HomeMy WebLinkAboutCHERRY BEKAERT & HOLLAND ANNUAL FINANCIAL STATEMENTS
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AUGUSTA, GEORGIA
Annual Financial Statements
For the Year Ended December 31, 2006
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AUGUST A, GEORGIA
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Annual Financial Report
Year Ended December 31, 2006
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Table of Contents
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FINANCIAL SECTION
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
MANAGEMENT'S DISCUSSION AND ANALYSIS
I BASIC FINANCIAL STATEMENTS
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Government-wide Financial Statements:
Statement of Net Assets
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Statement of Activities
Fund Financial Statements:
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Balance Sheet - Governmental Funds
Reconciliation of the Balance Sheet of the Governmental Funds to the Statement of Net Assets
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Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds
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Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of
Governmental Funds to the Statement of Activities
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Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual-
General Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual -
Fire Protection Fund
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Statement of Net Assets - Proprietary Funds
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Statement of Revenues, Expenses and Changes in Fund Net Assets - Proprietary Funds
Statement of Cash Flows - Proprietary Funds
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Statement of Fiduciary Net Assets - Fiduciary Funds
Statement of Changes in Fiduciary Net Assets - Fiduciary Funds
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Notes to Financial Statements
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REQUIRED SUPPLEMENT ARY INFORMATION
Pension Plans- Required Supplementary Information - Schedules of Funding Progress
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Pension Plans - Required Supplementary Information - Schedules of Employer Contributions and
Notes to Required Schedules
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1 - 2
4 - 14
19
20-21
24-25
27
28-29
31
32
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34
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36-37
38
39
43-79
82-83
84-86
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AUGUST A, GEORGIA
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Annual Financial Report
Year Ended December 31,2006
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Table of Contents (continued)
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Combining Balance Sheet - Nonmajor Capital Project Funds
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Statement of Revenues, Expenditures and Changes in Fund Balances-
Nonmajor Capital Project Funds
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NONMAJOR ENTERPRISE FUNDS
Combining Statement of Net Assets - Nonmajor Enterprise Funds
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Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets-
Nonmajor Enterprise Funds
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Combining Statement of Cash Flows - Nonmajor Enterprise Funds
INTERNAL SERVICE FUNDS
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Combining Statement of Net Assets - Internal Service Funds
Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets-
Internal Service Funds
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Combining Statement of Cash Flows - Internal Service Funds
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FIDUCIARY FUNDS
Combining Statement of Fiduciary Net Assets - Pension Trust Funds
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Combining Statement of Changes in Fiduciary Net Assets - Pension Trust Funds
Combining Statement of Changes in Fiduciary Assets and Liabilities - Agency Funds
I COMPLIANCE SECTION
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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
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Schedule of Expenditures of Federal A wards
Notes to Schedule of Expenditures of Federal Awards
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Summary Schedule of Prior Audit Findings
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Report ofIndependent Certified Public Accountants on Compliance with Requirements Applicable
to Each Major Program and Internal Control over Compliance in Accordance with OMB Circular
A-133
Schedule of Findings and Questioned Costs
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Page
129
130
132 - 133
134 - 135
136 - 137
140 - 141
142 - 143
146 - 147
152
153
156 - 157
C-2
C-4
C-7
C-8
C-28
C-30
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FINANCIAL SECTION
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
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Augusta-Riclunond County Commissioners
Augusta, Georgia
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We have audited the accompanying financial statements of the governmental activlties, the business-type
activities, Augusta Canal Authority, each major fund and the aggregate remaining fund information of Augusta,
Georgia as of December 31,2006 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-Riclunond 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.
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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 tnisstatement. An
audit includes exatnining, 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.
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In our opinion, based upon our audit and the report of other auditors, the basic fmancial 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, 2006, 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.
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In accordance with Government Auditing Standards, we have also issued our report dated June 29, 2007 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 fmancial 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 should be considered in assessing the results of our audit.
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Management's Discussion and Analysis and the schedules of funding progress and employer contributions are
not a required part of the basic fmancial statements but are supplementary information required by the
Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted
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MANAGEMENT'S DISCUSSION AND ANALYSIS
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Overview of the Financial Statements
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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 fmancial
statements, and 3) notes to the financial statements. The basic financial statements present two different views of the
Government through 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 the reader's understanding of the
financial condition of the Government.
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Required Components of Annual Financial Report
Figure 1
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Management's
Discussion and
Analysis
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Basic
Financial
Statements
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Government-
Wide Financial
Statements
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Fund
Financial
Statements
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Notes to the
Financial
Statements
Detail
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Summary
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Basic Financial Statements
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The frrst two statements in the basic fmancial statements are the Government-wide Financial Statements. They provide
both short and long-term information about the Government's financial status.
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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: I) the governmental funds statements; 2) the budgetary comparison statements; 3)
the proprietary fund statements; and 4) the fiduciary fund statements.
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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.
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Government-wide Financial Statements
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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:
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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.
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The Statement of Activities presents information showing how the Government's net assets changed during the most
recent fiscal year. All changes in net 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).
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Fiduciary Funds
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The Fiduciary Funds are used to account for assets held by the Goverrunent as an agent for individuals, private
organizations, other governments and other departments. The Goverrunent 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 goverrunent-wide financial statements because the resources are not available to support the
Government's operations or progralllS.
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Government-wide Financial Analysis
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Comparative data for the entity-wide goverrunental activities and the business-type activities is provided below.
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The G<lvernment's Net Assets
Oecember 3 I, 2006 and 2005
Figure 2
Governmental Business-type Governmental Business-type
Activities Activities Total Activities Activities Total
2006 2006 2006 2005 2005 2005
Current and other assets $ 316,588,395 $ 343,725,039 $ 660,3l3,434 $ 251,458,405 $ 364,l35,276 $ 6l5,593,681
Capital assets 229,164,702 420,611,468 649,776,l70 224,192,436 385,272,573 609,465,009
Total assets 545,753,097 764,336,507 1,310,089,604 475,650,84 t 749,407,849 1,225,058,690
Long-term liabilities 55.617,736 508,933,469 564,55l,205 20,232,853 512,5l5,078 532,747,931
Other liabilities 40,317,977 2l,963,251 62,281,228 29,837,750 21,148,12t 50,985,871
Totalliabilites 95,935,7l3 530,896,720 626,832,433 50,070,603 533,663,199 583,733,802
Net assets:
Invested in
capital assets, net
of related debt 224,230,109 130,616,469 354,846,578 22l,099,127 123,3l4,401 344,413528
Restricted 219,256,694 16,429,773 235,686,467 163,891,687 l5,48l,77l 179,373,458
Unrestricted 6,330,581 86,393,545 92,724,126 40,589,424 76,948,478 117,53 7 ,902
Total net $ 449,817,384 $ 233,439,787 $ 683,257,17l $ 425,580,238 $ 2l5,744,650 $ 64l,324,888
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The Government's Changes in Net Assets
I For the Years Ended December 31, 2006 and 2005
Figure 3
Governmental Business-type Govemmenul Business.type
I Activities Activities Toul Activities Activities Tout
2006 2006 2006 2005 2005 2005
Revenues:
Program revenues:
I Charges for services S 33,156,088 $ 98,384,056 $ 13l,540,144 $ 30,932,803 $ 85,02l,780 115,954,583
Operating grants and contributions 8,296,754 1,030,l73 9,326,927 6,285.773 599.930 6,885,703
Capiul grants and contributions 4,276.8l9 4,276,8l9 7l,553 9,122,494 9,l94,047
General revenues:
I Property taxes 47,5lO,238 47,5lO.238 41,706.778 4l,706,778
Other Uxes 99,296,470 99,296,470 99,778,156 99,778,156
Grants and contributions not restricted
to specific programs 950,923 950,923 985,698 985,698
I Unrestricted investment earnings l2,907,l42 l3,859,220 26,766,362 7,179,887 lO,839,456 l8,019,343
Gain on sale of assets
Miscellaneous l,228,979 7ll,659 1,940,638 l, l32,239 661,240 l, 793,4 79
ToUI revenues 203,346,594 ll8,261,927 321,608,521 l88,072,887 106,244,900 294,3l7,787
I Expenses:
General government 28,232,054 28,232,054 36,021,952 36,02l,952
Judicial 14,766,l71 14,766, 17 I 14, l53,022 l4,\ 53,022
I Public safety 73,164,301 73,l64,301 69,258,040 69.258,040
Public works 12,182,770 l2, l82, 770 l7,083,761 l7,083,761
Health and welfare 2,027 ,300 2,027,300 2,296,497 2,296,497
Culture and recreation 32,l3l,742 32,l31,742 l6,8lO,542 16,810,542
I Housing and development 9,469,828 9,469,828 6,9l5,284 6,915,284
Interest on long.term debt 769,6l8 769,618 120,177 120,l77
Waste management 5,859,827 5,859,827 4,l41,638 4,14l,638
Water and sewer 68,152,898 68,\52,898 59.260,707 59,260,707
I Airports 14,17l,584 l4,271,584 l2,525,408 l2,525,408
Municipal golf course 688,293 688,293 664,908 664,908
Transit 4,960,174 4,96O,l74 4,560,558 4,560,558
Newman Tennis Center 1,370 l,370 322,711 322,711
I Garbage Collection 12,998,308 l2,998,308 Il,316,057 ll,316,057
Riverwalk 247,406 247,406
Toul expenses l72.743,784 lO6,932,454 279,676,238 l62,659.275 93,039,393 255,698,668
lncrease in assets before transfers 30,602,8lO ll,329,473 41,932,283 25,4l3,612 l3,205,507 38,619,l19
I Transfers (6,365,664) 6,365,664 (9,549,8l9) 9,549,8l9
Increase in net assets 24,237,l46 17,695, l37 41,932.283 l5,863,793 22,755,326 38,6l9,lI9
I Net asset, January 1 425,580,238 2l5,744,650 641,324,888 409,716,445 192,989,324 602,705,769
Net assets, December 31 S 449,8l7,384 233,439,787 S 683,257,17l 425,580,238 S 2l5,744,650 $ 64l,324,888
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approximately $.5 million. During the year, the Government transferred a portion of these funds to other functions as
needed. The most notable changes to the 2006 were approved by the Board of Commissions on August 1, 2006. The
planned use of Fund Balance was reduced from $3.8 million to $346,000. Revenue projections were revised and budgets
adjusted according to record additional revenue. Amounts budgeted for transfers between funds were revised to reflect
corrected anticipated amounts. Savings attributed to a temporary hiring freeze were recorded. A transfer was budgeted to
cover the anticipated loss in the Transit department. Tax revenue projections were revised to reflect the 1.06 mill increase
for the General Fund and .5 mills for Fire Protection. Total amendments to the General Fund increased revenues/other
financing sources by $8 million or 7.5%.
The actual operating revenues for the General Fund were more than the budgeted amount by ($753 thousand), or .7%. The
individual sources within the revenues fluctuated both positively and negatively. No individual source materially varied.
from the final budget
As a result of sound budget management by all departments of the Government, actual operating expenditures were less
than the budgeted amount by $6.3 million. For the year, actual revenue and other financing sources were over actual
expenditures and other financing uses by $3.5 million.
Capital Projects Funds
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 $47.1
million, the SPLOST Fund Phase IV's fund balance is $101.3 million and the SPLOST Fund Phase V's fund balance is
$14.1 million, all of which is held for specific construction and improvement projects and capital acquisitions.
Proprietary Funds
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, $68.3 million; Augusta Regional Airport, $7.9 million;
Nonmajor Enterprise funds, $ 10.4 million. The total growth (reduction) in net assets for previously mentioned funds were
$5.2 million, $6.1 million and $6.6 million, respectively. Other factors concerning the finances of these funds have already
been addressed in the discussion of the Government's business-type activities.
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Long-Term Debt
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As of December 31, 2006, the Government had a total of $589.2 million in outstanding long-term debt. Of this amount,
$462.8 million consists of revenue bonds backed by the revenues of the water and sewer system.
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The Government's Outstanding Debt
General Obligation and Revenue Bonds
December 31, 2006
Figure 5
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Govemm:ntll Business-t)pe
Activities Activities Total
2006 2005 2006 2005 2006 2005
Gcnera1 obIig;llion bonis $ 44,741,536 $ $ - $ - $ 44,74l,536 $
Revenue Ixn1s 157,434 262,'>>) 49l,12l,382 495,33l,828 491,278,816 495,594,737
Other debt 27,688,084 29,459,380 25,528,616 23;126,675 53,216,700 52,686,055
Total debt $ 72,587,054 $ 29,m;Jjl,9 $ 5t6,649,998 $ 518,558,503 $ 589,237,052 $ 548,280,792
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$500
$450
$400
$350
$300
$250
$200
$150
$100
$50
$-
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02006
II 2005
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G.O. Bonds
Revenue Bonds
Other Debt
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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.
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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 $434 million.
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Additional information regarding the Government's long-term debt can be found in Note 3 of the notes to the financial
statements of this report.
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BASIC FINANCIAL STATEMENTS
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GOVERNMENT-WIDE FINANClAL STATEMENTS
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I Augusta, Georgia
Statement of Net Assets
December 31, 2006
I Primal)' Government Component Units
I Business Primacy Department Augusta Downtown
Governmental Type Government of Canal Development
Activities Activities Total Health Authority Authority
Assets
I Cash and temporary investments $ 212,448,265 $ 91,400,910 $ 303,849,175 $ 1,266,362 $ 311,064 $ 403,014
Receivables (net of allowance for
doubtful accounts)
I Taxes 7,962,073 7,962,073
Accounts 16,920,625 12,688,420 29,609,045 479,623 100,874
Interest 216,534 997,238 1,213,772
Notes 3,695,694 500,000 4,195,694
I Intergovernmental 161,843 1,206,138 1,367,981
Prepaid expenses 378,694 378,694 32,593
[nventory 204,130 2,640,233 2,844,363 30,159
Noncurrent note receivable 170,000
I Restricted cash and investments 59,283,006 229,103,947 288,386,953 1,151,843
Internal balances 14,411,139 (14,411,139)
Capital assets
I Land and construction in progress 90,377,545 140,091,166 230,468,711 1,647,997 501,949
Other capital assets, net of
accumulated depreciation 138,787,157 280,520,302 419,307,459 7,525,150 13,786,594 3,820,964
Other assets 906,392 19,599,292 20,505,684 80,678
I Total assets 545,753,097 764,336,507 1,310,089,604 10,919,132 15,915,076 4,474,656
Liabilities
I Accounts payable 6,297,462 5,059,724 1I,357,186 836,143 649,620 73,624
Accrued interest 625,601 6,072,824 6,698,425
Accrued salaries and vacation 3,783,668 717,046 4,500,714 132,812 33,013
Other accrued liabilities 1,659,369 2,397,128 4,056,497 23,921 38,644
I Unearned revenue 10,982,559 10,982,559
Liabilities due in less than one year 16,969,318 7,716,529 24,685,847 30,809 360,000 575,000
Liabilities due in greater than one
I year 55,617,736 508,933,469 564,551,205 865,954 1,800,000
T otalliabilities 95,935,713 530,896,720 626,832,433 1,889,639 1,042,633 2,487,268
Net assets
I Invested in capital assets net of
related debt 224,230,109 130,616,469 354,846,578 8,674,818 13,928,543 1,445,964
Restricted foc:
Capital projects 218,918,069 5,339,190 224,257,259 1,151,843
I Debt service t 1,090,583 11,090,583
Perpetual care 338,625 338,625
Health and welfare 622,764
Unrestricted 6,330,581 86,393,545 92,724,126 (268,089) (207,943 ) 541,424
I Total net assets $ 449,817,384 $ 233,439,787 $ 683,257,171 $ 9,029,493 $ 14,872,443 $ 1,987,388
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The notes to the financial statements are an integral part of this statemenL
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FUND FINANCIAL STATEMENTS
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Other Total
I Special Sales Special Sales Governmental Governmental
Tax Phase IV Tax Phase V Funds Funds
I $ 101,632,776 $ 10,593,253 $ 27,927,418 $ 209,701,953
I 2,545,454 7,962,073
42,296 2,669,246 2,148,669 12,253,965
115,O<J6 216,534
I 3,595,694 3,695,694
161,843
233,500 774 378,694
I 204,130
44,855,811 12 44,855,823
338,625 338,625
I 17,415,695
$ 101,908,572 $ 58,118,310 $ 36,671,712 $ 297,185,029
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$ 520,694 $ 105,562 $ 1,386,821 $ 4,112,345
I 920,879 920,879
54,50 I 186,524 3,734,962
65,623 1,659,369
I 6,227,918 21,952,538
575,195 105,562 8,787,765 32,380,093
I 4,688,506 2,230,799 1,171,384 10,488,019
4,696,460 4,696,460
I 2,500,000 2,500,000
233,500 774 582,824
43,866,010 43,866,010
I 4,955,061
96,411,371 11,915,939 178,201,233
I 11,764,126 11,764,126
276,351 276,351
6,918,919 6,918,919
I 555,933 555,933
101,333,377 58,012,748 27,883,947 264,804,936
I $ 101,908,572 $ 58,118,310 $ 36,671,712 $ 297,185,029
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Augusta, Georgia
Reconciliation of the Balance Sheet of Governmental Funds to the
Statement of Net Assets
December 31, 2006
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Amounts reported for governmental activities in the statement of net assets are different because:
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Ending fund balance - governmental funds
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Capital assets used in governmental activities are not flOancial resources and, therefore,
are not reported in the funds.
Historical cost of capital assets
Accumulated depreciation
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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 (liability)
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Internal service funds are used by management to charge the 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 governmental 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
Plus: capital leases included in adjustment for capital leases
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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
Notes payable
General obligation bonds payable
Compensated absences
Capital leases
Claims and judgements
Accrued interest
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Net assets of governmental activities
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The notes to the financial statements are an integral part of this statement
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$ 264,804,936
323,983,904
(94,819,202)
229,164,702
10,969,979
599,144
307,248
11,876,371
1,234,660
195,477
(385,654)
15,108
1,059,591
(157,434)
(2,500,000)
(44,741,536)
(4,104,746)
(1,535,623)
(3,423,275)
(625,601)
(57,088,215)
$ 449,817,385
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I Other Total
Special Sates Special Sates Governmental Governmental
I Tax Phase IV Tax Phase V Funds Funds
$ $ $ 9,787,888 $ 46,197,735
I 5, 102,031 23,120,411 13,217,674 99,296,470
3,195,036 4,552,396
4,744,104 736,601 1,139,772 12,929,817
I 5,314,879 21,367,867
1,218,399 7,273,008
11,868 6,009,688 9,136,145
lO3,787
I 3,064,578 3,204,439
9,858,003 23,857,012 42,947,914 204,061,664
I 339,027 599,144 3,181,511 30,046, 1t8
I 356,699 13,432,905
175,890 3,501,665 68,964,990
2,457,556 4,102,541 13,230,910
577,106 321,497 2,847,211
I 3,839,213 9,665,159 4,128,676 31,390,488
7,608,550 9,436,497
4,603,568 2,093,540 8,572,228
I 1,270,985 1,399,774
11,992,360 10,585,800 26,244,167 179,321,121
I (2,134,357) 13,271,212 16,703,747 24,740,543
2,045,000 425,104 12,002,700
I (15,916,898) (18,902,158)
71,495
44,000,000 44,000,000
I 741,536 741,536
2,045,000 44,741,536 (15,491,794) 37,913,573
I (89,357) 58,012,748 1,211,953 62,654, 1t6
101,422,734 26,671,994 202,150,820
I $ 101,333,377 $ 58,012,748 $ 27,883,947 $ 264,804,936
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Augusta, Georgia
I
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the
Statement of Activities
Year Ended December 31, 2006
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Amounts reported for governmental activities in the statement of activities are different because:
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Net change in fund balances - total governmental funds
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Governmental 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
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15,038,609
(9,985,029)
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Revenues in the statement of activities that do not provide current financial resources
are not reported as revenues in the funds.
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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.
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Governmental funds report collections of long-term receivables as revenues. However,
in the statement of net assets the receivables are recorded, and collection of those
receivables reduce the principal amount recorded. This is the amount of current year
coltections of notes receivable.
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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 effect
of these differences in the treatment of long-term debt and related accounts.
General obligation bonds payable
Revenue bonds payable
Compensated absences
Capital leases
Claims and judgements
Bond issue costs capitalized
Accrued interest
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The net revenue of certain activities of the internal service fund is reported with
governmental activities.
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Change in net assets of governmental activities
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1be notes to the financial statements are an integral part of this statement.
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3\
$ 62,654,1l6
5,053,580
1,312,503
50,528
(2,015,510)
(44,741,536)
105,475
(100,417)
1,295,048
621,582
599,144
(599,407)
(42,820,111)
2,040
$ 24,237,146
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I Augusta, Georgia
Fire Protection
I Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Year Ended December 31, 2006
With comparative amounts for December 31, 2005
I Variance with
Budgeted Amounts Final Budget -
I Actual Positive 2005
Revenues Original Final Amounts (Negative) Actual
I Taxes - property $ 3,505,670 $ 4,925,670 $ 4,921,327 $ (4,343) $ 3,424,774
Taxes - other than property 9,540,350 9,775,390 9,775,390 9,086,046
Licenses and permits 2,613 2,613 249
Use of money and property 60,700 440,700 517,060 76,360 290,067
I Charges for current services 45,700 45,700 87,462 41,762 56,398
Intergovernmental 798,080 997,580 486,484 (5II,096) 275,027
Contributions and donations 3,250 3,250 1,500
I Other 31,850 31,850
Total revenues 13,950,500 16,188,290 15,825,436 (362,854) 13,134,061
I Expenditures
Current:
General government 1,231,830 728,620 969,097 (240,477) 802,038
Public safety 18,131,330 19,083,240 18,368,600 714,640 17,556,062
I Capital outlay 536,730 628,660 407,679 220,981 440,914
Debt service 10,610 10,610 11,511 (901) 11,130
Total expenditures 19,910,500 20,451,130 19,756,887 694,243 18,810,144
I Excess (deficiency) of revenues
over (under) expenditures (5,960,000) (4,262,840) (3,931,451 ) 331,389 (5,676,083)
Other financing sources (uses)
I Transfers in 5,960,000 4,262,840 4,241,820 (21,020) 5,882,562
Total other frnancing sources (uses) 5,960,000 4,262,840 4,241,820 (21,020) 5,882,562
I Net change in fund balances $ $ 310,369 $ 310,369 206,479
Fund balance - beginning 2,463,202 2,256,723
I Fund balance - ending $ 2,773,571 $ 2,463,202
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I The notes to the fmancial statements are an integral part of this statement.
I 33
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Augusta, Georgia
I Statement of Revenues, Expenses, and Changes in Fund Net Assets
rropl"ietary Funds
I Year Ended December 31, 2006
Enterprise Funds
I \-Vater Augusta Other Internal
and Sewer Regional Enterprise Service
System Airpoct Funds Total Funds
I Operating cevenues
Chacges and fees $ 62,066,142 $ 13,680,415 $ 22,640,086 $ 98,386,643 $ 27,879,620
Total operating revenues 62,066,142 13,680,415 22,640,086 98,386,643 27,879,620
I Operating expenses
Personal services and employee benefits [0,89[ ,276 3,6[0,264 4,2[2,757 18,7[4,297 459,535
I Purchased/contracted services 8,[58,093 [ , [61,848 13,390,455 22,7l0,396 499,018
Supplies 5,373,315 7,134,898 1,442,198 13,950,4H 200,108
Repairs and maintenance 4,153,850 378,290 740,400 5,272,540 4,371,329
I Intcrfuudfinterdepartmental charges 2,158,461 264,500 1,339,22 [ 3,762,182
Other costs 6,575 44,206 50,781 159,342
Depreciation 11,953,686 1,466,439 1,454,932 14,875,057 81,312
Closurelpostclosure accrual 1,359,185 1,359,185
I Lease expense 1,374,097
Risk benefit charges 1,300,700
Insurance 20,061,477
I Total operating expenses 42,688,681 14,022,814 23,983,354 80,694,849 28,506,918
Opecating income (loss) [9,377,461 (342,399) (1,343,268) [ 7,691,794 (627,298)
I Nonoperating cevenue (expense)
[nterest revenue [ 1,098,280 1,328,248 l,)[4,056 13,740,584 655,739
I Sale of property 57,960 800 14,683 73,443 12,817
Other revenue 687,447 3,357 690,804 [28,713
Intergovernmental 4,382,048 927,604 5,309,652
Interest expense (25,375,252) (64 [ ,40 1) (26,016,653) (831,659)
I Total nonoperating revenue (expense) ([4,219,012) 6,398,543 1,618,299 (6,202,170) (34,390)
Income (loss) before transfers 5,158,449 6,056,144 275,03 I 11,489,624 (661,688)
I Transfers in 6,415,608 6,415,608 533,794
Transfers out (49,944) (49,944)
Change in net assets 5,158,449 6,056,144 6,64(),695 17,855,288 (127,894)
Lotal net assets - beginning 149,690,153 49,495,448 16,594,375 [,362,554
fotal net assets - ending $ [ 54,848,602 $ 55,551,592 $ 23,235,070 $ 1,234,660
Some amounts reported for business-type activities in the statement of net assets are different
~ause of the following:
Certain internal fund expenses are allocated to business-type activities_ (160,151)
T ota[ change in net assets for business-type activities $ 17,695,137
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I The notes to the financial statements ace an integrat part of this statement
35
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Augusta, Georgia
Statement of Cash Flows
Proprietary Funds
Y car Ended Dccember 31, 2006
Enterprise Funds
\-Vater Augusta Other Internal
& 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) $ 19,377,461 $ (342,399) $ (1,343,268) $ 17,691,794 $ (627,298)
Adjustments to reconcile operating income (loss)
to net cash provided by (used in) operating
activities:
Depreciation and amortization 11,953,686 1,466,439 1,454,934 14,875,059 81,314
Closure/post closure costs 1,359,185 1,359,185
Change in assets and liabilities
Accounts receivable (1,385,963) (290,196) (1,365,978) (3,042,137) (1,463,549)
Inventory (210,828) (21,181) 12,793 (219,216)
Prepaid expenses
Accounts payable (1,252,723 ) (908,341 ) 53,901 (2,107,163) 1,660,717
Accrued salaries and vacation 77,442 (22,344 ) 55,098 3,399
Other accrued liabilites 16,759 (30,731 ) (13,972)
Due lo other funds 2,726,205 1,60 1,710 (1,362,151) 2,965,764 1,196,972
Unearned revenue 50,197 (2,500) 47,697
Decrease in closure liability (955,385) (955,385)
Tolal adjustments 11,958,016 1,865,190 (858,276) 12,964,930 1,478,853
Net cash provided by (used in)
operating activities $ 31,335,477 $ 1,522,791 $ (2,201,544 ) $ 30,656,724 $ 851,555
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The notes to the financial statements are an integral part of this statement.
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Augusta, Georgia
Statement of Changes in Fiduciary Net Assets
Fiduciary Funds
Year Ended December 31, 2006
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Private-purpose
Pension Trust Fund
Trust Funds Joseph R. Lamar
Additions
Charges and fees $ 138,5 [7 $
Contributions - employer $ 3,492,760 $
Contributions - plan member [,140,267
Net investment income 11,334,522 306
Total additions [6,106,066 306
Deductions
Other 175
Administration 503,466
Benefit payments 6,933,377
Refunds 261,459
Total deductions 7,698,302 l75
Net increase in plan net assets 8,407,764 131
Total net assets - beginning 97,325,515 5,452
Total net assets - ending $ 105,733,279 $ 5,583
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The notes to the financial statements are an integral part of this statement
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Notes to Financial Statements
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AUGUST A, GEORGIA
Notes to Financial Statements
Year Ended December 31, 2006
Note I - Summary of significant accounting policies
Augusta, Georgia ("the Governmenl") accounts for its financial position and results of operations in accordance with
accounting principles generally accepted in the United 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 (F ASB) 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 SavaJUlah 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
Ridrmond 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 I, 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 (bur 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 statements 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 Government
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, 50 I 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 30901. Separate financial statements for the Downtown Development Authority may be
obtained from the Downtown Development Authority at III 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
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AUGUST A, GEORGIA
Notes to Financial Statements - Continued
Year Ended December 31,2006
Note 1 - Summary of significant accounting policies (Continued)
Special Sales Tax Phase In Fund - The Special Sales Tax Phase II[ Fund is a capital projects fund that accounts for
the receipts and disbursements of one percent (l %) 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.
Special Sales Tax Phase IV Fund - This fund was established for expenditures specifically budgeted from revenues
from the one cenl sales tax (Phase IV) collected from the years 200 I - 2006 to be used primarily for public works,
recreation and outside agency projects.
Special Sales Tax Phase V Fund - This fund is a capital projects fund that accounts for receipts and disbursements of
one percent (I %) 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.
The Government reports the following nonmajor goverrunental funds:
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".
Emergency Telephone System Fund - This fund accounts for the receipt and disbursement of revenues of the
emergency telephone response system.
Capital Outlay Fund - This fund accounts for the 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 of the Sheriffs Department and Jail.
Occupational Tax Fund - This fund accounts for the receipt and disbursement of tax revenues restricted for fire
protection services in the unincorporated area only.
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.
HotellMotel tax and Promotion/Tourism 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.
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.
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.
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.
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AUGUST A, GEORGIA
Notes to Financial Statements - Continued
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Year Ended December 31, 2006
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Note 1 - Summary of significant accounting policies (Continued)
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The Government reports the following major enterprise funds:
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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.
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Augusta Regional Airport at Bush Field Fund - This fund account,> 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.
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The Government reports the following nonmajor enterprise funds:
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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.
Municipal Golf Course Fund - This fund accounts for the operation of the Municipal Golf Course, an l8-hole
golf course located within the city limits.
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Transit Fund - This fund accounts for the operations of the Augusta Public Transit which provides scheduled bus
service within Richmond and Columbia counties.
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Daniel Field Airport Fund - This fund accounts for revenue and expenses related to Daniel Field Airport.
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Newman Tennis Center Fund - This fund accounts for receipt and expenses related to the operations at Newman
Tennis Center.
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Garbage Collection Fund - This fund accounts for receipt and expenses related to the Government's garbage
collection contract.
Rivenvalk Fund - This fund accounts for receipt and expenses related to the Government's Riverwalk.
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Additionally, the Government reports the following fund types:
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Pension Trust Fund - The Government has pension trust funds that account for the Government's employees'
pension plans. The Government maintains the following pension trust funds: 1945 Pension Trust Fund, 1977
Pension TruSl Fund, and the General Retirement Fund.
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Private Purpose Trust Fund - The Government has a private-purpose trust fund that accounts for resources
legally held in trust to finance awards for children attending Joseph R. Lamar School. The principal amount of the
gift is to be maintained intact and invested. Investment earnings are used for the awards. The Government
maintains the following private-purpose trust fund: Joseph R. Lamar Fund.
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Agency Funds - Agency funds are custodial in nature and do not involve the measurement of operating results.
Agency funds are used to account for assets the Government holds on behalf of others. The Government
maintains the following agency funds: Tax Commissioner, which accounts for tax billings, collections and
remittances made by the Tax Commissioner on behalf of the County and other governmental agencies; Probate
judge, which accounts for the receipt and disbursement of licenses and other fees collected by the Probate Judge;
.Sheriffs Department, which accounts for the receipt and disbursement of funds collected by the department from
individuals posting bond; Civil Court, which accounts for the receipt and disbursement of court-ordered fines, fees
and garnishments made on behalf of third parties; and Clerk of Court, which accounts for the receipt and
disbursement of court-ordered fines and fees made on behalf of third parties and traffic violation fines.
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AUGUST A, GEORGIA
Notes to Financial Statements - Continued
Year Ended December 31, 2006
Note 1 - Summary of significant accounting policies (Continued)
D. Budgets and budgetary accounting
The Government generally follows these procedures in establishing the budgetary data reflected 10 the financial
statements:
I. Budgetary hearings are held in August to discuss departmental budgets.
2. The Administrator presents the tentative budget to the Commission in October.
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 adjustment,
contingent of the Commission's approval.
5. Formal budgetary integration is employed as a management control device during the year forthe General, Special
Revenue, Debt Service and Capital Projects 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.
The State statutes authorize the Government to invest in obligations of the United States government and agencies
thereof, general obligations of the State of Georgia or any of its political subdivisions, or banks and savings and loan
associations to the extent that they are secured by the Federal Deposit Insurance Corporation.
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AUGUST A, GEORGIA
Notes to Financial Statements - Continued
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Year Ended December 31, 2006
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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.
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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.
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N. Use of estimates
The preparation of financial statements in conformily 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.
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Note 2 - Stewardship, compliance and accountability
A. Excess of expenditures over appropriations
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General Fund
General government
Fire Protection Fund
General government
Debt service
Nonmajor Governmental Funds
Urban Services District Fund
General government
Public works
Law Enforcement Fund
Capital outlay
Special Assessment Fund
General government
Public works
Promotion and Tourism Fund
Culture and Recreation
Housing and Neighborhood Development Fund
Debt service
Supplemental Juvenile Service Fund
General government
Weed and Seed Federal Grant Fund
General government
Landbank Authority Fund
Housing and development
Downtown Development Fund
General government
Housing and development
Debt service
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Expenditures Variance
Budget Actual Positive (Negative)
$ 22,910,624 $ 24,855,810 $ (1,945,186)
728,620 969,097 (240,477)
10,610 11,511 (90 I)
1,642,500 1,665,740 (23,240)
428,480 438,934 (l0,454)
22,570 24,859 (2,289)
8,710 10,610 (1,900)
3,229,040 3,497,643 (268,603)
3,730,000 4,027,930 (297,930)
29,378 126,474 (97,096)
1,090 1,092 (2)
9,500 9,504 (4)
777 (777)
621,690 621,691 (I)
154,790 154,791 (I)
6,000 20,423 (14,423)
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AUGUSTA, GEORGIA
Notes to Financial Statements - Continued
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Year Ended December 31, 2006
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Note 3 - Oetailed notes on all funds (Continued)
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2) Repurchase and reverse eepuechase agreements lor direct obligations of the UnIted States government and for
obligations unconditionally guaranteed by agencies.
3) FDIC insured cash assets or deposits.
4) Bonds, notes, warrants, loans Or other debt issued or guaranteed by the United States government.
5) TaKable 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 seclUities issued or insured or guaranteed by an agency, authonty, 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 Internalional 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 anr state or province thereof,
which are not in default and are secured to a certain level.
10) Secured and unseclUed 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.
II) Equipment trust obligations or interests in transportation equipment, wholly or In part within the United States of
America, and the right to receive detenninated portions or related income.
12) Loans that are secured by pledge or securities eligIble for investment.
I 3) Purchase money mortgages or like securities recei ved upon the sale or exchange of real pwpertr acquired.
t 4) Secured mortgages or mortgage participation, pass-through, conventional pass-through, trust certificate, or othee
similar securities with eestrictions.
t 5) 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 vanous circumstances.
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In addition, large retirement systems have restrictIOns as to the concentration of in~'estments in corporations and
equities and additional stipulations exist related to decreases in a fund's assel value.
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As of December 3 I, 2006 the investments of the Government were:
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Type of tu veslmenl
MalUlities io YeMS
Fa.r Value 4.12 Monlhs 1-5Years 6 - 10 Year>
~ 14,161,6J2 S 1 .l,J08,<J96 S 15.436,751 $ 5,415,885
I Ull.781 3,522,527 5.419,541 l,BO ,109
~ 16,83l,523 $ 20,916,298 $ 7,746,594
6).826,724
101,H5,512
11,115,390
S 227,882,041
u.s. GovenHneOl secUlilies
(A).porate sccUlilies
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Equity sex::U1ities
Geo.gia fuod 1
Georgia EJ(teoded Asset Pool
TOlal investments
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The exposure of the Government's debt securities lO credit quality risk is indicated below (as rated by Standard &
Poor's):
Type of iflvcstment fair Value AAA AA AA. A~ A
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U.S. Go\;,en.UtiCfli :i:e.:ut1lics :> 34,161,632 S S
Corporale ;ex::umies 11,3 32,78 3 2,215,438
$ 45,494,415 $ 2,235.438 $
$
s
~
1,690,839
1,690,839 $
2,032.011
2.0JZ.Otl $
1,109,547
I ,l09,54 7 $
4.264 ,946
4,264,946
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The local government investmellt pool "Georgia fund l", crealed by O.c.G.A. ~36.83-8, is a stable net asset value
investment pool. Georgia Fund l operates in a manner consistent with Rule 2a-7 of the {nvestment Company Act of
1940 and is considered to be a 13-7 like p0Q1. The pool is not registeeed 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
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AUGUST A, GEORGIA
Notes to Financial Statements - Continued
Year Ended December 31, 2006
Note 3 - Detailed notes on all funds (Continued)
Augusta Canal Authority
As of December 31, 2006, the bank balance tOlaled $490,358. Of the lotal bank balance, $466,556 was insured
through the Federal Depository Insurance Corporation (FDIC). The remaining $23,802 was collateralized with pooled
securities held by the financial institutions' trust departments. These securities are held in the name of the financial
institution and not that of the Authority.
As of December 31, 2006, the only investments of the Authorily were repurchase agreements. The fair value of the
agreements is $1,010,480, which are included in cash and cash equivalents. U.S Agency securities underlie the
repurchase agreements.
B. Receivables
Property taxes are administered on a calendar year basis subject to the following dates:
Lien date
Levy date
Collection period
Due date
January I
August 15
September 15 - November I 5
November 15
Receivables at December 31, 2006, including the applicable allowances for uncollectible accounts, consiSl of the
following:
Sve~ ia 1 Special Special
Fire Sales Tax Sales Tax Sales Tax
Gene", I Pwtecliou Phase III Phase IV Phase V
Receivables:
Taxes 5,204,359 $ 708.624
Accounts 7.632.903 7.342 51.2 28 42.296 2.669.246
Interest 101.468
Note 100.000
Illtergovemloeutal 161.843
Gross .-eceivables 13.099.105 7/5.966 /52.696 42.296 2.669.246
Less: aUowance f01
uncollectible:s (772.997) (21.091)
Net total receivables 12.326.113 $ 694.875 152.696 42.296 2.669.246
Nooma.iar Nooma.jor
\Vater and Bush Govemmental Enterprise Adjustments to Statement of
Sev....er field funds funds Total Full Accrual Net Assets
Receivables (Conl.):
Taxes 2.638..128 8.55UII S $ 8,551,311
Accounts 8.985.056 822.907 2.169.111 4.102.701 26.482.790 4.666.660 31,149,450
Interest 989.651 115.066 7.587 1.21 J.772 1.213,772
Note 500.000 .1.694.567 4.294,567 4,294,567
Intergovenlmental 1.206.138 1.367,981 1,367,981
Gross receivables 10.474.707 2.029.045 8.617.072 4.110.288 41.910.421 4,666,660 46,577 ,081
Less: allowance for
uncollectibles (270.500) (I 00.000~ (212.189) (851.744) (2.228,516) (2,228,516)
Net total receivables 10.204.207 $ /.929.045 8.404.883 ).2 58.544 $ 39.68/.905 S; 4,666,660 $ 44,348,565
Adjustments to full accrual relale lo internal service funds. Inlernal 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.
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 lo 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 lo amounts and
interest rates based on the level of income of the owner/occupiers. In the governmental fund financial statements,
repaymenls of these loans are recorded as other revenue in the Housing and Neighborhood Development Fund, a
nonmajor special revenue fund.
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AUGUST A, GEORGIA
Notes to Financial Statements - Continued
Year Ended December 31, 2006
Note 3 - Detailed notes on all funds (Continued)
Depreciation expense was charged to functions as follows:
Governmental activities
General government
Judicial
Public safety
Public works
Health and welfare
Culture and Recreation
Housing and development
Risk
Fleet
$
958,894
1,307,676
3,766,729
2,289,254
78,692
1,477,752
24,720
37,888
43,424
9,985,029
$
Balance Balance
December 31, December 31,
2005 Additions Disposals 2006
Water and Sewer
Capital assets, not being depreciated:
Land $ 7.592,871 $ 288,183 $ $ 7,881,054
Construction in progress 120,666,829 (16,056,165) * 104,610,664
Total capital assets not being depreciated 128,259,700 288,183 (16,056,165) 112,491,718
Other capital assets:
Buildings 39,026,157 21,516 39,047,673
Vehicles 5,657,719 357,973 (214,844) 5,800,848
Machinery and equipment 6,594,415 132,265 (150,304 ) 6,576,376
Fumiture and fixtures 440,474 440,474
Other capital 2,273,262 2,875,808 5,149,070
Water and sewerage systems 284,723,149 44,422,052 329,145,201
Contributed water and sewerage systems 10,563,423 10,563,423
Total capital assets being depreciated 349.278,599 47,809,614 (365,148) 396,723,065
Less accumulated depreciation for:
Buildings (23,111,921) (1,197,156) (24,309,077)
Vehicles (4,783,078) (501,272) 214,844 (5,069,506)
Machinery and equipment (5,628,925) (424,208) 150,304 (5,902,829)
Fumiture and fixtures (433,576) (6,367) (439,943)
Other capital (2,126,381 ) (992,890) (3,119,271)
Water and sewerage systems (99,382,928) (8,586,462) (107,969,390)
Contributed water and sewerage systems (6,635,949) (245,331 ) (6,881,280)
Total accumulated depreciation (142,102,758) (11,953,686) 365,148 ( 153,691,296)
Olher capital assets being depreciated, net 207,175,841 35,855,928 243,031,769
Water and sewer capital assets, net $ 335,435,541 $ 36,144,1 I I $ (16,056,165) $ 355,523,487
* Disposals in Construction in progress are shown as additions to Capital assets being depreciated.
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I AUGUST A, GEORGIA
Notes to Financial Statements - Continued
I Year Ended December 31~ 2006
I Note 3 - Detailed notes on all Cunds (Continued)
I Balance Balance
December December 3 I ,
31,
2005 Additions Disposals 2006
I Nonmaior enterprise funds
Capital assets, not being depreciated
Land $ 2,628,861 $ $ $ 2,628,862
Construction in process 4,539,205 (4,539,205)
I Total capital assets not being depreciated 7,168,066 (4,539,205) * 2,628,862
Other capital assets:
I Site and building improvements 1,962,763 605,820 2,568,583
Landfill Cell lIC 9,399,876 9,399,876
Landfill Cell III C 5,616,841 5,616,841
I Buildings 3,227,079 (62,175) 3,164,904
Vehicles 6,103,102 1;272,981 (795,068) 6,581,015
Machinery and equipment 3,015,764 2,566,447 11,385 5,593,596
Furniture and fixtures 11,385 (11,385)
In frastructu re 1,485,833 1,485,833
I IT - hardware 67,250 8,088 75,338
IT - software 441,734 28,008 469,742 .
Total capilal assets being depreciated 25,714,786 ** 10,098,185 (857,243) 34,955,728
I Less accumulated depreciation for:
Site and building improvements (1,244,620) (85,933) (1,330,553 )
I Landfill Cell lIC (9,399,876) (9,399,876)
Landfill CelllllC (31,205) (31,205)
Buildings (1,325,324 ) (100,834) 25,669 (1,400,489)
Vehicles (3,539,704 ) (774,520) 790,Q25 (3,524,199)
I Machinery and equipment (982,219) (406,314 ) (1,898) (1,390,431 )
Furniture and fixtures (1,898) 1,898
In frastructure (691,486) (49,528) (741,014)
IT - hardware (63,976) (4,171 ) (68,147)
I IT - software (443,351 ) (2,427) (445,778)
Total accumulated depreciation (17,692,454) ** (1,454,932) 815,694 (18,331,692)
Other capital assets, net 8,022,332 8,643,253 (41,549) 16,624,036
I Nonmajor enterprise funds, net 15,190,398 8,643,254 (4,580,754) 19,252,898
Business-type activities capital assets, net $ 385,272,573 $ 61,481,509 $ (26,142,614) $ 420,611,468
I Depreciation expense was charged to non-major enterprise funds as follows:
I Waste management and garbage collection $ 686,755
Transit 647,495
Daniel Field Airport 85,514
Municipal golf course 35,168
I $ 1,454,932
I * Disposals in Construction in progress are shown as addilions to Capital assets being depreciated.
** Note: Amounts totaling $508,640 were reclassified as of December 31, 2005 in order to correct presentation by major
class of asset and accumulated depreciation. There was no net affect on Other capital assets, net.
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AUGUSTA, GEORGIA
Notes to Financial Statements - Continued
Year Ended December 31, 2006
Note 3 - Detailed notes on all funds (Continued)
Downtown Development Authority
Capital assel activity for the year ended December 31, 2006 was as follows:
December 3 I , December 31,
2005 Addilions Deletions 2006
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 3,578 4;342 7,920
Total capital assets 6,460,971 4;342 6,465,313
Less accumulated depreciation for:
Port Royal parking deck (1,040,000) (65,000) (1,105,000)
Riverfront parking deck (1,431,000) (95,400) (1,526,400)
Clock (7,432) (4,139) ( II ,571)
Furniture and equipment (130) (1,248) (1,378)
Total accumulated depreciation (2,478,562) (165,787) (2,644,349)
Capital asselS, net 3,982,409 (161,445) 3,820,964
Related debt (2,925,000) 550,000 (2;375,000)
Capital assets, net of relaled debt $ 1,057,409 $ (161,445) $ 550,000 $ 1,445,964
I Depreciation expense for the year ended December 31, 2006 was $165,787.
D. Accounts payable and accrued liabilities
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Payables for the Government at December 31, 2006 were as follows:
Governmental Enterprise Adjustments Statement of
Funds Funds Total To Full Accrual Net Assets
Payables:
Accounts payable $ 4,112,345 $ 5,059,724 $ 9,172,069 $ 2,185,117 $ 11,357,186
Accrued interesl 6,072,824 6,072,824 625,60 I 6,698,425
Accrued salaries and vacation 3,734,962 1,463,596 5,198,558 (697,844 ) 4,500,714
Other accrued liabilities 1,659,369 2,397,128 4,056,497 4,056,497
Total accounts payable and
accrued liabilities $ 9,506,676 $ 14,993,272 $ 24,499,948 $ 2,112,874 $ 26,612,822
Adjustments to full-accrual basis include $625,60 I related to accrued interest on governmenlal long-term debt,
$746,550 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 $2,185,117 and $48,706, respectively, related to internal
service funds. Internal service funds predominalely 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 governmenl-wide financial statement.
Also, the fiduciary fund financial statements include $18,883 in accounts payable recorded in pension trust funds. This
amount is excluded from the foregoing schedule and represents amounts due to various other agencies, individuals or
governments.
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AUGUST A, GEORGIA
Notes to Financial Statements - Continued
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Year Ended December 31, 2006
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Note 3 - Detailed notes on all funds and account groups (Continued)
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Notes payable
Housing and Neighborhood Development:
$2,500,000 Section 108 loan for revitalization of locally owned historic hotel due in annual
installments of$125,000 to $216,000 beginning October 2011, plus variable interest at LIBOR
plus .2% varying annually through 2025.
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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%.
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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.
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Add: Bond issue premiums
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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
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Total
Notes Payable Revenue Bonds General Oblig,ation Bonds
Year ending
December 3 I Principal Interest Principal Interest Principal Interest
2007 $ $ 137,850 $ 111,843 $ 5,436 $ 8,t25,000 $ 1.602,389
2008 137,850 45,591 440 8,450,000 1.266,000
2009 137,850 8,785,000 921,300
2010 137.850 9.135,000 562.900
2011 125,000 137,850 9,505.000 190,100
2012 - 2016 703,000 580,292
2017 - 2021 856,000 370,320
2022 - 2026 816,000 114,691
2027 . 2031
$ 2,500,000 $ 1,754,553 $ 157,434 $ 5,876 $ 44,000,000 $ 4,542,689
Continued Certificates of Participation Total
Year ending
December 3 I Principal Interest Principal Interest
2007 $ $ 802,180 $ 8,236,843 $ 2,547,855
2008 802,180 8,495,591 2,206,470
2009 802,180 8,785,000 I ,861.3 30
2010 802,180 9,135,000 1,502,930
2011 802,l80 9,630,000 I ,130,030
2012 - 2016 4,010,900 703,000 4,591,192
20 I 7 - 2021 4,010,900 856,000 4,381,220
2022 - 2026 4,010,900 816,000 4.125,591
2027 - 203 I [6,888,000 1,136,422 16,888,000 1,136,422
$ 16,888,000 $ 17,180,022 $ 63,545,434 $ 23,483,140
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$ 2,500,000
$ 157,434
$ 44,000,000
741,536
$ 44,741,536
$ 16,888,000
(763,560)
$ 16,124,440
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AUGUST A, GEORGIA
Notes to Financial Statements - Continued
I Year Ended December 31, 2006
I Note 3 - Detailed notes on all funds (Continued)
Bush Field (Continued)
$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 2035 ranging from $1,455,000 to $1,760,000 plus
interest of 5.45% through January 2030 and fmal payment of$I,315,000 plus interest of 5.45%
due January 2031. $
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6,200,000
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Total revenue bonds - Bush Field
19,605,000
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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 I, 2005 through December I,
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
8,540,000
174,736
8,714,736
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Total revenue bonds
$ 491,121,382
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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.
$
2,980,587
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$6,553,217 State revolving loan - principal and interest due in quarterly installments of
$119,392, bearing interest at 4%, through July 2019.
4,751,581
Total
$
7,732,168
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Business-type Activities
Year ending Notes Payable Revenue Bonds Total
December 3 I Principal Interest Principal Interest Principal Interest
2007 $ 555,212 $ 301,028 $ 5,490,000 $ 24,609,571 $ 6,045,212 $ 24,910,599
2008 577,757 278,484 6,410,000 24,413,659 6,987,757 24,692,143
2009 601,215 255,024 7,225,000 24,135,194 7,826,215 24,390,218
2010 625,627 230,612 8,120,000 23,849,022 8,745,627 24,079,634
2011 651,030 205,209 7,805,000 23,522,746 8,456,030 23,727,955
2012-2016 3,483,516 608,349 42,795,000 112,138,659 46,278,516 112,747,008
2017-2021 1,237,811 75,501 54,330,000 100,291,295 55,567,811 100,366,7%
2022-2026 72,005,000 85,243,9\7 72,005,000 85,243,917
2027-203\ 97,375,000 64,253,557 97,375,000 64,253,557
2032-2036 113,430,000 37,350,178 113,430,000 37,350,178
2037-2041 75,630,000 8,076,600 75,630,000 8,076,600
$ 7,732,168 $ 1,954,207 $ 490,615,000 $ 527,884,398 $ 498,347,168 $ 529,838,605
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During the year ended December 31, 2006, the City entered into an interest rate swap transaction 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 the City 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 LlBOR rate. The City
considers the credit risk related to the interest rate swap to be low because such instruments are entered into only with
financial institutions having a high credit rating and are settled on a net basis. The City is exposed to credit loss in the
event of nonperformance by the other party to the interest rate swap agreement. However, the City does not anticipate
nonperformance by the counterparty. 65
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AUGUST A, GEORGIA
Notes to Financial Statements - Continued
Year Ended December 31, 2006
Note 3 - Dctailed notcs on all funds (Continucd)
The refunding will increase total debt service payments over the next 24 years by approximately $2, I 00,000 and will
produce an economic gain of approximately $110,000.
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 $531,246 and the debt for the obligation under capital lease was $498,329 at
June 30, 2006.
Au~usta 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.
Year Ending
December 31,
Notes Payable
Principal Interest
2007
$
$
360,000
11,138
Downtown Development AuthorilY
Development Authority Refunding Revenue Bonds, Series 2003:
In May of 2003, the Development Authority of the City of Augusta issued $4,035,000 Development Authority Revenue
Bonds, Series 2003. The proceeds of these bonds were used to redeem two previous issuances of revenue bonds,
Development Authority Parking revenue Bonds, Series 1989 and 1991. The original bond issuances were used to fund
the construction of two parking decks in downtown Augusta, Georgia.
The Series 2003 Bonds are limited, special obligations of the Authority and are secured from payments received under
an intergovernmental lease between the City of Augusta and the development Authority for use of the two parking
decks.
Interest on the Series 2003 development Authority Bonds is paid semi-annually. The interest rate is 2.56%. Principal is
due on January I of each year as follows:
Principal Interest
Year Payments Payments
2007 $ 575,000 $ 53,440
2008 585,000 38,592
2009 600,000 23,424
2010 615,000 7,872
$ 2,375,000 $ 123,328
H. Leascs
The Government has entered into several long-term lease agreements for various vehicles and machinery and
equipment. Although the leases contain clauses which provide that the leases are cancelable if funds are not
appropriated for the periodic payments for any future fiscal periods, the leases meet the criteria of a capital lease as
defined by Statement of Financial Accounting Standards No. 13 Accounting for Leases and the National Council on
Governmental Accounting Statement No. 5 Accounting and Financial Reporting Principles for Lease Agreements of
State and Local Governments.
The Government's lease agreements are through the Georgia Municipal Association and are accounted for in an
internal service fund. They also have lease agreements other the Georgia Municipal Association agreements that are
accounted for within the business-type activities and for governmental activities within the general long-term debt
account group. 67
I AUGUST A, GEORGIA
Notes to Financial Statements - Continued
I Year Ended December 31,2006
I Note 3 - Detailed notes on all funds (Continued)
I. Changes in long-term liabilities
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Primary government
The following is a summary of long-term debt transactions of the year ended December 31, 2006:
I Beginning Ending Current
Balances Additions Reductions Balances Portion
Governmental activities:
I Bonds and notes payable:
Notes payable $ 2,500,000 $ $ $ 2,500,000 $
General obligation bonds payable 44,000,000 44,000,000 8,125,000
Add: Bond issue premiums 741,536 741,536 148,307
I Revenue bonds payable 262,909 105,475 157,434 111,843
Total bonds and notes payable 2,762,909 44,741,536 105,475 47,398,970 8,385,150
Certificates of participation 16,888,000 16,888,000
I Less: original issue discount (808,476) (44,916) (763,560) (44,916)
Total certificates of participation 16,079,524 (44,916) 16,124,440 (44,916)
Other liabilities:
I Compensated absences 4,004,329 3,950,065 3,849,648 4,104,746 4,104,746
Capital leases 2,830,671 71,495 1,366,543 1,535,623 1,101,064
Claims and judgments 4,044,857 430,491 1,052,073 3,423,275 3,423,275
I Total other liabilities 10,879,857 4,452,051 6,268,264 9,063,644 8,629,085
Governmental activities long-term
liabilities $ 29,722,290 $ 49,193,587 $ 6,328,823 $ 72,587,054 $ 16,969,319
I Business-type activities:
Revenue debt:
Revenue bonds payable $ 494,890,000 $ $ 4,275,000 $ 490,615,000 $ 5,490,000
I Less: deferred refunding amounts (2,133,303) (99,329) (2,033,974) (99,329)
Less: bond issue discounts (4,398,381 ) ( 180,235) (4,218,146) ( 180,235)
Add: bond issue premiums 6,973,512 215,010 6,758,502 215,010
Total revenue debt 495,331,828 4,210,446 491,121,382 5,425,446
I Other liabilities:
Compensated absences 699,061 1,456,903 1,409,414 746,550 746,550
Notes payable 8,265,716 533,548 7,732,168 555,212
I Capital leases 1,375,386 2,919,806 479,549 3,815,643 924,767
Closurelpostclosure accrual 12,830,455 1,359,185 955,385 13,234,255
Total other liabilities 23,170,618 5,735,894 3,377,896 25,528,616 2,226,529
I Business-lype activities long-term
liabilities $ 518,502,446 $ 5,735,894 $ 7,588,342 $ 516,649,998 $ 7,651,975
I Typically, the General Fund has been used to liquidate claims and judgments. Compensated absences are liquidated by the
fund which recorded the related salary costs, primarily the General Fund, Fire Protection Fund, and the Water and Sewer
System Fund. Capital leases are liquidated by the fund which received the benefit of the related asset.
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AUGUST A, GEORGIA
Notes to Financial Statements - Continued
Year Ended December 31, 2006
Note 3 - Detailed notes on aU funds (Continued)
Transfers To/From Other Funds
Transfers in (out) for the year ended December 31,2006 are summarized below:
Fire Special Nonmajor
General Protection Sales Tax Govem- Nonmajor Intemal
Transfers out Fund Fund Phase I V mental Enterprise Service Total
General Fund $ $ $ $ 425,104 $ 2,089,162 $ 470,994 $ 2,985,260
Norunajor
governmental 5,240,832 4,241,820 2,045,000 4,326,446 62,800 15,916,898
Nonmajor
entelpnse 49,944 49,944
Total transfers $ 5,290,776 $ 4,241,820 $ 2,045,000 $ 425,104 $ 6,415,608 $ 533,794 $ 18,952,102
Transfers are used to move unrestricted revenues in the general fund and nonmajor governmental funds to finance
various programs that the Government must account for in other funds in accordance with budgetary authorizations,
including amounts provided as subsidies for nonmajor governmental funds, nonmajor enterprise funds and internal
service funds. In the year ended December J I, 2006, the Government made a one-time transfer of $2,045,000 from a
nonmajor capital projects fund to Special Sales Tax Phase IV in order to reallocate unrestricted funds for specific
projects in the Special Sales Tax Phase IV fund.
Note 4 - Other information
A. Risk management
The Government is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors
and omissions; and natural disasters for which the Government is self-insured. The Risk Management Funds (an
internal service fund) are utilized by the Government to account for and finance its self-insured risks of loss. The Risk
Management Funds are maintained to provide general liability insurance, workers' compensation coverage, and
unemployment coverage. The Government is self-insured for workers' compensation coverage through a self-
insurance program that is administered under contracts with a third party administrator. Future claims can be paid
from designated funds established in 1987 from previously unrestricted-unreserved funds. Balances as of December
3 I, 2006, include the following:
General Fund $ 4,705,061
Fire Protection Fund 250,000
Internal Service Fund 200,000
Total reserve $ 5,155,061
Related liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably
estimated. Liabilities include an amount for claims that have been incurred but not reported (IBNRs). Claim liabilities
are calculated considering the effects of'inflation, recent claim settlement trends including frequency and amount of
payouts and other economic and social factors.
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AUGUST A, GEORGIA
Notes to Financial Statements - Continued
I
Year Ended December 31, 2006
I
Note 5 - Pension plans
I
A. Plan descriptions, contribution information and funding policies
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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
Single-emplover pension plans
1945 Plan
The 1945 Plan was available to all former Richmond County employees hired prior to October I, 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
benefits if the participant elects to retire after attaining age 50 and completing 15 years of service. Employees are
required to make contributions to the Plan equal to 5% of earnings. The Government is required to contribute the
remaining amounts necessary to fund the Plan. If a participant terminates employment prior to completion of ten years
of credited service, the participant receives a lump-sum amount equal to his total contributions to the Plan, with 5%
interest computed from January I, 1997. After completion of at least ten years of credited service, the participant
receives a monthly benefit deferred to his normal retirement date, equal to the benefit computed as for normal
retirement multiplied by the percentage based on completed years of credited service, as follows: 50% after 10 years,
increasing 10% each year to 100% after 15 years of credited service. This is a closed retirement plan (new employees
may not participate in the Plan). The 1945 Plan does not issue a stand-alone financial statement report.
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The annual required contribution is determined as part of a January I, 2006 actuarial valuation using the attained age
aggregate method. The actuarial assumptions included (a) an 8% investment rate of return, (b) projected future salary
adjustment of 5%, and (c) a post retirement benefit increase of 5%. An inflation component of 5% is included. The
actuarial value of plan assets is determined using market value.
I
1977 Plan
The 1977 Plan was available to all former Richmond County full-time employees who were not participants in the
1945 Plan provided that they were not hired after reaching age 60. Normal retirement for the Plan is age 65 or the date
when age 62 is attained and an employee completes 25 years of credited service. At that time, the employee is entitled
to a monthly benefit equal to I % of average earnings multiplied by years of credited service. 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 benefits if the participant elects to retire after attaining
age 50 and completing 15 years of service. Employees are required to make contributions to the Plan equal to 4% of
earnings. The Government is required to contribute the remaining amounts necessary to fund the Plan. If a participant
terminates employment prior to completion of five years of credited service, the participant receives a lump-sum
amount equal to his total contributions to the Plan, with interest. After completing at least five years of credited
service, the participant receives a monthly benefit deferred to his normal retirement date, equal to the benefit computed
as for normal retirement. This is a closed retirement plan (new employees may not participate in the Plan). The 1977
Plan does not issue a stand-alone financial statement report.
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The annual required contribution is determined as part of a January I, 2006 actuarial valuation using the attained age
aggregate method. 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 5%. An inflation component of 5% is included. The
actuarial value of plan assets is determined using market value.
I
The funding policies for the 1945 and 1977 Plans provide for actuarially determined periodic contributions at rates that,
for individual employees, remain stable over time so that sufficient assets will be available to pay benefits when due.
The attained age aggregate cost method has been used to compute the normal cost for the plan. Any unfunded plan
costs are spread over the average future working lifetime of the participants as a level percentage of payroll. 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.
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AUGUST A, GEORGIA
Notes to Financial Statements - Continued
Year Ended December 31,2006
Note 5 - Pension plans (Continued)
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, 20 I Pryor Street, SW, Atlanta, Georgia 30303.
The employer contributions are determined as part of a March I, 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 return 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
pension benefits on a timely basis. The significant actuarial assumptions used to compute pension contribution
requirements are the same as those used to determine the standardized measure of the pension obligation. The plan's
unfunded actuarial accrued liability is being amortized over 30 years as a level dollar.
The actuarial assumptions included (a) an 8% investment rate of return, (b) projected future salary adjustment of 5.5%,
and (c) no post retirement benefit increase. An adjustment for inflation is not included.
Membership of the defined benefit plans are as follows:
Retirees and beneficiaries
receiving benefits
Terminated plan members
entitled to but not yet
receiving benefits
Active
Plan
members
1945 Plan
1977 Plan
General Pension Plan
Policemen's Pension Plan
Firemen's Pension Plan
City Employees' Pension Plan
General Retirement Plan (City 1949)
GMEBS
95
4
516
35
91
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2
7
II
147
79
137
201
8
5
Total
108
858
373
The cost of administering the plans are financed through investment earnings.
Actuarial assumptions and other information used to determine the annual required contributions are located in the
Supplementary Information section of this report_
Defined contribution plan
Augusta-Richmond County Board of Commissioners Retirement Savings Plan (the" 1998 Plan")
All full-time employees with more than one month of service are eligible to participate in the Relirement Savings Plan.
The Plan is a defined contribution plan under Section 401(a) of the Internal Revenue Code, and is administered by
Nationwide Life Insurance, PP A support. The Plan was organized and may be amended by a majority vote of the full-
body of the governing board, the Augusta-Richmond County Commission. Employees contribute four percent (4%) of
their salary, and the Government contributes two percent (2%) of the employee's salary. Contribution requirements
may be amended by a majority vote of the full-body of the governing board, the Augusta-Richmond County
Commission. At December 31, 2006, there were approximately 1603 plan participants. Participants are considered
fully vested in the Government's contributions after completing five (5) years of service. For the year ended December
31,2006, the employees' contributions were approximately $1,813,771, and the Government's contributions were
approximately $906,9 I O.
75
I AUGUST A, GEORGIA
Notes to Financial Statements - Continued
I Year Ended December 31, 2006
I Note 5 - Pension plans (Continued)
I Fiscal Annual Actual Percentage of Net Pension
Year Pension County APC (Asset)
Beginning Cost Contribution Contributed Obligation
2004
I 1945 Plan 01/01/2004 $ 170,881 $ 170,890 100% $
1977 Plan o 110 1/2004 913,60 I 955,819 105% (214,493)
General Pension Plan 01/0 112004 25,092 25,092 100%
Policemen's Pension Plan 01/01/2004 72,874 72,874 100%
I Firemen's Pension Plan 01101/2004 188,896 188,896 100%
City Employees' Pension
Plan 01101/2004 249,565 249,565 100%
I General Retirement Plan
(City 1949) 0110112004 100%
GMEBS 01/01/2004 200,432 200,432 100%
I Fiscal Annual Actual Percentage of Net Pension
Year Pension County APC (Asset)
Beginning Cost Contribution Contributed Obligation
I 2005
1945 Plan 0110112005 $ 361,352 $ 361,352 100% $ (9)
1977 Plan 01/0 1/2005 1,036,647 1,087,175 105% (256,711)
I General Pension Plan 01/0 I/2005 24,752 24,752 100%
Policemen's Pension Plan 01/01/2005 72,141 72,141 100%
Firemen's Pension Plan 01/0 112005 186,522 186,522 100%
City Employees' Pension
I Plan 01/01/2005 281,140 281,140 100%
General Retirement Plan
(City 1949) 01/0112005 100%
I GMEBS 0110112005 213,565 213,565 100%
Fiscal Annual Actual Percentage of Net Pension
Year Pension County APC (Asset)
I Beginning Cost Contribution Contributed Obligation
2006
1945 Plan 01/0 1/2006 $ 331,330 $ 360,238 109% $ (28,917)
I 1977 Plan 01/0112006 974,653 1,035,126 106% (307,239)
General Pension Plan 01/0 1/2006 13,219 13,219 100%
Policemen's Pension Plan 01/0 1/2006 50,480 50,480 100%
Firemen's Pension Plan 01/01/2006 179,202 179,202 100%
I City Employees' Pension
Plan 01/01/2006 297,368 297,368 100%
General Retirement Plan
I (City 1949) o I/O I/2006 138,517 138,517 100%
GMEBS 01101/2006 271,945 271,945 100%
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AUGUST A, GEORGIA
Notes to Financial Statements - Continued
Year Ended December 31, 2006
Note 9 - Conduit debt obligations
Conduit debt obligations are limited obligation revenue bonds, certificates of participation, or similar debt instruments
issued for the purpose of providing capital financing for a specific third party that is not a part of the Government's
financial reporting entity. The Government has no obligation for the debt beyond the resources provided by a lease or loan
with the third party on whose behalf the debt was issued.
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, 2006, the amount outstanding on the Special Facility Airport 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 31, 2006, including interest are as follows:
Revenue Bonds
Principal Interest
2007 $ $ 152,390
2008 152,390
2009 152,390
2010 3,110,000 152,390
$ 3,110,000 $ 609,560
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 11- Long-term obligation for Water and Sewer
Swaption
Object oj the swaption. 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 I, 2007, without issuing refunding
bonds at July 2004. The swaption gave the counterparty the option to make the Utilities enter into a floating-to-fixed
interest rate swap.
Terms. The swaption was entered into in July 2004. The $2,121,000 payment was based on a notional amount of
$62,475,000. The counterparty exercised 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 fixes 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 LlBOR, which was approximately 3.57% at December 3 I, 2006.
Fair value. As of December 31, 2006, the swap had a negative fair value of $5,154,671, based on quoted market
pnces.
Credit risk. The Utilities considers the credit risk related to the interest rate swaps to be low because such instruments
are entered into only with financial institutions having high credit ratings and are settled on a net basis. The Utilities
are exposed to credit loss in the event of nonperformance by the other party to the interest rate swap agreements.
However, the Utilities do not anticipate nonperformance by the counterparty.
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PENSION PLAN REQUIRED SUPPLEMENTARY INFORlVIA TION
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I AUGUSTA, GEORGIA
Defined Benefit Pension Trusts - Required Supplementary Information - Continued
I (Unaudited)
December 31, 2006
I A. Schedules of funding progress (Continued)
Actuarial (Funded) (FAAL)
Accrued Unfunded UAAL as
Actuarial Actuarial Liability AAL A %of
I Valuation Valueof AAL (F AAL) Funded Covered Covered
Date Assets Entry Age UAAL Ratio Payroll Payroll
Firemen's Pension Plan
I 12/3 1/94 $ - $ 1,342,821 $ 1,342,821 - % $ - %
\2/31/95 1,296,843 1,296,843
12/3 1/96 1,202,831 1,202,831
12/31/97 1,507,50 I 1,507,50 I
I 12/31/98 1,479,472 1,479,472
12/3 1 /99 1,276,044 1,276,044
12/3 1/00 \ ,258,550 1,258,550
12/31/01 1,345,\33 1,345,133
I 12/31/02 1,204,513 1,204,513
12/31/03 1,110,698 1,110,698
12/31/04 1,009,371 1,009,371
I \2/31/05 1,102,891 1,\02,891
12/31/06 975,046 975,046
City Employees' Pension Plan
12/3 1/94 $ - $ 2,704, I 29 $ 2,704,129 - % $ - %
I \2/3 1/95 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 12/31/99 2,060,501 2,060,501
12/31/00 \,9\1,904 1,911,904
12/3 I /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
12/31/05 1,999,996 1,999,996
12/31/06 1,710,832 1,710,832
I General Retirement Plan (City 1949)
01/01/93 $ 47,314,256 $ 38,551,529 $ (8,762,727) 123 % $ 7,397,577 ( (19) %
01/01/94 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)
I 01/01/96 56,004,033 41,587,715 (14,416,318) 135 6,345,073 (227)
01/01/97 59,413,476 42,712,240 (16,701,236) 139 5,165,172 (323)
01/0 1 /99 71, (38,815 51,388,074 (19,750,741) 138 5,794,554 (341 )
01/01/00 70,974,830 54,306,953 ( 16,667,877) 13\ 5,112,578 (326)
I 01/01/01 70,721,724 54,824,779 ( 15,896,945) 129 5,237,225 (304)
01/01/02 66,542,266 52,471,765 (14,070,50 I) \27 5,473,137 (257)
01/01/03 59,09\,990 53,688,662 (5,403,328) \10 5,774,707 (94)
01/01/04 65,345,259 58,984,857 (6,360,402) \\1 5,774,708 (110)
I 01/01/05 66,064,583 65,169,939 (894,644) 10\ 5,714,554 (16)
01/0 1/06 67,859,472 68,750,121 890,649 99 5,751,403 15
GMEBS
03/01/94 $ 2,754,918 $ 2,903,208 $ 148,290 95 % $ 10,375,830 1.0 0/0
I 03/01/95 3,351,907 3,315,936 (35,971 ) 101 10,657,439 (.3)
03/01/96 3,731,1\8 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
03/0 I /98 4,609,848 5,756,304 1,146,456 80 8,913,934 13.0
I 03/0 1/00 5,559,655 6,422,501 862,846 86 7,719,739 11.2
03/0 I /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
I 0310\/05 7,372,466 8,036,105 663,639 92 6,641,379 10.0
03/01106 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 \9.1
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AUGUST A, GEORGIA
Defined Benefit Pension Trusts - Required Supplementary Information - Continued
(Unaudited)
December 31, 2006
B. Schedules of employer contributions (Continued)
Fiscal Annual Required Percentage
Year Contribution Contributed
CilY Emplovees' Pension Plan
1996 $ 369,477 100 %
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
General Retirement Plan (City 1949)
1996 $ %
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006 138,517 100
GMEBS
1995 $ 106,440 100 %
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
C. Notes to required supplementary information
1945 Plan
1977 Plan
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
Inflation
1/1/06
Attained age aggregate
Level percentage of payroll
Average future working lifetime
Market value plus receivables
111/06
Attained age aggregate
Level of percentage of payroll
Average future working lifetime
Market value plus receivables
8.0%
5.0%
5.0%
5.0%
8.0%
5.5%
5.0%
5.0%
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COMBINING AND INDIVIDUAL
FUND STATEMENTS
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NONMAJOR GOVERNMENTAL FUNDS
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I Permanent Total Nonmajor
I Fund Governmental
Perpetual Care - II Funds
$ 217,308 $ 27,927,418
I
2,545,454
2,148,669
I 115,066
3,595,694
774
I 12
338,625 338,625
$ 555,933 $ 36,671,712
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I $ $ 1,386,821
920,879
186,524
I 65,623
6,227,918
8,787,765
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I 1,17l,384
4,696,460
2,500,000
774
I 555,933 19,515,329
555,933 27,883,947
I $ 555,933 $ 36,671,712
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I Hotel!l\(otel
Tax and Housing and Urban Federal State
I Special Promotionl Neighborhood Development Drug Drug
Assessment Tou.-ism Development Action Grant Fund Fund
I $ 317,786 $ 275,260 $ 3,172,422 $ 77,211 $ 426,196 $ 1,012,981
I 471,651 4,940 116,023 2,463 109,016 11,406
3,415,725 179,969
774
$ 789,437 $ 280,200 $ 6,704,944 $ 259,643 $ 535,212 $ 1,024,387
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$ 256,096 $ 280,200 $ 7,591 $ $ 18,477 $ 15,679
I 713,345
7,040 34,784
I 416,524 3,4 22,23 1
679,660 280,200 4,177,951 18,477 15,679
I 97,299 2,307 66,336 26,370
2,500,000
774
I 12,478 23,912 259,643 450,399 982,338
109,777 2,526,993 259,643 516,735 1,008,708
$ 789,437 $ 280,200 $ 6,704,944 $ 259,643 $ 535,212 $ 1,024,387
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Total Nonmajor
I Wireless Perpetual Land Bank Dilwntilwn Canine NPDES Special Revenue
Phase Care - I Authority Development Filrfeitures Permit Fees Funds
I $ 871,958 $ 423,749 $ 132,142 $ $ 17,098 $ 74,065 $ 14,579,976
2,503,205
I 5,357 168,890 1,171 2,148,669
3,595,694
774
$ 871,958 $ 429,106 $ 132,142 $ 168,890 $ 17,098 $ 75,236 $ 22,828,318
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$ 49,620 $ 151 $ 610 $ 261 $ $ 2,744 $ 878,612
I 207,534 920,879
540 186,524
65,623
95,527 6,182,400
I 49,620 151 1,150 303,322 2,744 8,234,038
I 4,200 329,380
2,500,000
774
I 822,338 424,755 130,992 (134,432) 17,098 72,492 11,764,126
822,338 428,955 130,992 (134,432) 17,098 72,492 14,594,280
$ 871,958 $ 429,106 $ 132,142 $ 168,890 $ 17,098 $ 75,236 $ 22,828,318
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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 31,2006
With comparative amounts for December 31, 2005
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Variance with
Final Budget -
Amended Positive 2005
Budget Actual (Negative) Actual
$ 2,688,230 $ 2,997,609 $ 309,379 $ 3,018,609
2,700 2,700
2,688,230 3,000,309 3 12,079 3,018,609
I
I
Revenues
Charges for current services
Other
Total revenues
I
Expenditures
Current:
General government
Public safely
Capital outlay
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
245,450 243,119 2,331 2 Ul.l 09
3,388,730 2,974,522 414,208 2,867,941
344,950 29,471 315,479
3,979,130 3,247,112 732,018 3,086,050
(1,290,900) (246,803) 1,044,097 (67,441)
647,350 (647,350) 18,000
(31,400) (31,400) (18,015)
643,550 489,050 (154,500) 126,000
1,290,900 457,650 (833,250) 144,000
$ 210,847 $ 210,847 76,559
600,922 524,363
$ 811,769 $ 600,922
I
I
I
Other financing sources (uses)
Transfers in
Transfers (out)
Transfers in (out) between nonmajor funds
Total other fmancing sources (uses)
I
Net change in fund balances
I
Fund balance (deficit) - beginning
I
Fund balance (deficit) - ending
I
I
I
I
I
103
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 31,2006
With comparative amounts for December 31, 2005
I
I
I
Variance with
Final Budget -
Amended Positive 2005
Budget Actual (Negative) Actual
$ 6,500 $ 19,138 $ 12,638 $ 16,04 7
108,140 73,933 (34,207) 77,200
114,640 93,071 (21,569) 93,247
I
Revenues
Use of money and property
Charges for current services
Total revenues
I
Expenditures
Current:
Public safety
Capital outlay
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
I
Net change in fund balances
317,570 17,469 300,101 198,686
22,570 24,859 (2,289) 66,714
340,140 42,328 297,812 265,400
(225,500) 50,743 276,243 (172,153)
$ 50,743 $ 50,743 (172,153)
383,779 555,932
$ 434,522 $ 383,779
I
I
Fund balance - beginning
Fund balance - ending
I
1-
I
I
I
I
I
I
105
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, 2006
With comparative amounts for December 31, 2005
I
I
I
I
Variance with
Final Budget -
Amended Positive 2005
Budget Actual (Negative) Actual
$ 1,371,160 $ 1,319,604 $ (51,556) $ 1,263,859
1,371,160 1,319,604 (51,556) 1,263,859
I
Revenues
Charges for current services
Total revenues
I
Expenditures
Current:
General government
Public works
Capital ouday
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
8,710 10,610 (1,900) 4,572
3,229,040 3,497,643 (268,603) 2,989,202
164,865 64,865 100,000 139,826
3,402,615 3,573,118 (170,503) 3,133,600
(2,031,455) (2,253,514) (222,059) (1,869,741)
389,965 325,104 (64,861) 315,633
1,641,490 1,641,492 2 1,593,681
2,031,455 1,966,596 (64,859) 1,909,314
$ (286,918) $ (286,918) 39,573
396,695 357,122
$ 109,777 $ 396,695
I
I
Other financing sources (uses)
Transfers in
Transfers in (out) between nonmajor funds
Total other fmancing sources (uses)
I
I
Net change in fund balances
Fund balance - beginning
I
Fund balance (deficit) - ending
I
I
I
I
I
I
107
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, 2006
With comparative amounts for December 31, 2005
I
I
Variance with
Final Budget -
Amended Positive 2005
Budget Actual (Negative) Actual
$ $ 80 $ 80 $ 9,153
6,501,344 5,847,412 (653,932) 3,597,470
446,806 3,058,063 2,611,257 647,413
6,948,150 8,905,555 1,957,405 4,254,036
I
I
Revenues
Use of money and property
Intergovernmental
Other
Total revenues
I
I
Expenditures
Current:
General government
Housing and development
Debt service
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
I
8,730
430,870
(97,096)
342,504
I
2,299,909
I
Other financing sources (uses)
Transfers in
Transfers (out)
Proceeds from Section 108 loan
Transfers in (out) between nonmajor funds
Total other fmancing sources (uses)
(31,620)
(15,700)
I
4
(47,316)
I
2,252,593
Net change in fund balances
I
Fund balance - beginning
Fund balance - ending
I
I
I
I
I
109
115,154
6,682,887
1,103,425
7,901,466
3,656,583
(3,603)
2,500,000
519,920
3,019,920
(636,663)
911,063
$
274,400
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, 2006
With comparative amounts for December 31, 2005
I
I
I
Variance with
FilIal Budget -
Amellded Positive 2005
Budget Actual (Negative) Actual
$ $ 127,451 $ 127,451 $ 6,255
617,683 454,366 (163,317) 114,151
617,683 581,817 (35,866) 120,406
I
I
Revenues
Use of money and property
Fines and forfeitures
Total revenues
I
Expenditures
Current:
Public safety
Capital outlay
Total expenditures
306,000 306,000 16,120
311,683 311,672 11 33,155
617,683 311,672 306,011 49,275
270,145 270,145 71,131
$ 270,145 $ 270,145 71,131
246,590 175,459
$ 516,735 $ 246,590
I
I
Excess (deficiency) of revenues
over (under) expenditures
Net change in fund balances
I
Fnnd Ir.tlance - beginning
Fund balance - eoding
I
I
I
I
I
I
I
I
III
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, 2006
With comparative amounts for December 31, 2005
I
I
I
Revenues
Use of money and property
Fines and forfeitures
Total revenues
Variance with
Final Budget -
Amended Positive 2005
Budget Actual (Negative) Actual
$ 5,000 $ 8,061 $ 3,061 $ 7,149
333,000 256,818 (76, (82) 241,485
338,000 264,879 (73,121) 248,634
I
I
I
Expenditures
Current:
General government
Judicial
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
10,850 10,848 2 14,580
361,850 281,698 80,152 329,975
372,700 292,546 80,154 344,555
(34,700) (27,667) 7,033 (95,921 )
34,700 (34,700)
34,700 (34,700)
$ (27,667) $ (27,667) (95,921)
233,356 329,277
$ 205,689 $ 233,356
I
I
I
Other financing sources (uses)
Transfers in
Total other flllancing sources (uses)
I
Net change in fund balances
Fund balance - beginning
I
Fund balance - ending
I
I
I
I
I
I
II3
I
I
Augusta, Georgia
Building Inspection
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Nonmajor Special Revenue Funds
Year Ended December 31, 2006
With comparative amounts for December 31, 2005
I
I
I
Variance with
Final Budget -
Amended Positive 2005
Budget Actual (Negative) Actual
$ 989,360 $ 1,105,713 $ 116,353 $ 1,066,734
2,700 41,492 38,792 17,428
4,138 4,138
992,060 1,151,343 159,283 1,084,162
I
I
Revenues
Licenses and permits
Use of money and property
Charges for current services
Total revenues
I
Expenditures
Current:
General government
Housing and development
Capital outlay
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
I
Net change ill fund balances
156,480 30,744 125,736 26,452
835,580 801,473 34,107 745,594
199,000 199,000
1,191,060 832,217 358,843 772,046
(199,000) 319,126 518,126 312,116
199,000 (199,000)
(15,700) (15,700) (5,405)
199,000 (15,700) (214,700)
$ 303,426 $ 303,426 312,116
629,238 317,122
$ 932,664 $ 629,238
I
I
I
Other financing sources (uses)
Transfers in
Transfers (out)
Total other fmancing sources (uses)
I
Fund balance - beginning
Fund balance - ending
I
I
I
I
I
I
115
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, 2006
With comparative amounts for December 31, 2005
I
I
I
Variance with
Final Budget -
Amended Positive 2005
Budget Actual (Negative) Actual
$ $ 891 $ 891 $
5,000 38,767 33,767 24,472
340,000 678,174 338,174 482,401
345,000 717,832 372,832 506,873
I
I
Revenues
Licenses and permits
Use of money and property
Charges for current services
Total revenues
I
I
Expenditures
Current:
General government
Public safety
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
I
Net change in fund balances
11,400 1,283
333,600 321,533
345,000 322,816
395,016
489,050
(489,050) (489,050)
(489,050)
$ (94,034) $
916,372
$ 822,338
10,117
12,067
22,184
1,920
284,420
286,340
I
395,016
220,533
I
Other financing sources (uses)
Transfers in
Transfers in (out) between nonmajor funds
Total other financing sources (uses)
(489,050)
(489,050)
(76,000)
(76,000)
(94,034)
144,533
I
Fund balance - beginning
771,839
Fund balance - ending
$
916,372
I
I
I
I
I
I
117
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, 2006
With comparative amounts for December 31, 2005
I
I
I
I
I
I
Revenues
Use of money and property
Other
Total revenues
I
I
Expenditures
Current:
Culture and recreation
Housing and development
Total expenditures
I
I
Excess (deficiency) of revenues
over (under) expenditures
Net change in fund balances
I
Fund balance - beginning
I
Fund balance - ending
I
I
I
I
I
I
I
Variance with
Final Budget -
Amended Positive 2005
Budget Actual (Negative) Actual
$ $ 6,301 $ 6,301 $ 3,585
3,980
6,301 6,301 7,565
4,860 6,001 (1,141)
777 (777) 1,544
4,860 6,778 (1,918) 1,544
(4,860) (477) 4,383 6,021
$ (477) $ (477) 6,021
131,469 125,448
$ 130,992 $ 131,469
119
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, 2006
With comparative amounts for December 31, 2005
I
I
I
V uiance with
Final Budget -
Amended Positive 2005
Budget Actual (Negative) Actual
$ $ 725 $ 725 $ 392
10,000 1,022 (8,978) 3,087
10,000 1,747 (8,253 ) 3,479
I
Revenues
Use of money and property
Fines and forfeilures
Total revenues
I
Expenditures
Current
Public safety
T olal expenditures
10,000 10,000
10,000 10,000
1,747 1,747 3,479
$ 1,747 $ 1,747 3,479
15,351 1I ,872
$ 17,098 $ 15,351
I
Excess (deficiency) of revenues
over (under) expenditures
I
Net change in fund balances
I
Fund balance - beginning
I
Fund balance - ending
I
I
I
I
I
I
I
121
I
I
Augusta, Georgia
I
Combining Balance Sheet
Nonmajor Debt Service Funds
December 31, 2006
I
I
Total Nonmajor
Urban Debt Service
Debt Service Debt Service Funds
Assets
Cash and temporary investments $ 5,266 $ 274,342 $ 279,608
Investments
Taxes 26,342 15,907 42,249
Reserve account 12 12
Total assets $ 31,620 $ 290,249 $ 321,869
Liabilities and fund balances
Liabilities:
Deferred revenue 28,707 16,811 45,518
Total liabilities 28,707 16,811 45,518
Fund balances:
Unreserved - undesignated 2,913 273,438 276,351
Total fund balances 2,913 273,438 276,351
Total liabilities and fund balances $ 31,620 $ 290,249 $ 321,869
I
I
I
I
I
I
I
I
I
I
I
I
I
I
123
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, 2006
With comparative amounts for December 31, 2005
I
I
I
Variance with
Final Budget -
Positive 2005
Budget Actual (Negative) Actual
Revenues
Taxes - property $ $ 2,902 $ 2,902 $ 3,405
Use of money and property 17,774 17,774 22,611
Total revenues 20,676 20,676 26,016
Excess (deficiency) of revenues
over (under) expenditures 20,676 20,676 26,016
Other financing sources (uses)
Transfers in 765,000 {765,000)
Transfers (out) (765,000) (765,000)
Total other financing sources {uses) (765,000) {765,000)
Net change in fund balances $ (744,324) $ (744,324) 26,016
Fund balance - beginning 747,237 2,276,678
Fund balance - ending $ 2,913 $ 2,302,694
I
I
I
I
I
I
I
I
I
I
I
I
I
125
I
I
Augusta, Georgia
Combining Balance Sheet
Nonmajor Capital Project Funds
December 31, 2006
I
I
Total Nonmajor
Community Special Sales Special Sales Capital Project
Development Tax Phase [ Tax Phase II Funds
Assets
Cash and temporary investments $ 135,577 $ 2,639,029 $ 10,075,920 $ 12,850,526
Receivables (net of allowance for doublful
accounts)
Interest 115,066 115,066
Total assets $ 135,577 $ 2,639,029 $ 10,190,986 $ 12,965,592
I
I
I
Liabilities and fund balances
Liabilities:
Accounts payable
Total liabilities
$
$ $ 508,209 $ 508,209
508,209 508,209
842,004 842,004
1,100,000 3,596,460 4,696,460
135,577 1,539,029 5,244,313 6,918,919
135,577 2,639,029 9,682,777 12,457,383
135,577 $ 2,639,029 $ 10,190,986 $ 12,965,592
I
Fund balances:
Encumbrances
Project maintenance
Unreserved - undesignated
Total fund balances
I
Total liabilities and fund balances $
I
I
I
I
I
I
I
I
I
I
127
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
NONMAJOR ENTERPRISE FUNDS
129
I
I
I
I Daniel Newman
Field Tennis Garbage
I Airport Center CoUection Riverwalk Total
$ 109,650 $ $ 11,858,546 $ $ 22,640,086
I 109,650 11,858,546 22,640,086
I 26,898 131,096 4,212,757
12,061 12,514,596 13,390,455
12,777 1,370 36,567 1,442,198
I 19,922 740,400
II ,521 17,856 1,339,221
44,206
85,514 39,997 1,454,932
I 1,359,185
168,693 1,370 12,740,112 23,983,354
I (59,043) (1,370) (881,566) (1,343,268)
I 15,949 1,314,056
14,683
84 3,357
3,920 927,604
I (257,695) (641,40 I)
19,953 (257,695) 1,618,299
I (39,090) (1,370) (1,139,261) 275,031
144,162 2,986,514 6,415,608
I (49,944) (49,944)
105,072 (1,370) 1,847,253 (49,943) 6,640,695
I 1,691,681 1,370 (2,606,365) 49,943 16,594,375
$ 1,796,753 $ $ (759,112) $ $ 23,235,070
I
I
I
I 133
I
I
I
Newman Total Nonmajor
I Daniel Field Tennis Garbage Enterprise
Airport Center Collection Riverwalk Funds
I $ 109,650 $ $ 11,211,271 $ $ 21,274,108
(172,979) (172,979)
I (45,176) (879) (13,753,680) (8,652) (17,619,988)
(26,417) (129,480) (6,998) (4,227,623)
(11,521) (17,856) (1,455,062)
I (146,443) (879) (2,689,745) (15,650) (2,201,544)
I 144,162 2,986,514 6,415,608
(49,944) (49,944)
1,143,197
I (257,695) (304,478)
144,162 2,728,819 (49,944) 7,204,383
I 56,230
3,920 3,920
I 2,399,884 2,919,806
(1,490,000)
(303,385)
I (17,665) (2,399,884) (5,558,981)
(5,558)
(345,346)
84 3,358
I (13,661) (4,719,956)
I 16,348 1,314,455
16,348 1,314,455
I 406 (879) 39,074 (65,593) 1,597,338
I 568,146 879 50,283 65,593 27,519,144
I $ 568,552 $ $ 89,357 $ $ 29,116,482
I
I 135
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
fNTERNAL SERVICE FUNDS
139
I
I
I
I Long-term Total
Employee Disability GMA Internal Service
Health Benefits Unemployment Insurance Leases Funds
I
I $ (393,278 ) $ $ (51,615) $ 128,945 $ (627,298)
I
81,314
I (6,307) (1,416,925) (1,463,549)
I 1,497,136 36,812 136,105 1,660,7 I 7
3,399
1,196,972 1,196,972
1,490,829 36,812 (83,848) 1,478,853
I
$ 1,097,551 $ $ (14,803) $ 45,097 $ 851,555
I
I
I
I
I
I
I
I
I 147
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
FlDUClAR Y FUNDS
149
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
PENSION TRUST FUNDS
151
I
Augusta, Georgia
I
Combining Statement of Changes in Fiduciary Net Assets
Pension Trust Funds
Year Ended December 31, 2006
I
I
1945 1977 General
Plan Plan Retirement Total
Additions
Charges and fees $ $ $ 138,517 $ 138,517
Contributions - employer 692,682 1,3 [7,547 1,482,531 3,492,760
Contributions - plan member 16,892 741,940 381,435 1,140,267
Net investment income I,OlO,189 2,291,754 8,032,579 11,334,522
Tota[ additions 1,7[9,763 4,35[,241 10,035,062 [6, [06,066
Deductions
Administration 49,612 112,605 341,249 503,466
Benefit payments 910,091 837,002 5,186,284 6,933,377
Refunds 211,265 50,194 261,459
Total deductions 959,703 l,l60,872 5,577,727 7,698,302
Net increase (decrease) in
plan net assets 760,060 3,190,369 4,457,335 8,407,764
Total net assets - beginning 9,567,674 20,197,057 67,560,784 97,325,515
Total net assets - ending $ 10,327,734 $ 23,387,426 $ 72,018,119 $ lO5,733,279
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
153
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I /
I
AGENCY FUNDS
155
I
I
Augusta, Georgia
Combining Statement of Changes in Fiduciary Assets and Liabilities - Continued
Agency Funds
December 31,2006
I
I
Clerk of Court
January 1,2006 Additions Deductions December 31,2006
$ 4,078,214 $ 100530,429 S 10,248.936 3) 4,359,707
$ 4,078,214 $ 10,530,429 $ 10,248,936 $ 4,359,707
3) 4,078,214 $ 10,530.429 $ 10,248,936 $ 4,359,707
$ 4,078,214 $ 10,530,429 $ 10,248,936 $ 4,359,707
Assets
ICash and cash equivalents
Total assets
I Liabilities
Due to others
Total liabilities
ITOTAL ALL AGENCY FUNDS:
Assets
laSh and cash equivalents
Receivables
(net of allowance for doubtful accounts)
I Taxes
Total assets
$ 7,072,289 $ 94,898,674 '5 93.114,523 $ 8,856,440
n,645,698 141.893,854 141.511,239 23,027,263
$ 29,717,987 $ 236,792,528 $ 234,626,812 $ 31,883,703
$ 7,072,289 $ 94.898,674 S 93,114.52.) $ 8,856,440
22,645,698 141,893.l;;54 141,512,289 23,027,263
$ 29,717,987 $ 236,792,528 $ 234,626,812 '5 31,883,703
. Liabilities
~ue to others
Uncollected laxes
I Total liabilities
I
I
I
I
I
I
I
I
157
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
COMPLIANCE SECTION
I
I
I
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
STATEMENTSPERFORMEDINACCORDANCE~TH
GOVERNMENT AUDITING STANDARDS
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I
I
Augusta-Riclunond 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 31,2006 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-Riclunond 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
Our consideration of internal control over financial reporting was for the litnlted purpose described in the preceding
paragraph and would not necessarily identify all deficiencies in internal control over financial reporting that tnlght
be sigrtificant deficiencies or material weaknesses. However, as discussed below, we identified certain deficiencies
in internal control over financial reporting that we consider to be sigrtificant deficiencies.
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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 tnlsstatements on a timely basis. A
sigrtificant 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 tnlsstatement 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 sigrtificant deficiencies in internal control over financial reporting, as described in 06-FS-0 I and 06-FS-02.
A material weakness is a sigrtificant deficiency, or combination of significant deficiencies, that results in more than
a remote likelihood that a material tnlsstatement of the financial statements will not be prevented or detected by the
entity's internal control.
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AUGUSTA, GEORGIA
Schedule of Expenditures of Federal Awards
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Year Ended December 31, 2006
Federal Grantor!
I Pass-through Grantor!
Program Title
Federal
CFDA
Number
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
14.218
14.231
14.239
14.235
14.241
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Total U.S. Department of Housing and Urban Development
I U.S. Department of Justice
<Direct Programs>
Local Law Enforcement Block Grant Program
16.592
16.592
16.592
16.592
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Juvenile Accountability Incentive Block Grants
16.523
16.523
I <Pass-through from the Office of the Governor>
Crime Nictim Assistance Grants
16.575
16.575
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Edward Byrne Memorial Formula Grant Program
16.579
Total U.S. Department of Justice
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C-4
Agency or Pass-through
Number
B-xx-MC-13-0004
S-xx-MC-13-0004
M-xx-MC-13-206
GAO I B504004
GAH-xx-F002
2004-LB-BX-1472
2005-DJ-BX-0630
2006-DJ-BX-0390
2005-DD-BX-I03 I
Total CFDA# 16.592
03B-FM-OOO I
03B-ST-000 1I04-ST-000 1
Total CFDA# 16.523
C06-8-00 1
C05-8-185
Total CFDA# 16.575
B04-8-005
Federal
Expenditures
$
4,194,821
132,425
1,917,703
44,222
329,062
6,618,233
98,641
137,527
24,316
32,953
293,437
5,550
5,550
27,132
38,211
65,343
92,795
457,125
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AUGUSTA, GEORGIA
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Schedule of Expenditures of Federal Awards (Continued)
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Year Ended December 31, 2006
I Federal Grantor!
Pass-through Grantor!
Program Title
Federal
CFDA
Number
I U.S. Environmental Protection A2:encv
Brownfields Cooperative Agreement
Nonpoint Source Implementation Grants
66.811
66.460
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Total U.S. Environmental Protection Agency
Emer2:encv Mana2:ement A2:encv
I Hazard Mitigation Grant
83.548
I U.S. National Park Service. Department of Interior
Historic Preservation Fund Grant-In-Aid
15.9Q.4
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Total Federal Expenditures
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C-6
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Agency or Pass-through
Number
BF-97493603-0
N/A
17PDMC03014245
N/A
Federal
Expenditures
$
137,751
77 ,971
215,722
19,170
13,009
$
13,268,697
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AUGUST A, GEORGIA
Summary Schedule of Prior Year Audit Findings and Questioned Costs
For the Year Ended December 31,2006
Summary Listinl!: of Prior Audit Findinl!:s
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Finding Control
Number
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04-01
05-FS-0 I
04-02
04-03
05-01
05-02
05-03
05-04
05-05
05-06
05-07
05-08
05-09
05-10
05-11
05-13
05-14
05-15
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Auditee Response/Status
Comments
Repeat finding in current year
Substantially resolved in the current year
Repeat finding in current year
Repeat finding in current year
Repeat finding in current year
Resolved during the current year
Resolved during the current year
Repeat finding in current year
Resolved during the current year
Repeat finding in current year
Resolved during the current year
Repeat finding in current year
Resolved during the current year
Resolved during the current year
Resolved during the current year
Repeat finding in current year
Repeat finding in current year
Resolved during the current year
See p. C-9
See p. C-9
See p. C-1O
See p. C-1O
See p. C-II
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
See p. C-21
See p. C-22
See p. C-24
See p. C-25
See p. C-26
C-8
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AUGUSTA, GEORGIA
Summary Schedule of Prior Audit Findings and Questioned Costs (Continued)
Year Ended December 31, 2006
I. Findings in Relation to the Audit of the Financial Statements (Continued)
CAUSE:
The City does not have sufficient resources devoted to financial reporting nor personnel with the appropriate financial
reporting knowledge level in order to properly prepare and review fmancial statements and schedules.
The City did not have a formal documentation policy relating to authorized rates of pay and any changes to the rate of pay
for employees.
The City did not have a reconciliation process in place to timely perform a reconciliation of capital expenditures to the
additions to the capital asset system. The City also did not enforce the closing out of projects from construction in
progress to the capitalization in the capital asset system.
RECOMMENDA TlONS:
We recommend that tasks that are part of internal controls, such as reconciliations of assets and liabilities to supporting
documentation for all funds, be performed on a regular basis not less frequently than montWy. We recommend that
appropriate reviews and approvals of transactions, accounting entries, and systems output be performed and documented
on a regular basis not less frequently than daily. We recommend that management develop a corrective action plan to
follow up and correct all identified deficiencies in internal controls, and that progress on the plan be monitored and
documented.
We recommend the City develop and implement a formal documentation policy for authorized pay rates and authorized
changes to pay rates.
CURRENT STATUS:
The City has implemented various levels of review of transactions, and has hired and trained additional accounting and
finance staff. Finding is considered substantially corrected.
II. Federal Awards Findings and Questioned Costs
Finding 04-2 (repeat finding)
U.S. Department of Housing and Urban Development - CFDA 14.239 - HOME Investment Partnership Program
Criteria
OMB A-l33 (.400(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.
Condition noted
Insufficient resources were dedicated to sub-recipient monitoring.
Recommendation
We recommend that the HOME program of Augusta, Georgia implement the following controls:
A. Review required sub-recipient reports and follow up on areas of concern.
B. Perform site visits to sub-recipients to review financial and programmatic records and observe operations.
C. Draft written policies which establish the following:
communication of Federal award requirements to sub-recipients;
responsibilities for monitoring sub-recipients;
process and procedures for monitoring;
methodology for resolving findings of sub-recipient noncompliance or weaknesses in internal control;
and requirements for and processing sub-recipient audits.
C-IQ
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AUGUSTA, GEORGIA
Summary Schedule of Prior Audit Findings and Questioned Costs (Continued)
Year Ended December 31,2006
II. Federal Awards Findings and Questioned Costs (Continued)
Expenditures of Federal Awards or the various federal financial reports to the general ledger. The general ledger also
cannot be reconciled to federal reporting systems such as the IDIS system maintained by HUD.
In addition, the Housing and Economic Development Department (HED) of the City maintains an inadequate filing system
and documentation retention. The information contained in the project files is unorganized and incomplete.
CRITERIA:
According to the Office of Budget and Management Circular A-I 02, Uniform Administrative Requirements for Grants and
Cooperative Agreements to State and Local Governments, the City is required to maintain accurate and complete
accounting records which identify the source of and application for federal funds. In addition, OMB A-102 states that the
grantee must establish reasonable control procedures which ensure the accuracy of such records. All grant revenue sources
need to be identified and properly reported on the Schedule of Expenditures of Federal Awards.
EFFECTS:
· Federal grants may not be properly reported on the Schedule of Federal Awards in the Single Audit report.
· Departments may not be aware of or be in compliance with federal laws concerning the management, spending, and
reporting 0 f the grants.
As a result, all federal grants may be in jeopardy for future funding.
QUESTIONED COSTS:
Undetermined
CAUSE:
The City has a systematic problem in that it does not have a grants management position that could centralize the
information and management of the grants received by the City.
RECOMMENDATIONS:
To improve the management of the City's grants, we recommend the City create a grants' manager position that would be
responsible for organizing and maintaining all grant information for the City as a whole. This position should also be
responsible for researching federal laws and regulations related to grant programs and ensuring compliance with these laws
and regulations. This position should maintain a summary of all federal funds received, all pertinent information related to
the grant program, such as CFDA number and codes of federal regulations. This position should also be responsible for
ensuring a reconciliation is prepared between the federal financial reporting and the City's general ledger.
MANAGEMENT'S RESPONSE AND CORRECTIVE ACTION PLAN:
Management concurs with the fmding and has already taken steps to implement the recommendations as practically
possible within the City's resources.
CURRENT STA TUS:
Repeat finding. Although the City created a grants manager position at the end of ftscal year 2006, it was not in place to
correct the management problems that occurred throughout the year under audit.
Finding 05-02
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 Progra~ CFDA #14.241 Housing Opportunities for Persons with
AIDS
Grants Management
Compliance Requirement:
C-12
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AUGUSTA, GEORGIA
Summary Schedule of Prior Audit Findings and Questioned Costs (Continued)
Year Ended December 31,2006
II. Federal Awards Findin2s and Ouestioned Costs (Continued)
Consideration of Internal Control over Compliance - Reportable Conditions
Finding 05-03
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
Eligibility, Program Income
Compliance Requirement:
CONDITION:
The City contracts with sub-recipients to carry out the performance of the grant programs. The use of sub-recipients does
not relieve the City of ensuring that federal funds are used in accordance with all program requirements. This includes
compliance with eligibility and program income requirements. The City did not perform any review of sub-recipients'
eligibility records during 2005. The City also did not review program income to insure proper reporting was made to
reduce grant draws. The lack of sub-recipient monitoring is a Compliance Finding related to the Housing and Urban
Development federal programs. This leads to an Internal Control Finding as it relates to Eligibility and Program Income
requirements because we rely on Sub-recipient Monitoring to test compliance with these requirements.
CRITERIA:
According to 24 CFR (HUD) 85.40(a), Monitoring by grantees, Grantees are responsible for managing the day-to-day
operations of grant and subgrant supported activities and must monitor these activities to assure compliance with
applicable Federal requirements and that performance goals are being achieved. Grantee monitoring must cover each
program, function or activity.
Furthermore, 24 CFR (HUD) 92.504(a) states that the participating jurisdiction is responsible for managing the day to day
operations of its HOME program, ensuring that HOME funds are used in accordance with all program requirements and
written agreements, and taking appropriate action when performance problems arise. The use of State recipients, sub-
recipients, or contractors does not relieve the participating jurisdiction of this responsibility. The performance of each
contractor and sub-recipient must be reviewed at least annually.
EFFECTS:
Failure to monitor the sub-recipients to insure their compliance with applicable Federal requirements, including the
eligibility of recipients of federal funding and the receipt and recording of p-,:ogram income, is a material non-compliance
with program requirements for Housing and Economic 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.
QUESTIONED COSTS:
Undetermined
CAUSE:
Lack of oversight in the Housing and Economic Development Department to insure sub-recipients are in compliance with
requirements such as eligibility and the reporting and treatment of program income resulted in a systematic problem
related to the control over eligibility and program income of the HOD programs.
RECOMMENDA TIONS:
We recommend the City establish policies and procedures for monitoring sub-recipients. These procedures should include
tests of eligibility and program income to insure they are in compliance with federal requirements specific to the programs.
MANAGEMENT'S RESPONSE AND CORRECTIVE ACTION PLAN'
Management concurs with the rmding and has already taken steps to implement the recommendations as practically
possible within the City's resources.
C-14
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AUGUSTA, GEORGIA
Summary Schedule of P.rior Audit Findings and Questioned Costs (Continued)
Year Ended December 31, 2006
II. Federal Awards Findinl!s and Ouestioned Costs (Continued)
RECOMMENDA TIONS:
We recommend the City use the time logs currently being completed in calculating the administrative charges to the
various grant programs in accordance with OMB Circular A-87.
MANAGEMENT'S RESPONSE AND CORRECTIVE ACTION PLAN'
Management concurs with the fIDding and has already taken steps to implement the recommendations as practically
possible within the City's resources.
CURRENT STATUS:
Repeat fIDding. The City took steps to correct this compliance finding in fiscal year 2007. As such, it is a repeat ftnding
in year under audit.
Finding 05-05
Federal Agency:
Federal Program:
Compliance Requirement:
U.S. Department of Housing and Urban Development
CFDA # 14.218 Community Development Block Grant
Sub-recipient Monitoring
CONDITION:
Contracts for Facade grants funded with federal funds include a Promissory note between the City and the recipient. The
promissory note bears no interest and is written off 20% per year. The abatement is conditional on the borrower both
properly maintaining the facade and continuing to own the loan that secures the note. The project ftles do not contain
supporting documentation that the facade is monitored for proper maintenance nor do the files contain written
documentation of the abatement of principaL
CRITERIA:
According to the Promissory Note between the City and the facade grant recipient, no amount of the debt shall abate
without written notification from the note holder who shall be responsible for reviewing compliance with the conditions of
the security deed within 30 days of each anniversary of said security deed for the period of 5 years.
EFFECTS:
The City's lack of monitoring sub-recipient contracts could result in the sub-recipient's non-compliance with federal
program activities which could require the return of funds to the federal agency.
OUESTIONED COSTS:
Undetermined
CA USE:
The lack of a policy to monitor the facade grant recipients once the project is complete resulted in a systematic problem
related to the sub-sequent monitoring of loan abatements.
RECOMMENDATIONS:
We recommend procedures be put in place to monitor the facade grants and any other loans that are abated according to
the Loan Agreements.
MANAGEMENT'S RESPONSE AND CORRECTIVE ACTION PLAN-
Management concurs with the fIDding and has already taken steps to implement the recommendations as practically
possible within the City's resources.
C-16
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AUGUSTA, GEORGIA
Summary Schedule of Prior Audit Findings and Questioned Costs (Continued)
Year Ended December 31,2006
II. Federal Awards Findinl!s and Ouestioned Costs (Continued)
CURRENT STATUS:
Repeat fmding. Though the City began monitoring its sub recipients during the year under audit and maintaining written
monitoring reports, follow-up of material findings is not being performed in a timely manner. Furthermore, the OMB
Circular A-l33 compliance reports are not being received from subrecipients receiving federal pass-through funds in
excess of $500,000. In 2006, we noted the written evidence of on-site programmatic monitoring. However, we also noted
that audits, if required, are not received and examined for program fmdings on a timely basis.
Consideration of Internal Control over Compliance
Finding 05-07
Federal Agency:
Federal Program:
Compliance Requirement:
U.S. Department of Justice
CFDA # 16.592 Local Law Enforcement Block Grant
Period of Availability
CONDITION:
The City received funding from the Local Law Enforcement Block grant for the acquisition of equipment. The grant has
very specific periods in which these funds must be obligated and expended or returned to the federal agency. The City
obligated the funds one day prior to the end of the grant award period and liquidated (expended) the funds two months
after the period of availability ended.
CRITERIA:
According to the Dept. of Justice Financial Guide, block, formula, and discretionary funds which have been properly
obligated by the end of the award period will have 90 days in which to be liquidated (expended). Any funds not liquidated
at the end of the 90-day period will lapse and revert to the awarding agency, unless a grant adjustment notice extending the
liquidation period has been approved. For LLEBG Block Grants, all Federal funds including interest, revenue, dividend,
and match must be spent within 2 years (24 months) from the date the grant payment is made to the jurisdiction. There are
no extensions of the obligation/expenditure period of the award.
EFFECTS:
Grant funds were not liquidated within the period of availability and should be returned to the Dept. of Justice - Office of
Justice Programs.
QUESTIONED COSTS:
$241,695 calculated as $234,837 (grant award drawn) plus interest earned on the grant funds in the amount of$6,858.
CAUSE:
The City had two years with which to spend the funds, but did not issue the purchase order until the day before the
obligation period expired. The vendor encountered problems with delivering the equipment in a timely manner. Thus, the
funds were not expended during the time period allowed.
RECOMMENDATIONS:
We recommend the City create a grants management position to oversee and ensure compliance with federal laws and
regulations for aU grants the City acquires rather than relying on individual departments to manage all aspects of the
grants. This position should oversee periods of availability to insure the timely expenditure of grant funds so funds will
not lapse.
MANAGEMENT'S RESPONSE AND CORRECTIVE ACTION PLAN:
Management concurs with the fmding and has already taken steps to implement the recommendations as practically
possible within the City's resources.
C-18
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AUGUSTA, GEORGIA
Summary Schedule of Prior Audit Findings and Questioned Costs (Continued)
Year Ended December 31, 2006
II. Federal Awards Findin2s and Ouestioned Costs (Continued)
Finding 05-09
Federal Agency:
Federal Program:
Compliance Requirement:
U.S. Department of Housing and Urban Development
CFDA # 14.218 Community Development Block Grant
Matching
CONDITION:
Contracts between the City and recipients of federal funds for Facade grants state that the recipient must match the amount
of the facade grant with an equal amount spent on the interior of the building. This match is neither being documented nor
monitored. The one facade grant sampled did not contain any documentation regarding the recipient's compliance with
the matching requirement. Subsequent correspondence from the recipient indicated that half of the match had been
expended on the facade. There was no indication that any funds had been expended on the interior of the building.
CRITERIA:
Contract between the City and the facade grant recipient stated that the recipient must match the amount of the facade
grant with an equal amount spent on the interior of the building. No documentation was available to indicate that this
requirement was met.
EFFECTS:
The City's lack of monitoring sub-recipient contracts could result in the sub-recipient's non-compliance with federal
program activities which could require the return of funds to the federal agency.
QUESTIONED COSTS:
Undetermined
CAUSE:
Lack of internal controls over monitoring facade grant recipients resulted in a systematic problem related to compliance
with the grant requirements.
RECOMMENDA TIONS:
We recommend procedures be implemented to monitor and document facade grant recipients' match of grant expenditures.
MANAGEMENT'S RESPONSE AND CORRECTIVE ACTION PLAN'
Management concurs with the rmding and has already taken steps to implement the recommendations as practically
possible within the City's resources.
CURRENT STATUS:
During fiscal year 2006 the City took steps to monitor its fayade grant recipients to insure they adhere to the requirements
of their contracts with the City. Property owners are notified in writing and are required to submit the following
documentation to ensure their compliance:
· Contract! work order for a contractor to perform work on the interior.
· Proof of payment to contractor (e.g. invoices, cancelled checks).
· If property owner performs interior work, he or she must provide receipts and method of payment
· Labor is calculated hourly based on federal labor standards (Davis-Bacon Wage Rates)
C-20
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AUGUSTA, GEORGIA
.
Summary Schedule of Prior Audit Findings and Questioned Costs (Continued)
Year Ended December 31, 2006
II. Federal Awards Findines and Ouestioned Costs (Continued)
CURRENT STATUS:
During fiscal year 2006, the City filed the SF-272 reports on a timely basis. Finding was corrected during 2006.
Finding 05-11
Federal Agency:
Federal Program:
Compliance Requirement:
U.S. Department of Housing and Urban Development
CFDA #14.241 Housing Opportunities for Persons with AIDS
Sub-recipient Monitoring
CONDITION:
Expenditures related to the Housing Opportunities for Persons with AIDS (HOPW A) program are associated with cost-
reimbursement contracts between the City and sub-recipients. For many of the federal expenditures sampled, there was an
unclear rationale for what documentation supported the amount of the draw. Examples include
· Supporting documents in excess of draw amount
· Draw amount in excess of supporting documents
· Documentation covering a period of several months
· Documentation containing late fees and service charges, which are not allowable costs under OMB Circular A-87
· Documentation consisting of only a vendor statement rather than an invoice
· Duplicate documentation
· Reimbursement of payroll not consistent, sometimes based upon net payroll and sometimes based upon gross
payroll
· Immaterial mathematical errors between supporting documentation and draw amount
Furthermore, good internal controls dictate that before payments are made to a sub-recipient, the invoices should be
reviewed carefully to determine that the costs are not only allowable, but that invoices have not been previously paid. This
is especially important when multiple invoices are submitted together and cover an extended period. The current controls
in place to detect and prevent duplicate draws consist of the program administrator performing a cursory review of check
numbers issued by the sub-recipient, supporting payment made by the sub-recipient. Due to the condition of the records,
this control does not appear to be adequate.
Due to the lack of reconciliation between the supporting documentation and the draw, we could not determine if the
unallowable costs, such as late fees and duplicate payments, were actually drawn.
CRITERIA:
OMB Circular A-87 (A-87) establishes principles and standards for determining allowable direct and indirect costs for
Federal awards. To be allowable under Federal awards, costs must be adequately documented.
EFFECTS:
Draw down of federal funds not adequately supported could result in draws for unallowable costs, including excess and
duplicate draws.
QUESTIONED COSTS:
It was not practical to extend our auditing procedures to determine if any questions costs resulted from this finding.
CAUSE:
Lack of internal controls to ensure proper support is received from the sub-recipient and reviewed by the grantee resulted
in a systematic problem related to compliance with sub-recipient monitoring.
C-22
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AUGUSTA, GEORGIA
Summary Schedule of Prior Audit Findings and Questioned Costs (Continued)
Year Ended December 31, 2006
II. Federal Awards Findin1!s and Ouestioned Costs (Continued)
RECOMMENDATIONS:
We recommend the City develop procedures for reviewing administrative cost caps allowed and compare these amounts to
administrative costs incurred to ensure these caps are not exceeded.
MANAGEMENT'S RESPONSE AND CORRECTIVE ACTION PLAN:
Management concurs with the fmding and has already taken steps to implement the recommendations as practically
possible within the City's resources.
CURRENT STATUS:
For fiscal year 2006, the City spent 6.54% of its annual allocation and program income on administrative and planning
costs. This is less than the earmarking maximum amount of 1O% allowed under the program. Finding was corrected
during 2006.
Finding 05-13 (repeat finding)
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program: CFDA # 14.218 Community Development Block Grant
Compliance Requirement: Procurement
CONDITION:
No documentation exists that procurement procedures were followed when using federal funds to purchase $25,772.86 in
supplies for a Community Development Block Grant sponsored project
CRITERIA:
24 CFR 85.36 on Procurement states that grantees will use their own procurement procedures which reflect applicable
State and local laws and regulations, provided that the procurements conform to applicable Federal law and the standards
identified in this section. The Grantees must maintain records sufficient to detail the 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 all other pending matters are closed.
EFFECTS:
The City is not in compliance with the procurement requirements of the federal award and could result in questioned costs.
QUESTIONED COSTS:
$25,772.86 computed as the invoice paid for which procurement records could not be found.
CAUSE:
Lack of internal controls to ensure procurement procedures are followed and procurement records are maintained for the
required period.
RECOMMENDATIONS:
We recommend the City maintain proper documentation of procurement procedures followed for the time period as
required by federal guidelines.
MANAGEMENT'S RESPONSE AND CORRECTIVE ACTION PLAN'
Management concurs with the fmding and has already taken steps to implement the recommendations as practically
possible within the City's resources.
C-24
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AUGUSTA, GEORGIA
Summary Schedule of Prior Audit Findings and Questioned Costs (Continued)
Year Ended December 31, 2006
IL Federal Awards Findinl!s and Ouestioned Costs (Continued)
MANAGEMENT'S RESPONSE AND CORRECTIVE ACTION PLAN'
Management concurs with the fmding and has already taken steps to implement the recommendations as practically
possible within the City's resources.
CURRENT STATUS:
Repeat finding. The City does not indicate in its capital asset tracking system the source of the funds used to purchase
equipment.
Finding 05-15
Federal Agency:
Federal Program:
Compliance Requirement:
u.s. Department of Transportation
CFDA # 20.106 Airport Improvements Program
Special Tests and Provisions
CONDITION:
The City contracts with a third party to prepare the Cost Allocation Plan (CAP). Both a full cost CAP and an OMB-87
CAP are prepared. The OMB-87 CAP excluded such costs as those incurred by the Mayor and the Commissioners.
Though the OMB-87 CAP was prepared, the full cost report was used in allocating indirect costs to Bush Field and Daniel
Field airports.
CRITERIA:
OMB Compliance Supplement for CFDA 20.106 has a Special Provision for recipients of Federal Aviation funds. The
Compliance Requirement, Revenue Diversion, states that all revenues generated by a public airport must be expended for
the capital or operating costs of the airport, the local airport system, or other local facilities which are owned or operated
by the owner or operator of the airport and are directly and substantially related to the actual air transportation of
passengers or property. Penalties imposed for revenue diversion may be up to three times the amount of the revenues that
are used in violation of the requirement. Indirect costs charged to the airport from the cost allocation plan are allocated in
accordance with the FAA policy on cost allocation. For central service costs to be allowable in the CAP, they must be
allowable costs under OMB-87.
EFFECTS:
Airport Revenue may be diverted and used for expenditures not directly and substantially related to the actual air
transportation of passengers or property related as required under the Special Provision of the Airport Improvements
Program. It could result in penalties imposed up to three times the amount of the revenues that are used in violation of the
requirement.
QUESTIONED COSTS:
$28,316 calculated as the difference between the indirect cost allocation calculated for Bush Field Airport and Daniel Field
Airport per the OMB-87 CAP and the full cost CAP that was charged to the airports.
CAUSE:
Management made the decision to charge the full cost CAP amounts to the City's funds regardless of federal regulations.
RECOMMENDATIONS:
We recommend the City use the OMB-87 Cost Allocation Plan when allocating indirect costs to departments that receive
federal funds.
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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
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Augusta-Richmond County Commission
Augusta, Georgia
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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 (OMB) Circular A-133 Compliance Supplement that are applicable to each of its
major federal programs for the year ended December 31, 2006. Augusta, Georgia's major federal programs are
identified in the sununary 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.
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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-B3 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.
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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, 2006. 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-B3 and which are described in the accompanying schedule of findings and
questioned costs as items 06-01 and 06-02.
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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.
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AUGUSTA, GEORGIA
Schedule of Findings and Questioned Costs
Year Ended December 31, 2006
I. Summary of the Auditor's Results
Financial Statements
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, 2006.
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 06-FS-0 1 and 06-FS-02 below.
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.
Federal Awards
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, 2006.
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-l33 were disclosed
during the audit as Finding Number 06-0 I and 06-02.
Identification of Maior Programs
CFDA Number
Name of Federal Program
14.218
14.239
14.241
U.s. Department of Housing and Urban Development
Community Development Block Grants/Entitlement Grants
HOME Investment Partnerships Program
Housing Opportunities for Persons with AIDS
20.106
u.s. Department of Transportation
Airport Improvement Program
I We used a threshold of$398,061 to distinguish between Type A and Type B programs.
Augusta, Georgia did not qualify as a low-risk auditee.
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AUGUSTA, GEORGIA
Schedule of Findings and Questioned Costs - Continued
Year Ended December 31, 2006
II. Findings in Relation to the Audit of the Financial Statements (continued)
RECOMMENDA TION:
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.
MANAGEMENT'S RESPONSE AND CORRECTIVE ACTION PLAN'
Management concurs with the fmding and has already taken steps to implement the recommendations as practically
possible within the Government's resources.
III. Federal Awards Findings and Questioned Costs
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
Compliance Requirement:
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.
CRITERIA:
In accordance with OMB 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.
EFFECTS:
The CDBG and HOME programs are bearing more than their equitable share of these expenditures.
QUESTIONED COSTS:
Not determined.
CA USE:
Various indirect costs were not allocated equitably among the federal programs receiving the benefits.
RECOMMENDATIONS:
We recommend that the City allocate its rent, utilities, and other office expenses equitably to each activity in accordance
with relative benefits received.
MANAGEMENT'S RESPONSE AND CORRECTIVE ACTION PLAN'
Management concurs with the fmding and has already taken steps to implement the recommendations as practically
possible within the City's resources.
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