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HomeMy Public PortalAbout2011 - MRRL Auditors ReportMISSOURI RIVER REGIONAL LIBRARY June 21, 2012 The Honorable Eric Struemph His Honor the Mayor City Hall, 320 E. McCarty Jefferson City, MO 65101 Dear Mayor Struemph: Enclosed is the 2011 Missouri River Regional Library audit report. . If you have any questions about the enclosed report, please feel free to contact me at any time. Sincerely, Helen Rigdon Director Enclosure Helen Rigdon Director 0 0 0 0 0 0 www.mrrl.org Mailing Address Osage County Library Administrative Offices Main Library PO Box 89 209 Adams Street 214 Adams Street 1014 D Main Street, PO Box 349 Jefferson City, MO 65102-0089 Jefferson City, MO 65101 Jefferson City, MO 65101 Linn, MO 65051 573.634.6064 573.634.6064 573.634.2464 573.897.2951 Fax: 573.634.7028 Fax: 573.634.7028 Fax: 573.634.7028 Fax: 573.897.3815 - TABLE- OF C ONTENTS ` PAGE INDEPENDENT AUDITORS' REPORT ................. :............... 1- 2 MANAGEMENT'S DISCUSSION. & ANALYSIS:......... .................. 3-9 FINANCIAL- STATEMENTS: Statement of Net Assets and Governmental. Fund Balance Sheet... .................. 1 o - Statement of Activities and Governmental Fund Revenues, Expenditures, and Changes in Fund Balance .................................. ...... ........... 11. - Notes to the Financial Statements ............................: ....................... 12-24 - REQUIRED SUPPLEMENTARY INFORMATION: Statement of Revenues; Expenditures and Changes in Fund. . Balance - Budget and Actual - Generaf Fund.. .:................ 25-27- Notes to the Budgetary. Comparison Information. , .......... ............... . . 28 Schedule of Funding Progress.' .... ......... ..... ... = ................... 29 r Evers Company,' CPA's.,; L.L.C. Certified Public Accountants and Consultants Elmer L. Evers Jerome L. Kauffman Richard E. Elliott Dale A. Siebeneck - Keith L. Taylor Jo'_L. Moore ! Wendy M. Renner INDEPENDENT AUDITORS'. REPORT To the Board of Trustees of Missouri River Regional Library . Jefferson City,.Missouri We have audited the accompanying financial statements of the governmental activities, each major, fund and discretely 'presented component unit of .Missouri River. Regional Library (the Library)' as of and for the yeafended December 31, 2011, which collectively` comprise the Library's basic; financial statements as listed in the -table, 'of contents.. These financial statements are the. responsibility of the Library's management. • Our responsibility is to -express opinions on these . financial statements based on our audit. We conducted our audit in accordance with auditing standards_ generally accepted 'in the United ..States. of America. Those standards require that.we plan and perform the audit to obtain reasonable assurance about. whether the e financial, statements are free of material misstatement. -An audit 'includes examining, on a test basis, : evidence supporting the_ amounts." and disclosures in the ' financial statements. , An audit also includes assessing the accounting .principles used and significant estimates - made by management, as well as evaluating the overall financial statement-:. presentation. We believe that our audit provides a reasonable, basis for our opinions. In our opinion; the financial statements referred to. above present fairly; in all material respects, the respectivefinancial position of the governmental activities .'and the aggregate discretely presented.. _ = component units of the Library, as of December 3.1, 2011; and -the respective changes in financial position thereof for the year then ended -in conformity- with accounting principles generally accepted in the United States of America. "520 Dix Road Jefferson. City, Missouri 65109 .573/635-0227 FAX 573/634-3764, Village Green Shopping Center 1021 W. Buchanan Street, Ste. 10' • California, Missouri 65018 ! 573/796 3210. •- FAX 573/796-3452 4571 Osage Beach Parkway, Suite A Osage Beach, Missouri -65065 • .573/348-4141 FAX 573/348-0989 MemberQ6NAffiliaied Offices Worldwide Accounting principles generally accepted in -the United States of America require that the management's discussion and analysis, budgetary comparison information and schedule of funding ., progress on pages 3 —9 and 25 — Z9 be presented to supplement the basic financial statements. Such information, although -not a part. of the basic financial statements, is required by, the Governmental Accounting Standards. Board, who. considers, it -to be an essential part 0f financial reporting for placing the basic financial statements in an appropriate operational, economic, or . - 'historical context. We have applied certain •. limited procedures to ,the required supplementary' information in accordance _ with auditing standards generally' accepted in the ' United 'States of -America, -which .consisted -of inquiries of management about the methods. of preparing the information and comparing the information for consistency with management's responses to our. inquiries, .the basic financial statements, and. other knowledge' we. obtained. during our audit of the - basic financial statements. We' do ' not express an opinion or- provide any 'assurance on the information because the limited procedures do riot provide us'with sufficient evidence to express an opinion or provide ahy assurance. EVERS &'COMPANY, CPA=s, L.L.C. Jefferson City, Missouri . June 19; 2012 y MISSOURI RIVER REGIONAL LIBRARY Jefferson City; Missouri MANAGEMENT'S DISCUSSION& ANALYSIS" For the Calendar Year Ended December 31, 2011 . The discussion and analysis of the MissouriRiver Regional Library's- (the "Library") financial' performance provides an overall review of the Library's financial. activities for the calendar year ended December 31, 2011.- .The intent of this discussion and analysis is to look at the Library's financial performance as a whole; readers should also, review- the basic -financial statements to enhance their understanding of the Library's financial performance. FINANCIAL HIGHLIGHTS Key financial highlights for 2011 are as follows: • The Library's liquid assets - of cash and investments of $1,537,100 increased over the course of the year's operation,by $139,862 or 9.10%. • Library'staff continues writing and receiving grants to help better'serve our patrons. The IT. department was awarded'two LSTA grants. , One to purchase a new server and the other for five new.corriputers and monitors -for the reference and teen departments. The Children's department -was awarded -'a grant .from the State Library for the Reading Buddies. program. 'In all these grants totaled $15,945. • 2011. additions to fixed assets included approximately $31,000 for computer equipment and software. Five of the new computers and a server were partially funded by $6,769 in. " grant proceeds., Other fixed -asset ,additions included approximately $269,7.75` for book inventory, $1,350 for library furniture and $0,800 for office furniture and equipment. • . By belonging to the consortium MoLib2Go Missouri River Regional Library patrons have access -to a greatcollection of,both eBooks and e=audio books. By combining our purchasing power with other libraries across the- state, patrons have, access to a much. larger'collection than if the Library purchased these items on its. own. • The Missouri River Regional Library Foundation is'included as'a component unit of the Library for financial reporting.purposes in 2011. Overview of the Financial Statements This annual -report. consists -of a series of financial- statements and notes to those statements.. These statements. are prepared and ' organized so the reader can understand the Library as a', financial whole or as an entire operating � entity. The statements then -proceed to 'provide an increasingly detailed look at the Library's specific financial conditions. The Library, because it is a special-purpose government .engaged "in a single governmental program, has elected.to present the government -wide financial'. statements and_the fund financial statements combined. 3 MISSOURI RIVER REGIONAL LIBRARY Jefferson City, Missouri MANAGEMENT'S DISCUSSION & ANALYSIS For the Calendar Year Ended December 31, 201.1 Government -Wide Financial Statements The. government -wide- Statement of Net Assets and Statement of Activities provide information about the activities. of the whole ,Library, presenting both an aggregate view of the Library's - finances and a longer-term view of those assets. These two statements, shown in columnar format, combined with the governmental funds reports consolidate the Library's . net assets and the changes in those assets'. --This change in assets is important because it tells -the reader whether, for the Library as a whole, the financial position of the Library has improved or diminished. However, in evaluating the overall position of the Library, non=financial information such as changes in the Library's tax base and the condition of Library_ capital assets will also need to be evaluated. Fund Financial Statements A. fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities_ or objectives. The Library, like other state and locale governments, uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. The Library uses governmental funds: Governmental funds Governmental funds are used to. account for essentially the same functions reported as government activities in the government -wide financial statements.. However,' unlike the government -wide financial statements, governmental fund financial statements focus on near= term inflows and outflows of spendable resources, as well as,on balances of spendable resources available at the end of the calendar, year: Such information .may be useful 'in evaluating a „ government's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmentalactivities iri the government -wide ,financial statements. - By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Library maintains one governmental fund, the general fund, which is considered a major fund. Information is presented separately in the _governmental fund balance -sheet and in the governmental fund statement of revenues, expenditures, and changes in fund -balances for the general fund. The Library adopts an annual appropriated budget for its general fund. A budgetary comparison statement has been provided for the general fund to demonstrate .compliance with this budget. 4' MISSOURI RIVER REGIONAL LIBRARY Jefferson City, Missouri MANAGEMENT'S -DISCUSSION ANALYSIS For the Calendar Year -Ended December 31, 2011 Notes to the Financial Statements The notes -provide .additional information that is essential to, a full understanding of the 'data' provided in the government -wide and fund financial statements. Other Information In addition -to the basic financial_ statements' and.. accompanying notes, :this reportalso presents - certain required supplementary information including � a comparison of the actual results of - operations of the- general fund to, the general, fund, budget adopted by, the board. Also hicluded' is information concerning the Library's progress in funding its commitment to provide pension benefits to its employees. The Missouri River Regional Library -Board -of Trustees has elected to participate in the. Missouri Local Government Employees Retirement System (LAGERS). The Library's full time employees do not contribute to the .pension plan. The Library is - required, to contribute at an actuarially determined rate; the current rate -is 12.3% (general) . of annual covered payroll. The ' contribution requirements of plan. members are determined by the governing body of the Library. The contribution provisions of the political subdivision are established by state statute. Missouri River Regional Library as a Whole The Statement of.Net Assets presents the Library. as a whole.Table .1 provides -a summary of the Library's net assets for 2011 compared to 2010. Table 1 Statement of Net Assets 2011 2010 Assets Current and Other Assets $4,070,795 $4,137;865 Capital Assets, Net 1,550,450 1,608,854 y Total Assets $5,621,245 $5,746,719 Liabilities Current Liabilities - $2,883,21.4 $3,064,2.10 Long -Term Liabilities 182,136 188,659 Total Liabilities $3,065,350 $3,252,869 Net Assets Invested in Capital ' - Assets, Net of Related Debt .$1,550,450 $1,608,854 Unrestricted 1,005,445 884,995 Total Net Assets. $2,555,895 $2,493,849 -5 MISSOURI RIVER REGIONAL. LIBRARY Jefferson City, Missouri MANAGEMENT'S DISCUSSION &ANALYSIS For the Calendar Year Ended -December 31', 2011 Missouri River Regional Library as a Whole (Cont'd.) No portion of the Library's net assets- represent resources that are subject to external restrictions on -how they may used. On a fund financial statement basis all unrestricted assets are available for use -when designated in future operations. The Library historically has paid for capital improvements and construction projects from the -available unrestricted assets. . Table 2 -shows the changes in net assets for the year ended December 31, 2011 and 2010. . .Table 2 Changes in Net Assets Fiscal Year 2011 2011 2010 Revenues, Program Revenues Fees, -Fines, Donations and Grants - $169,336 $187,760 General Revenues .Property Taxes 2,878,459 2,851,724 Investment Income 6,397 9,046 Miscellaneous 3,093 10;188 Gain/(Loss) Disposal of Assets (13,007) (13,037) Total Revenue $3,044,278 $3,045,681. Exp enditures/Expenses Library. Services $2,982,446 $2,966,685 Capital Expenditures 17,297 18,726 Total Expenses $2,999;743 $2,985,411 Change in Net Assets 62,046 60,270 1 Net Assets, beginning of year 2,493,849 1,990,618 Prior Period Adjustment - '442,961 .1 Net Assets, beginning of year; as restated 2,493,849 2,433,579 Net Assets' end of year. $2,555,895 $2,493,849 While several revenue sources help . to fund .the Library, property and other taxes is .the biggest . contributor,' accounting -for 94.56% of .total revenues. The library'.s assessed valuation is' provided by subclasses of Real and Personal Property at this time. The. tax levy for the Osage County Library District for 2011 and 2010 was $.1728 per $100. The tax levy for the City of, . Jefferson -Cole County -Library District was $.1977 per $100 for 2011 and $.1956 per $100 for 201D. Charges for services such as :overdue materials, photocopies, etc. make up just 2.72% of total revenues. Investment, income decreased. by 41% from 2010. Donation -and grant revenues decreased from $99,286 in 2010 to _$86,666 in 2011. 6 MISSOURI RIVER REGIONAL LIBRARY Jefferson City, Missouri - MANAGEMENT'S DISCUSSION & ANALYSIS For'the Calendar Year Ended December 31, 2011 Missouri River Regional Library as. a Whole (Corit'd.) Salaries and "benefits for library staffing and administration are by. far the Library's largest expense at $2,058,8.45 and comprise 68.64% of total expenditures. Library books and materials, which includes the cost, of periodicals, electronic resources; material processing"and database services is $361,051 or 12% of total expenses. Library service expenses, which include. programming, . bookmobile service, electronic" catalog maintenance and staff training, is $201;479 or 6.7% of total expenditures Current year depreciation of the Library's capital assets is $36.5,185 or 12.2% of total expenses. Total accumulated depreciation. increased to... $5,445,860 .or 77% -of total depreciable capital assets. The.library's. entire. book inventory and related accumulated depreciation were added to the financial statements on December 31, 2010 -following a five year pricing project. Operations .and maintenance for building and equipment' is $265,882 or 9.12%, of total operations... A total of $291,899 -was capitalized from the operations expenditures. " Budgetary: Highlights . The Library adopts an annual operating budget. -for its general fund that is prepared according to Missouri State Statutes.. The calendar year represented is from January 1, 2011 through December 31, 2011. During the-- course " of the year, the library . amended its' general fund budget. All - recommendations for a. budget change are presented by the Library's Administration to the Board of Trustees. The general fund -is monitored closely, looking for possible revenue shortfalls or over spending by individual departments. Original budgeted revenues for the .general fund of $3,010,010 were adjusted.,by a total of $30.258 to"account for receipts, and grant revenue. Final budget amount. was $3,040,268; . . and the actual revenue was $3,057,285. The major factors contributing to actual revenues being more than budgeted -revenues -were receipt of more thari anticipated tax revenue and state aid, and . higher than expected revenue from the annual book sale. Original budgeted expenditures for the general fund _of $3,010,010 were adjusted -by a total .of '$30,258 to account foregrant.expenditures and 'programming and public information expenses. Final budget amount was $3,040,268; the actual expenditures. were $2;926,379. 7 MISSOURI RIVER REGIONAL LIBRARY Jefferson City; Missouri MANAGEMENT'S DISCUSSION & ANALYSIS Forthe Calendar Year Ended December 31, 2011 Capital Assets - Table 3 shows a comparison of Capital Assets at December 31, 2011 and 2010... -, Table 3 Capital Assets 2011 2010. Land$ 322,095 $ 322095 Building 1,922,8.18' 1,922,818. Books 3,609,880 3,506,865 Automation 472,257 491,927 Automobiles 242,832 242;832' Furniture -and Equipment 552,153. 568,177, Total Capital Assets 7;122,035 7,054;714 Total Accumulated Depreciation .(5,571,585), (5,445;860) Net capital Assets S 1,550,450" $ 1,608,854 As of December 31, 2011, the Library's investment in capital assets amounted'to $1,550,450 (net of accumulated depreciation)." Before depreciation, there was.'a net increase of $67,321. " Debt Administration The -Library had no outstanding indebtedness during 2011. Economic Factors and Next Fiscal Year's. Budget: Net ."growth in assessed valuation' (including new' construction growth) f6r=2011 is rf approximately .3% for the City of Jefferson -Cole County Library District. The net . growth,.in ,assessed valuation for the Osage County. Library District for 2011 is approximately 1.2%. • The 2012 budget was prepared using a tax rate of $.1977 per $100 valuation for the City t of Jefferson -Cole County.Library District and a rate of $.1728'per $100 valuation for the Osage County Library District. MISSOURI RIVER REGIONAL LIBRARY Jefferson City, Missouri MANAGEMENT'S DISCUSSION & ANALYSIS For the Calendar Year'Ended December 342011 Economic. Factors and Next Fiscal Year's.Budget: (Cont'd:) • . The economy and the effect it has on the. Library's budget -remains a concern for the Board and Library staff. Staff will again look -over the benefits offered, to employees in the 2012 and 2013 budget cycles and make changes if needed. e The Library Board will be :asking the voters of Cole and Osage. Counties to approve a property. tax levy increase in 2012. The outcome of this vote will impact the Library's budget for 2013. . • One _aspect the. Library is ' studying -is making the current main library. building more energy efficient. An. energy audit is tentatively .planned for .2013. _ Based on, those findings the Library will formulate -a "plan -to -address areas of concern. 'Single -paned' - 'windows windowsand inefficient heating and cooling systems are"expected to be on that:list. Contacting the District's Financial Management This. financial discussion and report is designed to provide a general overview of the Library's finances for all. those with an interest in the; Library'. s finances and' io demonstrate the Library's :. accountability for the money it receives. - Questions. concerning any of the information provided in this report or requests for additional financial information should be -addressed to the Director or the Assistant -Director for Business and Finance, -Missouri -River Regional Library; P.O. Box _ 89; 214 Adams St., Jefferson City, MO 65102. r - 9 The accompanying notes are an integral part of these financial statements. 10 MISSOURI RIVER REGIONAL LIBRARY Jefferson City, Missouri T STATEMENT OVNET. ASSETS'ANR GOVERNMENTAL FUND BALANCE SHEET December 31., 2011 Statement of Net -Assets Adjustments Primary Component General Fund (Note 2) Government Unit ASSETS 4 Cash and. Investments .. 1,537,100 - 1,537,100 27,0301 - Property Tax Receivable, net 2,527,564. - 2,527,564 - „ Interest Receivable 1,93'1 -" 1,931 Other Assets 4,200 - 4,200 >U Land - '322,095 322,095• - Other Capital Assets, net of Accumulated Depreciation - 1,228,355 1,228,355- ,228,355-Total 'Total Assets .. 4,070,795 1,550,450 5,621,245 27,030 LIABILITIES _ Accounts Payable 47,143 - 47,143 - Deferred Revenue 2,853,582_ (17,511) 2,836,071 Compensated Absences - 182,136 182;136 - �. Total Liabilities 2;900,725 A64,625 3.,065,350 . - 1 FUND BALANCES/NET ASSETS Fund Balance: Unassigned 1,170,070 (1,170,070) - = - Total Fund Balances. 1,170,070 (1;170,070) - - Total Liabilities and Fund Balances 4,070,795 2 Net Assets: 1 ^ Invested in Capital Assets 1,,550,450 1,550,450 = Unrestricted 1,005,445 1,005;445 27;030 Total Net.Assets 2,555,895 2,555,895 -27,030 u The accompanying notes are an integral part of these financial statements. 10 MISSOURI RIVER REGIONAL LIBRARY Jefferson City; Missouri NOTES TO THE FINANCIAL STATEMENTS - For The Year Ended December 31; 2011 NOTE 1 ORGANIZATION AND SUMMARY OF -SIGNIFICANT ACCOUNTING POLICIES: Organization The Missouri River Regional Library (the Library). was created ,on- April 1, 1994 under the authority. of RSMo 70.210 when.the political subdivisions of -the City of Jefferson/Cole County . Library District- and the, Osage County'Library District sighed a joint'contract. The Library is ' headquartered' in Jefferson 'City, Missouri, with a second" location in Linn, Missouri as well as additional.coverage provided by the Library's bookmobile. The Library's- purpose is. to plan, .develop, operate and "pr"ovide a librarysystem for the .use and benefit of the _ residents of the City of Jefferson/Cole County- Library District and "the Osage .County Library District, and to fulfill and provide to. the extent possible those facilities, -programs, materials and services. of'a public library as are normally contemplated and.a ithorized . to:be provided under the laws of the State of Missouri. Financial Reporting Entity The Library's combined financial statements include the accounts of all. Library operations The criteria. for including organizations as component units within the Library's reporting entity, as set forth.in Section 2100 of GASB's Codification'of Governmental Accounting and Financial . Reporting Standards, include whether: the organization is, legally separate (can sue and be sued'in its: own name), * the Librarytolds.the, corporate powers of the organization * the Library,appoints. a voting majority of the organization's board * the Library is able to impose its will on the organization * the organization has the potential to impose a financial benefit/burden on the Library * there is. fiscal dependency by the organization of the Missouri River Regional Library. Based on the aforementioned criteria, -the Missouri River Regional Library has one component unit. The Missouri River Regional Library Foundation, financial statements (forthe year" ended December 31, 2011) are included as a discretely presented :component unit, because'' the economic resources received by the Foundation are for the direct benefit of the Library. 12 f � - MISSOURI R]-VER.REGIONAL'LIBRARY Jefferson City; Missouri° r - NOTES TO THE FINANCIAL STATEMENTS For The Year Ended December '312011' .NOTE 1:! ORGANIZATION . AND SUMMARY OF ,;:SIGNIFICANT ==ACCOUNTING s TOLICIESc (Cont'd ) measurement,Focus,"Basis of AccountinE.and Financial:StatementTresentation`'?' The =accounts of the• Library ­I"are .organized and operated ,.on the basis' of funds: A- fund is an independent fiscal and :accounting entity with aself:balancing set of accounts - `Fund accounting separates hinds according to., heir. intended purpose and, is used,:ao :aid' .management in. demonstrating- compliance-.with finance-related legal, and contractualprovisions The'minimuni t . `=number. of funds are maintained, with.legal_and_managerial requirements : The-ibrary_has the following'fi nd type:' - Governmental Funds are ,used`-to _ account for the government a :general .governmental.: activities: The Library has one governmental fiznd, the General Fund , The General Tund is �.. - the. Library's ope-ratirig:fi ijd: ` It accountsfor. all financial resources of the Library: The government wide financial statements (i.e-.,' the statement of net assets and the:statement of { activities) report information on all`:of the non=fiduciary: activities of .the Library The government=Wide; financial: statements-are repo' t -using ;the, economic -resources measurement - 1 focus and the accrual, basis of accounting Revenues are recorded when earned: arid. expenses. are recorded when a liability is incurred; regardless .ofahe timing of related cash_flows Property taxes are recognize 45, revenues in. the year for which they.are budgeted.:;They are-recorded as { f deferred revenues mthe .year m whA- they are. levied Grants -and similar items are recognized as revenue as soon'as all: eligibilrtyrequirements unposed by-the.providerhave Been-met. _ The fund financial statements emphasize, major"governmental funds, each displayed in a. separate column: Governmental fund financial -'statements are:accounted: for. >usmg . a current financial -resources ,. measurement :. focus arid'. the modified accrual.' basi's of accounting .: ;With- .this r� >' measurement:;focus;" only ' current assets and - current liabilities; generally are; included on the ' .;balance sheet:= The statement of revenues, expenditures and-changes in: fund'balances-reports on the. sources, (i.e.; revenues :and other financing sources) and uses, (i e; expenditures and heF f ` financing uses) of current: financial resources This approach 'differs. from;'the manner in which..: . . the governmental activities of the government-wide (financial statements are prepared:,' Since -the governmental "'_fund financial :,`statements arid: government-wide `financial` statements, are 1. combined, an adjustment: column is provided:to show the'. reconciliation.'betwe'en the -two sets of financial statements: The.notes to the financiaT:statements.further describe the:ad�ustments by providing brief ,explanations to .better identify the relationship between the .governrrient=wide stateineiits and <the statements for governmental: funds: MISSOURI RIVER REGIONAL LIBRARY Jefferson City, Missouri NOTES TO THE -FINANCIAL STATEMENTS For The Year Ended December 31, 2011 NOTE .1= ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:- (Cont'd.) Measurement Focus, Basis of Accounting and Financial Statement Presentation ,(Cont'd.) _- Under . the' modified accrual basis . of accounting, revenues are recognized in the accounting period in which they become both measurable and available. The term available is defined as collectible: within the current period.'or expected to be collected soon enough thereafter to be used to pay liabilities of the current period. For. the Library, available. means expected to be receivedwithin sixty.days of year end. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. The Library follows GASB Statement No. 33, Accounting and Financial Reporting for Non- ' Exchange Transactions (GASB 33), which establishes accounting and financial reporting — standards for nonexchange transactions involving financial -or capital resources, GASB 33 groups nonexchange transactions into the following four classes, based upon their. principal characteristics: -derived tax revenues, imposed nonexchange revenues, governmental mandated nonexchange transactions, and voluntary nonexchange transactions.- -The ransactions: -The Library recognizes assets from imposed nonexchange revenue transactions in the period in - , which an enforceable .legal claim -to the assets arises or in ' which the resources are received, whichever occurs first.. Revenues are recognized in the ..period in which the resources are required'to be used or the first period,that use is permitted. For example, for property taxes, the period for which they are levied. ,Resources received or recognized as receivable before the time requirements- are met. are 'reported . as deferred revenues. The Library's budget is based on the. previous. year's assessed valuation and tax levies. Recording deferred tax revenue allows recognition of the -revenue in the -period for which it was budgeted. Intergovernmental revenues, representing grants; entitlements, donations ,and assistance -received from other governmental units, -are generally recognized as revenues in the period in which all eligibility requirements, as defined by GASB 33,, have been met. Any resources received before eligibility requirements are met are reported as deferred revenues. Charges for. services, such as fines, book. sale revenues and photocopy revenues, in the governmental funds, which are exchange . transactions and are, therefore not subject -to the provisions of GASB 33, are recognized as revenues when received in cash because -they are -- generally not measurable until actually received. 14 MISSOURI RIVER REGIONAL LIBRARY Jefferson City, Missouri . NOTES TO THE FINANCIAL STATEMENTS For The Year Ended December3l, 2011= NOTE 1- —_ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:-(Cont'd.) Estimates The preparation of financial statements in accordance. with accounting principles, generally accepted in the United States of America requires -management to make ' estimates and assumptions that `affect certain. reported amounts and disclosures.. Accordingly, actual results could differ from those estimates. Capital Assets The accounting treatment for property, plant and equipment (capital assets) depends ori whether the assets are reported in the government -wide or fund financial statements. Government -wide Statements In the government -wide -financial statements capital assets are valued at historical cost, or estimated historical cost if actual is unavailable, except for, donated capital assets,. which are recordedat their estimated fair value at the date of donation. Depreciation -of ;all: exhaustible capital -assets is recorded . as -an expense in the Statement- of Activities,- with accumulated depreciation reflected in the Statement of Net Assets. Depreciation is provided over the. assets' estimated useful lives using the ,straight-line method of depreciation. The range of estimated .useful lives by type of assets is as follows: Building and Equipment 20 - 45 years Furniture- and Equipment. . . 5 20 years Automation 3 —10 years - '-Vehicles 5 —15 years Books 5 years The minimum capitalization threshold is any item with a.total cost greater than $1,000: The costs of normal maintenance and repairs that do not .add value to the assets -or. materially extend the asset's life are not capitalized. The Library does not possess any infrastructures. Fund Financial Statements In -the fund financial statements,- capital assets used in governmental fund operations are - accounted for as capital outlay expenditures of the governmental fund upon acquisition. MISSOURI RIVER REGIONAL LIBRARY Jefferson City, Missouri - NOTES TO THE FINANCIAL STATEMENTS . For The Year Ended December 31, 2011 NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Cont'd.) Compensated Absences Accumulated paid time off is accrued monthly. Employees accrue twenty days per year during the first -five years of service, increasing to a maximum of twenty -.eight days after fifteen years of employment. The maximum accrual allowed to be carried forward is sixty days. All employees also receive six days per year catastrophic leave with unlimited accrual. There is no payment of accrued catastrophic leave upon termination; therefore an accrual has not been — made in the financial statements. The liability for compensated absences is not recorded in the fund financial statements since it is anticipated that the liability will not be liquidated with currently available financial resources. . Accrued Liabilities and Long -Term Obligations - - All payables, accrued liabilities. and long-term obligations,' are reported in -the government -wide financial statements.. In general, payable and accrued liabilities that will be paid from governmental funds are reported . on the governmental fund financial statements regardless of whether they will be liquidated with . . current financial resources. However, special termination- benefits that will be paid -from governmental funds are reported as a liability in the fund financial statements only to the extent_ that they will be paid 'with, current;: expendable, available . financial resources.. In general, liabilities that mature or come due for payment during -the fiscal year are considered to have been made with current available financial resources: Other long-term obligations that will be paid _ from governmental funds are not recognized, as a liability -in the fund financial statements until due. Subsequent Events The Library evaluates events and- transactions occurring subsequent to the date. of -the financial statements for matters requiring recognition or disclosure in -the financial statements. The accompanying financial statements consider events through June 19, 2012, which is the date the financial statements were available to be issued. MISSOURI RIVER REGIONAL LIBRARY Jefferson City, Missouri NOTES TO THE -FINANCIAL STATEMENTS For The Year Ended December31' 2011 NOTE 1 = ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING. POLICIES: (Cont'd.) Net Assets Net assets represents the difference between assets and' liabilities. Net assets invested in capital assets, net of related debt consists .of capital assets, net of accumulated depreciation,,reduced by the' outstanding' balances of ''any borrowin.gs' used: for the acquisition, construction, or -improvement of those assets. Net assets are reported asrestricted, when there are limitations imposed on their use either through the enabling legislation adopted by the Library or through' external restrictions imposed by creditors, grantors or_ laws or regulations of other governments. All other net assets are reported as unrestricted. The Library applies restricted resources first when an expense, is incurred for purposes for which both_ restricted and unrestricted net assets are available: — NOTE 2 RECONCILIATION OF THE GOVERNMENTAL FUNDS "BALANCE SHEET TO THE STATEMENT OF NET ASSETS: Total Fund Balance — governmental ,funds .............................. .. $1;170,070 Amounts reported for governmentalactivities in'the Statement of Net Assets are different because: Capital assets used in governmental activities are not Financial resources and therefore are not reported, in the funds. The cost of the assets is $7,122,034 and the accumulated depreciation is $5,571,5.84... ..........:.: .............:. 1,550;450 . - Property taxes and other receivables will be collected this year, but are not available to pay for current -period . expenditures and therefore are deferred in the funds..." 17,5'11 Long-term. liabilities are not due and payable in the current ,period and therefore are not. reported in .the funds as follows: Compensated absences' (182,136) NET. ASSETS OF GOVERNMENTAL ACTIVITIES .......................... 2 555 895 17 MISSOURI RIVER REGIONAL -LIBRARY . , .. "_ - Jefferson Cty,;lVlissouri NOTES TO THE FINANCIAL STATEMENTS' . " For The Year'Ended December3.1; 2011 NOTE,' `3::--.'= -RECONCILIATION : _JOF � THE- . STATEMENT " OF-: REVENUES., , .. - EXPENDITURES. AND :=CHANGES- N. FUND- :BALANCES,,,.OF GOVERNMENTAL `FUNDS TO THE STATEMENT -OP ACTIVITIES:" --EXCESS" OF REVENUES OVER(VNDER) EXPENDITURES TOTAL,GOVERNMgNTAL FUND BAI;ANCES.. : $:130,906 Amounts reported for.governmental activities in the. . Statement of "Activities are different because Capital outlays.are reported as expenditures`m.the ;. , governmental :funds However; In ,the Statement of Activities; the cost of capital:assets is allocated:over their estimated:useful lives as;depreciatiori expenses In rim _ e crente,heseaounsare 1 Capital assets purchases. $..312,712 _ Depreciation expense:,.. 358-1M ` `Total ......... . (45,396) .Revenues in they Statement of Activities that do riot provide current financial resources are not reported as revenues in __ -• the., funds -deferred-tax-revenue.: .. -17,511 ies,e loss or gain ori the In.the Statement..of Activrt;th ... sale _or disposal -.of capital assets is recognized. 'The financial statements recognize only the proceeds - - .. from assets The:amounts areas follows Gam/(loss) on_'disposal'of capital assets ., (13,'007_) Total (15M7) Some expenses reported m the Statement of Activities do=not,require the use.of currentlinancial resources - _ and therefore arenotreporfed;as expenditures in {governmental funds "These activities" consist.of:." . Decrease in'comp-ensaied absences .. L27,2968) ;EXCES-S OF REVENUES OVER (IJNDER)�EXPENDITURES OF: -GOVERNMENTAL ACTIVITIES. 62 046 MISSOURI RIVER REGIONAL LIBRARY Jefferson City, Missouri. NOTES TO THE FINANCIAL STATEMENTS For The Year Ended December 31, 2011 NOTE 4 —DEPOSITS AND INVESTMENTS: The Library's.investments at December 31, 2011 consist of the following: Fair Less Than Investment Type Value One Year -- Repurchase agreements $1,350,170 $1,350,170 ,- _ - 1 350 170 1350 170 Custodial Credit Risk.—Tor an investment, custodial credit risk is the risk that, in the event of the . failure of .the counterparty, the organization "will not' be able to recover the value of its. investments or collateral securities that are in the possession of an outside party. Repurchase agreements had a bank balance of $1,350,170 at December 31, 2011 and are not covered by .FDIC but are backed by pledged securities. All of the organizations investments are held by the . investment's counterparty, not in the name of the organization. Investment Interest Rate Risk - The Organization has no formal 'investment policy .that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest -rates. Maturities of investments held at December 31, 2011 are less than one year. Investment, Credit Risk — The Library has no investment policy that limits its investment choices other than the limitation of state law "as follows: -- Missouri Statutes and legal opinions authorize the Library to invest in certain types of investments including, but not limited to, collateralized public deposits (certificates of deposit), U.S. Treasury and federal agency securities, and repurchase agreements. Collateral -is required for demand deposits and certificates of deposit. The market value of the collateral must equal at least 100% of deposits not covered by federal deposit -- insurance. Securities underlying a repurchase agreement must have a market value of at least 100% of. the cost of. the repurchase agreement. Obligations pledged .to secure deposits are delivered to the bank's joint -custody account at the Federal Reserve Bank. Concentration of Investment Credit Risk — The Library places no limit on the amount it may invest in any one issuer. At December 31, 2011, the Library's investments were.held at two financial -institutions. Uncollateralized deposits.at one financial institution"were in the amount of $1.1,962.82 at December 31, 2011. Deposits at the other financial institution were fully insured or collateralized. 19 MISSOURI RIVER REGIONAL LIBRARY Jefferson City, Missouri NOTES TO THE FINANCIAL STATEMENTS For The Year Ended December 31,2011 _ NOTE 4 - DEPOSITS AND INVESTMENTS: (Cont -'d.) Discretely Presented Component' Unit - At December 31, .2011, the Missouri Riser Regional Library Foundation's investment and deposit balances were as follows: Deposits 27 030 NOTE 5 -PROPERTY TAX REVENUE AND RECEIVABLES: Property taxes are levied by the Counties of_ Cole and Osage each March 1, based on property values assessed as of the previous January 1. Property taxes are ' considered past due on January 1 following -the levy date, at which time the -applicable ,property is subject to- lien and the assessment of penalties and 'interest. Cole County and. Osage County bill, and collect. property taxes �on-behalf of the Library. _ The property- tax- rates. per $100 assessed -valuation for 2010 for each of ,the respective taxing . districts were as follows: Osage County $0.1728 City of Jefferson/Cole County $0.1956, The assessed -valuation for property upon which, the. fiscal 2010 levy was based was as follows: Osage County- $ .158,016,460 - City. of Jefferson/Cole County. 1,305,234,798- Tax ,305,234,798Tax :revenue -receivable at December 31, 2011 on the fund financial statements. consist of the following: Taxes Receivable $2,588,070 Less Allowance for Uncollectible 60,506 -Total . NOTE 6 -.LEASES: The Library, located in Linn, Missouri, entered into a month-to=month lease with monthly rent = payments of $1,500 for facilities to conduct operations. The original lease expired in' April 2005. The lease has been continued on a'month-to-month basis -at the agreement of both parties at the same rental rate. - ,. 20 MISSOURI RIVER REGIONAL LIBRARY Jefferson City,;Missouri MISSOURI RIVER REGIONAL; LIBRARY Jefferson City, Missouri NOTES TO THE FINANCIAL, STATEMENTS For The Year Ended December 31, .2011 NOTE 7 - RETIREMENT PLANS: (Cont'd:) C. Annual Pension Cost For the 2011 plan year, the political subdivision's annual pension cost of $139,950 was -equal to the required -and actual contributions: The required "contribution was determined"as part of. the February 28, 2009 and February 28; 2010 annual"actuarial valuation using the.entryage " actuarial cost method. The actuarial assumptions included (a) a rate of return on the investment of' present and future assets of '7.25%. per"year, compounded annually, (b) . _— projected salary increases .of 3.5% per, year, compounded annually, attributable to inflation, (c) additional projected salary increases ranging from -0.0% to 6.0% per year, depending -on "ageand division,- attributable to seniority/merit, and -(d) pre --retirement mortality -based on 75% of the RP -2000 Combined Healthy Table set back 0 years for men and 0 years for - women. and (e), post-retirementmortality based on 105% of, the 199.4 Group Annuity Mortality table set back 0 years for men and 0 years for women. The actuarial'value of assets was determined using techniques -that smooth the effects of short-term volatility in.the market = . value of investments over a five-year period. The unfunded actuarial accrued liability is being amortized .as "a level "percentage of projected payroll on a closed basis.- The amortization _period as of February 28, 2009 was 26 years for the general division.. The amortization period at February 28, 2010 was 22 years for the. general division. - Three -Year Trend Information Fiscal Annual Percentage Net . Year. Pension of APC Pension Ending Cost (APC) Contributed' Obli ag tion . 06/30/.09 -127,425 100% -0= 06/30/10 134,585 100% -0- - 06/30/11 139,950 100% =0- The following table summarizes the funding status of the latest actuarial valuation date: Schedule of Funding Progress Entry Age Unfunded., i Actuarial Actuarial Actuarial Accrued Annual UAL as a Valuation Value Accrued Liability . Funded Covered Percentage of - Date- of Assets Liability ' (UAL) Ratio Payroll Covered -Payroll 2/28/2011 $1,106,386 $ 1,731,397 $ 625,011 64% $ 1,124,029 56% 22 MISSOURI RIVER REGIONAL LIBRARY. Jefferson .City; Missouri NOTES TO- THE FINANCIAL STATEMENTS For The Year Ended December 31, 2011 MISSOURI RIVER REGIONAL LIBRARY Jefferson City, Missouri STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN .FUND BALANCE - BUDGET AND ACTUAL -GENERAL FUND For the =year ended'De6ember'31', 2011 25 Variance - „ Original. Final. Favorable Budget Budget Actual (Unfavorable)' REVENUES ,Tax Revenue 2,864,703. 2,864,703 2,8781459" 13,756 - State Aid 4.107 - 41;807 52,494 , 10,687' Investment Income 20,000 20,000 6,397 (13,603) = - Fines 46,000 46,000 41,435 -(4,565) Grants - 19,424 21,945" ' 2,521 Lost Books and Cards- 7,000 7,000- 5,471 (1,529)•' _ . Photocopy Revenue, - - 12,500 12,500 13,718 1,218 _ Book Sale Revenue . 75,000 -15,000 22,046 7,046 . Miscellaneous = 3,000. 3,000 3,093 93" Gift Receipts - " 10,834, 1,2,227: 1,393 Total Revenues 3,010,010' . 3,040;268 3,057,285 17,017 ; EXPENDITURES Personnel Related: Administration 460,365 460;365 , 457,203 3,162' Network & Automation Services: 99,804. 99,804 96,345, -31459 Childrens - 191,007 191,007. 175,384 .' 15,623 . Reference 199,572 199,572 -210,469. (10,897) Circulation 247,256 247,256 251,414 (4,158) Outreach:.57,570 57,570 57;570 - Technical Seryices 200;776 200,776 197,495 3,281 Osage Branch 65,141 65;141 61,609 _ 3;532 Employee Relations `4,000 '4,000 2,155 1,845 s Payroll'Benefits-Emp1rFICA 116,394 116,394 1131-166 3,228 Payroll Benefits -Retirement'. - :' - 154,845 154,845 141,222 1.32623' Payroll Benefits -Insurance- . 282,944 278,805 257;714- 21;091' - Payroll Benefits -Match Def'Comp 5,596 5,596 '7,320 (1,724) . Payroll.Benefits-Cafeteria Plan Expense. 300 300 330 (30) Unemployment Expense _ - - 1,481 (1,481)' ; -- Total Personnel Related 2,085,570 2,081,431, 2,030;877 50,554, 25 26 MISSOURIRIVERREGIONAL. LIBRARY Jefferson City, Missouri STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET .AND ACTUAL -GENERAL FUND For the year ended ,D&ernber'34 ,2011 = Variance Original Final, Favorable' . Budget Budget Actual (Unfavorable) EXPENDITURES (Continued) Books. and Materials: .Adult Books --Non Fiction. _' 55,000 55,000 51,700 3,300. Adult Books-Ficfion - 55,526 55;526 48,466 7,060 Adult Books -Reference 35,000. 35,000, 33,661 - 1,339' Adult Non-Book-l'eriod/News 22,000 22;000 20,121 1,879` Adult Non -Book -Audio 22,000 :.; 22,000: 24,746 (2,746) AdultNon-Book-Video 21,500 21,500 24,166 (2,666) Adult Non -Book -Ref Online . 29,000 29,000 24,2.14 ' 4,786 Downloadable Material- 10;000 9,192. '- .808 Adult Non-Book-Mircoforms 6,600 6,000 -- 7,986 _(1;986) Teen Books . 9,000 -, 9,000 .9,304 "' (3,04)-' ' Juvenile Book -Non Fiction- 26,000~- 26,000-. - 28;386 .. (2,386) Juvenile Book -Fiction 27,000 27,000 25,3.17 1,683 Juvenile Book -Reference 1,500 1,500. 187 "'.; 1,313. _ JuvenileNon-Book-Periodical. 2;000. :' - 2,000. 1,305, 695 JuvenileNon=Book-Media 17;000 17,000 .17,082 (82) Collection Development Tools '2,000 2,000 2,395 (395)--. Public Use Software 1,000 1,000. 1,045: (45) Filtering Software License•. - 600 600 , . 576 24 " Internet Access/Real Project 1.1,500 11,500' 9,895 1,605 MOBIUS Fees. 8,500 8,500. " 8,379 121 OCLC-Cataloging 21,117: ' 2.1;117 - 17,'117 '. 4,000 . Interlibrary Loan 2,250 ' 2,250- 2,058. 192 Rebinding 500', 500, , 484 16', Collection Agency Fees y 6,816 6,816 6,881 (67)'. Total Books and Materials , 392,809 392,809 374,665 18,144 L' ibrary Departmental Overhead: Bookmobile: _OPER-BM 10,000 10,000, - 7,337 --.2,663, Library Automation Contracts 43,71.5 43,715. 45,856 Library Supplies _ : 35,000 35,000 26,520: 8;480: Photocopy 12,200- 12,200 9,089 3,111 Programming -Adults = ' 18,000 29;000' 27,752 1,248', . - Programming-Childrens. 14;000 17,500 -16,293: '- 1,207, "- Programming -Osage 3;800 4,492 3,678.. 814 Programming -Teen 3;500 - 4,191 3,627 564 Public. Information 28,000. 28,000' : 18,426 9,574, ' Recruitment 3,500 - 3,50Q - 3,338 162 ' Travel & Training 15,324 15,324 , . - 15,324 '• Volunteer Recognition 200 .' -200 88 - 112; Total Library Deptarmental,Overhead 187,239 203,122. 175,404 -27,7181, = 26 .MISSOURI RIVER REGIONAL LIBRARY Jefferson City; Missouri . STATEMENT OF.REVENUES; EXPENDITURES: AND CHANGES IN=FUND BALANCE = BUDGET AND ACTUAL -GENERAL FUND For the year ended December 31, 201:1 27 Variance Original -Final - Favorable' Budget Budget Actual (Unfavorable) , Overhead:. Bank Charges,,1;680 _ 1,680 1;617; '63 . Custodial Contract: Branch • 4,500 4,500 3,757 , 743 .. Custodial Supplies 6,000 ','6,000 4,721 Delivery Service_ 3,500: 3,500 3,399 101 Insurance -Business 32,000 22,000. 21,367 :: , ' 63,3 ,, Maintenance -Building & Equipment . 30,000" 30,000 '26,925 3,075 Maintenance-Furniture&.Equip- 8;000 8,000.- 4,434 3,566, _ Office Automation Contracts 4,000 4,000 3,685 315 Office Supplies 10'000 '' 10,000- -10,665 (665) Postage 18,000., 18,000, 13,251 4,749 -Professional Services - 13,000 13,000 „ . 10,353 2,647' Rent -Osage- 18,600 .18,600. 18,000 600 Rent -Weldon .- 51,912 :51,912 50,400 - 1,512 Telephone '12,000 12,000 10;405 1,595 Telephone:_ Oper-Osage 1,000 1,000. 1;198 -(198) ' Utilities 73,000. " '73500.0 '821986(9,986) ' Utitilities: Oper-Osage 4,000 4,000 4,314.. • (31.4) Vehicle Op eration/Passenger. ., 4,700 4,700 4,772 -(72) - Total Overhead 295,892 `'. 285,892 276,249 9,643 _ Capital Expenditures: Building &'Building Equipment 2,000'. 2,000 1,352 648 Contingency,. ' ..6,500 6,500 - .. = 6,560,'. Computer Equipment & Software '40,000 44,294 44,293 _ 1 _ ; Library.Furniture &Equipment - - 951 951 - Office Furniture & Equipment - 9,845 9,845 - Grant Expenses - 13,424 12,743 681 Total Capital Expenditures 48,500 77;014 69,184 7,830 Total Expenditures" 3,010,010 : 3;040,268 " 2,926-379- -" 113,889' Excess of Revenues over Expenditures - = 130,906 ,> ''130,906 Fund Balance, Beginning of Year - . 1,039,164,- . Fund Balance, End of Year ' . - - 1,176,010- 27 -'' -MISSOURI RIVER REGIONAL LIBRARY. Jefferson City; Missouri SCHEDULE OF FUNDING PROGRESS For The Year Ended December 31, 2011 Scheduie of Funding Progress ' [(b-a)/c] : �) (b -a) 'UAL as a . (a) Entry Age Unfunded (c) - Percentage , Actuarial ;Actuarial':- Actuarial-- Accrued- - (a/b).Annual : of. Valuation Value.-._.' Accrued ' Liability Funded Covered Covered Date . ` of Assets Liability UAL Ratio Payroll off, . _ ,. -02/28/09 .; 764,030 ; , 1;353,597. 589567 56% , 1,076.354 55% - 02/28/10 968;517 1,534,748 566,231 63% 1,1;33,.160 50% .02/28/11: 1,106,386--, 1;731,397. 625,011 64%, 1,124,029 56%. - Note: The above assets and actuarial accrued liability do not include, the assets and present value -of benefits associated with the Benefit Reserve- Fund and the Casualty Reserve Fund: The actuarial _assumptions were, changed, in conjunction with the February 28, 2011 annual actuarial valuations. *,Fora complete description. of the -actuarial assumptions.- used. in the annual valuations; please•contact the LAGERS office in Jefferson City..: 29