On November 6, 1977, at 1:30 am, the Kelly Barnes Dam failed after a period of heavy rain; seven inches from 2–5 November. In particular, 3 1/2 inches fell between 6 pm and midnight, November 5. A total of 200 feet (61 m) of the dam had failed, causing a peak of 24,000 cubic feet per second (680 m3) maximum discharge to burst downstream. Barnes Lake at the time held an estimated 27,442,800 cubic feet (777,090 m3) of water compared to a normal volume of 17,859,600 cubic feet (505,730 m3).
The flood caused 39 fatalities along with destroying nine houses, 18 house trailers, two college buildings and many motor vehicles. Five houses and five college buildings were also damaged. Two bridges on Toccoa Falls Drive and a culvert at County Farm Road were completely destroyed. The embankments at Georgia Highway 17 were destroyed on either side of the bridge, and one of the bridge abutments at Highview Road was destroyed. The water-supply pipe for the city of Toccoa was damaged and the city's water supply was contaminated for several days.
After the flood, Georgia's Governor George Busbee called for an immediate investigation, which was carried out by the Federal Investigative Board. The report was released December 21, 1977 with no specific cause(s) cited for the failure. The investigators had no engineering plans for the dam and records of construction on the dam were based on witnesses, pictures and newspaper articles.
The investigation did however cite several possible or probable causes. The failure of the dam's slope may have contributed to weakness in the structure, particularly in the heavy rain. A collapse of the low-level spillway could have also exacerbated this problem. A 1973 photo showed a 12-foot-high (3.7 m), 30-foot-wide (9.1 m) slide had occurred on the downstream face of the dam, which may have also contributed or foreshadowed the dam failure. Overall, the dam itself was in poor condition and lacked a sufficient design.