Review Report For Fiscal Year Ended June 30, 2022 ABRAHAM BALDWIN AGRICULTURAL COLLEGE TABLE OF CONTENTS For the Fiscal Year Ended June 30, 2022 Financial Section ............................................................................................................................................................. Independent Accountant's Report.................................................................................................................. 2 Management's Discussion and Analysis....................................................................................................... 4 Financial Statements (GAAP Basis).............................................................................................................. Statement of Net Position ........................................................................................................................ 12 Statement of Revenues, Expenses, and Changes in Net Position ................................................... 14 Statement of Cash Flows......................................................................................................................... 16 Statement of Fiduciary Net Position....................................................................................................... 18 Statement of Changes in Fiduciary Net Position ................................................................................. 19 Notes to the Financial Statements ......................................................................................................... 21 Required Supplementary Information ....................................................................................................................... Schedule of Contributions for Defined Benefit Pension Plan .................................................................... 49 Schedule of Proportionate Share of Net Pension Liability......................................................................... 50 Notes to the Required Supplemental Information for Pension Plans....................................................... 51 Schedule of Contributions for OPEB Plan.................................................................................................... 52 Schedule of Proportionate Share of the Net OPEB Liability...................................................................... 53 Notes to the Required Supplemental Information for OPEB Plan ............................................................ 54 Supplementary Information.......................................................................................................................................... Balance Sheet (Non-GAAP Basis) ................................................................................................................ 56 Statement of Funds Available and Expenditures Compared to Budget (Non-GAAP Basis) ................ 57 Statement of Changes to Fund Balance by Program and Funding Source (Non-GAAP Basis) ......... 59 Greg S. Griffin State Auditor INDEPENDENT ACCOUNTANT'S REVIEW REPORT The Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Regents of the University System of Georgia and Dr. Tracy L. Brundage, President Abraham Baldwin Agricultural College We have reviewed the accompanying financial statements of the business-type activities and the fiduciary funds of Abraham Baldwin Agricultural College, as of and for the year ended June 30, 2022, and the related notes (financial statements), as listed in the table of contents. A review includes primarily applying analytical procedures to management's financial data and making inquiries of management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes 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. Accountant's Responsibility Our responsibility is to conduct the review engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. Those standards require us to perform procedures to obtain limited assurance as a basis for reporting whether we are aware of any material modifications that should be made to the financial statements for them to be in accordance with accounting principles generally accepted in the United States of America. We believe that the results of our procedures provide a reasonable basis for our conclusion. We are required to be independent of Abraham Baldwin Agricultural College and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our review. Accountant's Conclusion Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in accordance with accounting principles generally accepted in the United States of America. 270 Washington Street, SW, Suite 4-101 Atlanta, Georgia 30334 | Phone (404) 656-2180 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, although not a required 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 and for placing the basic financial statements in an appropriate operational, economic, or historical context. Such information is the responsibility of management. We have not audited, reviewed, or compiled the required supplementary information and we do not express an opinion, a conclusion, nor provide any assurance on it. Other Matters The accompanying supplementary information listed in the table of contents is presented for additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management. We have not audited, reviewed, or compiled the supplementary information and we do not express an opinion, a conclusion, nor provide any assurance on it. We did, however, perform certain procedures on the supplementary information. This review report contains information pertinent to Abraham Baldwin Agricultural College's compliance with the requirements of the Southern Association of Colleges and Schools Commission on Colleges (COC) Standard 13.2 (Financial resources) as of and for the year ended June 30, 2022. Additionally, we performed procedures on Abraham Baldwin Agricultural College's Federal Student Aid programs for the year ended June 30, 2022, to meet the requirements of COC Standard 13.6. Included in a separate Report on Review and Federal Compliance Procedures dated September 9, 2022 is a section on findings and other items for any matters that came to our attention during our engagement, including results of our testing of the Federal Student Aid programs. Additionally, we have performed certain procedures at Abraham Baldwin Agricultural College to support our audit of the basic financial statements of the State of Georgia presented in the State of Georgia Annual Comprehensive Financial Report and the issuance of a State of Georgia Single Audit Report pursuant to the Single Audit Act Amendments, as of and for the year ended June 30, 2022. This report is intended solely for the information and use of the management of Abraham Baldwin Agricultural College, members of the Board of Regents of the University System of Georgia and the Southern Association of Colleges and Schools Commission on Colleges and is not intended to be, and should not be, used by anyone other than these specified parties. Respectfully submitted, Greg S. Griffin State Auditor September 9, 2022 ABRAHAM BALDWIN AGRICULTURAL COLLEGE Management's Discussion and Analysis The Management's Discussion and Analysis (MD&A) of Abraham Baldwin Agricultural College's (the "College") annual financial report presents a discussion and analysis of the financial performance of the College during the fiscal years ended June 30, 2022 and 2021. This discussion has been prepared by management along with the financial statements and related note disclosures and should be read in conjunction with the financial statements and notes. Introduction Abraham Baldwin Agricultural College (ABAC) is one of the 26 institutions of higher education of the University System of Georgia. The College offering instruction on campuses in Tifton and Bainbridge, Georgia, was founded in 1908 as the Second District A&M School. ABAC provides unique, hands-on learning opportunities for students as the South's premier destination for Agricultural studies. Our offerings have grown a great deal since our founding, now including a wide range of more traditional 4-year degrees and paths to success including a highly sought after nursing program and innovative arts and science tracks. The College's faculty, staff, and administration are committed to providing an excellent education by engaging, teaching, coaching, mentoring, and providing relevant experiences that prepare the graduate for life. The institution has remained stable with enrollment growth in 2021 but saw a decline in enrollment in 2022 that was attributed to changes in testing requirements in institutions across the state. The College is accredited by and is a member of the Southern Association of Colleges and Schools. The College is governed by The Board of Regents of the University System of Georgia. The Board determines policy and approves operating budgets, educational programs, facilities and capital financing, and sets the tuition and fee schedules for the College. Overview of the Financial Statements The College's financial statements present the financial condition of the College. The emphasis on discussions about these statements will be on current year data. There are three business-type financial statements presented: the Statement of Net Position, the Statement of Revenues, Expenses and Changes in Net Position, and the Statement of Cash Flows. There are two fiduciary financial statements presented: the Statement of Fiduciary Net Position and the Statement of Changes in Fiduciary Net Position. The notes to the financial statements provide additional information that is essential to a full understanding of the financial statements. In fiscal year 2022, GASB issued Statement No. 87, Leases, became effective. Under this statement, a lessee is required to recognize a lease liability and an intangible right-to-use asset and a lessor is required to recognize a lease receivable and deferred inflow of resources. The College did not have to recognize this restatement since the leases from fiscal year 2021 were completed during fiscal year 2022. Comparative data is provided for fiscal year 2022 and 2021. Condensed Statement of Net Position The Statement of Net Position is a financial condition snapshot as of June 30, 2022, and includes all assets and liabilities, both current and non-current, deferred outflows of resources and deferred inflow of resources. The differences between current and non-current assets are discussed in the Notes to the Financial Statements. The Statement of Net Position is prepared under the accrual basis of accounting which requires revenue and asset recognition when the service is provided, and expense and liability recognition when good or services are received despite when cash is actually exchanged. From the data presented, readers of the Statement of Net Position are able to determine the assets available to continue the operations of the College and how much the College owes vendors. The difference between assets and deferred outflows of resources and liabilities and deferred inflow of resources (net position) is one indicator of 4 Abraham Baldwin Agriculture College the College's financial health. Increases or decreases in net position provide an indicator of the improvement or decline of the College's financial health when considered in conjunction with other non-financial conditions, such as facilities and enrollment. Net Position is divided into three major categories. The first category of Net Position, net investment of capital assets, provides the College's equity in property, plant and equipment owned by the institution. The next category is restricted, which is divided into two categories, nonexpendable and expendable. The corpus of non-expendable, restricted resources is available only for investment purposes. Expendable, restricted resources are available for expenditure by the College but must be spent for purposes as determined by donors and/or external entities that have placed time or purpose restrictions on the use of the assets. The final category of Net Position is unrestricted. Unrestricted resources are available to the College for any lawful purpose. The following table summarizes the Statement of Net Position: Total assets increased by $1,254,206, which was primarily due to an increase of current assets of $2,856,974. In current assets, cash and cash equivalents increased by $1,634,278 primarily due to an increase in non-operating revenues, where a reduction in state appropriations in fiscal year 2021 was more than offset by funding for Coronavirus Aid, Relief, and Economic Security Act including the Higher Education Emergency Relief Fund. The prepaid items increased by $1,505,791 due to a prefunding of furniture, fixtures, and equipment for the Georgia State Financing and Investment Commission by the Board of Regents. Capital assets decreased by $1,357,088. See Capital Assets later within this section and Note 6 within the Notes to the Financial Statements for more information on capital assets. 2022 Annual Financial Report 5 Total deferred outflows of resources decreased by $1,074,823. The decrease in deferred outflows of resources was due to changes in actuarial assumptions for the Teachers' Retirement System of Georgia (TRS), Employees Retirement System (ERS) and Post-Employment Benefits Other than Pension Benefits (OPEB). Total liabilities decreased for the year by $23,159,455 which was due to an increase of $527,011 in current liabilities and a decrease of $23,686,466 in non-current liabilities. The decrease in non-current liabilities was due to a decrease of $19,272,306 in net pension liability, which is primarily attributable to the College's proportionate share of net pension liability related to TRS and ERS changes in assumptions used to estimate the liability, including an updated mortality projection scale and updated actuarial experience study. The net OPEB liability decreased $4,440,160. The College's proportionate share of the net OPEB liability decreased due to changes in assumptions used to estimate the liability, including the removal of the excise tax, updated mortality projection scale, revised demographic assumptions based on the May 2021 experience study, and lowering the discount rate. Total deferred inflows of resources increased by $18,279,820 which was due to an increase in the College's proportionate share of deferred inflow on OPEB of $2,990,159 and a increase in deferred inflow on defined benefit pension plans of $15,289,661. Deferred inflows for OPEB and pensions relate to changes in assumptions, experience and investment earnings, that affect the corresponding liability and are recognized as revenue in future periods. The combination of the change in total assets and deferred outflows of resources and the change in total liabilities and deferred inflow of resources yielded a increase in net position of $5,059,018. Statement of Revenues, Expenses, and Changes in Net Position Changes in total net position as presented on the Statement of Net Position are based on the activity present in the Statement of Revenues, Expenses and Changes in Net Position. The purpose of the statement is to present the revenues received by the College, both operating and non-operating, and the expenses paid by the College, operating and non-operating, and any other revenues, expenses, gains and losses received or spent by the College. Generally, operating revenues are received for providing good and services to the various customers and constituencies of the College. Operating expenses are those expenses paid to acquire or produce the goods and services provided in return for the operating revenues, and to carry out the mission of the College. Non-operating revenues are revenues received for which goods and services are not provided. For example, state appropriations are non-operating because they are provided by the Legislature to the College without the Legislature directly receiving commensurate goods and services for those revenues. The Statement of Revenues, Expenses and Changes in Net Position reflects a year of financial growth. The statements for the fiscal year ended June 30, 2022 and the prior year are summarized as follows: 6 Abraham Baldwin Agriculture College Operating Revenues The operating revenues represent resources generated by the College in fulfilling its instruction mission. Operating revenues increased by $1,394,121 in fiscal year 2022. Net student tuition and fees for fiscal year 2022 increased 2.3% over the prior year total, not because of an enrollment increase but because of an increase to the contrarevenue of Scholarship Allowances. Auxiliary revenues include operations such as student housing, student dining, bookstore, student health services, parking and transportation, and student athletic fees. Auxiliary enterprises should operate on a self-supporting basis, where the combination of fees and other revenues is sufficient to meet costs. The total auxiliary revenue increased in fiscal year 2022 by $994,282. The College recognized a 70% increase in sales and services revenue in fiscal year 2022 largely due to an increase of $73,392 in performing arts performances that were not held in fiscal year 2021 out of precaution due to COVID. Operating Expenses The College's operating expenses were $63.3 million for the fiscal year ended June 30, 2022, an increase of 5.9% over the prior year. The operating expenses are reported by natural classification in the financial statements and by functional classification in Note 17. The largest increase by function was the Scholarships and Fellowships, which was due to $5.5 million in Higher Education Emergency Relief Funds that were issued to students in fiscal year 2022. The following table illustrates the College's operating expenses by functional classification. 2022 Annual Financial Report 7 Operating expense categories changed at varying rates although the overall rate of increase was 5.9%. The scholarships and fellowships category increased by $3.8 million and effected only the Scholarships and Fellowships functional classification. The College had an increase of 31.3% in supplies and other services and this is due to additional expenditures related to the use of institutional funds for the Higher Education Emergency Relief Funds. The Center for Rural Prosperity and Innovation also issued $1.1M more in contracts in fiscal year 2022 than fiscal year 2021. The following graph illustrates the College's operating expenses by nature. Nonoperating Revenues and Expenses State appropriations, non-capital gifts and grants, and investment income are considered nonoperating because they were not generated by the College's principal, ongoing operations. The College received an amendment in the third quarter of fiscal year 2022 that significantly adjusted the original state appropriations allotment. Additional state appropriations of $1,927,571 was provided to help fund the $5,000 full time employee cost of living allowance provided in April 2022. The College also received state appropriations cash of $1,500,000 to prefund the furniture, fixtures, and equipment for the Georgia State Financing and Investment Commission by the Board of Regents. Without the third quarter budget adjustment of state appropriations, the College would have reported a $990,178 reduction in state appropriations for fiscal year 2022. Grants and contracts increased by $8,321,811, which was largely due to the receipt of $11,713,269 of federal revenue in Higher Education Emergency Relief Funds. Capital Gifts and Grants decreased by $21,304,529, mainly due to the completion of the new Edwards Hall and Carlton building renovation that was completed and gifted to the College in fiscal year 2021. Statement of Cash Flows The final statement presented by Abraham Baldwin Agricultural College is the Statement of Cash Flows. The Statement of Cash Flows presents detailed information about the cash activity of the College during the year and is divided into five sections. Cash flow information can be used to evaluate the financial viability of the College's ability to meet financial obligations as they mature. The first part is concerned with operating cash flows and shows the net cash used by the operating activities of the institution. The second section is related to cash flows from non-capital financing activities, which reflects the cash received and spent for non-capital financing purposes. The third section summarizes cash flows from capital and related financial activities and contains cash used for acquisition and construction of capital and related items. The fourth section is comprised of the the cash flows from investing 8 Abraham Baldwin Agriculture College activities and includes the purchases, proceeds and interest received from investing activities. The fifth, and final, section reconciles the net cash used to the operating income or loss reflected on the Statement of Revenues, Expenses and Changes in Net Position. Capital Assets Capital assets, net of accumulated depreciation, at June 30, 2022 and June 30, 2021, were as follows: The overall decrease in capital assets was driven by current year depreciation. Intangible Right to Use Assets An intangible right-to-use asset represents the College's right to use an underlying asset for the lease term. In GASB issued Statement 87, Lease, the college has recognized $50,291 of Intangible Right-to-Use Assets, net in fiscal year 2022. The College did not have any Intangible Right-to-Use Assets on July 1, 2021 that would have caused a restatement to the financial statements. For additional information concerning capital and intangible right-to-use assets, see Notes 1, 6, 8, and 12 in the Notes to the Financial Statements. Long Term Liabilities The College has Long-Term Liabilities of $1,552,552 excluding pension and OPEB liability; of which $882,928 are current liabilities at June 30, 2022. For additional information concerning Long-Term Liabilities, see Note 8 in the Notes to the Financial Statements. 2022 Annual Financial Report 9 Notes to the Financial Statements The Notes to the Financial Statements are an integral part of the basic financial statements and communicate information essential for fair presentation. For example, the notes convey information concerning significant accounting policies used to prepare the financial statements, detailed information on cash and investments, receivables, capital leases, compensated absences, retirement, and other post-employment benefits, capital assets and a report of operating expenses by function. Economic Outlook The College's overall financial position is strong, as evidenced by the College's fiscal year 2022 operating results. The University System of Georgia (USG) operates under a funding formula that provides the Governor and General Assembly a basis for new system funding. Allocations to Abraham Baldwin Agricultural College and other USG institutions are determined by the BOR's allocation strategy, which considers the enrollment of system schools. The College's state appropriations budget for fiscal year 2023 is $24,496,655, a net decrease of $81,611 from the prior year. Of the fiscal year 2023 allocation, $1.6 million was provided for the $5,000 full time employee cost of living allowance implemented in April 2022, and $1.7 million was provided to eliminate the special institution fee that was charged to students each semester. The college is poised to anticipate and manage future reductions in state appropriations that would be due to slight enrollment reductions and change in the state's financial position due to the economy. The College has a viability ratio of 555.62 and a capital liability burden ratio of 0.03%. A viability ratio of 1.0 indicates that the institution could pay off all debts. Outside of pension and OPEB liabilities, the College has $669,624 in non-current liabilities, of which $646,730 is compensated absences. Many areas of the College's Auxiliary Enterprises were impacted in fiscal year 2021 by the COVID-19 pandemic due to fewer students living on campus and the College's Georgia Museum of Agriculture seeing significant declines in school tour groups visiting throughout the year. In fiscal year 2022, the College saw many of these areas begin to rebound as can be seen in the Statement of Revenues, Expenditures and Changes in Net Position along with the expenditures reported by functional classification. In fiscal year 2021 and 2022, federal assistance from the Higher Education Emergency Relief Funds restored lost revenue related to Auxiliary Enterprises. Due to this additional support, the College maintained solid reserves necessary to cover required capital improvements performed in fiscal year 2022 and for future years to come. The College continues to take steps to enhance student recruitment, both in marketing efforts and in providing additional scholarship funding. Applications, acceptances, and retention are monitored closely to assess the potential impact of economic conditions on future enrollment. We are cautiously optimistic that demand for our programs will remain strong. The College remains focused on the mission and is mindful of providing this opportunity to students at an affordable price. The College has not had an increase in tuition since Fall 2019 and has not had an increase in mandatory student fees in over ten years. In fiscal year 2023, the College will eliminate the institutional fee charged to all fulltime students each semester of $200. Abraham Baldwin Agricultural College is committed to serving our students and will never cease to work to increase the value of an education from this College. 10 Abraham Baldwin Agriculture College Financial Section 10 Abraham Baldwin Agriculture College Financial Statements (GAAP Basis) 2022 Annual Financial Report 11 ABRAHAM BALDWIN AGRICULTURAL COLLEGE STATEMENT OF NET POSITION JUNE 30, 2022 ASSETS Current Assets Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Accounts Receivable, net Federal Financial Assistance Affiliated Organizations Other Inventories Prepaid Items Total Current Assets Non-Current Assets Notes Receivable, net Non-current Cash (Externally Restricted) Investments (Externally Restricted) Capital Assets, net Intangible Right-to-Use Assets, net Total Non-Current Assets TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES The notes to the financial statements are an integral part of this statement. $ 19,647,556 412,937 119,304 942,185 109,773 722,148 233,183 1,528,921 23,716,007 111,326 1,588 1,996,548 73,136,574 50,291 75,296,327 99,012,334 $ 14,610,728 12 Abraham Baldwin Agriculture College ABRAHAM BALDWIN AGRICULTURAL COLLEGE STATEMENT OF NET POSITION JUNE 30, 2022 LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Lease Obligations - External Compensated Absences Total Current Liabilities Non-Current Liabilities Lease Obligations - External Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability Total Non-Current Liabilities TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES NET POSITION Investment in Capital Assets Restricted for: Nonexpendable Expendable Unrestricted (Deficit) TOTAL NET POSITION The notes to the financial statements are an integral part of this statement. $ 1,091,939 313,261 87,386 166,699 22,700 1,042,680 174,550 105,636 12,348 870,580 3,887,779 22,894 646,730 43,147,442 10,300,542 54,117,608 58,005,387 27,880,209 72,962,224 1,911,461 960,917 (48,097,136) $ 27,737,466 2022 Annual Financial Report 13 ABRAHAM BALDWIN AGRICULTURAL COLLEGE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION FOR FISCAL YEAR ENDED JUNE 30, 2022 OPERATING REVENUES Student Tuition and Fees (net) $ Grants and Contracts Federal Sales and Services Rents and Royalties Auxiliary Enterprises Residence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Other Operating Revenues Total Operating Revenues OPERATING EXPENSES Faculty Salaries Staff Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation and Amortization Total Operating Expenses Operating Income (Loss) $ The notes to the financial statements are an integral part of this statement. 12,011,567 156,386 335,414 190,130 2,468,330 2,106,628 3,312,614 224,427 443,586 580,730 610,820 192,384 22,633,016 9,787,765 12,836,930 4,749,158 216,913 198,477 12,004,975 1,389,710 18,070,724 4,001,566 63,256,218 (40,623,202) 14 Abraham Baldwin Agriculture College ABRAHAM BALDWIN AGRICULTURAL COLLEGE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION FOR FISCAL YEAR ENDED JUNE 30, 2022 NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal State Other Gifts Investment Expense Interest Expense Other Nonoperating Revenues (Expenses) Net Nonoperating Revenues Income (Loss) Before Other Revenues, Expenses, Gains, or Losses Capital Grants and Gifts State Total Other Revenues, Expenses, Gains or Losses Change in Net Position Net Position, Beginning of Year Net Position, End of Year The notes to the financial statements are an integral part of this statement. $ 24,578,266 20,246,333 138,898 396,856 422,758 (232,521) (1,366) (3,542) 45,545,682 4,922,480 136,538 136,538 5,059,018 22,678,448 $ 27,737,466 2022 Annual Financial Report 15 ABRAHAM BALDWIN AGRICULTURAL COLLEGE STATEMENT OF CASH FLOWS FOR FISCAL YEAR ENDED JUNE 30, 2022 CASH FLOWS FROM OPERATING ACTIVITIES Payments from Customers Grants and Contracts (Exchange) Payments to Suppliers Payments to Employees Payments for Scholarships and Fellowships Other Receipts Net Cash Used by Operating Activities CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES State Appropriations Gifts and Grants Received for Other Than Capital Purposes Net Cash Flows Provided by Non-Capital Financing Activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Gifts and Grants Received Purchases of Capital and Intangible Right-to-Use Assets Principal Paid on Capital Debt and Leases Interest Paid on Capital Debt and Leases Net Cash Used by Capital and Related Financing Activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from Sales and Maturities of Investments Investment Income Purchase of Investments Net Cash Provided by Investing Activities Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents, Beginning of Year Cash and Cash Equivalents, End of Year The notes to the financial statements are an integral part of this statement. $ 22,286,963 325,821 (28,538,481) (22,682,371) (12,004,975) 31,601 (40,581,442) 24,578,266 21,507,350 46,085,616 41,750 (3,955,663) (18,007) (1,366) (3,933,286) 119,245 63,449 (119,304) 63,390 1,634,278 18,427,803 $ 20,062,081 16 Abraham Baldwin Agriculture College ABRAHAM BALDWIN AGRICULTURAL COLLEGE STATEMENT OF CASH FLOWS FOR FISCAL YEAR ENDED JUNE 30, 2022 RECONCILIATION OF OPERATING LOSS TO NET CASH USED BY OPERATING ACTIVITIES: Operating Loss Adjustments to Reconcile Net Operating Loss to Net Cash Used by Operating Activities Depreciation and Amortization Operating Expenses Related to Noncash Gifts Change in Assets and Liabilities: Receivables, net Inventories Prepaid Items Other Assets Notes Receivable, Net Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Deposits Advances (Including Tuition and Fees) Other Liabilities Funds Held for Others Compensated Absences Due to Affiliated Organizations Pollution Remediation Claims and Judgments Net Pension Liability Other Post-Employment Benefit Liability Change in Deferred Inflows/Outflows of Resources: Deferred Inflows of Resources Deferred Outflows of Resources Net Cash Used by Operating Activities NON-CASH INVESTING, NON-CAPITAL FINANCING, AND CAPITAL AND RELATED FINANCING TRANSACTIONS Noncapital Financing Activities Noncash Items: Current Year Accruals Related to Non-operating Non-capital Grants and Gifts Amortization of Non-capital Financing Activities Advances and Deferred Inflows Capital Financing Activities Noncash Items: Current Year Accruals Related to Capital Financing Activities Gain (Loss) on Disposal of Capital Assets Accrual of Capital Asset Related Payables Intangible RIght-to-Use Assets Acquired by Incurring Lease Obligations Investing Activities Noncash Items: Unrealized Gain (Loss) on Investments The notes to the financial statements are an integral part of this statement. Abraham Baldwin Agricultural College $ (40,623,202) 4,001,566 -- 113,298 882 (5,791) 227,462 86,204 99 10,700 (121,035) 31,601 54,597 (19,272,306) (4,440,160) 18,279,819 1,074,824 $ (40,581,442) $ 1,136,870 $ 20,146 $ 136,538 $ (3,542) $ 189,399 $ (53,249) $ (295,970) 2022 Annual Financial Report 17 ABRAHAM BALDWIN AGRICULTURAL COLLEGE STATEMENT OF FIDUCIARY NET POSITION JUNE 30, 2022 ASSETS Cash and Cash Equivalents Receivables Other Total Assets LIABILITIES Accounts Payable Deposits held for other organizations Total Liabilities NET POSITION Restricted for: Individuals, Organizations, and Other Governments The notes to the financial statements are an integral part of this statement. Custodial Funds $ 78,900 417,152 496,052 80 24,964 25,044 $ 471,008 2022 Annual Financial Report 18 ABRAHAM BALDWIN AGRICULTURAL COLLEGE STATEMENT OF CHANGES IN FIDUCIARY NET POSITION JUNE 30, 2022 ADDITIONS Federal Financial Aid State Financial Aid Other Financial Aid Clubs and Other Organizations Fund Raising Public-Private Partnership Passthrough Miscellaneous Total Additions DEDUCTIONS Administrative Expense Scholarships and Other Student Support Student Organizations Support Public-Private Partnership Passthrough Other Payments Total Deductions Net Increase (Decrease) in Fiduciary Net Position Net Position, Beginning of Year Net Position, End of Year Custodial Funds $ 7,717,018 4,046,521 1,535,474 217,579 8,192,745 21,709,337 13,344,544 253,321 8,209,980 21,807,845 (98,508) 569,516 $ 471,008 2022 Annual Financial Report 19 Notes to the Financial Statements 20 Abraham Baldwin Agriculture College ABRAHAM BALDWIN AGRICULTURAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2022 Note 1 Summary of Significant Accounting Policies Nature of Operations Abraham Baldwin Agricultural College (College) serves the state and national communities by providing its students with academic instruction that advances fundamental knowledge and by disseminating knowledge to the people of Georgia, the nation, and throughout the world. Reporting Entity As defined by Official Code of Georgia Annotated (O.C.G.A) 20-3-50, the College is part of the University System of Georgia (USG), an organizational unit of the State of Georgia (the State) under the governance of the Board of Regents (Board). The Board has constitutional authority to govern, control and manage the USG. The Board is composed of 19 members, one member from each congressional district in the State and five additional members from the state-at-large, appointed by the Governor and confirmed by the Senate. Members of the Board serve a seven year term and members may be reappointed to subsequent terms by a sitting governor. The College does not have the right to sue/be sued without recourse to the State. The College's property is the property of the State and subject to all the limitations and restrictions imposed upon other property of the State by the Constitution and laws of the State. In addition, the College is not legally separate from the State. Accordingly, the College is included within the State's basic financial statements as part of the primary government as defined in section 2100 of the Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial Reporting Standards. The accompanying basic financial statements are intended to supplement the State's Annual Comprehensive Financial Report (ACFR) by presenting the financial position and changes in financial position and cash flows of only that portion of the business-type activities of the State that is attributable to the transactions of the College. These financial statements do not purport to, and do not, present fairly the financial position of the State as of June 30, 2022, the changes in its financial position or its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. The accompanying basic financial statements should be read in conjunction with the State's ACFR. The most recent State of Georgia ACFR can be obtained through the State Accounting Office, 200 Piedmont Avenue, Suite 1604 (West Tower), Atlanta, Georgia 30334 or online at sao.georgia.gov/annual-comprehensive-financial-reports. Basis of Accounting and Financial Statement Presentation The financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) as prescribed by the GASB and are presented as required by these standards to provide a comprehensive, entitywide perspective of the College's assets, deferred outflows, liabilities, deferred inflows, net position, revenues, expenses, changes in net position and cash flows. The College's business-type activities and fiduciary fund financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. Grants and similar items are recognized as revenues in the fiscal year in which eligibility requirements imposed by the provider have been met. All significant intra-fund transactions have been eliminated. The College reports the following fiduciary funds: Custodial Funds - Accounts for activities of resulting from the College acting as an agent or fiduciary for various governments, companies, clubs or individuals. 2022 Annual Financial Report 21 New Accounting Pronouncements In June 2017, the GASB issued Statement No. 87, Leases, effective for fiscal years beginning after December 15, 2019. In fiscal year 2020, the College adopted GASB Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance which postponed the effective date of Statement No. 87 to fiscal year 2022. This statement 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 liability and an intangible right-to-use asset, and a lessor is required to recognize a lease receivable and deferred inflow of resources. The adoption of this statement does not have a significant impact on the financial statements. In June 2018, the GASB issued Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period, effective for fiscal years beginning after December 15, 2019. In fiscal year 2020, the College adopted GASB Statement No. 95, Postponement of Effective Dates of Certain Authoritative Guidance which postponed the effective dates of Statement No. 89 to fiscal year 2022. The objectives of this statement are to both enhance the relevance and comparability of information about capital assets and the cost of borrowing and to simplify accounting for interest costs incurred before the end of a construction period. The adoption of this statement does not have a significant impact on the financial statements and will be applied prospectively. In January 2020, the GASB issued Statement No. 92, Omnibus 2020, effective for fiscal years beginning after June 15, 2020. In fiscal year 2020, the College adopted GASB Statement No. 95, Postponement of Effective Dates of Certain Authoritative Guidance which postponed the effective dates of Statement No. 92 to fiscal year 2022. The objective of this statement is to enhance comparability in accounting and financial reporting and improve the consistency of authoritative literature by focusing on practice issues that have been identified during the implementation of various GASB Statements. The adoption of this statement does not have a significant impact on the financial statements. In March 2020, the GASB issued Statement No. 93, Replacement of Interbank Offered Rates effective for years beginning after June 15, 2020. In fiscal year 2020, the College adopted GASB Statement No. 95, Postponement of Effective Dates of Certain Authoritative Guidance which postponed the effective dates of Statement No. 93 to fiscal year 2022. This statement establishes accounting and financial reporting requirements related to the replacement of Interbank Offered Rates in hedging derivative instruments and leases. This statement also identifies appropriate benchmark interest rates for hedging derivative instruments. The adoption of this statement does not have a significant impact on the financial statements. In October 2021, the GASB issued Statement No. 98, The Annual Comprehensive Financial Report effective for fiscal years beginning after December 15, 2021. This statement establishes a new designation of the acronym for state and local government annual financial statements, the Annual Comprehensive Financial Report (ACFR). The adoption of this statement resulted in changes to the naming convention used throughout the report, but has no impact on the financial information provided. In April 2022, the GASB issued Statement No. 99, Omnibus 2022, effective for certain elements of the requirement effective upon issuance. The objectives of this statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing practice issues that have been identified during implementation. The adoption of this statement does not have a significant impact on the financial statements. Cash and Cash Equivalents Cash and Cash Equivalents consist of petty cash, demand deposits and time deposits in authorized financial institutions, and cash management pools that have the general characteristics of demand deposit accounts. Cash and Cash Equivalents that cannot be used to pay current liabilities are classified as non-current assets in the Statement of Net Position. Cash and Cash Equivalents restricted as to use by a third party are reported as externally restricted. Short-Term Investments Short-Term Investments consist of investments of 90 days - 13 months. These include certificates of deposits or other time-restricted investments with original maturities of six months or more when purchased. Funds are not readily available and there is a penalty for early withdrawal. 22 Abraham Baldwin Agriculture College Investments Investments include financial instruments with terms in excess of 13 months, certain other securities for the production of revenue, land, and other real estate held as investments by endowments. The College accounts for its investments at fair value. Changes in the fair value of investments are reported as a component of investment income in the Statement of Revenues, Expenses, and Changes in Net Position. Investments that cannot be used to pay current liabilities are classified as non-current assets in the Statement of Net Position. Investments restricted as to use by a third party are reported as externally restricted. Accounts Receivable Accounts receivable consists of tuition and fees charged to students and auxiliary enterprise services provided to students, faculty and staff, the majority of whom reside in the State of Georgia. Accounts receivable also includes amounts due from federal, state and local governments, or private sources, in connection with reimbursement of allowable expenditures made pursuant to the College's grants and contracts. Accounts receivable are recorded net of estimated uncollectible amounts. Inventories Resale inventories are valued at cost using the average-cost basis. Prepaid Items Payments made to vendors and state and local government organizations for services that will benefit periods beyond June 30, 2022 are recorded as prepaid items. Capital Assets Capital assets are recorded at cost at the date of acquisition, or acquisition value (entry price) at the date of donation in the case of gifts. For equipment, the College's capitalization policy includes all items with a unit cost of $5,000 or more, and an estimated useful life of greater than one year. Renovations to buildings, infrastructure, and land improvements that exceed $100,000 and/or significantly increase the value or extend the useful life of the structure are capitalized. Routine repairs and maintenance are charged to operating expense in the year in which the expense was incurred. Depreciation, which also includes amortization of intangible assets such as water, timber, and mineral rights, easements, patents, trademarks, and copyrights, as well as software, is computed using the straight-line method over the estimated useful lives of the assets, generally 40 to 60 years for buildings, 20 to 25 years for infrastructure and land improvements, 10 years for library books, and 3 to 20 years for equipment. Residual values will generally be 10% of historical costs for infrastructure, buildings and building improvements, and facilities and other improvements. To fully understand plant additions in the College, it is necessary to look at the activities of the Georgia State Financing and Investment Commission (GSFIC) - an organization that is external to the USG. GSFIC issues bonds for and on behalf of the State of Georgia, pursuant to powers granted to it in the Constitution of the State of Georgia and the Act creating the GSFIC. The bonds so issued constitute direct and general obligations of the State of Georgia, to the payment of which the full faith, credit and taxing power of the State are pledged. For projects managed by GSFIC, GSFIC retains construction in progress in its accounting records throughout the construction period and transfers the entire project to the institutional unit of the USG when complete. For projects managed by institutions of the USG, the institutions retain construction in progress on their books and are reimbursed by GSFIC. Intangible Right-To-Use Assets The College leases certain academic spaces, administrative offices, and equipment under lease agreements. The College has both leases under which it is obligated as a lessee and leases for which it is a lessor. Leases, as a lessee, are included in intangible right-to-use assets and lease obligations on the Statement of Net Position. Financed leases, which transfer ownership, are included in capital assets and notes payable on the Statement of Net Position. An intangible right-to-use asset represents the College's right to use an underlying asset for the lease term. Lease obligations represent the College'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 2022 Annual Financial Report 23 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 straight-line basis over the shorter of the lease term or useful life of the underlying asset. Deferred Outflows of Resources Deferred outflows of resources consist of the consumption of net position that is applicable to a future reporting period. Deposits Deposits represent good faith deposits from students to reserve housing assignments, meal plans or other auxiliary services. Advances Advances include amounts received for tuition and fees and certain auxiliary activities prior to the end of the fiscal year but related to the subsequent accounting period. Advances also include amounts received from grant and contract sponsors that have not yet been earned. Deposits Held for Other Organizations Deposits held for others result primarily from escheated funds that are the result of unclaimed property. Compensated Absences Employee vacation pay is accrued at the end of the fiscal year for financial statement purposes. The liability and expense incurred are recorded at the end of the fiscal year as compensated absences in the Statement of Net Position, and as a component of compensation and benefit expense in the Statements of Revenues, Expenses, and Changes in Net Position. Non-current Liabilities Non-current liabilities include: (1) liabilities that will not be paid within the next fiscal year; (2) lease obligations with contractual maturities greater than one year; and (3) other liabilities that, although payable within one year, are to be paid from funds that are classified as non-current assets. Deferred Inflows of Resources Deferred inflows of resources consist of the acquisition of net position that is applicable to a future reporting period. Other Post-Employment Benefit (OPEB) The net OPEB liability represents the College's proportionate share of the difference between the total OPEB liability and the fiduciary net position or the fair value of the plan assets as of a given measurement date. For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the Board of Regents Retiree Health Benefit Plan (the Plan) and additions to/deductions from the Plan's fiduciary net position have been determined on the same basis as they are reported by the Plan. For this purpose, the Plan recognizes benefit payments when due and payable in accordance with the benefit terms. Investments are reported at fair value, except for money market investments and participating interest-earning investment contracts that have a maturity at the time of purchase of one year or less, which are reported at cost. Pensions and Net Pension Liability The net pension liability represents the College's proportionate share of the difference between the total pension liability as a result of the exchange for employee services for compensation and the fiduciary net position or the fair value of the plan assets as of a given measurement date. 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 pension plans' fiduciary net position, additions to/deductions from the plans fiduciary net position have been determined on the same basis as they are reported by Teachers Retirement System of Georgia and Employees' Retirement System of Georgia. For this 24 Abraham Baldwin Agriculture College 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. Net Position The College's net position is classified as follows: Net Investment in capital assets represents the College's total investment in capital assets, net of outstanding debt obligations related to those capital assets and intangible right-to-use assets. To the extent debt has been incurred but not yet expended for capital assets or intangible right-to-use assets, such amounts are not included as a component of net investment in capital assets. The term "debt obligations" as used in this definition does not include debt of the GSFIC as discussed previously in Note 1 - Capital Assets section. Restricted - non-expendable net position includes endowments and similar type funds in which donors or other outside sources have stipulated, as a condition of the gift instrument, that the principal is to be maintained inviolate and in perpetuity, and invested for the purpose of producing present and future income, which may either be expended or added to principal. For institution-controlled, donor-restricted endowments, the by-laws of the Board of Regents of the University System of Georgia permits each individual institution to use prudent judgment in the spending of current realized and unrealized endowment appreciation. Donor-restricted endowment appreciation is periodically transferred to restricted - expendable accounts for expenditure as specified by the purpose of the endowment. The College maintains pertinent information related to each endowment fund including donor; amount and date of donation; restrictions by the source of limitations; limitations on investments, etc. Restricted - expendable net position includes resources in which the College is legally or contractually obligated to spend resources in accordance with restrictions by external third parties. Unrestricted net position represents resources derived from student tuition and fees, state appropriations, and sales and services of educational departments and auxiliary enterprises. These resources are used for transactions relating to the educational and general operations of the College, and may be used at the discretion of the governing board or management to meet current expenses for those purposes, except for unexpended state appropriations (surplus). Unexpended state appropriations must be refunded to the Office of the State Treasurer. These resources also include auxiliary enterprises, which are substantially self-supporting activities that provide services for students, faculty and staff. When an expense is incurred that can be paid using either restricted or unrestricted resources, the College's policy is to first apply the expense towards unrestricted resources, and then towards restricted resources. Income Taxes The College, as a political subdivision of the State of Georgia, is excluded from Federal income taxes under Section 115(1) of the Internal Revenue Code, as amended. Classification of Revenues and Expenses The Statement of Revenues, Expenses and Changes in Net Position classifies fiscal year activity as operating and nonoperating according to the following criteria: Operating revenue includes activities that have the characteristics of exchange transactions, such as (1) student tuition and fees, net of scholarship allowances, (2) certain federal, state and local grants and contracts, and (3) sales and services. Nonoperating revenue includes activities that have the characteristics of non-exchange transactions, such as gifts and contributions, and other revenue sources that are defined as non-operating revenue by GASB Statements No. 9, Reporting Cash Flows of Proprietary and Non-expendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting, and No. 34, Basic Financial Statements-- and Management's Discussion and Analysis--for State and Local Governments, such as state appropriations and investment income. Operating expense includes activities that have the characteristics of exchange transactions. Nonoperating expense includes activities that have the characteristics of non-exchange transactions, such as capital financing costs and costs related to investment activity. 2022 Annual Financial Report 25 Scholarship Allowances Scholarship allowances are the difference between the stated charge for goods and services provided by the College, and the amount that is paid by students and/or third parties making payments on the students' behalf. Certain governmental grants, such as Pell grants, and other Federal, state or nongovernmental programs are recorded as either operating or non-operating revenues in the College's financial statements. To the extent that revenues from such programs are used to satisfy tuition, fees and other student charges, the College has recorded contra revenue for scholarship allowances. Tuition, fees and other student charges reported on the Statement of Revenues, Expenses and Changes in Net Position are net of discounts and allowances of $4,190,240. Note 2 Deposits and Investments Cash and cash equivalents and investments as of June 30, 2022 are classified in the accompanying statement of net position and statement of fiduciary net position as follows: Statement of Net Position Current Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Short-term Investments Noncurrent Noncurrent Cash (Externally Restricted) Investments (Externally Restricted) Statement of Fiduciary Net Position Cash and Cash Equivalents $ 19,647,556 412,937 119,304 1,588 1,996,548 78,900 $ 22,256,833 Cash on hand, deposits and investments as of June 30, 2022 consist of the following: Cash on Hand Deposits with Financial Institutions Investments $ 13,560 20,246,725 1,996,548 22,256,833 A. Deposits with Financial Institutions Deposits include certificates of deposits and demand deposit accounts, including certain interest bearing demand deposit accounts. The custodial credit risk for deposits is the risk that in the event of a bank failure, the College's deposits may not be recovered. Funds belonging to the State of Georgia (and thus the College) 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 (O.C.G.A.) 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. 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 26 Abraham Baldwin Agriculture College 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 College participates in the State's Secure Deposit Program (SDP), a multi-bank pledging pool. The SDP requires participating banks that accept public deposits in Georgia to operate under the policy and procedures of the program. The Georgia Office of State Treasurer (OST) sets the collateral requirements and pledging level for each covered depository. There are four tiers of collateralization levels specifying percentages of eligible securities to secure covered Deposits: 25%, 50%, 75%, and 110%. The SDP also provides for collateral levels to be increased to amount of up to 125% if economic or financial conditions warrants. The program lists the type of eligible collateral. The OST approves authorized custodians. In accordance with the SDP, if a covered depository defaults, losses to public depositors are first satisfied with any applicable insurance, followed by demands of payment under any letters of credit or sale of the covered depository's collateral. If necessary, any remaining losses are to be satisfied by assessments made against the other participating covered depositories. Therefore, for disclosure purposes, all deposits of the SDP are considered to be fully collateralized. At June 30, 2022, the bank balances of the College's deposits totaled $21,168,032. This balance includes deposits in Fiduciary funds as these balances are not separable from the holdings of the USG. Of the College's deposits, $18,775,880 were uninsured. Of these uninsured deposits, $18,775,880 were collateralized with securities held by the financial institution's trust department or agent but not in the College's name. B. Investments The College maintains an investment policy which fosters sound and prudent judgment in the management of assets to ensure safety of capital consistent with the fiduciary responsibility it has to the citizens of Georgia and which conforms to Board of Regents investment policy. All investments are consistent with donor intent, Board of Regents policy and applicable federal and state laws. The following table summarizes the valuation of the College's investments measured at fair value on a recurring basis as of June 30, 2022. Investment Pools Board of Regents Balanced Income Fund Fair Value $ 1,996,548 Board of Regents Pooled Investment Program The USG serves as fiscal agent for various units of the University System of Georgia and affiliated organizations. The USG pools the monies of these organizations with the USG's monies for investment purposes. The investment pool is not registered with the U.S. Securities and Exchange Commission as an investment company. The fair value of the investments is determined daily. The pool does not issue shares. Each participant is allocated a pro rata share of each pooled investment fund balance at fair value along with a pro rata share of the pooled fund's investment returns. The USG maintains investment policy guidelines for each pooled investment fund that is offered to qualified University System participants. These policies are intended to foster sound and prudent responsibility each 2022 Annual Financial Report 27 institution has to the citizens of Georgia and which conforms to the Board of Regents investment policy. All investments must be consistent with donor intent, Board of Regents policy, and applicable Federal and state laws. Units of the University System of Georgia and their affiliated organizations may participate in the Pooled Investment Fund program. The overall character of the pooled fund portfolio should be one of above average quality, possessing at most an average degree of investment risk. The College's position in the pooled investment fund is described below. 1. Balanced Income Fund The Balanced Income Fund is available to both University System of Georgia institutions and their affiliated organizations. The Fund is designed to be a vehicle to invest funds that are not subject to the state regulations concerning investing in equities. This pool is appropriate for investing longer term funds that require a more conservative investment strategy. Permitted investments in the fund are domestic US equities, domestic investment grade fixed income, and cash equivalents. The equity allocation shall range between 20% and 40%, with a target of 30% of the total portfolio. The fixed income (bond) portion of the portfolio shall range between 60% and 80%, with a target of 70% of the total portfolio. Cash reserves and excess income are invested at all times in the highest quality par stable (A1, P1) institutional money market mutual funds, or other high quality short term instruments. The market value of the College's position in the Balanced Income Fund at June 30, 2022 was $1,996,548, of which 68% is invested in debt securities. The Effective Duration of the Fund is 5.76 years. Interest Rate Risk Interest rate risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of an investment. The College does not have a formal policy for managing interest rate risk for investments. Fair Value Investment type: Investment Pools Board of Regents Balanced Income Fund $ 1,996,548 Credit Quality Risk Credit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The College's policy for managing credit quality risk is contained in the investment policy guidelines for the various pooled investment funds, colleges, universities, and foundations: 1. In the Balanced Income Fund, Total Return Fund and Diversified Fund, total fixed income portfolios should have an average credit quality rating of at least A. Overnight investments shall be limited to high quality institutional money market mutual funds rated A1, P1 or other high quality short-term debt instruments rated as least AA+ 28 Abraham Baldwin Agriculture College Note 3 Accounts Receivable Accounts receivable consisted of the following at June 30, 2022: Business Type Activities Fiduciary Fund Student Tuition and Fees $ Auxiliary Enterprises and Other Operating Activities Federal Financial Assistance State General Appropriations Allotment Georgia Student Finance Commission Georgia State Financing and Investment Commission Due from Affiliated Organizations Due From Other USG Institutions Other Less: Allowance for Doubtful Accounts Net Accounts Receivable $ 123,030 $ 237,469 942,185 163,028 109,773 34,800 270,225 1,880,510 106,404 1,774,106 $ 134,679 282,473 417,152 417,152 Note 4 Inventories Inventories consisted of the following at June 30, 2022: Merchandise for Resale $ 233,183 Note 5 Notes and Loans Receivable Notes receivable consists of resources made available for financial loans to students of the Institution. Allowances for uncollectible loans are reported based on management's best estimate considering type, age, collection history, and other factors considered appropriate. The Federal Perkins Loan Program (the Program) comprises substantially all of the loans receivable at June 30, 2022. The Program provides for cancellation of a loan at rates of 10% to 30% per year up to a maximum of 100% if the participant complies with certain provisions. The Federal government reimburses the College for amounts canceled under these provisions. As the College determines that loans are uncollectible and not eligible for reimbursement by the federal government, the loans are written off and assigned to the U.S. Department of Education. 2022 Annual Financial Report 29 Note 6 Capital and Intangible Right-to-Use Assets Changes in capital assets for the year ended June 30, 2022 are shown below: Capital Assets, Not Being Depreciated: Land Capitalized Collections Construction Work-in-Progress Total Capital Assets Not Being Depreciated Capital Assets, Being Depreciated: Building and Building Improvements Facilities and Other Improvements Equipment Library Collections Capitalized Collections Total Capital Assets Being Depreciated Less: Accumulated Depreciation Building and Building Improvements Facilities and Other Improvements Equipment Library Collections Capitalized Collections Total Accumulated Depreciation Total Capital Assets, Being Depreciated, Net Capital Assets, net Balance July 1, 2021 $ 868,472 1,602,283 41,750 2,512,505 Additions Reductions Balance June 30, 2022 453,010 453,010 $ 41,750 41,750 868,472 1,602,283 453,010 2,923,765 105,929,360 3,255,880 6,836,308 2,124,962 102,600 118,249,110 1,217,828 982,991 32,983 2,233,802 255,249 4,639 259,888 107,147,188 3,255,880 7,564,050 2,153,306 102,600 120,223,024 37,418,151 1,902,857 4,985,027 1,919,191 42,727 46,267,953 71,981,157 $ 74,493,662 $ 3,066,300 146,322 730,806 53,840 1,340 3,998,608 (1,764,806) (1,311,796) $ 251,707 4,639 256,346 40,484,451 2,049,179 5,464,126 1,968,392 44,067 50,010,215 3,542 70,212,809 45,292 $ 73,136,574 For projects managed by GSFIC, GSFIC retains construction-in-progress on its books throughout the construction period and transfers the entire project to the College when complete. For projects managed by the College, the College retains construction-in-progress on its books and is reimbursed by GSFIC. For the year ended June 30, 2022, GSFIC had construction in progress of approximately $815,915 for incomplete GSFIC managed projects for the College. 30 Abraham Baldwin Agriculture College Changes in intangible right-to-use assets for the year ended June 30, 2022 are shown below: Beginning Balances July 1, 2021 Additions Reductions Ending Balance June 30, 2022 Intangible Right-to-use Assets Equipment $ -- $ 53,249 $ -- $ 53,249 Total Leased Assets Being Amortized -- 53,249 -- 53,249 Less: Accumulated amortization Equipment Total Accumulated Amortization Intangible Right-to-use Assets, net $ -- -- -- $ 2,958 2,958 50,291 $ -- 2,958 -- 2,958 -- $ 50,291 A comparison of depreciation and amortization expense for the last three fiscal years is as follows: Fiscal Year 2022 2021 2020 Depreciation & Amortization Expense 4,001,566 3,914,532 3,125,475 Note 7 Advances (Including Tuition and Fees) Advances, including tuition and fees, consisted of the following at June 30, 2022: Prepaid Tuition and Fees Other - Advances Totals Current Liabilities $ 973,078 69,602 $ 1,042,680 2022 Annual Financial Report 31 Note 8 Long-Term Liabilities Changes in long-term liability for the year ended June 30, 2022 was as follows: Leases Lease Obligations Other Liabilities Compensated Absences Total Long-Term Obligations Balance July 1, 2021 Additions Reductions Balance June 30, 2022 Current Portion $ -- $ 53,249 $ 18,007 $ 35,242 $ 12,348 1,462,713 1,023,303 $ 1,462,713 $ 1,076,552 $ 968,706 1,517,310 986,713 $ 1,552,552 $ 870,580 882,928 See Note 13, Retirement Plans, for information related to net pension liability. See Note 16, Post-Employment Benefits Other Than Pension Benefits, for information related to net other post employment benefits liability. Note 9 Deferred Outflows and Inflows of Resources Deferred outflows and inflows of resources reported on the Statement of Net Position as of June 30, 2022, consisted of the following: Deferred Outflows of Resources Deferred Outflow on Defined Benefit Pension Plans (See Note 13) Deferred Outflow on OPEB Plan (See Note 16) Total Deferred Outflows of Resources $ 7,478,001 7,132,727 $ 14,610,728 Deferred Inflows of Resources Deferred Inflow on Defined Benefit Pension Plans (See Note 13) Deferred Inflow on OPEB Plan (See Note 16) Total Deferred Inflows of Resources $ 16,901,992 10,978,217 $ 27,880,209 Service Concessions Arrangements At June 30, 2022, the College had no service concession arrangements that met the materiality threshold for discrete financial reporting. 32 Abraham Baldwin Agriculture College Note 10 Net Position The breakdown of business-type activity net position for the College fund at June 30, 2022 is as follows: Net Position Net Investment in Capital Assets $ 72,962,224 Restricted for Nonexpendable Permanent Endowment 1,911,461 Expendable Sponsored and Other Organized Activities Federal Loans Institutional Loans Quasi-Endowments Sub-Total 305,846 549,226 19,171 86,674 960,917 Unrestricted Auxiliary Enterprises Operations Reserve for Encumbrances Other Unrestricted Sub-Total Total Net Position 13,268,579 3,158,050 (64,523,765) (48,097,136) $ 27,737,466 Other unrestricted net position is reduced by $46,992,932 related to the recording of net OPEB liability, deferred inflow on OPEB plan, and deferred outflow on OPEB plan. Other unrestricted net position is also reduced by $19,724,533 related to the recording of net pension liability, deferred inflow on defined benefit pension plans, and deferred outflow on defined benefit pension plans. These OPEB and pension balances are mostly funded through state appropriation, student tuition and fees that are subject to State surplus rules which prevents the accumulation of budgetary fund balance. Therefore, the College is statutorily unable to maintain accumulated net position to offset these OPEB and pension balances. Changes in Net Position for the year ended June 30, 2022 are as follows: Net Investments in Capital Assets Restricted Net Position Unrestricted Net Position (Deficit) Total Net Position Balance July 1, 2021 Additions Reductions Balance June 30, 2022 $ 74,493,662 $ 2,716,318 $ 4,247,756 $ 72,962,224 3,127,217 21,075,011 21,329,850 2,872,378 (54,942,431) 47,245,133 40,399,838 (48,097,136) $ 22,678,448 $ 71,036,462 $ 65,977,444 $ 27,737,466 2022 Annual Financial Report 33 Note 11 Endowments Donor Restricted Endowments Investments of the College's endowment funds are pooled, unless required to be separately invested by the donor. For College controlled, donor-restricted endowments, where the donor has not provided specific instructions, the Board of Regents permits Institutions to develop policies for authorizing and spending realized and unrealized endowment income and appreciation as they determined to be prudent. Realized and unrealized appreciation in excess of the amount budgeted for current spending is retained by the endowments. Current year net depreciation for the endowment accounts was ($245,970) and is reflected as expendable restricted net position. For endowment funds where the donor has not provided specific instructions, investment return of the College's endowment funds is predicated under classical trust doctrines. Unless the donor has stipulated otherwise, capital gains and losses are accounted for as part of the endowment principal and are not available for expenditure. For the current year, the College did not incur investment losses that exceeded the related endowment's available accumulated income and net appreciation. 34 Abraham Baldwin Agriculture College Note 12 Leases Lease Obligations The College leases equipment. Although lease terms vary, many leases are subject to appropriation from the General Assembly to continue the obligation. In accordance with O.C.G.A. 50-5-64, these agreements shall terminate absolutely and without further obligation at the close of the fiscal year in which it was executed and at the close of each succeeding fiscal year for which it may be renewed. These agreements may be renewed only by a positive action taken by the College In addition, these agreements shall terminate if the State does not provide adequate funding, but that is considered a remote possibility. The College's principal and interest payments related to leases for fiscal year 2022 were $18,007 and $1,366, respectively. Interest rate is 4.2%. The following is a summary of the carrying values of intangible right-to-use assets held under lease at June 30, 2022: Description Leased Equipment Total Assets Held Under Lease at June 30, 2022 Gross Amount ( + ) Less: Accumulated Amortization ( - ) 53,249 2,958 Net, Assets Held Under Lease at June 30, 2022 ( = ) Outstanding Balance per Lease Schedules at June 30, 2022 50,291 35,242 $ 53,249 $ 2,958 $ 50,291 $ 35,242 The following schedule lists the pertinent information for each of the College's leases. Certain leases provide for renewal and/or purchase options. Generally purchase options at bargain prices of one dollar are exercisable at the expiration of the lease terms. Description Lessor 30 Forest Lakes Golf Carts Forest Lakes Range Picker Cart Forest Lakes Golf Cart Georgia Musuem of Ag Golf Cart Georgia Musuem of Ag 6 Passenger Golf C30arFt orest Lakes Golf Carts Two 4 Seater Golf Cart Two Adventurer Golf Carts Yamaha Yamaha Yamaha Yamaha Yamaha Yamaha Yamaha Yamaha Total Leases Original Principal Lease Term Begin End Month/ Month/Year Year Outstanding Principal 31,819 3 yrs 7,191 5,500 4,649 6,624 48,210 7,808 9,842 3 yrs 3 yrs 3 yrs 3 yrs 3 yrs 3 yrs 3 yrs April 2022 April 2022 April 2022 April 2022 April 2022 June 2019 June 2019 June 2019 March 2025 March 2025 March 2025 March 2025 March 2025 May 2022 May 2022 May 2022 11,789 7,033 5,285 4,653 6,482 -- -- -- $ 121,643 $ 35,242 2022 Annual Financial Report 35 Certain leases provide for renewal and/or purchase options. Generally purchase options at bargain prices of one dollar are exercisable at the expiration of the lease terms. Below is the future commitments related to outstanding lease obligations as of June 30, 2022. Year Ending June 30: 2023 2024 2025 Total Minimum Lease Payments Principal Interest $ 12,348 $ 12,876 10,018 $ 35,242 $ 1,244 716 176 2,136 36 Abraham Baldwin Agriculture College Note 13 Retirement Plans The College participates in various retirement plans administered by the State of Georgia under two major retirement systems: Teachers Retirement System of Georgia (TRS) and Employees' Retirement System of Georgia (ERS). These two systems issue separate publicly available financial reports that include the applicable financial statements and required supplementary information. The reports may be obtained from the respective administrative offices. The College also provides the Regents Retirement Plan. The significant retirement plans that the College 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. A. Teachers Retirement System of Georgia and Employees' Retirement System of Georgia General Information about the Teachers Retirement System Plan description All teachers of the College as defined in O.C.G.A. 47-3-60 are provided a pension through the Teachers Retirement System of Georgia (TRS). TRS, a cost-sharing 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 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% of their annual pay during fiscal year 2022. The College's contractually required contribution rate for the year ended June 30, 2022 was 19.81% of the annual College payroll. The College's contributions to TRS totaled $2,972,572 for the year ended June 30, 2022. General Information about the Employees' Retirement System 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 ers.ga.gov/financials. Benefits provided The ERS Plan supports three benefit tiers: Old Plan, New Plan, and Georgia State Employees' Pension and Savings Plan (GSEPS). Employees under the old plan started membership prior to July 1, 1982 and are subject to plan provisions in effect prior to July 1, 1982. 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 Old or New Plans are members of GSEPS. 2022 Annual Financial Report 37 ERS members hired prior to January 1, 2009 also have the option to irrevocably change their membership to GSEPS. Under the old plan, 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 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 ERS. Contributions Member contributions under the old plan are 4% of annual compensation, up to $4,200, plus 6% of annual compensation in excess of $4,200. Under the old plan, the State pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these State contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The required contribution rate for the year ended June 30, 2022 was 24.63% of annual covered payroll for old and new plan members and 21.57% for GSEPS members. The College's contributions to ERS totaled $65,229 for the year ended June 30, 2022. 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, 2022, the College reported a liability for its proportionate share of the net pension liability for TRS and ERS. The net pension liability was measured as of June 30, 2021. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2020. An expected total pension liability as of June 30, 2021 was determined using standard roll-forward techniques. The College's proportion of the net pension liability was based on contributions to TRS and ERS during the fiscal year ended June 30, 2021. At June 30, 2021, the College's TRS proportion was 0.113585%, which was a decrease of (0.006320)% from its proportion measured as of June 30, 2020. At June 30, 2021, the College's ERS proportion was 0.010890%, which was a decrease of (0.001617)% from its proportion measured as of June 30, 2020. For the year ended June 30, 2022, the College recognized pension expense of $(559,520) for TRS and $30,692 for ERS. At June 30, 2022, the College reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: 38 Abraham Baldwin Agriculture College TRS Deferred Outflows of Resources Deferred Inflows of Resources ERS Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience $ 2,397,256 $ -- $ 6,028 $ -- Changes of assumptions 1,944,339 -- 73,348 -- Net difference between projected and actual earnings on pension plan investments Changes in proportion and differences between contributions and proportionate share of contributions -- 14,694,220 -- 1,933,651 -- 19,229 235,409 38,712 Contributions subsequent to the measurement date 2,972,572 65,229 Total $ 7,314,167 $ 16,627,871 $ 163,834 $ 274,121 The College's contributions subsequent to the measurement date are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ending June 30, 2023. 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 Ending June 30: 2023 $ 2024 $ 2025 $ 2026 $ 2027 $ Thereafter $ TRS (2,763,190) $ (2,538,708) $ (3,172,292) $ (3,812,086) $ -- $ -- $ ERS (11,530) (43,898) (57,209) (62,879) -- -- Actuarial assumptions The total pension liability as of June 30, 2021 was determined by an actuarial valuation as of June 30, 2020 using the following actuarial assumptions, applied to all periods included in the measurement: Teachers Retirement System Inflation Salary increases Investment rate of return Post-retirement benefit increases 2.50% 3.00% - 8.75%, average, including inflation 7.25%, net of pension plan investment expense, including inflation 1.50% semi-annually 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. Post-retirement 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 improved 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. 2022 Annual Financial Report 39 The actuarial assumptions used in the June 30, 2020 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 long-term assumed rate of return and the assumed annual rate of inflation. Employees' Retirement System Inflation 2.50% Salary increases 3.00 6.75%, including inflation Investment rate of return 7.00%, net of pension plan investment expense, including inflation Post-retirement mortality rates were based on the Pub-2010 General Employee Table, with no adjustments, projected generationally with the MP-2019 scale used for both males and females while in active service. Post retirement mortality rates were based on the Pub2010 Family of Tables, with the MP-2019 projection scale applied generationally, as follows: service retirees General Healthy Annuitant mortality table with further adjustments (set forward one year and adjusted 105% and 108% respectively for males and females); disability retirees General Disabled Table (set back three years for males, and adjusted 103% and 106% for males and females, respectively); beneficiaries General Contingent Survivors Table (set forward to two years for both males and females and adjusted 106% and 105% respectively). The actuarial assumptions used in the June 30, 2020 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 TRS and ERS pension plan investments was determined using a lognormal distribution analysis in which best-estimate ranges of expected future real rates of return (expected nominal returns, net of pension plan investment expense and the assumed rate of 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 allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Asset class Fixed income Domestic large equities Domestic small equities International developed market equities International emerging market equities Alternatives Total TRS Target allocation 30.00 % 46.30 % 1.20 % 11.50 % 6.00 % 5.00 % 100.00 % TRS Longterm expected real rate of return* (0.80)% 9.30 % 13.30 % 9.30 % 11.30 % 10.60 % ERS Target allocation 30.00 % 46.40 % 1.10 % 11.70 % 5.80 % 5.00 % 100.00 % ERS Longterm expected real rate of return* (1.50)% 9.20 % 13.40 % 9.20 % 10.40 % 10.60 % * Rates shown are net of inflation Discount rate The discount rate used to measure the total TRS and ERS pension liability was 7.25% and 7.00%, respectively. 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 TRS and ERS 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 Institute's proportionate share of the net pension liability to changes in the discount rate: The following presents the College's proportionate share of the net pension liability calculated using the discount rate of 7.25% for TRS and 7.00% for ERS, as well as what the College's proportionate share of the net pension 40 Abraham Baldwin Agriculture College 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: Teachers Retirement System: Proportionate share of the net pension liability 1% Current Decrease discount rate 6.25% 7.25% $ 27,060,820 $ 10,045,836 $ 1% Increase 8.25% (3,896,770) Employees' Retirement System: Proportionate share of the net pension liability 1% Decrease 6.00% 466,744 Current discount rate 7.00% 254,707 1% Increase 8.00% 75,382 Pension plan fiduciary net position Detailed information about the pension plan's fiduciary net position is available in the separately issued TRS and ERS financial reports which are publicly available at trsga.com/publications and ers.ga.gov/financials, respectively. B. Defined Contribution Plan: Regents Retirement Plan Plan Description The Regents Retirement Plan, a single-employer defined contribution plan, is an optional retirement plan that was created/established by the Georgia General Assembly in O.C.G.A. 47-21-1 et.seq. and administered by the Board of Regents of the University System of Georgia (Board). O.C.G.A. 47-3-68(a) defines who may participate in the Regents Retirement Plan. An "eligible university system employee" is a faculty member or all exempt full and partial benefit eligible employees, as designated by the regulations of the Board. Under the Regents Retirement Plan, a plan participant may purchase annuity contracts from three approved vendors (VALIC, Fidelity, and TIAA-CREF) for the purpose of receiving retirement and death benefits. Benefits depend solely on amounts contributed to the plan plus investment earnings. Benefits are payable to participating employees or their beneficiaries in accordance with the terms of the annuity contracts. Funding Policy The institutions of the USG make monthly employer contributions to the Regents Retirement Plan on behalf of participants at rates determined by the Board. The Board reviews the contribution amount every three (3) years. For fiscal year 2022, the employer contribution was 9.24% for the participating employee's earnable compensation. Employees contribute 6.00% of their earnable compensation. Amounts attributable to all plan contributions are fully vested and non-forfeitable at all times. The College and the covered employees made the required contributions of $437,222 (9.24%) and $517,554 (6.00%), respectively. VALIC, Fidelity, and TIAA-CREF have separately issued financial reports which may be obtained through their respective corporate offices. Note 14 Risk Management The USG offers its employees and retirees under the age of 65 access to three self insured healthcare plan options and one fully insured plan option. For the USG's Plan Year 2022, the following self-insured health care options 2022 Annual Financial Report 41 were available: Blue Choice HMO plan, (Blue Cross and Blue Shield of Georgia) Consumer Choice HSA plan, and the (Blue Cross and Blue Shield of Georgia) Comprehensive Care plan. The College's participating employees and eligible retirees pay premiums into the plan fund to access benefits coverage. All units of the USG share the risk of loss for claims associated with these plans. The plan fund is considered to be a self-sustaining risk fund. The USG has contracted with Blue Cross and Blue Shield of Georgia, a wholly owned subsidiary of Anthem, Inc., to serve as the claims administrator for the self-insured healthcare plan options. In addition to the self-insured healthcare plan options offered to the employees and eligible retirees of the USG, a fully insured HMO healthcare plan option also is offered through Kaiser Permanente. The Comprehensive Care plan has a carved-out prescription drug plan administered through CVS Caremark. Pharmacy drug claims are processed in accordance with guidelines established for the Board of Regents' Prescription Drug Benefit Program. Generally, claims are submitted by participating pharmacies directly to CVS Caremark for verification, processing and payment. CVS Caremark maintains an eligibility file based on information furnished by Blue Cross and Blue Shield of Georgia on behalf of the various organizational units of the University System of Georgia. The self-insured dental plan is administered through Delta Dental. Retirees age 65 and older participate in a secondary healthcare coverage for Medicare-eligible retirees and dependents provided through a retiree health care exchange option. The USG makes contributions to a health reimbursement account, which can be used by the retiree to pay premiums and out-of-pocket healthcare-related expenses. The Department of Administrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The College is part of the State of Georgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment. A self-insured program of professional liability for its employees was established by the Board of Regents of the University System of Georgia under powers authorized by the O.C.G.A 45-9-1. The program insures the employees to the extent that they are not immune from liability against personal liability for damages arising out of the performance of their duties or in any way connected therewith. The program is administered by DOAS as a Self-Insurance Fund. Note 15 Contingencies Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditure disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although the Institution expects such amounts, if any, to be immaterial to its overall financial position. Litigation, claims and assessments filed against the College, 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 Comprehensive Annual Financial Report for the fiscal year ended June 30, 2022. 42 Abraham Baldwin Agriculture College Note 16 Post-Employment Benefits Other Than Pension Benefits Board of Regents Retiree Health Benefit Plan Plan Description and Funding Policy The Board of Regents Retiree Health Benefit Plan (Plan) is a single-employer, defined-benefit, healthcare plan administered by the University System Office, an organizational unit of the USG. The Plan was authorized pursuant to OCGA 47-21-21 for the purpose of accumulating funds necessary to meet employer costs of retiree postemployment health insurance benefits. Pursuant to the general powers conferred by the OCGA 20-3-31, the USG has established group health and life insurance programs for regular employees of the USG. It is the policy of the USG to permit employees of the USG eligible for retirement or who become permanently and totally disabled to continue as members of the group health and life insurance programs. The USG offers its employees and retirees under the age of 65 access to three selfinsured healthcare plan options and one fully insured plan option. For the USG's Plan Year 2022, the following selfinsured health care options were available: Blue Choice HMO plan, (Blue Cross and Blue Shield of Georgia) Consumer Choice HSA plan, and the (Blue Cross and Blue Shield of Georgia) Comprehensive Care plan. The USG offers a self-insured dental plan administered by Delta Dental. Retirees age 65 and older participate in a secondary healthcare coverage for Medicare-eligible retirees and dependents provided through a retiree health care exchange option. The USG makes contributions to the retirees' health reimbursement account, which can be used by the retiree to pay premiums and out-of-pocket healthcare related expenses. The College's membership in the Plan consisted of the following at June 30, 2022: Active Employees 351 Retirees or Beneficiaries Receiving Benefits 228 Retirees or Beneficiaries Eligible But Not Receiving Benefits -- Retirees Receiving Life Insurance Only 37 Total 616 The contribution requirements of plan members and the employer are established and may be amended by the Board. The Plan is substantially funded on a "pay-as-you-go" basis; however, amounts above the pay-as-you-go basis may be contributed annually, either by specific appropriation or by Board designation. The College pays the employer portion for group insurance for eligible retirees. The employer portion of health insurance for its eligible retirees is based on rates that are established annually by the Board for the upcoming plan year. For the 2022 plan year, the employer rate was approximately 85% of the total health insurance cost for eligible retirees and the retiree rate was approximately 15%. With regard to life insurance, the employer covers the total premium cost for $25,000 of basic life insurance. If an individual elects to have supplemental, and/or, dependent life insurance coverage, such costs are borne entirely by the retiree. For fiscal year 2022, the College contributed $1,250,968 to the plan for current premiums or claims. OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB At June 30, 2022, the College reported a liability for its proportionate share of the net OPEB liability. The net OPEB liability was measured as of June 30, 2021. The total OPEB liability used to calculate the net OPEB liability was based on an actuarial valuation as of May 1, 2021. An expected total OPEB liability as of June 30, 2021 was determined using standard roll-forward techniques. The College's proportion of the net OPEB liability was actuarially determined based on employer contributions during the fiscal year ended June 30, 2021. At June 30, 2021, the College's proportion was 0.857277%, which was a decrease of (0.034926)% from its proportion measured as of June 30, 2020. For the year ended June 30, 2022, the College recognized OPEB expense of $459,775. At June 30, 2022, the 2022 Annual Financial Report 43 College reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Differences between expected and actual experience Deferred Outflows of Resources Deferred Inflows of Resources $ 2,323,001 $ 147,618 Changes of assumptions 3,558,758 5,950,918 Net difference between projected and actual earnings on OPEB plan investments -- 106,998 Changes in proportion and differences between contributions and proportionate share of contributions -- 4,772,683 Contributions subsequent to the measurement date 1,250,968 -- Total $ 7,132,727 $ 10,978,217 The College's contributions subsequent to the measurement date of $1,250,968 are reported as deferred outflows of resources and will be recognized as a reduction of the net OPEB liability in the year ending June 30, 2023. 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 Ending June 30: 2023 $ 2024 $ 2025 $ 2026 $ 2027 $ Thereafter $ (1,908,571) (1,316,360) (1,282,785) (1,155,247) 228,268 338,237 44 Abraham Baldwin Agriculture College Actuarial assumptions The total OPEB liability as of June 30, 2021 was determined by an actuarial valuation as of May 1, 2021 using the following actuarial assumptions, applied to all periods included in the measurement: Cost Method Amortization Method Asset Method Interest Discounting and Salary Growth Mortality Rates Initial Healthcare Cost Trend Pre-Medicare Eligible Medicare Eligible Ultimate Trend Rate Pre-Medicare Eligible Medicare Eligible Year Ultimate Trend is Reached Experience Study Entry Age Normal Closed amortization period for initial unfunded and subsequent actuarial gains/ losses. Fair Value Discount Rate as as of 6/30/2021 2.18% GO 20-Municipal Bond Index Rate Discount Rate as of 6/30/2020 2.21% from Bond Buyers GO 20- Municipal Bond Index Long-term Rate of Return 4.37% General Inflation 2.10% Salary Increase 3.75% Pub - 2010 for Teachers (headcount weighted) projected with a scale MP-2020 6.4% 4% 4.5% 4% Fiscal Year 2031 for Pre-Medicare Eligible, Fiscal Year 2021 for Medicare Eligible Economic and demographic assumptions are based on the results of the most recent actuarial experience study over the Plan, which covered a three-year period ending June 30, 2019 with the exception of the disability and salary increase assumptions. These assumptions are based on the results of the most recent actuarial experience study of the Teachers Retirement System of Georgia, which covered the five year period ending June 30, 2018. Changes in Assumptions Since Prior Valuation The financial accounting valuation reflects the following assumption changes: Expected claims costs were updated to reflect actual experience. Mortality improvement scale was updated from MP-2019 to MP-2020. The discount rate was updated from 2.21% as of June 30, 2020 to 2.18% as of June 30, 2021. The disability rates were changed to be consistent with the Teacher's Retirement System of Georgia Pension June 30, 2019 valuation report. The salary scale was changed from 4.00% to 3.75% to be consistent with the Teacher's Retirement System of Georgia Pension June 30, 2019 valuation report. The HRA annual increase assumption was updated from 4.50% to 4.00% to reflect general long term HRA employer marketplace trends that show HRA amounts increasing slightly lower than long term medical trends but higher than inflation. The Expected Return on Assets was changed from 3.75% to 4.37%. The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of 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. Best estimates of geometric real rates of return for each major asset class included in the target asset allocation as of June 30, 2021 are summarized in the following table: Asset Class Fixed Income Equity Allocation Long-term Expected Real Rate of Return, Net of Inflation 0.69 % 4.21 % Target Allocation 70 % 30 % 2022 Annual Financial Report 45 Discount rate The Plan's projected fiduciary net position at the end of 2025 is $0, based on the valuation completed for the fiscal year ending June 30, 2021. As such, the Plan's fiduciary net position was not projected to be available to make all projected future benefit payments for current Plan members. The projected "depletion date" when projected benefits are not covered by projected assets is 2025. Therefore, the long-term expected rate of return on Plan investments of 4.37% per annum was not applied to all periods of projected benefit payments to determine the total OPEB liability as of June 30, 2021. Instead, a yield or index rate for a 20 year, tax-exempt general obligation municipal bond with an average rating of AA or higher was used. This rate was determined to be 2.18% from the Bond Buyer. Sensitivity of the net OPEB liability to changes in the discount rate The following presents the the College's proportionate share of the net OPEB liability, as well as what the College's proportionate share of the net OPEB liability would be if it were calculated using a discount rate that is 1% lower (1.18%) or 1% higher (3.18%) than the current discount rate (2.18%): Proportionate Share of the Net OPEB Liability 1% Decrease Current Rate 1% Increase 1.18% 2.18% 3.18% $ 52,226,777 $ 43,147,443 $ 36,145,937 Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates The following presents the College's proportionate share of the net OPEB liability, as well as what the College's proportionate share of the net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1% lower or 1% higher than the current healthcare cost trend rates: Proportionate Share of the Net OPEB Liability $ 1% Decrease 36,407,559 $ Current Rate 43,147,443 $ 1% Increase 52,019,502 Pre-Medicare Eligible Medicare Eligible 5.4% decreasing to 3.5% 6.4% decreasing to 4.5% 7.4% decreasing to 5.5% 3.0% 4.0% 5.0% OPEB plan fiduciary net position: Detailed information about the Plan's fiduciary net position is available in the USG Consolidated Annual Financial Report which is publicly available at usg.edu/fiscal_affairs/financial_reporting/. 46 Abraham Baldwin Agriculture College Note 17 Operating Expenses with Functional Classifications Business-type activity operating expenses by functional classification for fiscal 2022 are shown below: Functional Classification Instruction Public Service Academic Support Student Services Institutional Support Plant Operations and Maintenance Scholarships and Fellowships Auxiliary Enterprises Total Operating Expenses Faculty Salaries Staff Salaries Natural Classification Employee Benefits Personal Services $ 9,495,110 $ 2,462,137 $ 2,761,845 $ 66,326 344,301 57,468 180,555 2,972,981 618,368 5,250 1,895,915 385,947 4,200 2,386,698 358,188 105,794 23,923 12,849 $ 204,064 (7,405) Travel 61,184 25,109 39,106 12,882 40,342 36,324 2,669,104 543,419 $ 9,787,765 $ 12,836,930 $ 4,749,158 $ 7,405 216,913 $ 19,854 198,477 Functional Classification Instruction Public Service Academic Support Student Services Institutional Support Plant Operations and Maintenance Scholarships and Fellowships Auxiliary Enterprises Total Operating Expenses Scholarships and Fellowships Utilities Natural Classification Supplies and Other Services Depreciation/ Amortization Total Operating Expenses $ 199,840 $ 61,466 2,519 3,520 11,593,252 144,378 50,170 $ 5,159 63,954 3,815 34,356 1,211,786 20,470 3,003,057 $ 290,798 2,631,921 987,484 5,057,756 2,688,330 3,411,378 490,816 $ 46,535 523,415 9,012 1,302,928 1,193,850 435,010 18,537,008 897,162 7,032,819 3,303,825 9,388,532 5,216,278 11,593,252 7,287,342 $ 12,004,975 $ 1,389,710 $ 18,070,724 $ 4,001,566 $ 63,256,218 2022 Annual Financial Report 47 Required Supplementary Information 48 Abraham Baldwin Agriculture College ABRAHAM BALDWIN AGRICULTURAL COLLEGE REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS DEFINED BENEFIT PENSION PLAN FOR THE LAST TEN YEARS Employees' Retirement System Year Ended Actuarially Determined Contribution (a) Contributions in Relation to the Actuarially Determined Contribution (b) Contribution Deficiency (Excess) (b-a) Covered Payroll (c) Contributions as a Percentage of Covered Payroll (b/c) June 30, 2022 $ June 30, 2021 $ June 30, 2020 $ June 30, 2019 $ June 30, 2018 $ June 30, 2017 $ June 30, 2016 $ June 30, 2015 $ June 30, 2014 $ June 30, 2013 $ 65,229 $ 62,604 $ 78,001 $ 63,328 $ 68,712 $ 66,602 $ 105,597 $ 98,514 $ 66,153 $ 48,237 $ 65,229 $ 62,604 $ 78,001 $ 63,328 $ 68,712 $ 66,602 $ 105,597 $ 98,514 $ 66,153 $ 48,237 $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ 263,839 253,416 315,330 255,358 276,951 268,450 427,171 448,608 358,360 323,740 24.72% 24.70% 24.74% 24.80% 24.81% 24.81% 24.72% 21.96% 18.46% 14.90% Teachers' Retirement System June 30, 2022 $ June 30, 2021 $ June 30, 2020 $ June 30, 2019 $ June 30, 2018 $ June 30, 2017 $ June 30, 2016 $ June 30, 2015 $ June 30, 2014 $ June 30, 2013 $ 2,972,572 $ 2,803,600 $ 3,270,677 $ 3,099,698 $ 2,579,777 $ 2,214,537 $ 2,143,126 $ 2,048,926 $ 1,876,471 $ 1,708,047 $ 2,972,572 $ 2,803,600 $ 3,270,677 $ 3,099,698 $ 2,579,777 $ 2,214,537 $ 2,143,126 $ 2,048,926 $ 1,876,471 $ 1,708,047 $ -- $ 14,875,358 -- $ 14,778,534 -- $ 15,466,280 -- $ 14,875,195 -- $ 15,287,744 -- $ 15,476,443 -- $ 15,027,926 -- $ 15,583,000 -- $ 15,277,291 -- $ 14,975,216 19.98% 18.97% 21.15% 20.84% 16.87% 14.31% 14.26% 13.15% 12.28% 11.41% 2022 Annual Financial Report 49 ABRAHAM BALDWIN AGRICULTURAL COLLEGE REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY MULTIPLE EMPLOYER DEFINED BENEFIT PENSION PLANS FOR THE LAST EIGHT FISCAL YEARS* Employees' Retirement System Teachers Retirement System Year Ended June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 Proportion of the Net Pension Liability 0.010890% 0.012507% 0.010130% 0.010858% 0.010944% 0.008300% 0.007300% 0.009000% Proportionate Share of the Net Pension Liability Covered Payroll Proportionate Share of the Net Pension Liability as a Percentage of Covered Payroll Plan Fiduciary Net Position as a Percentage of the Total Pension Liability $ 254,707 $ 253,416 100.51% $ 527,165 $ 315,330 167.18% $ 418,018 $ 255,358 163.70% $ 446,376 $ 276,951 161.18% $ 444,473 $ 268,450 165.57% $ 869,072 $ 427,171 203.45% $ 791,441 $ 448,608 176.42% $ 596,911 $ 358,360 166.57% 87.62% 76.21% 76.74% 76.68% 76.33% 72.34% 76.20% 77.99% June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 0.113585% $ 0.119905% $ 0.121763% $ 0.128820% $ 0.134852% $ 0.087000% $ 0.088000% $ 0.086000% $ 10,045,836 $ 29,045,684 $ 26,182,337 $ 23,911,751 $ 25,062,659 $ 28,259,470 $ 22,474,440 $ 18,914,389 $ 14,778,534 15,466,280 14,875,195 15,287,744 15,476,443 15,027,926 15,583,000 15,278,448 67.98% 187.80% 176.01% 156.41% 161.94% 188.05% 144.22% 123.80% 92.03% 77.01% 78.56% 80.27% 79.33% 76.06% 81.44% 84.03% *This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 50 Abraham Baldwin Agriculture College ABRAHAM BALDWIN AGRICULTURAL COLLEGE REQUIRED SUPPLEMENTARY INFORMATION NOTES TO THE REQUIRED SUPPLEMENTAL INFORMATION DEFINED BENEFIT PENSION PLAN METHODS AND ASSUMPTIONS FOR FISCAL YEAR ENDED JUNE 30, 2022 Changes of assumptions Employees' Retirement System: 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 the rates of mortality, retirement, withdrawal, and salary increases. This also included a change in the long-term assumed investment rate of return to 7.00%. Teachers Retirement System: Changes of assumptions: In 2010 and later, the expectation of retired life mortality was changed to the RP-2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010. In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience. In 2010, assumed rates of salary increase were adjusted to more closely reflect actual and anticipated experience. 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 to 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 and 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. 2022 Annual Financial Report 51 ABRAHAM BALDWIN AGRICULTURAL COLLEGE REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS FOR OPEB PLAN BOARD OF REGENTS RETIREE HEALTH BENEFIT PLAN FOR THE LAST SIX YEARS* Year Ended Contractually Required Contribution (a) Contributions in Relation to the Contractually Required Contribution (b) Contribution Deficiency (Excess) (b-a) Covered Employee Payroll (c) Contributions as a Percentage of Covered Employee Payroll (b/c) June 30, 2022 $ June 30, 2021 $ June 30, 2020 $ June 30, 2019 $ June 30, 2018 $ June 30, 2017 $ 1,250,968 $ 1,006,278 $ 917,113 $ 1,470,039 $ 1,567,781 $ 1,000,672 $ 1,250,968 $ 1,006,278 $ 917,113 $ 1,470,039 $ 1,567,781 $ 1,000,672 $ -- $ -- $ -- $ -- $ -- $ -- $ 21,429,906 20,355,757 20,927,062 21,118,261 19,820,361 20,370,255 5.84% 4.94% 4.38% 6.96% 7.91% 4.91% *This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 52 Abraham Baldwin Agriculture College ABRAHAM BALDWIN AGRICULTURAL COLLEGE REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF NET OPEB LIABILITY BOARD OF REGENTS RETIREE HEALTH BENEFIT PLAN FOR THE LAST FIVE FISCAL YEARS* Year Ended June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 Proportion of the Net OPEB Liability Proportionate Share of the Net OPEB Liability Covered Employee Payroll Proportionate Share of the Net OPEB Liability as a Percentage of Covered Payroll Plan Fiduciary Net Position as a Percentage of the Total OPEB Liability 0.857277% $ 0.892203% $ 0.916580% $ 0.989636% $ 1.004900% $ 43,147,443 $ 47,587,603 $ 40,985,498 $ 43,650,380 $ 42,402,042 $ 20,355,757 20,927,062 21,118,261 19,820,361 20,370,255 211.97% 227.40% 194.08% 220.23% 208.16% 3.74% 2.91% 3.13% 1.69% 0.19% *This schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 2022 Annual Financial Report 53 ABRAHAM BALDWIN AGRICULTURAL COLLEGE REQUIRED SUPPLEMENTARY INFORMATION NOTES TO THE REQUIRED SUPPLEMENTAL INFORMATION FOR OPEB PLAN BOARD OF REGENTS RETIREE HEALTH BENEFIT PLAN METHODS AND ASSUMPTIONS FOR FISCAL YEAR ENDED JUNE 30, 2022 Changes in Assumptions Since Prior Valuation The financial accounting valuation reflects the following assumption changes: Expected claims costs were updated to reflect actual experience. Mortality improvement scale was updated from MP-2019 to MP-2020. The discount rate was updated from 2.21% as of June 30, 2020 to 2.18% as of June 30, 2021. The disability rates were changed to be consistent with the Teacher's Retirement System of Georgia Pension June 30, 2019 valuation report. The salary scale was changed from 4.00% to 3.75% to be consistent with the Teacher's Retirement System of Georgia Pension June 30, 2019 valuation report. The HRA annual increase assumption was updated from 4.50% to 4.00% to reflect general long term HRA employer marketplace trends that show HRA amounts increasing slightly lower than long term medical trends but higher than inflation. The Expected Return on Assets was changed from 3.75% to 4.37%. 54 Abraham Baldwin Agriculture College Supplementary Information 2022 Annual Financial Report 55 ABRAHAM BALDWIN AGRICULTURAL COLLEGE BALANCE SHEET (NON-GAAP BASIS) BUDGET FUNDS JUNE 30. 2022 (UNAUDITED) ASSETS Cash and Cash Equivalents Accounts Receivable Federal Financial Assistance Other Prepaid Expenditures Other Assets $ 3,785,162.77 929,166.97 1,121,996.73 29,530.08 144,572.62 Total Assets $ 6,010,429.17 LIABILITIES AND FUND EQUITY Liabilities Accrued Payroll Encumbrance Payable Accounts Payable Unearned Revenue Funds Held for Others $ 260,640.14 1,944,895.15 676,739.35 961,083.73 102,003.47 Total Liabilities $ 3,945,361.84 Fund Balances Reserved Department Sales and Services Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry - Forward Unreserved Surplus $ 718,892.79 396,968.68 289,467.72 331,509.20 50,902.43 277,320.74 5.77 Total Fund Balances 2,065,067.33 Total Liabilities and Fund Balances $ 6,010,429.17 Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. 56 Abraham Baldwin Agriculture College ABRAHAM BALDWIN AGRICULTURAL COLLEGE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE BUDGET FUND FOR THE FISCAL YEAR ENDED JUNE 30. 2022 Funds Available Compared to Budget Public Service / Special Funding Initiatives State Appropriation State General Funds Teaching State Appropriation State General Funds Federal Funds - Covid 19 Federal Funds - COVID 19 Federal Funds Not Specifically Identified Other Funds Original Appropriation Final Budget Current Year Revenues Prior Year Reserve Carry-Over $ 1,545,582.00 $ 1,579,363.00 $ 1,579,363.00 $ -- 19,731,976.00 -- -- 28,001,170.00 23,125,766.00 13,304,798.00 9,753,354.00 15,289,660.00 23,125,766.00 11,729,416.78 8,516,915.94 14,837,048.46 -- -- -- 1,894,760.64 Total Teaching 47,733,146.00 61,473,578.00 58,209,147.18 1,894,760.64 Total Operating Activity $ 49,278,728.00 $ 63,052,941.00 $ 59,788,510.18 $ 1,894,760.64 Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. 2022 Annual Financial Report 57 ABRAHAM BALDWIN AGRICULTURAL COLLEGE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE BUDGET FUND FOR THE FISCAL YEAR ENDED JUNE 30. 2022 Public Service / Special Funding Initiatives State Appropriation State General Funds Funds Available Compared to Budget Program Transfers or Adjustments Total Funds Available Variance Positive (Negative) Expenditures Compared to Budget Actual Variance Positive (Negative) Excess (Deficiency) of Funds Available Over/(Under) Expenditures $ -- $ 1,579,363.00 $ -- $ 1,579,363.00 $ -- $ -- Teaching State Appropriation State General Funds Federal Funds - Covid 19 Federal Funds - COVID 19 Federal Funds Not Specifically Identified Other Funds -- 23,125,766.00 -- 11,729,416.78 -- 8,516,915.94 -- 16,731,809.10 -- (1,575,381.22) (1,236,438.06) 1,442,149.10 23,125,766.00 11,729,416.78 8,516,915.94 14,676,921.09 -- 1,575,381.22 1,236,438.06 612,738.91 -- -- -- 2,054,888.01 Total Teaching -- 60,103,907.82 (1,369,670.18) 58,049,019.81 3,424,558.19 2,054,888.01 Total Operating Activity -- 61,683,270.82 (1,369,670.18) 59,628,382.81 3,424,558.19 2,054,888.01 Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. 58 Abraham Baldwin Agriculture College ABRAHAM BALDWIN AGRICULTURAL COLLEGE STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE BUDGET FUND FOR THE FISCAL YEAR ENDED JUNE 30. 2022 Public Service / Special Funding Initiatives State Appropriation State General Funds Teaching State Appropriation State General Funds American Recovery and Reinvestment Act Federal Funds - COVID 19 Federal Funds Not Specifically Identified Other Funds Total Teaching Total Operating Activity Prior Year Reserves Not Available for Expenditure Uncollectible Accounts Receivable Beginning Fund Balance/(Deficit) Fund Balance Carried Over from Prior Year as Funds Available Return of Fiscal Year 2021 Surplus Prior Year Adjustments Other Adjustments $ 126,830.40 $ -- $ (126,830.40) $ -- $ -- $ 33.00 $ -- $ (33.00) $ 5.77 $ -- -- -- 1,894,760.64 -- -- (1,894,760.64) -- -- -- -- -- -- -- (26,696.69) (14,032.19) 1,894,793.64 (1,894,760.64) (33.00) (26,690.92) (14,032.19) 2,021,624.04 (1,894,760.64) (126,863.40) (26,690.92) (14,032.19) 36,870.24 14,032.19 Budget Unit Totals $ 2,058,494.28 $ (1,894,760.64) $ (126,863.40) $ (26,690.92) $ -- Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. 2022 Annual Financial Report 59 ABRAHAM BALDWIN AGRICULTURAL COLLEGE STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE BUDGET FUND FOR THE FISCAL YEAR ENDED JUNE 30. 2022 Public Service / Special Funding Initiatives State Appropriation State General Funds Teaching State Appropriation State General Funds American Recovery and Reinvestment Act Federal Funds - COVID 19 Federal Funds Not Specifically Identified Other Funds Total Teaching Total Operating Activity Prior Year Reserves Not Available for Expenditure Uncollectible Accounts Receivable Early Return of Fiscal Year 2022 Surplus Excess (Deficiency) of Funds Available Over/Under) Expenditures Ending Fund Balance/(Deficit) June 30, 2022 Analysis of Ending Fund Balance Reserved Surplus/(Deficit) Total $ -- $ -- $ -- $ -- $ -- $ -- -- -- 5.77 -- -- -- -- -- -- -- -- -- -- 2,054,888.01 2,014,159.13 2,014,159.13 -- 2,054,888.01 2,014,164.90 2,014,159.13 -- 2,054,888.01 2,014,164.90 2,014,159.13 5.77 5.77 -- -- -- -- -- 2,014,159.13 5.77 2,014,164.90 5.77 2,014,164.90 50,902.43 50,902.43 50,902.43 Budget Unit Totals -- 2,054,888.01 2,065,067.33 2,065,061.56 5.77 2,065,067.33 Departmental Sales and Services Indirect Cost Recovery Technology Fees Restricted/Sponsored Funds Tuition Carry-Forward Uncollectible Accounts Receivable Surplus 718,892.79 396,968.68 289,467.72 331,509.20 277,320.74 50,902.43 -- -- 718,892.79 -- 396,968.68 -- 289,467.72 -- 331,509.20 -- 277,320.74 -- 50,902.43 5.77 5.77 2,065,061.56 5.77 2,065,067.33 Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. 60 Abraham Baldwin Agriculture College ABRAHAM BALDWIN AGRICULTURAL COLLEGE 2802 Moore Highway Tifton, Ga 31793 abac.edu 2022 Annual Financial Report 61