Loading...
HomeMy WebLinkAboutANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2007 I I I I I I I I I I I I I I I I I I I AUGUST A, GEORGIA Annual Financial Statements For the Year Ended December 31, 2007 I I AUGUSTA, GEORGIA I Annual Financial Report Year Ended December 31,2007 Table of Contents I I FINANCIAL SECTlON REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS I MANAGEMENT'S DISCUSSION AND ANALYSIS BASIC FINANCIAL STATEMENTS I Government-wide Financial Statements: Statement of Net Assets I Statement of Activities I Fund Financial Statements: Balance Sheet - Governmental Funds I Reconciliation of the Balance Sheet of the Governmental Funds to the Statement of Net Assets Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds I Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities I Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual- General Fund I Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - Fire Protection Fund - Statement of Net Assets - Proprietary Funds I Statement of Revenues, Expenses and Changes in Fund Net Assets - Proprietary Funds Statement of Cash Flows - Proprietary Funds I Statement of Fiduciary Net Assets - Fiduciary Funds Statement of Changes in Fiduciary Net Assets - Fiduciary Funds I Notes to Financial Statements REQUIRED SUPPLEMENTARY INFORMATlON I Pension Plans- Required Supplementary Information - Schedules of Funding Progress I Pension Plans - Required Supplementary Information - Schedules of Employer Contributions and Notes to Required Schedules I I - 2 4 - 14 19 20-21 24-25 27 28-29 31 32 33 34 35 36-37 38 39 43-82 84-85 86-88 I AUGUST A, GEORGIA I Annual Financial Report Year Ended December 31, 2007 I Table of Contents (continued) Page I Combining Balance Sheet - Nonmajor Capital Project Funds 130 I Statement of Revenues, Expenditures and Changes in Fund Balances- Nonmajor Capital Project Funds 131 NONMAJOR ENTERPRISE FUNDS I Combining Statement of Net Assets - Nonmajor Enterprise Funds 134 - 135 I Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets - Nonmajor Enterprise Funds 136- 137 Combining Statement of Cash Flows - Nonmajor Enterprise Funds I INTERNAL SERVICE FUNDS Combining Statement of Net Assets - Internal Service Funds 138-141 I 144 - 145 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets - Internal Service Funds 146 - 147 I Combining Statement of Cash Flows - Internal Service Funds 148=-151 FIDUCIARY FUNDS I Combining Statement of Fiduciary Net Assets - Pension Trust Funds 156 I Combining Statement of Changes in Fiduciary Net Assets - Pension Trust Funds 157 Combining Statement of Changes in Fiduciary Assets and Liabilities - Agency Funds 160 - 161 I COMPLIANCE SECTION I Report of Independent Certified Public Accountants on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards C-3 - C-4 Schedule of Expenditures of Federal Awards C-5 - C-7 I Notes to Schedule of Expenditures of Federal Awards C-8 I Summary Schedule of Prior Audit Findings C-9 - C-22 I Report of Independent Certified Public Accountants on Compliance with Requirements Applicable to Each Major Program and Internal Control over Compliance in Accordance with OMB Circular A-133 C-23 - C-24 Schedule of Findings and Questioned Costs C-25 -C31 I I I I I I I I I I I I I I I I I I I I I FINANCIAL SECTION I I I I I I I I I I I I I I I I I I I REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNT ANTS Augusta-Richmond County Commissioners Augusta, Georgia We have audited the accompanying financial statements of the governmental actiVities, the business-type activities, Augusta Canal Authority, each major fund and the aggregate remaining fund information of Augusta, Georgia as of December 31,2007 and for the year then ended, which collectively comprise Augusta, Georgia's basic financial statements, as listed in the table of contents. These financial statements are the responsibility of the Augusta, Georgia management. Our responsibility is to express opinions on these basic financial statements based on our audit. We did not audit the financial statements of the Augusta-Richmond County Department of Health or Downtown Development Authority. Those financial statements were audited by other auditors whose reports thereon has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Department of Health and Downtown Development Authority, is based solely on the reports of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America 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 perform the audit to obtain reasonable assurance about whether the basic financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the basic financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall basic financial statement presentation. We believe that our audit and the reports of other auditors provide a reasonable basis for our opinions. In our opinion, based upon our audit and the report of other auditors, the basic financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the Augusta Canal Authority, each major fund and the aggregate remaining fund information of Augusta, Georgia, as of December 31,2007, and the respective changes in financial position and cash flows, where applicable, and the respective budgetary comparison for the general fund and fire protection fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 15 to the financial statements, certain errors resulting in overstatement of capital assets and beginning net assets as of December 31, 2006 and interest income for the year ended December 31, 2006, were discovered by management of Augusta, GA during the current year. Accordingly, an adjustment has been made to beginning net assets as of December 31, 2007 to correct the error. In accordance with Government Auditing Standards, we have also issued our report dated June 30, 2008 on our consideration of Augusta, Georgia's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance_ That report is an integral part of an audit performed in accordance with Government Auditing Standards and is important in assessing the results of our audit. I I" I I I I I I I I I I I I I I I- I I MANAGEMENT'S DISCUSSION AND ANALYSIS 3 I I I I I I I I I I I I I I I I I I I Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the Government's basic financial statements. The basic financial statements consist of three components: I) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. The basic financial statements present two different views of the Government Ihrough the use of government-wide statements and fund financial statements. In addition to the basic financial statements, this report contains other supplemental information that will enhance Ihe reader's understanding of the financial condition of the Government. Required Components of Annual Financial Report Figure 1 Management's Discussion and Analysis I Basic Financial Statements I Government- Wide Financial Statements I Fund Financial Statements Notes to the Financial Statements Detail . Summary Basic Financial Statements The first two statements in the basic financial statements are the Government-wide Financial Statements. They provide both short and long-term information about the Government's financial status. The next statements are Fund Financial Statements. These statements focus on the activities of the individual parts of Augusta, Georgia's government. These statements provide more detail than the government-wide statements. There are four parts to the Fund Financial Statements: 1) the governmental funds statements; 2) the budgetary comparison statements; 3) the proprietary fund statements; and 4) the fiduciary fund statements. The next section of the basic financial statements is the notes. The notes to the financial statements explain in detail some of the data contained in those statements. After the notes, supplemental information is provided to show details about the Government's non-major governmental funds and internal service funds, all of which are added together in one column on the appropriate basic financial statements. Government-wide Financial Statements The Government-wide financial statements provide a broad view of the Government's operations in a manner similar to a private-sector business_ The statements provide both short-term and long-term information about the Government's financial position, which assists in assessing the economic condition at the end of the fiscal year- These statements are prepared using the flow of economic resources measurement focus and the accrual basis of accounting. This means the statements take into account all revenues and expenses connected with the fiscal year even if cash involved has not been received or paid_ The government-wide financial statements include the following two statements: The Statement of Net Assets presents information on all of the Government's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Government is improving or deteriorating. The Statement of Activities presents information showing how the Government's net assets changed during the most recent fiscal year- All changes in nel assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will not result in cash flows until future fiscal periods (e_g. uncollected taxes and earned but unused vacation leave). 5 I Fiduciary Funds I The Fiduciary Funds are used to account for assets held by the Government as an agent for individuals, private organizations, other governments and other departments. The Government is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and only by those to whom the assets belong. These funds are not reflected in the government-wide fInancial statements because the resources are not available to support the Government's operations or programs_ I I Government-wide Financial Analysis I Comparative data for the entity-wide governmental activities and the business-type activities is provided below. I The G<>vernment's Net Assets December 31, 2007 and 2006 Figure 2 I I Business-type Governmenlal Business-type Govenunental Activities Tolal Activities Activities Tolal Activities (As reslated) ( As restated) 2007 2007 2007 2006 2006 2006 Cwrent and other assets $ 337,082,135 $ 301,886,466 $ 638,968.601 $ 316.588,395 $ 343,725,039 $ 660,313,434 Capital assets 247,213,678 485,052,108 732,265,786 229,164,702 419,297,536 648,462,238 Total assets 584,295,813 786,938,574 1,371,234,387 545,753,097 763,022,575 1,308,775,672 I Long-term liabilities Other liabilities Totalliabilites 45,530,123 48,060,667 93,590,790 504,604,579 30,406,025 535,010,604 550,04,702 78,466,692 628,601,394 55,617,736 40,317,977 95,935,713 508,933,469 21,963,251 530,896,720 564,551,205 62,281,228 626,832,433 I I Net assets: Invested in capital assets, net of related debt Restricted Unrestricted I 238,765,702 143,717,492 382,483,194 224,230,109 129,302,537 353,532,646 186,758,852 15,926,125 202,684,977 219,256,694 16,429,773 235,686,467 65,180,469 92,284,353 157,464,822 6,330.581 86,393.545 92,724,126 490,705,023 $ 251,927,970 $ 742,632,993 $ 449,817,384 $ 232,125,855 $ 681,943,239 Tolal oet assets $ I I I I I I I 7 I I The G.lvernment's Changes in Net Assets For the Years Ended December 31, 2007 and 2006 Figure 3 I The <riJvecnment Changes in Net Assets Figure J I Business-type Governmental Business-type Governmental Activities Total Activities Activities Total Activities (As restated) (As restated) 2007 2007 2007 2006 2006 2006 Revenues: I Program revenues: Charges for selVices $ 35,142,343 $ 108,082,353 143,224,696 $ 33,156,088 $ 98,384,056 $ 131,540,144 Operating grants and contributions 10,591,102 183,764 10,774,866 8,296,754 1,030,173 9,326,927 Capital grants and contributions 630,514 3,654,745 4,285,259 4,276,819 4,276,819 I General revenues: Property taxes 48,820,848 48,820,848 47,510,238 47,510,238 Other taxes 111,459,091 111,459,091 99,296,470 99,296,470 Grants and contributions not restricted I to specific programs 960,741 960,741 950,923 950,923 Unrestricted investment earnings 15,424,993 11,961,476 27,386,469 12,907,142 12,994,865 25,902,007 Miscellaneous 815,900 939,453 1,755,353 1,228,979 711,659 1,940,638 Total revenues 223,845,532 124,821,791 348,667,323 203,346,594 117,397,572 320,744,166 I Expenses: Genernl government 32,569,426 32,569,426 28,232,054 28,232,054 Judicial 15,871,604 15,871,604 14,766,171 14,766,171 I Public safety 77,636,868 77,636,868 73,164,301 73,164,301 Public works I3,007,368 13,007,368 12,182,770 12,182,770 Hea[th and welfare 2,227,609 2,227 ,609 2,027,300 2,027 ,300 Culture and recreation 24,555,210 24,555,210 32, I31,742 32,131,742 Housing and development 8,844,236 8,844,236 9,469,828 9,469,828 I Interest on long-tena debt 1,517,141 1,5[7,141 769,618 769,618 Waste management 6,196,161 6,196,161 5,859,827 5,859,827 Water and sewer 70,720,901 70,720,901 68,152,898 68,152,898 Airports 15,380,555 15,380,555 14,271,584 14,271,584 I Municipal golf course 546,477 546,477 688,293 688,293 Transit 4,607,435 4,607,435 4,960,174 4,960,174 Newman Tennis Center 1,370 1,370 Garbage Collection 14,296,461 14,296,461 12,998,308 12,998,308 I Riverwalk 117 117 Total expenses 176,229,462 111,748,107 287,977,569 172,743,784 106,932,454 279,676,238 Increase in net assets before transfers 47,616,070 I3,073,684 60,689,754 30,602,810 10,465,118 38,619,119 I Transfers (6,728,431) 6,728,431 (6,365,664) 6,365,664 Increase in net assets 40,887,639 19,802,115 60,689,754 24,237,146 16,830,782 41,067,928 I Net assets, January I 449,817,384 232,125,855 681,943,239 425,580,238 215,744,650 641,324,888 Prior period adjustments (449,577) (449,577) Net assets, January I, .s restated 215,295,073 215,295,073 I Net assets, December 3 1 $ 490,705,023 $ 251,927,970 $ 742,632,993 S 449,817,384 S 232,125,855 $ 681,943,239 I I I I 9 I The actual operating revenues for the General Fund were more than the budgeted amount by $5.3 million, or 5%. The individual sources within the revenues fluctuated both positively and negatively. No individual source materially varied from the final budget I I As a result of sound budget management by all departments of the Government, actual operating expenditures were less than the budgeted amount by $684 thousand. For the year, actual revenue and other financing sources were over actual expenditures and other financing uses by $5.2 million. I Capital Projects Funds I The Government uses Capital Projects Funds to account for the acquisition and construction of major capital facilities that are not financed by Proprietary Funds. Major funds included in the fund financial statements are the SPLOST Fund Phase III , SPLOST Fund Phase IV and SPLOST Fund Phase V. The proceeds of the special purpose 1% sales tax are accounted for in Capital Projects Funds until improvement projects are completed. The SPLOST Fund Phase III fund balance is $45.9 million, the SPLOST Fund Phase IV's fund balance is $96.4 million and the SPLOST Fund Phase V's fund balance is $80.7 million, all of which is held for specific construction and improvement projects and capital acquisitions. I Proprietary Funds I The activities of the Government that render services to the general public on a user charge basis, or that require periodic determination of revenues for public policy are accounted for as Enterprise Funds. The Government's proprietary funds provide the same type of information found in the government-wide statements but in more detaiL Unrestricted net assets at the end of the year were as follows: Water and Sewer System Fund, $60.4 million; Augusta Regional Airport, $14 million; Nonmajor Enterprise funds, $18.1 million. The total growth (reduction) in net assets for previously mentioned funds were $5.6 million, $5.4 million and $8.4 million, respectively_ Other factors concerning the finances of these funds have already been addressed in the discussion of the Government's business-type activities. I I I I I I I I I I I I II I Long-Term Debt I As of December 31, 2007, the Government had a total of $577 million in outstanding long-term debt. Of this amount, $490.2 million consists of revenue bonds backed by the revenues of the water and sewer system. I I The Government's Outstanding Debt General Obligation and Revenue Bonds December 31, 2007 Figure 5 I I Govemmntal Buiiress-type Activities Activities Tolal 2007 2006 7IXJ7 2006 20Cfl 2006 Gemal oblig;ltioo Ixlnds $ 36,468,229 $ 44,741,536 $ . $ . $ 36,468,229 $ 44,741,536 Revenue ixlrrls 46,053 157,434 4'XJ,209,032 491,121,382 4'XJ,255,085 491,278,816 0Iher ddJt 26,941,843 27,688,084 23,267,89t 25,528,616 ':iJ,2(J'),737 53,216,700 Total ddx $ 63,456,125 $ 72,587,054 $ 513,476,926 $ 516,649,998 $ 576,933,051 $ 589,237,052 I I I $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $- I I I G.O. Bonds Revenue Bonds Other Debt I I The Government has maintained a bond rating of A+ from Standard & Poor's Rating Group and an Al rating from Moody's Investor Service. These bond ratings are clear indications of the sound financial condition of the Government These high ratings are a primary factor in keeping interest costs low on the Government's outstanding debt. I The State of Georgia limits the amount of general obligation debt that a unit of government can issue to 10 percent of the total assessed value of taxable property located within that government's boundaries_ The legal debt margin for the Government is $460 million based on the 2007 County-wide bond digest of $4,604 million. I Additional information regarding the Government's long-term debt can be found in Note 3 of the notes to the fmancial statements of this report. I I I 13 I I I I I I I I I I I I I I I I I I I BASIC FINANCIAL STATEMENTS 15 I I I I I I I I I I I I I I I I I I I GOVERNMENT-WIDE FINANCIAL STATEMENTS \ 17 I I Augusta, Georgia Statement of Net Assets December 31,2007 I Primary Government Component Units Business Primary Department Augusta o..wntown I Governmental Type Government of Canal Development Activities Activities Total Health Authority Authority Assets Cash and temporal)' in vestments $ 250,508,611 $ 87,501,670 $ 338,010,28 I $ 1,556,220 $ 558,176 $ 523,410 I Receivables (net of allowance for doubtful accounts) Taxes 3,855,683 3,855,683 Accounts 16,084,982 14,727,267 30,812,249 1,121,307 249,755 I Interest 227,482 524,122 751,604 Notes 3,701,447 3,701,447 Intergovernmental .w,325 789,351 829,676 Prepaid expenses 277,773 277,773 22,118 I Inventol)' 108,1\4 2,955,322 3,063,436 33,211 Restricted cash and investments 58,525,888 175,244,654 233,770,542 2,391,766 Internal balances 2,870,195 (2,870,195) Capital assets I Land and construction in progress 114,395,153 175,161,411 289,556,564 1,647,997 520,651 Other capital assets, net of accumulated depreciation 132,818,525 309,890,697 442,709,222 7,292,703 11,851,263 3,655,032 Other assets 881,635 23,014,275 23,895,910 55,853 Total assets 584,295,813 786,938,574 1,371,234,387 11,618,227 15,626,940 4,234,295 I Liabilities Accounts payable 9,358,656 15,156,650 24,515,306 1,524,584 58,957 190,387 I Accrued interest 478,333 5,366,603 5,844,936 Accrued salaries and vacation 4,621,046 763,327 5,384,373 171,720 41,355 Other accrued liabilities 4,031,665 250,099 4,281,764 32,840 11,214 Unearned revenue 1\ ,644,965 11,644,965 I Liabilities due in less than one year 17 ,926,002 8,869,346 26,795,348 33,035 585,000 Liabilities due in greater than one year 45,530,123 504,604,579 550,\34,702 835,164 1,215,000 Total liabilities 93,590,790 535,010,604 628,601,394 2,597,343 100,312 2,001,601 I Net assets Invested in capital assets net of related debt 238,765,702 143,717,492 382,483,194 8,473,180 12,371,914 1,855,032 Restricted foc I Capital projects 186,420,227 5,516,766 191,936,993 2,391,766 Debt service 10,.w9,359 10,409,359 Perpetual care 338,625 338,625 Health and welfare 857,867 I Unrestricted 65,180,469 92,284,353 157,464,822 (310,163) 762,948 377,662 Total net assets $ 490,705,023 $ 251,927,970 $ 742,632,993 $ 9,020,884 $ 15,526,628 $ 2,232,694 I I The notes to the fmanciat statements are an integral part of this statement. I I I 19 I I I Net (Expense) Revenue and Changes in Net Assets Primary Government Component Units I Department Augusta Downtown Goverumental Business-type of Canal Development Activities Activities Total Health Authority Authority I $ (17,206,426) $ $ ( 17,206,426) $ $ $ (6,474,313) (6,474,313) I (68,914,813) (68,914,813) (10,929,821) (10,929,821) (1,570,941 ) (1,570,941 ) (19,250,204) ( 19,250,204) I (4,001,844) (4,001,844) (1,517,141) ( 1,517, 141) (129,865,503) ( 129,865,503) I 4,879,170 4,879,170 (3,868,096 ) (3,868,096) 4,036,215 4,036,215 I (77,252) (77,252) (3,846,065) (3,846,065) (948,217) (948,217) 175,755 175,755 I ( 129,865,503) 175,755 (129,689,748) I (1,413,540) 319,953 231,184 (1,413,540) 319,953 231,184 I 48,820,848 48,820,848 74,441,584 74,441,584 I 18,093,444 18,093,444 18,924,063 18,924,063 960,74 I 960,741 1,357,646 15,424,993 11,961,476 27,386,469 47,285 73,937 14,122 I 815,900 936,453 1,752,353 260,294 (6,728,431) 6,728,43 1 170,753,142 19,626,360 190,379,502 1,404,931 334,231 14,122 I 40,887,639 19,802,115 60,689,754 (8,609) 654,184 245,306 449,817,384 233,439,787 683,257,171 9,029,493 14,872,444 1,987,388 ( I ,313,932) (1,313,932) I 449,817,384 232,125,855 681,943,239 9,029,493 14,872,444 1,987,388 $ 490,705,023 $ 251,927,970 $ 742,632,993 $ 9,020,884 $ 15,526,628 $ 2,232,694 I I I 21 I I I I I I I I I I I I I I I I I I I FUND FINANCIAL STATEMENTS 23 I I I I Other Total Special Sales Special Sales Governmental Governmental I Tax Phase IV Tax Phase V Funds Funds $ 99,424,032 $ 32,639,003 $ 23,888,154 $ 249,1l6,285 I 847,638 3,855,683 21,275 2,839,707 1,837,635 11,820,548 121,006 227,482 I 3,701,447 3,701,447 40,325 277,773 I 108,114 45,979,350 45,979,350 338,625 338,625 I 179,433 3,605,366 $ 99,445,307 $ 81,458,060 $ 30,913,938 $ 319,070,998 I $ 2,948,503 $ 720,726 $ 1,267,872 $ 8,743,488 720,607 720,607 I 72,627 198,007 4,576,050 17,508 1,419,861 4,596,080 18,179,247 I 3,021,130 720,726 6,800,074 33,639,253 I 9,070,844 1,647,516 1,420,820 19,725,581 1,596,460 1,596,460 385,887 43,866,010 43,866,010 I 4,955,061 87,353,333 35,223,808 193,806,162 I 15,406,935 15,406,935 10,194 10,194 5,139,392 5,139,392 I 540,063 540,063 96,424,177 80,737,334 24,113,864 285,431,745 I $ 99,445,307 $ 81,458,060 $ 30,913,938 $ 319,070,998 I I 25 I I Augusta, Georgia Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets December 31,2007 I I I Amounts reported for governmental activities in the stalement of net assets are different because: Ending fund balance - governmental funds I Capital assets used in governmental activities are nol financial resources and, therefore, are not reported in the funds. Historical cost of capital assets Accumulated depreciation I Other long-term assets are not available to pay for current-period expenditures and, therefore, are deferred in the funds. Adjustment of deferred revenue Bond issue costs capitalized Annual pension asset (Iiabilily) I I Internal service funds are used by management to charge thc costs of risk management, fleet operations, employee benefits, and GMA lease activity to individual funds. The assets and liabilities of the internal service funds are included in governmcntal activities in the statement of net assets. Net assets of internal service funds Less: cumulative amounts allocated to business-type activities Less: capital assets included in adjustment for capital assets I I I Long-term liabilities, including bonds payable and accrued interest, are not due and payable in the current period and therefore are not reported in the funds. Revenue bonds payable General obligation bonds payable Compensated absences Capital leases Claims and judgemenls Olher post employement benefits liability Accrued interest I I I Net assets of governmental activities I The notes to the financial statements are an integral part of this statement I I I 27 $ 285,431,745 351,814,268 (104,600,590) 247,213,678 6,534,282 479,315 402,320 7,415,917 1,371,172 113,514 (464,095) 1,020,591 (46,053 ) (36,468,229) (4,050,544) (1,743,688) (4,978,257) (2,611,804) (478,333) (50,376,908) $ 490,705,023 I I I I Other Total Special Sales Special Sales Governmental Governmental Tax Phase IV Tax Phase V Funds Funds I $ $ $ 11,167,266 $ 53,378,700 37,584,639 13,805,066 Ill,459,091 3,288,900 4,890,187 I 4,732,002 3,247,522 1,177,728 15,452,614 5,854,388 22,915,930 1,274,329 7,309,184 3,907,573 5,144,651 12,208,110 I 34,693 415,911 478,575 8,639,575 40,832,161 42,128,239 228,127,084 I 477,515 2,925,029 28,481,107 I 392,497 14,582,183 114,913 4,626,887 76,602,674 3,220,332 484,141 4,055,419 14,493,083 I 518,838 1,824,098 4,485,973 2,284,356 5,080,255 4,494,502 25,400,613 6,781,376 8,828,774 10,410,166 934,691 2,785,095 16,211,559 I 57,000 13,926,946 14,1l2,538 17 ,026,120 8,380,185 39,987,751 203,198,504 I (8,386,545) 32,451,976 2,140,488 24,928,580 3,477,345 11,013,631 23,376,904 I (9,727,390) (16,924,202) (29,646,425) 1,967,750 3,477,345 (9,727,390) (5,910,571) (4,301,771) I (4,909,200) 22,724,586 (3,770,083) 20,626,809 101,333,377 58,012,748 27,883,947 264,804,936 I $ 96.424,177 $ 80,737,334 $ 24,113.864 $ 285,431,745 I I I I 29 I I Augusta, Georgia Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year Ended December 31,2007 I I I Amounts reported for governmental activities in the statement of activities are different because: Net change in fund balances - total governmental funds I Govemmental funds report capital outlays as expenditures_ However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlay exceeded depreciation in the current period. Capital outlay Depreciation expense I 28,364,246 (10,393,717) I Govemmental funds recognize revenues when current resources are provided; the Statement of Activities recognizes revenue when earned, resulting in a timing difference of current period revenues relating to converting from modified-accrual basis to full accrual basis_ I The change in the net pension obligation or asset does not affect current financial resources and are not reported as a revenue or expense in the funds. I The change in the net olher post employment benefit obligation or asset does not affect current financial resources and are not reported as a revenue or expense in the funds. I The issuance of long-term debt (e.g. bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effecl of these differences in the treatment of long-term debt and related accounts. General obligation bonds payable Revenue bonds payable Notes payable Compensated absences Capital leases Claims and judgements Bond issue costs capitalized Accrued interest I I I I I The net revenue of certain activities of the internal service fund is reported with govemmental activilies. I Change in net assets of governmental activities The notes to the financial statements are an integral part of this statement. I I 31 $ 20,626,809 17,970,529 (4,435,697) 95,072 (2,611,804) 8,273,307 111,381 2,500,000 54,202 (223,169) (1,554,982) (119,826) 147,268 9,188,181 54,549 $ 40,887,639 I I I Augusta, Georgia Fire Protection Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Year Ended December 31,2007 With comparative amounts for December 31, 2006 I I Variance with Budgeted Amounts Final Budget - Actual Positive 2006 Original Final Amounts (Negative) Actual $ 4,130,670 $ 5,236,618 $ 5,464,228 $ 227,610 $ 4,921,327 9,775,390 10,227,510 10,227,510 9,775,390 2,613 60,700 60,700 473,874 413,174 517,060 45,700 45,700 113,971 68,271 87,462 164,394 245,417 81,023 486,484 3,250 1l,29 I 1l,29 I 31,850 14,012,460 15,734,922 16,536,291 801,369 15,825,436 Revenues I Taxes - property Taxes - otherthan property Licenses and permits Use of money and property Charges for current services Intergovernmental Contributions and donations Other Total revenues I I I Expenditures Current: General government Public safety Capital outlay Debt service Total expenditures Excess (deficiency) of revenues over (under) expenditures 969,097 19,438,610 21,067,613 20,075,393 992,220 18,368,600 523,240 616,699 143,476 473,223 407,679 10,610 10,610 1l,314 (704) II ,511 19,972,460 21,694,922 20,230,183 1,464,739 19,756,887 (5,960,000) (5,960,000) (3,693,892) 2,266,108 - (3,931,451) 5,960,000 5,960,000 6,340,085 380,085 4,241,820 5,960,000 5,960,000 6,340,085 380,085 4,241,820 $ $ 2,646,193 $ 2,646,193 310,369 2,773,571 2,463,202 $ 5,419,764 $ 2,773,571 I I I Otber financing sources (uses) Transfers in Total other fmancing sources (uses) I Net change in fund balances Fund balance - beginning I Fund balance - ending I I I I The notes to the fmancial statements are an integral part of this statement. I 33 I I Augusta, Georgia Statement of Revenues, Expenses, and Changes in Fund Net Assets I Proprietary Funds Year Ended December 31, 2007 I Enterprise Funds Water Augusta Otber Internal and Sewer Regional Enterprise Service System Airport Funds Total Funds I Operating revenues Charges and fees $ 66,859,327 $ 14,981,099 $ 25,657,069 $ 107,497,495 $ 30,279,999 Total operating revenues 66,859,327 14,981,099 25,657,069 107,497,495 30,279,999 I Operating expenses Personal services and employee benefits 1l,465,121 3,573,476 4,291,891 19,330,488 464,303 Purchased/contracted services 8,516,411 1,096,561 14,159,852 23,772,824 453,636 I Supplies 5,443,961 8,061,353 1,232,291 14,737,605 197,538 Repairs and maintenance 3,935,676 352,348 1,004,770 5,292,794 4,377,555 Interfund/interdepartmental charges 1,873,690 219,512 1,103,145 3,196,347 Other costs 87,996 87,996 282,080 I Depreciation 13,086,218 1,523,817 2,301,430 16,911,465 46,540 Closure/postc\osure accrual 1,246,810 1,246,810 Lease expense 2,504,942 I Risk benefit charges 981,472 Insurance 20,419,941 Total operating expenses 44,321,077 14,827,067 25,428,185 84,576,329 29,728,007 I Operating income (loss) 22,538,250 154,032 228,884 22,921,166 551,992 Nonoperating revenue (expense) I Interest revenue 9,864,651 552,743 1,503,584 11,920,978 652,635 Sale of property 18,264 30,540 40,800 89,604 2,405 Other revenue 866,667 1,192,603 231,776 2,291,046 241,526 Intergovernmental 3,739,406 98,603 3,838,009 I Interest expense (23,957,459) (430,382) (24,387,841) (853,136) Loss on early termination of swap agreement (3,367,879) (3,367,879) Loss on disposal of capital assets (313,362) (313,362) Total nonoperating revenue (expense) (16,575,756) 5,201,930 1,444,381 (9,929,445) 43,430 I Income (loss) before transfers 5,962,494 5,355,962 1,673,265 12,991,721 595,422 Transfers in 6,728,431 6,728,431 139,272 I Transfers out (598,182) Change in net assets 5,962,494 5,355,962 8,401,696 19,720,152 136,512 I Total net assets - beginning 154,848,602 55,551,592 23,235,070 1,234,660 Prior period adjustment (1,313,932) I Total net assets - beginning, as restated 154,848,602 54,237,660 23,235,070 1,234,660 Total net assets - ending $ 160,811,096 $ 59,593,622 $ 31,636,766 $ 1,371,172 I Some amounts reported for business-type activities in the statement of net assets are different because of the following: I Certain internal fund expenses are allocated to business-type activities. 81,963 Total change in net assets for business-type activities $ 19,802,115 I The notes to the financial statements are an integral part of this statement. 35 I I I I I I I I I I I I I I I I I I I Augusta, Georgia Statement of Cash Flows Proprietary Funds Year Ended December 31, 2007 Enterprise Funds Water Augusta Other (nternal & Sewer Regional Enterprise Service System Airport Funds Total Funds Reconciliation of operating income (loss) to net cash provided by (used in) operating activities Operating income (loss) $ 22,538,250 $ 154,032 $ 228,884 $ 22,921,166 $ 551,992 Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 13,086,218 1,523,817 2,301,430 16,911,465 46,540 Closure/post closure costs 1,246,810 1,246,810 Change in assets and liabilities Accounts receivable (1,417,826) (145,484) (475,537) (2,038,847) 398,465 Inventory (282,966) (32,696) 573 (315,089) Accounts payable 8,288,101 958,327 1,032,363 10,278,791 ( 1,570,218) Accrued salaries and vacation 44,099 12,760 56,859 (3,710) Other accrued Iiabilites 4,849 4,849 Due to other funds (9,828,859) (144,241) (9,973,100) (656,216) Unearned revenue 2,076 2,076 Decrease in closure liability (1,709,991) (1,709,991) Total adjustments 9,890,843 2,303,964 2,269,016 14,463,823 (1,785,139) Net cash provided by (used in) operating activities $ 32,429,093 $ 2,457,996 $ 2,497,900 $ 37,384,989 $ (1,233,147) Reconciliation of cash and cash equivalents to the balance sheets Cash and cash equivalents in current assets $ 47,299,031 $ 11,041,977 $ 29,160,662 $ 87,501,670 $ 1,392,326 Restricted cash and cash equivalents included in noncurrent cash and investments 152,683,994 17,698,136 4,862,524 175,244,654 12,207,913 Net cash and cash equivalents $ 199,983,025 $ 28,740,113 $ 34,023,186 $ 262,746,324 $ 13,600,239 The notes to the financial statements are an integral part of this statement. 37 I I I Augusta, Georgia Statement of Changes in Fiduciary Net Assets Fiduciary Funds Year Ended December 31, 2007 I I Private-purpose Pension Trust Fund Trust Funds Joseph R. Lamar Additions Contributions - employer $ 2,418,674 $ Contributions - plan member 1,492,559 Net investment income 9,136,575 306 Total additions 13,047,808 306 Deductions Other 175 Administration 504,905 Benefit payments 7,005,602 Refunds 234,956 Total deductions 7,745,463 175 Net increase in plan net assets 5,302,345 131 Total net assets - beginning 105,733,279 5,583 Total net assets - ending $ 111,035,624 $ 5,714 I I I I I I I I I I I I I The notes to the financial statements are an integral part of this statement. I 39 I I I I I I I I I I I I I I I I I I I Notes to Financial Statements 41 I I I I I I I I I I I I I I I I I I I AUGUSTA, GEORGIA Notes to Financial Statements Year Ended December 31, 2007 Note 1 - Summary of significant accounting policies Augusta, Georgia ("the Government") accounts for its financial position and results of operations in accordance with accounting principles generally accepted in the Uniled States of America (GAAP) applicable to governmental units. The Government's reporting entity applies all relevant Government Accounting Standards Board (GASB) pronouncements. In the government-wide financial statements and in the proprietary fund financial statements, the Government applies financial Accounting Standards Board (fASB) pronouncements and Accounting Principles Board (APB) opinions issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements, in which case, GASB prevails. Accordingly, the Government has adopted accounting policies, as described below. A. Reporting entity Augusta is located in the east central section of the state on the south bank of the Savannah River, which serves as the boundary between Georgia and South Carolina. Augusta is on the fall line and has a landscape dotted with foothills which descend to the coastal plain. Augusta is the head of the navigation on the Savannah River and is 135 miles east of Atlanta, 127 miles northwest of the port of Savannah, and 72 miles southwest of Columbia, South Carolina. Augusta is the trade center for 13 counties in Georgia and five in South Carolina, a section known as the Central Savannah River Area_ The Government was created by legislative act in the State of Georgia in 1995 from the unification of the two governments, the City of Augusta, Georgia and Richmond County, Georgia. On June 20, 1995, the citizens of Richmond County and the City of Augusta voted to consolidate into one government named Augusta, Georgia_ The officials for the new government were elected and, based on the charter, took office on January 1, 1996. The unified government combined all functions and began financial operations January I, 1996. The Government is governed by a full-time Mayor, with a term of four years, and a ten member Commission, who serve on a part-time basis and are elected to staggered terms of four years. The Mayor and Commission appoint an Administrator who serves as a full-time administrative officer and is responsible for the daily operations of the Government. The Government's financial stalements include the accounts of all Augusta and Richmond County operations. The criteria for including organizations as component units within Augusta's reporting entity, as set forth in Section 2100 ofGASB's Codification of Governmental Accounting and Financial Reporting Standards, include whether: · the organization is legally separate (can sue and be sued in their own name) · the Government holds the corporate powers of the organization · the Government appoints a voting majority of the organization's board · the Government is able to impose its will on the organization · the organization has the potential to impose a financial benefit/burden on the Government · there is fiscal dependency by the organization on the Govemment Utilizing the above criteria, the following agencies and commissions were included using the blending method in the financial statements: Augusta Port Authority, due to degree of fiscal dependency on the Government, and Richmond County Public Facilities, Inc_ (see Note 4D). Complete financial statements for the individual component units may be obtained at the following address: Augusta, Georgia, Finance Department, 501 Greene Street, Augusta, Georgia 30901 The Government's other component units, the Department of Health, Augusta Canal Authority, and Downtown Development Authority are included in separate columns in the accompanying government-wide financial statements. These units are reported in separate columns to emphasize that they are legally separate from the Government. Separate financial statements may be obtained from the Richmond County Department of Health at 950 Laney Walker Blvd_, Augusta, Georgia 3090 I. Separate financial statements for the Downtown Development Authority may be obtained from the Downtown Development Authority at 111 Tenth Street, Augusta, Georgia, 30901. Separate financial statements for the Augusta Canal Authority may be obtained from the Augusta Canal Authority at 1450 Greene Street, Suite 400, Augusta, Georgia, 30903. 43 I I AUGUSTA, GEORGIA Notes to Financial Statements - Continued I Year Ended December 31, 2007 I Note 1 - Summary of significant accounting policies (Continued) I Special Sales Tax Phase III Fund - The Special Sales Tax Phase III Fund is a capital projects fund that accounts for the receipts and disbursements of one percent (1 %) sales tax currently collected from 1996 through 2000. The primary revenue sources are sales taxes, and the primary expenditures are capital outlay projects, primarily for public works, recreation and outside agency projects_ I Special Sales Tax Phase IV Fund - This fund was established for expenditures specifically budgeted from revenues from the one cent sales tax (Phase IV) collected from the years 2001 - 2006 to be used primarily for public works, recreation and outside agency projects. I Special Sales Tax Phase V Fund - This fund is a capital projects fund that accounts for receipts and disbursements of one percent (1%) sales tax collected beginning March 2006 and expiring after five years or the quarter after a total of $160 million has been collected, whichever occurs first. The revenue sources are sales tax and earned interest, and expenditures will be for capital outlay projects, primarily for public works, recreation, and outside agency projects. The funds will also be used to repay $44 million bonds issued for the expansion on the Webster Detention Center and $8 million bonds issued for the Canal Authority. I I The Government reports the following nonmajor governmental funds: I Special Revenue Funds Urban Services District Fund - This fund accounts for revenue primarily from ad valorem taxes from areas within the former city limits and expenditures related to governmental services such as "Main Street", "Urban Street Lights", and "Sanitation". I Emergency Telephone System Fund - This fund accounts for the receipt and disbursement of revenues of the emergency telephone response system. I Capital Outlay Fund - This fund accounts for Ihe disbursement of revenues for all capital expenditures in General Fund departments. Capital expenditures are defined as any non-disposable item over $500 which includes vehicles, office and computer equipment, communications equipment, building renovations and office furniture. Law Enforcement Fund - This fund accounts for revenue and expenditures oflhe Sheriffs Department and Jail. I Occupational Tax Fund - This fund accounts for the receipt and disbursement of tax revenues restricted for fire protection services in the unincorporated area only. I Special Assessment Fund - This fund accounts for the receipt and disbursement of street light assessment taxes for the installation of street lights in the Government. I Hotel/Motel tax and Promotionffourism Fund - This fund accounts for the receipt and disbursement of hotel/motel and beer/wine tax revenues to the Augusta-Richmond County Convention & Visitors Bureau and the Augusta-Richmond County Coliseum Authority. I Housing and Neighborhood Development Fund - This fund accounts for the financing and construction of various community development projects from grants received from the U.S. Department of Housing and Urban Development. I Urban Development Action Grant (UDAG) Fund - This fund accounts for loan transactions in relation to urban development action grants. Repayments of initial grant revenue loaned to qualified recipients are restricted to additional financing to qualified applicants. I Federal Drug Fund - This fund accounts for activities associated with drug education and enforcement. State Drug Fund - This fund accounts for activities associated with drug education and enforcement. I 45 I I AUGUSTA, GEORGIA Notes to Financial Statements - Continued I Year Ended December 31,2007 I Note 1 - Summary of significant accounting policies (Continued) I Permanent Fund Perpetual Care II Fund - This fund accounts for the principal originally donated for the sale of perpetual care contracts at government-owned cemeteries after October I, 1970. The principal must be maintained intact and invested. The Government reports the following major enterprise funds: I I Water and Sewer System Fund - This fund is used to account for the activity of providing water and sewer services to the residents of the County. All activities necessary to provide such services are accounted for in this fund, including, but not limited to, operations, maintenance, financing and related debt service, and billing and collection. I Augusta Regional Airport at Bush Field Fund - This fund accounts for the operations of Augusta Regional Airport at Bush Field, the only airport within the County from which service from the major airlines is available. The Government reports the following nonmajor enterprise funds: I Waste Management Fund - This fund accounts for the provision of landfill services to residents and industries of the County. All activities necessary to provide such services are accounted for in this fund including, but not limited to, administration, operations, billing and collection. I Municipal Golf Course Fund - This fund accounts for the operation of the Municipal Golf Course, an 18-hole golf course located within the city limits. I Transit Fund - This fund accounts for the operations of the Augusta Public Transit which provides scheduled bus service within Richmond and Columbia counties. Daniel Field Airport Fund - This fund accounts for revenue and expenses relaled to Daniel Field Airport. I Garbage Collection Fund - This fund accounts for receipt and expenses related to the Government's garbage collection contract. I The Government also reports the following internal service funds: Risk Management Fund - This fund accounts for the receipt and disbursement of settlement exposure and damage expense claims, commercial insurance premiums and bond on certain employees and elected officials. I Fleet Operations Fund - This fund accounts for the operation and maintenance of County vehicles_ The Fund bills other County funds at amounts that will approximately recover all the cost of the services provided_ I Workers' Compensation Fund - This fund accounts for the receipt and disbursement of self-insured workers' compensation claims_ I Employee Health Benefits Fund - This fund accounts for the receipt and disbursement of self-insured employee group health insurance claims. Unemployment Fund - This fund accounts for the receipt and disbursement of unemployment benefits. I Long-term Disability Insurance Fund - This fund accounts for the receipt and disbursement of long-term disability claims_ I GMA Leases Fund - This fund accounts for the receipt and disbursement of the lease pool agreement with the Georgia Municipal Association. I 47 I I I I I I I I I I I I I I I I I I I AUGUSTA, GEORGIA Notes to Financial Statements - Continued Year Ended December 31,2007 Note 1- Summary of significant accounting policies (Continued) Those revenues susceptible to accrual are property taxes, licenses, interest revenues and charges for services. State- shared revenues collected and held by the state at year-end on behalf of the Government also are recognized as revenue. Fines, fees and permits are not susceptible to accrual because generally they are not measurable until received in cash_ Grant revenues which are unearned at year-end are recorded as unearned revenues. Under the terms of grant agreements, the Government funds certain programs by a combination of specific cost-reimbursement grants, categorical block grants, and general revenues. Thus, when program expenses are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the Government's policy to first apply cost-reimbursement grant resources to such programs, followed by categorical block grants, and then by general revenues_ D. Budgets and budgetary accounting The Government generally follows these procedures in establishing the budgetary data reflected in the financial statements: 1: Budgetary hearings are held in August to discuss departmental budgets. 2. The Administrator presents the tentative budget to the Commission in Octo beL 3. The permanent budget is legally adopted by the Commission prior to the start of the next fiscal year. 4. All budget revisions or changes must be approved as required by Georgia law and administrative policy. Transfer of budgeted amounts within operating categories within departments can be requested by department directors. Transfer of budget amounts involving capital outlay or salaries require approval of the Augusta-Richmond County Commission. The Augusta-Richmond County Commission must approve revisions that alter the total expenditures of any department or fund_ Budgets for capital items may be reappropriated in the ensuing year's budget. Departments may request for other budget items to be reappropriated in the form of a budget adjustm~nt, contingent of the Commission's approval. 5. Formal budgetary integration is employed as a management control device during the year for the General, Special Revenue, Debt Service and Capital Projecls Funds_ 6. Budgets for these funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America (GAAP)_ Budget information for expenditures represents the operating budget (as amended) as approved by the Augusta- Richmond County Commission. E. Encumbrances Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration for the General Fund, Special Revenue Funds, Debt Service and Capital Projects Funds. Encumbrances are recorded when purchase orders are issued but are not considered expenditures until liabilities for payments are incurred. Encumbrances for outstanding purchase orders do not lapse at year end. Therefore, they are reported as reservations of fund balance. F. Cash and cash equivalents The Government maintains a cash and investment pool in which the General Fund and all funds share. Each fund's portion of the pool is displayed on its respective balance sheet as cash and cash equivalents and includes non-pooled cash and investments separately held. Funds which have an excess of outstanding checks over bank balance have had these balances reclassified as a due to the General Fund for purposes of financial statement presentation. Interest income is allocated to each fund monthly based on its average monthly balance. For the purposes of financial statement presentation, the Government considers all highly liquid investments with an original maturity of three months or less, or with insignificant early withdrawal penalties, to be cash equivalents. Exceptions include the Government's pension plans which classify only cash as cash equivalents in order to appropriately report investment activity. Cash equivalents include amounts in certificates of deposit, repurchase agreements, and U.S. Treasury bills, and are stated at cost which approximates market. All deposits are stated at cost plus accrued interest, which reasonably estimates fair value. 49 I I I I I I I I I I I I I I I I I I I AUGUSTA, GEORGIA Notes to Financial Statements - Continued Year Ended December 31,2007 Note 1 - Summary of significant accounting policies (Continued) M. Compensated absences The vacation policy of the Government provides for the accumulation of up to thirty days earned vacation leave with such leave being fully vested when earned. For the Government's government-wide financial statements and proprietary fund financial statements, an expense and a liability for compensated absences and the salary-related payments are recorded as leave is earned. The Government has assumed a first-in, first-out method of using accumulated compensated time. The portion of that time that is estimated to be used in the next fiscal year has been designated as a current liability in the government-wide financial statements. No accrual has been established for accumulated sick leave of employees since it is the Government's policy to record the cost of sick leave only when it is used. N. Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amount of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. 51 I AUGUST A, GEORGIA I Notes to Financial Statements - Continued I Year Ended December 31,2007 I Note 3 - Detailed notes on all funds (Continued) I 5) Taxable bonds, notes warrants or other securities issued and guaranteed by any state, the District of Columbia, Canada or any province in Canada. 6) Bonds, debentures or other securities issued or insured or guaranteed by an agency, authority, unit, or corporate body created by the government of the United States of America. 7) Investment grade collateralized mortgage obligations. 8) Obligations issued, assumed or guaranteed by the International Bank for Reconstruction and Development or the International Financial Corporation. 9) Bonds, debentures, notes and other evidence of indebtedness issued, assumed, or guaranteed by any solvent institution existing under the laws of the United States of America or of Canada, or any state or province thereof, which are not in default and are secured to a certain level. 10) Secured and unsecured obligations issued by any solvent institution existing under the laws of the United States of America or of Canada, or any state or province thereof, bearing interest at a fixed rate, with mandatory principal and interest due at a specified time with additional limits. 11) Equipment trust obligations or interests in transportation equipment, wholly or in part within the United States of America, and the right to receive determinated portions or related income. 12) Loans that are secured by pledge or securities eligible for investment. 13) Purchase money mortgages or like securities received upon the sale or exchange of real property acquired. 14) Secured mortgages or mortgage participation, pass-through, conventional pass-through, trust certificate, or other similar securities with restrictions. 15) Land and buildings on such land used or acquired for use as a fund's office for the convenient transaction of its own business with restrictions. 16) Real property and equipment acquired under various circumstances. I I I I I In addition, large retirement systems have restrictions as to the concentration of investments in corporations and equities and additional stipulations exisl related to decreases in a fund's asset value. I As of December 31,2007 the investments of the Government were: I Maturities in Years Type of Investment Fair Value 4-12 Months 1-5 Years 6 - 10 Years U.S. Government securities $ 30,196,758 $ 12,126,128 $ 13,746,343 $ 4,324,286 Corporate securities 9,985,444 1,803,733 3,421,348 4,760,364 $ 13,929.861 $ 17,167,691 $ 9,084,650 Equity securities 48,318,153 Georgia Fund I 152,523,9 [7 Georgia Extended Asset Pool 11,845,377 Total investments $ 252,869,649 I I I The exposure of the Government's debt securities to credit quality risk is indicated below (as rated by Slandard & Poor's): Type of investment Fair Value AAA AA AA- A+ A U.S. Government securities Corporate securities $ 30,196,758 $ 9,985,444 $ 40,182,202 $ $ $ $ $ I 1,538,923 1,538,923 $ [,939,132 1,939,132 $ 3,394,513 3,394,513 $ 1,525,165 1,525,165 $ 1,587,711 1,587,711 I The local government investment pool "Georgia Fund 1", created by O.C.G.A. ~36-83-8, is a stable net asset value investment pool. Georgia Fund 1 operates in a manner consistent with Rule 13-7 of the Investment Company Act of 1940 and is considered to be a 2a-7 like pool. The pool is not registered with the SEC as an investment company; the regulatory oversight of the pool is assigned to the State of Georgia's Office of Treasury and Fiscal Services. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($ 1.00 per share value). Net asset value is calculated weekly' to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and determines participant's shares sold and redeemed based on $1.00 per share_ As a public fund, Georgia Fund I is exempt from any disclosure of custodial credit risk. I I 53 I AUGUSTA, GEORGIA I Notes to Financial Statements - Continued I Year Ended December 31, 2007 Note 3 - Detailed notes on all funds (Continued) I As of December 31, 2007, the Authority had no investments. B. Receivables Property taxes are administered on a calendar year basis subject to the following dates: I Lien date Levy date Collection period Due date January 1 July 26 August 31 - November 15 November 15 I I Receivables at December 31, 2007, including the applicable allowances for uncollectible accounts, consist of the following: Special Special Special Fire Sales Tax Sales Tax Sales Tax General Protection Phase III Phase rv Phase V Receivables: Taxes $ 3,049,219 456,894 $ $ $ Accounts 7,400,047 19,603 21,275 2,839,707 Interest ' 106,476 Note Intergovernmental 40,325 Gross receivables 10,489,591 456,894 126,079 21,275 2,839,107 Less: allowance for uncollectibles (774.696) (21,091) Net total receivables $ 9,714,895 $ 435,803 $ 126,079 $ 21,275 $ 2,839,707 Nonmajor Nonmajof Water and Bush Governmental Enterprise Adjustments to Statement of Sewer Field Funds Funds Total Full Accrual Net Assets Receivahles (Cout.): Taxes $ $ $ 938,809 $ $ 4,444,922 $ 4,444,922 Accounts 10,402,882 968,391 1,858,077 4,578,238 28,088,220 4,264,434 32,352,654 Interest 516,098 121,006 8,024 751,604 751,604 Note 3,785,609 3.785,609 3,785,609 Intergovernmental 789,351 829,676 829,676 Gross receivables 10,918,980 1,757,742 6,703,50 I 4,586,262 37,900,031 4,264,434 42,164,465 Less: allowance for uncollectibles (270,500) (100,000) (195,775) (851,744) (2,213,806) (2,213 ,806) Net total receivables $ 10,648,480 $ 1,657,742 $ 6,507,726 $ 3,734,518 $ 35,686,225 4,264,434 $ 39,950,659 I I I I I I Adjustments to full accrual relate to internal service funds. Internal service funds predominately serve the governmental funds. Accordingly, the internal service funds receivables balances are included in governmental activities on the accompanying government-wide financial statement- I For the above-mentioned long-term notes receivable, the bank maintains records that are not recorded in the governmental fund financial statements. These loans represent funds received through HUD's Housing Rehabilitation Program. The Housing Rehabilitation Program is designed to fund improvements to homes owned and occupied by persons in low to moderate-income ranges. In 1993, loans were also made to owners of rental units under a deferred loan arrangement as part of the Housing Rehabilitation Program. Loans made for these projects vary as to amounts and interest rates based on the level of income of the owner/occupiers. In the governmental fund financial statements, repayments of these loans are recorded as other revenue in the Housing and Neighborhood Development Fund, a nonmajor special revenue fund. I I Finally, the Fiduciary fund financial statements include $21,448,784 in taxes receivable recorded in agency funds. This amount is excluded from the foregoing schedule and represents the amount of receivables billed on behalf of other governments in an agency relationship: Also, included in the Fiduciary fund financial statements and excluded from the foregoing schedule are interest receivable totaling $474,959 and accounts receivable totaling $572,482 in the pension trust fund. I I I 55 I AUGUST A, GEORGIA Notes to Financial Statements - Continued I Year Ended December 31, 2007 I Note 3 - Detailed notes on aU funds (Continued) I Depreciation expense was charged to functions as follows: Governmental activities General government $ 1,038,675 Judicial l,319,11l I Public safety 3,449,771 Public works 3,176,514 Health and welfare 84,572 I Culture and Recreation 1,312,903 Housing and development 15,750 Risk 1,722 Fleet 41,240 I $ 10 ,440 ,25 8 Balance Balance I December 3 I, December 3 I, 2006 Additions Disposals 2007 Water and Sewer Capital assets, not being depreciated: I Land $ 7,881,054 $ 111,306 $ $ 7,992,360 Construction in progress 104,610,664 25,490,389 130,10 1 ,053 Total capital assets not being depreciated 112,491,718 25,601,695 138,093,413 I Other capital assets: Buildings 39,047,673 37,327 39,085,000 Vehicles 5,800,848 187,763 (50,467) 5,938,144 Machinery and equipment 6,576,376 206,487 (10,883) 6,771,980 I Fumiture and fixtures 440,474 440,474 Other capital 5,149,070 93,402 5,242,472 Water and sewerage systems 329,145,20 I 46,161,183 375,306,384 Contributed water and sewerage systems 10,563,423 10,563,423 I Total capital assets being depreciated 396,723,065 46,686,162 (61,350) 443,347,877 Less accumulated depreciation for: I Buildings (24,309,077) (1,190,083) (25,499,160) V chicles (5,069,506) (340,252) 50,467 (5,359,291) Machinery and equipment (5,902,829) (30 1,756) 10,883 (6,193,702) Fumiture and fixtures (439,943) (531) (440,474) I Other capital (3,119,271) (1,032,630) (4,151,901) Water and sewerage systems (107,969,390) (9,989,592) ( 117,958,982) Contributed water and sewerage systems (6,881,280) (231,374) (7, 112,654) I Total accumulated depreciation (153,691,296) (13,086,218) 61,350 (166,716,164) Other capital assets being depreciated, net 243,031,769 33,599,944 276,631,713 I Water and sewer capital assets, net $ 355,523,487 $ 59,201,639 $ - $ 414,725,126 I I I 57 I AUGUST A, GEORGIA Notes to Financial Statements - Continued I Year Ended December 31, 2007 I Note 3 - Detailed notes on all funds (Continued) I Balance Balance December 3 I, December 31, 2006 Additions Disposals 2007 I Nonmaior enterprise funds Capital assets, not being depreciated Land $ 2,628,862 $ 66,007 $ $ 2,694,869 Construction in process 1,509,799 1,509,799 I Total capital assets not being depreciated 2,628,862 1,575,806 4,204,668 Other capital assets: I Site and building improvements 2,568,583 12,636 2,581,219 Landfill CellllC 9,399,876 9,399,876 Landfill CelllllC 5,616,841 5,616,841 Buildings 3,164,904 3,164,904 I Vehicles 6,581,015 399,637 (238,273 ) 6,742,379 Machinery and equipment 5,593,596 7,800 (868,850) 4,732,546 Infrastructure 1,485,833 1,485,833 IT - hardware 75,338 75,338 I IT - software 469,742 13,281 483,023 Total capital assets being depreciated 34,955,728 433,354 (1,107,123) 34,281,959 Less accumulated depreciation for: I Site and building improvements (1,330,553 ) (122,089) (1,452,642) Landfill CellllC (9,399,876) (9,399,876) Landfill Cell IIIC (31,205) (374,455) (405,660) I Buildings (1,400,489) (100,958) (1,501,447) Vehicles (3,524,199) (854,237) 228,589 (4,149,847) Machinery and equipment (1,390,431) (784,811 ) 308,1 72 (1,867,070) Infrastructure (741,014) (49,528) (790,542) I IT - hardware (68,147) (2,696) (70,843) IT - software (445,778) ( 12,656) (458,434) Total accumulated depreciation ( 18,331 ,692) (2,301,430) 536,761 (20,096,361 ) I Other capital assets, net 16,624,036 (1,868,076) (570,362) 14,185,598 Nonmajor enterprise funds, net 19,252,898 (292,270) (570,362) 18,390,266 I Business-type activities capital assets, net $ 420,611,468 $ 67,410,938 $ (883,727) $ 487,138,679 Depreciation expense was charged to non-major enterprise funds as follows: I Waste management and garbage collection $ 1,457,865 Transit 715,842 Daniel Field Airport 92,555 I Municipal golf course 35,168 $ 2,301,430 I Construction costs include, among other things, capitalized interest costs and engineering fees. Capitalized net interest costs were approximately $264,000 for the year ended December 31,2007. I I 59 I I AUGUSTA, GEORGIA Notes to Financial Statements - Continued I Year Ended December 31,2007 I Note 3 - Detailed notes on all funds (Continued) I Downtown Development Authority Capital asset activity for the year ended December 31,2007 was as follows: December 31, December 31, 2006 Additions Deletions 2007 Capital assets: Port Royal parking deck $ 2,600,000 $ - $ $ 2,600,000 Riverfront parking deck 3,816,000 3,816,000 Clock 41,393 41,393 Furniture and equipment 7,920 7,920 Total capital assets 6,465,313 6,465,313 Less accumulated depreciation for: Port Royal parking deck (1,105,000) (65,000) (1,170,000) Riverfront parking deck (1,526,400) (95,400) ( 1,621,800) Clock (11,571) (4,139) (15,710) Furniture and equipment (1,378) (1,393) (2,771) Total accumulated depreciation (2,644,349) (165,932) (2,810,281 ) Capital assets, net 3,820,964 (165,932) 3,655,032 Related debt (2,375,000) 575,000 (1,800,000) Capital assets, net of related debt $ 1,445,964 $ (165,932) $ 575,000 $ 1,855,032 I I I I I Depreciation expense for the year ended December 31, 2007 was $165,932. I D. Accounts payable and accrued liabilities Payables for the Government at December 31, 2007 were as follows: I I Governmental Enterprise Adjustments Statement of Funds Funds Total To Full Accrual Net Assets Payables: Accounts payable $ 8,743,488 $ 15,156,650 $ 23,900,138 $ 615,168 $ 24,515,306 Accrued interest 5,366,603 5,366,603 478,333 5,844,936 Accrued salaries and vacation 4,576,050 1,534,257 6,110,307 (725,934 ) 5,384,373 Other accrued liabilities 1,419,861 250,099 1,669,960 2,611,804 4,281,764 Total accounts payable and accrued liabilities $ 14,739,399 $ 22,307,609 $ 37,047,008 $ 2,979,371 $ 40,026,379 I I Adjustments to full-accrual basis include $478,333 related to accrued interest on governmental long-term debt, $2,611,804 related to the current year unfunded health insurance contribution for retirees, $770,930 relating to the reclassification of accrued vacation from accrued liabilities to liabilities due within one year, and account payable and accrued salaries and vacation of$615,168 and $44,996, respectively, related to internal service funds. Internal service funds predominately serve the governmental funds_ Accordingly, the accounts payable and accrued liability balances for the internal service funds are included in the governmental activities on the accompanying government-wide financial statement. I. I I I 61 I I AUGUSTA, GEORGIA Notes to Financial Statements - Continued I Year Ended December 31,2007 I Note 3 - Detailed notes on all funds and account groups (Continued) I In 2007, the Housing and Neighborhood Development Section 108 loan was defeased by the creation of an irrevocable trust fund. Funds received from repayment of a loan to a local hotel were used to purchase V_So Government securities that were placed in a trust fund. The investments and fixed earnings from the investment are sufficient to fully service the defeased debt until the debt matures. For financial reporting purposes, the debt is considered defeased and, therefore, not included as a liability in the government-wide financial statements Funds. As of December 31, 2007, the amount of defeased debt outstanding but removed from the governmental debt is $2,500,000. I I Revenue bonds Augusta Port Authority: $1,200,000 1993 Augusta Port Authority Bonds - due in monthly principal and interest installments of$9,773 through April 2008, bearing interest at 5.45%. $ 46,053 I General obligation bonds $44,000,0002006 sales tax bonds - due in annual installments of$8, 125,000 to $9,505,000, plus interest at 4% through December 2011. $ 35,875,000 I Add: Bond issue premiums 593,229 $ 36,468,229 I Certificates of Participation GMA Leases Fund: $16,888,000 Certificates of Participation - principal due in a lump sum payment on June 1, 2028. Interest only payments are due annually at a rate of 4.75%, through June 1,2028_ Original issue amount Original issue discount $ 16,888,000 (718,644) I Total Revenue Bonds General Obligation Bonds Year ending December 3 1 Principal Interest Principal Interest 2008 $ 46,053 $ 659 $ 8,450,000 $ 1,266,000 2009 8,785,000 921,300 2010 9,135,000 562,900 2011 9,505,000 190,100 2012 2013-2017 2018 - 2022 2023 - 2027 2028 - 2032 $ 46,053 $ 659 $ 35,875,000 $ 2,940,300 $ 16,169,356 I I I I I I I I 63 I AUGUSTA, GEORGIA I Notes to Financial Statements - Continued I Year Ended December 31, 2007 I Note 3 - Detailed notes on all funds (Continued) I Augusta Regional Airport at Bush Field $8,990,000 2005A Airport Passenger Facility Charge and General Revenue Bonds - due in annual interest only payments of $462,985 through January 2030_ Principal due in annual installments beginning January 2031 ranging from $540,000 to $2,275,000 plus interest of 5.15% through January 2035. $ I $4,415,000 2005B Airport Passenger Facility Charge and General Revenue Bonds - due in annual interest only payments of$236,203 through January 2024. Principal due in annual installments beginning January 2025 ranging from $1,355,000 to $1,505,000 through January 2027 plus interest of 5.35% and final payment of $130,000 plus interest of 5.35% due January 2028. I I $6,200,000 2005C Airport Passenger Facility Charge and General Revenue Bonds - due in annual interest only payments of$337,900 through January 2027. Principal due in annual installments beginning January 2028 through January 2031 ranging from $1,455,000 10 $1,760,000 plus interest of 5.45% through January 2030 and final payment of$I,315,000 plus interest of 5.45% due January 203 1. I Total revenue bonds - Bush Field I Waste Management: $11,475,000 Solid Waste Management Authority of Augusta Revenue Bonds, Series 2004 - due in annual installments of $170,000 to $1,700,000, starting December 1,2005 through December 1, 2019, plus interest of3.0% to 4.0% payable semi-annually on June 1 and December 1, beginning December 1, 2004 Add: Bond issue premium Total revenue bonds - Waste Management I I Total revenue bonds I Notes payable Water and Sewer Fund: $5,143,272 State revolving loan - due in quarterly principal and interest installments of $94,668, bearing interest at 4%, through May 2016. I $6,553,217 State revolving loan - principal and interest due in quarterly installments of $119,392, bearing interest at 4%, through July 2019. Total I I I I I 65 8,990,000 4,415,000 6,200,000 $ 19,605,000 $ 7,000,000 160,757 7,160,757 $ 490,209,032 $ 2,717,221 4,384,940 $ 7,102,161 I AUGUSTA, GEORGIA I Notes to Financial Statements - Continued I Year Ended December 31, 2007 I Note 3 - Detailed notes on all funds (Continued) I be used for improvements to the Utilities' water and sewer system. No difference resulted in the current refunding between the reacquisition price and the net carrying amount of the old debt. The Government completed the refunding to obtain an economic gain (difference between present values of the old and new debt service payments) of approximately $792,000. I Series 2000 Water and Sewerage Revenue Bonds During 2000, the Government issued $97,080,000 in Series 2000 Water and Sewerage Revenue Bonds for the purpose of financing the costs of making additions, extensions and improvements to the Utilities' water and sewer system. I Series 1996 Water and Sewerage Revenue Bonds During 1996, the Government issued $66,600,000 in Series 1996 Water and Sewerage Revenue Bonds. A portion of the proceeds from the sale of these bonds was used to advance refund all of the former City of Augusta's Series 1972 and 1991 Water and Sewerage Revenue Bonds and the former Richmond County's Series 1987 and 1991 Water and Sewer Revenue Bonds. Proceeds of $19,400,000 plus an additional $4,900,000 of sinking fund monies from the defeased issues were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust fund with an escrow agent to provide for all future debt service payments on the above-mentioned bonds_ As a result, the bonds are considered to be defeased and the liabilities for those bonds have been removed from the Water and Sewer Fund. The advance refunding during 1996 resulted in a difference between the reacquisition price and the net carrying amount of the old debt of approximately $2,500,000. This difference, reported in the accompanying financial statements as a deduction from bonds payable, is being charged to operations through the year 2028 using the effective- interest method. The refunding increased the total debt service payments over the next 30 years by approximately $8,600,000 and produced an economic gain of approximately $260,000. I I I I Series 1997 Water and Sewerage Revenue Bonds In 1997, the Government issued $5,900,000 in Series 1997 Water and Sewerage Revenue Bonds. A portion of the proceeds from the sale of these bonds was used to advance refund all of the former Richmond County's Series 1986 Water and Sewerage Revenue Bond. Proceeds of approximately $5,600,000 plus an additional $900,000 of sinking fund monies from the defeased issues were used to purchase U_S_ government securities_ Those securities were deposited in an irrevocable trust fund with an escrow agent to provide for all future debt service payments on the above- mentioned bonds. As a result, the bonds are considered defeased and the liability for those bonds have been removed from the Water and Sewer Fund. The advance refunding during 1997 resulted in a difference between the reacquisition price and the net carrying amount of the old debt of approximately $540,000. This difference, reported in the accompanying financial statements as a deduction from bonds payable, is being charged to operations through the year 2021 using the effective-interest method. The refunding will increase total debt service payments over the next 24 years by approximately $2,100,000 and will produce an economic gain of approximately $110,000. I I I As of December 31, 2007, the amount of these defeased debts outstanding but removed from the Water and Sewer Fund is $1,400,000_ I Department of Health The Department of Health's long-term liabilities represent compensated absences and an obligation under capital lease. The debt for compensated absences was $400,679 and the debt for the obligation under capilallease was $434,485 at June 30, 2007. I I Augusta Canal Authority Notes payable $1,800,000 note payable to a bank due in five annual installments of $360,000, beginning June 2003. The note bears interest at a variable rate equal to 75% of the lender's Prime Rate, which was 6.19% at December 31, 2006, and is paid semi-annually. The note is collateralized by all equipment, furniture, fixtures, and other personal property owned by the Authority and is used or to be used in connection with the Visitors and Interpretive Center; property leased to Standard Textile Augusta, Inc. is not included in the collateraL The principal and interest balance of the note was paid during the year ended December 31,2007. I I 67 I AUGUST A, GEORGIA I Notes to Financial Statements - Continued I Year Ended December 31,2007 Note 3 - Detailed notes on all funds (Continued) I I The Government is lessor of terminal space, land and buildings at Augusta Regional Airport at Bush Field and Daniel Field under various operating leases. Revenues and related expenses for Augusta Regional Airport at Bush Field are recorded in the Augusta Regional Airport at Bush Field Fund while the revenue and related expenses for Daniel Field are recorded in the Daniel Field Airport Fund. Some of the leases provide for additional payments based on usage activity in addition to non-cancelable amounts of fixed rates. I During 2007, rental income totaled approximately $2,300,000 and $80,650 in the Augusta Regional Airport at Bush Field and Daniel Field Airport Funds, respectively_ The assets acquired through capital leases as of December 31, 2007 are as follows: I Governmental Business-type Activities Activities Vehic\es $ 3,010,252 $ 926,50 I Machinery and equipment 396,414 3,006,841 3,406,666 3,933,342 Less: accumulated depreciation (1,064,716) (989,647) Carrying value $ 2,341,950 $ 2,943,695 I I I I I I I I I I I I 69 I AUGUSTA, GEORGIA I Notes to Financial Statements - Continued I Year Ended December 31,2007 I Note 3 - Detailed notes on all funds (Continued) I Augusta Canal Authority The following is a summary of long-term debt transactions for Augusla Canal Authority of the year ended December 31,2007: Beginning Ending Current Balances Additions Reductions Balances Portion Governmental activities: Notes payable: Notes payable $ 360,000 $ $ 360,000 $ $ Total notes payable 360,000 360,000 Other liabilities: Compensated absences 19,408 14,901 8,153 26,156 26,156 Total other liabilities 19,408 14,901 8,153 26,156 26,156 Governmental activities long-term liabilities $ 379,408 $ 14,901 $ 368,153 $ 26,156 $ 26,156 I I I I Downtown Development Authority Long-term debt activity for the year ended December 3 1, 2007 was as follows: I General Long-term Debt Development Authority Bonds, Series 2003 I Debt outstanding at December 31, 2006 $ 2,375,000 I Principal payments (575,000) Debt outstanding at December 31, 2007 $ 1,800,000 I Current portion $ 585,000 I J. Due Fromffo Other Funds The composition of interfund balances as of December 31, 2007 are as follows: Due to Other Funds Due from other Water and Nonmajor Nonmajor Internal Funds Fuods Sewer Fund Bush Field Governmental Enterprise Service Total General Fund $ 572,386 $ 2,182,298 $ 541,174 $ 1,997 $ 128,078 $ 3,425,933 Nonmajor Governmental 179,433 179,433 Total interfund Balances $ 572,3 86 $ 2,182,298 $ 720,607 $ 1,997 $ 128,078 $ 3,605,366 I I I Amounts were due to other funds primarily for timing of payments from agency funds_ I I 71 I AUGUST A, GEORGIA I Notes to Financial Statements - Continued I Year Ended December 31,2007 I Note 4 - Other information (Continued) B. Contingent liabilities I Litigation The Government is party to various legal proceedings which normally occur in governmental operations. The Government follows the practice of recording liabilities resulting from claims and legal actions only when they become probable and measurable_ The Government has accrued a liability in the Risk Management Fund (an internal service fund) for all claims for which a loss is probable and measurable. I I Possible unasserted claims The Government participates in a number of Federal and state assisted grant programs, which are subject to program compliance audits under the Single Audit Act Amendments of 1996. An audit of these programs has been performed for the year ended December 31, 2007, in compliance with the Single Audit Act Amendments of 1996 and OMB Circular A-133. However, the audit is pending final acceptance by the various grantor agencies. The amount, if any, of expenditures, which may be disallowed by the granting agencies, is expected to be immaterial. I C. Contracts and commitments I Augusta-Richmond County Coliseum Authoritv The Government has committed to provide funds to service the Augusta-Richmond County Coliseum Authority's debt to the extent of the 50% Hotel-Motel Excise Tax and 30% of the Beer Tax collected. I D. Richmond County Public Facilities, Inc. I The Richmond County Public Facilities, Inc. is a nonprofit organization, tax exempt under Internal Revenue Code Section 50 I (c )(3 )The purpose of this nonprofit organization is to construct and maintain buildings and equipment to be leased by the Government, the Department of Family and Children Services, and the Richmond County Board of Education. The Richmond County Public Facilities, Inc_ is part of the reporting entity of Augusta, Georgia, due to the degree of control the Government has over the Board of Directors of Richmond County Public Facilities, Inc. I I Richmond County Public Facilities, Inc. issued Certificates of Participation to provide funds for the Government to refund the 1990 Certificates of Participation issue and for certain capital projects. The related assets are included in the financial statements of the Government in the governmental activities. The Certificates of Participation were retired during 2001. I In addition, the Richmond County Public Facilities, Inc. issued Certificates of Participation of $13,240,000 for the Richmond County Board of Education in a prior year- These Certificates of Participation are the sole responsibility of the Richmond County Board of Education and the related assets and liabilities have not been included in the financial statements of the Government. I Note 5 - Pension plans A. Plan descriptions, contribution information and funding policies I The Government has seven single-employer pension plans and one agent multiple-employer pension plan currently in existence_ These plans are defined benefit plans. The Government also has a single-employer, defined contribution plan. The following is a summary of funding policies, contribution methods, and benefit provisions for each plan. I I Single-employer pension plans 1945 Plan The 1945 Plan was available to all former Richmond County employees hired prior to October 1, 1975 that met the Plan's age and length of service requirements. Participants in the Plan who retired at or after age 60 are entitled to a monthly benefit equal to 2% of average earnings multiplied by years of service. Also, the benefit is not to exceed 60% of the average earnings_ The Plan provides death and disability benefits. These benefit provisions and all other requirements including amendments are established by Government ordinance. The Plan also provides for reduced I 73 I I I I I I I I I I I I I I I I I I I AUGUSTA, GEORGIA Notes to Financial Statements - Continued Year Ended December 31, 2007 Note 5 - Pension plans (Continued) General Retirement Plan Employees hired after March 1, 1949 and before March 1, 1987, whose age did not exceed thirty-five years at the time of their employment and are not participants of the 1977 Plan are covered under the General Retirement Plan_ Pension benefits vest after an employee is 45 years of age and has 15 years of full-time employment. An employee may retire at age 60 with 25 years of service and receive annual pension benefits equal to 2% of the employee's average salary earned during the last three years of employment, multiplied by the number of full-time years of employment. The Plan provides death and disability benefits. These benefit provisions and all other requirements including amendments are established by Government ordinance. All full-time employees hired before July 1, 1980, must contribute 8% of gross earnings to the Plan, with the Government contributing remaining amounts sufficient to provide future pensions. This is a closed retirement plan (new employees may not participate in the Plan). The General Retirement Plan does not issue a stand-alone financial statement report. Employer contributions are determined as part of the January 1, 2006 actuarial valuation using the frozen entry age cost method. The unfunded accrued liability is composed of pieces that are amortized over various periods to comply with Georgia law as a level percentage of payrolL When the actuarial value of assets exceeds 150% of the present value of accrued benefits, the Official Code of Georgia Annotated states that there is no minimum required contribution. The significant actuarial assumptions used to compute pension contribution requirements are the same as those used to determine the standard measure of the pension obligation_ The actuarial assumptions included (a) an 8% investment rate of return, (b) projected future salary adjustment of 5.5%, and (c) a post retirement benefit increase of 4%. An inflation component of 4% is included. The actuarial value of plan assets is determined with a smoothing method that uses the sum of the actuarial value of assets on the preceding valuation date, net contributions and disbursements during the preceding year, interest on the items calculated using the valuation investment return assumption, and 20% of the difference between the market value of assets on the current valuation date and the sum of the first three items. Agent multiple-employer pension plan Georgia Municipal Employees Benefit System (GMEBS) Employees hired after March 1, 1987 and before consolidation on December 31,1996, and who were not participants in any other employer-sponsored retirement plan are covered under the Georgia Municipal Employees Benefit System. The Plan provides pension benefits, deferred allowances, and death and disability benefits. These benefit provisions and all other requirements including amendments are established by Government ordinance. A participant may retire after reaching the age of 65 if the participant is not classified as public safety personnel; participating public safety personnel may retire at age 65 or age 55 with 25 years of total credited service, whichever is earlier. Early retirement may be taken at age 55 with 10 years of credited service. Benefits vest after 10 years of service. Employees who retire at or after age 55 with 10 or more years of service are entitled to pension payments for the remainder of their lives equal to 1 1J.% of their final five-year average salary times the number of years of which they were employed as a participant in the GMEBS. The final five-year average salary is the average salary of the employee during the final five years of full-time employment. Pension provisions include deferred allowances, whereby an employee may terminate his or her employment with the Government after accumulating 10 years of service but before reaching the age of 55. If the employee does not withdraw his or her accumulated -contributions, the employee is entitled to all pension benefits upon reaching the age of 55. Employees must contribute 3.5% of their gross earnings to the Plan_ In addition, the Government must provide annual contributions sufficient to satisfy the actuarially determined contribution requirements as amended by GMEBS_ The GMEBS Retirement Fund issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained by writing to Georgia Municipal Employees Benefit System, 201 Pryor Street, SW, Atlanta, Georgia 30303. The employer contributions are determined as part of a March 1, 2007 actuarial valuation using the projected unit credit actuarial cost method. The actuarial value of plan assets are computed with a smoothing method that uses a roll forward of prior year's actuarial value with contributions, disbursements, and expended retum of investments, plus 10% of investment gains (losses) during 10 prior years. Normal cost is funded on a current basis. The Plan is subject to the minimum funding standards of the Public Retirement Systems Standards Law. Since the Government's policy is to contribute the pension expense in each year, the funding strategy should provide sufficient resources to pay employee 75 I AUGUST A, GEORGIA I Notes to Financial Statements - Continued I Year Ended December 31, 2007 I Note 5 - Pension plans (Continued) Funding policy. The Government intends to continue to fund the OPEB on an actual pay-as-you-go expense. I Annual OPEB cost and net OPEB obligation. The Government's annual other post-relirement benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The following table shows the components of the Government's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the Government's net OPEB obligation: I I Components of net OPEB obligation Annual required contribulion Interest on net OPEB obligation Adjustment on annual required contribution Annual OPEB cost (expense) Contributions made or accrued Increase in net obligation $ 4,374,442 I 4,374,442 (1,762,638) $ 2,611,804 I Net OPEB obligation (beginning of year) Net OPEB obligation (end of year) $ $ 2,611,804 I The Government's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2007 is as follows: I fiscal Year Ended Annual OPEB Cost Percentage of OPEB Cost Net OPEB Obligation 12/31/2007 $ 4,374,442 40.3% $ 2,611,804 I Funded status and funding progress. As of January 1, 2007, the most recent actuarial valuation date, the plan was 0% funded. The actuarial accrued liability for benefits was $62,353,000 and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (VAAL) of$62,353,000. I Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding Ihe funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The Schedule of funding progress, presented as required supplementary information following the notes to the financial statements, present multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. I I I Actuarial metbods and assumptions. Projections of benefits for financial reporting purposes are based on substantive plan (the plan as understood by the employer and the plan members) and includes the type of benefits provided at the time of each valuation and the historical pattern of sharing the benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations_ I In the January 1, 2007 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions include a 5.5% investment rate of return (net of administrative expenses), based on the employer's own investments and used to discount liabilities at the valuation date, and an annual healthcare cost trend rate of 8% initially, reduced by decrements to an ultimate rate of 5% after three years. The VAAL is being amortized as a level percentage of payroll on an open basis_ The remaining amortization period at January 1,2007 was 30 years. I I 77 I AUGUST A, GEORGIA I Notes to Financial Statements - Continued I Year Ended December 31,2007 Note 5 - Pension plans (Continued) I Fiscal Annual Actual Percentage of Net Pension Year Pension County APC (Asset) Beginning Cost Contribution Contributed Obligation I 2005 1945 Plan o I/O 1/2005 $ 361,352 $ 361,352 100% $ (9) 1977 Plan o I/O 1/2005 1,036,647 1,087,175 105% (256,711) General Pension Plan o I/O 1/2005 24,752 24,752 100% I Policemen's Pension Plan o I/O 1/2005 72,141 72,141 100% Firemen's Pension Plan o I/O 1/2005 186,522 186,522 100% City Employees' Pension I Plan o I/O 1/2005 281,140 281,140 100% General Retirement Plan (City 1949) o I/O 1/2005 100% GMEBS 01/01/2005 213,565 213 ,565 100% I Fiscal Annual Actual Percentage of Net Pension Year Pension County APC (Asset) Beginning Cost Contribution Contributed Obligation I 2006 1945 Plan o I/O 1/2006 $ 331,330 $ 360,238 109% $ (28,917) 1977 Plan o I/O 1/2006 974,653 1,035,126 106% (307,239) I General Pension Plan o I/O 1/2006 13,219 13,219 100% Policemen's Pension Plan o I/O 1/2006 50,480 50,480 100% Firemen's Pension Plan 01/01/2006 179,202 179,202 100% City Employees' Pension I Plan o I/O 1/2006 297,368 297,368 100% General Retirement Plan (City 1949) 01/01/2006 138,517 138,517 100% GMEBS 01/01/2006 271,945 271,945 100% I Fiscal Annual Actual Percentage of Net Pension Year Pension County APC (Asset) Beginning Cost Contribution Contributed Obligation I 2007 1945 Plan 01/0 I/2007 $ 214,686 $ 220,377 103% $ (34,608) 1977 Plan 01/01/2007 714,806 934,962 131% (367,712) I General Pension Plan o I/O I/2007 13 ,219 13 ,219 100% Policemen's Pension Plan 01/0 I/2007 50,480 50,480 100% Firemen's Pension Plan 01/01/2007 179,202 179,202 100% City Employees' Pension I Plan o I/O 1/2007 297,368 297,368 100% General Retirement Plan (City 1949) o I/O 1/2007 100% GMEBS o I/O 1/2007 271,945 271,945 100% I Note 6 - Joint venture and related organization Joint venture I Under Georgia law, the Government, in conjunction with the sixteen counties and fifty-four cities in east Georgia known as the Central Savannah River Area (CSRA), is a member of the CSRA Regional Development Center (CSRA RDC). The CSRA RDC is a public organization that assists local governments in planning for common needs, cooperating for mutual I benefit, and coordinating for sound regional development. The operations are mainly financed by membership dues and financial assistance provided by the State of Georgia. Membership in the CSRA RDC is required by the Official Code of Georgia Annotated (O_CG_A.) ~58-8-34 with annual dues based on a per capita amount. During the year ended I 79 I I I I I I I I I I I I I I I I I I I AUGUSTA, GEORGIA Notes to Financial Statements - Continued Year Ended December 31, 2007 Note 9 - Conduit debt obligations (Continued) On December 14, 2000, the Government issued Special Facility Airport Revenue Bonds in the amount of $3,110,000 which qualifies as a conduit debt obligation. The bonds are payable solely from revenues pledged under a lease agreement. As of December 31, 2007, the amount outstanding on the Special FacilityAirport Revenue Bonds is $3,110,000. A - Debt service requirements to maturity for bonds payable The following requirements to amortize debt outstanding as of December J I, 2007, including interest are as follows: Revenue Bonds Principal Interest 2008 $ $ 152,390 2009 152,390 2010 3,1l0,000 152,390 $ 3,110,000 $ 457,170 Note 10 - Prior period adjustments - Department of Health For the component unit Department of Health, prior period adjustments were made to two beginning fund balances to correct variances in prior year accruals as required by Georgia DHR. The error resulted in an understatement of net assets of$869. During the year ended June 30, 2006, the error was corrected. Note ll- Long-term obligation for Water and Sewer Swap agreement Utilities entered into an interest rate swap transaction in July 2006, which hedges an aggregate principal amount of $160 million, Series 2004 Water and Sewerage Revenue Bonds. The notional amount is $160 million, maturing over 33 years from the effective date of the interest rate swap agreement of June 1,2006. The interest rate swap agreement requires Augusta, Georgia to pay to Deutsche Bank AG, the Bond Market Association municipal swap index (BMA) (tax exempt variable rate) and receive in return from Deutsche Bank 75.02% of USDA LIB OR rate. During June 2007, Utilities elected to terminate the swap agreement, which resulted in a termination payment of$L2 million received by the Utilities during 2007 and netted against loss from early termination of swap agreement. Swaption agreement The Utilities entered into a swaption contract that provided the Utilities a nonrefundable premium of $2,121,000 payable in an up-front payment of $121,000 and annual option premium payments of $500,000 payable on October I, 2004,2005,2006 and 2007. This nonrefundable premium has been deferred and is being amortized over the life of the agreement. As a synthetic refunding of its Series 1996A and 1997 bonds, this payment represents the risk-adjusted, present-value savings of a refunding as of October 1,2007, without issuing refunding bonds at July 2004. The swaption gave the counterparty the option to make the Utilities enter into a floating-to-ftxed interest rate swap. The swaption was entered into in July 2004. The $2,121,000 payment was based on a notional amount of $62,475,000. The counterpartyexercised the agreement on October 1, 2006 - the Utilities' Series 1996A and 1997 bonds' first call date. The interest rate swap commenced on October 1, 2006, and effectively ftxes the interest rate at 4_54% to the counterparty. In return the Utilities receive variable interest from the counterparty at a rate of 67% of the I-month LIBOR. During December 2007, the Utilities elected to terminate the swap agreement, which resulted in a termination payment of$6.7 million paid by the Utilities during 2007 and recorded as a loss from early termination of swap agreement. Additionally, the remaining nonrefundable premium of $2.1 million was netted against the loss from early termination of swap agreement. 81 I I I I I I I I I I I I I I I I I I I PENSION PLAN REQUIRED SUPPLEMENT ARY INFORMATION 83 I AUGUSTA, GEORGIA I Defined Benefit Pension Trusts - Required Supplementary Information - Continued (Unaudited) I December 31, 2007 A. Schedules of funding progress (Continued) I Actuarial (Funded) (FAAL) Accrued Unfunded UAAL as Actuarial Actuarial Liability AAL A%of Valuation Value of AAL (F AAL) Funded Covered Covered I Date Assets Entry Age UAAL Ratio Payroll Payroll Firemen's Pension Plan 12/3 1/95 $ - $ 1,296,843 $ 1,296,843 - % $ - % 1213 1/96 1,202,831 1,202,831 I 12/31/97 1,507,50 I 1,507,501 12/31/98 1,479,472 1,479,472 12/3 1/99 1,276,044 1,276,044 12/31/00 1,258,550 1,258,550 I 12/31/0 I 1,345,133 1,345,133 12/31/02 1,204,513 1,204,513 12/3 1/03 1,110,698 l,llO,698 12/31/04 1,009,371 1,009,371 I 12/31/05 1,102,891 1,102,891 12/3 1/06 975,046 975,046 12/31/07 788,489 788,489 City Employees' Pension Plan I 12/31/95 $ - $ 2,598,066 $ 2,598,066 - % $ - % 12/31/96 2,584,786 2,584,786 12/31/97 2,418,723 2,418,723 12/31/98 2,266,704 2,266,704 I 12/3 1/99 2,060,50 I 2,060,50 I 12/3 1/00 1,911,904 1,911 ,904 12/31/0 I 1,914,347 1,914,347 12/31/02 2,063,450 2,063,450 I 12/31/03 1,931,942 1,931,942 12/3 1/04 1,789,910 1,789,910 12131/05 1,999,996 1,999,996 12/3 1/06 1,710,832 1,710,832 12/31/07 1,412,498 1,412,498 I General Retirement Plan (City 1949) 01/0 1/94 $ 49,875,350 $ 36,456,408 $ (13,418,942) 137 % $ 7,243,580 (185) % 01/01/95 47,710,074 39,699,516 (8,0 I 0,558) 120 7,053,091 (114) 01/01/96 56,004,033 41,587,715 (14,416,318) 135 6,345,073 (227) I 01/01/97 59,413,476 42,712,240 (16,701,236) 139 5,165,172 (323) 01/0 1/99 71,138,815 51,388,074 (19,750,741) 138 5,794,554 (341) 01/01/00 70,974,830 54,306,953 (16,667,877) 131 5,112,578 (326) 01/01/0 I 70,721,724 54,824,779 (15,896,945) 129 5,237,225 (304) I 01/0 1/02 66,542,266 52,471,765 (14,070,501) 127 5,473,137 (257) 01/01/03 59,091,990 53,688,662 (5,403,328) 110 5,774,707 (94) 01/01/04 65,345,259 58,984,857 (6,360,402) III 5,774,708 (110) 01/01/05 66,064,583 65,169,939 (894,644) 101 5,714,554 (16) I 01/01/06 67,859,472 68,750,121 890,649 99 5,751,403 15 01/01/07 72,348,604 71,720,302 (628,302) 101 6,082,087 (10) GMEBS 03/01/95 $ 3,351,907 $ 3,315,936 $ (35,971) 101 % $ 10,657,439 (.3) % I 03/01/96 3,731, ll8 3,568,982 (162,136) 105 9,369,684 (2.0) 03/01/97 4,144,704 5,312,277 1,167,573 78 8,082,062 14.0 03/01/98 4,609,848 5,756,304 1,146,456 80 8,913,934 13.0 03/01/00 5,559,655 6,422,50 I 862,846 86 7,719,739 IU I 03/01/02 6,308,424 6,887,424 579,000 91 6,913,560 8.4 03/01/03 6,477,885 7,146,314 668,429 90 6,988,509 9-6 03/01/04 6,913,410 7,553,911 640,501 91 6,637,655 9.6 03/01/05 7,372,466 8,036,105 663,639 92 6,641,379 10.0 I 03/01/06 8,023,690 9,161,600 1,137,910 88 6,985,599 16.3 03/01/07 8,566,194 9,877,759 1,311,565 87 6,858,000 19.1 I 85 I I AUGUST A, GEORGIA I Defined Benefit Pension Trusts - Required Supplementary Information - Continued (U naudited) December 31, 2007 I I B. Schedules of employer contributions (Continued) Fiscal Annual Required Percentage Year Contribution Contributed Citv Emplovees' Pension Plan 1997 $ 409,881 100 % 1998 331,619 100 1999 348,792 100 2000 302,169 100 2001 263,080 100 2002 299,512 100 2003 285,177 100 2004 249,565 100 2005 281,140 100 2006 297,368 100 2007 297,368 100 General Retiremenl Plan (Citv 1949) 1997 $ % 1998 1999 2000 2001 2002 2003 2004 2005 2006 138,517 100 2007 GMEBS 1996 $ 187,548 100 % 1997 197,167 100 1998 214,536 100 1999 191,385 100 2000 204,576 100 2001 192,622 100 2002 168,316 100 2003 181,834 100 2004 200,432 100 2005 213,565 100 2006 271,945 100 2007 271,945 100 C. Notes to required supplementary information I I I I I I I I I I 1945 Plan 1977 Plan I Valuation date Actuarial cost method Amortization method Amortization period Actuarial asset valuation method Actuarial assumptions: Investment rate of return Projected salary increases Post retirement benefit increases lnflation 111107 Attained age aggregate Level percentage of payroll Average future working lifetime Market value plus receivables 1/1/07 Attained age aggregate Level of percentage of payroll Average future working lifetime Market value plus receivables I 8_0% 5.0% 5.0% 5.0% 8.0% 5.5% 5.0% 5.0% I I 87 I I I I I I I I I I I I I I I I I I I COMBINING AND INDIVIDUAL FUND STATEMENTS 89 I I I I I I I I I I I I I I I I I I I NONMAJOR GOVERNMENTAL FUNDS 91 I I I I Permanent Total Nonmajor I Fund Governmental Perpetual Care - II Funds I $ 201,438 $ 23,888,154 847,638 I 1,837,635 121,006 3,701,447 I 338,625 338,625 179,433 $ 540,063 $ 30,913,938 I $ $ 1,267,872 I 720,607 198,007 17,508 4,596,080 I 6,800,074 I 1,420,820 1,596,460 540,063 21,096,584 I 540,063 24,113,864 $ 540,063 $ 30,913,938 I I I I I I 93 I I I I HoteVMotel Tax and Housing and Urban Federal State Special Promotion! Neighborhood Development Drug Drug Assessmen t Tourism Development Action Grant Fund Fund I $ 355,596 $ 318,558 $ 373,446 $ 17,932 $ 632,038 $ 1,108,825 I 202,004 4,940 143,350 1,900 500 3,544,387 157,060 179,433 $ 557,600 $ 323,498 $ 4,240,616 $ 176,892 $ 632,038 $ 1,109,325 I $ 235,482 $ 323,497 $ 196,389 $ $ 50,028 $ 27,489 I 338,862 9,417 38,864 147,890 3,544,386 I 392,789 323,497 4,118,501 50,028 27,489 I 83 1,444 61,915 150 164,728 120,671 176,892 520,095 1,081,686 164,811 122,115 176,892 582,010 1,081,836 I $ 557,600 $ 323,498 $ 4,240,616 $ 176,892 $ 632,038 $ 1,109,325 I I I I I I I I 97 I I I I Total Nonmajor Wireless Perpetual Landbank Downtown Canine NPDES Special Revenue I Phase Care - I Authority Development Forefeitures Permit Fees Funds $ $ $ $ 75 $ $ 11,167,266 I 479,443 13,805,066 32,725 3,288,900 36,106 50,889 59,634 815 4,535 679,887 586,659 5,854,088 I 433 1,274,329 5,141,165 415,911 622,765 50,889 59,634 479,518 1,248 37,260 41,626,612 I 1,692 632,988 2,894,302 I 392,497 282,315 4,617,755 18,398 3,977,851 56,361 4,494,502 I 132,142 154,790 6,781,376 20,903 2,102,876 27,050 4,199,007 284,007 77,264 132,142 814,828 18,398 29,460,166 I 338,758 (26,375) (72,508) (335,310) 1,248 18,862 12,166,446 I 1,286,241 (13,443,944) (399,500) 347,080 1,473,438 (399,500) 347,080 (10,684,265) I (60,742) (26,375) (72,508) 11,770 1,248 18,862 1,482,181 I 822,338 428,955 130,992 (134,432) 17,098 72,492 14,594,280 $ 761,596 $ $ $ ( 122,662) $ 16,076,461 402,580 58,484 $ 18,346 $ 91,354 I I I I I 103 I I I I I I I I I I I I I I I I I I I Augusta, Georgia Emergency Telephone System Fund Schedule of Revenues, Expenditures and Changes in Fund Balance (Deficit) - Budget and Actual Nonmajor Special Revenue Funds Year Ended December 31, 2007 With comparative amounts for December 31,2006 Variance with Final Budget - Amended Positive 2006 Budget Actual (Negative) Actual Revenues Use of money and property $ 1,000 $ 28,419 $ 27,419 $ 38,532 Charges for current services 2,877,270 3,039,669 162,399 2,959,077 Total revenues 2,878,270 3,068,088 189,818 3,000,309 Expenditures Current: General government 254,120 388 253,732 243,119 Public safety 3,567,309 3,250,805 316,504 3,005,922 Capital outlay 194,341 150,822 43,519 29,471 Total expenditures 4,015,770 3,402,015 613,755 3,278,512 Excess (deficiency) of revenues over (under) expenditures (1,137,500) (333,927) 803,573 (278,203) Other financing sources (uses) Transfers in 663,000 246,241 (416,759) Transfers (out) (25,000) 25,000 Transfers in (out) between nonrnajor funds 499,500 399,500 (100,000) 489,050 Total other financing sources (uses) 1,137,500 645,741 (491,759) 489,050 Net change in fund balances $ 311,814 $ 311,814 210,847 Fund balance (deficit) - beginning 811,769 600,922 Fund balance (deficit) - ending $ 1,123,583 $ 811,769 105 I I I Augusta, Georgia Law Enforcement Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Nonmajor Special Revenue Funds Year Ended December 31, 2007 With comparative amounts for December 31,2006 I I I Revenues Use of money and property Charges for current services Total revenues Variance with Final Budget- Amended Positive 2006 Budget Actual (Negative) Actual $ $ 34,387 $ 34,387 $ 19,138 580,934 580,934 73,933 615,321 615,321 93,071 I I I Expenditures Current: Public safety Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures 300,000 299,961 39 17,469 125,000 122,0 I 9 2,981 24,859 425,000 421,980 3,020 42,328 (425,000) 193,341 618,341 50,743 425,000 (425,000) 425,000 (425,000) $ 193,34 I $ 193,341 50,743 434,522 383,779 $ 627,863 $ 434,522 I Other financing sources (uses) Transfers in Total other financing sources (uses) I Net change in fund balances Fund balance - beginning I Fund balance - ending I I I I I I I 107 I I I I I I I I I I I I I I I I I I I Augusta, Georgia Special Assessment Fund Schedule of Revenues, Expenditures and Changes in Fund Balance (Deficit) - Budget and Actual Nonmajor Special Revenue Funds Year Ended December 31,2007 With comparative amounts for December 31, 2006 Revenues Charges for current services Total revenues Variance with Final Budget - Amended Positive 2006 Budget Actual (Negative) Actual $ 1,395,000 $ 1,308,561 $ (86,439) $ 1,319,604 1,395,000 1,308,561 (86,439) 1,319,604 Expenditures Current: General government Public works Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Fund balance - beginning 8,710 44,143 (35,433) 10,610 3,427,290 3,253,085 174,205 3,497,643 100,000 97,299 2,701 64,865 3,536,000 3,394,527 141,473 3,573,118 (2,141,000) (2,085,966) 55,034 (2,253,514) 500,000 500,000 325,104 1,641,000 1,641,000 1,641,492 2,141,000 2,141,000 1,966,596 $ 55,034 $ 55,034 (286,918 ) 109,777 396,695 $ 164,811 $ 109,777 Other financing sources (uses) Transfers in Transfers in (out) between nonmajor funds Total other financing sources (uses) Net change in fund balances Fund balance (deficit) - ending 109 I I I I I I I I I I I I I I I I I I I Augusta, Georgia Housing and Neighborhood Development Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Nonmajor Special Revenue Funds Year Ended December 31,2007 With comparative amounts for December 31,2006 Variance with Final Budget - Amended Positive 2006 Budget Actual (Negative) Actual Revenues Use of money and property $ $ $ $ 80 Intergovemmental 4,756,746 4,594,781 (161,965) 5,847,412 Other 74,484 398,409 323,925 3,058,063 Total revenues 4,831,230 4,993,190 161,960 8,905,555 Expenditures Current: General government 160,210 373,414 (213,204) 151,482 Housing and development 4,875,500 5,554,087 (678,587) 6,604,310 Debt service 2,500,000 (2,500,000) 126,474 Total expenditures 5,035,710 8,427,501 (3,391,791) 6,882,266 Excess (deficiency) of revenues over (under) expenditures (204,480) (3,434,311) (3,229,831) 2,023,289 Other financing sources (uses) Transfers (out) (15,700) Transfers in (out) between nonmajor funds 204,480 1,029,433 824,953 245,004 Total other financing sources (uses) 204,480 1,029,433 824,953 229,304 Net change in fund balances $ (2,404,878) $ (2,404,878) 2,252,593 Fund balance - beginning 2,526,993 274,400 Fund balance - ending $ 122,115 $ 2,526,993 11( I I I Augusta, Georgia Federal Drug Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Nonmajor Special Revenue Funds Year Ended December 31,2007 With comparative amounts for December 31, 2006 I I I Variance with Final Budget - Amended Positive 2006 Budget Actual (Negative) Actual $ $ 36,191 $ 36,191 $ 127,451 727,980 793,106 65,126 454,366 727,980 829,297 10 1,317 581,817 I Revenues Use of money and property Fines and forfeitures Total revenues I Expenditures Current: Public safety Capital outlay Total expenditures 687,040 703,349 (16,309) 40,940 60,673 (19,733) 311,672 727,980 764,022 (36,042) 311,672 65,275 65,275 270,145 $ 65,275 $ 65,275 270,145 516,735 246,590 $ 582,010 $ 516,735 I Excess (deficiency) of revenues over (under) expenditures I Net change in fund balances I Fund balance - beginning Fund balance - ending I I I I I I I I 113 I I I Augusta, Georgia 5% Victim's Crime Assistance Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Nonmajor Special Revenue Funds Year Ended December 31,2007 With comparative amounts for December 31,2006 I I I Revenues Use of money and property Fines and forfeitures Other Total revenues Variance with Final Budget - Amended rositive 2006 Budget Actual (Negative) Actual $ 2,950 $ 10,281 $ 7,331 $ 8,061 333,000 331,224 (1,776) 256,818 381 381 335,950 341,886 5,936 264,879 I I I Expenditures Current: General government Judicial Total expenditures Excess (deficiency) of revenues over (under) expenditures 10,850 7,356 3,494 10,848 325,100 274,010 51,090 281,698 335,950 281,366 54,584 292,546 60,520 60,520 (27,667) $ 60,520 $ 60,520 (27,667) 205,689 233,356 $ 266,209 $ 205,689 I Net change in fund balances I Fund balance - beginning Fund balance - ending I I I I I I I I 115 I I I I Augusta, Georgia Building Inspection Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual NODmajor Special Revenue Funds Year Ended December 31, 2007 With comparative amounts for December 31,2006 I I Variance with Final Budget - Amended Positive 2006 Budget Actual (Negative) Actual $ 1,083,220 $ 950,913 $ (132,307) $ 1,105,713 50,961 50,961 41,492 4,138 1,083,220 1,001,874 (81,346) 1,151,343 I Revenues Licenses and permits Use of money and property Charges for current services Total revenues I I Expenditures Current: General government Housing and development Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures 30,740 24,768 5,972 30,744 885,480 853,977 31,503 801,473 167,000 21,029 145,971 1,083,220 899,774 183,446 832,217 lO2, lOO lO2, I 00 319,\26 (15,700) (15,700) $ 102,100 $ 102,100 303,426 932,664 629,238 $ 1,034,764 $ 932,664 I I Other financing sources (uses) Transfers (out) Total other financing so urces (uses) I Net change in fund balances Fund balance - beginning I Fund balance - ending I I I I I I 117 I I I I I I I I I I I I I I I I I I I Augusta, Georgia Wireless Phase Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Nonmajor Special Revenue Funds Year Ended December 31, 2007 With comparative amounts for December 31, 2006 Variance with Final Budget - Amended Positive 2006 Budget Actual (Negative) Actual Revenues Licenses and permits $ $ $ $ 891 Use of money and property 5,000 36,106 31,106 38,767 Charges for current services 446,280 586,659 140,379 678,174 Total revenues 451,280 622,765 171,485 717,832 Expenditures Current: General govcmment 1,280 1,692 (412) 1,283 Public safety 450,000 282,3 15 167,685 321,533 Total expenditures 451,280 284,007 167,273 322,816 Excess (deficiency) of revenues over (under) expenditures 338,758 338,758 395,016 Other financing sources (uses) Transfers in 399,500 (399,500) Transfers in (out) between nonmajor funds (399,500) (399,500) (489,050) Total other financing sources (uses) (399,500) (399,500) (489,050) Net change in fund balances $ (60,742) $ (60,742) (94,034 ) Fund balance - beginning 822,338 916,372 Fund balance - ending $ 761,596 $ 822,338 119 I I I I Augusta, Georgia Landbank Authority Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Nonmajor Special Revenue Funds Year Ended December 31, 2007 With comparative amounts for December 31,2006 I I Variance with Final Budget - Amended Positive 2006 Budget Actual (Negative) Actual $ $ 59,634 $ 59,634 $ 6,301 59,634 59,634 6,301 I Revenues Use of money and property Total revenues I Expenditures Current: Culture and recreation Housing and development Total expenditures I 7,130 7,130 6,001 132,142 (132,142) 777 7,130 132,142 (125,012) 6,778 (7,130) (72,508) (65,378) (477) $ (72,508) $ (72,508) (477) 130,992 131,469 $ 58,484 $ 130,992 Excess (deficiency) of revenues over (UDder) expenditures I Net change in fund balances I Fund balance - beginning Fund balance - ending I I I I I I I I 121 I I I Augusta, Georgia Canine Forfeitures Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Nonmajor Special Revenue Funds Year Ended December 31,2007 With comparative amounts for December 31,2006 I I I Variance with Final Budget - Amended Positive 2006 Budget Actual (Negative) Actual $ $ 815 $ 815 $ 725 \0,000 433 (9,567) \,022 10,000 1,248 (8,752) 1,747 I Revenues Use of money and property Fines and forfeitures Total revenues I Expenditures Current: Public safety Total expenditures 10,000 10,000 10,000 10,000 1,248 1,248 \,747 $ 1,248 $ 1,248 1,747 17,098 15,35\ $ 18,346 $ 17,098 I Excess (deficiency) of revenues over (under) expenditures I Net change in fund balances I Fund balance - beginning Fund balance - ending I I I I I I I I 123 I I I Augusta, Georgia Combining Balance Sheet Nonmajor Debt Service Funds December 31,2007 I I Assets Cash and temporary investments Total assets I I Liabilities and fund balances Fund balances: Unreserved - undesignated Total fund balances I Total liabilities and fund balances I I I I I I I I I I I Debt Service $ $ Urban Debt Service GO Sales Tax 2006 Bonds Debt Service $ $ $ 10,194 $ 10,194 10,194 10,194 $ 10,194 $ $ $ 125 Total Nonmajor Debt Service Funds $ 10,194 $ 10,194 10,194 10,194 10,194 I I I I I I I I I I I I I I I I I I I Augusta, Georgia Debt Service Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Nonmajor Debt Service Funds Year Ended December 31,2007 With comparative amounts for December 31, 2006 Variance with Final Budget - Positive 2006 Budget Actual (Negative) Actual Revenues Taxes - property $ $ $ $ 2,902 Use of money and property 17,774 Total revenues 20,676 Excess (deficiency) of revenues over (under) expenditures 20,676 Other financing sources (uses) Transfers (out) (2,913) (2,913) (765,000) Total other financing sources (uses) (2,913) (2,913) (765,000) Net change in fund balances $ (2,913) $ (2,913 ) (744,324) Fund balance - beginning 2,913 747,237 Fund balance - ending $ $ 2,913 127 I I I Augusta, Georgia 2006 GO Sales Tax Bonds Debt Service Fund Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Nonmajor Debt Service Funds Year Ended December 31,2007 With comparative amounts for December 31,2006 I I I Variance with Final Budget - Positive 2006 Budget Actual (Negative) Actual $ $ 10,743 $ 10,743 $ 10,743 10,743 9,727,390 9,727,939 (549) 9,727,390 9,727,939 (549) (9,727,390) (9,717,196) 10,194 9,727,390 9,727,390 9,727,390 9,727,390 $ 10,194 $ 10,194 I Revenues Use of money and property Total revenues I Expenditures Debt service Total expenditures I Excess (deficiency) of revenues over (under) expenditures I Other financing sources (uses) Transfers in Total other financing sources (uses) I Net change in fund balances Fund balance - beginning I Fund balance - ending $ 10,194 $ I I I I I I I 129 I I I Augusta, Georgia Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Capital Project Funds Year Ended December 31,2007 I I Revenues Use of money and property Intergovernmental Total revenues Total Nonmajor Community Special Sales Special Sales Capital Project Development Tax Phase I Tax Phase [I Funds $ 2,120 $ 44,029 $ 440,949 $ 487,098 3,486 3,486 2,120 44,029 444,435 490,584 I I Expenditures Current: General government Public safety Public works Capital outlay Total expenditures 5,713 5,713 8,844 9,132 77,568 682,219 777,763 14,557 9,132 77,568 682,219 783,476 I I Excess (deficiency) of revenues over (under) expenditures 2,120 38,316 (333,328) (292,892) I Other financing sources (uses) Transfers (out) Transfers in (out) between nonrnajor funds Total other financing sources (uses) I Fund balance - ending $ (1,477,345) (2,000,000) (1,200,000) (2,677,345) (2,000,000) 2,120 (2,639,029) (2,333,328) 135,577 2,639,029 9,682,777 137,697 $ $ 7,349,449 $ (3,477,345) ( 1,200,000) (4,677,345) I Net change in fund balances (4,970,237) Fund balance - beginning 12,457,383 7,487,146 I I I I I I I 131 I I I I I I I I I I I I I I I I I I I NONMAJOR ENTERPRISE FUNDS 133 I I I. I Daniel Total Nonmajor Field Garbage Enterprise I Airport Collection Funds $ 581,726 $ 596,976 $ 29,160,662 I 1,540,401 3,726,494 8,024 8,024 I 210,832 589,750 2,13 7 ,377 33,106,012 I 4,862,524 299,153 1,216,727 1,879,909 18,390,266 I 1,216,727 1,879,909 23,551,943 1,806,477 4,017,286 56,657,955 I 7,495 869,895 L,929,933 I 1,997 L,997 12,667 9,488 310,393 13,500 250,099 479,977 726,662 I 1,585,000 35,659 1,359,360 4,804,084 I 12,771,074 5,575,757 1,439,930 1,870,274 1,439,930 20,217,105 I 35,659 2,799,290 25,021, L 89 I 1,216,727 (39,998) 13,492,933 2,164 554,091 1,257,994 18,14L,669 $ 1,770,818 $ 1,217,996 $ 31,636,766 I I I I 135 I I I I I Daniel Field Garbage Airport Collection Total I $ 80,650 $ 13,348,361 $ 25,657,069 80,650 13,348,361 25,657,069 I 29,584 193,371 4,291,891 13,587 13,423,297 14,159,852 I 13,815 9,325 1,232,291 23,596 1,004,770 14,072 33,456 1,103,145 87,996 I 92,555 479,977 2,301,430 1,246,810 187,209 14,139,426 25,428,185 I (106,559) (791,065) 228,884 I 30,854 1,503,584 40,800 29,770 231,776 20,000 98,603 I (157,035) (430,382) 80,624 (157,035) 1,444,381 I (25,935) (948,100) 1,673,265 2,925,208 6,728,431 I (25,935) 1,977,108 8,401,696 1,796,753 (759,112) 23,235,070 I $ 1,770,818 $ 1,217,996 $ 31,636,766 I I I I 137 I I I Total Nonmajor I Daniel Field Garbage Enterprise Airport Collection Funds I $ (106,559) $ (791,065) 228,884 I 92,555 479,977 2,301,430 1,246,810 I 2,609 (475,537) 573 I 7,058 293,334 1,032,363 342 (719) 12,760 13,500 4,849 (28,400) (144,241 ) I (1,709,991) 85,055 775,201 2,269,016 I $ (21,504) $ (15,864) $ 2,497,900 I $ 581,726 $ 596,976 $ 29,160,662 4,862,524 $ 581,726 $ 596,976 $ 34,023,186 I I I I I I I I 141 I I I I I I I I I I I I I I I I I I I INTERNAL SERVICE FUNDS 143 I I I I I I I I I I I I I I I I I I I Employee Health Benefits $ (81,584) (35,651 ) (1,497,405) 1,533,056 $ (81,584) $ $ 46,540 405,937 398,465 4,505 (136,105) (1,570,218) (3,710) (2,189,272) (656,216) 4,505 (1,919,440) (1,785,139) 4,551 $ 3,278 $ (1,746,912) $ (1,233,147) Unemployment $ 4,551 $ $ $ Long-term Disability Insurance Total Internal Service Funds GMA Leases $ (1,227) $ $ 551,992 172,528 $ 56,974 $ $ 1,392,326 12,015,641 12,015,641 12,207,913 $ 13,600,239 $ 56,974 $ 151 I I I I I I I I I I I I I I I I I I I FIDUCIARY FUNDS 153 I I I I I I I I I I I I I I I I I I I PENSION TRUST FUNDS 155 I I I I I I I I I I I I I I I I I I I Augusta, Georgia Combining Statement of Changes in Fiduciary Net Assets Pension Trust Funds Year Ended December 31, 2007 1945 1977 General Plan Plan Retirement Total Additions Contributions - employer $ 331,330 $ 641,507 $ 1,445,837 $ 2,418,674 Contributions - plan member 11,578 1,102,231 378,750 1,492,559 Net investment income 805,345 2,035,461 6,295,769 9,136,575 Total additions 1,148,253 3,779,199 8,120,356 13,047,808 Deductions Administration 43,311 105,505 356,089 504,905 Benefit payments 900,245 791,129 5,314,228 7,005,602 Refunds 234,956 234,956 Total deductions 943,556 1,131,590 5,670,3 17 7,745,463 Net increase (decrease) in plan net assets 204,697 2,647,609 2,450,039 5,302,345 Total net assets - beginning 10,327,734 23,387,426 72,018,119 105,733,279 Total net assets - ending $ 10,532,431 $ 26,035,035 $ 74,468,158 $ 111,035,624 157 I I I I I I I I I I I I I I I I I I I AGENCY FUNDS 159 I I I Augusta, Georgia Combining Statcment of Changcs in Fiduciary Assets and Liabilitics - Continucd Agcncy Funds December 31,2007 I I Clerk of Court January 1,2007 Additions Deductions December 31,2007 $ 4,359,707 $ 9,531,255 $ 10,096,111 $ 3,794,851 $ 4,359,707 $ 9,531,255 $ 10,096, III $ 3,794,851 $ 4,359,707 $ 9,531,255 $ 10,096,111 $ 3,794,851 $ 4,359,707 $ 9,531,255 $ 10,096, III $ 3,794,851 I Assets Cash and cash equivalents Total assets Liabilities I Due to others Total liabilities I TOTAL ALL AGENCY FUNDS: Assets I Liabilities $ 8,856,440 $ 99,996,622 $ 100,276,266 $ 8,576,796 23,027,263 153,491,014 155,069,493 21,448,784 $ 31,883,703 $ 253,487,636 $ 255,345,759 $ 30,025,580 $ 8,856,440 $ 99,996,622 $ 100,276,266 $ 8,576,796 23,027,263 153,491,014 155,069,493 21,448,784 $ 31,883,703 $ 253,487,636 $ 255,345,759 $ 30,025,580 I Cash and cash equivalents Receivables (net of allowance for doubtful accounts) Taxes Total assets I Due to others Uncollected taxes Total liabilities I I I I I I I I 161 I I I I I I I I I I I I I I I I I I I COMPLIANCE SECTION C-I I I _...~ . . . to . ~ I I CERTIFIED l'l"!lLlC .\CCOU\TA;-': IS & CONSCLTANT$ I REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS I I. Augusta-Richmond County Commission Augusta, Georgia I I We have audited the accompanying financial statements of the governmental activities, the business-type activities, Augusta Canal Authority, each major fund and the aggregate remaining fund information of Augusta, Georgia as of December 31, 2007 and for the year then ended, which collectively comprise Augusta, Georgia's basic financial statements, as listed in the table of contents. These financial statements are the responsibility of the Augusta, Georgia management. Our responsibility is to express opinions on these basic financial statements based on our audit. We did not audit the financial statements of the Augusta-Richmond County Department of Health or Downtown Development Authority. Those financial statements were audited by other auditors whose reports thereon has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Department of Health and Downtown Development Authority, is based solely on the reports of the other auditors. I I Internal Control over Financial Reporting In planning and performing our audit, we considered Augusta, Georgia's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Augusta, Georgia's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of Augusta, Georgia's internal . control over financial reporting. I I Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and would not necessarily identity all deficiencies in internal control over financial reporting that might be significant deficiencies or material weaknesses. However, as discussed below, we identified certain deficiencies in internal control over financial reporting that we consider to be significant deficiencies. I I A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity's financial statements that is more then inconsequential will not be prevented or detected by the entity's internal control. We consider the deficiencies described in the accompanying schedule of findings and questioned costs to be significant deficiencies in internal control over financial reporting, as described in 07-FS-OI and 07-FS-02. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the entity's internal control. I I I I I C-3 I I AUGUSTA, GEORGIA I Schedule of Expenditures of Federal Awards I Year Ended December 31, 2007 I Federal Grantor! Pass-through Grantor! Program Title I u.s. Department of Housinl!: and Urban Development <Direct Programs> Community Development Block Grants Emergency Shelter Grants Program Home Investment Partnerships Program Supporting Housing Program Housing Opportunities for Persons with AIDS I I Total U.S. Department of Housing and Urban Development I I U.S. National Park Service. Department of Interior <Direct Programs> Preserve America - Way Finding I U.s. Department of Justice <Direct Programs> Local Law Enforcement Block Grant Program I Juvenile Accountability Incentive Block Grants I Edward Byrne Memorial Justice Assistance Grant Program I I Edward Byrne Memorial Formula Grant Program I <Pass-through from the Children and Youth Coordinating Council> Just the Two of Us I <Pass-through from the Criminal Justice Coordinating Council> Serious Violent Offender Reentry Progam I Total U.S. Department of Justice I Federal CFDA Number 14.218 14.231 14.239 14.235 14.241 l5.0FA 16.592 16.523 16.738 16.575 16.575 16.579 16_0FA 16.0FA C-5 Agency or Pass-through Number B-xx-MC-13-0003 S-xx-MC-13-0004 M-xx-MC-13-0206 GA-O 1 B-x-0400x GA-HO-x-FO-02 13-06-PA-2008 200S-DD-BX-1031 05B-ST-000 I 2006-DJ-BX-0390 C06-8-00 1 C05-8-185 Total CFDA# 16.575 B04-8-005 04P-I0-09-0006 2002-RE-CX-0020 Federal Expenditures $ 3,144,533 72,906 1,542,856 80,817 467,670 5,308,782 25,003 107,777 8,347 73,836 50,121 30,559 80,680 48,177 9,754 71,586 400,157 I I AUGUST A, GEORGIA I Schedule of Expenditures of Federal Awards (Continued) I Year Ended December 31, 2007 I Federal Grantor! Pass-through Grantor! Program Title I Reimburseable Agreement Security Requirements after September 11,2001 Cooperative Agreement, beginning October I, 2007 I I <Pass-through from the Georgia Emergency Management Agency> Homeland Security Grant Program Homeland Security Grant Program I Buffer Zone Protection Program I Total U.S. Department of Homeland Security I I I I I I I I I Federal CFDA Number 97.090 97.090 97.067 97_067 97. 0 78 C-7 Agency or Pass-through Number HSTSO 1-04-A-LEF003 HSTS02-08-H-SLR007 Total CFOA# 97.090 2006-GE- T6-0066-0853 2006-GE- T6-0066-0869 Total CFOA# 97.067 GA-2006-000-00491 Total Federal Expendilures $ Federal Expenditures 94,054 21,396 115,450 216,297 189,711 406,008 23,605 703,010 10,683,264 I I I AUGUSTA, GEORGIA Summary Schedule of Prior Year Audit Findings and Questioned Costs For the Year Ended December 31,2007 I Summary Listinl! of Prior Audit Findinl!s I Finding Control Number Auditee Response/Status Comments I 04-01 06-FS-0 1 06-FS-02 04-02 04-03 05-01 05-04 05-06 05-08 05-13 05-14 06-01 06-02 I I I I I I I I I I I I I Repeat finding in current year Repeal finding in current year Substantially resolved during tbe currrent year Repeat finding - finding updated in current year Resolved during tbe current year Substantially resolved during tbe currrent year Substantially resolved during tbe currrent year Repeat finding - finding updated in current year Resolved during tbe current year Repeat finding - finding updated in current year Resolved during tbe current year Resolved during tbe current year Resolved during tbe current year See p. C-9 See p. C-9 See p. C-lO See p_ C-II See p_ C-12 See p. C-12 See p. C-14 See p. C-15 See p. C-16 See p_ C-17 See p. C-18 See p. C-19 See p. C-20 C-9 I I AUGUSTA, GEORGIA I Summary Schedule of Prior Audit Findings and Questioned Costs (Continued) Year Ended December 31, 2007 I I. Findings in Relation to the Audit of the Financial Statements (continued) I CA USE: The Govemment does not have sufficient resources with the financial statement expertise which would allow the Government to internally prepare its conversion entries for the Fund Financial Statements to the Government-wide financial statements, in accordance with GAAP. Historically, due to the cost-benefit analysis made by management of internal control over financial reporting, the Government has engaged its auditor to assist in the conversion to GAAP basis and financial statement preparation. I I The Government also has not had sufficient resources in the accounting and finance departments which would allow sufficient time to be spent on reconciling balance sheet accounts for all funds to the supporting documentation on a timely basis. I RECOMMENDA TION: We recommend that management consider the cost-benefit analysis of the preparation of its financial statements in accordance with GAAP. We also recommend that management continue the training and supervision of its finance and accounting staff in order to reconcile all balance sheet accounts to supporting documentation on a timely basis. I I MANAGEMENT'S RESPONSE AND CORRECTIVE ACTION PLAN- Management concurs with the finding and has already taken steps to implement the recommendations as practically possible within the Government's resources. I CURRENT STATUS: The Government did not prepare its financial statements for the year ended December 31, 2007, nor its conversion entries related to converting the Fund Financial Statements to the Statement of Net Assets and Statement of Activities; repeat finding this fiscal year. I I Finding number 06-FS-02 CONDITION: The Government did not have sufficient supporting documentation relating to the Human Resources function. During our audit procedures, the testing of controls for payroll transactions resulted in finding a lack of supporting documentation in several instances, including time cards and documented rates of pay included in personnel files. We also noted that variances noted upon reconciliation of the insurance coverage to the insurance statements were not resolved in a timely manner. I I CAUSE: The Government does not have appropriate policies and procedures that are enforced in order to ensure the proper documentation is retained within personnel files. The Government also does not have sufficient processes in place by which variances noted during the insurance reconciliation are resolved in a timely manner. I I RECOMMENDATION: We recommend that proper procedures be required and enforced in order to ensure proper supporting documentation is retained within the Human Resources department to support payroll disbursements. We also recommend that timely follow up be performed for variances noted during the reconciliation of insurance statements to insurance withholdings. I I C-II I I AUGUST A, GEORGIA I Summary Schedule of Prior Audit Findings and Questioned Costs (Continued) Year Ended December 31,2007 I II. Federal Awards Findings and Questioned Costs (continued) I Finding 04-3 Federal Agency: Federal Program: Compliance Requirement: u.s. Department of Housing and Urban Development CFDA # 14.246 Neighborhood Initiative Grant Reporting I CRITERiA: The grant agreement states in Article IV that each recipient shall submit a progress report every six months after the effective date of the grant agreement. Progress reports shall include reports on both performance and financial progress and shall conform with 24 CFR 85.40 and 85.41 or 24 CFR Sections 84.50 through 84.53, as applicable. I I CONDITION: No controls existed at year-end to meet the reporting requirements of the Neighborhood Initiative Grant; therefore, no reports were submitted to the awarding agency to track the progress of the grant. I RECOMMENDATION.- We recommend that the Neighborhood Initiative Program of Augusta, Georgia implement the following controls: I I A. Draft written policies that establish responsibility and provide the procedures for periodic monitoring, verification, and reporting of program progress and accomplishments. B. Setup a tracking system that reminds staff when reports are due. C. Setup supervisory review of reports performed to assure accuracy and completeness of data and information included in the reports. I I CURRENT STATUS: The Government did not receive funding through the Neighborhood Initiative Grant ill fiscal year 2007. Finding is no longer applicable. I Finding 05-01 Federal Agency: Federal Program: Compliance Requirement: CFDA # All The Government's Federal Grants Grants Management I I CONDITION: The Government has several federal, state and local grants as well as many other revenue sources. The Government does not designate anyone to oversee the accounting and management of the grants and contracts. Each of the Government's departments that receives federal grants is responsible for all aspects of the related grant administration. This includes the application, the requests for draws, the spending of the funds, the monitoring, the reporting, and the compliance with federal requirements. This results in a decentralized and inadequate grants management process. I I The Finance Department is unaware of all the federal grants that the Government receives. There is little, if any, communication between the departments receiving the grants and the Finance Department. There is no management oversight that the departments are in compliance with federal grant requirements. I C-13 I I AUGUST A, GEORGIA I Summary Schedule of Prior Audit Findings and Questioned Costs (Continued) Year Ended December 31,2007 I II. Federal Awards Findings and Questioned Costs (continued) I CURRENT STATUS: Though a grants manager was in place in 2007, the duties of the manager did not include ensuring compliance with laws and regulations, maintaining pertinent information related to the grant programs, or ensuring reconciliation between the Government's general ledger and financial reports submitted to the awarding agencies. Grants were still decentralized with various Government departments managing all aspects of the grant, from application to close-out. A new grants manager was hired January I, 2008, for which the job description is to include these appropriate duties. The finding was substantially resolved. I I I Finding 05-04 Federal Agency: Federal Program: U.S. Department of Housing and Urban Development CFDA # 14.218 Community Development Block Grant; CFDA #14.239 HOME Investment Partnerships Program; CFDA # 14.241 Housing Opportunities for Persons with AIDS Allowable Costs I Compliance Requirement: I CONDITION: CDBG, HOME, and HOPW A grant programs allow for administrative costs to be charged to the program. Salaries and Wages are charged to the grants based upon an allocation of employees' time. Many are charged 100% to a program because they only work on that program. Others are charged 50/50, 60/40, etc. Personnel are required to keep a daily log of how their time is spent. These logs, however, are not used in the allocation of the personnel wages charged to the programs either on an actual daily basis or in supporting the percentages of salaries charged. I I I CRITERIA: In accordance with OMB Circular A-87, monthly effort reports of actual time spent on federal programs are required for employees engaged in two or more federal programs or activities and semi-annual reports are required for employees engaged in only one federal program or other project or activity that could affect the charges to federal programs. Where employees are expected to work solely on a single Federal award or cost objective, charges for their salaries and wages must be supported by periodic certifications that the employees worked solely on that program for the period covered by the certification. These certifications must be prepared at least semi-annually and must be signed by the employee or supervisory official having first hand knowledge of the work performed by the employee. Where employees work on multiple activities or cost objectives, a distribution of their salaries or wages must be supported by personnel activity reports or equivalent documentation that reflect an after-the-fact distribution of the actual activity of each employee. The documentation must account for the total activity for which each employee is compensated, must be prepared at least monthly, must coincide with one or more pay periods, and must be signed by the employee. Budget estimates or other distribution percentages determined before the services are performed do not qualify as support for charges to Federal awards but may be used for interim accounting purposes. I I I I EFFECTS.- Administrative costs submitted for reimbursement is unsupported and may be inaccurately reported. Failure to document time or failure to use documented time in the allocation of administrative charges to grant programs could result in questioned costs. Though payroll charges are allowable grant expenditures, administrative charges may be overdrawn on some federal programs and under drawn on other federal programs. I I C-15 I I AUGUSTA, GEORGIA I Summary Schedule of Prior Audit Findings and Questioned Costs (Continued) Year Ended December 31,2007 I II. Federal Awards Findings and Questioned Costs (continued) I EFFECTS: Failure to monitor the performance of sub-recipients is a material non-compliance with program requirements for Housing and Urban Development programs. Lack of monitoring could result in questioned costs spent by the sub-recipient that would have to be returned to the federal agency. Future funding could be in jeopardy. I I QUESTIONED COSTS: Undetermined I CA USE: Lack of oversight in the Housing and Economic Development Department to insure compliance requirements are communicated to the staff and are carried out resulted in a systematic problem related to compliance with sub-recipient monitoring. I RECOMMENDA TIONS: We recommend the Government establish policies and procedures for monitoring sub-recipients. These procedures should include identification of all contracts and sub-recipients, the preparation of annual monitoring schedules, check lists of federal compliance requirements and contract requirements that need to be monitored and tested on the sub-recipient level, guidance on written documentation that must be maintained to support the monitoring, and follow-up procedures for noted deficiencies or concerns. I I MANAGEMENT'S RESPONSE AND CORRECTIVE ACTION PLAN: Management concurs with the finding and has already taken steps to implement the recommendations as practically possible within the Government's resources. I CURRENT STATUS: We noted written evidence of on-site programmatic monitoring related to subrecipients of the Community Development Block Grant and the Housing Opportunities for Persons with AIDS programs. The HOME program, however, did not maintain documentation sufficient to determine if adequate monitoring is being performed. As such, this finding has only been partially corrected. See finding 07-01 where deficiency is re- written to reflect its current status. I I Finding 05-08 Federal Agency: Federal Program: U.S. Department of Housing and Urban Development CFDA # 14.218 Community Development Block Grant; CFDA #14.239 HOME Investment Partnerships Program Cash Management and Program Income I Compliance Requirement: I CONDITION: The Government was not in compliance with requirements relating to cash draws and the use of program income. Program income was not reported to HUD through the IDIS system throughout the year. In addition, program income was not consistently deducted from federal draws to ensure compliance with federal cash management requirements. This resulted in funds being drawn prior to using all available program income. Subsequent to year end, program income reported on the IDIS system was reconciled to the program income deposits recorded on the Government's general ledger. All missing income on the IDIS system was subsequently reported. I I I C-17 I I AUGUSTA, GEORGIA I Summary Schedule of Prior Audit Findings and Questioned Costs (Continued) Year Ended December 31, 2007 I II. Federal Awards Findings and Questioned Costs (continued) I significant history of a procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. All required records must be retained for three years after grantees make final payments and aU other pending matters are closed. I EFFECTS.- The Government is not in compliance with the procurement requirements of the federal award and could result in questioned costs. I I QUESTIONED COSTS: $25,772.86 computed as the invoice paid for which procurement records could not be found. I CA USE: Lack of internal controls to ensure procurement procedures are followed and procurement records are maintained for the required period. I RECOMMENDATIONS: We recommend the Government maintain proper documentation of procurement procedures followed for the time period as required by federal guidelines. I MANAGEMENT'S RESPONSE AND CORRECTIVE ACTION PLAN: Management concurs with the finding and has already taken steps to implement the recommendations as practically possible within the Government's resources. I CURRENT STATUS: Finding is included in the Government's Findings in Relation to audit of the Financial Statements at 07-FS-Ol. I Finding 05-14 Federal Agency: U.S. Department of Justice; U.S. Department of Transportation CFDA #16.592 Local Law Enforcement Block Grant; CFDA #20.106 Airport Improvements Program Real Property and Equipment Maintenance I Federal Program: I Compliance Requirement: I CONDITION: The City of Augusta maintains a capital asset detail for all Government property. This listing does not maintain the source of the funds used to purchase the equipment on the asset schedule. Thus, there is no tracking of equipment purchased with federal funds. No periodic inventory is taken and reconciled to the capital asset detail. I I I C-19 I I AUGUSTA, GEORGIA I Summary Schedule of Prior Audit Findings and Questioned Costs (Continued) Year Ended December 31,2007 I II. Federal Awards Findings and Questioned Costs (continued) I Finding 06-01 Federal Agency: Federal Programs: U.S. Department of Housing and Urban Development CFDA # 14.218 Community Development Block Grant CFDA #14.239 HOME Investment Partnerships Allowable Costs I Compliance Requirement: I CONDITION: CDBG and HOME grant programs allow for administrative costs to be charged to the programs. Rent, utilities, and various office supplies are charged to these grants on a 50%/50% with no corresponding charges to programs that also benefit from the use of the Housing & Neighborhood Development facility and department personnel. I I CRITERIA: In accordance with OMS Circular A-87 and 2 CFR part 225 Appendix (C), costs of central services should be allocable to all activities. A cost is allocable to a particular cost objective if the goods or services involved are chargeable or assignable to such cost objective in accordance with relative benefits received. All activities that benefit from the governmental unit's indirect cost, including unallowable activities and services donated to the governmental unit by third parties, will receive an appropriate allocation of indirect costs. I I EFFECTS: The CDBG and HOME programs are bearing more than their equitable share of these expenditures. I QUESTIONED COSTS: Not determined. CA USE: Various indirect costs were not allocated equitably among the federal programs receiving the benefits. I RECOMMENDATIONS: We recommend that the Government allocate its rent, utilities, and other office expenses equitably to each activity in accordance with relative benefits received. I MANAGEMENT'S RESPONSE AND CORRECTIVE ACTION PLAN: Management concurs with the finding and has already taken steps to implement the recommendations as practically possible within the Government's resources_ I I CURRENT STATUS: During fiscal year 2007, the Housing and Community Development Department maintained documentation and support for allocations of indirect costs. Finding corrected. I Finding 06-02 Federal Agency: Federal Programs: Compliance Requirement: U.S. Department of Housing and Urban Development CFDA # 14.218 Community Development Block Grant Earmarking I I C-21 I I I I I I I I I I I I I I I I I I I -........ . .4O . 4 I CERnFlED Pl'BUC .\CCOt !'dANIS & CONSl '!:rANTS REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNT ANTS ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-I33 Augusta-Richmond County Commission Augusta, Georgia Compliance We have audited the compliance of Augusta, Georgia with the types of compliance requirements described in the u.s. Office of Management and Budget (OMS) Circular A-i33 Compliance Supplement that are applicable to each of its major federal programs for the year ended December 31, 2007. Augusta, Georgia's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of Augusta, Georgia's management. Our responsibility is to express an opinion on Augusta, Georgia's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred, An audit includes examining, on a test basis, evidence about Augusta, Georgia's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of Augusta, Georgia's compliance with those requirements. In our opinion, Augusta, Georgia complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended December 31, 2007. However, the results of our auditing procedures disclosed instances of noncompliance with those requirements, which are required to be reported in accordance with OMB Circular A-133 and which are described in the accompanying schedule of findings and questioned costs as items 07-02, 07-03, and 07-04. Internal Control over Compliance The management of Augusta, Georgia is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered Augusta, Georgia's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Augusta, Georgia's internal control over compliance. C-23 I I AUGUST A, GEORGIA I Schedule of Findings and Questioned Costs Year Ended December 31,2007 I I. Summary ofthe Auditor's Results I Financial Statements I The auditor's report expresses an unqualified opinion on the financial statements of the Augusta, Georgia as of and for the year ended December 31, 2007. I Significant deficiencies in internal control over financial reporting which would be required to be reported in the Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards were disclosed during the audit and are listed as findings 07-FS-OI and 07-FS-02 below. I No instances of noncompliance or other matters material to the financial statements of Augusta, Georgia, as required to be reported in accordance with Government Auditing Standards, were disclosed by the audit. I Federal A wards I The auditor's report expresses an unqualified OpInIOn on compliance for major programs of Augusta, Georgia as of and for the year ended December 31, 2007. I Significant deficiencies in internal control over compliance applicable to major federal award programs which would be required to be reported in the Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A-133 were disclosed during the audit as Finding Number 07-0 1,07-02, and 07-04. I Identification ofMaior Programs CFDA Number Name of Federal Program I 14.218 14.239 14.241 U.S. Department of Housing and Urban Development Community Development Block GrantslEntitlement Grants HOME Investment Partnerships Program Housing Opportunities for Persons with AIDS I 20.106 U.S. Department of Transportation Airport Improvement Program I 97.067 U.S. Department of Homeland Security Homeland Security Grant Program I We used a threshold of$320,498 to distinguish between Type A and Type B programs. I Augusta, Georgia did not qualifY as a low-risk auditee. I I C-25 I I AUGUST A, GEORGIA Schedule of Findings and Questioned Costs - Continued I Year Ended December 31,2007 I III. Findings in Relation to tbe Audit oftbe Financial Statements (continued) I CA USE: Time cards are transferred to a time sheet to be entered into the payroll system. Although Departments are required to turn in the time cards to the Payroll Department and the time cards are required to be retained in the Human Resources Department, it was noted that the time cards are not reviewed for completeness by the Payroll Department or the HR Department. I I Access was given to the Payroll Department in order to make changes if there are errors when they are processing payroll. I RECOMMENDATION.- We recommend making Department Heads responsible for time worked when they sign-off on the time sheet which indicates exceptions only. We recommend the Payroll Department reconcile time sheets to the Payroll Edit Report (also exceptions only) for every payroll run. I We recommend that Human Resources request, review and retain a change report from IT for changes to payroll data for each payroll run if it is necessary that the Payroll Department be given access to make changes to payroll data. I MANAGEMENT'S RESPONSE AND CORRECTIVE ACTION PLAN: Management concurs with the finding and has already taken steps to implement the recommendations as practically possible within the Government's resources. I III. Federal Awards Findings and Questioned Costs I Finding 07-01 (update of Finding 04-2 and 05-06) Federal Agency: U.S. Department of Housing and Urban Development Federal Programs: CFDA # 14.239 HOME Investment Partnerships Program Compliance Requirement: Subrecipient Monitoring Type of finding: Weakness in internal control (material weakness) I I CONDITION: The Government did not have adequate procedures to document and ensure that subrecipients are administering federal awards in compliance with federal requirements as they apply to: . Allowable costs and activities . Eligibility . Procurement . Special tests and provisions for rent reasonableness, housing quality standards, and project-based rental assistance. Although the HOME Program administrator conducted annual site visits for all subrecipients, sufficient documentation supporting the monitoring process was not maintained to provide adequate evidence that the subrecipients' controls were adequate or that they addressed the appropriate compliance requirements. I I I I CRITERIA: OMB A-133 (AOO(d)) states that a pass-through entity shall monitor the activities of sub-recipients as necessary to ensure that Federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved. I C-27 I I AUGUSTA, GEORGIA I Schedule of Findings and Questioned Costs - Continued Year Ended December 31,2007 I III. Federal Awards Findings and Questioned Costs (continued) I CRITERIA: The Government is required to submit an annual Section 3 Summary Report to report the number and amount of Construction and Non-construction contracts awarded on CDBG, HOME, and HOPW A projects, the number and amount of these contracts that were awarded to Section 3 businesses, and information regarding employment and other economic opportunities provided to low and very low income persons under Section 3 that resulted from these contracts. I I EFFECTS: Inaccurate Section 3 Summary Reports were filed with the U.S. Housing and Urban Development Agency. I QUESTIONED COSTS: None I CA USE: Staff is not trained on completing the Section 3 Summary Reports. There is also no effective internal control in place to ensure these performance reports are complete and accurate. I RECOMMENDATIONS: We recommended the Government implement procedures to ensure information reported in the annual Section 3 Summary Report is complete and accurate. I I MANAGEMENT'S RESPONSE AND CORRECTIVE ACTION PLAN: Management concurs with the finding and has already taken steps to implement the recommendations as practically possible within the Government's resources. I Finding 07-03 Federal Agency: Federal Programs: Compliance Requirement: Type of finding: U.S. Department of Housing and Urban Development CFDA # 14.239 HOME Investment Partnerships Program Cash Management Compliance (non-material noncompliance) I I CONDITION: The Government drew down federal funds and disbursed these funds to a sub-recipient for the purchase of property to be used in the HOME Investment Partnerships Program. The sub-recipient did not remit support that they had disbursed their own funds to acquire the property, as is the policy before the Government reimburses a sub-recipient. Documentation from the sub-recipient indicated that the sub- recipient borrowed funds to purchase the property. The sub-recipient obligated to spend the funds through signed mortgage agreements, but at the time of reimbursement the mortgages had not been paid. I I I I C-29 I I AUGUST A, GEORGIA I Schedule of Findings and Questioned Costs - Continued Year Ended December 31,2007 I III. Federal Awards Findings and Questioned Costs (continued) I assets. For other equipment purchased with federal funds and included on the fixed asset system, we were unable to verify whether the equipment was designated as being purchased with Federal funds. If equipment purchased with federal funds is sold, then the Federal government must be reimbursed their share of the selling price. I I CRITERIA: 28CFR 66.32(d) states that the recipients' property management standards for equipment acquired with Federal funds shall, at a minimum, meet the following requirements: . a description of the equipment, a serial number or other identification number, the source of equipment, including the award number who holds title, the acquisition date and cost of the equipment, percentage of Federal participation in the cost of the equipment, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. I . . . I . . . . I A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. I I EFFECTS: Without proper inventory controls in place, it minimizes the assurance that the Government is adequately tracking and monitoring acquisitions and disposals of equipment acquired with Federal funds. I QUESTIONED COSTS: Unable to be determined. I CA USE: The Government has inadequate controls over ensuring capital assets acquired with Federal funds are properly coded as capital expenditures and maintained in the capital asset system. I RECOMMENDATIONS: We recommend the Government strengthen internal controls over fixed asset records to ensure acquisitions of equipment with Federal funds are properly safeguarded in accordance with Federal regulations. I MANAGEMENT'S RESPONSE AND CORRECTIVE ACTION PLAN: Management concurs with the finding and has already taken steps to implement the recommendations as practically possible within the Government's resources. I I I C-31 I I I I I I I I I I I I I I I I I I I SPECIAL ONE PERCENT SALES AND USE TAX SECTION S-l I I I I I I I I I I I I I I I I I I I Report of Independent Certified Public Accountants on the Schedule of Special One Percent Sales and Use Tax Performed in Accordance with Government Auditing Standards Augusta-Richmond County Commission Augusta, Georgia We have audited the accompanying financial statements of the governmental activIties, the business-type activities, Augusta Canal Authority, each major fund and the aggregate remaining fund information of Augusta, Georgia as of December 31, 2007 and for the year then ended, which collectively comprise Augusta, Georgia's basic financial statements, as listed in the table of contents. These financial statements are the responsibility of the Augusta, Georgia management. Our responsibility is to express opinions on these basic financial statements based on our audit. We did not audit the financial statements of the Augusta-Richmond County Department of Health or Downtown Development Authority. Those financial statements were audited by other auditors whose reports thereon has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Department of Health and Downtown Development Authority, is based solely on the reports of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America 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 perform the audit to obtain reasonable assurance about whether the basic financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the basic financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall basic financial statement presentation. We believe that our audit and the reports of other auditors provide a reasonable basis for our opinions. As explained in Note I, the accompanying Schedule of Special One Percent Sales and Use Tax of Augusta, Georgia, as of and for the year ended December 31, 2007, as listed in the table of contents, is not a presentation in conformity with accounting principles generally accepted in the Unites States of America. In our opinion, the accompanying Schedule of Special One Percent Sales and Use Tax is fairly stated, in all material respects, in relation to the portion of the basic financial statements from which it has been derived. This report is intended solely for the information and use of management and the Board of Commissioners of Augusta, Georgia, and is not required to be presented as part of the basic financial statements. This report is not intended to be and should not be used by anyone other than these specified parties. C~J 1x1W f ~J t..lP Augusta, Georgia June 30, 2008 S-3 I AUGUST A, GEORGIA I SCHEDULE OF SPECIAL ONE PERCENT SALES AND USE TAX - Continued YEAR ENDED DECEMBER 31,2007 Estimated Prior Current Per-ceDtag~ Original Cost Current Cost Years' Year Total of I Projects Estimate Estimate Cost Cost Cost Completion ARC drainage improvements Phase II 53,100 84,427 50,729 50,729 60% SR 56 @ Goshen Road 88,000 362,718 362,718 362,718 100% Belair Road improvement 2,361,000 2,367,036 140,703 140,703 6% Berckman's Road 2,713,000 14,284 14,284 14,284 100% I Courtney's Detention Pond Emer Rep 70,805 71,074 69,923 69,923 98% Travis! Plantation Road 2,361,000 2,368,255 183,366 183,366 80/0 County Forces 3,672,500 4,310,686 3,202,289 318,812 3,521,101 82% Miscellaneous grading & drainage 4,650,000 2,904,306 878,590 310,453 1,189,043 41% Resurfacing County Forces 5,975,000 4,624,324 725,316 725,316 16% I Resurfacing 8,500,000 7,438,208 1,526,889 1,526,889 21% Paving various dirt roads 7,000,000 4,450,668 3,388,928 3,427 3,392,355 76% Rail Road crossing improvement 750,000 825,258 10 1,238 101,238 12% (Broad Street Area) 2,656,200 2,722,887 444,593 373,625 818,218 30% (Telfair Street Area) 1,469,000 1,486,979 186,977 186,977 13% I East Boundary improvements 1,318,700 4,601,966 591.326 2,042,567 2,633,893 57% Wheeler Road operational 433,600 416,574 52,674 52,674 13% Wrightsboro Road Widening Phase I 3,143,700 3,182,139 426,989 426,989 13% Washington Road intersection 849,800 1,138,671 401,569 107,556 509,125 45% I Hollywood SID Area 2,640,800 2,662,163 325,160 325,160 12% Telephone system upgrade 527,082 535,811 535,812 535,812 100% GIS 474,400 482,274 475,060 475,060 99% Docwnent imaging system 418,518 425,586 425.588 425,588 100% Springfield Village 200,000 200,000 81,284 81,284 41% I Dyess Park 60,000 65,530 44,705 9,952 54,657 83% Newman Tennis Center 120,000 121,644 71,674 5,285 76,959 63% South Augusta Branch Library 1,625,000 5,926,028 5,713,005 10 5.713,015 96% Library - main branch 7,375,000 7,465,331 1,276,401 1,596,261 2,872,662 38% Greene Street Property Purchase 1,084,585 1,084,585 1,084,585 100% I Construction of Station #8 1,500,000 1,500,957 1,438,500 1,438,500 96% Station 15 (Wrigbtshoro Road) 1,500,000 1,699,791 1,690,789 1,690,789 99% Engines 3,484,000 3,454,544 3,454,540 3,454,540 100% Aerials 1,300,000 1,312,973 1,311,971 1,311,971 100% Construction of Station # 12 (Heph Mcbean Area) 1,500,000 1,341,361 1,275,233 1,275,233 95% I Paving various dirt roads 1.000,000 920,725 346,883 346,883 38% East Bo~ndary Street & drainage improvements 1,318,700 151,497 1,497 1,497 1% Wrightsboro Road improvements 1,500,000 1,514,969 14,968 14,968 1% Walton Way Extension I Davis Road 350,000 356,940 82,892 82,892 23% I Windsor Spring Road Section IV 1,250,000 1,264,731 123,590 67,130 190,720 15% Windsor Spring Rd Section V(SR88 Hepzibah 1,257,484 7,484 7,484 1% Washington Road Sidewalk 276,000 1,311 1,311 1,311 100% St. Sebastian Way/Greene StlI5th Street 3,457,800 9,641,676 3,357,026 5,732,727 9,089,753 94% Traffic improvement 621,500 705,892 307,699 307,699 44Olc. I ANIClHopkms Street Improvements 2,000,000 1,172,188 72,188 430,029 502,217 43% Windsor Spring Road Section IV 678,000 736,126 614,463 49,261 663,724 90% RiBe Range Road @ Belair Road 62,200 5,981 5,981 5,981 100% Lake Olmstead Park 425,000 455,728 439,681 2,213 441,894 97% Bernie Ward 106,059 61,961 31,804 93,765 88% I Fleming Tennis 100,195 100,195 100,195 100% Meadowbrook Park 90,873 90,873 90,873 100% Hepzibah Community Ctr 83,908 37,884 8,615 46,499 55% DDA 853,418 605,991 76,107 682,098 80% St Sebastian Way/Greene St 675,543 543 543 0% I Belair Hills Est Imp(W&S) 112,603 112,605 \12,605 100% Pinnacle Place Org Imp 772, \17 74,349 612,411 686,760 89% SR 4/l5th @cr 2207(Central Ave) 117,218 14,443 14,443 12% Richmond Hill Rd Sidewalks 117,645 117,645 117,645 100% I Alexander Dr Emergency Repair 74,688 75,077 75,077 101% Powell Rd Culvert Replacement 364,836 234,464 234,464 64% Point West Drainage 608,276 187,798 45,186 232,984 38% Oates Creek Rehab Proj 843,266 213,266 213,266 25% ARC Drainage 1,494,422 1,185,200 1,185,200 79% I Resurfacing PH VIII 1,331,683 1,088,852 1,088,852 82% Lake Aumond Oam Improvements 491,762 107,450 107,450 22% Belair Hills Estate 5,562,558 440,064 117,244 557,308 10% Walton Way Extension/Davis Rd 2,421,507 84,357 84,357 3% Windsor Spring Rd Section V(SR88 Hepzibah 798,894 246,113 413,265 659,378 83% I Apple Valley Park 34,871 26,839 7,265 34,104 98% Pension Property Purchase 1,272,514 1,272,514 1,272,514 100% Replacement of Old Equipment 574,317 368,829 102,983 471,812 82% Remodel Stations 3,4,11,13,14 & 17 656,585 324,729 324,729 49% Pineview Drive 136,416 136,416 136,416 100% I I S-5 I AUGUST A, GEORGIA I SCHEDULE OF SPECIAL ONE PERCENT SALES AND USE TAX - Continued YEAR ENDED DECEMBER 31,2007 Estimated Prior Current Percentage Original Cost Current Cost Years' Yea< Total of Projects Estimate Estimate Cost Cost Cost Completion I SR 4/US I 16,500 12,413 12,413 12,413 100% Windsor Spring Road 1,055,386 919,146 919,146 919,146 100% Tobacco Road 3,046,858 2,736,545 2,736,545 2,736,545 100% Lock & Dam Road 404,522 364,826 364,826 364,826 100% I Barton Chapel Rd, Phase I 29,300 29,300 29,300 29,300 100% Barton Chapel Road, Phase II 2,036,000 3,143,693 2,753,083 22,226 2,775,309 88% SR 10/US 223 Gordon Highway 84,500 74,893 74,893 74,893 100% Pepperidege Drive Intersection 172,177 156,358 156,358 156,358 100% SR 56 at Phinizy 399,425 342,695 342,695 342,695 100% I Fall Line Freeway 77,000 0% Paving Various Rd., Phase V 1,200,000 725,423 725,423 725,423 100% Boykin Road Drg. 1,466,809 1,367,118 1,367,118 1,367,118 100% SR 56 @Old Waynesboro Rd 416,000 461,687 461,686 461,686 100% Willis Foreman Road Dr. 350,100 440,304 440,302 440,302 100% I Sand Ridge Stonn 341,800 218,682 218,682 218,682 100% SR 56 Old Savannah Road 552,500 375,003 375,004 375,004 100% Kimberly Clark Industrial Park 2,215,000 2,215,633 350,210 350,210 16% Municipal Building 8,721,250 8,580,303 3,099,826 1,451,137 4,550,963 53% Library (South Richmond) 700,000 709,881 654,985 654,985 92% I Board of Health 7,000,000 7,000,000 7,000,000 7,000,000 100% Augusta Mini Theater 850,000 856,245 364,438 452,155 816,593 95% Lucy Craft Laney Museum 800,000 762,246 749,964 864 750,828 9~~ Georgia Golf Hall of Fame 4,000,000 4,000,000 4,000,000 4,000,000 100% I Bethlehem Community Ctr 27,194 61,320 61,320 61,320 100% Administration 182,795 181,816 181,816 181,816 100% Wacren Rd Renovation 373,249 373,249 373,249 373,249 100% Bennie Ward II 0,000 109,508 109,508 109,508 100% Riverfront Pavilion 655,648 655,561 655,561 655,561 100% I May Park 525,000 522,779 522,779 522,779 100% West Augusta Soccer Field 1,000,000 999,739 999,739 999,739 100% WT Johnson renovation 306,500 305,831 305,831 305,831 100% Belair/Flager Road renovations 112,650 112,602 112,602 112,602 100% Dyess Park renovation 192,993 192,993 192,773 192,773 100% I South Augusta Recreation Administrative Complex 7,550,000 7,552,419 7,552,419 7,552,419 100% Aquatic Natatorium 5,143,000 5,140,093 5,140,093 5,140,093 100% Golden CamplBelle TERR 929,119 927,295 927,925 927,925 100% Belle Terrace Renovation 232,1l1 233,169 233,169 233,169 100% I Elliott Park 100,000 100,089 99,911 99,911 100% Heath Pool 5,000 0% Jones Pool 35,000 35,017 35,017 35,017 100% Doughty Park 50,000 50,479 50,479 50,479 100% Eastview Park 227,500 169,161 169,161 169,161 100% I HephizahlCarrotl Park 175,358 175,185 175,185 175,185 100% Jamestown Park 112,566 112,566 112,566 112,566 100% McBean Park 140,000 140,949 139,735 139,735 990/0 Minnick Park 55,000 53,849 53,849 53,849 100% I Savannah Place 245,000 248,769 244,942 244,942 98% Blythe Community Center 708,000 703,302 703,302 703,302 100% Chafee Park Gym renovation 124,889 14,374 14,374 14,374 100% Hinside Park renovation 50,000 47,400 45,894 45,894 97% Lock & Dam renovation 75,000 34,992 34,993 34,993 100% I Julian Smith renovation 742,207 742,182 742,182 742,182 100% Fleming Building renovation 100,000 90,884 90,883 90,883 100% Gracewood Park renovation 152,076 152,218 142,671 3,924 146,595 %% Lake Olmstead Park 43,793 43,793 43,793 43,793 100% Fleming Athletic Complex 133,850 133,170 133,170 133,170 100% I Chester A venue renovation 151,500 151,500 147,926 147,926 98% Boykin Road Park 40,000 39,8 tI 39,811 39,811 100% Eisenhower Park Gym 1,477,000 1,4 76,000 1,476,000 1,476,000 100% Discovety Center Ent 353,137 352,954 352,954 352,954 100% St. Sebastian Extension 1,368,%9 1,633,799 1,610,578 20,282 1,630,860 100% I 2nd Street Outfull 762,760 1,810,621 1,546,089 l,546,089 85% 6th Street handicap ramp 517,347 625,358 611,966 611,966 98% Turbett Springs Detention 228,161 337,300 306,132 306,132 91% Augusta Commons 1,825,291 3,609,599 3,652,638 3,652,638 101% I Martin Luther King drainage 273,794 727 727 727 100% Inter City Arts - Imperial 300,000 300,000 225,000 225,000 75% CSO 10,500,000 10,546,852 9,629,637 9,629,637 91% Wetlands 10,500,000 10,508,941 9,591,726 9,591,726 91% Third Level Canal Cleaning 491,506 492,418 887 185 1,072 0% I I S-7 I AUGUSTA, GEORGIA I SCHEDULE OF SPECIAL ONE PERCENT SALES AND USE TAX - Continued YEAR ENDED DECEMBER 31,2007 Estimated Prior Current Peneotage Original Cost Current Cost Years' Year Total of Projects Estimate Estimate Cost Cost Cost Completion I Heard A "cout: Park renovation 6,000 3,883 3,883 3,883 100% Troup St Pk Renovation 10,000 0% Hickman Park renovation 100,000 90,994 73,395 73,395 81% l\t1cDuffie Woods Park renovation 150,000 148,3 30 148,330 148,330 100% I Meadowbrook Park renovation 45,000 47,554 47,216 47,216 99% Julian Smith BBQ renovation 187,000 186,558 186,558 186,558 100% Blount Park renovation 19,000 2,600 2,600 2,600 100% Augusta Canal Master 100,000 103,312 103,312 103,312 100% Big Oak Park renovation 65,000 65,230 47,118 47,118 72% I Wood Street South Ban Field 47,000 47,230 41,000 3,359 44,359 94% Wood Lake Park renovation 100,000 100,776 79,664 6,909 86,573 86% Royal (Barrett) Park renovation 12,000 5,086 5,086 5,086 100% Garrett 500,000 500,000 500,000 500,000 100% West Vineland Park renovation 20,000 20,127 20,119 20,119 100% I Bedford Heights 35,000 35,192 26,941 26,941 77% 4 - H Camp Park reno,'ation 20,000 18,830 17,478 17,478 93% Adjusting Rd/Way Structure 200,000 62,498 62,498 62,498 100% International Boulevard Extension 340,000 289,800 289,800 289,800 100% Walton Way Extension 1,385,000 0% I Skinner Mill Road Culvert Extension 153,100 11,876 11,876 1l,876 100% Rocky Creek Hazard Mitigatio 717,860 717,860 62,064 62,064 9% Resurfacing various roads Phase VI 1,350,000 1,123,739 1.123.739 1,123,739 100% Suburban Forces Capital Equipment 1,664,000 1,674,064 1,717,688 1,717,688 103% I Railroad Street slope repair 289,500 290,600 33,459 33,459 12% Wheeler Road Signal Plan Analysis 10,000 7,799 7,799 7,799 100% Gordon Highway median banier 185,000 185,703 1,256 1,256 1% Mason Road Bridge @ Claudia 275,000 197,329 197,329 197,329 100% Bungalow Road 776,000 3,962,785 290,017 559,155 849.172 21% I W oodlake Subdivision 939,000 942,567 43,817 43,817 S% Pepperidge Point Retention Pond 50,000 32,667 32,677 32,677 100% Windsor Spring Rd Sec IV 1,560,500 0% Windsor Spring Rd Sec V 1,560,500 0% Flood control feasibility 1,637,649 2,229,458 1,920,872 308,586 2,229,458 100% I Judicial Center - County Court House 40,016,200 40,016,200 0% Webster Detention Center 36,000,000 36,000,000 160,271 1,752,889 1,913,160 5% Exhibit Han 20,000,000 20,000,000 161,225 71,209 232,434 1% Sheriff Administation Relocation 3,000,000 3,000,000 0% RCCI Renovations 750,000 750,000 0% I Main Library 14,700,000 14,700,000 0% Augusta Canal Improvements 2,500,000 2,500,000 2,500,000 2,500,000 100% Augusta Canal Bond Repayment 8,200,555 8,200,5 5 5 8,200,555 8,200,555 100% Bond Debt Service 5,417,800 5,417,800 0% Information Technology 2,000,000 2,000,000 0% I Flood Land Acquisition 500,000 500,000 0% Wrightsboro Road Project 4,000,000 4,000,000 0% D'Antignac Street Flood Avoidance 1,000,000 1,000,000 0% Administration - Engineering 2,500,000 2,500,000 484,140 484,140 19% I Marks Church Road Improvement 2,500,000 2,500,000 0% Fire Stations & Training Center 6,000,000 6,000,000 0% Lake Olmstead Stadium 360,000 400,000 [00,000 298,827 398,827 100% Augusta Soccer Park 180,000 \80,000 157,007 157,007 87% The Boat House 90,000 90,000 0% I Apple Valley Park 315,000 315,000 876 214,996 215,872 69"1. WT Johnson Park 67,500 67,500 2.1 00 1,486 3,586 5% MM Scott Park 270,000 270,000 6,500 18,860 25,360 9"1. Diamond Lakes Park 720,000 720,000 38,545 38,545 5% Jamestown Park 135,000 148,860 500 38,346 38,846 26% I Wood Park 270,000 270,000 \5,283 15,283 6% Valley Park 22,500 22,500 160 160 1% GoshenlBrown Road Park 135,000 135,000 0% McDuffie Woods Park 90,000 90,000 2,700 12,326 15,026 17% McBean Park 180,000 180,000 16,686 16,686 9% I Fleming T enois Center 112,500 112,500 77,060 77,060 68% Lock and Darn Park 49,500 49,500 0% May Park 67,500 {j7,500 9,700 9,700 14% HH Brigham Park 117,000 117,000 104,068 104,068 89"1. I Land Acquisition 180,000 1&>,140 10,827 10,827 7% Dyess Park 63,000 63,000 5,400 5,400 9% Brookfield Park 45,000 45,000 0% Lake Olmstead Park 207,000 207,000 15,128 15,128 7% Blythe Park 180,000 180,000 4,790 4,790 3% I I S-9 I I I I I I I I I I I I I I I I I I I AUGUST A, GEORGIA SCHEDULE OF SPECIAL ONE PERCENT SALES AND USE TAX Notes to Schedule of Special One Percent Sales and Use Tax Year Ended December 31,2007 Note 1 - Summary of significant accounting policies The accounting policies of Augusta's Special One Percent Sales and Use Tax conform to accounting principles generally accepted in the United States of America as applicable to governments. These financial statements present only the activity of the Special One Percent Sales and Use Tax projects and are not intended to be a complete presentation of Augusta's assets, liabilities, revenues, and expenses. Basis of accounting The Special One Percent Sales and Use Tax projects are accounted for using the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they are "measurable and available"). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to pay liabilities of the current period. Expenditures are recorded when the related fund liability is incurred. Estimates The preparation of this Schedule requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results may differ from these estimates. S-ll