Audit report, Georgia Regional Transportation Authority, a component unit of the State of Georgia, year ended June 30, 2000

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AUDIT REPORT GEORGIA REGIONAL TRANSPORTATION AUTHORITY
A COMPONENT UNIT OF THE STATE OF GEORGIA YEAR ENDED JUNE 30, 2000

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

GEORGIA REGIONAL TRANSPORTATION AUTHORITY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHffiITS

FINANCIAL STATEMENTS

A COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUPS

2

B STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCE

GENERAL FUND

3

C NOTES TO THE FINANCIAL STATEMENTS

5

SUPPLEMENTARY INFORMATION

SCHEDULES

1 CASH AND CASH EQUIVALENTS

18

2 SCHEDULE OF EXPENDITURES BY OBJECT AND FUNCTION

GENERAL FUND

19

3 RECONCll..IATION OF TRAVEL

20

SECTIONll
COMPLIANCE AND INTERNAL CONTROL REPORT
REPORT ON COMPLIANCE AND INTERNAL CONTROL OVER FINANCIAL REPORTING
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE wrrn
GOVERNMENT AUDITING STANDARDS

SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
August 18,2000

Honorable Roy E. Barnes, Governor Members of the General Assembly of Georgia Members of the Georgia Regional Transportation Authority
and Honorable Catherine L. Ross, Executive Director
INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SupPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying financial statements (Exhibits A through C) of the Georgia Regional Transportation Authority as of and for the year ended June 30, 2000. These financial statements are the responsibility of the Authority's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perfonn the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Georgia Regional Transportation Authority as of June 30, 2000, and the results of its operations for the year then ended, in confonnity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated August 18,2000, on our consideration of the Georgia Regional Transportation Authority's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit perfonned in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.

OOARL-IGX

Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplementary infonnation (Schedules 1 through 3) is presented for purposes of additional analysis and is not a required part of the financial statements of the Georgia Regional Transportation Authority. Such infonnation has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly presented in all material respects in relation to the financial statements taken as a whole.
Respectfully submitted,

RWH:gp OOARL-IGX

Ru sell W. Hinton State Auditor

FINANCIAL STATEMENTS - 1-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30, 2000

EXHIBIT "A"

ASSETS
Cash and Cash Equivalents
Accounts Receivable Other
Fixed Assets Equipment
Amount to be Provided for Payment of Accrued Compensated Absences

GOVERNMENTAL FUND TYPE GENERAL

ACCOUNT GROUPS

GENERAL

GENERAL

FIXED

LONG-TERM

ASSETS

DEBT

TOTAL (Memorandum
Only)

$ 7,607,752.83

$ 7,607,752.83

414,000.00

414,000.00

$ 204,565.99

204,565,99

_ _ _ _ $ 65,171.47

65,171.47

Total Assets

$ 8,021.752.83 $ 204.565.99 $ 65,171.47 $ 8,291.490.29

LIABILITIES FUND EQUITY AND OTHER CREDITS
Liabilities Accounts Payable Payroll Withholdings Compensated Absences
Total Liabilities
Fund Equity and Other Credits Investment in General Fixed Assets Fund Balances Unreserved Undesignated
Total Fund Equity and Other Credits

$

227,270.64

554.10

$

227,824.74

$ $ 65,171.47

227,270.64 554.10
65,171.47

$ 65,171.47 $ 292,996.21

$ 204,565.99

$ 204,565.99

$ 7l93,928.09 $ 7,793,928.09 $ 204,565.99

7,793,928.09 $ 7,998.494.08

Total Liabilities, Fund Equity and Other Credits

$ 8,021.752.83 $ 204,565.99 $ 65.171.47 $ 8,291.490.29

The notes to the financial statements are an integral part of this statement -2-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
GENERAL FUND YEAR ENDED JUNE 30, 2000

EXHIBIT"B"

REVENUES Intergovernmental Other Interest and Other Investment Income Total Revenues
EXPENDITURES Current: Transportation
Excess of Revenues over (under) Expenditures FUND BALANCE JULY 1. 1999
FUND BALANCE JUNE 30. 2000

$ 10,307,139.00 127,606.35
$ 10,434,745.35
$ 2,640,817.26 $ 7,793,928.09
0.00
$

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

GEORGIA REGIONAL TRANSPORTATION AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2000

EXHffiIT"C"

NOTE I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY The Georgia Regional Transportation Authority (Authority) is an instrumentality of the State of Georgia and a public corporation. The Authority was created by an Act of the General Assembly of the State of Georgia for the purposes ofmanaging or causing to be managed land transportation and air quality within certain areas of the State of Georgia. The management of the business and affairs of the Authority is vested in a Board of Directors. The Board of Directors of the Authority consists of fifteen (15) members appointed by the Governor. The Authority is considered a component unit of the State of Georgia for financial reporting purposes because of the significance of its legal, operational and financial relationships with the State of Georgia. These reporting entity relationships are defined in Section 2100 of the Governmental Accounting Standards Board Codification of Governmental Accounting and Financial Reporting Standards.
FUND ACCOUNTING The Georgia Regional Transportation Authority uses a fund and account groups to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities.
A fund is a 'separate accounting entity with a self-balancing set of accounts. An account group, on the other hand, is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect net expendable available financial resources. The Authority uses one governmental fund and account groups as follows:
GOVERNMENTAL FUND TYPE
GENERAL FUND - The fund used to account for the Authority's general activities as the primary operating fund. The General Fund accounts for all financial resources of the Authority.
ACCOUNT GROUPS
GENERAL FIXED ASSETS - The account group used to account for fixed assets used in governmental fund type operations.
GENERAL LONG-TERM DEBT - The account group used to report the noncurrent portions of certain governmental long-term liabilities, such as claims, judgements and compensated absences, which will be paid from future resources.
MEASUREMENT FOCUS Al~D BASIS OF ACCOUNTING The accounting and financial reporting treatment applied to a fund is detennined by its measurement focus. Governmental fund types are presented using the flow of current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets.
-5-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2000

EXHffiIT"C"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
MEASUREMENT FOCUS AND BASIS OF ACCOUNTING Governmental fund types use the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Revenues subject to accrual include primarily intergovernmental revenue. Expenditures are recorded when the related fund liability is incurred, except for certain compensated absences, claims and judgements which are recognized when the obligations are expected to be liquidated with expendable available financial resources.
CASH AND CASH EQUIVALENTS Cash and Cash Equivalents include currency on hand, demand deposits with banks and other financial institutions, and the State investment pool that has the general characteristics of demand deposit accounts in that the Authority may deposit additional cash at any time and also may withdraw cash at any time without prior notice or penalty.
The State investment pool (Georgia Fund 1) is an external investment pool that is not registered with the Securities and Exchange Commission (SEC) but does operate in a manner consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940. The State of Georgia's Office of Treasury and Fiscal Services (OTFS) manages Georgia Fund 1 in 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 price, $1.00 per share.
The Authority does not have any risk exposure related to investments in derivatives or similar investments in Georgia Fund 1 as the investment policy ofOTFS does not provide for investments in derivatives or similar investments through the Georgia Fund 1.
INVESTMENTS The Authority is authorized to invest in the following:
(1) Bonds or obligations of the State of Georgia or qbligations guaranteed by the State.
(2) Bonds or obligations issued by the United States government or subsidiary corporations of the United States government fully guaranteed by such government.
(3) Obligations of agencies of the United States government issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intennediate Credit Bank and the Bank for Cooperatives.

-6-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000

EXHIBIT "C"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
(4) Bonds or obligations issued by any public housing authority or municipality in the United States fully secured by a pledge ofannual contributions under an annual contributions contract or contracts with the United States government; or project notes issued by any public housing agency, urban renewal agency, or municipality in the United States fully secured by requisition, loan, or paYment agreement with the United States government.
(5) Certificates of deposit issued by financial institutions located within the State of Georgia and insured by the Federal Deposit Insurance Corporation or any Georgia deposit insurance corporation.
(6) Interest-bearing time deposits, repurchase agreements, reverse repurchase agreements, rate guarantee agreements, or similar banking arrangements within guidelines defined by statute.
(7) State operated investment pools.
INVENTORIES No inventories of supplies are reported in these financial statements. Expendable supplies are recorded as expenditures at the time of purchase.
FIXED ASSETS Fixed assets of the Authority are reflected as expenditures in the general fund and the related assets reported in the general fixed assets account group. Fixed assets purchased are recorded at cost or at estimated historical cost if historical cost is not practically determinable. Donated fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded values. Assets in the general fixed assets account group are not depreciated.
The costs ofnormal maintenance and repairs that do not add to the value of assets or materially extend assets' lives are not included in the general fixed assets account group. Material improvements adding to the value or useful life of assets are included in the general fixed assets account group.
COMPENSATED ABSENCES Compensated absences represent obligations of the Authority relating to employee's rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulating annual and compensatory leave in which paYment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount will not be liquidated with expendable available financial resources.
The liability for compensated absences at year end is reported in the General Long-Term Debt Account Group for governmental funds.

- 7-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000

EXHIBIT "C"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
MEMORANDUM ONLY - TOTAL COLUMN The total column on the Combined Balance Sheet is captioned "Memorandum Only" because it does not represent consolidated financial information and is presented only to facilitate financial analysis. The column does not present information that reflects financial position, results of operations or changes in financial position in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
NOTE 2: BUDGET
An internal operations budget is prepared by the Authority 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: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds of the State of Georgia cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral anyone or more of the following securities as enumerated in the Official Code of Georgia Annotated (OCGA) Section 50-17-59:
(1) Bonds, bills, certificates of indebtedness, notes, or other direct obligations of the United States or of the State of Georgia.
(2) Bonds, bills, certificates of indebtedness, notes, or other obligations of the counties or municipalities of the State of Georgia.
(3) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose.
(4) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia.
(5) Bonds, bills, certificates of indebtedness, notes, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest, or debt obligations issued by the Federal Land Bank., the Federal Home Loan Bank., the Federal Intermediate Credit Bank., the Central Bank. for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, or the Federal National Mortgage Association.
(6) Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation.
- 8-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2000

EXHffiIT"C"

NOTE 3: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES As authorized in the OCGA Section 50-17-53, the State Depository Board has adopted policies which allow agencies of the State of Georgia the option of exempting demand deposits from the collateral requirements.

In addition, laws governing the Authority require the portion of certificates of deposits invested in excess of Federal or State insurance to be secured by deposit of securities with the Federal Reserve Bank of Atlanta, or national or state bank located within the State of Georgia, in an aggregate principal amount equal at least to the amount of such excess. Allowable securities are those as defined in Note 1 Investments, items 1 through 4, and direct and general obligations of any county or municipality in the State of Georgia.

CATEGORIZATION OF DEPOSITS For purposes of analysis of custodial credit risk, cash deposits consist of all bank balances which include demand deposits and/or interest bearing accounts. The bank balances as of June 30, 2000, are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk.

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

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

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

Cash Deposits

Carrying Amount

Bank Balances

$ -156906.33 $

4721.85 $

Risk Categories

2

3

4.721.85 $

0.00 $======o=.o=:o

CATEGORIZATION OF INVESTMENTS The carrying amount of the investment balance as of June 30, 2000, shown below is maintained in an investment pool by the Office of Treasury and Fiscal Services and is not subject to risk categorization.

T~e of Investment

Fair Value/ Carrying Amount

State Investment Pool

$ 7.764.559.16

-9-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000

EXHIBIT "C"

NOTE 4: OPERATING LEASES

The Authority has entered into certain agreements to lease real property and equipment which are classified as operating leases. These leases generally contain provisions that, at the expiration date of the original term of the lease, the Authority has the option of renewing the lease on a year-to-year basis. Future minimum commitments for operating leases as ofJune 30, 2000, are listed below. Amounts are included only for multiyear leases and for cancellable leases for which an option to renew for the subsequent fiscal year has been exercised.

Fiscal Year Ending June 30

2001 2002 2003 2004 2005 Thereafter

$ 338,116.99 377,460.76 374,519.06 372,729.78 383,861.86 327,929.80

$ 2,174,618.25

Expenditures for rental of real property and equipment under operating leases for the year ended June 30, 2000, totaled $266,196.99.

NOTE 5: CHANGES IN GENERAL FIXED ASSETS

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

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

Balance July 1, 1999 Additions Balance June 30, 2000
NOTE 6: GENERAL LONG-TERM DEBT

$

0.00

204.565.99

$ 204.565.99

CHANGES IN GENERAL LONG-TERM DEBT During the year ended June 30, 2000, the following changes occurred in the compensated absences liability
reported in the General Long-Term Debt Account Group:

- 10-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2000

EXHffiIT"C"

NOTE 6: GENERAL LONG-TERM DEBT

CHANGES IN GENERAL LONG-TERM DEBT

Balance July 1, 1999

$

0.00

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

60,540.15 4.631.32

Balance June 30, 2000

$ 65,171.47

NOTE 7: RISK MANAGEMENT

Public Entity Risk Pool

The Department of Community Health administered for the State of Georgia a program of health benefits during fiscal year 2000 for the employees of units of government of the State of Georgia, units of county government and local education agencies located within the State of Georgia. This plan is funded by participants covered in the plan, by employers' contributions paid by the various units of government participating in the plan, and appropriations made by the General Assembly of Georgia. The Department of Community Health contracted with Blue Cross Blue Shield of Georgia to process claims in accordance with the State Employees' Health Benefit Plan as established by the Department of Community Health.

Other Risk Management

The Department ofAdministrative Services (DOAS) has the responsibility for the State ofGeorgia ofmaking and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The Authority is part of the State of Georgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment.

- 11 -

GEORGIA REGIONAL TRANSPORTATION AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2000

EXHIBIT "C"

NOTE 8: RETrnEMENIPLANS
EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Plan Description The Authority participates in the Employees' Retirement System of Georgia ("ERS"), a single-employer, defined benefit plan established by the General Assembly of Georgia for the purpose ofproviding retirement allowances for employees of the State of Georgia.
The benefit structure of ERS is defined by State statute and was significantly modified on July 1, 1982. Unless elected otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July 1, 1982, is an "old plan" member subject to the plan provisions in effect prior to July 1, 1982. All other members are "new plan" members subject to the modified plan provisions.
Under both the old plan and new plan, members become vested after 10 years of creditable service. A member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 65. If 10 years of service is completed and age 60 is reached, the member may retire with a reduced benefit. Additionally, there are certain provisions allowing for retirement after 25 years of service regardless of age.
Retirement benefits paid to members are based upon a formula which considers the monthly average of the member's highest twenty-four consecutive calendar months of salary, the number of years of creditable service, and the member's age at retirement. Postretirement cost-of-living adjustments are also made to member's benefits. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension at reduced rates to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS.
In addition, the ERS Board ofTrustees created the Supplemental Retirement Benefit Plan (SRBP) effective January 1, 1998. The SRBP was established as a qualified governmental excess benefit plan in accordance with Section 415 ofthe Internal Revenue Code (IRC) as a portion ofERS. The purpose of SRBP is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC 415.
The ERS issues a separate stand alone financial audit report and a copy can be obtained through the Georgia Department of Audits and Accounts.
Funding Policy As established by State statute, all full-time employees ofthe State of Georgia and its political subdivisions, who are not members of other state retirement systems, are eligible to participate in the ERS. Both employer and employee contributions are established by State statute. The Authority's payroll for the year ended June 30, 2000, for employees covered by ERS was $738,242.21. The Authority's total payroll for all employees was $910,154.32.

- 12-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2000

EXHIBIT "C"

NOTE 8: RETmEMENTPLANS

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA

Funding Policy Under the old plan, member contributions consist of 4% of annual compensation up to $4,200.00 and 6% of annual compensation in excess of $4,200.00. Of these member contributions, the employee pays the first 1.250/0 and the employer pays the remainder on behalf of the employee. Under the new plan, member contributions consist solely of 1.25% of annual compensation paid by employee. The Authority also is required to contribute at a specified percentage of active member paYroll determined annually by actuarial valuation. For the year ended June 30, 2000, the ERS employer contribution rate for the Authority amounted to 14.48% of covered paYroll and included the amounts contributed on behalf of the employee under the old plan referred to above. Employer contributions are also made on amounts paid for accumulated leave to retiring employees.

Total contributions to the plan made during fiscal year 2000 amounted to $116,112.16, ofwhich $106,884.12 was made by the Authority and $9,228.04 was made by employees. These contributions met the requirements of the plan. There is no net pension obligation for the plan. Employer contributions (annual pension cost) for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Annual Pension Cost (APe)

Percentage ofAPC
Contributed

Net Pension
Obli~ation

2000 1999 1998

$ 106,884.12

1000/0

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Actuarial and Trend Information Actuarial and historical trend information is presented in the ERS June 30, 2000, financial audit report which may be obtained through the Georgia Department of Audits and Accounts.

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Plan Description The Authority participates in the Teachers Retirement System of Georgia (TRS), a cost-sharing multipleemployer defined benefit pension plan established by the General Assembly of Georgia for the purpose of providing retirement allowances and other benefits for teachers ofthe State of Georgia. TRS provides service retirement, disability retirement and survivor's benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

- 13 -

GEORGIA REGIONAL TRANSPORTATION AUTHORITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2000

EXHIBIT "C"

NOTE 8: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Funding Policy Employees of the Authority who are covered by TRS are required by State statute to contribute 50/0 of their gross earnings to TRS. The Authority makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2000, the employer contribution rate is 11.29% for covered employees. Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2000 1999 1998

100% N/A N/A

$ 12,419.04 N/A N/A

NOTE 9: POSTEMPLOYMENI BENEFITS

In addition to the pension benefits described in Note 8, the State of Georgia provides postretirement health care benefits through the State Health Benefit Plan to retirees pursuant to OCGA Section 45-18. An individual eligible for these benefits must have been a full time 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 Community Health for various health insurance plans. The various agencies of the State contribute to the health insurance fund based upon amounts recommended by the Department of Community Health and set forth in the State of Georgia's Appropriations Act. The plan is funded on a "pay-as-you-go" basis. Expenses of the Plan include provisions for incurred but not reported claims. The portion ofemployer contributions and expenses attributable to postretirement health care benefits cannot be reasonably estimated.

NOTE 10: LEAVE POLICIES

Employees earn ten hours of sick leave each month with a maximum accumulation of ninety days. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination of employment.

Employees earn annual leave ranging from ten to fourteen hours each month depending upon the employees' length of continuous State service with a maximum accumulation of forty five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. See Note 1 - Compensated Absences.

- 14-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2000

EXHIBIT "C"

NOTE 10: LEAVE POLICIES
Certain employees who retire with one hundred and twenty days or more of forfeited annual and sick leave are entitled to additional service credit in the Employees' Retirement System of Georgia.
NOTE 11: CONTINGENCIES
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditures which are disallowed under grant tenus. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although the Authority expects such amounts, if any, to be immaterial to its overall financial position.
Litigation, claims and assessments filed against the Authority, if any, are generally considered to be actions against the State of Georgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 2000.

- 15 -

SUPPLEMENTARY INFORMATION
- 17 -

GEORGIA REGIONAL TRANSPORTATION AUTHORITY CASH AND CASH EQUIVALENTS JUNE 30. 2000

SCHEDULE "1"

NONINTEREST BEARING ACCOUNTS
Bank of America, N. A., Atlanta, Georgia
INTEREST BEARING ACCOUNTS
Bank of America, N. A., Atlanta, Georgia
Funds on Deposit with Office of Treasury and Fiscal Services State Investment Pool
OTHER
Cash on Hand

$

986.45

$

-157,892.78

7,764,559.16

7,606,666.38

100.00

$ 7,607,752.83

See notes to the financial statements.

- 18-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY SCHEDULE OF EXPENDITURES BY OBJECT AND FUNCTION
GENERAL FUND YEAR ENDED JUNE 30, 2000

SCHEDULE "2"

TRANSPORTATION Personal Services Salaries and Wages Employer's Contributions for: F.LC.A. Retirement Health Insurance Unemployment Compensation Insurance Workers' Compensation Insurance
Regular Operating Expenses Supplies and Materials Repairs and Maintenance Rents (Other than Real Estate) Insurance and Bonding Publications and Printing Other Operating Expenses
Travel
Motor Vehicle Purchases
EqUipment
Computer Charges
Real Estate Rentals
Telecommunications
Per Diem, Fees and Contracts Per Diem and Fees
Total Expenditures

$

910,154.32

67,713.56 123,023.18 110,009.27
576.00
10,176.00 $

1,221,652.33

$

23,809.17

1,294.31

2,454.71

10,780.00

13,270.20

30,283.23

81,891.62 24,853.62 17,340.42 223,024.06 135,168.91 291,862.73 37,337.91

607,685.66

$ 2,640,817.26

See notes to the financial statements.

- 19-

GEORGIA REGIONAL TRANSPORTATION AUTHORITY RECONCILIATION OF TRAVEL YEAR ENDED JUNE 30. 2000
Total per Annual Supplement Accruals June 30, 2000
Total per Report

SCHEDULE "3"

TRAVEL

$

21,443.62

3.410.00

$ ===2=4=,8=5=3,=6:=2

See notes to the financial statements.

- 20-

SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORT

RUSSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 \Vashington Street, S.W., Suite 214 Atlanta, Georgia 30334-X400
August 18, 2000

Honorable Roy E. Barnes, Governor Members of the General Assembly of Georgia Members of the Georgia Regional Transportation Authority
and Honorable Catherine L. Ross, Executive Director Georgia Regional Transportation Authority
REPORT ON COMPLIANCE AND INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENTAUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of the Georgia Regional Transportation Authority as of and for the year ended June 30, 2000, and have issued our report thereon dated August 18, 2000. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether the Georgia Regional Transportation Authority's financial statements are free of material misstatement, we perfonned tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the detennination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Re.porting
In planning and perfonning our audit, we considered the Georgia Regional Transportation Authority's internal control over financial reporting in order to detennine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial
OOARL-5X

reporting that, in our judgement, could adversely affect the Georgia Regional Transportation Authority's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanYing Schedule of Findings and Questioned Costs as item FS-976-00-01.
A material weakness is a condition in which the design or operation of one or more of the internal 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 being audited may occur and not be detected within a timely period by employees in the nonnal course of perfonning their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe that the reportable condition described above is not a material weakness.
This report is intended solely for the infonnation and use ofmanagement, members of the Georgia Regional Transportation Authority and members of the General Assembly and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:gp OOARL-5X

R ssell W. Hinton State Auditor

SECTIONID CURRENT YEAR FINDINGS AND QUESTIONED COSTS

GEORGIA REGIONAL TRANSPORTATION AUTHORITY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2000

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

ACCOUNTING CONTROLS (OVERALL) Inadequate Separation of Duties Reportable Condition Finding Control Number: FS-976-00-01

For the year under review, internal accounting control procedures of the Georgia Regional Transportation Authority did not provide for an adequate separation of duties in the perfonnance of certain accounting functions and related procedures in the following control categories:

(1) Cash and Cash Equivalents

(4) Employee Compensation

(2) Revenue/Receivables/Receipts

(5) General Ledger

(3) Expenditures/Liabilities/ Disbursements

(6) General Fixed Assets/ Property Management

This condition was a result of management's decision to limit the number of administrative staff made responsible for accounting functions.

Management should continue to review the accounting procedures in place. To the extent possible and practical, management should design and implement procedures which would enhance segregation of duties to the above categories.