Georgia Public Telecommunications Commission, a component unit of the State of Georgia, financial statements for the fiscal year ended 2023 June 30 (with independent auditor's report thereon).

AUDIT REPORT FISCAL YEAR 2023
Georgia Public Telecommunications Commission
A Component Unit of the State of Georgia
Greg S. Griffin | State Auditor

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

AUDIT REPORT

FOR THE FISCAL YEAR ENDED JUNE 30, 2023 -- TABLE OF CONTENTS --

SECTION I

Page

FINANCIAL

Independent Auditor's Report............................................................................................................. 1

Management's Discussion and Analysis............................................................................................. 6

BASIC FINANCIAL STATEMENTS Exhibits
Government-wide Financial Statements A Statement of Net Position ...................................................................................................... 13 B Statement of Activities........................................................................................................... 14
Fund Financial Statements C Balance Sheet Governmental Funds ................................................................................... 15 D Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds................................................................................. 16 E Notes to the Financial Statements .......................................................................................... 18

REQUIRED SUPPLEMENTARY INFORMATION

Schedule 1 Schedule of Changes in Total OPEB Liability and Related Ratios - GPTC's PostEmployment Health Benefit Plan .............................................................................. 57
Schedule 2 Schedule of Proportionate Share of the Net SEAD - OPEB Asset Employees' Retirement System...................................................................................................... 58
Schedule 3 Schedule of Contributions SEAD-OPEB Employees' Retirement System ............ 59 Schedule 4 Schedule of Proportionate Share of the Net Pension Liability Employees'
Retirement System of Georgia ................................................................................... 60 Schedule 5 Schedule of Proportionate Share of the Net Pension Liability Teachers
Retirement System of Georgia ................................................................................... 61 Schedule 6 Schedule of Contributions Employees' Retirement System of Georgia ................. 62 Schedule 7 Schedule of Contributions Teachers Retirement System of Georgia...................... 63 Schedule 8 Notes to the Required Supplementary Information.................................................... 64

SUPPLEMENTARY INFORMATION

Schedule 9 Schedule of Revenues and Expenditures Budget and Actual................................ 66 Schedule 10 Statement of Activities By Corporation for Public Broadcasting Grantee............... 67 Schedule 11 Notes to the Supplementary Information ................................................................. 69

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

AUDIT REPORT

FOR THE FISCAL YEAR ENDED JUNE 30, 2023 -- TABLE OF CONTENTS --

SECTION II

Page

INTERNAL CONTROL AND COMPLIANCE REPORT

Independent Auditor's 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.................................................................................71

SECTION IV FINDINGS
Schedule of Findings ............................................................................................................................74

SECTION V MANAGEMENT'S CORRECTIVE ACTION Schedule of Management's Corrective Action ....................................................................................77

SECTION I FINANCIAL

Greg S. Griffin State Auditor
INDEPENDENT AUDITOR'S REPORT
The Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the Board of Directors of the Georgia Public Telecommunications Commission
and Mr. Bert Wesley Huffman, President and Chief Executive Officer
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities and each major fund of the Georgia Public Telecommunications Commission (Commission), a component unit of the State of Georgia, as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the Commission's basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the Commission as of June 30, 2023, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report.
We are required to be independent of the Commission and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
270 Washington Street, SW, Suite 4-101 Atlanta, Georgia 30334 | Phone (404) 656-2180

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Commission's ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Commission's internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Commission's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis and required supplementary information listed in the table of contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, 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 of 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 GAAS, 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 not provide us with sufficient appropriate evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Commission's basic financial statements. The accompanying supplementary information, as listed in the table of contents, is presented for the purposes of additional analysis and is not a required part of the basic financial statements.
The supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Report on Summarized Comparative Information
We have previously audited the Commission's 2022 financial statements, and we expressed unmodified opinions on the respective financial statements of the governmental activities and each major fund in our report dated February 6, 2023. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2022, is consistent, in all material respects, with the audited financial statements from which it has been derived.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 19, 2023 on our consideration of the Commission's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Commission's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Commission's internal control over financial reporting and compliance.

A copy of this report has been filed as a permanent record and made available to the press of the State, as provided for by Official Code of Georgia Annotated section 50-6-24. Respectfully submitted,
Greg S. Griffin State Auditor
December 19, 2023

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GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2023
The following is a discussion and analysis of the financial performance of the Georgia Public Telecommunications Commission (Commission), which does business as Georgia Public Broadcasting (GPB). It provides an overview of the activities for the fiscal year ended June 30, 2023 and compares them to fiscal year ended June 30, 2022. Georgia Public Broadcasting provides educational, instructional and public broadcasting services to the citizens of the state of Georgia. This information is designed to be read in conjunction with the Commission's financial statements that follow this section.
HIGHLIGHTS
Net Position As of the close of fiscal year 2023, the Commission's combined ending net position totaled ($76,484). Of this total, $7,035,572 is net investment in capital assets and ($7,112,056) is unrestricted (deficit).
Long-term Liabilities GPB's total long-term liabilities consist of $1,252,933 in compensated absences, $702,924 in leases, $21,637,628 in GPB's proportionate share of net pension liability and $12,003,020 in net other post-employment benefit liability.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the Commission's basic financial statements. The Commission's basic financial statements have three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains additional required supplementary information to the basic financial statements themselves.
The Government-Wide Financial Statements are designed to provide a broad overview of the Commission's finances, in a manner similar to private-sector business reports.
The Statement of Net Position presents information on the Commission's assets, deferred outflows of resources, liabilities and deferred inflows of resources and net position as of June 30, 2023. The total of assets plus deferred outflows of resources less liabilities and deferred inflows of resources is reported as net position. Over time, increases or decreases in net position should serve as a useful indicator of whether the financial position of the Commission is improving or deteriorating.
The Statement of Activities presents information showing how the Commission's net position has changed during the most recent fiscal year. All changes in net position 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 only result in cash flows in future fiscal periods (e.g., earned unused vacation leave).
The government-wide financial statements only include the operations of the Commission. The Commission is considered a component unit of the State of Georgia for financial reporting purposes because of the significance of the Commission's legal, operational and financial relationships with the State of Georgia. These reporting entity relationships are defined in Section 2100 of the Governmental Accounting Standards Board's Codification of Governmental Accounting and Financial Reporting Standards.
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GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2023
Fund Financial Statements A fund is a grouping of related accounts used to maintain control over resources that have been segregated for specific activities or objectives. The Commission, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All Commission funds can be classified into the category of governmental funds.
Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on nearterm inflows and outflows of spendable resources, as well as balances of spendable resources available at the end of the fiscal year. 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 Commission maintains three individual governmental funds. The general fund is a major fund and is used to account for all activities of the Commission not otherwise accounted for by specific funds. The special revenue fund is used to account for all financial transactions related to the blended component unit, The Foundation for Public Broadcasting in Georgia, Inc. The capital projects fund accounts for financial transactions related to the Commission's capital facilities projects funded by Georgia State Financing and Investment Commission (GSFIC) bonds, Federal Communication Commission (FCC) repacking projects funded by FCC auction proceeds or FCC reimbursements.
Notes To the Financial Statements Notes to the financial statements provide additional information essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found in the Basic Financial Statements section of this report.
Supplementary Information In addition to this management's discussion and analysis, which is required supplementary information, the basic financial statements are followed by a section of other required supplementary information that further explains and supports the information in the financial statements. This section, which begins on page 60 of this report, consists of a schedule of the Commission's changes in total OPEB liability and related ratios for Georgia Public Telecommunications Commission's health plan, schedules of proportionate share of the net OPEB asset for SEAD, schedules of proportionate share of the net pension liability for the Employees' Retirement System (ERS) and the Teachers Retirement System of Georgia (TRS), schedules of contributions of ERS and TRS and notes to the required supplementary information for both pension plans.
Other supplementary information that is not required begins on page 69 and consists of a general fund statement of revenues and expenditures budget and actual statement and a statement of activities by Corporation for Public Broadcasting grantee and notes to this supplementary information.
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GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2023

GOVERNMENT-WIDE FINANCIAL ANALYSIS
Georgia Public Telecommunications Commission Net Position

Assets Capital Assets, Net of Depreciation Intangible Right-To-Use Assets, Net of Amortization Other Assets Accounts Receivable
Current Noncurrent
Total Assets

2023
$ 7,078,930 659,566
21,067,603
2,478,950 733,573
32,018,622

2022
$ 7,502,043 616,818
25,420,479
2,125,372 1,876,270 37,540,982

Deferred Outflows of Resources Related to Defined Benefit Pension Plans Related to Other Post-Employment Benefits Plans
Total Deferred Outflows of Resources

9,510,853 3,593,278 13,104,131

4,209,621 4,320,319 8,529,940

Liabilities Other Liabilities Long-Term Liabilities
Current Noncurrent
Total Liabiltiies

1,388,193
805,184 34,791,321 36,984,698

2,683,250
709,140 22,855,666 26,248,056

Deferred Inflows of Resources Related to Lease Revenue Related to Defined Benefit Pension Plans Related to Other Post-Employment Benefits Plans
Total Deferred Inflows of Resources

1,749,167 247,310
6,218,062
8,214,539

2,946,026 6,781,585 4,784,949
14,512,560

Net Position Investment in Capital Assets Unrestricted (Deficit)

7,035,572 (7,112,056)

7,480,338 (2,170,032)

Total Net Position

$ (76,484) $ 5,310,306

The Commission's total net position decreased by $5,386,790 from the prior year which is largely attributed to a net increase in liabilities.
The adoption of GASB Statement No. 87 on July 1, 2020, establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this statement, a lessee is required to recognize a lease obligation and an intangible right-to-use asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources. Future receivables for leases were $1,876,270 and $3,083,054 for fiscal years 2023 and 2022, respectively.
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GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2023

Changes to capital assets were ($423,113). The change in capital assets is due to the current year addition of other property and equipment and current year depreciation expense.
The Commission's total liabilities for fiscal year 2023 increased by $10,736,642 and are mostly attributable to a decrease in the OPEB liability of $2,556,184 and an increase in net pension liability of $14,510,541. These liabilities are offset by net changes in deferred outflows and inflows of resources related to defined benefit pension plans and the OPEB benefits plan and lease revenue.
The following is a summary of the changes in net position for fiscal years 2023 and 2022:

2023

Revenues

Program Revenues

Charges for Services

$ 7,896,675

Operating Grants and Contributions

5,079,641

Capital Grants and Contributions

209,329

General Revenues

Intergovernmental - Other State Appropriations 14,814,216

Contributions and Donations

11,639,706

Miscellaneous Revenue

248,975

Unrestricted Investment Earnings

1,557,483

Transfers and Donated Assets

-

2022
$ 7,372,310 3,836,886 712,677
17,923,104 11,230,500
(1,310,387)
(395,870)

Total Revenues and Transfers

41,446,025

39,369,220

Expenses Culture and Education
Increase (Decrease) in Net Position

46,832,815 (5,386,790)

37,113,033 2,256,187

Net Position - Beginning as Originally Reported

5,310,306

604,098

Change in Prior Year Net Position Net Position - Beginning of Year, Restated

5,310,306

2,450,021 3,054,119

Total Net Position - Ending

$ (76,484) $ 5,310,306

The increase in total revenues and transfers from fiscal year 2022 to fiscal year 2023 is attributable to a net effect of a decrease in state appropriations, an increase in investment earnings due to unrealized gains, decreases in capital grants for projects funded by the Federal Communications Commission (FCC) and increases in stabilization grants recognized from the Corporation for Public Broadcasting.
The FCC invited stations to enter a reverse auction at the end of 2015 to purchase spectrum used by television stations to sell to wireless and broadband companies. GPTC entered two of its stations into the reverse auction, WJSP TV (Columbus) and WNGH TV (Rome). These stations were on the UHF band, and we were able to sell some of our TV spectrum by moving these two
9

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2023
stations to a different frequency, a low VHF band. The change will not impact any viewers or listeners around the state. Final FCC funding was received during fiscal year 2022 for the repack projects and the FCC completed final close out letters for all repacked sites during fiscal year 2023.
Other changes to revenue include an increase in sponsorship. The Statement of Activities reflects a decrease in net position attributable to current year activity.
FINANCIAL ANALYSIS OF THE COMMISSION'S FUNDS
General Fund The general fund is the chief operating fund of the Commission and consists of the budget fund for GPB. The budget fund for GPB is the fund responsible for all activities of the Commission. At June 30, 2023, the general fund had $391,532 in assigned fund balance for encumbrances and $382,132 in unassigned fund balance as described in the Notes to the Financial Statements.
Special Revenue Fund The special revenue fund is used to account for all financial transactions related to the blended component unit, The Foundation for Public Broadcasting in Georgia, Inc. Although legally separate, the Foundation is, in substance, a part of the Commission's operations. Funds raised by the Foundation are almost entirely devoted to the benefit of the Commission. At June 30, 2023, the special revenue fund has $19,669,922 in assigned fund balance as described in the Notes to the Financial Statements.
Capital Projects Fund The capital projects fund accounts for financial transactions related to the Commission's capital facilities projects funded by Georgia State Financing and Investment Commission (GSFIC) bonds and Federal Communication Commission (FCC) repacking projects funded by FCC auction proceeds or FCC reimbursements. At June 30, 2023, the capital projects fund had no fund balance.
BUDGET COMPARISON ANALYSIS
The original budget for the Commission of $37,182,199 increased to $41,922,544 during the fiscal year. Expenditures on a budgetary basis were less than budget by $734,442 and less than revenues by $48,594.
CAPITAL ASSETS
The Commission's investment in capital assets as of June 30, 2023, amounts to $55,351,473 which with accumulated depreciation of $48,272,543 leaves a net book value of $7,078,930. This investment in capital assets includes land, buildings and equipment. The actual depreciation charges for the year totaled $1,774,224. The Georgia Public Telecommunications Commission entered into a forty-year intergovernmental agreement with the Board of Regents effective July 1, 2012. The Commission transferred other property and equipment at its headquarters location and the WJSP tower site to the Board of Regents. This transfer is required to obtain the use of general obligation bonds sold in the Board of Regents name on behalf of the Commission. The Commission, an authority created after 1967, cannot sell bonds. There was no transfer to the Board of Regents in fiscal year 2023.
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GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2023

LONG-TERM LIABILITY ADMINISTRATION

At June 30, 2023, the Commission had $35,596,505 in total long-term liability outstanding with $805,184 due within one year. The following table summarizes total long-term liability outstanding at June 30, 2023 and 2022.

2023

2022

Leases

$

702,924 $

638,523

Compensated Absences

1,252,933

1,239,992

Net Other Post-Employment Benefit Liability

12,003,020

14,559,204

Net Pension Liability

21,637,628

7,127,087

$ 35,596,505 $ 23,564,806
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
Georgia's economy has historically been, and remains, a strong, fiscally conservative state and economic opportunity has continued to grow for Georgians. For state government, there have been stronger than anticipated revenues, enabling the state to make strategic economic and infrastructure investments to support future growth. The Commission, along with other state agencies, was asked to submit budget enhancements of up to three percent for both the amended fiscal year 2024 and next fiscal years. Additionally, state agencies were encouraged to look for opportunities for streamlining and increasing efficiency in governance and asked to submit a one percent reduction plan for fiscal year 2025.
The current state appropriation is approximately 32% of GPB's annual budget. The Commission's state appropriation was reduced by $1.4 million from fiscal year 2023 to fiscal year 2024. To meet expenditures, GPB must raise approximately $26.0 million for the current budget year. Our revenue generation from outside sources remains critically important as state appropriations decrease. GPB projects moderate increases in other sources of revenue to sustain its annual budget; however, fundraising efforts could be adversely affected if the economy is unstable.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the Commission's finances for those individuals interested in the Commission's finances. Questions concerning any of the information provided in this report should be addressed to:
Georgia Public Broadcasting Chief Financial Officer 260 14th Street N.W.
Atlanta, Georgia 30318-5360

11

BASIC FINANCIAL STATEMENTS

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION STATEMENT OF NET POSITION JUNE 30, 2023
(with summarized comparative information for the year ended June 30, 2022)

EXHIBIT "A"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable Current Interest Leases Other Noncurrent Leases Net Other Post-Employment Benefit Asset Intangible Right-to-Use Assets Transmission Towers Equipment Less: Accumulated Amortization Capital Assets Land Buildings and Building Improvements Other Property and Equipment Less: Accumulated Depreciation Total Assets
DEFERRED OUTFLOWS OF RESOURCES Related to Defined Benefit Pension Plans Related to Other Post-Employment Benefits Plans Total Deferred Outflows of Resources
LIABILITIES Accounts Payable and Other Accruals Interest Payable Unearned Revenue Long-term Liabilities Due Within One Year Compensated Absences Leases Due in More Than One Year Compensated Absences Leases Other Post-Employment Benefit Liability Net Pension Liability Total Liabilities
DEFERRED INFLOWS OF RESOURCES Related to Lease Revenue Related to Defined Benefit Pension Plans Related to Other Post-Employment Benefits Plans Total Deferred Inflows of Resources
NET POSITION Net Investment in Capital Assets Unrestricted (Deficit)
Total Net Position

Governmental Activities

2023

2022

$

2,842,556 $

11,317,279

17,523,026

12,978,369

5,602 1,142,697 1,330,651
733,573 702,021
979,690 30,146
(350,270)
1,478,948 217,978
53,654,547 (48,272,543) 32,018,622

9,135 1,206,784
909,453
1,876,270 1,124,831
799,986 63,154
(246,322)
1,478,948 217,978
67,674,003 (61,868,886) 37,540,982

9,510,853 3,593,278 13,104,131

4,209,621 4,320,319 8,529,940

1,103,738 2,841
281,614

789,685 2,998
1,890,567

681,456 123,728
571,477 579,196 12,003,020 21,637,628 36,984,698

604,176 104,964
635,816 533,559 14,559,204 7,127,087 26,248,056

1,749,167 247,310
6,218,062 8,214,539

2,946,026 6,781,585 4,784,949 14,512,560

7,035,572 (7,112,056)

7,480,338 (2,170,032)

$

(76,484) $

5,310,306

The notes to the financial statements are an integral part of this statement.
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GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION STATEMENT OF ACTIVITIES
FOR FISCAL YEAR ENDED JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

EXHIBIT "B"

Functions/Programs Governmental Activities Culture and Education Programming and Content Operations and Content Delivery Facilities Marketing and Communications Fundraising Sponsorship Studio Rentals and Client Services Administration
Total Governmental Activities

Expenses 2023

Charges for Services

Program Revenues 2023 Operating Grants and
Contributions

Capital Grants and Contributions

$

18,821,058 $

11,179,328

3,409,482

2,896,853

4,018,264

1,324,148

1,730,640

3,453,042

$

46,832,815 $

15,804 $ -
1,320,566 -
4,138,043 2,422,262
-
7,896,675 $

5,079,641 $ -
5,079,641 $

General Revenues Intergovernmental - Other State Appropriations Contributions and Donations Miscellaneous Revenue Unrestricted Investment Earnings
Transfers and Donated Assets Total General Revenues and Transfers Change in Net Position

Net Position - Beginning as Originally Reported
Change in Prior Year Net Position Net Position - Beginning of Year, Restated
Net Position - Ending

- $ 209,329
209,329
$

Net (Expense) Revenue and Changes in Net Position

Governmental Activities

2023

2022

(13,725,613) $ (10,969,999)
(2,088,916) (2,896,853) (4,018,264) 2,813,895
691,622 (3,453,042)
(33,647,170)

(10,882,183) (7,655,627) (1,037,802) (2,100,061) (3,589,634) 2,551,651 783,677 (3,261,181)
(25,191,160)

14,814,216 11,639,706
248,975 1,557,483
28,260,380 (5,386,790)
5,310,306
5,310,306
(76,484) $

17,923,104 11,230,500
(1,310,387)
(395,870) 27,447,347
2,256,187
604,098
2,450,021 3,054,119
5,310,306

The notes to the financial statements are an integral part of this statement. 14

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2023
(with summarized comparative information for the year ended June 30, 2022)

EXHIBIT "C"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Interest Leases Other
Total Assets
LIABILITIES AND FUND BALANCES Liabilities
Cash Overdraft Accounts Payable and Other Accruals Unearned Revenue
Total Liabilities
DEFERRED INFLOWS OF RESOURCES Related to Lease Revenue
Fund Balances Assigned Unassigned Total Fund Balances
Total Liabilities and Fund Balances

General Fund

Special Revenue Capital Projects

Fund

Fund

Total Governmental Funds

2023

2022

$

867,178 $

2,156,600 $

-

17,523,026

- $ -

3,023,778 $ 17,523,026

11,317,279 12,978,369

5,602 1,876,270 1,149,429

-

-

5,602

9,135

-

-

1,876,270

3,083,054

-

181,222

1,330,651

909,453

$

3,898,479 $ 19,679,626 $

181,222 $ 23,759,327 $ 28,297,290

$

- $

1,094,034

281,614

1,375,648

- $ 9,704
9,704

1,749,167

-

391,532 382,132 773,664

19,669,922 -
19,669,922

$

3,898,479 $ 19,679,626 $

181,222 $ -
181,222

181,222 $ 1,103,738
281,614 1,566,574

789,685 1,890,567 2,680,252

-

1,749,167

2,946,026

-
181,222

20,061,454 382,132
20,443,586

22,208,101 462,911
22,671,012

Amounts reported for governmental activities in the Statement of Net Position are different because:

Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. These assets consist of:

Land Buildings and Building Improvements Other Property and Equipment Accumulated Depreciation
Total Capital Assets

$

1,478,948

217,978

53,654,547

(48,272,543)

Right-to-use assets used in governmental activities are not financial resources and therefore are not reported in the funds.

Leased Transmission Towers Leased Equipment Accumulated Amortization
Total Right-to-use Assets

$

979,690

30,146

(350,270)

Certain liabilities and deferred inflows/outflows of resources are not due and payable in the current period and therefore are not reported as liabilities in the funds. These consist of:

Compensated Absences Leases Liability and Interest Payable Other Post-Employment Benefit Liability and Deferred Outflows and Inflows on OPEB Plans Pension Liability and Deferred Outflows and Inflows on Pension Plans

Net Position of Governmental Activities (Exhibit "A")

$

7,078,930

7,502,043

659,566

616,818

(1,252,933) (705,765)
(13,925,783) (12,374,085) (28,258,566)
(76,484) $

(1,239,992) (641,521)
(13,899,003) (9,699,051)
(25,479,567)
5,310,306

The notes to the financial statements are an integral part of this statement.
15

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS FOR FISCAL YEAR ENDED JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

EXHIBIT "D"

REVENUES Intergovernmental - Federal U.S. Department of Education Intergovernmental - Other State Appropriations through the Board of Regents of the University System of Georgia Corporation for Public Broadcasting - Grants Federal Communications Commission - Proceeds GSFIC Contributions and Donations Foundation for Public Broadcasting in Georgia, Inc. Interest and Other Investment Income Rents and Royalties Sales and Services Sponsorship Gain on Investments Miscellaneous Total Revenues
EXPENDITURES Current
Culture and Education Programming and Content Operations and Content Delivery Facilities Marketing and Communications Fundraising Sponsorship Studio Rentals and Client Services Administration Total Expenditures
Excess Of Revenues Over (Under) Expenditures
OTHER FINANCING SOURCES (USES) Leases Interfund Transfers Total Other Financing Sources (Uses)
Net change in Fund Balances
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING

General Fund

Special Revenue Capital Projects

Fund

Fund

Total Governmental Funds

2023

2022

$

95,586 $

- $

- $

95,586 $

22,029

14,814,216 4,984,055 -
3,236,348 522,284 4,138,043 248,975 28,039,507

-
11,639,706 391,919 -
1,165,564 -
13,197,189

209,329
209,329

14,814,216 4,984,055 209,329
11,639,706 391,919
3,236,348 522,284
4,138,043 1,165,564
248,975 41,446,025

17,923,104 3,814,857 522,143 190,534
11,230,500 467,241
2,910,804 577,125
3,475,066 (1,777,628)
409,315 39,765,090

17,743,699 9,965,668 3,441,033 2,627,707 3,744,054 1,324,148 1,683,514 2,997,440
43,527,263
(15,487,756)

50,869 65,694 116,563
13,080,626

209,329
209,329
-

17,743,699 10,174,997
3,441,033 2,627,707 3,794,923 1,324,148 1,683,514 3,063,134 43,853,155
(2,407,130)

15,037,152 8,837,665 2,415,304 2,202,185 3,638,648 1,202,165 1,273,676 3,283,347
37,890,142
1,874,948

179,704 12,775,000 12,954,704

(12,775,000) (12,775,000)

(2,533,052)

305,626

3,306,716

19,364,296

$

773,664 $ 19,669,922 $

-
-
-
- $

179,704 -
179,704

248,891 -
248,891

(2,227,426)

2,123,839

22,671,012

20,547,173

20,443,586 $ 22,671,012

Net change in fund balances - total governmental funds
Amounts reported for governmental activities in the Statement of Activities are different because:
Capital outlays are reported as expenditures in governmental funds. However, in the Statement of Activities, the cost of these assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:
Capital Outlay Depreciation Expense
Some items reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as revenues or expenditures in governmental funds. This activity consists of:
Increase in Compensated Absences Increase in Leases Increase in Other Post-Employment Benefit Obligations Increase in Pension Obligations
The net effect of transactions involving capital assets is to increase net position:
Net Transfer of Equipment
Change in net position of governmental activities (Exhibit "B")

$ (2,227,426) $ 2,123,839

$ 1,351,111 (1,774,224)

(423,113)

46,318

(12,941) (21,496) (26,780) (2,675,034)

(118,043) (11,496)
(530,946) 1,142,385

-

(395,870)

$ (5,386,790) $ 2,256,187

The notes to the financial statements are an integral part of this statement.
16

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

INDEX
Note 1. Note 2. Note 3.
Note 4. Note 5. Note 6. Note 7. Note 8. Note 9. Note 10. Note 11. Note 12. Note 13. Note 14. Note 15.

Page Summary of Significant Accounting Policies........................................ 18 Stewardship, Compliance and Accountability ....................................................25 Accounting Changes - Adoption Of New Accounting Principles .........................................................................................26 Deposits and Investments ...................................................................................27 Accounts Receivable...........................................................................................30 Capital Assets and Intangible Right-To-Use-Assets...........................................31 Leases ..................................................................................................................34 Interfund Transfers..............................................................................................36 Long-Term Liabilities .........................................................................................37 Risk Management ...............................................................................................37 Retirement Plans .................................................................................................38 Other Post-Employment Benefits (OPEB) .........................................................47 Nonmonetary Transactions .................................................................................55 Contingencies ......................................................................................................55 Subsequent Events ..............................................................................................55

17

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. REPORTING ENTITY The Georgia Public Telecommunications Commission (the Commission) is an instrumentality of the State of Georgia and a public corporation. The Commission, a component unit of the State of Georgia, was created by an Act of the General Assembly of the State of Georgia for the purpose of providing educational, instructional, and public broadcasting services to the citizens of the State of Georgia.
The overall management of the business and affairs of the Commission is vested in a Board of Directors. State law provides that the Board is to be comprised of nine members. Board members serve on a part-time basis and are appointed by the Governor for specific periods of time. The Board of Directors appoints an Executive Director who is responsible for the day-to-day operations of the Commission.
A component unit is an entity for which the Commission is financially accountable. Financial accountability includes the ability of the Commission to appoint a voting majority of the component unit's governing board and to impose its will upon the organization or to have the potential for the organization to provide specific financial benefits or impose specific financial burdens on the Commission.
Blended Component Unit As required by accounting principles generally accepted in the United States of America (GAAP), these financial statements present the Commission and its blended component unit, The Foundation for Public Broadcasting in Georgia, Inc. ("the Foundation"). The Foundation assists the Commission in fulfilling its statutory responsibility for providing educational and public broadcasting to the citizens of the State of Georgia. Funds raised by the Foundation are almost entirely devoted to the benefit of the Commission. The Foundation's Board of Directors is composed of five directors which are the Chairperson and the Vice Chairperson of the Commission's Board, the Executive Director of the Commission and two directors elected by the Foundation's Board.
Because the Foundation, a legally separate entity, is in substance a part of the Commission's operations, the financial statements of the Foundation have been blended with the financial statements of the Commission. To satisfy GAAP requirements for the blending of component units, the Foundation's financial activity is presented as a special revenue fund in a separate column on the Statement of Revenue, Expenditures and Changes in Fund Balance. This presentation more accurately depicts the unique relationship between the Commission and the Foundation.
The Georgia Public Telecommunications Commission, with its blended component unit, is considered a component unit of the State of Georgia for financial reporting purposes because of the significance of its legal, operational and financial relationships with the State of Georgia. The component unit is organized as a not-for-profit corporation in which the primary government is the sole corporate member, as identified in the component unit's articles of incorporation or bylaws, and the component unit is included in the financial reporting entity pursuant to the provisions defined in Section 2100 of the Governmental Accounting Standards Board Codification of Governmental Accounting and Financial Reporting Standards.

18

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

B. BASIS OF PRESENTATION A key feature of the governmental financial reporting model is its unique combination of government-wide and fund financial reporting. This combination of government-wide and fund financial reporting is designed to accomplish two goals: (1) to provide information using the economic resources measurement focus and the accrual basis of accounting for functions reported in governmental funds, and (2) to provide net cost information by function for governmental activities. These goals are accomplished through government-wide financial statements and fund financial statements.
The basic financial statements include prior year summarized comparative information in total, but not at the level of detail required for a presentation in conformity with U.S. generally accepted accounting principles. Accordingly, such information should be read in conjunction with the Commission's financial statements for the year ended June 30, 2022 from which the summarized information was derived.
Government-Wide Financial Statements The Statement of Net Position and Statement of Activities report information on all the nonfiduciary activities of the Commission and its component unit.
As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. The only exception to this general rule is in those instances where the elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable within a specific function. Program revenues include (a) charges to customers or applicants who purchase, use, or directly benefit from goods, services or privileges provided by a given function and (b) operating and capital grants and contributions that are restricted to meeting the operational requirements of a particular function. Annual appropriations received from the State of Georgia, through the Board of Regents of the University System of Georgia, and other items not meeting the definition of program revenues are instead reported as general revenue.
Fund Financial Statements Separate financial statements for each fund category are provided for governmental funds. The major individual governmental funds are reported as separate columns in the fund financial statements.
The financial activities of the Commission and its blended component unit are recorded in individual funds, each of which is deemed to be a separate accounting entity. The Commission uses fund accounting to report on its financial position and results of operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts.

19

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

The Commission reports the following major governmental funds:
The General Fund is used to account for all financial transactions not required to be accounted for in another fund. These transactions relate to resources obtained and used for providing educational, instructional and public broadcasting services to the citizens of the State of Georgia.
The Special Revenue Fund is used to account for all financial transactions related to the component unit, The Foundation for Public Broadcasting in Georgia, Inc.
The Capital Projects Fund accounts for financial transactions related to the Commission's capital facilities projects funded by Georgia State Financing and Investment Commission (GSFIC) bonds, FCC repacking projects funded by FCC auction proceeds or FCC reimbursements.
C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING Government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of cash flows.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Major revenue sources susceptible to accrual include intergovernmental revenue. Appropriations from the State of Georgia, passed through the Board of Regents of the University System of Georgia to the Commission, are recognized when they become measurable and available to the extent they are collected within the current period. All other revenue items become measurable and available when they are earned.
Expenditures generally are recorded when the related fund liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. General capital asset acquisitions are reported as expenditures in governmental funds.
D. ASSETS, LIABILITIES AND NET POSITION/FUND BALANCE Cash and Cash Equivalents The Commission's cash and cash equivalents are considered to be cash on hand, demand deposits with banks and other financial institutions, money market funds and the State investment pool that have the general characteristics of demand deposit accounts in that the Commission may deposit additional cash at any time and may withdraw cash at any time without prior notice or penalty.
Funds held in money market funds and certificates of deposit are valued at cost which approximates fair value.

20

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

Investments Investments are defined as those financial instruments with terms in excess of three months from the date of purchase and certain other securities held for the production of revenue. Investments are presented at fair value.
Accounts Receivable Accounts receivable for service are recorded when either the asset or revenue recognition criteria have been met. Management periodically reviews the status of all the accounts receivable balances for collectability and determined that the balances are collectible and an allowance for uncollectible accounts is considered unnecessary.
Capital Assets Capital assets, which include property, plant and equipment, are reported in the applicable governmental activities in the government-wide financial statements. All land is capitalized regardless of cost. Buildings and building improvements are capitalized when the cost of individual items or projects exceeds $100,000. Equipment is capitalized when the cost of individual items exceeds $5,000 and an estimated useful life in excess of three years. Such assets are recorded at historical costs or estimated historical cost if historical cost information is unavailable. Donated capital assets are recorded at acquisition value on the date donated. Disposals are deleted at recorded cost.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets' lives are not capitalized.
Capital assets of the Commission are depreciated using the straight-line method over the following estimated useful lives:
Estimated Useful Life

Buildings and Building Improvements Equipment Vehicles

'10 - 50 Years 3 - 20 Years 5 - 10 Years

Intangible Right-to-Use Assets Leases, as a lessee, are included as intangible right-to-use assets and lease obligations on the Statement of Net Position. An intangible right-to-use asset represents the Commission's right to use an underlying asset for the lease term. Lease obligations represent the Commission's liability to make lease payments arising from the lease agreement. Intangible right-to-use assets and lease obligations are recognized based on the present value of lease payments over the lease term, where the initial term exceeds 12 months. Residual value guarantees and the value of an option to extend or terminate a lease are reflected to the extent it is reasonably certain to be paid or exercised. Variable payments based on future performance or usage are not included in the measurement of the lease liability. Intangible right-to-use assets are amortized using a straightline basis over the shorter of the lease term or useful life of the underlying asset.

Leases as Lessee The Commission is a lessee for noncancellable leases of certain space within buildings owned by 3rd parties.

21

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

At the commencement of a lease, the Commission initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The right-to-use lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on the straight-line basis over the shorter of the useful life of the asset or the lease term.
Key estimates and judgments related to leases include how the Commission determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments:
The lease agreements entered into by the Commission as lessee do not contain stated interest rates. Therefore, the Commission has used its estimated incremental borrowing rate as the discount rate for the leases. The Commission has estimated this incremental borrowing rate to be 2.26% to 3.42% for the leases in which the Commission is currently involved as the lessee.
The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payments the Commission will make over the lease term.
The Commission monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease asset and lease liability if certain changes occur that are expected to significantly affect the amount of the lease liability.
Lease assets are reported as right-to-use assets and lease liabilities are reported with current and long-term debt on the statement of net position.
Leases as Lessor The Commission is a lessor for noncancellable leases of space within buildings and transmission towers owned by the Commission. The Commission recognizes a lease receivable and a deferred inflow of resources for deferred lease receipts in the statement of net position.
At the commencement of a lease, the Commission initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments made. The deferred inflow of resources for deferred lease receipts is initially measured as the initial amount of the lease receivable, adjusted for lease payments made at or before the lease commencement date, less certain costs paid to or reimbursed to the lessee. Subsequently, the deferred inflow of resources is amortized on a straight-line basis over the lease term.
Key estimates and judgments related to leases include how the Commission determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments:
The lease agreements entered into by the Commission do not contain stated interest rates. Therefore, the Commission has used its estimated incremental borrowing rate as the discount rate for the leases. The Commission has estimated this incremental borrowing rate to be 2.62% to 3.42% for the leases in which the Commission is currently as the lessor.
22

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease receivable are composed of fixed payments the Commission will receive over the lease term.
The Commission monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.
Deferred Outflows of Resources Deferred outflows of resources reported in the Commission's Statement of Net Position represents resources related to the Employees' Retirement System of Georgia (ERS) and the Teachers Retirement System of Georgia (TRS) pension plans and the Commission's other postemployment benefits plan (OPEB) related to health insurance and the State Employees' Assurance Department (SEAD) OPEB. It represents a consumption of net resources that is applicable to a future reporting period and will not be recognized as an outflow of resources (expense) until that time. Deferred outflows of resources have a positive effect on net position, but they are not assets.
Unearned Revenue Unearned revenue includes grant funds, rentals and fees received but not earned.
Long-Term Liabilities In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities. The Commission's long-term obligations include compensated absences, leases, pensions and other post-employment benefits obligations.
Deferred Inflows of Resources Deferred inflows of resources reported in the Commission's Statement of Net Position represents resources related to the Employees' Retirement System of Georgia (ERS) and the Teachers Retirement System of Georgia (TRS) pension plans; the Commission's other post-employment benefits plan (OPEB) related to health insurance and the State Employees' Assurance Department (SEAD) OPEB and related to leases. It represents an acquisition of net resources that is applicable to a future reporting period and will not be recognized as an inflow of resources (revenue) until that time. Deferred inflows of resources have a negative effect on net position, but they are not liabilities.
Pension Items For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Employees' Retirement System (ERS) and the Teachers Retirement System of Georgia (TRS) and additions to/deductions from ERS's and TRS's fiduciary net position have been determined on the same basis as they are reported by ERS and TRS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
Other Post-Employment Benefits (OPEB) Items There are two items relating to OPEB. The Commission's OPEB Plan is a single-employer defined benefit post-retirement healthcare plan and the SEAD-OPEB establishes a fund for the provision of term life insurance to retired and vested inactive members of ERS, the Georgia Judicial
23

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

Retirement System (GJRS), and Legislative Retirement System (LRS). For purposes of measuring the net SEAD-OPEB asset, deferred outflows of resources and deferred inflows of resources related to SEAD-OPEB, and SEAD-OPEB expense, net position has been determined on the same basis as reported by ERS.
Fund Balance In the fund financial statements, governmental funds fund balance is composed of classifications designed to disclose the hierarchy of constraints placed on how fund balance can be spent. The governmental funds classify fund balances as follows:
Nonspendable Fund Balance This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact.
Restricted Fund Balance This classification includes amounts that can be spent only for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation.
Committed Fund Balance This classification includes amounts that can be used only for the specific purposes determined by a formal action of the government's highest level of decisionmaking authority.
Assigned Fund Balance This classification includes revenue sources that reflect the intended use of resources established at either the highest level of decision making, or by a body or official designated for that purpose.
Unassigned Fund Balance This classification includes that portion of fund balance that has not been restricted for specific purposes.
The Commission receives an annual appropriation from the State of Georgia through the Board of Regents of the University System of Georgia. In general, Georgia law requires that unencumbered annual state appropriations lapse at fiscal year end; however, statutory provisions allow the Commission to carry over unencumbered appropriations to future periods. Encumbrance accounting is employed in the governmental funds. Encumbrances (e.g., purchase orders, contracts) outstanding at year-end in the amount of $391,532 are reported as assigned fund balances and do not constitute expenditures or liabilities because the commitments will be honored during the subsequent fiscal year. The special revenue fund has an assigned fund balance of $19,669,922 as of June 30, 2023. This balance consists of funding for general operational support of the Commission.
Net Position In the government-wide financial statements, the difference in the Commission's assets and deferred outflows of resources and liabilities and deferred inflows of resources is reported as net position. Where applicable, net position is reported in three categories:
Net investment in capital assets consists of a total investment in capital assets, net of accumulated depreciation, and reduced by outstanding debt obligations related to leased assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component in capital assets.
Restricted net position results when constraints placed on net position use are either externally imposed by creditors, grantors, contributors, and the like, or imposed by law through constitutional provisions or enabling legislation.
24

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

Unrestricted net position consists of net position that does not meet the definition of the two preceding categories. Unrestricted net position is often designated, indicating they are not available for general operations. Such designations have internally imposed constraints on resources but can be removed or modified.
E. REVENUES AND EXPENDITURES/EXPENSES Program Revenues Amounts reported as program revenues include (a) charges to customers or applicants who purchase, use, or directly benefit from goods, services or privileges provided by a given function and (b) operating and capital grants and contributions that are restricted to meeting the operational requirements of a particular function. Annual appropriations received from the State of Georgia, through the Board of Regents of the University System of Georgia, and other items not meeting the definition of program revenues are instead reported as general revenue.
Compensated Absences Employees earn annual leave ranging from ten to fourteen hours each month depending upon the employee's length of continuous State service with a maximum accumulation of forty-five days. Employees are paid for a maximum of 360 hours of unused accumulated annual leave upon retirement or termination of employment.
Employees earn ten hours of sick leave each month with a maximum accumulation of ninety days. Sick leave does not vest with the employee. Unused accumulated sick leave is forfeited upon retirement or termination of employment unless an employee that is retiring has a combined total of 960 hours to include unused sick leave and forfeited annual leave. Thus, certain employees who retire with one hundred and twenty days or more of forfeited annual and sick leave or 960 hours or more are entitled to additional service credit in the Employees' Retirement System of Georgia.
F. BUDGET The annual budget of the Commission is prepared on the budgetary basis. The budget is prepared by the Commission and reviewed by the Board. Liabilities and expenditures are recorded upon issuance of completed purchase orders. Goods and services need not have been received for liabilities and expenditures to be recorded.
NOTE 2: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
State of Georgia Collateralization Statutes and Policies Funds belonging to the State of Georgia (and thus the Commission) cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral any one or more of the following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:
1. Bonds, bills, notes, certificates of indebtedness, or other direct obligations of the United States or of the State of Georgia.
2. Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia.
3. Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose.

25

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

4. Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia.
5. Bonds, bills, certificates of indebtedness, notes or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association and the Federal National Mortgage Association.
6. Letters of credit issued by a Federal Home Loan Bank. 7. Guarantee or insurance of accounts provided by the Federal Deposit Insurance
Corporation.
The Georgia General Assembly enacted legislation creating the Georgia State Pledging Pool Program effective in January 1999. This bill allows a bank to manage the collateral pledged towards their public funds in a pooled method instead of the traditional dedicated method. The Commission and Foundation bank accounts are a part of the Georgia State Pledging Pool program that is administered by the Georgia Bankers Association. This pool allows public depositors the option of having their financial institution secure deposits using a pooled method. By using the pooled method, the bank can pledge a pool of securities against the combined deposits of all their public depositors net of the FDIC insured amount. There are three separate entities that monitor deposits on a regular basis the financial institution, the Office of the State Treasurer (OST) and GBA Services, Inc. (GBASI), a subsidiary of Georgia Bankers Association an authorized administrative agent for the OST. Significant savings are realized in administrative time and by avoiding the fees safe keepers charge to move securities from one account holder to another.
NOTE 3: ACCOUNTING CHANGES ADOPTION OF NEW ACCOUNTING PRINCIPLES
During fiscal year 2023, the following GASB statement was implemented:
No. 96 Subscription-Based Information Technology Arrangements (SBITA) This statement provides guidance on the accounting and financial reporting for subscriptionbased information technology arrangements (SBITAs) for government end users (governments). This statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset--an intangible asset--and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. To the extent relevant, the standards for SBITAs are based on the standards established in Statement No. 87, Leases, as amended.
A SBITA is defined as a contract that conveys control of the right to use another party's (a SBITA vendor's) information technology (IT) software, alone or in combination with tangible capital assets (the underlying IT assets), as specified in the contract for a period of time in an exchange or exchange-like transaction.
Under this statement, a government generally should recognize a right-to-use subscription asset--an intangible asset--and a corresponding subscription liability. A government should recognize amortization of the subscription asset as an outflow of resources over the subscription term.

26

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

The Commission adopted this statement effective July 1, 2022 during the fiscal year 2023 preparation of financial statements.

The adoption of this statement did not have an impact on the Commission's financial statements.

NOTE 4: DEPOSITS AND INVESTMENTS

A. Cash Deposits with Financial Institutions Custodial Credit Risk - Deposits The custodial credit risk for deposits is the risk that in the event of a bank failure, the Commission's deposits may not be recovered. At June 30, 2023 the Commission's deposits bank balance of $1,407,460 was insured and collateralized as part of the State of Georgia Pledging Pool; therefore, none of this amount was exposed to custodial credit risk.

Per Statement of Net Position
Reclassifications to Investments for Risk Assessment Disclosures
Money Market Mutual Fund

2023

Cash and Cash Equivalents

Investments

$

2,842,556 $ 17,523,026

2022

Cash and Cash Equivalents

Investments

$ 11,317,279 $ 12,978,369

(1,933,089)

1,933,089

(4,941,980)

4,941,980

Per Notes to the Financial Statements

$

909,467 $ 19,456,115 $

6,375,299 $ 17,920,349

B. Investments The Commission's investments as of June 30, 2023 are presented by investment type and debt securities are presented by maturity.

Investment Type Debt Securities Corporate Bonds Money Market Mutual Fund CMO and Asset Backed Securities Municipal Bonds U. S. Agencies U. S. Treasury Obligations

Less Than 1 Year

Investment Maturity

1 - 5

6 - 10

Years

Years

More than 10 Years

Fair Value 2023

Fair Value 2022

$

- $ 2,047,087 $

- $

1,933,089

-

-

.

10,214

-

-

301,273

-

-

-

-

1,528,578

1,807,364

-

- $ 2,047,087 $

-

1,933,089

-

10,214

-

301,273

-

-

-

3,335,942

2,207,098 4,941,980
147,558 527,695 280,173 609,061

Other Investments Exchange Traded Funds

$ 3,461,667 $ 4,165,938 $

- $

- $ 7,627,605 $ 11,828,510

8,713,565 9,206,784

$ 19,456,115 $ 17,920,349
Interest Rate Risk Interest rate risk is the chance that changes in interest rates of debt investments will adversely affect the fair value of an investment. The Commission, through the Foundation, contracts with an investment consultant and professional investment managers to invest assets on the Foundation's behalf. The investment consultant and the fixed income manager work together to adjust bond duration to minimize the interest rate risk of the bond portfolio. Asset allocations and general investment guidelines are determined by the Foundation's investment policy.

27

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The investment policy includes the following investing restrictions to manage credit risk:

1. Acceptable Fixed Income Investments may be comprised of the following: Domestic bonds, of "Baa3/BBB-" (as rated by Moody's and/or S&P) or better with sufficient liquidity; bonds issued by or guaranteed by the U.S. Treasury or U.S. Government agencies are considered AA+ rating; Convertible bonds; Treasury Inflation Protected Securities (TIP's); Exchange Traded Funds (ETF's) and Fixed Income mutual funds.
2. Acceptable Cash Equivalent Investments may be comprised of the following: Certificates of Deposit ($250,000 maximum investment per issuer, as insured by FDIC); Money Market Funds, Commercial Paper (Rate A-1, P-1), U.S. Treasury bills and any other high quality fixed income investment with a yield to maturity of less than one (1) year (see ratings restrictions in above Fixed Income).
3. Unacceptable/Restricted Investments and/or Transactions are as follows: Borrowing of money; Purchasing of securities on margin or short sales; Pledging, mortgaging, or hypothecating of any securities; Purchase of securities of the investment advisor, its parent or its affiliates; Purchase of illiquid securities (i.e. private placements, real estate or mortgages, Limited Partnerships); Purchase or sale of commodities, (unless held in an actively managed, liquid EFT or mutual fund structure), commodity contracts and purchase or sale of futures of options for speculation or leverage.

The following table provides information about the Commission's exposure to credit quality risk.

Rated Debt Investments

AAA

Quality Ratings

AA

A

BBB

Unrated

Fair Value 2023

Fair Value 2022

Corporate Bonds

$

Money Market Mutual Fund

CMO and Asset Backed Securities

Municipal Bonds

U.S. Agencies

U. S. Treasury Obligations

- $ 10,214 90,055 -

67,611 $ -
103,671 -
3,196,769

1,269,832 $ -
107,547 -

709,644 $ -

- $ 2,047,087 $

1,933,089 1,933,089

-

10,214

-

301,273

-

-

139,173 3,335,942

2,207,098 4,941,980
147,558 527,695 280,173 609,061

$ 100,269 $ 3,368,051 $ 1,377,379 $ 709,644 $ 2,072,262 $ 7,627,605 $ 8,713,565
Equity Risk Equity risk is the risk that equity investments or funds holding equity investments (ETFs and mutual funds) will lose value due to poor market conditions, an economic recession, and/or any number of unforeseen events (economic or geopolitical). Additionally, foreign equities held in U.S. dollar denominated funds are subject to foreign exchange risk. The Commission's policy for managing equity risk is to only allocate funds to equities that are longer-term in nature and can be held through a full market cycle. With the assistance of the investment consultant, the investment committee will determine the appropriate allocation to equities based on market conditions and the near-term liquidity needs of the Commission. The investment policy includes the following investing restrictions to manage equity risk:

1. Acceptable Equity Investments should consist of the following: Domestic (U.S.) common stock-includes preferred and convertible issues; American Depository Receipts (ADR's) of foreign companies; mutual funds (excluding those managed by the manager's/advisor's firm(s)); Exchange Traded Funds (ETF's) and Publicly-traded Real Estate Investment Trusts (REIT's).

28

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

2. Unacceptable Equity Investments include the following, but not limited: Unlisted stocks; "Penny Stocks," Options (puts and calls) and Non-U.S. Dollar denominated foreign stocks.

Fair Value Measurement Investments are measured at fair value on a recurring basis and the Commission categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles (GAAP). The hierarchy is based on the inputs used in valuation and gives the highest priority to unadjusted quoted prices in active markets and requires that observable inputs be used in the valuation when available. The disclosure of fair value estimates in the hierarchy is based on whether the significant inputs into valuations are observable. In determining the level of the hierarchy, in which the estimate is disclosed, the highest level, Level 1, is given to unadjusted quoted prices in active markets and the lowest level, Level 3, to unobservable inputs.

Level 1 valuations based on unadjusted quoted prices in active markets for identical assets and have daily liquidity and daily pricing. Commission investments under Level 1 include money market funds, exchange traded funds and U.S. Treasury Securities.

Level 2 valuations based on quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and modelderived valuations in which all significant inputs are observable. Commission investments under Level 2 include U.S. Agencies, Corporates, Municipals, Agency Mortgage-backed, Commercial Mortgage-backed and Asset-backed securities.

Level 3 valuations based on inputs that are unobservable and significant to the overall fair value measurement. The Commission's investments did not hold any level 3 inputs at June 30, 2023.

The Commission did not have any Net Asset Value (NAV) investments at June 30, 2023. The following table shows the fair value leveling of the Commission's investments.

Fair Value Measures Using

Quoted prices in active markets for
identical assets

Significant other observable inputs

Significant unobservable
inputs

Investments by Fair Value Level

Level 1

Level 2

Level 3

Debt Securities

Corporate Bonds

$

- $

2,047,087 $

- $

Money Market Mutual Fund

1,933,089

-

-

CMO and Asset Backed Securities

-

10,214

-

Municpal Bonds

-

301,273

-

U. S. Agencies

-

-

-

U. S. Treasury Obligations

3,335,942

-

-

Other Investments Exchange Traded Funds

11,828,510

-

-

Total 2023
2,047,087 $ 1,933,089
10,214 301,273
3,335,942
11,828,510

Total 2022
2,207,098 4,941,980
147,558 527,695 280,173 609,061
9,206,784

$

17,097,541 $

2,358,574 $

- $ 19,456,115 $ 17,920,349

Custodial Credit Risk-Investments Custodial credit risk for investments is the risk that, in the event of a failure of the counterparty to a transaction, the Commission will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The Commission's policy for managing custodial credit risk for investments is to have all investments managed through an investment
29

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

account custodian. This custodian provides Securities Investor Protection Corporation (SIPC) which protects securities customers of its member institutions for up to $500,000 (including $100,000 for claims for cash). In addition to this coverage, the custodian has secured protection through additional commercial insurance to $150.0 million per customer.

At June 30, 2023, $19,456,115 of the Commission's applicable investments was held by the investment account custodian.

Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The Commission's policy for managing concentration of credit risk is no individual security, except diversified funds, shall make up more than 5% of each portfolio. The Fixed Income Securities portfolio has additional stipulations stating that in the case of asset backed securities and private label mortgage obligations the maximum limit shall relate to obligations from a specific "master trust" which holds the assets collateralizing the securities. There shall be no such limit on U.S. Government securities or U.S. Government-sponsored agency securities or mortgage obligations that are collateralized entirely by U.S. Government or U.S. Government agency securities. The maximum exposure to any single municipal obligor shall not exceed 5% of the total portfolio.

The investment advisor for the Fixed Income portfolio which represents approximately 22% of the Commission's total funds available for investment has additional restrictions to limit the relative sector exposure of the investments and additional restrictions on the type of investments. The restrictions include: No obligations of BB&T Corporation/Truist Financial Corporation which own the investment advisor's company; No Private Placements; No Derivatives; No Non-U.S. Dollar Denominated Issues. The restrictions to limit the relative sector exposure include: Exposure to corporate debt will be restricted to 60% of the portfolio market value; Exposure to mortgagebacked securities will be restricted to a maximum of 30% of the weighting of the portfolio; Assetbacked securities will be restricted to a maximum of 25% of the portfolio; Commercial Mortgage Backed Securities will be restricted to a maximum of 25% of the portfolio; Yankee debt will be restricted to a maximum of 10% of the fund and Total exposure to municipal obligations shall not exceed 15% of the overall account. At June 30, 2023, the Commission did not have any debt investments in any one organization, other than those issued or guaranteed by the U.S. Government or its agencies, which represented greater than 5% of total investments.

NOTE 5: ACCOUNTS RECEIVABLE

Governmental Activities

2023

2022

Production, Sales, Rents and Sponsorship

$

Interest

Leases

GSFIC Bonds

1,149,429 $ 5,602
1,876,270 181,222

909,453 9,135
3,083,054 -

Total

$

3,212,523 $

4,001,642

30

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

NOTE 6: CAPITAL ASSETS AND INTANGIBLE RIGHT-TO-USE ASSETS:

Capital asset activity at June 30, 2023 and June 30, 2022 is as follows:

Governmental Activities: Capital Assets, Not Being Depreciated:
Land

Beginning Balance 2023

Increases

Decreases

Ending Balance 2023

$

1,478,948 $

- $

- $

1,478,948

Capital Assets, Being Depreciated: Buildings and Building Improvements Other Property and Equipment
Total Capital Assets Being Depreciated

217,978 67,674,003 67,891,981

1,351,111 1,351,111

(15,370,567) (15,370,567)

217,978 53,654,547 53,872,525

Less: Accumulated Depreciation For:
Buildings and Building Improvements Other Property and Equipment Total Accumulated Depreciation
Governmental Activities Capital Assets, Net

(63,760) (61,805,126) (61,868,886)

(4,904) (1,769,320) (1,774,224)

15,370,567 15,370,567

(68,664) (48,203,879) (48,272,543)

$

7,502,043 $ (423,113) $

-

$

7,078,930

Governmental Activities: Capital Assets, Not Being Depreciated:
Land

Beginning Balance 2022

Increases

Decreases

Ending Balance 2022

$

1,478,948 $

- $

- $

1,478,948

Capital Assets, Being Depreciated: Buildings and Building Improvements Other Property and Equipment
Total Capital Assets Being Depreciated

217,978 72,655,679 72,873,657

699,802 699,802

(5,681,478) (5,681,478)

217,978 67,674,003 67,891,981

Less: Accumulated Depreciation For:
Buildings and Building Improvements Other Property and Equipment Total Accumulated Depreciation

(58,855) (66,442,155) (66,501,010)

(4,905) (648,579) (653,484)

5,285,608 5,285,608

(63,760) (61,805,126) (61,868,886)

Governmental Activities Capital Assets, Net

$

7,851,595 $

46,318 $

(395,870) $

7,502,043

31

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

Depreciation expense for the fiscal year ended June 30, 2023 was $1,774,224 and the total expense by function is as follows:

Culture and Education Operations and Content Delivery Studio Rentals and Client Services Programming and Content Marketing and Communications Administration Facilities

$ 1,692,352 7,059
15,340 2,560 4,880
52,033

$ 1,774,224
The Commission entered into a 40-year Intergovernmental Agreement with the Board of Regents effective July 1, 2012. In exchange for transferring Buildings and Building Improvements and Other Property and Equipment located at the Commission's headquarters and the WJSP tower site to the Board of Regents, the Commission receives the proceeds of general obligation bond funds sold in the Board of Regents' name. As an authority created after 1967, the Commission cannot sell bonds. Under the terms of the Agreement, the Commission continues to use and maintain its headquarters site and the WJSP tower site. The Commission is also permitted to improve these sites. Title to any improvements at these sites is transferred to the Board of Regents as the improvements are completed. Transfers to the Board of Regents are included as a decrease to the Commission's assets. There were no transfers in fiscal year 2023.

32

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

Changes in intangible assets for the year ended June 30, 2023 are shown below:

Beginning Balance 2023

Increases

Decreases

Ending Balance 2023

Governmental Activities:

Intangible Right-To-Use Assets, Being Amoritized

Transmission Towers

$

Equipment

Total Leased Assets Being Amortized

799,986 $ 63,154
863,140

179,704 $ -
179,704

- $ (33,008) (33,008)

979,690 30,146
1,009,836

Less Accumulated Amortization For: Transmission Towers Equipment
Total Accumulated Amortization
Governmental Activities Intangible Right-To-Use Assets, Net

(199,882) (46,440)
(246,322)

(127,939) (9,017)
(136,956)

$

616,818 $

42,748 $

33,008 33,008

(327,821) (22,449)
(350,270)

- $

659,566

Beginning Balance 2022

Increases

Decreases

Ending Balance 2022

Governmental Activities:

Intangible Right-To-Use Assets, Being Amoritized

Transmission Towers

$

Equipment

Total Leased Assets Being Amortized

551,095 $ 63,154
614,249

248,891 $ -
248,891

- $ -

799,986 63,154
863,140

Less Accumulated Amortization For: Transmission Towers Equipment
Total Accumulated Amortization
Governmental Activities Intangible Right-To-Use Assets, Net

(97,867) (22,899) (120,766)

(102,015) (23,541)
(125,556)

$

493,483 $

123,335 $

-

(199,882)

-

(46,440)

-

(246,322)

- $

616,818

Amortized expense for the fiscal year ended June 30, 2023 was $136,956 and the total expense by function is as follows:

Culture and Education Operations and Content Delivery Facilities

$ (127,939) (9,017)

$ (136,956)

33

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

NOTE 7: LEASES

The adoption of GASB Statement No. 87 on July 1, 2020, establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this statement, a lessee is required to recognize a lease obligation and an intangible right-to-use asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources. The Commission is a lessee and lessor, and details of these leases are reported below.

Lessee The Commission has acquired equipment and transmission tower space under the provisions of various contracts that convey control of the right to use another entity's asset for a period of time in an exchange or exchange-like transaction. These contracts are classified as leases for accounting purposes. The Commission's principal and interest payments related to leases for fiscal year 2023 were $115,303 and $20,608 respectively. Interest rates range from 2.26% to 3.42%.

The following is a summary of the carrying values of intangible right-to-use assets under lease at June 30, 2023:

Gross Amount

Less: Accumulated Depreciation

Net Assets Held Under Lease Obligation

Outstanding Balance Per Lease Schedules

Leased Transmission Towers Leased Equipment

$

979,690 $

327,821 $

30,146

22,449

651,869 $ 7,697

694,987 7,937

Total Assets Held Under Lease

$

1,009,836 $

350,270 $

659,566 $

702,924

The following schedule lists the pertinent information for each of the Commission's leases:

Description

Lessor

Original Principal

Lease Term Months

Outstanding Principal

Postage Meter Transmission Tower Transmission Tower Transmission Tower Transmission Tower Transmission Tower

Pitney Bowes, Inc.

$

Lighthouse Christian Broadcasting Corp

Crown Castle South, LLC

Media General Operations, Inc

Habersham Broadcasting Company

Crown Castle South, LLC

30,146 179,704 82,996 353,099 115,000 248,891

36

$

7,937

120

169,366

72

45,153

57

183,359

48

49,646

360

247,463

Total Leases

$ 1,009,836

$

702,924

34

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

A schedule of future lease payments is shown below:

Year Ended June 30:

Principal

Interest

Total

2024 2025 2026 2027 2028 2029 - 2033 2034 - 2038 2039 - 2043 2044 - 2048 2049 - 2052

$

123,728 $

19,290 $ 143,018

122,962

16,070

139,032

85,237

13,073

98,310

21,413

11,564

32,977

20,281

10,946

31,227

107,476

45,142

152,618

31,104

35,534

66,638

48,428

28,822

77,250

70,816

18,740

89,556

71,479

4,870

76,349

Total Lease Payments $

702,924 $

204,051 $ 906,975

Lessor The Commission has rented out office space and transmission tower space under the provisions of various contracts that convey control of the right to use the Commission's assets for a period of time in an exchange or exchange-like transaction. These contracts are classified as leases for accounting purposes. The Commission's receivable and interest payments related to revenue leases for fiscal year 2023 were $1,206,784 and $78,343 respectively. Interest rates range from 2.26% to 3.42%.
The following is a summary of the inflows of resources under lease at June 30, 2023:

Description

Beginning Future
Receivable

Less: Rent

Ending Future Receivable

Ending Deferred Inflows of Resources

Transmission Tower Office Space

$ 1,249,803 $ 1,833,251

252,038 $ 954,746

997,765 $ 878,505

934,159 815,008

Total Leases

$ 3,083,054 $ 1,206,784 $ 1,876,270 $ 1,749,167

35

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

The following schedule lists the pertinent information for each of the Commission's revenue leases:

Description

Lessee

Beginning Future
Receivable

Lease Term Months

Begin Month/Year

End Month/Year

Ending Future Receivable

Transmission Tower

Georgia Bureau of Investigation

$

37,880

48

Office Space

Georgia Institute of Technology

1,029,630

36

Transmission Tower

ITT Corporation

133,364

105

Office Space

Georgia Institute of Technology

680,074

36

Transmission Tower

National Oceanic and Atmospheric Admin.

236,857

39

Transmission Tower

Federal Bureau of Investigation

161,515

63

Transmission Tower

CNZ Communication SE, LLC

284,504

96

Transmission Tower

National Oceanic and Atmospheric Admin.

150,822

87

Transmission Tower

Ploener Radio Group, LLC

244,861

96

July 2020 July 2020 July 2020 July 2020 July 2020 July 2020 July 2020 July 2020 July 2020

June 2025 $ June 2024 February 2030 June 2024 September 2024 September 2026 June 2029 September 2028 June 2029

25,675 529,151 117,884 349,354 134,917 127,040 249,812 128,378 214,059

Total Leases

$

2,959,507

$ 1,876,270

A schedule of future lease payments is shown below:

Year Ended June 30:

Receivable

Interest

2024

$

2025

2026

2027

2028

2029 - 2030

1,142,697 $ 192,320 159,873 135,275 130,956 115,149

40,945 $ 18,181 13,285
9,008 5,364 2,130

Total Lease Receivable $

1,876,270 $

88,913 $

Total
1,183,642 210,501 173,158 144,283 136,320 117,279
1,965,183

NOTE 8: INTERFUND TRANSFERS

In the fund financial statements, transfers represent flows of assets without equivalent flows of assets in return or requirements for repayment. In addition, transfers are recorded when a fund receiving revenue provides it to the fund which expends the resources. Transfers of balances between funds are made to accomplish various provisions of law. Transfers between funds as of June 30, 2023 were as follows:

Transfers

General Fund

Special Revenue Fund

$ 12,775,000 $ (12,775,000)

36

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

The total transfer of funds from the Foundation (Special Revenue Fund) to the Commission's general fund for fiscal year 2023 was $12,775,000. The Foundation assists the Commission in fulfilling its statutory responsibility for providing educational and public broadcasting to the citizens of the State of Georgia. Funds raised by the Foundation are almost entirely devoted to the benefit of the Commission.

NOTE 9: LONG-TERM LIABILITIES

Long-term obligations at June 30 and changes for the fiscal year 2023 and 2022 are as follows:

Fiscal Year 2023

July 1, 2022

Increases

Decreases June 30, 2023

Due Within One Year

Compensated Absences

$

Leases

Net Other Post-Employment Benefit Obligation

Liability

Net Pension Liability

1,239,992 $ 638,523

914,389 $ 179,704

901,448 $ 115,303

14,559,204 7,127,087

14,510,541

2,556,184 -

1,252,933 $ 702,924
12,003,020 21,637,628

681,456 123,728
-

$

23,564,806 $ 15,604,634 $ 3,572,935 $ 35,596,505 $

805,184

Fiscal Year 2022

July 1, 2021

Increases

Decreases June 30, 2022

Due Within One Year

Compensated Absences

$

Leases

Net Other Post-Employment Benefit Obligation

Liability

Net Pension Liability

1,121,949 $ 503,864
15,128,143 13,086,046

815,545 $ 248,891

697,502 $ 114,232

-

568,939

-

5,958,959

1,239,992 $ 638,523
14,559,204 7,127,087

604,176 104,964
-

$

29,840,002 $ 1,064,436 $ 7,339,632 $ 23,564,806 $

709,140

NOTE 10: RISK MANAGEMENT
The Commission is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and injuries to employees. The State of Georgia utilizes self-insurance programs established by individual agreement, statute or administrative action, to provide property insurance covering fire and extended coverage and automobile insurance and to pay losses that might occur from such causes; liability insurance for employees against personal liability for damages arising out of performance of their duties; survivors' benefits for eligible members of the Employees' Retirement System; consolidating processing of unemployment compensation claims against State agencies and the payment of sums due to the Department of Labor; and workers' compensation insurance coverage for employees of the State and for the receipt of benefits as prescribed by the workers' compensation statutes of the State of Georgia. These self-insurance funds are accounted for as internal service funds of the State of Georgia where assets are set aside for claim settlements. The majority of the risk management programs are funded by assessments charged to participating organizations. A limited amount of commercial insurance is purchased by the self-insurance funds applicable to property, employee and automobile liability, fidelity and certain other risks to limit the exposure to catastrophic losses. Otherwise, the risk management programs service all claims against the State for injuries and

37

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

property damage. Financial information relative to the self-insurance funds will be presented in the State of Georgia Annual Comprehensive Financial Report for the fiscal year ended June 30, 2023.

In addition, the Commission has purchased a liability insurance policy for broadcasters and producers and another liability and crime policy for the Foundation's Board of Directors.

NOTE 11: RETIREMENT PLANS

The Commission participates in various retirement plans administered by the State of Georgia under two major retirement systems: Employees' Retirement System of Georgia (ERS) and Teachers Retirement System of Georgia (TRS). These two systems issue separate, publicly available financial reports that include the applicable financial statements and required supplementary information. The reports may be obtained by visiting the following websites:

Employees' Retirement System Teachers Retirement System

www.ers.ga.gov www.trsga.com

The significant retirement plans that the Commission participates in are described below. More detailed information can be found in the plan agreements and related legislation. Each plan, including benefit and contribution provisions, was established and can be amended by State law.

Employees' Retirement System of Georgia (ERS) Plan description ERS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. ERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/financials.

Benefits provided The ERS Plan supports two benefit tiers: New Plan and Georgia State Employees' Pension and Savings Plan (GSEPS). Members hired on or after July 1, 1982 but prior to January 1, 2009 are new plan members subject to modified plan provisions. Effective January 1, 2009, new state employees and rehired state employees who did not retain membership rights under the New Plan are members of GSEPS. ERS members hired prior to January 1, 2009 also have the option to irrevocably change their membership to GSEPS.

Under the new plan and GSEPS, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 60 or 30 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 25 years of creditable service for members under age 60.

Retirement benefits paid to members are based upon the monthly average of the member's highest 24 consecutive calendar months, multiplied by the number of years of creditable service, multiplied by the applicable benefit factor. Annually, postretirement cost-of-living adjustments may also be made to members' benefits provided the members were hired prior to July 1, 2009. The

38

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through the ERS plan.

Contributions Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The Commission's total required contribution rate for the year ended June 30, 2023 was 31.01% of annual covered payroll for new plan members and 27.47% for GSEPS members. The rates include the annual actuarially determined employer contribution rate of 24.67% of annual covered payroll for new plan members and 21.59% for GSEPS members, plus a 6.34% adjustment to the new plan and a 5.88% adjustment to the GSEPS plan for the commencement of cost of living adjustments prefunding for certain retired ERS members. The Commission's contributions to ERS totaled $2,634,945 for the year ended June 30, 2023. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2023, the Commission reported a liability for its proportionate share of the net pension liability of $21,157,043. The net pension liability was measured as of June 30, 2022. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2021. An expected total pension liability as of June 30, 2022 was determined using standard roll-forward techniques. The Commission's proportion of the net pension liability was based on contributions to ERS during the fiscal year ended June 30, 2022. At June 30, 2022, the Employer's proportion was 0.316795%, which was an increase of 0.017748% from its proportion measured as of June 30, 2021.

For the year ended June 30, 2023, the Commission recognized pension expense of $5,293,388. At June 30, 2023, the Commission reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Outflows of Resources

Deferred Inflows of Resources

Differences between expected and actual experience

$

Changes of assumptions

Net difference between projected and actual earnings on pension plan investments

Changes in proportion and differences between Employer contributions and proportionate share of contributions
Employer contributions subsequent to the measurement date

45,438 $ 3,760,873
2,458,231
378,359 2,634,945

191,892 -
-
11,559 -

Total

$

9,277,846 $

203,451

39

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

Commission contributions subsequent to the measurement date of $2,634,945 are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year ended June 30:
2024 2025 2026 2027

$ 3,491,174

$ 996,483

$

61,297

$ 1,890,496

Actuarial Assumptions The total pension liability as of June 30, 2022 was determined by an actuarial valuation as of June 30, 2021 using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation Salary increases Investment rate of return

2.50% 3.00 6.75%, including inflation 7.00%, net of pension plan investment expense, including inflation

Mortality rates are as follows:
The Pub-2010 General Employee Table, with no adjustments, projected generationally with the MP-2019 scale is used for both males and females while in active service.
The Pub-2010 Family of Tables projected generationally with the MP-2019 Scale and with further adjustments are used for post-retirement mortality assumptions as follows:

Participant Type

Membership Table

Set Forward (+) / Setback (-)

Adjustment to Rates

Service Retirees Disability Retirees Beneficiaries

General Healthy Annuitant General Disabled General Contingent Survivors

Male: +1; Female: +1 Male: -3; Female: 0 Male: +2; Female: +2

Male: 105%; Female: 108% Male: 103%; Female: 106% Male: 106%; Female: 105%

The actuarial assumptions used in the June 30, 2021 valuation were based on the results of an actuarial experience study for the period July 1, 2014 June 30, 2019.

The long-term expected rate of return on pension plan investments was determined using a lognormal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

40

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset Class

Target Allocation

Long-term expected real rate of return*

Fixed Income Domestic large equities Domestic small equities International developed market equities International emerging market equities Alternatives

30.00% 46.30%
1.20% 12.30%
5.20% 5.00%

0.20% 9.40% 13.40% 9.40% 11.40% 10.50%

Total

100.00%

* Rates shown are net of inflation.

Discount Rate The discount rate used to measure the total pension liability was 7.00%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and State of Georgia contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Sensitivity of the Commission's Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the Commission's proportionate share of the net pension liability calculated using the discount rate of 7.00%, as well as what the Commission's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1percentage-point lower (6.00%) or 1-percentage-point higher (8.00%) than the current rate:

Employer's proportionate share of the net pension liability

1% Decrease (6.00%)

Current discount rate
(7.00%)

$

28,163,940 $

21,157,043 $

1% Increase (8.00%)
15,264,783

Pension Plan Fiduciary Net Position Detailed information about the pension plan's fiduciary net position is available in the separately issued ERS financial report which is publicly available at www.ers.ga.gov/financials.

41

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

Teachers Retirement System of Georgia (TRS) Plan Description All qualifying employees in educational service as defined in 47-3-60 of the O.C.G.A. are provided a pension through the Teachers Retirement System of Georgia (TRS). TRS, a costsharing multiple-employer defined benefit pension plan, is administered by the TRS Board of Trustees (TRS Board). Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. TRS issues a publicly available financial report that can be obtained at www.trsga.com/publications.
Benefits Provided TRS provides service retirement, disability retirement, and death benefits. Normal retirement benefits are determined as 2% of the average of the employee's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. An employee is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. Ten years of service is required for disability and death benefits eligibility. Disability benefits are based on the employee's creditable service and compensation up to the time of disability. Death benefits equal the amount that would be payable to the employee's beneficiary had the employee retired on the date of death. Death benefits are based on the employee's creditable service and compensation up to the date of death.
Contributions Per Title 47 of the O.C.G.A., contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees were required to contribute 6.00% of their annual pay during fiscal year 2023. Employer's contractually required contribution rate for the year ended June 30, 2023 was 19.98% of payroll. The Commission's contributions to TRS were $41,466 for the year ended June 30, 2023.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2023, the Commission reported a liability for its proportionate share of the net pension liability of $480,585. The net pension liability was measured as of June 30, 2022. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2021. An expected total pension liability as of June 30, 2022 was determined using standard roll-forward techniques. The Commission's proportion of the net pension liability was based on contributions to TRS during the fiscal year ended June 30, 2022. At June 30, 2022, the Commission's proportion was 0.001480%, which was a decrease of 0.000020% from its proportion measured as of June 30, 2021.

42

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

For the year ended June 30, 2023, the Commission recognized pension expense of $67,720. At June 30, 2023, the Commission reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Outflows of Resources

Deferred Inflows of Resources

Differences between expected and actual experience

$

Changes of assumptions
Net difference between projected and actual earnings on pension plan investments
Changes in proportion and differences between Employer contributions and proportionate share of contributions

Employer contributions subsequent to the measurement date

19,949 $ 72,343 94,421
4,828 41,466

2,502 -
41,357 -

Total

$

233,007 $

43,859

The Commission contributions subsequent to the measurement date of $41,466 are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:
Year ended June 30:

2024 2025

$

36,099

$

22,088

2026 2027

$

21,196

$

68,299

Actuarial Assumptions The total pension liability as of June 30, 2022 was determined by an actuarial valuation as of June 30, 2021 using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation Salary increases Investment rate of return
Post-retirement benefit increases

2.50% 3.00 8.75%, average, including inflation
6.90%, net of pension plan investment expense, including inflation
1.50% semi-annually

43

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

Post-retirement mortality rates for service retirements and beneficiaries were based on the Pub-2010 Teachers Headcount Weighted Below Median Healthy Retiree mortality table (ages set forward one year and adjusted 106%) with the MP-2019 Projection scale applied generationally. The rates of improvement were reduced by 20% for all years prior to the ultimate rate. Postretirement mortality rates for disability retirements were based on the Pub-2010 Teachers Mortality Table for Disabled Retirees (ages set forward one year and adjusted 106%) with the MP-2019 Projection scale applied generationally. The rates of improvement were reduced by 20% for all years prior to the ultimate rate. The Pub-2010 Teachers Headcount Weighted Below Median Employee mortality table with ages set forward one year and adjusted 106% as used for death prior to retirement. Future improvement in mortality rates was assumed using the MP-2019 projection scale generationally. These rates of improvement were reduced by 20% for all years prior to the ultimate rate.

The actuarial assumptions used in the June 30, 2021 valuation were based on the results of an actuarial experience study for the period July 1, 2013 June 30, 2018 with the exception of the investment rate of return and payroll growth assumption.

The long-term expected rate of return on pension plan investments was determined using a lognormal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset Class

Target Allocation

Long-term expected real rate of return*

Fixed Income Domestic large equities Domestic small equities International developed market equities International emerging market equities Alternatives
Total

30.00% 46.30%
1.20% 12.30%
5.20% 5.00%
100.00%

0.20% 9.40% 13.40% 9.40% 11.40% 10.50%

* Rates shown are net of inflation.

Discount Rate The discount rate used to measure the total pension liability was 6.90 %. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and State of Georgia contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

44

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

Sensitivity of the Commission's Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the Commission's proportionate share of the net pension liability calculated using the discount rate of 6.90%, as well as what the Commission's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1percentage-point lower (5.90%) or 1-percentage-point higher (7.90%) than the current rate:

Employer's proportionate share of the net pension liability

1% Decrease (5.90%)

Current discount rate
(6.90%)

$

725,043 $

480,585 $

1% Increase (7.90%)
280,952

Pension Plan Fiduciary Net Position Detailed information about the pension plan's fiduciary net position is available in the separately issued TRS financial report which is publicly available at www.trsga.com/publications.

GSEPS 401(k) Defined Contribution Component of ERS In addition to the ERS defined benefit pension described above, Georgia State Employees' Pension and Savings Plan (GSEPS) members may also participate in the Peach State Reserves 401(k) defined contribution plan and receive an employer matching contribution. The 401(k) plan is administered by the Employees' Retirement System of Georgia (ERS) and was established by the Georgia Employee Benefit Plan Council in accordance with State law and Section 401(k) of the Internal Revenue Code (IRC). The GSEPS segment of the 401(k) plan was established by State law effective January 1, 2009. Plan provisions and contribution requirements specific to GSEPS can be amended by State law. Other general 401(k) plan provisions can be amended by the ERS Board of Trustees as required by changes in federal tax law or for administrative purposes. The State was not required to make significant contributions to the 401(k) plan prior to GSEPS because most members under other segments of the plan either were not State employees or were not eligible to receive an employer match on their contributions.

During the 2022 Legislative Session, the Georgia General Assembly approved a significant increase in the state employee 401(k) employer match, with an enhanced benefit that increases with years of service. The GSEPS plan includes automatic enrollment in the 401(k) plan at a contribution rate of 5% of salary unless the participating member elects otherwise. The member may change such level of participation at any time. In addition, the member may make such additional contributions as he or she desires, subject to limitations imposed by federal law. The State will match 100% of the employee's contribution up to 5%. Therefore, the employer will match 5% of salary when an employee contributes 5% to the 401(k) plan. GSEPS members with at least six years of service, and who are contributing at least 5%, will get an additional half percent employer match for every full year of service in excess of five years, up to a maximum match of 9%.

45

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

GSEPS employer contributions are subject to a vesting schedule, which determines eligibility to receive all or a portion of the employer contribution balance at the time of any distribution from the account after separation from all State service. Vesting is determined based on the following schedule:

Less than 6 years 6 years 7 years 8 years 9 years 10 years 11 years 12 years 13 or more years

5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0% 8.5% 9.0%

Employee contributions and earnings thereon are 100% vested at all times. The 401(k) plan also allows participants to roll over amounts from other qualified plans to their respective account in the 401(k) plan on approval of the 401(k) plan administrator. Such rollovers are 100% vested at the time of transfer. Participant contributions are invested according to the participant's investment election. If the participant does not make an election, investments are automatically defaulted to a Lifecycle fund based on the participant's date of birth.

The participants may receive the value of their vested accounts upon attaining age 59.5, qualifying financial hardship, or 30 days after retirement or other termination of service (employer contribution balances are only eligible for distribution upon separation from service). Upon the death of a participant, his or her beneficiary shall be entitled to the vested value of his or her accounts. Employees who die while actively employed and eligible for 401(k) employer matching contributions become fully vested in employer contributions upon death. Distributions are made in installments or in a lump sum. For fiscal year 2023, employee GSEPS contributions totaled $548,891 and GPTC recognized expense of $57,783.

Georgia Defined Contribution Plan Certain employees of the Commission participate in the Georgia Defined Contribution Plan (GDCP), which is a single-employer defined contribution plan established by the General Assembly of Georgia for the purpose of providing retirement allowances for public employees who are not members of a public retirement or pension system. GDCP is administered by the ERS Board of Trustees.

A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board. If a member has less than $3,500 credit to his/her account, the Board has the option of requiring a lump sum distribution to the member in lieu of making periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit provisions of GDCP are established and may be amended by State statute.

Member contributions are 7.5% of gross salary. There are no employer contributions. Contribution rates are established and may be amended by State statute. Earnings are credited to each member's account in a manner established by the Board. Upon termination of

46

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

employment, the amount of the member's account is refundable upon request by the member. Total contributions by employees during the fiscal year ended June 30, 2023 were $175,071 which represents 7.5% of covered payroll. These contributions met the requirements of the plan.
NOTE 12: OTHER POST-EMPLOYMENT BENEFITS (OPEB)
The Commission participates in the following post-employment benefits plans:
Administered by the ERS System: State Employees' Assurance Department (SEAD) For Retired and Vested Inactive (SEAD-OPEB)
Administered by the Georgia Public Telecommunications Commission (GPTC): Georgia Public Telecommunications Commission Post-Employment Health Benefits Plan (GPTC OPEB Plan)
Separate financial reports that include the applicable financial statements and required supplementary information for the plans administered by ERS are publicly available and may be obtained from the offices that administer the plans.
State Employees' Assurance Department (SEAD) Plan Description SEAD-OPEB was created in 2007 by the Georgia General Assembly to amend Title 47 of the O.C.G.A., relating to retirement, so as to establish a fund for the provisions of term life insurance to retired and vested inactive members of ERS, the Georgia Judicial Retirement System (GJRS), and Legislative Retirement System (LRS). The plan is a cost-sharing multiple-employer defined benefit other post-employment benefits plan as defined in Governmental Accounting Standards Board (GASB) Statement No. 74, Financial Reporting for Postemployment Benefits Plans other than OPEB Plans. The SEAD-OPEB trust fund accumulates the premiums received from the aforementioned retirement plans, including interest earned on deposits and investments of such payments.
Benefits Provided The amount of insurance for a retiree with creditable service prior to April 1, 1964 is the full amount of insurance in effect on the date of retirement. The amount of insurance for a service retiree with no creditable service prior to April 1, 1964 is 70% of the amount of insurance in effect at age 60 or at termination, if earlier. Life insurance proceeds are paid in a lump sum to the beneficiary upon death of the retiree.
Contributions Georgia law provides that employee contributions to the plan shall be in an amount established by the Board of Trustees not to exceed one-half of 1% of the member's earnable compensation. There were no employer contributions required for the fiscal year ended June 30, 2023.
OPEB Asset, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB At June 30, 2023, the Commission reported an asset of $702,021 for its proportionate share of the net SEAD-OPEB asset. The net SEAD-OPEB asset was measured as of June 30, 2022. The total SEAD-OPEB asset used to calculate the net SEAD-OPEB asset was based on an actuarial valuation as of June 30, 2021. An expected total SEAD-OPEB asset as of June 30, 2022 was
47

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

determined using standard roll-forward techniques. The Commission's proportion of the net SEAD-OPEB asset was based on actual member salaries reported to the SEAD-OPEB plan during the fiscal year ended June 30, 2022. At June 30, 2022, the Commission's proportion was 0.190981%, which was an increase of 0.008327% from its proportion measured as of June 30, 2021.

For the year ended June 30, 2023, the Commission recognized SEAD-OPEB expense of ($100,118). At June 30, 2023, the Commission reported deferred outflows of resources and deferred inflows of resources related to SEAD-OPEB from the following sources:

Deferred Outflows of Resources

Deferred Inflows of Resources

Differences between expected and actual experience

$

Changes of assumptions

Net difference between projected and actual earnings on pension plan investments

Changes in proportion and differences between Employer contributions and proportionate share of contributions

3,222 $ -
146,341
2,300

214 3,333
-
15,355

Total

$

151,863 $

18,902

There were no employer contributions subsequent to the measurement date. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Year ended June 30: 2024 2025 2026 2027

$

3,419

$

14,371

$

5,477

$ 109,694

48

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

Actuarial Assumptions The total SEAD-OPEB liability as of June 30, 2022 was determined by an actuarial valuation as of June 30, 2021 using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation Salary increases:
ERS GJRS LRS Investment rate of return
Healthcare cost trend rate

2.50%
3.00 6.75% 3.75% N/A 7.00%, net of OPEB plan investment expense, including inflation N/A

Mortality rates are as follows:

The Pub-2010 General Employee Table, with no adjustments, projected generationally with the MP-2019 scale is used for both males and females while in active service.
The Pub-2010 Family of Tables projected generationally with the MP-2019 Scale and with further adjustments are used for post-retirement mortality assumptions as follows:

Participant Type

Membership Table

Set Forward (+) / Setback (-)

Adjustment to Rates

Service Retirees Disability Retirees Beneficiaries

General Healthy Annuitant General Disabled General Contingent Survivors

Male: +1; Female: +1 Male: -3; Female: 0 Male: +2; Female: +2

Male: 105%; Female: 108% Male: 103%; Female: 106% Male: 106%; Female: 105%

The actuarial assumptions used in the June 30, 2021 valuation were based on the results of an actuarial experience study for the period July 1, 2014 June 30, 2019.
The long-term expected rate of return on OPEB plan investments was determined using a lognormal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

49

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

The target asset allocation and estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset Class

Target Allocation

Long-term expected real rate of return*

Fixed Income Domestic large equities Domestic small equities International developed market equities International emerging market equities Alternatives

30.00% 46.30%
1.20% 12.30%
5.20% 5.00%

0.20% 9.40% 13.40% 9.40% 11.40% 10.50%

Total * Rates shown are net of inflation.

100.00%

Discount Rate The discount rate used to measure the total OPEB liability was 7.00%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and State of Georgia contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the OPEB plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.

Sensitivity of the Commission's Proportionate Share of the Net SEAD-OPEB Asset to Changes in the Discount Rate The following presents the Employer's proportionate share of the net OPEB asset calculated using the discount rate of 7.00%, as well as what the Employer's proportionate share of the net OPEB asset would be if it were calculated using a discount rate that is 1-percentage-point lower (6.00%) or 1-percentage-point higher (8.00%) than the current rate:

Employer's proportionate share of the

net OPEB asset

$

1% Decrease (6.00%)

Current discount rate
(7.00%)

(453,141) $

(702,021) $

1% Increase (8.00%)
(905,840)

SEAD-OPEB Plan Fiduciary Net Position Detailed information about the SEAD-OPEB plan's fiduciary net position is available in the separately issued ERS annual comprehensive financial report which is publicly available at www.ers.ga.gov/financials.

50

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

Georgia Public Telecommunications Commission Post-Employment Health Benefits Plan (GPTC OPEB Plan)

Plan Description On November 1, 2013, the Commission began administering its own retiree health insurance plan. The GPTC OPEB Plan is a single-employer defined benefit post-retirement health care plan, or other post-employment benefits (OPEB Plan).

Effective July 1, 2018, the GPTC OPEB Plan implemented the provisions of GASB Statement No. 75 Accounting and Financial Reporting for Postemployment Benefits Plans Other Than Pensions, which significantly changed the disclosures related to the plan. For the purposes of reporting under GASB Statement No. 75, the GPTC OPEB Plan is a single-employer defined benefit OPEB plan without a special funding situation where no assets are accumulated in a trust that meet the criteria in paragraph 4 of GASB Statement No. 75. The information disclosed in this note is presented in accordance with this standard. GPTC's actuarial report was prepared as of June 30, 2022 (measurement date) based on data, assumptions and results of the biennial actuarial evaluation as of June 30, 2021 (valuation date). Total OPEB Liability (TOL) was calculated as of the measurement date June 30, 2022.

Retiree medical eligibility is attained when an employee retires and is immediately eligible to draw a retirement annuity from the Employees' Retirement System of Georgia or the Teachers Retirement System of Georgia. Coverage starts immediately at retirement, provided the retiree makes proper premium payments. Prior to Medicare eligibility, retirees are required to contribute to the premium at the same rate as active employees. Effective January 1, 2020, upon reaching Medicare eligibility, coverage for retirees is provided via a Medicare Advantage plan and retirees must pay the premiums for that plan. Retiree and spousal coverage is provided for the lifetime of the participant. Other dependents may participate for the lifetime of the retiree as long as the retiree pays the required monthly contribution for dependent coverage and the dependent is eligible to continue coverage based on age requirements. The Commission as an authority of the State of Georgia has the authority to establish and amend benefit provisions.

The plan is currently funded on a pay-as-you-go basis. That is, annual employer costs of providing benefits will be financed in the same year as claims occur, with no significant assets accumulating as would occur in an advance funding strategy. The contribution requirements of plan members are established and may be amended by the Commission. Contributions of plan members or beneficiaries receiving benefits vary based on plan election, dependent coverage, and Medicare eligibility and election. Prior to Medicare eligibility, plans offered include a Health Reimbursement Account (HRA) and High Deductible Health Plan (HDHP). As of January 1, 2022, retirees are required to pay 11% of the premium through their required contributions.

The following schedule reflects membership for the GPTC-OPEB Plan as of June 30, 2021 measurement date.

Inactive Members or Beneficiaries Currently Receiving Benefits

18

Inactive Employees Entitled to But Not Yet Receiving Benefits

-

Active Members

103

Total Membership

121

51

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

Total OPEB Liability GPTC's total OPEB liability of $12,003,020 was measured as of June 30, 2022, and as determined by an actuarial valuation as of June 30, 2021.

Actuarial Assumptions The total OPEB liability at June 30, 2022 is based on the June 30, 2021 actuarial valuation with actuarial assumptions and methods used in its determination. Significant assumptions included by the actuary include:

Inflation Real Wage Growth Wage Inflation Salary Increases, including Wage Inflation
General Employees Municipal Bond Index Rate
Prior Measurement Date Measurement Date Health Care Cost Trends Pre-Medicare Medical and Prescription Drug
Medicare Medical and Prescription Drug

2.50% 0.50% 3.00%
3.00% - 6.75%
2.16% 3.54%
6.50% for 2021 decreasing to an ultimate rate of 4.50% by 2029 5.00% for 2021 decreasing to an ultimate rate of 4.50% by 2023

The discount rate used to measure the total OPEB liability was based on Bond Buyer 20-year General Obligation Bond Index published on the last Thursday of June by the Bond Buyer (www.bondbuyer.com).

Pre-retirement mortality rates were based on the Pub-2010 General Employee table, with no adjustments, projected generationally with the MP-2019 scale. Post-retirement mortality rates were based on the Pub-2010 family of mortality tables, with adjustments outlined in the actuarial valuation Statement of Actuarial Assumptions and Methods to better fit actual experience, projected generationally with the MP-2019 scale.

The demographic actuarial assumptions for retirement, disability incidence, withdrawal, and salary increases used in the June 30, 2021 valuation were based on the results of actuarial experience study for the July 1, 2014 through June 30, 2019, adopted by the Board of Trustees of the Employees' Retirement System of Georgia on December 17, 2020.

The remaining actuarial assumptions (e.g. initial per capital costs, healthcare cost trends, rate of plan participation, rates of plan election, etc.) used in the June 30, 2021 valuation were based on a review of recent plan experience done concurrently with the June 30, 2021 valuation.

52

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

Changes in the total GPTC OPEB Liability The changes in the components of the OPEB liability for the year ended June 30, 2023, were as follows:

Total OPEB Liability Beginning of Year Changes for the Year:
Service Cost as of the end of the year* Interest on TOL and cash flows Difference between expected and actual experience Changes of assumptions or other inputs Net benefit payments and implicit subsidy credit**
Net Changes

$ 14,559,204
878,499 311,861
9,197 (3,512,043)
(243,698) (2,556,184)

Total OPEB Liability End of Year

$ 12,003,020

*The service cost includes interest for the year. **The net benefit payments shown above include $41,900 due to the implicit subsidy.

Since the prior measurement date, there were no changes in benefit terms or changes in assumptions other than a change in the municipal bond index rate from 2.16% as of the prior measurement date to 3.54% as of the measurement date. Health care cost trend rates and inflation were used as of the valuation date.

Sensitivity of the Total GPTC OPEB Liability to Changes in the Health Care Cost Trend Rate The following presents the total OPEB liability of the plan, calculated using the health care cost trend rates, as well as what the plan's total OPEB liability would be if it were calculated using a health care cost trend rate that is 1-percentage-point lower or 1-percentage-point higher than the current rate.

Health Care Cost Trent Rate Sensitivity

1% Decrease

Current

1% Increase

Total OPEB Liability $

9,891,725 $

12,003,020 $

14,785,512

Sensitivity of the Total GPTC OPEB Liability to Changes in the Discount Rate The following exhibit presents the total OPEB liability of the plan, calculated using the discount rate of 3.54%, as well as what the plan's total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current rate.

Discount Rate Sensitivity

1% Decrease (2.54%)

Current (3.54%)

1% Increase (4.54%)

Total OPEB Liability $

14,416,358 $

12,003,020 $

10,131,729

53

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB The following table provides a summary of the deferred outflows of resources and deferred inflows of resources as the reporting date June 30, 2023.

Deferred Outflows of Resources

Deferred Inflows of of Resources

Difference between expected and actual experience

$

Changes of assumptions or other inputs

Benefit payments subsequent to the measurement date

30,358 $ 3,210,270
200,787

2,723,410 3,475,750
-

Total

$

3,441,415 $

6,199,160

Benefit payments paid subsequent to the measurement date are reported as deferred outflows of resources and will be recognized as a reduction of the OPEB liability in the year ended June 30, 2024. Other amounts reported as deferred inflows of resources related to GPTC-OPEB benefits will be recognized in OPEB Expense as follows:

Year Ended June 30:
2024 2025 2026 2027 2028 Thereafter

$ (716,234) $ (473,157) $ (338,127) $ (522,490) $ (654,072) $ (254,452)

The calculation of the OPEB expense for the reporting year ended June 30, 2023 is shown in the following table:

Service cost at end of year*

$

878,499

Interest on the total OPEB liability

311,861

Expensed portion of current-period difference beween expected and actual experience in the total OPEB liability
Expensed portion of current-period changes of assumptions or other inputs

1,421 (542,820)

Administrative costs
Recognition of beginning deferred outflows of resources as OPEB expense
Recognition of beginning deferred inflows of resources as OPEB expense

12,000 861,372 (1,139,737)

OPEB Expense *The service cost includes interest for the year.

$

382,596

54

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION

EXHIBIT "E"

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2023 (with summarized comparative information for the year ended June 30, 2022)

NOTE 13: NONMONETARY TRANSACTIONS

During the years ended June 30, 2023 and June 30, 2022 the Commission received in-kind contributions from the following institutions that housed local Georgia Public Broadcasting radio operations throughout the state. The in-kind contributions are for administrative, communication, facilities and departmental support. These amounts are not reflected on the Commission's financial statements.

Institution

GPB Facility

In-Kind Contribution
2023

In-Kind Contribution
2022

Georgia Southern University (Armstrong Campus)
Mercer University University of Georgia

WSVH-FM $
WMUM-FM WUGA-FM

58,478 $
58,850 1,120,303

55,105
60,844 1,101,926

Total In-Kind Contributions

$

1,237,631 $

1,217,875

NOTE 14: CONTINGENCIES

Amounts received or receivable from grantor agencies are subject to audit and adjustments by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the Commission expects such amounts, if any, to be immaterial.

Litigation, claims and assessments filed against the Commission, if any, are generally considered to be actions against the State of Georgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Annual Comprehensive Financial Report for the fiscal year ended June 30, 2023.

NOTE 15: SUBSEQUENT EVENTS

General Obligation Bonds and Capital Projects As discussed in Note 6, the Commission entered into an Intergovernmental Agreement with the Board of Regents, which allows the Commission to use the proceeds of general obligation bonds sold in the Board of Regents' name. The Commission accounts for the use of these proceeds in a capital projects fund. Bond projects planned for fiscal year 2024 are:

Tower Lighting Upgrade at Multiple Transmission Towers Replace Chiller #2 at Headquarters in Atlanta Equipment for New FM radio station in Bainbridge

$1,730,000 $710,000 $250,000

General obligation twenty-year taxable bonds for these projects were sold on June 27, 2023. The Intergovernmental Agreement is designed to accommodate future general obligation bond issues for the Commission. All equipment and property will be transferred back to the ownership of the Commission upon the termination of the agreement with the Board of Regents.

55

REQUIRED SUPPLEMENTARY INFORMATION

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS
GPTC's POST-EMPLOYMENT HEALTH BENEFIT PLAN JUNE 30, 2023

SCHEDULE "1"

Total OPEB Liability (measurement period ending)

2023

2022

2021

2020

2019

2018

Service Cost at end of year

$ 878,499 $

913,875 $

635,592 $

881,442 $

968,119 $ 1,082,723

Interest

311,861

331,440

393,317

601,555

557,453

483,452

Changes in benefit terms

-

-

-

(5,405,939)

-

-

Difference between expected and actual experience

9,197

(3,498,136)

21,748

(780,934)

44,189

(12,296)

Changes of assumptions or other inputs

(3,512,043)

1,947,071

2,959,429

656,956

(1,419,412)

(1,742,436)

Benefit payments and implicit subsidy credit Net changes in Total OPEB Liability

(243,698) (2,556,184)

(263,189) (568,939)

(237,110) 3,772,976

(281,285) (4,328,205)

(249,364) (99,015)

(179,824) (368,381)

Total OPEB Liability - beginning

14,559,204

15,128,143

11,355,167

15,683,372

15,782,387

16,150,768

Total OPEB Liability - ending

$ 12,003,020 $ 14,559,204 $ 15,128,143 $ 11,355,167 $ 15,683,372 $ 15,782,387

Commission's covered payroll

$ 7,716,670 $ 7,716,670 $ 8,536,794 $ 8,536,794 $ 7,639,554 $ 7,639,554

Total OPEB Liablity as a percentage of covered payroll

155.55%

188.67%

177.21%

133.01%

205.29%

206.59%

Note: No assets are accumulated in a trust that meet the criteria to pay related benefits.

Changes in assumptions: Administrative costs are included in OPEB expense. Discount rate 3.54% per annum, compounded annually. Health care cost trend rate assumptions:

Pre-65 Retiree Post-65 Retiree Claims Trend Claims Trend

2021 2022 2023 2024 2025 2026 2027 2028 2029 and beyond

6.50% 6.25% 6.00% 5.75% 5.50% 5.25% 5.00% 4.75% 4.50%

5.00% 4.75% 4.50% 4.50% 4.50% 4.50% 4.50% 4.50% 4.50%

This schedule is intended to show information for 10 years. Additional years will be added as they become available.
57

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION SCHEDULE OF PROPORTIONATE SHARE OF THE NET SEAD-OPEB ASSET
EMPLOYEES' RETIREMENT SYSTEM JUNE 30, 2023

SCHEDULE "2"

Employer's proportion of the net OPEB asset
Employer's proportionate share of the net OPEB asset
Employer's covered payroll
Employer's proportionate share of the net OPEB asset as a percentage of its covered payroll
Plan fiduciary net position as a percentage of the total OPEB asset

2023

2022

2021

2020

2019

2018

0.190981%

0.182654%

0.199519%

0.195157%

0.186089%

0.207716%

$ 702,021 $ 1,124,831 $ 566,670 $ 551,836 $ 503,642 $ 539,864

$ 1,970,808 $ 1,979,965 $ 2,377,364 $ 2,491,840 $ 2,576,156 $ 3,024,890

35.62%

56.81%

23.84%

22.15%

19.55%

17.85%

138.03%

164.76%

129.20%

129.73%

129.46%

130.17%

This schedule is intended to show information for 10 years. Additional years will be added as they become available.
58

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION SCHEDULE OF CONTRIBUTIONS SEAD-OPEB EMPLOYEES' RETIREMENT SYSTEM JUNE 30, 2023

SCHEDULE "3"

2023

Contractually required contribution *

$

- $

Contributions in relation to the contractually required

contribution

-

Contribution deficiency (excess)

$

- $

2022 - $
- $

2021 - $
- $

2020 - $
- $

2019 - $
- $

2018 -
-

Covered payroll

$ 1,829,610 $ 1,970,808 $ 1,979,965 $ 2,377,364 $ 2,491,840 $ 2,576,156

Contributions as a percentage of covered payroll

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

* Employer contributions are not currently required for the SEAD-OPEB plan.

Schedule is intended to show information for the last 10 fiscal years. Additional years will be displayed as they become available.
59

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
EMPLOYEES' RETIREMENT SYSTEM JUNE 30, 2023

SCHEDULE "4"

Employer's proportion of the net pension liability
Employer's proportionate share of the net pension liability
Employer's covered payroll
Employer's proportionate share of the net pension liability as a percentage of its covered payroll
Plan fiduciary net position as a percentage of the total pension liability

2023

2022

2021

2020

2019

2018

2017

2016

2015

0.316795%

0.299047%

0.300737%

0.303758%

0.288566%

0.316308%

0.301857%

0.277984%

0.255447%

$ 21,157,043 $ 6,994,422 $ 12,675,935 $ 12,534,668 $ 11,863,043 $ 12,846,328 $ 14,279,104 $ 11,262,238 $ 9,580,841

$ 8,393,564 $ 7,842,215 $ 8,308,833 $ 8,369,318 $ 8,025,859 $ 8,409,681 $ 7,571,004 $ 6,887,434 $ 6,252,863

252.06%

89.19%

152.56%

149.77%

147.81%

152.76%

188.60%

163.52%

153.22%

67.44%

87.62%

76.21%

76.74%

76.68%

76.33%

72.34%

76.20%

77.99%

Schedule is intended to show information for the last 10 fiscal years. Additional years will be displayed as they become available. 60

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
TEACHERS RETIREMENT SYSTEM OF GEORGIA JUNE 30, 2023

SCHEDULE "5"

Employer's proportion of the net pension liability
Employer's proportionate share of the net pension liability
Employer's covered payroll
Employer's proportionate share of the net pension liability as a percentage of its covered payroll
Plan fiduciary net position as a percentage of the total pension liability

2023

2022

2021

2020

2019

2018

2017

2016

2015

0.001480%

0.001500%

0.001693%

0.001933%

0.001837%

0.001419%

0.001938%

0.001538%

0.001603%

$ 480,585 $ 132,665 $ 410,111 $ 415,647 $ 340,987 $ 263,726 $ 399,831 $ 234,145 $ 202,518

$ 200,038 $ 195,138 $ 218,299 $ 235,960 $ 218,815 $ 165,129 $ 212,600 $ 162,373 $ 163,542

240.25%

67.99%

187.87%

176.15%

155.83%

159.71%

188.07%

144.20%

123.83%

72.85%

92.03%

77.01%

78.56%

80.27%

79.33%

76.06%

81.44%

84.03%

Schedule is intended to show information for the last 10 fiscal years. Additional years will be displayed as they become available. 61

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION SCHEDULE OF CONTRIBUTIONS
EMPLOYEES' RETIREMENT SYSTEM JUNE 30, 2023

SCHEDULE "6"

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

Contractually required contribution

$ 2,634,945 $ 1,910,242 $ 1,767,727 $ 1,869,829 $ 1,897,360 $ 1,826,103 $ 1,924,905 $ 1,734,997 $ 1,395,723 $ 1,061,780

Contributions in relation to the contractually required contribution

2,634,945 1,910,242 1,767,727 1,869,829 1,897,360 1,826,103 1,924,905 1,734,997 1,395,723

1,061,780

Contribution deficiency (excess)

$

- $

- $

- $

- $

- $

- $

- $

- $

- $

-

Employer's covered payroll

$ 9,189,899 $ 8,393,564 $ 7,842,215 $ 8,308,833 $ 8,369,318 $ 8,025,859 $ 8,409,681 $ 7,571,004 $ 6,887,434 $ 6,252,863

Contributions as a percentage of covered payroll

28.67%

22.76%

22.35%

22.50%

22.67%

22.75%

22.89%

22.92%

20.26%

16.98%

62

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION SCHEDULE OF CONTRIBUTIONS
TEACHERS RETIREMENT SYSTEM OF GEORGIA JUNE 30, 2023

SCHEDULE "7"

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

Contractually required contribution

$ 41,466 $ 39,628 $ 37,193 $ 46,149 $ 49,316 $ 36,783 $ 23,258 $ 30,338 $ 21,352 $ 20,083

Contributions in relation to the contractually required contribution

41,466

39,628

37,193

46,149

49,316 36,783 23,258 30,338

21,352

20,083

Contribution deficiency (excess)

$

- $

- $

- $

- $

- $

-$ -$

- $

- $

-

Employer's covered payroll

$ 207,535 $ 200,038 $ 195,138 $ 218,299 $ 235,960 $ 218,815 $ 165,129 $ 212,600 $ 162,373 $ 163,542

Contributions as a percentage of covered payroll

19.98%

19.81% 19.06% 21.14% 20.90% 16.81% 14.08% 14.27% 13.15% 12.28%

63

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2023

SCHEDULE "8"

EMPLOYEES' RETIREMENT SYSTEM
Changes of assumptions : On December 17, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement, disability, withdrawal, and salary increases. The expectation of retired life mortality was changed from the RP-2000 Mortality Tables to the RP-2000 Combined Mortality Table projected to 2025 with projection scale BB (set forward 2 years for both males and females).
A new funding policy was initially adopted by the Board on March 15, 2018, and most recently amended on June 18, 2020. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for the June 30, 2017 actuarial valuation and further reduced from 7.40% to 7.30% for the June 30, 2018 actuarial valuation.
On December 17, 2020, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System based on the experience study prepared for the five-year period ending June 30, 2019. Primary among the changes were the updates to rates of mortality, retirement, withdrawal, and salary increases. This also included a change to the long-term assumed investment rate of return to 7.00%. These assumption changes are reflected in the calculation of the June 30, 2021 Total Pension Liability.
On April 21, 2022, the Board adopted a new funding policy which, in part, provides that the Actuarial Accrued Liability and Normal Cost of the System will include a prefunded variable Cost-of-Living Adjustment (COLA) for eligible retirees and beneficiaries of the System. Under the new policy, future COLAs are provided through a profit-sharing mechanism using the System's asset performance. After studying the parameters of this new policy, the assumption for future COLAs was set at 1.05%. Previously, no future COLAs were assumed. In addition, the funding policy set the assumed rate of return at 7.20% for the June 30, 2021 valuation and established a new Transitional Unfunded Actuarial Accrued Liability as of June 30, 2021 which will be amortized over a closed 20-year period.
TEACHERS RETIREMENT SYSTEM OF GEORGIA
Changes of assumptions : On November 18, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement, disability, withdrawal and salary increases. The expectation of retired life mortality was changed from the RP-2000 tables to the RP-2000 White Collar Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB (set forward one year for males).
On May 15, 2019, the Board adopted recommended changes from the smoothed valuation interest rate methodology that has been in effect since June 30, 2009, to a constant interest rate method. In conjunction with the methodology, the long-term assumed rate of return in assets (discount rate) has been changed from 7.50% to 7.25%, and the assumed annual rate of inflation has been reduced from 2.75% to 2.50%.
In 2019 and later, the expectation of retired life mortality was changed to the Pub-2010 Teachers Headcount Weighted Below Median Healthy Retiree mortality table from the RP-2000 Mortality Tables. In 2019, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience.
On May 11, 2022, the Board adopted recommended changes to the long-term assumed rate of return and payroll growth assumption utilized by the System. The long-term assumed rate of return was changed from 7.25% to 6.90%, and the payroll growth assumption was changed from 3.00% to 2.50%.
SEAD-OPEB Employer
Changes of assumptions : On December 17, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the Plan. Primary among the changes were the updates to rates of mortality, retirement, disability, withdrawal, and salary increases. The expectation of retired life mortality was changed from the RP-2000 Mortality Tables to the RP-2000 Combined Mortality Table projected to 2025 with projection scale BB (set forward 2 years for both males and females).
A new funding policy was initially adopted by the Board on March 15, 2018. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for the June 30, 2017 actuarial valuation and further reduced from 7.40% to 7.30% for the June 30, 2018 actuarial valuation.
On December 17, 2020, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System based on the experience study prepared for the five-year period ending June 30, 2019. Primary among the changes were the updates to rates of mortality, retirement, withdrawal, and salary increases. This also included a change to the long-term assumed investment rate of return to 7.00%. These assumption changes were first reflected in the calculation of the June 30, 2021 Total OPEB Liability.

64

SUPPLEMENTARY INFORMATION

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION SCHEDULE OF REVENUES AND EXPENDITURES BUDGET AND ACTUAL FOR FISCAL YEAR ENDED JUNE 30, 2023

SCHEDULE "9"

Funds Available Revenues Other Revenues Retained
Expenditures Culture And Education

Original Budget

Final Budget

Actual Amounts (Budgetary Basis)

Variance

$

37,182,199 $

41,922,544 $

41,236,696 $

(685,848)

$

37,182,199 $

41,922,544

41,188,102

734,442

Excess of Funds Available over Expenditures
The budget for the Commission is adopted on a basis consistent with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, which is a basis other than prescribed by Generally Accepted Accounting Principles (GAAP). This budget is considered to be an appropriated budget. The following is an explanation of differences between budgetary inflows and outflows and GAAP revenues and expenditures
Sources/inflows of resources Actual amounts (budgetary basis) "Funds available"
Total revenues as reported on the Statement of Revenues, Expenditures, and Changes in Fund Balances - General Fund and Special Revenue Funds (Exhibit "D")
Uses/outflows for resources Actual amounts (budgetary basis) "expenditures"
Differences - Budget to GAAP: For budget purposes, certain adjustments to prior year expenditure/payable items are considered fund balance adjustments rather than expenditure items for financial reporting purposes.
For budget purposes, encumbrances are reported as expenditures in the year purchase orders are issued but are expensed when invoiced for financial reporting purposes.
For budget purposes, expenditures in the Foundation are non-budgetary.
Total expenditures as reported on the Statement of Revenues, Expenditures, and Changes in Fund Balances - General Fund and Special Revenue Funds (Exhibit "D")

$

48,594 $

48,594

$

41,236,696

$

41,236,696

$

41,188,102

(113,112)

2,452,273 116,563

$

43,643,826

See notes to the financial statements.
66

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION STATEMENT OF ACTIVITIES
BY CORPORATION FOR PUBLIC BROADCASTING GRANTEE FOR FISCAL YEAR ENDED JUNE 30, 2023
(with summarized comparative information for the year ended June 30, 2022)

SCHEDULE "10"

REVENUES

Intergovernmental - Federal

U.S. Department of Education

$

Intergovernmental - Other

State Appropriations through the Board of Regents of the

University System of Georgia

Corporation for Public Broadcasting - Grants

Federal Communications Commission - Proceeds

GSFIC

Contributions and Donations

Foundation for Public Broadcasting in Georgia, Inc.

Interest and Other Investment Income

Rents and Royalties

Sales and Services

Sponsorship

Gain on Investments

Miscellaneous

Transfers and Donated Assets

Total Revenues and Transfers

EXPENDITURES Programming and Content Operations and Content Delivery Facilities Marketing and Communications Fundraising Sponsorship Studio Rentals and Client Services Administration

Total Expenditures and Governmental Activities

Change in Net Position

Net Position - Beginning as Originally Reported

Change in Prior Year Net Position

Net Position - Beginning of Year Restated

Net Position - Ending

$

GPB TV

WJSP-FM

WUGA-FM

95,586 $

- $

- $

12,063,252 4,111,868 163,701
8,277,743 329,498
3,234,758 522,284
3,011,389 932,451 176,593 -
32,919,123

2,724,892 571,279 45,628
3,099,071 62,421 1,590 -
980,190 233,113
72,382 -
7,790,566

14,275,259 8,032,568 2,488,922 2,116,079 2,807,367 941,086 1,730,640 2,520,720
34,912,641
(1,993,518)
19,816,817
-
19,816,817
17,823,299 $

4,253,433 3,119,212
920,560 780,774 1,038,341 324,444
932,322
11,369,086
(3,578,520)
(15,423,768)
-
(15,423,768)
(19,002,288) $

26,072 300,908
-
262,892 -
146,464 -
736,336
152,540 167,374
172,556 58,618 -
551,088
185,248
917,257
-
917,257
1,102,505 $

2023

Total

2022

95,586 $

22,029

14,814,216 4,984,055 209,329
11,639,706 391,919
3,236,348 522,284
4,138,043 1,165,564
248,975 -
41,446,025

17,923,104 3,814,857 522,143 190,534
11,230,500 467,241
2,910,804 577,125
3,475,066 (1,777,628)
409,315 (395,870)
39,369,220

18,681,232 11,319,154
3,409,482 2,896,853 4,018,264 1,324,148 1,730,640 3,453,042
46,832,815
(5,386,790)
5,310,306
-
5,310,306
(76,484) $

14,782,209 8,386,676 2,410,835 2,157,561 3,589,634 1,202,165 1,273,557 3,310,396
37,113,033
2,256,187
604,098
2,450,021
3,054,119
5,310,306

Additional Information: In-Kind Donations

$

- $

117,328 $

1,120,303 $

1,237,631 $

1,217,875

See notes to the financial statements.
67

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GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION NOTES TO THE SUPPLEMENTARY INFORMATION JUNE 30, 2023

SCHEDULE "11"

CORPORATION FOR PUBIC BROADCASTING
The Corporation for Public Broadcasting (CPB) is the steward of the federal government's investment in public media and supports the operations of nearly 1,500 locally owned and operated public television and radio stations. CPB is a private nonprofit corporation created and funded by the federal government. CPB does not produce or distribute programs, nor does it own, control or operate any broadcast stations.
CPB distributes community service grants (CSGs) to qualifying, noncommercial public television and radio stations that provide significant public service programming to their communities. CSGs are used to augment the resources of public broadcasting entities. In order to maintain any CPB funding, GPTC must meet a variety of legal, managerial, staffing, mandatory reporting and operational criteria on an annual basis.
GPTC is currently eligible to receive funding for three CPB grantees: TV, WJSP-FM and WUGA-FM. Each grantee is required to file an Annual Financial Report (AFR) that reflects the revenue and expense activity attributable to the operations of GPTC. CPB's Financial Reporting Guidelines for Preparing the AFR require that all grantees include a supplemental schedule that shows the discrete information for each grantee that is consolidated in the audit.

69

SECTION II INTERNAL CONTROL AND COMPLIANCE REPORT

Greg S. Griffin State Auditor
INDEPENDENT AUDITOR'S 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
The Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the Board of Directors of the Georgia Public Telecommunications Commission
and Mr. Bert Wesley Huffman, President and Chief Executive Officer
We have audited the financial statements of the governmental activities and each major fund of the Georgia Public Telecommunications Commission (Commission), a component unit of the State of Georgia, as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the Commission's basic financial statements, and have issued our report thereon dated December 19, 2023. We conducted our audit in accordance with the auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Commission's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the basic financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Commission's internal control. Accordingly, we do not express an opinion on the effectiveness of the Commission's internal control.
A deficiency in internal control 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 and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Commission's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any
270 Washington Street, SW, Suite 4-101 Atlanta, Georgia 30334 | Phone (404) 656-2180

deficiencies in internal control that we consider to be material weaknesses. We did identify a certain deficiency in internal control, described in the accompanying Schedule of Findings in finding FS 2023-001 that we consider to be a significant deficiency.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Commission's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
Commission's Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on the Commission's response to the finding identified in our audit and described in the accompanying Schedule of Findings. The Commission's response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Commission's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Commission's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Respectfully submitted,
Greg S. Griffin State Auditor
December 19, 2023

SECTION IV FINDINGS

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION SCHEDULE OF FINDINGS
YEAR ENDED JUNE 30, 2023

FINANCIAL STATEMENT FINDINGS

FS 2023-001 Control over Capital Assets

Internal Control Impact: Compliance Impact: Repeat of Prior Year Finding:

Significant Deficiency None FS 2022-001, FS-977-21-01

Description: The Georgia Public Telecommunications Commission (GPTC) is not always properly managing and accounting for capital assets to ensure capital asset records are properly maintained and accurate.

Background Information: The GPTC capitalizes equipment when the cost of individual items exceeds $5,000 and the estimated useful life exceeds two years. There is $53,654,547 recorded on the financial statements as capital assets, other property and equipment at June 30, 2023. About 80% of these items are fully depreciated. As part of our fiscal year 2023 audit, we tested other property and equipment to verify existence. The GPTC was unable to locate a significant number of items selected for testing.

Criteria: The GPTC management is responsible for designing and maintaining internal controls that provide reasonable assurance that capital asset inventory records are properly maintained and accurate. The State Accounting Office's (SAO) policy manual outlines policies and procedures related to fixed assets accounting, which includes specific requirements related to physical inventory, useful life, additions, disposal management and surplus property management. That policy provides that State of Georgia organizations must ensure that a physical inventory of capital assets is conducted at least every two years to validate the existence of capital assets reported in the financial statements.

Condition: Our review of capital assets revealed the following:
Any item with a value greater than $347,935 was considered to be an individually significant item for testing purposes. A test of all 30 individually significant items with values totaling $20,328,886 for fully depreciated other property and equipment revealed that one item with a value of $633,612 could not be located resulting in a likely overstatement of other property and equipment and accumulated depreciation.
For the remaining population, a sample of 31 fully depreciated other property and equipment items revealed that 14 items could not be located resulting in a $620,965 likely overstatement of other property and equipment and accumulated depreciation. When the 38.5% sample error rate was projected to the total population, it resulted in a $8,762,536 projected overstatement.
Cause: Per discussion with management, the GPTC had not implemented adequate internal controls that included full capital asset physical inventory procedures of all areas within headquarters and at each field site in prior years and attempted to remedy this by completing an inventory in fiscal year 2023. Due to the magnitude of the task, the asset inventory process that covered all field and headquarter locations took until the final days of the fiscal year and was not completed until June 2023. Department custodians were required to thoroughly research the whereabouts of any unlocated assets and provide a historical accounting of their location or disposal. The GPTC's objective was to ensure that departments

74

GEORGIA PUBLIC TELECOMMUNICATIONS COMMISSION SCHEDULE OF FINDINGS
YEAR ENDED JUNE 30, 2023
took the time needed and all assets were thoroughly reviewed before retiring them from asset management. Assets that were not located on the sample list were those that were remaining for the department custodians to review but were unable to be confirmed in time to retire them before fiscal year end. In addition, problems in which departments did not consistently notify the finance department to update or remove assets in the financial system persisted and could be attributed to overall staff turnover and a lack of communication and coordination. Effect: The GPTC is not complying with SAO policies. Without the proper controls over capital assets, including maintaining a complete and accurate capital asset listing, there is a risk that the financial statements for internal and external reporting do not accurately reflect the true value of the GPTC's capital assets. Recommendation: The GPTC management should improve capital asset policies and procedures and implement additional procedures over physical inventory, asset removal and useful life. The GPTC should ensure that assets are capitalized properly, disposed of, and removed from the financial system timely and that useful lives are being appropriately evaluated and changed. The GPTC should also review the SAO capital asset policies and more effectively implement procedures to conduct a physical inventory of capital assets other property and equipment, review capital asset records for accuracy, and make appropriate adjustments, as necessary, every two years. Views of Responsible Officials: We concur with this finding.
75

SECTION V MANAGEMENT'S CORRECTIVE ACTION

CORRECTIVE ACTION PLANS FINANCIALS STATEMENT FINDINGS

FS 2023-001 Controls Over Capital Assets

Internal Control Impact: Compliance Impact: Repeat of Prior Year Finding

Significant Deficiency None FS 2022-01, FS-977-21-01

Description: The GPTC capitalizes equipment when the cost of individual items exceeds $5,000 and the estimated useful life exceeds two years. There is $53,654,547 recorded on the financial statements as capital assets, other property and equipment at June 30, 2023. Almost 80% of these items are fully depreciated. As part of our fiscal year 2023 audit, we tested other property and equipment to verify existence. The GPTC was unable to locate a significant number of items selected for testing.

Corrective Action Plans: The GPTC Finance department is responsible for asset management and continues to address the deficiency as follows:
1. GPTC's asset management policy is reviewed annually and custodians of GPTC assets receive specific guidance on the asset management process. For example, how assets are acquired and properly disposed of in accordance with GPTC and State Accounting Office policies.
2. GPTC began a complete inventory of assets across the state of Georgia during fiscal year 2022. As our assets are located at headquarters and across the state, we plan to complete a full inventory every 2 years with a complete inventory of all field sites one year and headquarters the next.
3. Immediate action involves completing the inventory started during fiscal year 2022 by the end of fiscal year 2024. This will give GPTC a true baseline for future asset acquisitions, disposals or surplus items, and inventory.

Estimated Completion Date: June 30, 2024 Contact Person: Elizabeth Laprade, Chief Financial Officer Telephone: (404) 685-2619 Email: elaprade@gpb.org

Approved by: Bert Wesley Huffman, President and CEO

Signature: