Audit report, State Road and Tollway Authority, a component unit of the state of Georgia, year ended June 30, 2002

STATE ROAD AND TOLLWAY AUTHORITY -TABLE OF CONTENTS-

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S REPORT ON BASIC FINANCIAL STATEMENTS

ACCOMPANIED BY REQUIRED SUPPLEMENTARY INFORMATION AND

SUPPLEMENTARY INFORMATION

1

MANAGEMENT'S DISCUSSION AND ANALYSIS

5

EXHIBITS

BASIC FINANCIAL STATEMENTS

GOVERNMENT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET ASSETS

12

B

STATEMENT OF ACTIVITIES

13

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET-GOVERNMENTAL FUND

14

D

STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

GOVERNMENTAL FUND

16

E

STATEMENT OF NET ASSETS

PROPRIETARY FUND5-ENTERPRISE FUNDS

18

F

STATEMENT OF REVENUES, EXPENSES AND CHANGES

IN FUND NET ASSETS

PROPRIETARY FUND5-ENTERPRISE FUNDS

20

G

STATEMENT OF CASH FLOWS

PROPRIETARY FUND5-ENTERPRISE FUNDS

22

H NOTES TO THE FINANCIAL STATEMENTS

24

SUPPLEMENTARY INFORMATION

SCHEDULES

1 CASH AND CASH EQUIVALENTS

47

2 INVESTEMENTS

48

3 SCHEDULE OF OTHER OPERATING EXPENSES

49

4 RECONCILIATION OF SALARIES

50

SECTION II

COMPLIANCE AND INTERNAL CONTROL REPORT

REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL

REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED

IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

53

STATE ROAD AND TOLLWAY AUTHORITY -TABLE OF CONTENTS-

SECTION Ill

AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

61

SECTION IV

CURRENT YEAR FINDINGS AND QUESTIONED COSTS

SCHEDULE OF FINDINGS AND QUESTIONED COSTS

65

SECnON I FINANCIAL

RUSSELL W. H1vroN
STATE AUDITOR
(404) 6.2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washmgton Street, S W, Sutte 214 Atldnta, Georgia 10334-8400
February 28, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly of Georgia Members of the State Road and Tollway Authonty
and Honorable John D. Leonard, Acting Executive Director

INDEPENDENT AUDITOR'S REPORT ON BASIC FINANCIAL STATEMENTS ACCOMPANIED BY REQUIRED SUPPLEMENTARY INFORMATION AND SUPPLEMENTARY INFORMATJON

LadJ.es and Gentlemen

We have audited the accompanying financial statements of the governmental activities, the busmess-type actiVIties, and each maJor fund of the State Road and Tollway Authonty, a component urut of the State of Georgia, as of and for the year ended June 30, 2002, winch collectively compnse the Authonty's basic fmancial statements as listed in the table of contents These financial statements are the responsibility of the Authontys management. Our responsibility IS to express opinions on these fmancial statements based on our audit

We conducted our audit in accordance With auditing standards generally accepted m the Uruted States of Amenca and the standards applicable to financial audits contamed m Government Auditing Standards, Issued by the Comptroller General of the Uruted States Those standards reqwre that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of matenal misstatement An audit includes exammmg, on a test basis, eVIdence supporting the amounts and disclosures in the financial statements An audit also includes assessing the accounting pnnciples used and sigruficant estimates made by management, as well as evaluating the overall financial statement presentation We believe that our audit proVIdes a reasonable basis for our opimons

In our opimon, the financial statements referred to above present fairly, m all matenal respects, the respective fmancial position of the governmental actiVIties, the busmesstype activities, and each maJor fund of the State Road and Tollway Authonty, as of June 30, 2002, and the respective changes m fmancial positiOn and cash flows. where applicable, thereof for the year then ended m confomuty With accounting pnnciples generally accepted m the United States of Amenca.

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As discussed in Note 3 to the bas1c fmanc1al statements, the State Road and Tollway Authonty adopted Governmental Accounung Standatds Board Statement No 34, Bas1c Fmanczal Statements - and Management 's D1scuss1on and Analys1s -for State and Local Governments, Statement No. 37, Bas1c Fmanc1al Statements - and Management's D1scusswn and Analys1s- for State and Local Governments Ommbus, and Statement No 38, Certam F1nanc1al Statement Note Disclosures, as of June 30, 2002
In accordance with Government Aud1tmg Standards, we have also 1ssued a report dated February 28, 2003 on our consideration of the State Road and Tollway Authonty's mternal control over financial reportmg and on our tests of 1ts compliance With certain provisiOns of laws, regulauons, contracts and grants That report IS an mtegral part of an aud1t performed in accordance with Government Aud1tmg Standards and should be read m conjunction with this report considering the results of our audit.
The management's discussion and analys1s on pages 5 through 9 is not a reqwred part of the basic fmanc1al statements but 1s supplementary mformallon reqwred by the Governmental Accounting Standatds Board We have applied certam !united procedures, which consisted principally of inqumes of management regarding the methods of measurement and presentallon of the required supplementary mformauon. However, we did not audit the information and express no opiDlon on 11.
Our audit was conducted for the purpose of formmg opinions on the financial statements that collectively comprise the State Road and Tollway Authority's bas1c financial statements The accompanymg supplementary mfonnation (Schedules I through 4) 1s presented for purposes of additional analysis and 1s not a reqwred part of the bas1c financial statements. The accompanying supplementary mfonnauon (Schedules I through 4) has been subjected to the auditing procedures applied in the aud1t of the bas1c financial statements and, in our opirnon, IS fairly stated in all matenal respects in relation to the basic financial statements taken as a whole.
Respectfully submitted,
~ ~~...:k
II W Hmton, CPA, CGFM State Auditor
RWH:Idj
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STATE ROAD AND TOLLWAY AUTHORITY MANAGEMENT'S DISCUSSION AND ANALYSIS
YEAR ENDED JUNE 30. 2002
The followmg is a discussion and analys1s of the financ1al performance of State Road and Tollway Authonty It prov1des an overv1ew of the activities for the fiscal year ended June 30, 2002 The State Road and Tollway Authority 1s a pubhc corporatiOn and body corporate The State Road and Tollway Authonty mamtams and operates two toll fac1h11es m the State of Georg1a The Management DiSCUSSIOn and Analysis is des1gned to be read m conJunCtiOn With the State Road and Tollway Authonty's financial statements Because fiscal year 2002 represents the first year m wh1ch the State of Georgia, includmg State Road and Tollway Authonty, Implemented the proviSIOns of Governmental Accounllng Standards Board (GASB) Statement No 34, tins diSCUSSion and analys1s 1s not required to prov1de compansons with the previous year Future reports are reqwred to mclude extensive compansons.
IDGHLIGHTS
Net Assets As of the close of fiscal year 2002, the State Road and Tollway Authonty's combined endmg net assets totaled $2 milhon. Of tins total, $16.4 million is mvested m capital assets, $15,302 is restricted for debt serv1ce, and $-14.4 million IS unrestncted.
Long-term Debt The State Road and Tollway Authonty's long-term debt obliganons cons1st of$464 million
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analys1s IS mtended to serve as an mtroducllon to the State Road and Tollway Authonty's bas1c financ1al statements The State Road and Tollway Authonty's bas1c financial statements have three components 1) government-wide financial statements, 2) fund financ1al statements, and 3) notes to the financial statements This report also contains other supplementary informallon m addJ.Ilon to the basic financlal statements themselves
Government-wide Financials Statements. The government-wzde financzal statements are des1gned to prov1de a broad overview of the State Road and Tollway Authority's finances, m a manner sumlar to a pnvate-sector business reports.
The Statement ofNet Assets presents mfonnation on all the State Road and Tollway Authority assets and habilities, With the d1fference between the two reported as Net Assets Over time, increases or decreases m net assets should serve as a useful mdJ.cator of whether the financ1al posinon of the State Road and Tollway Authonty is 1mprovmg or deteriorallng
The Statement of Actzvztzes presents mformallon shoWing how the State Road and Tollway Authonty's net assets have changed dunng the most recent fiscal year. All changes m net assets are reported as soon as the underlymg event giVIng nse to the change occurs, regardless of the tlmmg of related cash flows. Thus, revenues and expenses are reported in tins statement for some 1terns that will only result m cash flows in future fiscal periods.
The government-Wide fmancial statements only mclude the operanons of the State Road and Tollway Authority. The State Road and Tollway Authonty is cons1dered a component unit of the State of Georgia for financial reportmg purposes because of the significance of 1ts legal, operational and financial rela11onsh1ps With the State of Georgia. These reporung entity relanonships are defined m
- 5-

SectiOn 2100 of the Governmental Accounting Standards Board's CodificatiOn of Governmental Accounting and Fmanc1al Reoortmg Standards
Fund Financial Statements. A fund IS a grouping of related accounts used to mamtam control over resources that have been segregated for spec1fic activities or objectives. The State Road and Tollway Authonty, like other state and local governments, uses fund accountmg to ensure and demonstrate compliance With fmance-related legal requirements. All of the State Road and Tollway Authonty funds can be class1fied mto two categones governmental funds and propnetary funds
Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental acltvltles m the government-Wide financJaJ statements. However, unl1ke the government-wide financial statements, governmental fund financial statements focus on near-term 1rlflows and outflows of spendable resources, as well as balances of spendable resources available at the end of the fiscal year. Both the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures and Changes in Fund Balances prov1de a reconciliation to facilitate tlus comparison between governmental funds and governmental acllwties
The State Road and Tollway Authonty mamtains one mdlVldual governmental fund. The General Fund is the onJy governmental fund and is used to account for all activities of the Authonty not otherWise accounted for by propnetary specific funds
Proprietary Funds. The State Road and Tollway Authonty onJy maintains one of the two different types of proprietary funds. The type used by the Authonty, Enterprise Funds, is used to report the same functions as those presented as busmess-type actiVIties m the government-wide financial statements. The State Road and Tollway Authonty uses enterprise funds to account for 1ts Tollway operat1ons in Brunswick, Georg~a for the Torras Causeway operation, and, Atlanta, Georg1a for the Georgia 400 Extension.
Proprietary funds prov1de the same type of information as the government-wide financial statements, onJy in more detaiJ The propnetary fund financ1aJ statements provide information for the Torras Causeway and GeoTg~a 400 Extension.
Notes To The Financial Statements The notes provide additionaJ information that IS essential to a full understanding of the data proVIded in the government-wide and fund financ1aJ statements The notes to the financiaJ statements can be found in the Bas1c FmanciaJ Statements section of tlus report
Other Information In addition to the bas1c financ1aJ statements and accompanymg notes, this report aJso presents certain supplementary mjormat10n concerning the Authority's cash, mvestments, other operating expenses and saJanes.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net assets may serve over time as a useful md1cator of a government's financ1al position. The reader can thmk of the State Road and Tollway Authonty's net assets as the difference between 1ts assets (1.e., what the Authonty owns) and its llabll1tles (i.e., what the Authonty owes) at the end of a fiscal year. This balance represents one way to measure the Authonty's financ1aJ heaJth or 1ts fmanciaJ pos1t1on. In the case of the State Road and Tollway Authority, assets exceeded liabilities by $2 m!lllon at the close of the most recent fiscal year
To better understand the Authonty's actual financ1aJ pos1tion and ability to deliver serv1ces m future periods, the reader will also need to reVIew the vanous components of the net asset categoty Net assets in the amount of$ 16 4 m!lhon represent the Authority's investment m capital assets The
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State Road and Tollway Authonty uses these capital assets to proVIde serv1ces to those Citizens served by the Authonty Because of the very nature and on-gomg use of the assets being reported m this component of net assets, 1t must be recogruzed that th1s portion of the net assets IS not available for future spendmg
Net assets m the amount of $15,302 represent financial resources that are subJect to external restnctions on how they can be used The remwrung net assets of $-14 4 rmlhon. winch, 1f positive, could be utilized for Authonty purposes The pnmary contnbuting factor to the negative net assets 1s that the Authonty mcurs debt to fund mfrastructure proJeCts adrmmstered and, upon completiOn, retamed by the Georgia Department of Transportation (GDOT) The GDOT 1s to provide motor fuel taxes rece1ved to pay the debt serv1ce for the State of Georg~a Guaranteed Revenue Bonds, Senes 2001 Bonds
The tabular rnformation below provides a companson of the State Road and Tollway Authonty's net assets at June 30, 2002 and 2001. The schedule proVIdes comparative information for both the governmental and busmess-type activities For presentation purposes, the amounts shown have been rounded to the nearest dollar

Other Assets Capital Assets (net of
Depreciation) Total Assets

Comparative Schedule OfSRTA's Net Assets

Governmental

Activities

FY 6Q02

EY ~QQI*

$666,114,608

$0

Busmess-Type

ActiVItiCS

EX 2002

FY 2QQI

$81,129,410 $118,022,215

Total

EX 2002

fY:.lQQ!

$747.244,018 $118,022,215

IQ.415.915 $676,5JQ,523

Q

~.982.1~~

7,42J~S3

.$2 $87,118,566 $125,445.428

12.405,071 $76M49,082

7,42J~BJ
$125,445.498

Current LiabiiiUes

$285,882,861

Long-Term LIBbilities Current Noncurrent Total LIBbllmes

49,499,748
351,474,~76
$686.856,885

Net Assets

Invested m Capital

Assets

$10,415,915

Restricted

15,302

Unrestricted

-6Q.Z~Z 579

Total Net Assets

"-'" ,~~ ,~,

ActiYrty d1d not uut pnor to FY 2002

$0 $11,732,621 $11,738,982 $297,615,482

0

0

Q 63,08l.m

.$2 $74,813,724

0
6MiJM2!1 $8Q.377.406

49,499,748 41 !1.~~~.449 $761,67Q,672

$11,738,982
0 28.!i38,424 $80,377.4Q6

$0 $5,989,156

0

0

__Q

~.JI5,!il6

$0 tl2 304 772

$0 3,490,631 41.m.!l1
..,. < "" 110'>

$16,405,071 15,302
-I 4,!1!11.963
$1.978.410

$0 3,490,631
!!I.~ZZ.461
$45.068 092

The followmg table proVides a companson of the changes in the State Road and Tollway Authonty's net assets for the fiscal years ended June 30, 2002 and 2001. The schedule provides comparative information for both the governmental and busmess-type actiVIties. For presentation purposes, the amounts shown have been rounded to the nearest dollar

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Comparative Schedule OfChanJ;(es In SRTA's Net Assets

R~CI\\)CS
Program Revenues ChiUJes for Scrv1ccs
General Revenues Rents Bnd Royalttes Un=tnced lnvcstmcnt Earmngs
Loss on Dtsposol of Caplla1
As!cts

Governmental Acuvrues

EX.l2Q;1

- EY2QQJ

so

so

0

0

8,431,683

0

0

0

Busmess-Type Actwmes

EX.l2Q;1

EYl2!ll

S21,758,950
46,976 1,582,593 (109,391!

S21,609,661
47,306 3,535,986 (12617

Total
~
$21,758,950 46976
10,014,276
(109~91!

Total General Revenues Expenses
Clencnll Govmuncnt Debt ServiCe lntcrcst on Long-Term Debt Toll Roods

S8 431 683
$1,426,446 1,266,246 6,645,478
0

so

S23d79,128 $25 180,336

S31 710 811

so

so

$(

$1,426,446

0

0

0

1,266,246

0

0

0

6,645,478

0

18,000~33

17207113

18,000~33

Total Expenses
1nCI"e8Seiilccrea m Net A1sets BefOJ< Transfers
Tramf=

S9,J38,170
($906,487) (9419875)

so

$18,0000333 $17,207113

527,338,503

so

S5,278,795 S7,973,223

$4,372,308

0 (37,715,734!

0 (47,13S,609!

Change In Net Asscls

(S 10,326,362)

so ($32,436,939) S7,973,223 ($42,763,301)

Net AucU - llegmrua& (Restmd)

0

0

o4o4 741 711

37 094 871

o4-4,741 711

Net Assets - Endlfll!

(SlO.J26,J62)

so

Sl2.J04,7n $45,068,094

(Sl,978,410)

fYllm
$21,609, 47,3
3,535 9 (12,61 S25,180 3
17d07,1 517,207,1 $7,973
$7,973.2
37 094 8 $45 068 0'

Aclrvltv dld rrot uist prior to F'r 2002

Governmental Activities Due to a change in the laws govemmg the State Road and Tollway Authonty, a governmental fund became necessary to capture the actiVIty for the Authority's new dU'ect10n. As a result of the change in the Authority laws, the Authonty and the GDOT millated a senes of transportallon Infrastructure projects that reqwred the Authonty to Issue debt for these proJects and to change the vanous proJect's fundmg mechamsm from the Federal government These prOJeCts are in therr beginnmg stages and the above tables reflect those rmtial financial transactions. The pnmary contnbullng factor to the negallve unrestncted balance and change in net assets was the tnlnsfer to the GDOT of apprmomately $86 4 milhon to initiate these proJects
Business-Type Activities The change m the Authonty's laws did not change the pnmary focus of the busmess-type activities, wluch is the operation of the F J. Torras Causeway and the Georg1a 400 ProJect act1v1ties However, the change did affect the net asset and changes m net assets for these business-type actiVIties Official Code of Georgia section 32-10-72 provided for the excess balances of the two activities to be transferred to the Authonty's governmental actiVIties (General Fund) to contnbute to the change m overall direction of the Authonty. The transfer of approximately $37.7 nnlhon was the primary contributing factor to the decrease m net assets and the negative change in net assets for these two
- 8-

actiVIties Otherwise, operations for these two act1v1t1es remamed stable from fiscal year 2001 through 2002.
FINANCIAL ANALYSIS OF THE AUTHORITY'S FUNDS
Governmental Fund General Fund. The General Fund 1s the chief operating fund of the State Road and Tollway
Authonty At June 30, 2002, the General Fund has $538,272 m reserves and an unreserved fund balance of $337,681,676 that is pnmarily the result of the 1ssuance of debt to fund road projects m conjunction with the Georg1a Department of Transportation
Proprietary Funds The State Road and Tollway Authority's proprietary funds provide the same type of mformation found in the government-Wide financ1al statements, but m more detail.
Unrestricted net assets of the F. J Torras Causeway at the end of the fiscal year amounted to $-57,110.17, and those for the Georgia 400 Project amounted to $6,372,725.72. Factors concermng the fmances of these two funds have already been addressed in the dJscussion of the Authonty's busmess-type actiVIties.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets. The State Road and Tollway Authority mvestment m capital assets as of June 30, 2002, amounts to $23,253,947, which With accumulated depreciation of $6,848,876, leaves a net book value of $16,405,071. Th!s investment in capitaJ assets mcludes, land, buildmgs and equipment. The Authority's net capital assets mcreased by approximately $8,981,788 due largely to the mclus10n of land in capital assets Actual depreciation charges for the year totaled $1 ,340, 122 Additional mformation on the Authonty's cap1tal assets can be found in the notes to the financ1al statements
Long-Term Debt. At the end of the current fiscal year, the State Road and Tollway Authonty had total long-term debt m the amount of $464,055,197 45, wh1ch was composed of $41,446,212.00 m bond anticipation notes and $359,527,812.25 m revenue bonds m the governmental actiVIties, and $63,081,173.20 in revenue bonds in the busmess-type activities Add1t10nal information on the Authority's long-term debt can be found in the notes to the financ1al statements
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
The general slow down m the nation's economy Will be marg1nally reflected m "new home starts" m the Georgia counties serviced by the Georgia 400 Extens1on Tollway Subsequently new users of the road will also show less of an mcrease but Will not be less than current year. Thus there should be no declme in revenue from the project
RentaJ rates m the Buckhead area should show no sgmficant mcrease Thus our office space rental and our operating expense should remam static. Inflation factors for labor and serv1ces will be shghtly under national averages All of these factors were g1ven consideration m the preparation of our FY 2004 budget
Subsequent to fiscal year end an mtervention lawswt was filed to halt the Issuance of certatn revenue bonds associated with the governmental activities The case IS m the process of adjudicatiOn
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REQUESTS FOR INFORMATION Th1s financial report IS designed to prov1de a general overv1ew of the State Road and Tollway Authonty's finances for all those mdlViduals havmg an mterest m the Authonty's finances. Questions concerrung any of the mforrnatJ.on prov1ded m tlus report should be addressed to State Road and Tollway Authonty, 47 Tnruty Avenue, SW, Swte 522, Atlanta, Georgia 30334
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BASIC FINANCIAL STATEMENTS - 11 -

STATE ROAD AND TOLLWAY AUTHORITY STATEMENT OF NET ASSETS JUNE 30. 2002

EXHIBIT "A"

~
cash and C8ah Equivalents l"""olmanta Accounts Rece!vabla (no1 of allowance for uncolledlblel) Prepaid IIams Dofene<ICharves RH1rict&c1Aasels
Temporarily ReolndBd Cssh and C8sh Equlvalerrts lrwestments Accounta Receivable
Estate for Yeara, Net Copltal Aase1s
Land Buldklg
Less Aa:urnthled Depreciation Improvements Other Than Building
Less Accumulaled Dapraaatlon
Maclunary - Equlpman1 Less Aco.lmula1IHI Dopreaa1lon
lnlraabueture Less Accumulated Dopr&claUon
Total Aase1s

Llai!IL\II~li AND tilii alilililli

Accounta Payable and 011181' CUmml Llal>lllllas Doferred Rewnua

CUmin! L.labllllal Payabla from -
Fund Hold tor Othara Deferred Revenue

Aase1s

Cuotomer Dopoalts Payable

Acauad lntlnal Payabla

Bond Anticipation Notes Payable Guaranteed Refunding Rawnua Booda Payable Noncurrent Uabillos Dua Within One Yaar
Dua In More Than One Year

Tolall.labiBtloa

NetAuets
I~ In Cai>llaiAasels
Reo1ricedfor DobtSeMce
llrnatr1clo<l
Total Net Aaae1a

Governmental AdMtles

BLJSiness-Type Actlvlllos

Total

s s s 26,241,32110

2,082 083 03

28,323,404 13

297,93312

297 933 12

1,288,482 44

114,293 40

1 402,77S 84

8,248 83

8,248 83

2,740,69814

2,740,698 14

272,607,396 83 323,785 S71 01
39,271,138 00

13,478,239 27 16 918,086 50
48,232,525 43

286,283,636 10 340 683,859 51
39,271,138 00 48 232,525 43

10.415,915 00

5,063,230 89 -2,482,421 76 2,484,92134 -1,215,918 60 4,154 039 31 -2,724 595 45 1,135,840 55
-425 94021

10.415,915 00 5,063,230 89 -2,482,421 76 2,484,921 34 121591860 4,154,039 31 2,724,59S 45 1,135,840 55 -425 940 21

s s s 676,530,522 52 87.118,565 85 783,849.08617

s s 16,927 5&1 83 6,152 48

s 824,794 52

17,752,359 15

8 152 48

9,080,355 87 2S9,688,768 00

4,292 05 3,218,582 51
225,745 !50 1,614,206 25
5,845 000 00

4,292 05 3,218,582 51
225,745 50 10,874,561 92 259,868 788 00
S,84S,OOO 00

49,499,748 20 351.474,278 05

63.081 '173.20

49 499,748 20 414,55S,449 2S

s s s 686,856,685 01

74,813.794 03 761.870.879 04

s s 10,415,915 00

5,989,156 07 $ 18,405,071 07

15,301 96 -20 757 579 45

8.315,815 55

15,301 96 -14 441 963 90

s -101328 362 49 $ 121304.n1 62 s

1 978 409 13

Tho notes to the financial statemento are an Ollegral part ollh15 statamont.
- 12.

Functlons/Proorams Governmental ActJvrtes General Government Debt SerVIce Interest on Long-Term Debt

Total Governmental ACIIVItes

BUSIMI!SS Type ActiVIty Toll Roads

~

""

Total ActJv1tres

STATE ROAD AND TOLLWAY AUTHORITY STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30. 2002

EXHIBIT "B"

Ex~enses

Program Revenues Charges for Services

Net (Expense) Revenue and

Chanses In Net Assets

Governmental

Business-Type

Actvtles

Activities

Total

s

s 1,426 445 92

126624561

6,645,476 20

DOD S

s -1,426,445 92
1 ,266 245 61 6 645,476 20

0 DO $

-1 426 445 92 1 ,266 245 61 6,645,478 20

s

s 9,338,169 93

0 DO $

s 9,336, 169 93

0 DO $

9,338 169 93

18 000,332 81
s s 27,336,502 74

21 758 950 44
s 21,756,950 44

General Revenues

Rents and Royalles

Unrestncted Investment Earmngs

s

Loss on Disposal of Capital Assets

Transfers

Total General Revenues and Transfers S

Change In Net Assets

s

Net Assets - Beg.nnlng

Change In Capitalization Threshold

Net Assets - End.ng

s

0 DO
s 9,336, 169 93 s
6,431,682 59 9,419 87515
s -988,192 56 s -10,326,362 49
s 10,326,362 49

3,756,617 63
s 3,756,617 63
s 46,976 30
1,582 593 46 -109,391 64 37,715,734 66
s 36, 195 556 96
32 436,939 33 $
45,066,093 01
326,362 06
s 12,304,771 62

3,756 617 63 5,579 552 30
46 976 30 10,014 276 05
109,391 84 -47 135 610 03 -37,163,749 52 -42 763,301 82 45,068,093 01
326 382 06 1,978 409 13

The notes to the flnanclat statements are an Integral part of this statement

STATE ROAD AND TOLLWAY AUTHORITY BALANCE SHEET
GOVERNMENTAL FUND JUNE 30. 2002
Cosh and CUh Equtvolents lnteJVS! Receivable Dolerred Chargoo CUh and Cosh Equivalents ReolrlciBd
Prtlf8d Fund Investment Account &nlung Fund l""""trnant Acx:oont General Account lnveolments. Reslr1dad General Account
TotaiAoaels
UA8JL!TIES ANP FUND BALANCES
Llablllbes Aca>unto Payable Contracts Payable lnterfund Payable Bond Antn:~atlon Noles Payable Deferred Revenue Accrued lnteresl Payable
Totaii.Jabi-
Fund Balances Reserved lor Encumbrances Deb!SaMce Dolerred Chargoo Uni888Mid
Tolal Fund Balances
Total LJabllltloo and Fund Balancel

EXH!BIT"C"

General Fund
$ 26,241,32110
1,288,482
37 00 7 11
1,928 715.63 270,878 874 09 323,765,571 01
$ 62411021808 88

$

155.330 25

27,76628

16,744.48810

259 888,788 ()()

6,15246

9,080,355 67

$ 285,882,860 76

$

522,932 97

15.301 96

37 00

337,881,875 69

$ 336,219,94612

$ 82411021808 88

Tho notes to tho finanaallllalomOnlo ""' an Integral part ollhls statemont - 14-

STATE ROAD AND TOLLWAY AUTHORITY BALANCE SHEET
GOVERNMENTAL FUND JUNE 30. 2002

Not- Amounts f1IIIOIIed lor -""""rdallldlvlleoln tho S1atemont of

ore dHioron1 bocauae

Tolol Fund Balanoo&- gowmi1WIIallundo

Coplloi8U81B used In gowmrnonlal acllvi1Bs are not flnanciai18101J1t:81 and lhar8lora are not
repor18CIIn tho lunda n - aooetB conslsl ot
Land
Long-llonn noc:aNal*tls n o t - to pay Qlrrenl-pOIIod-- and, thoralore, Ia not f1IIX)IIed In tho funds
LOng-mrm liabilities are not duo and payoblo In tho Qlnrent period and theroloro are not reporlod as babilitiosln tho !undo Long-llonn habirtles at year...OO a>n~~~l of
Bond AIIIJ:Jpolbi Noles~ Premium on Bond AniJ:Jpolb Noles Payablo
Revaiue- Poyalilo
Premium on--~ Leu AJiiOibZalk:Ni of Prl!lmlJm on Revanue Bondi Payat:M
Delorred Cliorgoo L - Amortlzallon of Bond llauance Coots
Not- ofGovemrnenlaf-- (EJdillll"A")

EXHIBIT"C"
General Fund
s 338,219,1148 12
10,415,915 00 39,271138 00
-'40,111,212 00 -1,335.000 00
-350,000,000 00 -10,029,276 05 501,463 60 2,864,905 94 -144 245 30
s -10,326.362.C9

The nOieO to the flnanaal-iWinls are on lnlegral port ollhla -WII1l
-15-

STATE ROAD AND TOLLWAY AUTHORITY

EXHIBIT "D"

STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUND

YEAR ENDED JUNE 30. 2002

RE\IENUES
lnteresllfld Other Investment Income
EXPENQITUBES
Cunerrt Gener111 Government
~5ervlce
PrinCipal Interest
Revenue Bend luuance Colli Capital OuUoy
~
~ (llefiaency) cl R......,.. Over (Unclor) Expenditures
QTHEB ANANC!NG souRces rusesl
Transtnln Transtera Out Long-Term Dobtluuod
Total Other Flnanca>g Sourt:es and U.S
Net Chango m Fund Balances
FUNp BALANCES. BEG!NNJNG
FUNQ BALANCES. ENQING

General Food
s_ __,s.,,.a"',882,.,.59"'-

s

1 282,200 82

259,888 788 00 7 148,$.42 00 4,151,15175

10415 915 00

s 282.88a1.997 37

s -274453 314 78

s 37,715,734 88 -&e .we 748 03
861 364 276 OS
s 81216731282 90 s 338 219,1Ma 12
000
s 338~191948 12

The notes to the finanaal statements are an 1ntegral part of thts statement - 16-

STATE ROAD AND TOLLWAY AUTHORITY

EXHIBIT "D"

STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUND
YEAR ENDED JUNE 30. 2002

Amoixrt11 reponed fOf' goverrmental actMb8S In the Statement of Ac:tMtiel are different because
Net change in fund bala:ncea ~ total governmental funds
Governmental fund a report ceprtal outays u expenditure~ How8'lef, In the Statement of ActMtle!. the cost of those aueta IS atlocllted owr thai" estimated usefui11V85 and reported as depredatiOn expense ThiS Ia the 11111ount by which capttaJ outlays uceed eel depredat lon " the c:urrent period
T1'8111fer.ln In the ataternent ot actJvJ\iea that do not P'f'O't'lde current ftnllncial resources . . not
reponed u tr.nafers-tn In the funds
The INU81"1C8 r:A long-term debt provides wrrent flnanaal rweources to goyerrrnental funds, while the repayment of the prtnc:llp81 of lOng-term debt COOIU11Etl the OJJTent flnanaal resourcea of govemmentat fLndl Neither tranuctio n, however, has 1 ny errec:t on net uaet1 Also govemmenULI funds report the errec:t of laauance COlts and pramk.ms when debt 11 flm lslued whereas these
amount11re deferred net amortized In the atatement ot ac:ttvltles The following amcx.rtt1 are the
dlrfereneea ., the nanent of long--term debt.
Issuance of Bond Antk::lpatiDf'l Notes Pfeff\100\ on IMUence of Bond. AnUdp&Uon Notei lasuance of Revenue Bondi
Prermum on Issuance at Revenue Bonds

General Food
10 41!5,915 00 39,271,138 00
-40,111212 00 -1 335,000 00
-350 000,000 00 -10,029 276 05

Some expenses rwporte d In the Statement of Ac:ttvffiH do not rwqulre the UN of c:urrent fWianCiilt reaourt:a and. therwfore, are not reported 111 expendttures In governmental funda. In 1M anent penod, theae amounts are
Revenue Bond taauance Costs Amorti.zabOn of PremlLm oo Revenue Bondi Payable Amortl.zabOn c:A Revenue Bond lsaulnce Costa
Chango In not ....,. ol Govommo,...l Actlvrte (Exhibit "81

2 88.4,905 94 M)1,483 1!10 -1 2-45 30
$ -10.32&,362 49

The notes to tho financial statements are an Integral part of thiS statemont
. 17.

STATE BOAD At:jD TQLLWAY AUTHQRITY ST~TEMENT OF t:lET ASSETS
PRQPRIETARY FUND5-[;NTERPRIE FUNDS JUNE 30. 2002

EXHIBIT "E"

~
CooentA..... Cash lncl Cash Equtvalents lnvestmonto
Acccults Rece l'i8:ble (net of sla.wance for uncollacti:lles)
lnterest~e
Prepaid Hems
Total Currant Auets
Noncurrent Auets
- " * ' Caah 111-.:t Cash Equlvalentt
Cuslomor Depoolts Guaranteed Refunding Revenu. Bend Covenant Accounts lnveotmonts G1J818nteed Refunding Revenue Bond Covenant Accounts
Total R-.:ted~
EWteforYNR Net
CapllalBulldrog Leu AcaJm ulaled Depfwclldlon lmprov~~ments Other Than Bulkt1ng loa Acannulaled Oepreaabon Mllchnery ond E~ont Lau Accumulaled ~ obon lntrutruchn Lou Aa:umul- o.,ndobon
CopolaiAooeto (Net of Accumulated o.pr.ciobon)
Total Noncu:Twnl A -

F J TORRAS CAUSEWAY

GEORGIA400 PROJECT

$ 4i5,409 36 $ 55000
$ 495 959 36 s

1 586,673 67 $ 297 933 12 92,201 61 21,541 79 8 246 83
2.006.597 02 $

s

225,746 50 s

13,250493 n

18 918 088 50
s 30 394 327 77 s s 48.232.525 43 s

s 143 880 00 s
-104,313 00
302,136 30 -110993 ..3
1,1as.e.a 55
_.25 9.CO 21
s s 9<4081021 s 940 610 21 s

s 4 919,350 89
-2 378,108 76 2,484 921 34 -1,21591660 3,881 903 01 -2,813 602 02
504854586 s 53 281 071 29 s

TOTAL
2,082,083 03 297 933 12 92,751 61 21,541 79 8 2~8 83
2.502 556 38
225 745 50
n 13 250,493
16.918.088 50 30 394 327 77 48.232.525 .t3
5 063,230 89 -2 482 421 76 2 484,921 34 -1 215,91B 60 4,154,039 31 -2,724,595 45 1,135,840 55
-425 94.0 21
5 989 156 07
54.221 881 50

TolaiAoaota

s 143658957 s as es1 996 oe s 87118 565 65

The notes to the finallCI81 statements are an Integral part of thiS statement
- 18-

STATE ROAD AND TObLWAY AUTHORITY STATEMENT OF NET AS~ETS
PROPRIETARY FUNDS-ENTERPRISE FUNDS JUNE 30. 2002

EXHIBIT 'E"

F J TORRAS CAUSEWAY

GEORGIA 400 PROJECT

UAB!L!T!ES ANQ NET ASSETS

Cl6rent Uablhbes Account. Payoble ContractaPayoble
Total Curntnt l.la"llllos

s Jo.c so OJ s
8 501 00
s 312 951 03 s

46653999 s s 303 so
51184349 s

Current Uabillbel Payatu from Ratncted Aueta

Foods Hetd tor Othera

Detorred Rev.nue

s

CusiOmor lle!>OS!ta Payable

Acc:rued Interes I Payable
Guara- Rofunclong Re.onuo Bondo Poya!llo

s To<al Cumoml..lllb bbos Payoblo from Rntricted A -

s
240,18 50
24011850 s

"292 05 s
2,978 484 01 225,745 50
1,61.t 206 25 5 845.000 00
10 861707 81 s

None~ 1.181> biles G...,..,_ Rerun ding Revonuo Bonds Payable Unam.ortlzod Premrum on G..aranteed Refundtng Revenue Bonds l.olo Oet.red Amount on Refln:ilng
Total Noncurrent Uabi11bM
TCUI Uablrtla

s 85,575 000 00 s
997 756 97 -3 491 583 77
s s 8308117320 s 553.069 53 s 74.260.724 50 s

N01AaMts
IOVMtod 1n Copllal Ass01I Unrestncted

I

940,810 21 s

5,048 545 86 s

-5711017

6.372.725 72

TOTAL
no 99002
53 804 50 824 794 52
4,292 05 3 211! 582 51
225 745 50 1,614 206 25 584500000 10 907 826 31
65 575 000 00 997 756 97
-3 491 583 77 6308117320 74 813 794 03
5,989 158 07 631581555

To<al No1Aoo01o

s 883 500"" s 11421 271 58 $

12 304 771 62

The notes to the finanaal statements are an 1ntegrel part of thiS statement
- 19-

STATE ROAD AND TOLLWAY AUTHORITY

EXHIBIT 'F'

STAT!;MENT OF REVENUES, EXPENSES AND CHAN~ES IN FUNQ NET ASSETS

PROPRIETARY FUND!;! !;NTERPRISE FUNDS

YEAR ENDED JUNE 30, 2002

OPERATING REVENUES
Saloa and Charges for Services Adi1"Mnlslratlve Fees
Sales and SeMceS Toll Fees Annual Tol Decals Cash Tolls Crul8eCarda
To1al Seles and Clwges for SeMceS
Rema and Royalboa Rental Income
To1al Operabng Revenues
OPERATING EXPENSES
PeniOMI Services Motor Vehicle Expense Pnntlng and PU>IIcabonl. Medoe Supplies and Ma1erials Repalra and Mamtenance
Equipment on Inventory Not Caprtallzed
Water and Sewage Ene1ll'l Rema Other than Real Estate Insurance and Bonding Bad Debt Fre1ghl Other Operabng Expenses TnM!I Real Ealate Rentals Per Dlom and Fees Contracts Software Telecommunk:atlons DepreCiabon AmorbZIIIIOrl of Estate tor Yea111 lnduect CD11
Total Operatng Expenses

F J TORRAS CAUS<WAY

GEORGIA400 PROJECT

TOTAL

$

625 ()() $

467 899 87 $

468 524 87

$ 488 860 50

$

488,860 50

1,041,380 53 $ 12 715,360 84

13,756,741 37

7 044 823 70

7,044,823 70

$ 1,530,241 03 $ 19,760,184 54 $ 21,290,425 57
s 1,530,866 03 $ 20,228,084 41 $ 21 ,758,950 44

s

48 976 30 s

46 976 30

s s $ 1,530,866 03

20,275,060 71

21 ,805,926 74

$

s 582,531 73 $ 1,696,19360

2.278,725 33

42055

1,140 55

1,56110

3,341 ()()

281,842 75

285,183 75

32.230 01

1 768 290 20

1,800.520 21

52,33503

814,39898

866,73401

16,840 DO

69,36849

86,208 49

316 32

3,718 08

4,03440

10.89517

79,698 13

90,593 30

2,615 62

66,180 DO

68 79562

1,000 00

1 000 00

43 731 00

43 731 00

2,113 75

12,689 32

15 003 07

36,737 79

320,690 39

357,428 18

5 312 18

2,365 15

7,6n33

413.000 00

254,413 68

667,413 68

647,218 12

647,218 12

38,822 54

1,871,186 34

1,910,008 88

104,10967

104,109 67

3,871 41

120,64946

124,520 89

193,742 65

1,146 378 71

1,340,121 36

3,n8 50714

J.n8,50714

4 307 21

76832

5 075 53

$ 1,399,432 96 $ 13,084,738 10 $ 14 484 171 06

Opelabng Income

$ 131 433 07 $ 7,190,32261 $ 7,321,755 68

The notes to the financaal statements are an 1ntegral part of thrs statement
- 20.

STATE ROAD AND TOLLWAY AUTHORITY

EXHIBIT 'F'

STATEMENT OF REVENUES. EXPENSES AND CHANGES IN FUND NET ASSETS

PROPRIEJARY FUNDS- ENTERPRISE FUNDS

YEAR ENDED JUNE 30. 2002

NONOPERATING REVENUES rE/(PENSESl
Investment Income Loss on Disposal of Gapltal Allaets
Bond Interest Expense Total Nonoperatng Revenues (Expenses) Income Befora TransferB
TRANSFERS
TransflnOUl Changes In Net Allaets
TOTAL NET ASSETS- JULY 1
Ad(ustments Change "' Gaprtallzatlon Threshold

F J TORRAS CAUSEWAY

GEORGIA 400 PROJECT

TOTAL

s

166,687 89 $ 1,415,905 57 s 1,582,593 46

-6,521 43

-102,870 41

-109.391 84

-3.516,161 75

-3 516 161 75

s

160 166 46 s -2.203.126 59 s -2,().42.960 13

s

291,599 53 s 4,987,196 02 $ 5,278,795 55

-8,000,000 00 -29,715.734 68 -37.715.734 88

s -7,708,400 47 s -24,728,538 86 $ -32,436,939 33

8 615,026 45

36,453,066 56

45,068,093 01

-23125 94

-303.256 12

-326.382 06

TOTAL NET AS$ETS - JUNE 30

s

883 500 ().4 $ 11 421 271 58 $ 12130o4 1n1 62

The notes to the finanCI81 statements are an mtegr;~l part of this statement
-21 -

STATE ROAD AND TOLLWAY AUTHORITY STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS- ENTERPRISE FUNDS YEAR ENDED JUNE 30. 2002

EXHIBIT "G"

CASH FbgNS fROM PPERADNG ,&..CTMIIES
CUh R.ec::ltlwd from Cuatomera Caah Pllld to Vlll'ldorl Cah PM! to Emp~ayees
l'lotCoah-.., Opemlng ..........
CASI::I ELOWS EBQM ~~!& EI&~IH!;i ACTMTJES
Opentr.g Trafllfef ~ Genwtil Fund
!;,MI::I E~QWS EBQM Cz!.fll& ~~12 BELATEC El~f:iel~~ &::D~E::i
Accplillon ncl Conltruc:tlon of CllpltaJ ...... Interest Paid on Refl.ndi'IQ Re'II!Wu,. Bond:l Prtnapel PM:! on Rehn:llng R.......,..., Bonds
Nit CUh Uled In CIIPblnd Reillted FIIWTICing Ac:tlvttm.
~1::1 ELOYIS EBQM ~~~mz ,bCTNm!;;S
Pun:hue oflmeatnwrt Sec.n1tln Proceeds from s.le end Mautty of tn....tmenta lnvestrr.nt lncxmll R~
Net CUh PnMdecl b'J lnveatJ'Ig Ac:tNib8l
Net lna'MM (Deaeue) r. Cah 8nd Cuh Equ~
CASH AND CASH EOUiYAl.EtiTS -JULY 1

F J TORRAS CAUSEWAY

GEORGIA400 PROJECT

TOTAL

s s s 154354153

20 393 200 08

21 836 741 61

..a35,280 46

-6,620 170 31

1 355 450 n

-582 5~1 73

-1 896193 eo

-.21218 7,5 33

s

If:~ 729 3o4 $ t6: tzs S36 11 s 1230,~51

s .a Q!i!g OOO,Q2 $ -a! 1]5134JB $ -3771~ 7}!.88

s

s -341 768 00

-3-41,768 DO

-3 354 300 00
-s 596000 DO

-3 354 300 00 ~,595 000 00

s s -9,291 068 Q:Q

..S,291 10SB QQ

s s -10,&22,10tl 157
18 724 87334
327~678

-30 717,443 41 I 52 i55,387 30
1 ~5,893 23

-41 83til5ll0 08 71 680,240 84
2 233 170 01

s 8,]~ 1 043 45 I

2<4 143 8:]7 12 I

~.273 !ISO 57

s

:ze5n2n s s -2,888 149 59 -2 430,378 so

2U63657

17.7.-i 082 53

HQM,699 tO

~t:t ~C ~H EQUOlAI EtiiS- JIIUE i!l

s

49540Q~ $ 15 !i:1912 94 I 151558 322 30

The notes to the financoal statements are an mtegral part of thiS statement
- 22-

STATE ROAD AND TOLLWAY AUTHORITY
STATEMENT OF CASH FLOWS PROPRIETARY FUNDS- ENTERPRISE FUNDS
YEAR ENDED JUNE 30. 2002

EXHIBIT"G"

F J TORRAS
CAUSEWAY

GEORGIA400 PROJECT

TOTAL

Opomng Income
-Ad,...amel"dd to Recondle OJ*'I'IIng Income to Not C a s h - by c:>perau.g-
Amcw tw:atkA 1of Eltale for Yeara Changes ... ~ lnd Uilblit)a
lncreue ., AccDuntl Rec:eMbae lnc:reue n PrepU:t 1tem1 """-"'...-(()the"'""~-) lncrwae i1 Cuatomer ~ Payable lnc:ruse i1 Delen8d R~
Total-

.... C.llh- by ()porotrog-

c.- ~QH~t:l ~II& 6titl BliiL.MEQ El~!;dU!:2 ~TIVITY OdpoaaloiC."""'-

Clw1ge"

'Ill-

$

s 131 433 07

s 7.190.322 81

7 321.755 8B

$

193 742 86 s

1 148 378 71 $

1 340,121 3e

3 778,507 , ..

J,ne so1 14

-:140 00 -212 121 88
13 015 ~

~n4t3
-2.231 21
-109 " ' 39 11 880 00
168 844 50

s

s -5 703 73

4.988 513 58 I

-5 114 13 -2 231.27 -322.113 27 11 880 00 17DMOOO
4 ;.eo SO! 83

s

s 125 729 34

12 178 838 17 I 12,302 585 !51

s

s 17 533 V8

42438&71

e.cs 592.86 s
7131!! 57

V66 128 &4 1 137 5a82B

s

~1920M S

1M179243 S

2 103 713 12

The notes to the finanoal statements are an 1ntegral part of ttns statement
- 23-

1-

STATE ROAD AND TOLLWAY AliTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT "H"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. REPORTING ENTITY The State Road and Tollway Authority (Authonty) is an mstrumentality ofthe State ofGeorgta and a public corporation created for the purposes offinancmg the construction oftoll highways and bndges in Geol'gla The Authonty conststs of five (5) ex-officiO members. the Governor, Commisstoner of the Department of Transportation, Duector of the Office of Planmng and Budget, Appomtee of Lieutenant Governor and Appomtee of Speaker of the House Admmistrauve services are provtded to the Authonty by the Department ofTransportauon The Authority IS considered a component unit ofthe State ofGeol'gla for financial reporting purposes because of the sigmficance of 1ts legal, operational and financial relat10nslups with the State of Georgia. These reporting entity relatJ.onslups are defined m Section 2100 of the Governmental Accounting Standards Board (GASB) Codification ofGovernmental Accounting and Financial Reporting Standards.
B. BASIS OF PRESENTATION A key feature of the governmental fmancial reporting model 1s its unique combmat.J.on of government-Wide and fund fmanctal reporting. Tlus combination ofgovernment-Wide and fund financial reporting is destgned to accomplish two goals. (I) to proVIde mformauon usmg the econormc resources measurement focus and the accrual basts ofaccounting funcuons reported m governmental funds, and (2) to provide net cost mfonnauon by function for governmental activities Tlus 1s accomplished through government-wide financtal statements and fund financtal statements
Government-Wide Financial Statements The Statement ofNet Assets and the Statement of ActiVIties report infonnation on all the nonfiduciary actJ.vtties of the Authonty. Governmental actiVIties, wluch normally are fmanced through taxes, mtergovernmental revenues, and other non-exchange revenues, are reported separately from bus1ness-type actiVIties, which are financed m whole or m part by fees charged to external parties for goods or serVIceS.
As a general rule the effect ofinterfund activity luis been eliminated from the government-wide fmanctal statements The only exception to thts general rule are m those mstances where the ehmmauon ofthese charges would distort the dtrect costs and program revenues reported for the various functiOns concerned
The Statement of ActlVltJ.es demonstrates the degree to wluch the dtrect expenses of a gtven function or segment are offset by program revenues. Dtrect expenses are those that are clearly identifiable Wlthm a spectfic funcuon Program revenues include (a) charges to customers or apphcants who purchase, use, or duectly benefit from goods, semces or pnvileges proVided by a gtven function and (b) grants and contnbutions that are restricted to meeting the operational or capital requirements of a parttcular function Taxes and other 1tems not meeting the defimtton of program revenues are mstead reported as general revenue.
-24-

STATE ROAD AND TOLLWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT "H"

Fund Financial Statements The Authonty reports activity m a single governmental fund and two propnetary funds Separate financial statements are provided for the governmental fund and propnetary funds. MaJor mdiVJdual governmental funds and maJOr mdJVJdual enterpnse funds are reported as separate columns m the fund financ1al statements
The Authonty reports the followmg maJOr governmental fund.
The General Fund is used to account for all financial transactJons not requrred to be accounted for m another fund.
The Authonty reports the following maJor propnetary funds
The EnterpriSe Funds are used to report activities for winch fees are charged to external users for goods or serVIces. These funds are also used when the actJVJty is financed WJth debt that IS secured by a pledge of the net revenues from the fees The Authonty's F J Torras Causeway Fund and Georgia 400 Project Fund are reported as enterprise funds
C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING Government-wide financial statements are reported usmg the economic resources measurement focus and the accrual basis ofaccounting, as are the propnetary fund financial statements Under the accrual basis of accountJng, revenues are recorded when earned and expenses are recorded when a hability IS incurred, regardless of the timmg of cash flows.
Governmental fund fmancial statements are reported using the current financial resources measurement focus and the modrlied accrual basis ofaccounnng. Revenues are recognized when susceptible to accrual (I.e., when they become both measurable and avrulable) Revenues are considered to be "measurable" when the amount of the transactJon can be deterrnmed and "available" when they are collecnble within the current penod or soon enough thereafter to pay liabilities ofthe current period. Major revenue sources susceptible to accrual mclude mterest and other investment mcome. Expenditures are generally recorded when the related fund hab1hty is incurred as under accrual accounting However, debt service expenditures, as well as expenditures related to compensated absences and clrums and judgments are recorded only when payment IS due
The Authonty has elected to follow generally accepted accounting pnnc1ples prescnbed by the Governmental Accounting Standards Board (GASB) as well as Statements and Interpretations of the Financial Accounting Standards Board, Accounnng Pnnc1ples Board Opmions and Accountmg Research Bullenns ofthe Committee on Accounting Procedure Issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements.

-25-

STATEROADANDTOLLWAYAUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHffiiT "H"

Propnetary funds d1stmgmsh operatmg revenues and expenses from nonoperatmg Items Operatmg revenues and expenses generally result from proVIding services and producmg and delivenng goods m connection with a propnetary fund's principal ongomg operatwns The pnnc1pal operatmg revenues of the Authonty's enterpnse funds are charges to customers for sales and services and rents and royallies Operatmg expenses mclude the cost of sales and seTV!ces, admmistralive expenses and deprec1atwn on capital assets The Authonty also recognizes as operatmg expense the amortization of the asset "Estate for Years". All revenues and expenses not meeting this definiuon are reported as nonoperating revenues and expenses
When both restncted and unrestricted resources are avrulable for use, generally it IS the Authonty' s policy to use restncted resources first, and then unrestricted resources as they are needed
D. ASSETS, LIABILITIES AND NET ASSETS Casb and Casb Equivalents
Cash and Cash Eqmvalents mclude currency on hand, demand deposits with banks and other financial institutions Cash and Cash Eqwvalents also include short-term, highly liqmd
investments With maturities of three months or less from the date of acqms1tion The
aforementioned definitions were applied m the preparation ofthe Statement of Cash Flows
The State investment pool (Georgia Fund I) is an external investment pool that is not registered with the Secunties and Exchange Commission (SEC) but does operate m a manner consistent with the SEC's Rule 2a7 ofthe Investment Company Act of 1940 The State ofGeorg~a's Office ofTreasury and Fiscal Services (OTFS) manages Georgia Fund I m accordance with policies and procedures established by State law and the State Depository Board, the oversight Board for OTFS. This investment is valued at the pool's share pnce, $1.00 per share
The Authority does not have any nsk exposure related to mvestments in denvat1ves or sHnilar mvestments in Georgia Fund 1, as the mvestment policy of OTFS does not provide for investments in derivatives or srmilar investments through the Georgia Fund I
Investments Investments are defined as those financial mstnmients With terms in excess ofthree months from the date ofpurchase and certain other secunties held for the production ofrevenue. Investments are stated at fair value.
The Authority may invest regular funds in certificates of deposit, United States government secunties of guaranteed convertibility or rnatunties not in excess of two years and repurchase agreements In addition, the Senes 1998 Guaranteed Refundmg Revenue Bond covenants and the Senes 2001 Guaranteed Revenue Bond covenants restrict the Authonty to the followmg forms of mvestments
(1) Obligations issued by the United States government
-26-

STATEROADANDTOLLWAYAUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT "H"

(2) Obligations ofany corporanon ofthe United States government fully guaranteed by the United States government.
(3) Obligations ofthe Federal Home Loan Bank.
(4) Repurchase Agreements
Accounts Receivable Accounts rece1vable ansing from operations of the Georgta 400 Project are reported net of an allowance for uncollecubles in the amount of$25,027.00.
Interest rece1vable for tbe General Fund and the Georgia 400 Project cons1sts of mterest earned wtuch has not been rece1ved at year-end
Restncted Accounts receivable for the General Fund cons1sts offunds available from the Georgta
Department of Transportation to pay for debt service and mterest payments for tbe Senes 2001 Guaranteed Revenue Bonds.
Prepaid lteiDll Payments made to vendors for services that Will benefit penods beyond June 30, 2002, are recorded as prepaid items.
Deferred Charges Unamortized Bond Issue Costs for tbe Senes 2001 Guaranteed Revenue Bonds and equipment depos1ts are recorded as deferred charges at June 30, 2002.
Restricted Assets Specific portions ofthe Authonty's Cash and Cash Equivalents and Investments are classified as restricted assets on tbe Statement of Net Assets. Certam revenue bond proceeds, as well as certam resources set as1de for the1r repayment, are reflected as restricted assets on the Statement of Net Assets because tberr use 1s linuted by applicable bond covenants.
Governmental Activities (General Fund) The "Project Fund Investment Account" is used to mvest funds m tbe Project Fund that were not mvested as part of the initial Flex Repurchase Agreement. The "Sink.mg Fund Investment Account" IS used to accumulate funds transferred from tbe Georgia Department ofTransportanon for payment of debt servtce. The "General Account" is used to pay tbe costs of the Project.
Business-Type Activities (Georgia 400 Project Fund) A desenptJon of restncted assets assoc1ated with the Guaranteed Refundmg Revenue Bond Covenants follows. The "Revenue Fund" is used to record deposits of all Pledged Revenues as defmed in the Trust Indenture. Funds in the "Revenue Fund" are dtstnbuted monthly by the
-27-

STATE ROAD AND TOLLWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT"H"

Trustee to other funds and accounts as set forth m the Trust Indenture The "Smkmg Fund" 1s compnsed ofthe "Interest Account" whtch is used for the payment ofmterest on the Senes 1998 Guaranteed Refunding Revenue Bonds and the "Pnnctpal Account" whtch IS used for the payment of pnnctpal or redemption pnce on the Senes I998 Guaranteed Refundmg Revenue Bonds The "Operating and Mamtenance Fund" IS used to pay the operating and mamtenance expenses The "Resurfacmg Fund" IS used to pay the costs of the next scheduled major resurfacmg ofthe Project. The "Toll Facility Removal Fund" is used to pay the costs ofremoval ofthe toll plaza and toll collection eqwpment when the bonds are paid off The "Rebate Fund" IS used to accumulate funds due to the Uruted States Government for arbttrnge rebate. The "Debt Retuement Fund" is used for restoring any deficiency m fundmg of the aforementiOned funds and accounts.
In addition, Restncted Assets include customer deposits paid to the Authority
Estate for Years On July I 0, 1991, the State of Georgia Department of Transportation granted to the State Road and Tollway Authonty an "Estate for Years" m retmn for a portion ofthe proceeds ofthe sale of the Series 1991 Guaranteed Revenue Bonds in the amount of$67,508,129.40 This "Estate" entitles the Authonty the nght to possess and operate the Georgia 400 Project and was continued in force by the Senes 1998 Guaranteed Refunding Revenue Bonds which defeased the Senes 1991 Bonds. Upon payment m full ofthe Senes 1998 Guaranteed Refundmg Revenue Bonds by the Authority, all rights, title and interest acquired by this agreement shall revert to the State of Georgia Department of Transportation
The asset "Estate for Years" IS amortized over the payoffperiod ofthe refunding revenue bonds The amortization expense each year is based on the percentage of refunding revenue bonds redeemed in that year to total bonds issued muiUphed by the original asset amount of $67,508,129 40 This amortiZation method corresponds to the revenue stream projected dunng the payoff period of the refunding revenue bonds The amortization expense recognized for the fiscal year 2002 was $3,778,507.14, wluch reduced the "Estate for Years" to $48,232,525.43 as of June 30, 2002.
Capital Assets
Capttal assets, which include property, plant, machmery and eqwpment, and infrastructure assets,
are reported in the government-wide financial statements at historical cost Donated capital assets are recorded at fair market value on the date donated and disposals are deleted at recorded cost Infrastructure assets are capitalized when project costs exceed $1 milhon Buildings and Improvements Other than Buildings are capttal!zed when the cost ofindividual Items or projects exceeds $5,000. Machmery and eqwpment IS capitalized when the cost of mdiVIdual items exceeds $5,000 The costs of normal mamtenance and repairs that do not add to the value of assets or materiaiJy extend asset hves are not capttaltzed

-28-

STATE ROAD AND TOLLWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT "H"

Apphcable capital assets ofthe Authonty are depreciated usmg the strrught-lme method over the following estimated useful lives
Assets

Infrastructure

8

Buildmgs and Buildmg Improvements

7-20

Improvements Other Than Buildings

7-18

Machinery and Eqwpment

3-9

Compensated Absences It IS the Authority's pohcy to penrut employees to accumulate earned but unused vacation and sick pay benefits. There is no hability for unpaid accumulated sick leave smce the Authority does not have a policy to pay any amounts when employees separate from service With the government. All vacation pay is accrued and paid when mcurred in the government-Wide and fund financial statements. These amounts are paid when incurred due to the Georgia Department of Transportation (Goon perfonnmg certain admmlstrative functions for the Authority (see note 1, A. Reporting Entity). The Authonty reimburses the GDOT on a monthly basis for administrative expenses, including salaries and accrued vacation leave
Long-Term Obligations In the government-wide finanCllll statements and proprietary fund finanCllll statements, long-term debt and other long-term obligations are reported as habilittes. Bond discounts, as well as Issuance costs, are deferred and amortized over the hfe of the bonds using the straJght-lme method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt.

In the fund financial statements, the governmental fund recogruzes bond prerniwns, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financmg sources Premiwns received on debt Issuances are reported as other financmg sources Issuance costs, whether or not Withheld from the actual debt proceeds received, are reported as debt service expenditures.

AJomt resolution of the StJ.ite Transportation Board and the State Road and Tollway Authonty approved a land pubhc transportation project consisting of construction and improvement to roads and bridges, mcluding related plannmg, engineermg and land acquisition expenses and approved the Issuance by the Authonty of the State of Georgia Guaranteed Revenue Bonds (Governor's Transportation Chmces Initiative), Series 2001. The Georgia Department of Transportation (Goon IS to transfer to the Authority the amount ofnet proceeds of motor fuel tax received in each fiscal year as shall be necessary to provide for the Authonty a source of revenues with which to pay debt service on the Bonds as and when the same become due

-29-

STATE ROAD AND TOLLWAY AUTHORJTY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT "H"

Net Assets In the government-Wide fmanc1al statements, the dJfference between fund assets and habihtJes is reported as net assets. Net assets are reported m three categones:
Invested in Capital Assets consists of capital assets, net of accumulated depreciatJon
Restricted Net Assets result when constramts placed on net asset use are either externally unposed by creditors, grantors, contributors, and the hke, or imposed by law through constitutional provisions or enabling legislation.
Unrestricted Net Assets consist of net assets that do not meet the defmit10n of the two preceding categones Unrestncted net assets often are designated, mdJcating they are not available for general operations. Such designations have internally Imposed constramts on resources, but can be removed or modified
Fund Equity In the fund financial statements, governmental funds classify fund balances as either reserved or unreserved Reserved fund balances are those amounts that are not available for appropnanon or are legally restricted by outside parties for a specific use. Unreserved fund balances reflect the balances avwlable for appropriation for the general purposes of the fund
Encumbrance accounting is employed in the governmental funds. Encumbrances (e.g., purchase orders, contracts) outstandJng at year-end are reported as reservations of fund balances and do not constitute expendJtures or liabihtJes because the commitments will be honored during the subsequent fiscal year.
NOTE2: BUDGET
The Authonty prepares an internal operations budget for management purposes. The budget is not subject to review or approval by the Legislature of the State of Georgia and therefore, IS a nonappropriated budget
NOTE 3: ACCOUNTING CHANGES
In fiscal year 2002, the Authority implemented the followmg new accountJng standards Issued by theGASB:
Statement 34, Bas1c Fmanc~al Statements- and Management 's Discusswn andAnalys1s-for State and Local Governments;
Statement 37, Bas1c Fmanc1al Statements- and Management 's D1scusswn and Analys1s-for State and Local Governments Ommbus, and

-30-

STATE ROAD AND TOLLWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"H"

Statement 38, Certam Fmanczal Statement Note Dzsclosures.
Statement 34, as amended by Statement 37, establishes new financial reportmg requirements for state and local governments It reqwres new mformatwn and restructures much of the informatiOn that governments have presented m the past. Comparability With reports Issued m prior years 1s affected.
Statement 38 reqwres certam note disclosures when Statement 34 is Implemented
No adjustments to begmnmg net assets were reqwred as a result of the ImplementatiOn of these Statements
In addition to the Implementation of the new accounting standards mentioned above, the Authonty increased capitalization thresholds for capital assets as outlined m the State ofGeorgza Capztal Asset Guzde This change in the capitalization threshold resulted m decreases to beginnmg net assets in the amount of $303,256.12 m the Georgw 400 Project Fund and $23,125.94 in the F.J. Torras Causeway Fund.
The Authority also modified the definition of cash and cash eqwvalents in fiscal year 2002 to
mclude short-term investments (matunties ofthree months or less from the date ofacqwsitiOn) held by the Trustee ofthe Georgia 400 Project Short-term mvestments held by the Trustee at June 30,2001, amounted to $9,411,740.54.
NOTE 4: STEWARDSillP, COMPLIANCE AND ACCOUNTABILITY
COMPLIANCE WITH GUARANTEED REVENUE BOND COVENANTS The Authonty is subject to certain covenants with regard to the issuance of the Series 1998 Guaranteed Refundmg Revenue Bonds (Georgia 400 Project) and the Series 2001 Guaranteed Revenue Bonds (Governor's Transportation Chmces Initiative).
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds of the State of Georgia cannot be placed m a depository paying mterest longer than ten days Without the depository prov1dmg a surety bond to the State In lieu of a surety bond, the depository may pledge as collateral any one or more ofthe folloWing securitzes as enumerated m the Official Code of Georgia Annotated (OCGA) Section 50-17-59:
(1) Bonds, bills, certificates of mdebtedness, notes, or other direct obligations of the Umted States or of the State of Georgia
(2) Bonds, bills, certificates ofindebtedness, notes, or other obligations ofthe counties or mumcipalities of the State of Georgza
(3) Bonds of any public authonty created by the laws of the State of Georgza, providmg
- 31 -

STATE ROAD AND TOLLWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"H"

that the statute that created the authority authonzed the use of the bonds for this purpose (4) lndustnal revenue bonds and bonds of development authorities created by the laws of the State of Georgia
(5) Bonds, bills. certificates of mdebtedness, notes, or other obligations of a subsidiary corporanon ofthe Uruted States government, which are fully guaranteed by the Uruted States government both as to pnnc1pal and interest, or debt obligatiOns Issued by or securines guaranteed 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 Corporanon, or the Federal National Mortgage Association
(6) Guarantee or msurance of accounts proVIded by the Federal Deposit Insurance Corporation.
As authorized ill the OCGA SectiOn 50-17-53, the State Depository Board has adopted policies, winch allow agencies ofthe State of Georgia the op1lon ofexemptmg demand deposits from the collateral requrrements.
NOTE 5: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS
CATEGORIZATION OF DEPOSITS For purposes of analysis of custodial credit risk, cash deposits consist of all bank balances that include demand deposits and/or interest bearing accounts The bank balances as of June 30, 2002, are categonzed below ill order to proVIde informatiOn about the extent to winch such deposits are exposed to custodial credit nsk
Category 1 - Amounts covered by depository msurance or collateralized With secun1les (at market value) held by the Authonty or by Its agent m the Authonty's ruune
Category 2 - Amounts collateralized with secuntles (at market value) held by the pledging financial ms1ltu1lon's trust department or agent in the Authonty's ruune.
Category 3 - Amounts collateralized With securities (at market value) held by the pledging financial mstitutlon or by its trust department or agent, but not ill the Authonty's name, and amounts uncollateral1zed

- 32-

STATE ROAD AND TOLLWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT"H"

Cash Dcpos1ts

Canymg Amount
s s 6,304,725 70

Bank Balances
s 6,139,727 87

R1sk Categones 2

s ___ 104,996 58

0::..0:::0:....5

3 6,034,73129

CATEGORIZATION OF INVESTMENTS
For purposes of analysts of custodtal credit nsk, mvestments constst of U S Government secunttes and repurchase agreements. Investments are stated at frur value (See Note I) and are surnmanzed and classified as to custodial credtt risk withm the categories descnbed below:

Category I - Insured or regtstered, or securiues held by the Authonty or 1ts agent in the Authonty's name

Category 2 - Uninsured and unregistered, with secunties held by the counterparty's trust department or agent in the Authority's name.

Category 3 - Uninsured and unregistered, With secunties held by the counterparty, or by
its trust department or agent but not m the Authonty's name.

The carrying amounts of mvestrnent balances as ofJune 30, 2002, are categorized below. These amounts also mclude amounts rnaintamed m the State investment pool by the Office ofTreasury and Fiscal Servtces that are not subject to nsk categonzaUon.

Type of Investment

R1sk eatesones

2

3

Canymg Amount

Fa1r Value

U S Govcmmcnt
Secuntlcs

s s 297,436,610 34

Repurchase Ag=nts

323,765,571 01

Toll!!

s s 621,202,181 35

SuuclnvcsttnentPool

0 ()() s 0 ()() s

s s 0 ()() 297,436,610 34 297,436,610 34
323,76S,S71 01 323.765,571 01
s s 0 ()() 621,202.,181 35 621,202.,181 35

28,016,974 so

28,016,974 so

s s 649,219,155 85 649,219,155 85

NOTE 6: CAPITAL ASSETS
As menuoned in Note 3, mcreases in capttaJization thresholds for capttaJ assets resulted m adjustments to begmning balances

-33-

STATE ROAD AND TOLLWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT "H"

Bullness-Type Acdvibes Capnal Assets Bcmg Dcprecullcd
lnframucture Bulldmgs lmprovcmcms Ohc:r Than BuUd1n&S Machmery md Equopmcnl Total Capotal Assets Bems Dcprccllllcd
Less AC<UIJlllialcd llcp=oatton For lnftastruclure BulldJnp lmprovc:mcnt5 Other Than BuUdiiiS' Macllloery and Equopmcnl
TOTal Accumulalcd Dcpreco11110n
TOTal Capnal AISCb Bcons lleprecoatcd, Net

Balance Julv I 2001

Rcstatcmcnts

Balance (Restated) Julv I, 2001

$

000 $

5,029,791 71

4,142,098 69

5,428,086 81

$ 14,599,977 21 $

I, 135,840 55 $ (1,425 00)
(1,682,042 35) (589,959 48!
(1,137,586 28) $

1,135,840 55 5,028,366 71 2,460,056 34 4,838,127 33 13,462,390 93

$

000 $

2,202,992 23

l,n8,960 33

3,244,741 32

$ 7,176,693 88 $

$ 7,423,283 33 $

283,960 14 $ (487 97)
(685,338 48) ~409.337 91! (811,204 22) $
p26,382 06! $

283,960 14 2,202,504 26 1,043,621 85 2,835,403 41 6,365,489 66
7,096,901 27

Capital asset activity for the year ended June 30, 2002, was as follows

Govcnmeatll Activtdes Capllal Assets Nol Bang Dcptcclalcd
l..ond
Bu&loeu-Type Aclivides:
Capotal Assets Bcm8 Deprccoalcd ln&astruct= Bulk! IllS' lmprovanenb Olhcr Than Bwldmgs Maclunery and Equ1pment
Tolal Cap>tal Asscu Be>nJ Dcprecllllcd
I= Acaunulalcd Dcprccoatton For lnfnslruclure BwldJngs Improvements Other Than Bu1ldmgs Machonery and Equopmcnl
Total AC<Umulalcd Dcprccoatton
Total Cap1tal Assets Bemg Dcprecwed, Net

Bai8nce (Rellalcd) Ju!ll, 2001

AddJIIOIIS

DcletJons

Balance Juoe 30, 2002

s

s 000

10,415,915 00 $

000 $ 10,415.915 00

$

1,135,1140 55 $

5,028,366 71

2,460,056.34

4,838,12733
s 13,462,390 93 s

000 $ 65,850 00 24,865 00 251 053 00 341,76800 $

000 $ (30,985 82)
000 !935,141 02) (%6,126 84) $

1,135,1140 55 5,063,230 89 2,484,921 34 4,154,039 31 12,838,032 09

s

283,960 14 $

141.980 07 $

000 $

425,940.21

2,202,504 26

292,650 13

(12,732 63)

2,482,421 76

1,043,621 85

172,296 75

000

1,215,918 60

2,835,403 41

733,194 41

(844,002 37!

2,724,59545

$

6,365,489 66 $

s 1.340.12136

(856,735 00! $

6,848,876 02

$

7 096,901 27 $

(998,353.36) $ (109,391 84) $

5,989,156 07

Depreciation expense for the fiscal year ended June 30, 2002, was $1 ,340,121 36 and the total amount was charged to Toll Roads function ofthe busmess-type activities

-34-

STATE ROAD AND TOLLWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHlBIT"H"

NOTE7: INTERFUNDPAYABLESANDTRANSFERS
The composition of mterfund transfers dunng fiscal year 2002, IS as follows

Tran.sfer! In

General Fund

s

From

<icofp Dcpamnent ofTr>npOrtallon

s

Transfen Out Georg1a Dcpartmc:nt ofTranportabon

Total T'""'fers

s

Gcru:n!.l Fund
s 37,71~.734 S8
39271 133 00
s 76,986,872 88
86406 748 03 !9,419 875 I~ S

<icofp400 Pro~ Fund

Tmufcrs Out FJ ToJJB5
C.U.CV..V Fund

s (29,71~.734 88)
000
s (29,71~.734 88)

(8 000,000 00) s
000
s (8,000,000 00)

s !29 71S,734 8&!

!8,000,000 00) s

Total
000 39 271 138 00 39,271,138 00
86 406 748 03 !47,135,61003!

The Authonty reported transfers from the Georgta 400 Project Fund and the F J Torras Causeway Fund to the General Fund pursuant to OCGA (Official Code of Georgia Annotated) 32-10-72 to move prior year retamed earrungs to the General Fund.
In the fund financial statements, total transfers out are greater than total transfers in because of transfers between the General Fund and the Georgia Department ofTransportation (GDOn, The transfer out to GDOT m the amount of$86,406,748.03 was transferred from the proceeds ofthe Guaranteed Revenue Bonds, Senes 2001, and proceeds of the Limited Obligation Bond Anticipation Notes, Senes 2001, to reimburse GDOT for the construction costs related to various transportation projects At June 30, 2002, $16,744,468 10 of the total amount transferred to GDOT IS reported as Accounts Payable in the Statement of Net Assets and as an Interfund Payable on the governmental fund Balance Sheet. The transfer m from GDOT m the amount of $39,271,138 00 was transferred from motor fuel taxes to service debt
NOTE 8: OPERATING LEASES
LESSEE AGREEMENTS The Authonty has entered mto certam agreements to lease real property and eqwpment, whtch
are classified as operating leases. Amounts are mcluded only for multt-year leases and for cancellable leases for wluch an option to renew for subsequent fiscal year has been exerctsed Future mmimum commitments for operating leases as of June 30, 2002, are as follows

-35-

STATE ROAD AND TOLLWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"H"

Fiscal Year Ended June 30
2003 2004 2005 2006
Total Minimum Commitments

$ 296,015 52 59,291.40 25,514.80 3,263.84
$ ~,;;3,;;,84~,0;,;,;;8,;;;5,;;;56~

In adchuon, under a contractual agreement with the GDOT, the Authority operates the F. J Torras Causeway The Causeway IS owned by the GDOT and leased to the Authonty m order to collect tolls for the purpose of earning sufficient revenues to make possible the maintenance, repair and Improvements to the Causeway Terms ofthe lease, as revised, call for payments to the Department of $413,000 00 per year to the expiration of the lease on December 31, 2021. The lease may be terminated at anytime by mutual agreement between the Department and the Authority.

Expenchtures for rental ofreal property and equipment under operating leases for the year ended June 30, 2002, totaled $773,527 44.
LESSOR AGREEMENTS
The Authority leases certam parcels of land for use by others for varying terms. The leases are accounted for as operating leases and revenues are recorded when earned Revenue denved from these leases during fiscal year 2002 amounted to $46,976.30. Muumum future rentals to be received under operating leases as of June 30, 2002, are as follows:

F!SC81 Year Ended June 30 2003 2004 2005 2006 2007
Total Mmunum Connrutmerus

$

45,810 ()()

45,810 ()()

45,810 ()()

42,81750

825 00

$ _ _..:,18:.;1;.:.;,0:..;,7::.2.:..50:....

NOTE 9: LONG-TERM DEBT
Long-term obligations at June 30, 2002, and changes for the fiscal year then ended are as follows

-36-

STATE ROAD AND TOLLWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"H"

_..... ~-....
No~c>Payablc
Bond Anbapmoo Noces PranmmooBood
Toco!N.,...Poyable
Boodsl'oyoble
~-Pn::mNm oo.lle'Yc:rlut BCDb. Toco!Boodsl'ayablc
~l..oDg-Tcrm UabUtbes

July 1,2001

June 30 2002

AmounbDuo Wld:l.m One Year

s

s 000 s 40111.21200

000 s

s 40,111.21200

.4011121200

000

1.335 000 00

000

1,335 000 00

1,335 000 00

s

000 s s 41,446.212 00

s s 000

41,446.212 00

41 446,212 00

s

000 s s 350,000,000 00

s 000

JSO,OOO 000 00 S

8 !155 00000

000

1C029,2160S

(SOl 463 30)

9.!121,312.25

(50\ 46J 10)

s

s 0 00

360,029.276 M S

s (SOl 463 SOl S 359.!127,1112.25

8 053,536.20

s

s 000

401,475 4U OS S

s s (501 ,463 &0)

400 974,024.25

49 499 748 20

~Type ActMbes

~Rdllodma-Pn:m:mm Oil bvelme 8oads

lea Dcfaml -

r... Refimdma

Toco!Boodsl'ayablc

IJmmou.TypeI...oog-Tam Uabilmel

J~ 1,2001

,.,.._,

o.a.-

.hne 30 2002

AmounbDuo Wnlnn One Year

s 77,015 000 00 s
997 7S697
(3,779.333 02)
s s 74.233 423 95

000 s
000 000
000 s

(5,>95,000 00) s
000 217,749.25
(5J07250 ,, s

7142000000 s
997,156 97 (3 491 5113 77)
s 68,926,173 20

s 845 000 00
000 000 5 845 000 00

s s 74,233 423 ~

000 s

(5.307 .250 75) s

s 6!926,17320

584500000

BOND ANTICIPATION NOTES Governmental Activities
During fiscal year 2002, the Authonty issued bond anttc1patton notes in the amount of $300,000,000.00. The temporary note was to be hqUJdated With the proceeds of revenue bonds issued during fiscal 2003. Legal comphcattons regarchng the ISsuance of the revenue bonds prompted the Authority to liquidate a portion of the temporary note With cash in the subsequent fiscal year and, as a result, report a short-teTm note m the amount of$259,888,788.00 at June 30, 2002 (see Note 16). The Authonty 1ssued transportation revenue bonds m the subsequent fiscal year for the purpose of refundmg the remairung port10n of the temporary note and, as a result. reported a long-term note m the amountof$40,111,212 00 at June 30,2002 Th1s amount IS net of the face amount of the transportation revenue bonds 1ssued, the related bond issuance costs and a prorated amount of the mterest earned on the temporary note

REVENUE BONDS Governmental Activities
In fiscal year 2002, the Authonty 1ssued State of GeorgJa Guaranteed Revenue Bonds, Senes 200 I, for the purposes of(I) financmg a portion of the Governor's Road Improvement Program,

- 37-

STATE ROAD AND TOLLWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT "H"

winch cons1sts of additions, extensiOns and unprovements to the portwn of the States highway system known as the Developmental H1ghway System, and to fmance certam other road and bndge projects both on and offthe State's h1ghway system and (2) to pay the costs of1ssuance of the bonds. These bonds are secured by the federal assistance that the State of Georg~a 1s entitled to rece1ve from the Federal Highway Admmlstratwn Further, the State of Georg~a has guaranteed the full payment of the bonds and the mterest thereon m accordance With the Constitution of the State of Georgia and has reserved $29,350,680 00 m the State of Georg1a Guaranteed Revenue Debt Common Reserve Fund that is on deposit at the Office of Treasury and Fiscal Services

Business-Type Activities The Authority 1ssued State of Georgia Guaranteed Refunding Revenue Bonds (Georgia 400 Project), Senes 1998, for the purpose of financmg a portion of the costs of acquinng, constructmg and mamtammg the Georg1a 400 Project The toll revenues to be generated from the usage of the Georg18 400 Extenswn secure these bonds Further, the State of Georgia has guaranteed the full payment of the bonds and the mterest thereon m accordance with the ConstitutiOn of the State of GeorgJ.a and has reserved $9,078,325.00 in the State of Georg1a Guaranteed Revenue Debt Conunon Reserve Fund, wh1ch IS on deposit at the Office ofTreasury and Fiscal Semces.

Revenue bonds outstanding at June 30, 2002 are as follows

Bond Issue Governmental Activities:
Guaranteed Revenue Bonds, Senes 200 I

Pwpose
Governor's Road Improvement Program

Interest Rates 2 50-5 375%

Busmess-Type Activities: Guaranteed Refundmg Revenue Bonds, Senes 1998

Georgia 400 ProJect

3 50 - 5 00"/o

Amount $350,000,000 00
$71,420,000 00

Guaranteed revenue bond debt semce reqmrements to matunty are as follows.

-38-

STATE ROAD AND TOLLWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHffi!T"H"

FISCill Year
Ended June 30

Pnncpal

Gover.mcntal ActR 1t1es Scnes 2001 lnlerest

TOI.BI

Bu11Dtst--Tl~ Adn 1t1es

Smes 1998

Pnnc1pal

Interest

TOI.BI

2003

s

8.~~~.ooo oo s

2004

12,18~,000 00

2005

12,675,000 00

2006

13,21~.000 00

2007

13,845,000 00

20082012

80,620,000 00

2013-2017

104,110,000 00

2018-2021

104,79~.000 00

22,077,850 00 s 17,410,905 00 16,920,455 00 16,382,285 00 1~.749,360 00 67,365,846 30 43,879,3~3 78 13,~88.~68 76

30,632,8~0 00 s 29.~95,905 00 29,595,455 00 29,!197,28~ 00 29,!194,360 00 147,985,846 30 147 ,989,3~3 78 118,383,!168 76

5,845,000 00 s 6, II 0,000 00 6,350,000 00 6,605,000 00 6,915,000 00 39,!195,000 00

1,482,693 7~ s 7,327,693 75

2,846,242 50

8,956,242 so

2.600,097 50

8,950,097 ~0

2,316,228 75

8,921,228 7~

2,017,602 50

8,932,602 50

4,847,242 50 44,442,242 50

s 350,000,000 00 s 213,374,623 84 s 563,374,623 84 s 71,420,000 00 s 16,110,107 ~0 s 87.~30,107 50

Interest on the Senes 1998 bonds due on July 1, 2002, m the amount $1,614,206.25 was recorded
as a liability of the Georg1a 400 Project Fund for the year ended June 30, 2002

LEITER OF CREDIT AGREEMENT
The State Road and Tollway Authority entered into a Letter ofCredit Agreement, dated January 31, 2002, m the amount of $15,000,000.00 With the Sun Trust Bank. As of June 30, 2002, no monies have been drawn on this letter of cred1t

NOTE 10: DEFEASANCE OF DEBT

Dunng the fiscal year ended June 30, 1998, the State Road and Tollway Authonty defeased
certam revenue bonds by placing the proceeds of a refunding revenue bond 1ssue m an
irrevocable trust to proVIde for all future debt serVIce payments on the refunded revenue bonds. On July 1, 2001, all remainmg defeased bonds outstanding were paid

NOTE 11: RELATED PARTIES

The Georgia Department of Transportation and the State Road and Tollway Authonty are considered to be related parties due to certam common management personnel The CommissiOner of the Department of Transportation serves as one of five members of the State Road and Tollway Authonty

NOTE 12: RISK MANAGEMENT

Public Entity Risk Pool The Department of Commumty Health administers for the State of GeorglB a program of health benefits for the employees of umts of government of the State of Georgta, uruts of county government and local education agenc1es located Wltlun the State of Georgia Th1s plan 1s funded by participants covered m the plan, by employers' contribunons prud by the vanous uruts

-39-

STATE ROAD AND TOLLWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXIDBIT"H"

of government participating m the plan, and appropriatiOns made by the General Assembly of Georgia. The Department ofComrnumty Health has contracted With Blue Cross Blue Slueld of Georgia to process claims m accordance With the State Employees' Health Benefit Plan as established by the Department of Comrnumty Health
Other Risk Management The Department of Adrnimstrative Services (DOAS) has the responsibility for the State of Georgia ofmakmg and carrymg out decisions that Will mmmuze the adverse effects ofaccidental losses that mvolve State government assets The State believes It JS more economical to manage its nsks internally and set aside assets for claim settlement Accordmgly, DOAS processes claims for risk of loss to which the State IS exposed, includmg general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Lumted amounts ofcommercial insurance are purchased applicable to property, employee and automobile hab1lity, fidelity and certam other nsks The Authonty Js part of the State of Georgia reporting entity, and as such, is covered by the State of Georgia nsk mamJgement program administered by DOAS. Premiums for the nsk management program are charged to the various state organizations by DOAS to proVIde claims serv1cmg and clrums payment
NOTE 13: POSTEMPLOYMENT BENEFITS
In addition to the pensiOn benefits described in Note 14, the State of Georgia provides postretirement health care benefits through the State Health Benefit Plan to retirees pursuant to OCGA Section 45-18 An mdividual eligible for these benefits must have been a full t1me employee at the time of retirement of either the State of Georgia or a county social service agency and must be receiving monthly retirement benefits from either the ERS or a county employees' retirement system. The State Health Benefit Plan (Plan) IS a public entity risk pool funded by employee and employer contributions Employees and retirees subject to the Plan contribute amounts determined by the Department of Comrnumty Health for vanous health insurance plans. The vanous agencies ofthe State contribute to the health IDSurance fund based upon amounts recommended by the Department ofCommumty Health and set forth in the State of Georgia's Appropnalions Act The plan JS funded on a "pay-as-you-go" bas1s Expenses of the Plan mclude provisiOns for mcurred but not reported drums The portion of employer contnbutions and expenses attributable to postretirement health care benefits cannot be reasonably estimated
NOTE 14: RETIREMENT PLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA Plan Description
The Authority participates m the Employees' Retirement System ofGeorgta ("ERS"), a smgleemployer defined benefit plan established by the General Assembly ofGeorgta for the purpose of proVIding retirement allowances for employees ofthe State ofGeorgJa The benefit structure of
-40-

STATE ROAD AND TOLLWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"H"

ERS IS defined by State statute and was s1gruficantly modified on July I, 1982 Unless elected otheiWISe, an employee who currently mamtams membership With ERS based upon State employment that started pnor to July I, 1982, IS an "old plan" member subject to the plan prov1s10ns m effect pnor to July I, 1982 All other members are "new plan members subject to the mod1fied plan proVJstons.
Under both the old plan and the new plan, members become vested after I0 years of cred1table serVJce. A member may rettre and rece1ve normal retirement benefits after completJon of I0 years of cred1table serVJce and attainment ofage 65 If I 0 years of serVJce is completed and age 60 is reached, the member may retire With a reduced benefit. Addittonally, there are certam prov1s1ons allowing for retirement after 25 years of serVJce regardJess of age
RetJrement benefits paid to members are based upon a formula which cons1ders the monthly average ofthe member's highest twenty-four consecutJve calendar months ofsalary, the number ofyears ofcredttable serVJce, and the member's age at retirement Postretirement cost-of-livmg adjustments are also made to member's benefits. The normal retJrement pens1on ts payable monthly for life, however, options are avrulable for dtstribution of the member's monthly penston at reduced rates to a designated beneficiary upon the member's death Death and disab1hty benefits are also avrulable through ERS.
In add1tJon, the ERS Board of Trustees created the SupplementaJ Reurement Benefit Plan
(SRBP) effectJve January I, I998. The SRBP was established as a qual1fied governrnentaJ
excess benefit plan m accordance With Section 4IS of the Internal Revenue Code (IRC) as a portion ofERS The purpose ofSRBP ts to provide retJrement benefits to employees covered by ERS whose benefits are otherWJse limited by IRC 4I5.
The ERS 1ssues a separate stand-alone financial aud1t report and a copy can be obtained tltrough the Georgta Department of Aud1ts and Accounts.
Funding Policy As established by State statute, all full-tJme employees of the State of Georgia and 1ts pohucal subdivisiOn, who are not members ofother state retirement systems, are ehg1ble to partiCipate in the ERS Both employer and employee contnbutJons are established by State statute The Authonty's payroll for the year ended June 30, 2002, for employees covered byERS was $I,866,395.66. The Authority's totaJ payroll for all employees was $I,867,952.98
Under the old plan, member contnbut1ons consist of4% of81IDual compensauon up to $4,200 00 and 6% of 8JIDual compensation m excess of $4,200 00 Of these member contributions, the employee pays the first I 25% and the employer pays the remamder on behalf of the employee. Under the new plan, member contnbutions consist solely of 1.25% of 81IDual compensauon pa1d by employee The Authonty also IS requtred to contnbute at a specified percentage of actJve member payroll detenruned annually by actuarial valuatJon For the year ended June 30, 2002, the ERS employer contnbution rate for the Authonty amounted to I0.30"/o ofcovered payroll and
- 4I -

STATE ROAD AND TOLLWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"H"

mcluded the amounts contributed on behalf ofthe employee under the old plan referred to above Employer contributions are also made on amounts pwd for accumulated leave to retmng employees

Employer connibutions made to the plan made durmg fiscal year 2002 amounted to $192,156.76 These contributions met the reqwrements of the plan. Employee contributiOns were not available. There Is no net pension obligation for the plan Employer contnbuttons (annual penston cost) for the current fiscal year and the preceding two fiscal years are as follows.

Ftsca! Year
2002 200! 2000

Annual
Pension Cost CAPel
$192,156 76 Not Avadable Not Available

Percentage OfAPC
Contrtbute<l
100 00"/o N/A N/A

Net Penston Obhgatton
NIA N/A NIA

Actuarial and Trend Information Actuanal and lustoncal trend information IS presented m the ERS June 30, 2002, financial audit report which may be obtained through the Georg~a Department of Audits and Accounts

GEORGIA DEFINED CONTRIBUTION PLAN Plan Description
The Authonty participates m the Georgia Defined Connibution Plan ("GDCP") winch is a singleemployer defined contribution plan established by the Georgta General Assembly for the purpose ofprovidrng retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or penston system. GDCP is administered by the ERS Board of Trustees. ERS Issues a publicly available financial report that mcludes the financial statements and disclosures applicable to GDCP The report may be obtamed through the Georgta Department of Audits and Accounts.

Benefits A member may retire and elect to receive penodic payments after attamment of age 65. The payment wtll be based upon mortality tables and mterest 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 reqwnng a lump sum dtstnbutton to the member m lieu ofmaking penodic payments. Upon the death ofa member, a lump sum distribution equalmg the amount credited to }us/her account Will be pwd to the member's designated beneficiary. Benefit prov1s10ns are established by State statute
Contributions and Vesting Member contributions are seven and one-half percent (7 5%) of gross salary There are no employer contnbut10ns Contribution rates are established by State statute Earnmgs are credited to each member's account m a manner established by the Board Upon tennination of

-42-

STATE ROAD AND TOLLWAY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT"H"

employment, the amount ofthe member's account IS refundable upon request by the member No Authority employee participated m the GDCP dunng fiscal year 2002.
NOTE 15: LEAVE POLICIES
Employees earn ten hours of Sick leave each month with a maxunum accumulation of ninety days. Unused accumulated sick leave does not vest With the employee and IS forfeited upon retirement or termmation of employment.
Employees earn annual leave rangmg from ten to fourteen hours each month depending upon the employees' length of conUnuous SUite service With a maximum accumulation offorty-five days. Employees are paid for unused accumulated annual leave upon reurement or termmation of
employment Certam employees who retire with one hundred and twenty days or more of
forfeited annual and sick leave are entitled to additional service credit in the ERS
NOTE16: SUBSEOUENTEVENTS
On July 16, 2002, members of the Board ofthe State Road and Tollway Authority approved the Issuance of Federal Highway Grant Anticipation Revenue Bonds m the amount of
$822,000,000.00. The purpose of the bond ISSue was to finance the costs of making additions,
extensions and improvements to the State of Georgia's highway system and to refund the Authonty's Limited Obligation Bond Anticipation Notes m the amount of $300,000,000 00
issued m fiscal year 2002 Subsequent to the Board's resolution, an intervention laWSUit was
filed to halt the issuance of the bonds clmming the funding plan VIolates the Georgia Constitution The case is currently awaiting a decision by the Georgia Supreme Court.
On November 13, 2002, the Authority issued Transportation Revenue Bonds m the amount of $45,760,000 00. The proceeds of the bonds will be used for the purpose ofrefundmg a portion of the Authonty's Lun1ted ObligaUon Bond Anticipation Notes issued m fiscal year 2002. The purpose of the bond anticipation notes was to finance the costs of makmg additions, extensions and Improvements to the State of Georgia's highway system.
NOTE 17: CONTINGENCIES
Litigation, claims and assessments filed against the Authority, If any, are generally considered to be actions agrunst the State of Georgia. Accordmgly, s1gruficant litigation, clrums and assessments pendmg against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 2002

-43-

SUPPLEMENTARY INFORMATION
-45-

STATE ROAD AND TOLLWAY AUTHORITY CASH AND CASH EQUIVALENTS JUNE 30. 2002

SCHEDULE "1"

NONINTEBESJ BEARING ACCOUNJS
The Bank of New York ....... Goo....

......

!NJEB(iSJ BEARING ACCOUNTS

Bmk r1 AtNrtca. NA A!Wita. Geo~

8-*: of AmwiCe NA 8runtw6ct Gearv&a

TIM 88r* of New Vortl

--~ Federal NaoniJ t.Wtgtlge Al.adatlon Dbc:ou'\t NeWt

Purt:haM DMI June 'Z1 2002. Maturlly 0.. Julot 1 2002

s

Purt:hue Data Jun1127, 2002 MaUlt)' Ollie Juty 1 2002

U 5 Tra:aury Bt111

Pun::haM Date ..,. 2 2002 t.tnJrtty 0111:11 J4it 25 2002

Pun::ha:M O.&e May 18 2002 Mllturlty o.te July 25 2002
Purch.ae o.-. May 20, 2002 u.turtty 0. Julys 2002

u.av ~on, JM)t 20 2002 Mlib..lrlty [)Me July 11 2002

Pun:haM o.te

20 2002, Maturity om July te 2002

Pun::hae O.te t.Uy 20 2002 Maturity o.te July 25, 2002

PurchauO.W lay20 2002 .....nty[)D July25 2002

Pun:ha:M Date May 20 2002, Ma!urtty [)lite July 25 2002

Pufdlase O.te U8y 20 2002 Ullturtty Dille July 25 2002

Pun::tl... 0... May 23 2002 Mllhlrlty Dltll July 25 2002

PurdlaH Db ~ 23 2002 ..-..rtty CD lvJguat22 2002

Purma.. Date June e 2002 Mllhdy o.te ~ult .22 2002

Purchae Date June 13 2002. uaturly 0*1 lvJpt22 2002

o - Pwt:t~. . 0... June 20 2002 Mllhrlty

July 2S 2002

Pun::haM o.te ..June 20 2002 Mlllurity Ol:te Augull 22 2002

Pulthae Dl1e June 77 2002 MIUty DCe July 25 2002

Purc:hase Db June 27 2002. uaturlly 011te August 22 2002

Ft.lnd:a on~ wil'l Office d lreeU')' .-w:1 FIEIII Serv6c:H Stl1e tnvestrnenl Pool

s !61<4Q2576

1 613 731 DO 5844 025.83

a eee488SB
47 82114412 3,Dgg 652 23
3.989,58103 3 99e.222 01 49.848 750 00 48..848 750 00
11.301 708 eo
49848 75000 3822 527 60
27 824 018.80 3.573 727 81 3MD.St3 77 1,78Q,30201 2.33Q 472.26
IW 894.22 3.202 010 87

2!0.220.5SS 72 I 288,520.317 81

28016974!!()

314537.2;234

64751.31
' 314.1507 040 23

See notes to the finandal statements

-47-

STATE ROAD AND TOLLWAY AUTHORITY INVESTMENTS JUNE 30. 2002

SCHEDULE "2"

FUNpt!N\IESTMENJ TYpE
GENERAL EUNQ
Roolndod Fundi Hlkl b)' Guanmteed Rewnu Bond Trutee First UI'Von NalKin.ll S.nk Atlanta Georgia Genenll Aci:XJunt Repun::hpe Ag rwerneot
GEORGIA 400 PROJECT
RHtridod
Funds H-'d b Retuncl-.g Reveru... Bond Truat.e The Ban k ol New Yorit. -nla.Georgle
Toa Facilrty RemD8.1 Fund U 5 Tf8dUIY BID
RHUrfacing Fa.nd U S Treeaury Bill U 5 Trasury Bll
Debt RJ,.rnent Fund U S Trw.~ury Bll
u s !1'881Ul'y Bll
UnT_he.&...nGk eaotrNguelw York,
lrwestrne:nt Account U S Trea:awy BID U S Traawy Bill US Truaury Bill
Totlillnveslment /v:tD4Jnt

PURCHASE DATE

MATURITY DATE

AMOUNT

Janullry 10 2002

July 1 2004

s 323 785.571 01

June 27, 2002 Ja.ne20, 2002 June 27, 2002
May 31,2002 June 27, 2002
Aprtl26, 2002 May 23,2002 June 27 2002

December 19 2002
December 19 2002 Oecemt. 18 2002
Nowmber 29 2002 Novemt.r 29, 2002

s

9til21 2!5

I 6 568 07! g; 165 684 88
s 6 731 763 87

I 8119i652 59 178 7507g
s 10 178 403 ~

October 24 2002 Nowmber 21 2002 Octoblr 24 2002

s 120 86 80
61 1.5
17~10.52 17

s

2V7 833 12

s 17 216 021 82

s 340 981 582 &3

See notes to the finanaal statements

-48-

STATE ROAD AND TOLLWAY AUTHORITY SCHEDULE OF OTHER OPERATING EXPENSES
YEAR ENDED JUNE 30. 2002

SCHEDULE "3"

General Fund
Regular Operating Expenses Advertlsong Expense Bank Charges Dues and Subscnpt1ons Notary Costs Other Reg1strabon Fees
F J Torras CausewaY
Regular Operatmg Expenses Bank Charges Cash Over/Short Court Costs Credit \nvesbga\1011 Other
Geor91a 400 Prolect
Regular Operatmg Expenses AdvertiSing Expense Bank Charges Cash Over/Short CredH Card Charges Credit lnvesbgallOn Dues and Subscriptions F1lm Processing Garbage Collector Reg1strabon Fees

$

1,508 96

4,128 77

1,227 26

15 00

660 00

271500$ 10,254 99

$ 14,690 44 -66 80 20 00 2 95
22,091 20

36,737 79

s

5,591 97

96,345 07

-8,68815

200,318 86

5,201 30

2,822 23

719

5,660 92

1143100

320,690 39

$ 367 68317

See the note to 11\e financial lllatemenls

-49 -

, STATE ~OAD AND TOLLWAY AlFI"HORITY RECONCILIATION OF SALARIES YEAR ENDER JUNE 30. 2002

SCHEDULE "4"

Total per Annual Supplement
Adjustments Reported at Georg1a Department of Transportallon Compensated Absences Expensed When Earned

$

0 00

1,867,952 98 355,123 27
$ 2,223,076 25

See notes to the finanaalstatements

. 50.

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORT
-51 -

DEPARTMENT oF Aunrrs AND AccoUNTS

254 Washington Street, S W, Sunc 214

RussELL W. III'I'O~
STATE At'DITOR
(.404) 656-2174

Atlanta, Georgta 30334-8400

February 28, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly of Georgia Members of the State Road and Tollway Authonty
and Honorable John D. Leonard, Actmg Executtve Director
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Lad1es and Gentlemen.
We have aud1ted the financial statements of the State Road and Tollway Authonty, a component urut ofthe State ofGeorgia, as ofand for the year ended June 30, 2002, and have issued our report thereon dated February 28, 2003 We conducted our aud1t in accordance w1th auditing standards generally accepted m the Umted States ofAmerica and the standards applicable to financ1al audits contained m Government Auciltmg Standards, 1ssued by the Comptroller General of the Umted States.
Compliance As part of obtammg reasonable assurance about whether the State Road and Tollway Authonty's financial statements are free ofmatenal misstatement, we performed tests of 1ts compliance w1th certam provisions oflaws, regulations, contracts and grants, noncompliance with whtch could have a dtrect and matenal effect on the determmatwn of financtal statement amounts However, provtdmg an op1mon on compliance w1th those provtstons was not an objective of our audit and, accordingly we do not express such an opm1on The results of our tests dtsclosed the followmg tnstance of noncompliance that 1s requued to be reported under Government Audllmg Standards and whtch 1s described in the accompanymg schedule of Fmdmgs and Questwned Costs
Retained Earnings Deficit m F.J Torras Causeway Fund Fmding Control Number FS-927-02-05
-53-

Internal Control Over Fmanc1al Reportmg In plannmg and performmg our audit, we considered the State Road and Tollway Authonty's mternal control over financial reportmg m order to determine our auditing procedures for the purpose of expressmg our opm1on on the financial statements and not to provide assurance on the mternal control over financial reportmg Our consideration ofthe mternal control over financial reportmg would not necessarily disclose all matters m the mternal control that m1ght be matenal weaknesses A matenal weakness IS a conditiOn m which the design or operation of one or more of the mternal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements bemg audited may occur and not be detected w1thm a timely penod by employees m the normal course of performing their assigned functions The followmg material weaknesses are descnbed m the accompanymg schedule of Fmdmgs and Questwned Costs.
(I) Accounting Controls (Overall) Inadequate Controls Over Cruise Card Information Findmg Control Number. FS-927-02-01
(2) Revenues/Receivables/Receipts Deficiencies in the Collection and Recording of Cash Tolls (F J. Torras Causeway) Fmding Control Number FS-927-02-02
(3) Revenues/Receivables/Receipts Inadequate Accountmg Procedures Findmg Control Number: FS-927-02-03
(4) Ell.penditures/Liabilities!Disbursements Inadequate Accounting Procedures Findmg Control Number. FS-927-02-04
(5) Retained Earnings Deficit m F.J Torras Causeway Fund Fmding Control Number. FS-927-02-05
-55-

Thts report IS intended solely for the mformat10n and use of management, members of the Authonty, and management of the State ofGeorgta, and IS not mtended to be and should not be used by anyone other than these specified parties
Respectfully submttted,
~...~ tJ. &::S.
Russell W Hmton, CPA, CGFM State Audttor RWHldj
-57-

SECTION Ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS
-59-

STATEROADANDTOLLWAY AUTHORITY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-927-00-01 FS-927-01-01

Further Action Not Warranted Unresolved - See Corrective Act10n!Responses

CORRECTIVE ACTION/RESPONSES

REVENUES/RECEJVABLES/RECEIPTS Deficiencies m the Collection and Recording of Cash Tolls (F. J Torras Causeway) Fmding Control Number FS-927-01-01

Responses to findmgs for Torras Causeway:

I) Expensive hardware and software IS reqmred to track lane actiVIty A study to detennine a recommended approach to operatmg Torras Causeway is near completion

2) See #I above

3) A maintenance plan has been Implemented to keep the decal readers cleaned and to ensure optimum reading reliability. All readers were repaued durmg FYO I

4) Additional hardware and software would be required to Implement a violation system, mcludmg lane controllers, VIolation cameras and detection loops m each lane A study to detenmne a recommended approach to operating Torras Causeway is near completion.

5) Cash rece1pts are now collected and deposited byE M Armored Car.

- 61 -

SECTION IV CURRENT YEAR FINDINGS AND QUESTIONED COSTS
-63-

STATE ROAD AND TOLLWAY AUTHORITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
ACCOUNTING CONTROLS (OVERALL) Inadequate Controls Over Cru1se Card InformatiOn (Georgia 400 ProJect) Reportable Cond1t10n/Matenal Weakness Findmg Control Number. FS-927-02-01
Our exarnmation mcluded a review of the mtemal controls utihzed by the State Road and Tollway Authonty m secunng confidential patron informatiOn. The followmg conditions were noted as a result of our review.
I. Cruise card patrons can make changes to credit card mformauon, on file With the Authonty, by faxmg their changes to the Authonty's Service Center The Service Center's fax maclune is located man unsecured locatJon that can be accessed by all Serv1ce Center employees.
2. Origmal patron CTU!se card applications that contam confident.J.al patron informatmn are filed in a locked file cabmet, however, all Sernce Center employees mcludmg temporary employees have access to this cabmet.
Failure to adequately secure confident.J.al mformatJon could result m unauthonzed use or dissemination of patron information. The Authority should ensure that all confidentJal mformatiOn IS stored m a secure location that can onJy be accessed by designated employees
REVENUESIRECEIV ABLES/RECEIPTS Deficiencies m the Collection and Recordmg of Cash Tolls (F.J Torras Causeway) Reportable Cond!Uon!Matenal Weakness Fmding Control Number: FS-927-02-02
Our aud1t included an examination of the mtemal controls utJhzed by the State Road and Tollway Authonty to safeguard collecuon and recording of cash tolls received by the Authority. This exammat10n mcluded procedures to proVIde reasonable assurance that cash tolls collected were correctly recorded on subsidiary records and posted on the Authonty's account.J.ng records We observed that the Authonty's eqwpment used to record toll patron actJvity and revenue received at the F.J Torras Causeway plaza was not funct10nmg properly The folloWing deficiencies were noted
I) Electroruc eqwpment could not produce reports to track md1viduaJ lane actiVIty, including the number of velucles passing through the toll booth and the amounts deposited mto the toll b1ns as vehicles pass through each toll lane
-65-

STATE ROAD AND TOLLWAY AUTHORITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
REVENUESIRECEIV ABLES/RECEIPTS Deficiencies in the CollectiOn and Recordmg of Cash Tolls (F J Torras Causeway) Reportable CondJtion!Material Weakness Fmdmg Control Number FS-927-02-02
2) Electroruc equipment, at times, could not provide data to facilitate a formal reconciliation of amounts collected at the toll plaza and amounts deposited by the contracted security cpmpany
3) Laser scanners used to read yearly decals were not functiorung properly
4) No formal violation processing procedures were in place to proVIde the appropnate data to identify toll violations
5) Cash receipts were not deposited into the bank m a timely manner
Lack of mtemal controls over the recordmg of patron activity, includmg violations, tolls collected, and untimely deposits could result in undetected rrusstatements and/or rnisappropnation of assets. These deficiencies are a result of mechanical fwlure of toll plaza eqwpment as well as management's fwlure to establish procedures to ensure timely deposits of cash receipts. The Authonty should provide a system to accurately record patron activity, includJng VIolations, and toll revenue on the accounting records The Authority should also establish appropnate procedures to ensure deposits are made m a timely manner.
REVENUESIRECEIV ABLES/RECEIPTS Inadequate Accounting Procedures Reportable Condition!Matenal Weakness Finding Control Number: FS-927-02-03
Subsequent to the year under review, Authonty employees dJscovered that State Road and Tollway Authonty funds had been rrusappropnated. Purportedly, certain employees of the Authority had made reimbursements to therr personal credit card accounts utiiizmg Authority funds The employees allegedly mvolved in tlus misappropnatiOn of funds have been terminated and the case IS currently under mvestigation by the Georgia Bureau of Investigation.
Tlus condition occurred because management failed to provide for adequate mtemal controls over the credJt card processing function Internal controls should be established to ensure that the credJt card processing functiOn IS adequately safeguarded
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STATE ROAD AND TOLLWAY AUTHORITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
EXPENDITURES/LIABILITIES/DISBURSEMENTS Inadequate Accounting Procedures Reportable Cond!t.ton!Material Weakness Findmg Control Number FS-927-02-04
Our exanunatton mcluded a rev1ew of internal accounting controls and accounting procedures utilized by the State Road and Tollway Authonty m processmg payments made to the Georgia Department of Tnmsportation for vanous transportation proJects. The total expenditures reunbursed to Georgia Department of Tnmsporttit.lon durmg fiscal year 2002 amounted to $69,662,279 93 With an additional $16,744,468.10 recorded as an accounts payable at June 30, 2002 The Authonty has no wntten policies and procedures to ensure that the mvo1ces rece1ved were for approved tnmsportation proJects
This defic1ency was a result of the Authority's failure to adequately establish clear wntten pohc1es and procedures over the payments made to Georg1a Department of Tnmsportatwn and could result m erroneous payments made for proJects other than the approved projects. The Authonty should establish the necessary polic1es and procedures to ensure there are adequate internal controls over payments made for approved transportation prOJects
RETAINED EARNINGS Deficit m F.J. Terms Causeway Fund Nonmatenal Noncompliance Reportable Cond1tion!Material Weakness Fmding Control Number: FS-927-02-05
At June 30, 2002, the State Road and Tollway Authority had a deficit Unrestricted Net Assets in the F J Terms Causeway Fund totalmg $57,110.17 The deficit results m a violation of 0 C.G.A. 32-10-72, winch states.
"All revenue in excess of all obligat.tons of the authority of any nature,
together will all unused receipts and gifts of every kind and nature whatsoever, shall be and become the authonty fund "
This deficit balance 1s a result of the Authonty' s fwlure to establish controls to ensure that funds are not transferred to the General Fund (authonty fund) m excess of funds avwlable mcurred in the F.J Terms Causeway fund. The Authonty should implement procedures to ensure that only excess receipts are transferred in accordance With 0 C.G.A 32-10-72
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