Audit report, Georgia Public Telecommunications Commission, a component unit of the state of Georgia, year ended June 30, 1995

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

AUDIT REPORT GEORGIA PUBLIC TELECOMMUNICATIONS
COMMISSION A COl\.1PONENT UNIT OF THE
STATE OF GEORGIA YEAR ENDED JUNE 30, 1995

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

EXIIlBITS

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)

GOVERNMENTAL FUND TYPE

C STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

BUDGET FUND

4

D STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES

COMPARED TO BUDGET

BUDGET FUND

6

E NOTES TO THE FINANCIAL STATEMENTS

7

SUPPLEMENTARY INFORMATION

SCHEDULES

I SCHEDULE OF APPROVED BUDGET

26

2 CASH AND CASH EQUIVALENTS

27

3 SCHEDULE OF FEDERAL REVENUES

28

4 SCHEDULE OF OTHER OPERATING EXPENSES

29

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

30

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) 6562174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
August 29, 1995

Honorable Zell Miller, Governor Members of the General Assembly of Georgia Members ofthe Georgia Public Telecommunications Conunission
and Honorable Werner Rogers, Executive Director Georgia Public Telecommunications Conunission
INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying financial statements (Exhibits A through E) of the Georgia Public Telecommunications Conunission as of and for the year ended June 30, 1995. These financial statements are the responsibility of the Conunission's management. Our responsibility is -to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in Note 1, these financial statements were prepared on a prescribed basis of accounting that demonstrates compliance with the budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles.
As described in Note 1, the financial statements referred to above do not include financial activities of the Foundation for Public Broadcasting in Georgia, Incorporated, which should be included in order to conform with generally accepted accounting principles. The Conunission has historically excluded the financial activities ofthe Foundation from its financial statements. The effect on the Conunission's financial statements as a result of this omission has not been determined but is believed to be material.
95ARL-3

In our opinion, except for the effects on the financial statements of the omission described in the preceding paragraph, the financial statements referred to above present fairly, in all material respects, the financial position (statutory basis) ofthe Georgia Public Telecommunications Commission as ofJune 30, 1995, and the results of its operations (statutory basis) for the year then ended, on the basis of accounting described- in Note 1.
Our audit was made for the purpose offorming an opinion on the financial statements taken as a whole. The accompanying supplementary information (Schedules 1 through 5) is presented for purposes of additional analysis and is not a required part of the financial statements of the Georgia Public Telecommunications Commission. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, except for the effects ofthe matter referred to in the fourth paragraph, such information is fairly presented in all material respects in relation to the financial statements taken as a whole.
Respectfully submitted,

CLV:gp 95ARL-3

Claude L. Vickers State Auditor

FINANCIAL STATEMENTS -I-

GEORGIA PUBLIC TELfCQMMLJNICATIQNS COMMISSION COMB'NEP BAI ANCE SHEET (STATUTORY BAIS} ALL FLJNP TYPES ANP ACCOUNT GROUP JUNE30 1995

EXHIBIT"A"

~ Cash and Cash Equivalents
(See Schedule)
Accounts Receivabkt Federal Financial Assistance Other
Prepaidltams
l11W1nlories
FixedAssels Equipment
Amount to be Provided for Payment of Accrued Compensated Absences Installment Purchase Commitments

GOVERNMENTAL FUND TYPE BUDGET

ACCOUNT GROUPS

GENERAL

GENERAL

FIXED

LONG-TERM

ASSETS

DEBT

TOTALS {Memorandum On~} JUNE30 1995 JUNE30 1994

32 159 445.47

32 159 445.47 $ 855031.26

7,803.50 1 n8974.48 1 7367TT.98
4961.43
159153.75

$

7,803.50 $

46,855.50

1 n8974.48 6070632.93

17367TT.98 $ 6111i88.43

4961.43 $

5214.01

159153.75 $ 124949.19

46161 578.12

46161578.12 $ 455TT842.00

764,200.03 $ 764,200.03 $ 692,394.58

7065565.19

7065565.19

8000000.00

7 829 765.22 $ 7 829 765.22 $ 8692394.58

TolalAssets

34060338.63 $ 46161 578.12 $ 7 829 765.22 $ 88051681.97 $ 611n119_41

LIABILmss AND FUND EQUITY
Liabilities Accounts Payable Deferred Revenue Payroll Withholdings Compensated Absences Installment Purchases
Total Liabilities
Fund Equity Investment in General FDCed Assets Fund Balances Reserved Georgia Distance Leaming and TelemecUcine Network Information Technology Policy Grant Lottery for Education Headquarters and Production Facility Project Zoo Atlanta Resources Center Production Projects Satellite Distance Leaming Program Unreserved Undosignated Deficit to be Funded in Subsequent Year
Total Fund Equity

4,279,132.39 4,230.00 514.50
4283876.89

764,200.03 7065565.19

4,279,132.39 $ 4,230.00 514.50
764,200.03 7065565.19

7,069,037.09 284,996.06 485.00 692,394.58
8000000.00

7 829 765.22 $ 12113642.11 $ 16046912.73

46,161,578.12

46,161,578.12 $ 45,STT,842.00

375,759.00 87,375.00
26,912,351.00 2,500,000.00
115,956.00 0.00
-214979.26
29776461.74 $ 46161 578.12

375,759.00 87,375.00
26,912,351.00 2,500,000.00
115,956.00 0.00

0.00 0.00
43,397.13 0.00 0.00
233,784.99

-214979.26

-n9217.38

75 938 039.86 $ 45125 806.74

Total Liabilities and Fund Equity

34 060,338.63 $ 46161,578.12 $ 7 829 765.22 $ 88 051 681.97 $ 611n119.47

The notes to the financial statements are an integral part of this statement.

2.

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION COMBINED STATEMENT OF CHANGES IN FUND BALANCES /STATUTORY BASIS)
GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 1995

EXHIBIT "B"

FUND BALANCES - JULY 1 Reserved Unreserved Undesignated
ADDITIONS Adjustments to Prior Year's Accounts Payable Excess of Funds Available over Expenditures Exhibit "C" Reimbursement of Prior Year's Expenditures
DEDUCTIONS Adjustments to Prior Year's Accounts Receivable Reserved Fund Balance Carried Over from Prior Year as Funds Available
FUND BALANCES - JUNE 30 (To Exhibit "Ai

BUDGET FUND YEAR ENDED JUNE 30, 1995 JUNE 30, 1994

$

277,182.12 $

0.00

-729,217.38

-2,040,262.13

$ -452,035.26 $ -2,040,262.13

$

99,534.02 $

10,193.40

30,376,620.26 29,817.88

1,592,996.25 15,000.00

$ 30,505,972.16 $ 1,618,189.65

$

293.04 $

277,182.12

$

277,475.16 $

29,962.78 0.00
29,962.78

$ 29,776,461.74 $ -452,035.26

The notes to the financial statements are an integral part of this statement. -3-

GEORGIA PUB! IC TELECOMMUNICATIONS COMMISSION STATEMENT QF FUNDS AYAJL.ABI F AfllP EXPENDITURES
BUDGETFUNQ
YEAR ENPED JUNE 30 1995

EXHIBIT"C"

FUNDS AVAILABI E
~
FEDERAL REVENUES (See schedule)
OTHER REVENUES RETAINED Commission on Vending Machines Contrada Administndive Servic:es, Department of Corporation for Public Broadcasting Ed-. Georgia Department of Foundation for Public Broadcasting in Georgia, Incorporated, The Georgia Emergency Management Agency Office of the Governor Public Broadcasting Ser.lice Regents of the University System of Georgia, Board of Grants Operating Funds 1.-.yforEdTranspoltalion, Georgia Department of Corporate Sponsorships I-Ht Earned Rental Income Royatties SalesandServic:es
Total Other Revenues Retained
Total Revenues
CARRY:QVFR FROM PR'OR YEAR
Transfer from ROSOIVOd Fund Balanca Headquarten, and Production Faoilily Project Satellite Distance Leaming Program
Total Carry-Over from Prior Year

TOTALS YEAR ENDED JUNE 30 1995 JUNE30 1994

$

92 787.00 $

345054.24

$

932.27 $

813.67

3,864,498.00 2,039,496.00
0.00
5,660,069.06 20,000.00 39,385.15 23,000.00

6,220,921.35 2,013,968.00 12,230,390.50
4,644,068.48 0.00 0.00
30,000.00

120,000.00 9,397,315.00 34,721,000.00
40,000.00 2,411,003.34
165,573.82 0.00
48,529.67 598382.94

166,732.00 7,475,339.00 2,021,512.00
0.00 1,283,612.96
22,270.53 1,140.00
40,899.69 420453.95

$ 59 149 145.25 $ 36 572 122.13 $ 59 241 932.25 $ 36 917 176.37

$

43,397.13$

0.00

233784.99

0.00

277182.12 $

0.00

Total Funds Available

$ 59 519114.37 $ 36 917176.37

EXPENDITURES
PERSONAL SERVICES
Salaries and Wages Employer's Contributions for:
F.I.CA Retirement Health Insurance Personal Liability Insurance Unempfoyment Compensation Insurance Workers' Compensation Insurance
Total Personal Services
OPERATING EXPENSES
REGULAR OPERATING EXPENSES Motor Vehicle Expenses Supplies and Materials Repairs and Maintenance Utilities Rents (other than Real Estate) Insurance and Bonding

$ 5,505,080.28 $ 4,785,594.14

380,552.62 827,422.97 669,751.94
44,308.00 3,993.00
25237.00

332,280.17 706,404.81 579,142.69
24,840.00 8,529.00
21 211.00

7 456 345.81 $ 6 458001.81

41,866.37$ 625,381.76 242,368.80 752,625.66 2,961,254.24
34,564.44

36,278.27 395,789.34 139,434.36 722,539.28 2,754,682.73 34,874.47

The notes to the financial statements are an integral part of this statement. .4.

GEORGIA PUB! IC TELECOMMUNICATIONS CQUMlSION
STATEMENT OF FUNDS AVAIL.ABLE ANP EXPE;NQITURES BUQGETfUNQ
YEAR ENDED JUNE ;V> 1995

EXHIBIT"C"

EXPENDITURES
OfERATINC.: EXPENSES
REGULAR OPERATING EXPENSES Other Operating Expenses (See Schedule) Duplicating and Rapid Copy Publications and Printing
TRAVEL
MOTOR VEHICLE PURCHASES
EQUIPMENT Equipment Purchases Lease/Purchase of Equipment Rental of Equipment
COMPUTER CHARGES OlherCosts Supplies and MatRepairs and Maintenance Software Equipment Equipment Purchases Per Diem, Fees and Contracts Per Diem and Fees Contracts Computer Billings, DOAS
REAL ESTATE RENTALS
TELECOMMUNICATIONS
PER DIEM, FEES AND CONTRACTS Per Diem and Fees Conlnoots
Tolal Operating Expenses
CAPITAL OUTLAY
Other Costs Other Operating Expenses (See Schedule) TiaWII Duplicating and Rapid Copy
Per Diem, Fees and Contracts Per Diem and Fees Contracts
Tolal Capital Outlay
Total Expenditures
Excess d Funds Available over Expenditures

TOTALS YEAR ENDED JUNE 30 1995 JUNE 30 1994

3,135,842.66 $ 596.21
263 753.69

2,924,547.31 442.79
685-45.51

8 058 253.83 $ 70n 134.06

$

152598.96 $

99140.44

111191.47 $

79023.50

284,663.64 $ 1,240,323.96
29 097.92
$ 1 554 085.52 $

6,475,956.52 1,790,514.45
0.00
8266470.97

32,595.96$ 3,389.60
22,482.58
108,886.17
12,155.00 27,400.60
11.71
206921.62 $
14 950.00 $
370849.37 $

14,158.93 1,360.61 4,074.07
44,732.15
0.00 24,633.87
7.80
89167.43
16000.00
221 023.16

3,573,694.23 $ 10,321,616.97

2 213 436.47

719636.24

5 787130.70 $ 11 041 253.21

16255981.47 $ 26 889 212.77

96.75 $ 1,358.34
0.00

2,554.70 0.00
19.72

158,347.13 5270 364.61

1,974,391.12 0.00

5 430 166.83 $ 1976965.54

29,142,494.11 $ 35,324,180.12

30376 620.26

1592996.25

$ 59,519,114.37$ 36 917 176.37

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

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES
COMPARED TO BUDGET BUDGET FUND
YEAR ENDED JUNE 30 1995

EXHIBIT"D"

FUNDS AVAILABLE REVENUES
Federal Revenues other Revenues Retained
CARRY-OVER FROM PRIOR YEAR Transfer from Reserved Fund Balance
EXPENDITURES Personal Services Operating Expenses Capital Outlay
Excess of Funds Available over Expenditures

BUDGET

ACTUAL

VARIANCEFAVORABLE {UNFAVORABLE)

$

92,787.00 $

92,787.00 $

57 619 777.00

59,149 145.25

$ 57,712,564.00 $ 59,241,932.25 $

0.00 1529368.25
1,529,368.25

0.00

277 182.12

277182.12

$ 57 712,564.00 $ 59,519,114.37 $

1,806,550.37

$ 7,710,938.00 $ 7,456,345.81 $

50,001,626.00

16,255,981.47

0.00

5 430 166.83

254,592.19 33,745,644.53 -5 430 166.83

$ 57 712,564.00 $ 29,142,494.11 $ 28,570,069.89

$ 30,376,620.26 $ 30,376,620.26

The notes to the financial statements are an integral part of this statement. -6-

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995

EXHIBIT"E"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY The Georgia Public Telecommunications Commission is an instrumentality ofthe State of Georgia and a public corporation. The Commission consists ofnine (9) members, six (6) ofwhom are chosen by the Governorfrom the general public. The remaining three (3) ex-officio members are the State School Superintendent, the Chancellor of the Board of Regents of the University System of Georgia and the Commissioner of the Department ofTechnical and Adult Education. The Commission is assigned to the Board ofRegents ofthe University System of Georgia for administrative purposes only. The Commission has decision making authority, the power to designate management, the ability to influence operations and is primarily accountable for its fiscal matters. In addition, the Commission may solicit and receive funds from the general public, corporate underwriters, and various public and private foundations as well as receive gifts, donations, contributions, or endowments from any person, firm, or corporation. The Commission is considered a component unit of the State of Georgia and is included within the State of Georgia reporting entity for financial reporting purposes because 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.
The financial statements of the Georgia Public Telecommunications Commission do not include those of the Commission's component unit described below. To conform with generally accepted accounting principles, the financial statements ofthe component unit should be blended into and included in the financial statements of the Georgia Public Telecommunications Commission.
COMPONENT UNIT The Foundation for Public Broadcasting in Georgia, Incorporated is an entity legally separate from the Georgia Public Telecommunications Commission. The Foundation was incorporated August 13, 1982, and was organized pursuant to the provisions ofthe Georgia Non-Profit Corporation Code. Section III of the Articles oflncorporation of The Foundation for Public Broadcasting in Georgia, Incorporated is quoted, in part, as follows:
"The Corporation is organized for the following purposes:
The objects and purposes of this Corporation are to acquire and administer funds and property, which after payment of necessary expenses shall be devoted exclusively to educational and charitable purposes which promote, aid and advance educational and public broadcasting, public telecommunications in general and the aims and objectives of the Georgia Public Telecommunications Commission in providing educational and public broadcasting to the citizens of the State of Georgia."
Funds raised by the Foundation are almost entirely devoted to the benefit of the Georgia Public Telecommunications Commission. Additionally, the Board of Directors of the Foundation for Public Broadcasting in Georgia, Incorporated is currently comprised solely of the nine (9) members of the Georgia Public Telecommunications Commission. For financial reporting purposes, The Foundation for Public Broadcasting in Georgia, Incorporated should be considered a blended component unit of the Georgia Public
-7-

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE30 1995

EXHIBIT"E"

NOTE I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
COMPONENT UNIT Telecommunications Commission; however, the Commission has historically excluded the financial activities ofthe Foundation from its financial statements.
For the year ended June 30, 1995, the Board of Directors of The Foundation for Public Broadcasting in Georgia, Incorporated approved the transfer of$5,660,069.06 to the Georgia Public Telecommunications Commission as shown on Exhibit "C" of this report.
FUND ACCOUNTING The Georgia Public Telecommunications 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 ofthe 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 ofl994-1995. 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.
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.
The cost of normal maintenance and repairs that do not add to the value of the 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.
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GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995

EXIIlBIT "E"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING MEASUREMENT FOCUS
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. Governmental funds should be accounted for using the 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 of available spendable resources.
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 are "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 pay liabilities ofthe current period. Revenues that are accrued include primarily Federal grants and entitlements and certain amounts earned under operating agreements with other parties. 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 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, 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.
BUDGET The budget ofthe Georgia Public Telecommunications Commission is compiled in the same manner as all State departments. Expenditures are classified by budget unit object classes as provided in Act No. 1208 of Georgia Laws 1994 (as approved April 18, 1994) and amended by Act No. 6 of Georgia Laws 1995 (as approved February 22, 1995), which is an appropriated budget and is referred to in these notes as the Amended
-9-

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION NOTES TO THE FINANCIAL STATEJ\ffiNTS JUNE30 1995

EXHIBIT "E"

NOTE I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUDGET Appropriations Act of 1994-1995. Budgets are prepared to provide a basis for funding operations and there is no legal prohibition regarding overexpenditure of the aggregate budget.
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 Commission may deposit additional cash at any time and also may withdraw cash at any time without prior notice or penalty.
INVESTMENTS The Georgia Public Telecommunications Commission participates in an investment pool managed by the State of Georgia's Office of Treasury and Fiscal Services referred to as the "Georgia Fund I". The Commission does not have any risk exposure from investments in Georgia Fund I as the Commission is unaware of any amounts that are invested in derivatives or similar investments through the Georgia Fund I.
INVENTORIES Inventories ofsupplies are valued at weighted average cost on the Combined Balance Sheet (Statutory Basis). The consumption method is used to account for the inventories. Under the consumption method, the cost of inventories are recorded as expenditures when consumed rather than when purchased.
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:
GEORGIA DISTANCE LEARNING AND TELEMEDICINE NETWORK The residual portion offunds received from the Georgia Distance Learning and Telemedicine fund through the Department ofAdministrative Services for the establishment of a Distance Learning and Telemedicine Network throughout Georgia. This amount is reserved for expenditures in future years to cover the expenses of the Distance Learning and Telemedicine Network.
INFORMATION TECHNOLOGY POLICY GRANT The residual portion of the Information Technology Grant received through the Board of Regents. This amount is reserved for expenditures in future years to cover the expenses of the Information Technology Policy Council which was established in 1995 by an act of the Legislature to amend Title SO of the Official Code of Georgia Annotated.

- 10 -

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995

EXIIlBIT "E"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
RESERVED FUND BALANCE LOTI'ERYFOREDUCATION HEADQUARTERS AND PRODUCTION FACILITY PROJECT - Funds reserved for this project represent unexpended Lottery for Education funds appropriated through the Board of Regents of the University System ofGeorgia for the architectural design, project coordination and land acquisition costs for a new headquarters and production facility for the Commission. This amount is available in fiscal years 1996 and 1997 for qualifying expenditures as defined by O.C.G.A. 50-27-13.
ZOO ATLANTA RESOURCES CENTER - Funds reserved for this project represent unexpended Lottery for Education funds appropriated through the Board of Regents of the University System of Georgia for the Zoo Atlanta Resources Center. This amount is available to Zoo Atlanta (City of Atlanta) in fiscal years 1996 and 1997 for qualifying expenditures as defined by O.C.G.A. 50-27-13.
PRODUCTION PROJECTS Individuals and corporations donate funds to be used to produce certain programs for public television. These funds are reserved for expenditures in future years for the projects specified by the donation.
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 recorded in the individual funds for the current portion of this obligation as this amount will not be liquidated with expendable available financial resources.
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 of this 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.
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GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXHIBIT "E"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds ofthe 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, certificates of indebtedness, notes, or other direct obligations ofthe United States or ofthe State of Georgia.
(2) Bonds, bills, certificates ofindebtedness, notes, or other obligations ofthe counties or municipalities ofthe State ofGeorgia.
(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.
(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 ofa subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest, and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
(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 of the 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 of June 30, 1995, are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk.
Category l - 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.

- 12 -

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE30 1995

EXHIBIT"E"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

CATEGORIZATION OF DEPOSITS 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

Canying Amount

Bank Balances

Risk Categories

S 554 78] 16 SJ 245 588 3] S )26 307 97 ==.diol,lio~o s 11122ao34

CATEGORIZATION OF INVESTMENTS Investments are stated at cost. The carrying amount of the investment balance as ofJune 30, 1995, shown below is maintained in an investment pool by the Office of Treasury and Fiscal Services and is not subject to risk categorization.

Type oflnvestment

Carrying Amount

Market Value

State Investment Pool

$31604664 31 $31 604 664 31

NOTE3: INSTALLMENT PURCHASE COMMITMENTS

The Georgia Public Telecommunications Commission acquires certain equipment through multi-year installment purchases with varying terms and options. These agreements contain fiscal funding clauses in accordance with O.C.G.A. 50-5-64 which prohibits the creation ofa debt to the State of Georgia for the payment of any sums under such agreements beyond the fiscal year of execution if appropriated funds are not available. If renewal of such agreements is reasonably assured, however, installment purchases requiring appropriation by the General Assembly of Georgia are considered noncancellable for financial reporting
purposes.

At June 30, 1995, future minimum commitments under installment purchases for equipment are as follows:

- 13 -

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995

EXHIBIT"E"

NOTE 3: INSTALLMENT PURCHASE COMMITMENTS

Fiscal Year Ending June 30
1996 1997 1998 1999 2000 Thereafter
Total Future Minimum Commitments
Less: Amounts Representing Interest
Present Value of Future Minimum Commitments
NOTE 4: FINANCING AGREEMENT/ACCOUNTS PAYABLE

$ 1,240,323.96 1,240,323.96 1,240,323.96 1,240,323.96 799,897.32 2 399 691.96
$ 8,160,885.12
1 095 319.93
$ 7 065 565 19

The Commission entered into a financing agreement with the Public Broadcasting Service to defer payment ofthe 1993 National Program Service Commitment. Payments are being made over three years in quarterly installments of$113,289.33, which began July 15, 1993. The entire obligation was recorded as an expenditure in fiscal year 1993. The unpaid balance is included in accounts payable on Exhibit "A" of this report. The payment schedule is as follows:

Fiscal Year Ending June 30
1996
NOTE 5: CHANGES IN GENERAL FIXED ASSETS

$ 453 157 36

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, 1994 Additions Balance June 30, 1995

$45,577,842.00 583 736.12
$46 ]61 578 ]2

- 14 -

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30 1995

EXHIBIT "E"

NOTE 6: 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, 1995, follows:

Installment Compensated Purchase
Absences Commitments

Total

Balance July I, 1994

$ 692,394.58 $ 8,000,000.00 $ 8,692,394.58

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

66,702.69 5,102.76

934 434.81

66,702.69 5,102.76
934 434.81

Balance June 30, 1995

$ 764 200 03 $ 7 065 565 19 $ 7 829 765 22

NOTE 7: RISK MANAGEMENT

Public Entity Risk Pool

The State Personnel Board, Merit System of Personnel Administration internally administers for the State of Georgia a program of health benefits for the employees of units of government of the State of Georgia and 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 ofPersonnel 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 services claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance is 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 state agencies by DOAS to provide claims servicing and claims payment.

- 15 -

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995

EXHIBIT"E"

NOTE 8: DEFERRED COMPENSATION PLAN
The State ofGeorgia 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, pennits 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 is presented in the financial report ofthe State Personnel Board - Merit System of Personnel Administration for the year ended June 30, 1995.
NOTE 9: RETIREMENT PLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Plan Description The 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 ofthe State ofGeorgia. The Commission's payroll for the year ended June 30, 1995, for employees covered by ERS was $4,949,260.93. The Commission's total payroll for all employees was $5,505,080.28.
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.
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. Retirement benefits paid to members are based upon a formula which considers the monthly average of the member's highest eight consecutive calendar quarters of salary, the number of years 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. 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 ofage.

- 16 -

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995

EXHIBIT"E"

NOTE9: RETIREMENTPLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Contributions Required and Contributions Made Under the old plan, member contributions consist of employee contributions paid by the employee of 1.25% ofannual compensation and 4.75% ofannual compensation paid by the Commission on behalf of the employee. Under the new plan, member contributions consist solely of 1.25% of annual compensation paid by employee. The Commission also is required to contribute at a specified percentage ofactive member payroll determined annually by actuarial valuation. For the year ended June 30, 1995, the ERS employer contribution rate for the Commission amounted to 15.52% of covered payroll and included the 4.75% contributed on behalf of the employee referred to above. Contributions are also made on amounts paid for accumulated leave of retiring employees.
Total contributions to the plan made during fiscal year 1995 amounted to $829,514.80, of which $767,649.10 was made by the Commission and $61,865.70 was made by employees. These contributions met the requirements ofthe plan.
Funding Status and Progress Pension Benefit Obligation
The amount shown as the "pension benefit obligation" is a standardized disclosure measure of the present value ofpension benefits, adjusted for the effects ofprojected salary increases and step-rate benefits, estimated to be payable in the future as a result ofemployee service to date. The measure is intended to help users assess the funding status ofERS on the going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due and make comparisons among employers. The measure is the actuarial present value of credited projected benefits, and is independent of the funding method used to determine contributions to the plan.
The pension benefit obligation was computed as part of an actuarial valuation performed as ofJune 30, 1994. Significant actuarial assumptions used in the valuation include the following:
1) The present value offuture pension benefits paid was computed using a discounted rate of7.5 percent. This rate is also the same rate assumed to be earned on investments in the plan in future years.
2) Future pension payments reflect the following assumed salary increases as a result ofinflation and merit increases:

- 17 -

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995

EXHIBIT"E"

NOTE9: RETIREMENTPLANS

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA

Funding Status and Progress Pension Benefit Obligation

Percentage

20

9.5%

25

8.5%

30

6.5%

35

6.0%

40 to 65

5.7%

3) ERS has the authority to grant cost-of-living adjustments by state statute. As ofJune 30, 1994, cost-ofliving adjustments have been included in the pension benefit obligation.

The total unfunded pension benefit obligation ofERS as ofJune 30, 1994, was $310,149,000, as follows:

Pension Benefit Obligation:

Retirees and Beneficiaries Currently Receiving Benefits and Terminated Employees Entitled to Benefits but Not Yet Receiving Benefits

$ 2,227,653,000

Current Employees

Accumulated Contributions

648,516,000

Employer-Financed Vested

1,085,190,000

Employer-Financed Nonvested

I 206 805 000

Total Pension Benefit Obligation

$5,168,164,000

Net Assets Available for Benefits

4 858 015 000

Unfunded Pension Benefit Obligation

$ 310 )49 000

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995

EXHIBIT"E"

NOTE9: RETIREMENTPLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Funding Status and Progress Pension Benefit Obligation
The measurement ofthe total pension benefit obligation is based on an actuarial valuation as of June 30, 1994. Net assets available for benefits were valued as ofthe same date. ERS does not make separate measurements of assets and pension benefit obligation for individual employers.
Funding Policy The ERS funding policy provides for periodic employer contributions at actuarially determined rates that, expressed as percentages of annual payroll, are sufficient to accumulate sufficient assets to pay benefits when due. Level percentage of payroll employer contribution rates are detennined using the entry age funding method. ERS also uses the level percentage of payroll method to amortize the unfunded liability within approximately 20 years following the valuation date.
Total contributions from all employers to ERS for the year ended June 30, 1995, were $256,624,679.00. The Commission's contribution was actuarially determined and represented .30% of total contributions made by all participating employers.
Significant actuarial assumptions used to compute contributions are the same as those used to compute the standardized measure of pension obligation.
Trend Information Historical trend information is presented in the financial report ofERS for the year ended June 30, 1995. This information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due.
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description The Georgia Public Telecommunications Commission participates in the Georgia Defined Contribution Plan ("GDCP") which is a single-employer defined contribution plan established by the Georgia General Assembly in July 1993 for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and part-time 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, 1995, for employees covered by GDCP was $146,257.31. The Commission's total payroll for all employees was $5,505,080.28.
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 his/her account, the Board has the option of requiring a lump sum distribution to the member
- 19 -

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995

EXHIBIT"E"

NOTE9: RETIREMENTPLANS
GEORGIA DEFINED CONTRIBUTION PLAN
Benefits in lieu of making periodic payments. Upon the death of a member, a Jump 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 contributions. Earnings are credited to each member's account in a manner established by the Board. Upon tennination ofemployment, the amount ofthe member's account is refundable upon request by the member.
Total contributions made by employees during fiscal year 1995 amounted to $10,969.48 which represents 7.5% ofcovered payroll. These contributions met the requirements of the plan.
TEACHERS RETIREMENT SYSTEM OF GEORGIA
Plan Description Georgia Public Telecommunications Commission participates in the Teachers Retirement System of Georgia (TRS), a cost-sharing multiple-employer public employee retirement system (PERS) established by the General Assembly ofGeorgia for the purpose ofproviding retirement allowances and other benefits for teachers ofthe State ofGeorgia. The Commission's payroll for the year ended June 30, 1995, for employees covered by TRS was $141,414.37. The Commission's total payroll for all employees was $5,505,080.28.
Benefits TRS provides service retirement, disability retirement, and survivor's benefits for its members. A member is eligible for service retirement after the member (1) has attained the age of60 years and has at least ten years ofcreditable service, (2) has at least 30 years ofcreditable service, regardless ofage, or (3) has attained the age of55 years and has at least 25 years of creditable service. For those members with 30 years of service or those age 60 with at least ten years of service, retirement benefits are equal to 2% of the average of the member's two consecutive highest paid years ofservice multiplied by the number of years of creditable service up to 40 years. Any member who has between 25 and 30 years of creditable ser.vice and is at least 55 years ofage shall receive a benefit which is reduced by the lessor of 1/12 of 7% for each month the member is below age 60, or by 7% for each year or fraction thereofby which the member has Jess than 30 years of service. The normal retirement pension is payable monthly for life. Options are available for distribution ofthe member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement benefits also include death and disability benefits whereby the disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The benefit is based on member's creditable service (minimum of 10 years of service) and compensation up to the date of death or up to the time of disability.

-20-

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995

EXHIBIT"E"

NOTE 9: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Benefits Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employer contributions occurs, but the member's contributions are refunded with interest.

Contributions Required and Contributions Made Employees ofthe Commission who are covered by TRS are required to pay 5% oftheir gross earnings to TRS. The Institute makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees as advised by their independent actuary. For fiscal year 1995, the employer contribution rate was 11.81% for covered employees. The interest rate assumption (rate of return on investments) was 7.50%.

Total contributions to the plan made during fiscal year 1995 amounted to $23,771.86, of which $16,701.07 was made by the Commission and $7,070.79 was made by employees. These contributions represented 11.81% (Commission) and 5% (employees) of covered payroll.

Funding Status and Progress Pension Benefit Obligation
The amount of the total pension benefit obligation is based on a standardized measurement established by Statement No. 5 of the Governmental Accounting Standards Board (GASB) that is required to be used for reporting purposes. The standardized measurement is the actuarial present value of credited projected benefits. This pension valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date and is adjusted for the effects of projected salary increases and any step-rate benefits. A standardized measure of the pension benefit obligation was adopted by the GASB to enable readers ofthe PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among similar PERS.

The total unfunded pension benefit obligation of TRS as of June 30, 1994, which was the latest information available, was as follows:

Total pension benefit obligation

$15,313,743,000.00

Net assets available for benefits, at cost

14 254 785 000.00

Unfunded pension benefit obligation

$ I 058 958 000 00

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as of June 30, 1994. Net assets available for benefits were valued as of the same date. TRS does not make separate measurements of assets and pension benefit obligation for individual employers.

- 21 -

GEORGIA PUBLIC TELECOMMUNICATIONS CO:MMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995

EXHIBIT "E"

NOTE9: RETIREMENTPLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Funding Status and Progress Funding Policy
Total contributions from all employers to TRS for the year ended June 30, 1995, were $565,117,811.00. The Commission's contribution for the year ended June 30, 1995, of$16,701.07 was actuarially determined and represented .0029% of total contributions made by all participating employers.

Trend Information Historical trend information is presented in the financial report of TRS for the year ended June 30, 1995. This information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due.

NOTE 10: 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.

Employees earn annual leave ranging from ten to fourteen hours each month depending upon the employees' length ofcontinuous 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 offorfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System of Georgia.

NOTE 11: DONATED SUPPORT

Donated support to the Georgia Public Telecommunications Commission during the year under review, which was not reflected on the financial statements of the Commission for the year ended June 30, 1995, was as follows:

Governmental Agency Georgia Department ofEducation

$ 2,089,309.98

Volunteer Services

40,241.49

Other Sources Total

1 500 198.77
$ 3 629 750 24

- 22-

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION NOTES TO THE FINANCIAL STATEMENTS JUNE 30 1995

EXIIlBIT "E"

NOTE12: SUBSEOUENTEVENTS
Subsequent to the date of this report, the Georgia Public Telecommunications Commission executed a construction agreement for a new headquarters and production facility.
NOTE 13: 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 Georgia Public Telecommunications Commission, 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 selfinsurance 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 ofGeorgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 1995.
NOTE 14: BONDING INFORMATION
The Executive Director and all employees ofthe Georgia Public Telecommunications Commission are bonded under a Public Employees Blanket Bond written by Employers Insurance ofWausau, their Bond No. 1450-00110723, on which the premium was paid to October 1, 1995. 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 of its employees to perform faithfully their duties or to account properly for all monies and property received by virtue of their position or employment.
All employees of the Georgia Public Telecommunications Commission are also bonded under Commercial Crime Policies written by the United States Frre Insurance Company, their Policy Nos. 626 012292 6 and 626 012294 4, on which premiums were paid to October 1, 1995. 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.

- 23 -

SUPPLEMENTARY INFORMATION -25 -

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION SCHEDULE OF APPROVED BUDGET YEAR ENDED JUNE 30 1995

SCHEDULE "1"

FUNDS AVAILABLE
REVENUES
Federal Revenues Other Revenues Retained

ORIGINAL

AMENDED

BUDGET

APPROPRIATION APPROPRIATION ADJUSTMENTS

TOTAL

$

92,787.00

16,484,239.00 $

$

92,787.00

5,340,994.00 $ 35,794,544.00 57,619,777.00

$ 16,577,026.00 $

5,340,994.00 $ 35,794,544.00 $ 57,712,564.00

EXPENDITURES
Personal Services Operating Expenses

$

7,098,276.00 $

612,662.00

$ 7,710,938.00

9,478,750.00

4 728,332.00 $ 35,794,544.00 50,001,626.00

$ 16,577,026.00 $

5,340,994.00 $ 35,794,544.00 $ 57,712,564.00

See notes to the financial statements.

-26-

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION CASH AND CASH EQUIVALENTS JUNE 30 1995

SCHEDULE "2"

NONINTEREST BEARING ACCOUNTS
NationsBank of Georgia, N.A., AUanta, Georgia
Heritage Bank, Tempe, Arizona
INTEREST BEARING ACCOUNTS
Funds on Deposit with Office of Treasury and Fiscal Services State Investment Pool

$

546,472.66

8,308.50 $

554,781.16

31,604,664.31

$ 32,159,445.47

See notes to the financial statements.

-27-

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION SCHEDULE OF FEDERAL REVENUES YEAR ENDED JUNE 30 1995

PROGRAM
Commerce, U. S. Department of other Federal Assistance Maintenance of NOAA Weather Radio Contracts Direct

CFDA NUMBER
N/A

SCHEDULE "3" AMOUNT
$ 92,787.00

See notes to the financial statements.

-28-

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION SCHEDULE OF OTHER OPERATING EXPENSES YEAR ENDED JUNE 30 1995

SCHEDULE "4"

OPERATING EXPENSES
REGULAR OPERATING EXPENSES Advertising Courier Services Freight, Express and Storage Fund-Raising Expenses General Assessment Services and Interconnection Fees Public Broadcasting Services Production Costs Program Rating Service Registration Fees Relocation Expenses Subscriptions and Dues
CAPITAL OUTLAY
OTHER COSTS Freight, Express and Storage

$ 100,111.70 5,511.68
46,518.12 1,917,447.56
186,863.50 248,435.30
41,413.32 42,245.00
9,589.82 537,706.66
$ 3,135,842.66

$

96.75

See notes to the financial statements.

-29-

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION SUMMARY OF SALARIES TRAVEL AND PER DIEM AND FEES
YEAR ENDED JUNE 30 1995

SCHEDULE "5"

BUDGET FUND
Regular Computer Charges Capital Outlay

SALARIES

TRAVEL

PER DIEM AND FEES

$ 5,505,080.28 $

152,598.96 $ 1,358.34

3,573,694.23 12,155.00
158,347.13

$ 5,505,080.28 $

153,957.30 $ 3,744,196.36

See notes to the financial statements.

-30-

SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS

GEORGIA PUBLIC TELECOMMUNICATIONS COMMJSSION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1995

STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR QUESTIONED COSTS

The status ofthe finding disclosed in the audit report for the year ended June 30, 1994, is summarized below:

Audit Control Number

Status ofFinding

977-94-01

Corrective Action Implemented

CURRENT YEAR

GENERAL LEDGER Inadequate Documentation ofManual Journal Entries Financial Statements Audit Control Number 977-95-01

For the year ended June 30, 1995, an examination ofthe manual journal vouchers and related procedures for the Georgia Public Telecommunications Commission disclosed the following deficiencies:

I. The manual journal entry packages generally did not contain sufficient explanations or supporting documentation to determine the propriety of each entry.

2. Numerous manual journal entries did not reflect review or approval by appropriate supervisory personnel.

3. Certain manual journal entries were missing from the files and therefore not available for our examination and verification.

This condition was caused by a lack of internal controls over manual journal voucher preparation, data entry and file maintenance.

Appropriate action should be taken by the Commission to ensure that all manual journal vouchers are properly reviewed, approved, documented and filed and controlled sequentially in order to provide a complete audit trail.

GENERAL LEDGER General Ledger not in Balance With Subsidiary Ledgers Financial Statements Audit Control Number 977-95-02

At June 30, 1995, a comparison of the Commission's general ledger to subsidiary records revealed that the "Departmental Trial Balance" (FACS Report No. 2410) did not agree with the subsidiary listings for outstanding receivables (FACS Report No. 2230) and outstanding payables (FACS Report No. 2060). This condition was caused by the Commission's failure to update subsidiary ledgers for adjustments made to the general ledger by manual journal entries.

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30 1995
CURRENT YEAR
GENERAL LEDGER General Ledger not in Balance With Subsidiary Ledgers Financial Statements Audit Control Number 977-95-02
The Accounting Procedures and Instructions Manual, as published by the State Auditor, states that general ledger control accounts should be reconciled to the subsidiary ledger accounts at the end of each accounting period. The Commission should implement procedures to ensure that subsidiary records are updated for any adjustments made to the general ledger.