidated financial information and are presented only to facilitate financial analysis. The columns do not present information that reflects 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 ofthis data.
COMPARATIVE DATA Comparative total data for the prior year have been presented in selected sections of the accompanying financial statements in order to provide an understanding ofthe changes in the Commission's financial position and operations. Comparative totals have not been included on statements where their inclusion would not provide enhanced understanding of the Commission's financial position and operations or would cause the statements to be unduly complex and difficult to understand. Also, certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year's presentation.
NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS
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 anyone or more ofthe following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:
(1) Bonds, bills, certificates of indebtedness, notes, or other direct obligations of the United States or ofthe State of Georgia.
(2) Bonds, bills, certificates ofindebtedness, notes, or other obligations of the counties or municipalities ofthe State of Georgia.
(3) Bonds ofany 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.
- 11 -

STATE SOIL AND WATER CONSERVAnON COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30.1996

EXHIBIT "E"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS

STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES (4) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia.

(5) Bonds, bills, certificates ofindebtedness, notes, 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.

(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.

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. The bank balances as ofJune 30, 1996, 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 Commission or by its agent in the Commission's name.

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

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

Cash Deposits

Carrying Amount

Bank Balances

Risk Categories

2

3

$====O~.QQ~ $ 4674709 $ 46747 09 $==dO~QQ~ $,===O~.QQ=

- 12 -

STATE SOIL AND WATER CONSERVAnON COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 3D. 1996

EXHIBIT "E"

NOTE 3: OPERATING LEASES

The State Soil and Water ConselVation Commission 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 of the lease, the Commission has the option of renewing the lease on a year-to-yearbasis. Future minimum commitments for operating leases as ofJune 30, 1996, are listed below. Amounts are included only for multi-year leases and for cancellable leases for which an option to re~ew for the subsequent fiscal year has been exercised.

Fiscal Year Ending June 30

1997

$ 80,388.00

Expenditures for rental of real property and equipment under operating leases for the year ended June 30, 1996, totaled $99,770.34.

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$l,OOO.OO 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, 1995

$ 184,808.31

Additions

52,099.34

Balance June 30, 1996

$ 236,907.65

- 13 -

STATE SOIL AND WATER CONSERVAnON COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1996

EXHIDIT"E"

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, 1996, follows:

Compensated Absences

Installment Purchase
Commitments

Total

Balance July 1, 1995

$ 71,584.74 $

909.04 $ 72,493.78

Additions

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

3,591.39 274.74

909.04

3,591.39 274.74 909.04

Balance June ~O, 1996

$ 75.450.87 $

0.00 $ 75.450.87

NOTE 6: RISK MANAGEMENT

Public Entity Risk Pool

The State Personnel Board, Merit System ofPersonnel Administration administers for the State of Georgia a program ofhealth benefits for the employees ofunits of government ofthe State of Georgia, units of county government and local education agencies located within the State of Georgia. This plan is funded by participants covered in the plan, by employers' contributions paid by the various units of government participating in the plan, and appropriations made by the General Assembly of Georgia. The State Personnel Board, Merit System of Personnel Administration has contracted with Blue Cross Blue Shield of Georgia to process claims in accordance with the State Employees' Health Benefit Plan as established by the State Personnel Board.

Other Risk Management

The Department ofAdministrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to. manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and

- 14 -

STATE SOIL AND WATER CONSERVAnON COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30,1996

EXHIBIT "E"

NOTE 6: RISK MANAGEMENT
Other Risk Management
law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The Commission is part of the State ofGeorgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment.
NOTE 7: DEFERRED COMPENSATION PLAN
The State ofGeorgia offers its employees a deferred compensation plap in accordance with Internal Revenue Code Section 457. The plan, available to employees ofthe State of Georgia and county health departments, permits such employees to defer a portion oftheir salary until future years. Participation in the plan is optional. 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, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the employee or other beneficiary) solely the property or rights of the State of Georgia subject only to the claims of the State's general creditors. Participant's rights 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 of the deferred account of each participant. Financial information relative to the plan will be presented in the State of Georgia Comprehensive Annual Financial Report for the year ended June 30, 1996.
NOTE 8: RETIREMENTPLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Plan Description The State Soil and Water Conservation Commission participates in the Employees' Retirement System of Georgia ("ERS"), a single-employer, defined benefit plan established by the General Assembly of Georgia for the purpose of providing retirement allowances for employees of the State of Georgia. The Commission's payroll for the year ended June 30, 1996, for employees covered by ERS was $723,239.13. The Commission's total payroll for all employees was $737,465.79.
Benefits The benefit structure of ERS was significantly modified on July 1, 1982. Unless elected otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July 1, 1982, is an "old plan" member subject to the plan provisions in effect prior to July 1, 1982. All other members are "new plan" members subject to the modified plan provisions.

- 15 -

STATE SOIL AND WATER CONSERVAnON COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996

EXHIBIT"E"

NOTE 8: RETIREMENT PLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Benefits Under both the old plan and new plan, members become vested after 10 years of creditable service. A member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 65. If 10 years of service is completed and age 60 is reached, the member may retire with a reduced benefit. Additionally, there are certain provisions allowing for retirement after 30 years of service regardless of age.
Retirement benefits paid to members are based upon a formula which considers the monthly average of the member's highest eight consecutive calepdar quarters of salary, the number ofyears of creditable service, and the member's age at retirement. Postretirement cost-of-living adjustments are also made to member's benefits. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension at reduced rates to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS.
Funding Status and Progress Funding status and progress information is presented in the ERS June 30, 1996, financial report which may be obtained through ERS.
Contributions Required and Contributions Made As established by State statute, all full-time employees ofthe State of Georgia and its political subdivisions, who are not members ofother state retirement systems, are eligible to participate in the ERS. Both employer and employee contributions are established by State statute.
Under the old plan, member contributions consist of employee contributions paid by the employee of 1.25% ofcompensation and 4.75% of compensation paid by the Commission on behalf ofthe employee. Under the new plan, member contributions consist solely of 1.25% ofcompensation paid by employee. The Commission also is required to contribute at a specified percentage of active member payroll determined annually by actuarial valuation. For the year ended June 30, 1996, the ERS employer contribution rate for the Commission amounted to 14.79010 ofcovered payroll and included the 4.75% contributed on behalf ofthe employee under the old plan referred to above. The employer contributions are projected to liquidate the unfunded actuarial liability within 20 y~s based upon the actuarial valuation ofJune 30, 1995. Employer contributions are also made on amounts paid for accumulated leave to retiring employees.
Actuarial assumptions used by the ERS to compute actuarially determined contribution requirements are the same as those used to compute the pension benefit obligation.
Total contributions to the plan made during fiscal year 1996 amounted to $115,975.39, of which $106,934.31 was made by the Commission and $9,041.08 was made by employees. These contributions met the requirements of the plan.
- 16 -

STATE SOIL AND WATER CONSERVAnON COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30,1996

EXHIBIT "E"

NOTES: RETffiEMrnNTPLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Trend Information Historical trend infonnation is presented in the ERS June 30, 1996, financial report which may be obtained through ERS. This infonnation gives an indication of the progress made in accumulating sufficient assets to pay benefits when due.
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description The State Soil and Water Conservation Commission participates in the Georgia Defined Contribution Plan ("GDCP") which is a single-employer defined contribution plan established by the Georgia General Assembly for the purpose ofproviding retirement coverage for State employees who are temporary, seasonal, and parttime and are not members ofa public retirement or pension system. GDCP is administered by the Employees' Retirement System Board of Trustees. The Commission's payroll for the year ended June 30, 1996, for employees covered by GDCP was $6,636.15. The Commission's total payroll for all employees was $737,465.79.
Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to. be adopted by the Board. If a member has less than $ 3,500 credit to hislher account, the Board has the option of requiring a lump sum distribution to the member in lieu of making periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary.
Contributions and Vesting Member contributions are seven and one-half percent (7.5%) of gross salary. There are no employer contnbutions. Earnings are credited to each member's account in a manner established by the Board. Upon termination of employment, the amount ofthe member's account is refundable upon request by the member.
Total contributions made by employees during fiscal year 1996 amounted to $497.72 which represents 7.5% of covered payroll. These contributions met the requirements of the plan.
NOTE 9: LEAVB 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.

- 17 -

STATE SOIL AND WATER CONSERVATION COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996

EXHffiIT"E"

NOTE 9: 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 thirty 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 offorfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System of Georgia.
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 Commission expects such amounts, if any, to be immaterial to its overall financial position.
Litigation, claims and assessments filed against the State Soil and Water Conservation Commission, if any, are generally considered to be actions against the State ofGeorgia. Accordingly, significant litigation, claims and assessments pending against the State ofGeorgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 1996.
NOTE 11: BONDING INFORMATION
The Executive Director and all employees of the State Soil and Water Conservation Commission are bonded under a Public Employees Blanket Bond written by Employers Insurance ofWausau, their Bond No. 1450-02110723, on which the premium was paid to October 1, 1996. Under this agreement the Public Employee Dishonesty Coverage insures the Commission 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 Commission to a maximum of $1,000,000.00 against loss sustained from failure ofits employees to perform faithfully their duties or to account properly for all monies and property received by virtue oftheir position or employment.
All employees ofthe State Soil and Water Conservation Commission are also bonded under Commercial Crime Policies written by the United States Fire Insurance Company, their Policy Nos. 626 012292 6 and 626 012294 4, on which premiums were paid to October 1, 1996. Under these additional public employee dishonesty coverages, the policies insure the Commission to a maximum of$9,000,000.00 against loss sustained through fraudulent or dishonest acts by its employees and from failure of its employees to perform faithfully.

- 18 -

SUPPLEMENTARY INFORMATION - 19-

STATE SOIL AND WATER CONSERVATION COMMISSION SCHEDULE OF APPROVED BUDGET YEAR ENDED JUNE 30,1996

SCHEDULE "1"

FUNDS AVAILABLE REVENUES
State Appropriation Federal Revenues
EXPENDITURES
Personal SerVices Regular Operating Expenses Travel Motor Vehicle Purchases Equipment Computer Charges Real Estate Rentals Telecommunications Per Diem. Fees and Contracts County Conservation Grants

ORIGINAL

AMENDED

BUDGET

APPROPRIATION APPROPRIATION ADJUSTMENTS

TOTAL

$ 2,182.494.00 $ 168.461.00

-90',000,00 $

$ 147,494.00

2,092,494,00 315,955,00

$ 2,350,955.00 $

-90,000.00 $

147.494.00 $ 2,408.449,00

$ 1,054,598,00

$

210,954.00

40,520.00

27.450.00

11,910,00

9,000.00

90,591.00

19,090,00

486,842,00

400,000,00 $ _ _..;.-9.;.:0."""00;..;0..;.0.;.,0

11;551.00 $ 130,3n.00
1,108.00 -500,00
7.556,00
3,402,00 -6.000.00

1.066,149.00 341,331.00 41,628,00 26,950,00 11,910,00 16,556,00 90,591,00 19,090,00 490,244,00 304,000,00

$ 2,350,955,00 $

-90,000.00 $

147.494.00 $ 2,408.449,00

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 20-

OTHER Cash on Hand

STATE SOIL AND WATER CONSERVATION COMMISSION CASH AND CASH EQUIVALENTS
JUNE 30, 1996

SCHEDULE "2"

$====30=0='0=0

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 21 -

STATE SOIL AND WATER CONSERVATION COMMISSION SCHEDULE OF FEDERAL REVENUES
YEAR ENDED JUNE 30, 1996

PROGRAM
Agriculture, U. S. Department of Conservation Reserve Program Direct
Energy, U. S. Department of State Energy Conservation Through Office of the Governor
Environmental Protection Agency, U. S. Water Quality Management Planning Through Department of Natural Resources
Interior, U. S. Department of Fish and Wildlife Service Direct

CFDA NUMBER
10.069 81.041 66.454
N/A

SCHEDULE "3"
AMOUNT
$ 19,001.75 17,388.29
239,074,83 11,790.99
$ 287,255.86

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 22-

STATE SOIL AND WATER CONSERVATION COMMISSION SCHEDULE OF OTHER OPERATING EXPENSES YEAR ENDED JUNE 30, 1996

SCHEDULE "4"

REGULAR OPERATING EXPENSES
Bank Charges Legal Advertising Registration Fees Subscriptions and Dues

$

38.09

4,081.26

2,019.00

1,613.00

$

7,751.35

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 23-

STATE SOIL AND WATER CONSERVATION COMMISSION SUMMARY OF SALARIES, TRAVEL, AND PER DIEM AND FEES
YEAR ENDED JUNE 30, 1996

SCHEDULE "5"

BUDGET FUND
Regular Computer Charges

SALARIES

TRAVEL

PER DIEM AND FEES

$ 737,465.79 $

34,060.09 $

132,892.53 280.00

$ 737,465.79 $

34,060.09 $ 133,172.53

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information;
- 24-