Abraham Baldwin Agricultural College, Tifton, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2011

ABRAHAM BALIDUIN AGRICULTURAL COLLEGE
TIFTON, GEORGIA
REPORT ON AUDIT OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED
JUNE 30,2011

Georgia Department Aadtta m d Xcidounts

I

State Auditor

ABRAHAM BALDWIN AGRICULTURAL COLLEGE - TABLE OF CONTENTS -

SECTION I

Page

INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

REQUIREDSUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

BASIC FINANCIAL STATEMENTS

EXHIBITS

A STATEMENT OF NET ASSETS

B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS

C STATEMENT OF CASH FLOWS

D NOTES TO THE FINANCIAL STATEMENTS

SUPPLEMENTARY INFORMATION

SCHEDULES

1 BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND

24

2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT

(NON-GAAP BASIS) BUDGET FUND

2 5

3 STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET

BY PROGRAM AND FUNDING SOURCE

(NON-GAAP BASIS) BUDGET FUND

2 6

4 STATEMENT OF CHANGES TO FUND BALANCE

BY PROGRAM PAND FUNDING SOURCE

(NON-GAAP BASIS) BUDGET FUND

28

5 RECONCILIATION OF SALARIES AND TRAVEL

31

SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

ABRAHAM BALDWIN AGRICULTURAL COLLEGE
- TABLE OF CONTENTS -
SECTION Ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1 - 1 56 Atlanta, Georgia 30334-8400
December 9 , 2 0 1 1

Honorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the Board of Regents of the University System of Georgia
and Honorable David Bridges, President Abraham Baldwin Agricultural College
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying basic financial statements (Exhibits A through D) of Abraham Baldwin Agricultural College, a unit of the University System of Georgia, which is an organizational unit of the State of Georgia, as of and for the year ended June 30. 2011. These financial statements are the responsibility of the Abraham Baldwin Agricultural College's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of College's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As discussed in Note 1,the financial statements of Abraham Baldwin Agricultural College are intended to present the financial position and changes in financial position and cash flows of only that portion of the business-type activities of the State of Georgia that is attributable to the transactions of Abraham Baldwin Agricultural College. They do not purport to, and do not, present fairly the financial position and changes in financial position and cash flows of the State of Georgia, in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of Abraham Baldwin Agricultural College as of June 30, 2011, and its changes in financial position and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Management's Discussion and Analysis is not a part of the basic financial statements but is required supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of this required supplementary information. However, we did not audit this information and express no opinion on it.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements of Abraham Baldwin Agricultural College taken as a whole. The accompanying supplementary information (Schedules 1through 5) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
Respectfully submitted,
~ u k e lWl . Hinton, CPA, CGFM State Auditor

REQUIRED SUPPLEMENTARY INFORMATION

ABRAHAM BALDWIN AGRICULTURAL COLLEGE
Management's Discussion and Analysis

Abraham Baldwin Agricultural College is one of the 35 institutions of higher education of the

University System of Georgia. The College, located in Tifton, Georgia, was founded in 1908 and has

become known for its state-of-the-art technology and technology-related programs. The College

offers associate and baccalaureate degrees in a wide variety of subjects. This wide range of

educational opportunities attracts a highly qualified faculty and a student body of more than 3,500

students each year. The institution continues to grow as shown by the comparison numbers that

follow.

Students

Students

Faculty

(Headcount)

(FTE)

Fiscal Year 2 0 1 1 Fiscal Year 2 0 1 0 Fiscal Year 2 0 0 9
Overview of the Financial Ststemen& and FinancialAnalysis
Abraham Baldwin Agricultural College is proud to present its financial statements for fiscal year 2011. The emphasis of discussions about these statements will be on current year data. There are three financial statements presented: the Statement of Net Assets; the Statement of Revenues, Expensesand Changes in Net Assets; and the Statement of Cash Flows. This discussion and analysis of the College's financial statements provides an overview of its financial activities for the year. Comparative data is provided for fiscal year 2011and fiscal year 2010.
Statementof Net Assets
The Statement of Net Assets presents the assets, liabilities, and net assets of the College as of the end of the fiscal year. The Statement of Net Assets is a point of time financial statement. The purpose of the Statement of Net Assets is to present to the readers of the financial statements a fiscal snapshot of Abraham Baldwin Agricultural College. The Statement of Net Assets presents endof-year data concerning Assets (current and noncurrent), Liabilities (current and noncurrent), and Net Assets (assets minus liabilities). The difference between current and noncurrent assets will be discussed in the Notes to the Financial Statements.
From the data presented, readers of the Statement of Net Assets are able to determine the assets available to continue the operations of the institution. They are also able to determine how much the institution owes vendors.
Finally, the Statement of Net Assets provides a picture of the net assets (assets minus liabilities) and their availability for expenditure by the institution. Net assets are divided into three major categories. The first category, invested in capital assets, net of debt, provides the institution's equity in property, plant and equipment owned by the institution. The next asset category is restricted net assets, which is expendable. Expendable restricted net assets are available for expenditure by the institution 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 is unrestricted net assets. Unrestricted net assets are available to the institution for any lawful purpose of the institution.

Statement of Net Assets, Condensed
Assets Current Assets Capital Assets, Net Other Assets
Total Assets
Liabilities Current Liabilities Noncurrent Liabilities
Total Liabilities
Net Assets Invested in Capital Assets, Net of Debt
Restricted - Expendable
Unrestricted
Total Net Assets

June 30,2011
$ 32,236,944 601,095
5,362,472

June 30,2010
$ 26,326,161 825,499
3.889.578

The total assets of the institution increased by $6,695,149. A review of the Statement of Net Assets will reveal that the increase was primarily due to an increase of $4,748,845 in the category of Capital Assets, Net. This increase was due to the College acquiring the Georgia Museum of Agriculture and the capital assets. The balance of the increase is mainly in cash. The consumption of assets follows the institutional philosophy to use available resources to acquire and improve all areas of the institution to better serve the instruction, research and public service missions of the institution.
The total liabilities for the year decreased by $464,124. The combination of the increase in total assets of $6,695,149 and the decrease in total liabilities of $464,124 yields an increase in total net assets of $7,159,273. The increase in total net assets is primarily in the category of lnvested in Capital Assets, Net of Debt, in the amount of $5,910,783.
Statement of Revenues, Expensesand Changesin NetAsseb
Changes in total net assets as presented on the Statement of Net Assets are based on the activity presented in the Statement of Revenues, Expenses and Changes in Net Assets. The purpose of the statement is to present the revenues received by the institution, both operating and nonoperating, and the expenses paid by the institution, operating and nonoperating, and any other revenues, expenses, gains and losses received or spent by the institution. Generally speaking operating revenues are received for providing goods and services to the various customers and constituencies of the institution. 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 institution. Nonoperating revenues are revenues received for which goods and services are not provided. For example state appropriations are nonoperating because they are provided by the Legislature to the institution without the Legislature directly receiving commensurate goods and services for those revenues.

Statement of Revenues, Expenses and Changes in Net Assets, Condensed

June 30,2011

June 30,2010

Operating Revenues Operating Expenses

Operating Loss

$ -22,328,250

$ -21,283,234

NonoperatingRevenues and Expenses

21,652,427

20,761,565

Income (Loss) Before Other Revenues, Expenses, Gains or Losses

$

-675,823

$

-521,669

Other Revenues, Expenses, Gains or Losses

3,443,436

1,397,153

Increase (Decrease) in Net Assets

$

2,767,613

$

875,484

Net Assets at Beginningof Year, as Originally Reported

$ 31,041,238

$ 30,572,771

Prior Year Adjustments

Net Assets at Beginningof Year, Restated

$ 35,432,898

$ 30,165,754

Net Assets at End of Year

The Statement of Revenues, Expenses and Changes in Net Assets reflects a positive year with an increase in the net assets at the end of the year. Some highlights of the information presented on the Statement of Revenues, Expenses and Changes in Net Assets are as follows:

Revenue by Source For the Years Ended June 30, 2 0 1 1 and June 30,2010

June 30,2011

June 30,2010

Operating Revenue

Tuition and Fees

$

Grants and Contracts

Sales and Services of Educational Departments

Auxiliary

Other

4,308,335 67,372
102,283 12,655,028
293,166

Total Operating Revenue

$ 17,426,184

$

3,848,877

460,006

206,077

11,576,970

219,957

$ 16,311,887

Nonoperating Revenue State Appropriations
Federal Stimulus - Stabilization Funds
Grants and Contracts Gifts Investment Income Other

$ 12,770,887
10,040,291 1,047,440 11,833 -3,458

$ 11,204,035 2,298,334 9,117,173 365,710 76,765 -35,477

Total Nonoperating Revenue

Capital Grants and Gifts State
Total Revenues

Expenses (By Functional Classification) For the Years Ended June 3 0 , 2 0 1 1 and June 30,2010

June 30,2011

June 30,2010

Operating Expenses Instruction Public Service Academic Support Student Services Institutional Support Plant Operations and Maintenance Scholarships and Fellowships Auxiliary Enterprises

Total Operating Expenses

$ 39,754,434

$ 37,595,121

Nonoperating Expenses Interest Expense (Capital Assets)
Total Expenses

Operating revenues increased by $1,114,297 in fiscal year 2011. Although Tuition and Fees included an 11%increase and auxiliary revenues increased by 9%, revenues decreased in Grants and Contracts and Sales and Services.

Nonoperating revenues increased by $840,453 for the year primarily due to an increase in Federal revenue.

The compensation and employee benefits category increased by $536,281 and primarily affected the Instruction category. The increase reflects the increase in part time faculty members and an increased cost of health insurance for the employees of the institution.

Utilities increased by $277,246 during the past year. The increase was primarily associated with the increased electricity costs that were experienced in the fiscal year 2 0 1 1 and affected the Plant Operations and Maintenance category.
Statement of Cash Flows

The final statement presented by the Abraham Baldwin Agricultural College is the Statement of Cash Flows. The Statement of Cash Flows presents detailed information about the cash activity of the institution during the year. The statement is divided into five parts. The first part deals with operating cash flows and shows the net cash used by the operating activities of the institution. The second section reflects cash flows from noncapital financing activities. This section reflects the cash received and spent for nonoperating, noninvesting, and noncapital financing purposes. The third section deals with cash flows from capital and related financing activities. This section deals with the cash used for the acquisition and construction of capital and related items. The fourth section reflects the cash flows from investing activities and shows the purchases, proceeds, and interest received from investing activities. The fifth section reconciles the net cash used to the operating income or loss reflected on the Statement of Revenues, Expenses and Changes in Net Assets.

Cash Flows for the Years Ended June 3 0 , 2 0 1 1 and 2010, Condensed

June 30,2011

June 30,2010

Cash Provided (Used) By: Operating Activities Noncapital FinancingActivities Capital and Related Financing Activities Investing Activities

$ -14,346,150 23,833,523 -3,859,257 11,833

$ -19,535,604 22,992,912 -4,160,460 76,765

Net Change in Cash

Cash at Beginningof Year, as Originally Reported $ Acquisition of Georgia Museum of Agriculture

616,526 1,882

$ 1,242,913

Cash, Beginning of Year, Restated

Cash, End of Year

The College had no significant capital asset additions for facilities for fiscal year 2011.
For additional information concerning Capital Assets, see Notes 1,6, 8, and 10 in the Notes to the Financial Statements.
f ong-Term Liabilities
Abraham Baldwin Agricultural College had Long-Term Liabilities of $49,182,818 of which $1,770,820 was reflected as current liability at June 30, 2011.
For additional information concerning Long-Term Liabilities, see Notes 1and 8 in the Notes to the Financial Statements.
Economic Ouffaok
The College is not aware of any currently known facts, decisions, or conditions that are expected to have a significant effect on the financial position or results of operations during this fiscal year beyond those unknown variations having a global effect on virtually all types of business operations. The College's overall financial position is strong. Even with a relatively flat funded year, the College was able to generate a modest increase in Net Assets. The College anticipates the current fiscal year will be much like last and will maintain a close watch over resources to maintain the College's ability to react to unknown internal and external issues.
Dr. David C. Bridges, President Abraham Baldwin Agricultural College

BASIC FINANCIAL STATEMENTS

ABRAHAM BALDWIN AGRICULTURAL COLLEGE STATEMENT OF NET ASSETS JUNE 30,2011
ASSETS
Current Assets Cash and Cash Equivalents Accounts Receivable, Net (Note 3) Receivables - Federal Financial Assistance Receivables -Other Due from Affiliated Organizations Inventories (Note 4) P r e ~ a i dItems
Total Current Assets Noncurrent Assets
Notes Rece~vable.Net Capital Assets (Note 6)
Total Noncurrent Assets
Total Assets LIABILIT1ES
Current Liabilities Accounts Payable Salar~esPayable Contracts Payable Deferred Revenue (Note 7) Other Liabilities Deposits Held for Other Organizatlons Lease Purchase Obligations Compensated Absences Due to Affiliated Organizatlons Total Current L~abilities
Noncurrent Liabilitles Lease Purchase Obligations Compensated Absences Total Noncurrent Liabilities
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Restricted for:
Expendable Unrestricted
Total Net Assets
The notes to the financial statements are an integral part of this statement. - 2

EXHIBIT "A"

ABRAHAM BALDWIN AGRICULTURAL COLLEGE STATEMENT OF REVENUES. EXPENSES AND CHANGES IN NET ASSETS
YEAR ENDED JUNE 30,2011
OPERATING REVENUES
Student Tu~tionand Fees Less: Scholarship Allowances
Grants and Contracts Federal State
Sales and Services Rents and Royalties Aux~l~aErynterprises
Residence Halls Bookstore Food Services ParkinglTransportation Health Services Intercollegiate Athletics Other Organizations Other Operating Revenues
Total Operating Revenues
OPERATING EXPENSES
Salaries Faculty Staff
Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation
Total Operating Expenses
Operating Income (Loss)
NONOPERATING REVENUES (EXPFNSFS)
State Appropriat~ons Grants and Contracts
Federal State Other Gifts Investment Income Interest Expense Other Nonoperating Revenues
Net Nonoperating Revenues
Income (Loss) Before Other Revenues, EXpenSeS, GatnS, or Losses
Capital Grants and Gifts State
Increase (Decrease) in Net Assets
Net Assets - Beginning of Year. Restated
Net Assets - End of Year
The notes to the financial statements are an integral part of this statement.
- 3

EXHIBIT "B"

ABRAHAM BALDWIN AGRICULTURAL COLLEGE STATEMENT OF CASH FLOWS YEAR ENDEDJUNE 30.2011
CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Grants and Contracts Sales and Services Payments to Suppliers Payments to Employees Paymentsfor Scholarships and Fellowships Loans Issued to Students and Employees Auxiliary Enterprise Charges: Restdence Halls Bookstore Food Services ParkinglTransportation Health Services Intercollegiate Athletics Other Organizations Other Receipts (Payments)
Net Cash Provided (Used) by OperatingActivities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations Agency Funds Transactions Giftsand Grants Received for Other than Capital Purposes
Net Cash Flows Provided (Used) by Noncapital Financing Activrties
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Grants and Gifts Received Purchases of Capital Assets Principal Paid on Capital Debt and Leases interest Paid on Capital Debt and Leases
Net Cash Provided (Used) by Capital and RelatedFinancingActivities
CASH FLOWS FROM INVESTING ACTIVITIES Interest on Investments
Net Increase (Decrease)in Cash
Cash and Cash Equivalents- Beginningof Year as Originally ReDoned
Acquisition of Georgia Museum of Agriculture
Cash and Cash Equivalents- Beginningof Year
Cash and Cash Eauivalents - End of Year
RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating Income (Loss) Adjustments to Reconcile Operating income (Loss) to Net Cash
Provided (Used) by OperatingActivities Depreciation Change in Assets and Liabilities: Accounts Receivable, Net Inventories Prepatd Items Notes Receivable. Net Accounts Payable Deferred Revenue Other Liabilities Compensated Absences
Net Cash Provided (Used) by Operating Activities
NONCASH ACTlVlN Fixed Assets Acquired by Incurring Capital Lease Obligations
The notes to the financial statements are an integral part of thls statement

ABRAHAM BALDWIN AGRICULTURAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30,2011

EXHIBIT "D"

Note 1. Summary of Significant Accounting Policies
Nature of Operations Abraham Baldwin Agricultural 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 and throughout the country.
Reporting Entity Abraham Baldwin Agricultural College is one of thirty-five (35) State supported member institutions of higher education in Georgia which comprise the University System of Georgia, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations of Abraham Baldwin Agricultural College as a separate reporting entity.
The Board of Regents has constitutional authority to govern, control and manage the University System of Georgia. This authority includes but is not limited to the power to designate management, the ability to significantly influence operations, the authority to control institutions' budgets, the power to determine allotments of State funds to member institutions and the authority to prescribe accounting systems and administrative policies for member institutions. Abraham Baldwin Agricultural College does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Abraham Baldwin Agricultural College is considered an organizational unit of the Board of Regents of the University System of Georgia reporting entity for financial reporting purposes because of the significance of its legal, operational, and financial relationships with the Board of Regents as defined in Section 2100 of the Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial Re~orting Standards.
Legally separate, tax exempt organizations whose activities primarily support units of the University System of Georgia, which are organizational units of the State of Georgia, are considered potential component units of the State. See Note 16 for additional information.
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, entity-wide perspective of the College's assets, liabilities, net assets, revenues, expenses, changes in net assets and cash flows.
Generally Accepted Accounting Principles (GAAP) requires that the reporting of summer school revenues and expenses be between fiscal years rather than in one fiscal year. Due t o the lack of materiality, Institutions of the University System of Georgia will continue to report summer revenues and expenses in the year in which the predominant activity takes place.
Basis of Accounting For financial reporting purposes, the College is considered a special-purpose government engaged only in business-type activities. Accordingly, the College's financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting, except as noted in the preceding paragraph. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. All significant intra-College transactions have been eliminated.
The College has the option to apply all Financial Accounting Standards Board (FASB) pronouncements issued after November 30,1989, unless FASB conflicts with GASB. The College has elected to not apply FASB pronouncements issued after the applicable date.

ABRAHAM BALDWIN AGRICULTURAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30,2011

EXHIBrr "D"

Cash and Cash Equivalents Cash and Cash Equivalents consist of petty cash, demand deposits and time deposits in authorized financial institutions.
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 each residing in the State of Georgia. Accounts receivable also includes amounts due from the Federal government, 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.
Capital Assets
Capital assets are recorded at cost at the date of acquisition, or fair market value 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 4 0 to 60 years for buildings, 2 0 to 25 years for infrastructure and land improvements, 1 0 years for library books, and 3 to 2 0 years for equipment. Residual values will generally be 10% of historical costs for infrastructure, buildings and building improvements, and facilities and other improvements.
To obtain the total picture of plant additions in the University System, it is necessary to look at the activities of the Georgia State Financing and Investment Commission (GSFIC) - an organization that is external to the System. 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 the year ended June 30, 2011, GSFIC did not transfer any capital additions to Abraham Baldwin Agricultural College.
Deposits Deposits represent good faith deposits from students to reserve housing assignments in a College residence hall.
Deferred Revenues Deferred revenues 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. Deferred revenues also include amounts receivedfrom grant and contract sponsors that have not yet been earned.

ABRAHAM BALDWIN AGRICULTURAL COLLEGE NOTES TO THE FINANCIAL STATEMEWS
JUNE 30, 2011

EXHIBIT "DM

Compensated Absences Employee vacation pay is accrued at year-end for financial statement purposes. The liability and expense incurred are recorded at year-end as compensated absences in the Statement of Net Assets, and as a component of compensation and benefit expense in the Statement of Revenues, Expenses and Changes in Net Assets. Abraham Baldwin Agricultural College had accrued liability for compensated absences in the amount of $998,974 as of July 1, 2010. For fiscal year 2011, $516,617 was earned in compensated absences and employees were paid $549,445, for a net decrease of $32,828. The ending balance as of June 30, 2 0 1 1 in accrued liability for compensated absences was $966,146.

Noncurrent Liabilities Noncurrent liabilities include liabilities that will not be paid within the next fiscal year and capital lease obligations with contractual maturities greater than one year.

Net Assets
The College's net assets are classified as follows:

Invested in capital assets, net of related debt: This represents the College's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt. The term "debt obligations" as used in this definition does not include debt of the GSFlC as discussed previously in Note 1- Capital Assets section.

Restrided net assetc - expendable: Restricted expendable net assets include resources in which the College is legally or contractually obligated to spend resources in accordance with restrictions imposed by external third parties.

Expendable Restricted Net Assets include the following:

Restricted - E&G and Other Organized Activities

$

-69,146

Federal Loans

641,617

Institutional Loans

Total Restricted Expendable

$

601,095

Unrestricted net asseis: Unrestricted net assets represent 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 to meet current expenses for those purposes, except for unexpended state appropriations (surplus) of $5,428.46. Unexpended state appropriations must be refunded to the Board of Regents of the University System of Georgia, University System Office for remittance 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.

ABRAHAM BALDWIN AGRICULTURAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30,2011

EXHIBIT " D

Unrestricted Net Assets includes the following items which are quasi-restricted by management.

R & R Reserve Reserve for Encumbrances Other Unrestricted

Total Unrestricted Net Assets

$

5,362,472

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.

lnwrne Taxes Abraham Baldwin Agricultural 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 Assets classify fiscal year activity as operating and nonoperating according to the following criteria:

Operating Revenues: 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 Revenues: Nonoperating revenue includes activities that have the characteristics of nonexchange transactions, such as gifts and contributions, and other revenue sources that are defined as nonoperating revenue by GASB No. 9, Repotting Cash Flows of Pmprietaty and Nunexpendable Trust Funds and Governmenla1Entities That Use Pmprietaty Fund Accounting, and GASB No. 34, such as state appropriations and investment income.

Operating Expenses: Operating expense includes activities that have the characteristics of exchange transactions.

Nonoperating Expenses: Nonoperating expense includes activities that have the characteristics of nonexchange transactions, such as capital financing costs and costs related to investment activity.

Restatementof Prior Year NetAssets On July 12010, Abraham Baldwin Agricultural College acquired the assets and operations of the Georgia Museum of Agriculture. Due to this merger, the College's capital assets were increased by $5,786,678 of which $5,477,455 was reported in the fiscal year 2010 CAFR and $309,223 were adjustments made by the College when the assets were added. In addition, net assets were increased by $26,101. The College also corrected some prior year errors made in accumulated depreciation for capital leases which caused a decrease in the amount of $1,421,119. These adjustments caused an overall increase in beginning net assets of $4,391,660.

ABRAHAM BALDWIN AGRICULTURAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2011

EXHIBIT "DM

Scholarship Allowances Student tuition and fee revenues, and certain other revenues from students, are reported at gross with a contra revenue account of scholarship allowances in the Statement of Revenues, Expenses and Changes in Net Assets. 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 nonoperating revenues in the College's financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the College has recorded contra revenue for scholarship allowances.

Note 2. Deposits

Deposits 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 Section 50-17-59:

1. Bonds, bills, notes, certificates of indebtedness, or other direct obligations of the United States or of the State of Georgia.

2.

Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or

municipalities of the State of Georgia.

3.

Bonds of any public authority created by the laws of the State of Georgia, providing that the

statute that created the authority authorized the use of the bonds for this purpose.

4.

Industrial revenue bonds and bonds of development authorities created by the laws of the

State of Georgia.

5. Bonds, bills, certificates of indebtedness, notes or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association and the Federal National MortgageAssociation.

6.

Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation.

The Treasurer of the Board of Regents is responsible for all details relative to furnishing the required depository protection for all units of the University System of Georgia.

At June 30, 2011, the carrying value of deposits was $6,244,702 and the bank balance was
$7,039,333 . Of the College's deposits, $6,178,743 were uninsured. Of these uninsured deposits,
$5,794,533 were collateralized with securities held by the financial institution, by its trust department or agency, in the College's name, and $384,210 were collateralized with securities held by the financial institution, by its trust department or agency, but not in the College's name.

ABRAHAM BALDWIN AGRICULTURAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2011

Note 3. Accounts Receivable

Accounts receivable consisted of the following at June 30, 2011:

Student Tuition and Fees

$

Auxiliary Enterprises and Other Operating Activities

Federal Financial Assistance

Due from Affiliated Organizations

Other

232,101 395,788 198,382 226.963 1,140,293

EXHIBIT "D"

Less Allowance for Doubtful Accounts
Net Accounts Receivable
Note 4. Inventvries
Inventories consisted of the following at June 30, 2011:
Bookstore
Note 5. Notes/loans Receivable
The Federal Perkins Loan Program (the Program) comprises substantially all of the loans receivable at June 30, 2011. 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 cancelled 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. The College has provided an allowance for uncollectible loans, which, in management's opinion, is sufficient to absorb loans that will ultimately be written off.

ABRAHAM BALDWIN AGRICULTURAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30,2011

Note 6. CapitalAssets
Following are the changes in capital assets for the year ended June 30, 2011:

Beginning Balance July 1,2010 (Restated)

Additions

Reductions

Ending Balance June 30.2011

Capital Assets, Not Being Depreciated: Land Construction Work-In-Progress

$

517.110

$

0 $

517.110

Total Capital Assets, Not Being Depreciated $

1.985.496 $ 3,851,668 $

0 8

5,837,164

Capital Assets, Being Depreciated: Building and Building Improvements Facilities and Other Improvements Equipment Capital Leases Library Collections Capitalized Collections

$ 45,679,750 1,926,032 3,798,731 $
52,242,345 2.719.228 1.686.989

411,994 $ 28.063 40,868

$
135.265 20.833
2,274 1.500

45,679,750 1,926,032 4,075,460
52,249,575 2,757,822 1.685.489

Total Assets Being Depreciated

Less: Accumulated Depreciation: Buildingand Building Improvements Facilities and Other Improvements Equipment Capital Leases Library Collections Capitalized Collections

$

16,073,184 $

939.092

931,194 22,064

$

17,004,378

961,156

Total Accumulated Depreciation

Total Capital Assets, Being Depreciated, Net

$

78,084,834$ -3,452,895$

15.487 $

74,616.452

Capital Assets. Net

ABRAHAM BALDWIN AGRICULTURAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2011

Note 7. Deferred Revenue

Current deferred revenue consisted of the following at June 30, 2011:

Other Deferred Revenue

$

41,183

There was no noncurrent deferred revenue at June 30, 2011.

Noh 8. Long-TermLiabilities

Long-Term liability activity for the year ended June 30, 2 0 1 1 was as follows:

Beginning Balance July 1,2010

Additions

Reductions

Ending Balance June 30.2011

Current Portion

Leases Lease Obligations

$ 49,378,610 $

28.063 $ 1,190,001 $ 48,216,672 $ 1,261,299

Other Liabilities Compensated Absences

998,974

516,617

549,445

966,146

509,521

Total Long-Term Obligat~ons $ 50.377.584 $

544,680 $ 1,739,446$ 49,182,8180 1,770,820

Note 9. Significant Commitments

The College had significant unearned, outstanding, construction or renovation contracts executed in the amount of $668,390 as of June 30, 2011. This amount is not reflected in the accompanying basic financial statements.

Note 10. Lease Obligations

Abraham Baldwin Agricultural College is obligated under various operating leases for the use of real property (land, buildings, and office facilities) and equipment, and also is obligated under capital leases and installment purchase agreements for the acquisition of real property.

CAPITAL LEASES

Capital leases are generally payable in installments ranging from monthly to annually and have terms expiring in various years between 2 0 1 1 and 2038. Interest rates range from 4.459 percent t o 8.399 percent. Expenditures for fiscal year 2 0 1 1 were $3,401,437, of which $2,214,566 represented interest and $1,186,871 represented principal. The following is a summary of the carrying values of assets held under capital lease at June 30, 2011:

Buildings Equipment

Total Assets Held Under Capital Lease

$

42,097,872

ABRAHAM BALDWIN AGRICULTURAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2011

EXHIBIT "D"

Certain capital 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.
Abraham Baldwin Agricultural College had two capital leases with related entities in the current fiscal year. On July 1, 2007, Abraham Baldwin Agricultural College entered into a capital lease of $33,247,240 at 4.459 percent with First ABAC, LLC, whereby the College leases a building for a twenty-two year period that expires August 2029. On August 1,2007, the College entered into a capital lease of $18,935,452 at 4.641 percent with Second ABAC, LLC, whereby the College leases a building for a thirty year period that expires July 2037. The outstanding liability at June 30, 2011, on these capital leases were $29,218,039 and $18,951,289, respectively. The College at its option may terminate the lease and purchase First and Second ABAC, LLC's interest for the unamortized principal balance and the payment of $1.
Abraham Baldwin Agricultural College also has various capital leases for equipment with an outstanding balance at June 30, 2011, in the amount of $47,344.
OPERATING LEASES
Abraham Baldwin Agricultural College's noncancellable operating leases having remaining terms of more than one year expire in various fiscal years from 2 0 1 1 through 2015. This agreement has no renewal option and is cancellable if the State of Georgia does not provide adequate funding, but that is considered a remote possibility. In the normal course of business, operating leases are generally renewed or replaced by other leases. This lease is payable on a monthly basis and is for maintenance equipment.
FUTURE COMMITMENTS
Future commitments for capital leases (which here and on the Statement of Net Assets include other installment purchase agreements) and for noncancellable operating leases having remaining terms in excess of one year as of June 30,2011, were as follows:

ABRAHAM BALDWIN AGRICULTURAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30,2011

EXHIBrr "D"

Real Property and Equipment

Capital

Operating

Leases

Leases

Year EndingJune 30: 2012 2013 2014 2015 2016 2017 - 2021 2022 - 2026 2027 - 2031 2032 - 2036 2037 - 2038
Total Minimum Lease Payments $

77,150,128 $

26,130

Less: Interest

28.933.456

Principal Outstanding

$

48,216,672

Abraham Baldwin Agricultural College's fiscal year 2011 expense for rental of real property and equipment under operating leases was $6,968.

Note 11. Retimment Plans

Abraham Baldwin Agricultural College participates in various retirement plans administered by the State of Georgia under two major retirement systems: Employees' Retirement System of Georgia (ERS System) and Teachers Retirement System of Georgia. 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 system offices. The significant retirement plans that Abraham Baldwin Agricultural 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.

Employees'RetirementSystem of Georgia

The ERS System is comprised of individual retirement systems and plans covering substantially all employees of the State of Georgia except for teachers and other employees covered by the Teachers Retirement System of Georgia. One of the ERS System plans, the Employees' Retirement System of Georgia (ERS), is a cost-sharing multiple-employer defined benefit pension plan that was 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 and has the powers and privileges of a corporation. ERS acts pursuant to statutory direction and guidelines, which may be amended prospectively for new hires but for existing members and beneficiaries may be amended in some aspects only subject to potential application of certain constitutional restraints against impairment of contract.

ABRAHAM BALDWIN AGRICULTURAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2011

EXHIBlT "D"

On November 20, 1997, the Board created the Supplemental Retirement Benefit Plan (SRBP-ERS) of ERS. SRBP-ERS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of ERS. The purpose of the SRBP-ERS is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC Section 415. Beginning January 1,1998, all members and retired former members in ERS are eligible to participate in the SRBP-ERS whenever their benefits under ERS exceed the limitation on benefits imposed by IRC Section 415.

The benefit structure of ERS is established by the Board of Trustees under statutory guidelines. Unless the employee elects otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July 1,1982, is an "old plan" member subject to the 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 the modified plan provisions. Effective January 1,2009, newly hired State employees, as well as rehired State employees who did not maintain eligibility for the "old" or "new" plan, are members of the Georgia State Employees' Pension and Savings Plan (GSEPS). ERS members hired prior to January 1,2009 also have the option to change their membership to the GSEPS plan.

Under the old plan, new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 1 0 years of creditable service and attainment of age 6 0 or 3 0 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 2 5 years of creditable service for members under age 60.

Retirement benefits paid to members are based upon a formula adopted by the Board of Trustees for such purpose. The formula considers the monthly average of the member's highest 2 4 consecutive calendar months of salary, the number of years of creditable service, and the member's age at retirement. Post-retirement cost-of-living adjustments may 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.

Member contribution rates are set by law. 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, Abraham Baldwin Agricultural College pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these Abraham Baldwin Agricultural College 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. Abraham Baldwin Agricultural College is required to contribute at a specified percentage of active member payroll established by the Board of Trustees determined annually in accordance with actuarial valuation and minimum funding standards as provided by law. These Abraham Baldwin Agricultural College contributions are not at any time refundable to the member or his/her beneficiary.

Employer contributions required for fiscal year 2 0 1 1 were based on the June 30, 2008 actuarial valuation for the old and new plans and were set by the Board of Trustees on September 18, 2008 for GSEPS as follows:

Old Plan* New Plan GSEPS

10.41% 10.41%
6.54%

* 5.66% exclusive of contributions paid by the employer on behalf of old plan members

ABRAHAM BALDWIN AGRICULTURAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2011
Members become vested after 1 0 years of service. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contributions; the member forfeits all rights to retirement benefits.
Teachers Retirement System of Georgia
The Teachers Retirement System of Georgia (TRS) is a cost-sharing multiple-employer defined benefit plan created in 1943 by an act of the Georgia General Assembly to provide retirement benefits for qualifying employees in educational service. A Board of Trustees comprised of active and retired members and ex-officio State employees is ultimately responsible for the administration of TRS.
On October 25, 1996, the Board created the Supplemental Retirement Benefit Plan of the Georgia Teachers Retirement System (SRBP-TRS). SRBP-TRS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of TRS. The purpose of SRBP-TRS is to provide retirement benefits to employees covered by TRS whose benefits are otherwise limited by IRC Section 415. Beginning July 1,1997, all members and retired former members in TRS are eligible to participate in the SRBP-TRS whenever their benefits under TRS exceed the IRC Section 415 imposed limitation on benefits.
TRS provides service retirement, disability retirement, and survivor's benefits. The benefit structure of TRS is defined and may be amended by State statute. A member is eligible for normal service retirement after 3 0 years of creditable service, regardless of age, or after 1 0 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service.
Normal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 4 0 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 60 or by 7% for each year or fraction thereof by which the member has less than 3 0 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lumpsum distribution in addition to a reduced monthly retirement benefit. Death, disability and spousal benefits are also available.
TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 1 0 years of service. If a member terminates with less than 10 years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest. Member contributions are limited by State law to not less than 5% or more than 6% of a member's earnable compensation. Member contributions as adopted by the Board of Trustees for the fiscal year ended June 30, 2 0 1 1 were 5.53% of annual salary. Employer contributions required for fiscal year 2 0 1 1 were 10.28% of annual salary as required by the June 30, 2009 actuarial valuation.

ABRAHAM BALDWIN AGRICULTURAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2011

EXHIBIT " D

The following table summarizes the Abraham Baldwin Agricultural College contributions by defined benefit plan for the years ending June 30,2011, June 30,2010, and June 30,2009:

Fiscal Year

ERS

Required

Percentage

Contribution Contributed

TRS

Required

Percentage

Contribution Contributed

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. 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 a principal administrator, as designated by the regulations of the Board of Regents. Under the Regents Retirement Plan, a plan participant may purchase annuity contracts from four approved vendors (AIG-VALIC,American Century, 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 Abraham Baldwin Agricultural College makes monthly employer contributions for the Regents Retirement Plan at rates adopted by the Teachers Retirement System of Georgia Board of Trustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2011, the employer contribution was 9.24% for the participating employee's earnable compensation. Employees contribute 5% of their earnable compensation. Amounts attributable to all plan contributions are fully vested and nonforfeitable at all times.
Abraham Baldwin Agricultural College and the covered employees made the required contributions of
$262,582 (9.24%) and $142,090 (5%),respectively.
AIG-VALIC, American Century, Fidelity, and TIM-CREF have separately issued financial reports which may be obtained through their respective corporate offices.
Georgia Defined Contribution Plan
Plan Description Abraham Baldwin Agricultural College participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employerdefined contribution plan established by the General Assembly of Georgia for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia.

ABRAHAM BALDWIN AGRICULTURAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2011

EXHIBIT "DM

Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board of Trustees. If a member has less than $3,500 credited to his/her account, the Board of Trustees has the option of requiring a lump sum distribution to the member in lieu of making periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute.
Contributions Member contributions are seven and onehalf percent (7.5%) of gross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member.
Total contributions made by employees during fiscal year 2 0 1 1 amounted to $56,306 which represents 7.5% of covered payroll. These contributions met the requirements of the plan.
The Georgia Defined Contribution Plan issues a financial report each fiscal year, which may be obtained from the ERS offices.
Note 12. Risk Management
The University System of Georgia offers its employees and retirees access to three different selfinsured healthcare plan options. A PPO/PPO Consumer healthcare plan was offered for the entire reporting period, and effective 01/01/2011, a HSA/High Deductible PPO and a HMO are also offered on a self-insured basis. The HSA/High Deductible PPO and HMO were previously insured through Blue Cross Blue Shield of Georgia. Abraham Baldwin Agricultural College and participating employees and retirees pay premiums to either of the self-insured healthcare plan options to access benefits coverage. The respective self-insured healthcare plan options are included in the financial statements of the Board of Regents of the University System of Georgia - University System Office. All units of the University System of Georgia share the risk of loss for claims associated with these plans. The reserves for these plans are considered to be a self-sustaining risk fund. The Board of Regents has contracted with Blue Cross Blue Shield of Georgia, a wholly owned subsidiary of Wellpoint, to serve as the claims administrator for the self-insured healthcare plan products. In addition to the self-insured healthcare plan options offered to the employees of the University System of Georgia, a fully insured HMO healthcare plan option is also offered to System employees through Kaiser.
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. Abraham Baldwin Agricultural College, as an organizational unit of the Board of Regents of the University System of Georgia, 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.

ABRAHAM BALDWIN AGRICULTURAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2011

EXHIBIT "D"

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 Official Code of Georgia Annotated Section 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 13. Contingendes
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 Abraham Baldwin Agricultural College expects such amounts, if any, to be immaterial to its overall financial position.
Litigation, claims and assessments filed against Abraham Baldwin Agricultural College (an organizational unit of the Board of Regents of the University System of Georgia), 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 ComprehensiveAnnual Financial Report for the fiscal year ended June 30, 2011.
Note 14. Post-EmploymentBenefits Other ThanPension Benefits
Pursuant to the general powers conferred by the Official Code of Georgia Annotated Section 20-3-31, the Board of Regents of the University System of Georgia has established group health and life insurance programs for regular employees of the University System of Georgia. It is the policy of the Board of Regents to permit employees of the University System of Georgia eligible for retirement or that become permanently and totally disabled to continue as members of the group health and life insurance programs. The policies of the Board of Regents of the University System of Georgia define and delineate who is eligible for these post-employment health and life insurance benefits. Organizational units of the Board of Regents of the University System of Georgia pay the employer portion for group insurance for affected individuals. With regard to life insurance, the employer covers the total 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 employee.
The Board of Regents Retiree Health Benefit Plan is a single employer defined benefit plan. Financial statements and required supplementary information for the Plan are included in the publicly available Consolidated Annual Financial Report of the UniversitySystem of Georgia. The College pays the employer portion of health insurance for its eligible retirees based on rates that are established annually by the Board of Regents for the upcoming plan year. For the 2010 and 2 0 1 1 plan years, the employer rate was between 70-75% of the total health insurance cost for eligible retirees and the retiree rate was between 25-30%.
As of June 30, 2011, there were 172 employees who had retired or were disabled that were receiving these post-employment health and life insurance benefits. For the year ended June 30. 2011, Abraham Baldwin Agricultural College recognized as incurred $746,721 of expenditures, which was net of $400,548 of participant contributions.

ABRAHAM BALDWIN AGRICULTURAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2011

Note 15. Natural Classifications with Funciional Clasifications The College's operating expenses by functional classification for fiscal year 2011are shown below:

Functional Classification

Natural Classification

Instruction

Public Service

Academic Support

Student Services

Institutional Support

Salaries Faculty Staff
Employee Benefits Other Personal Serv~ces Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation

Total Operating Expenses

Natural Classification
Salaries Faculty Staff
Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation
Total Operating Expenses

Plant Operations and
Maintenance

Functional Classification

Scholarships

and

Auxiliary

Fellowships

Enterprises

Total Operating Expenses

Note 16. Afl5/ated Owanization
In accordance with GASB Statement No. 39, Determining WheNer Certain Organtiations are Component UniB, the Abraham Baldwin Agricultural College Foundation, Inc., has been determined to be a legally separate, tax exempt organization whose activities primarily support Abraham Baldwin Agricultural College, a unit of the University System of Georgia (an organizational unit of the State of Georgia). The State Accounting Office has determined Component Units of the State of Georgia, as

ABRAHAM BALDWIN AGRICULTURAL COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011

EXHIBIT "D"

required by GAS6 Statement No. 39, should be assessed in relation to their significance to the State of Georgia. Accordingly, Abraham Baldwin Agricultural College has not included financial activity for Abraham Baldwin Agricultural College Foundation, Inc., in these financial statements.

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SUPPLEMENTARY INFORMATION

ABRAHAM BALDWIN AGRICULTURAL COLLEGE BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND JUNE 30,2011
ASSETS
Cash and Cash Equivalents Accounts Receivable
Federal Financial Assistance Other Prepaid Expenditures Other Assets
Total Assets
LIABILITIES AND FUND EOUITY
Liabilities Accrued Payroll Encumbrances Payable Accounts Payable Deferred Revenue Other Liabilities
Total Liabilities
Fund Balances Reserved Department Sales and Services Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over Unreserved Surplus
Total Fund Balances
Total Liabilities and Fund Balances

SCHEDULE "1"

Actual amounts were prepared on a prescribed basis of accountingthat demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles.
-24-

ABRAHAM BALDWIN AGRICULTURAL COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GAAP BASIS)
BUDGET FUND YEAR ENDED JUNE 3 0 , 2 0 1 1

REVENUES
State Appropriation State General Funds
Other Funds
Total Revenues
ADJUSTMENTS AND PROGRAM TRANSFERS CARRYWFR FROM PRIOR YEARS
Transfers from Reserved Fund Balance Total FundsAvailable
Spec~aFl unding Initiative Teaching
Total Exaenditures Excess of Funds Available over Expenditures FUND BALANCE JULY i
Reserved Unrese~ed
ADJUSTMENTS
Prior Year Receivables/Revenues UnreservedFund Balance (Surplus)Returned
to Board of Regents - Unlverstty System Office
Year Ended June 30,2010 Prior Year Reserved Fund Balance Included iv Funds Ava~lable FUND BALANCFJUNE BQ
SUMMARY OF FUND BALANCE
Reserved Department Sales and Serv~ces Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuibon Carr~Ouer
Total Reserved
Unreserved Surplus
Total Fund Balance

BUDGET

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulat~onsof the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accountingprinc~ples.

ACTUAL

SCHEDULE "2"
VARIANCE -
FAVORABLE (UNFAVORABLE)

ABRAHAM BALDWIN AGRICULTURAL COLLEGE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE
(NONGAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30.2011

Special Funding Initiative State Appropr~at~on State General Funds
Teaching State Appropriation State General Funds Federal Funds Amerlcan Recovery and Reinvestment Act of 2009 Federal Stabilization Funds Other Funds
Total Teach~ng
Total OperattngActlv~ty

Original Ap~r~priatl~n

Amended Appropriation

Flnal Budget

current year Revenues

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 comprehensive basis of accounting other than generally accepted accounting principles.

SCHEDULE "3"

Funds Available Compared to Budget

Prior Year

Adjustments and

Total

Carry-Over

Program Transfers Funds Available

Variance Positive (Negative)

ExpendituresComparedto Budget

Variance

Actual

Pos~tive(Negative)

Excess (Deficiency) of Funds Available
Over/(Under) Expenditures

ABRAHAM BALDWIN AGRICULTURAL COLLEGE STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE
(NON-GAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30,2011

Special FundingInitiative State Appropriation State General Funds
Teaching State Appropriation State General Funds Federal Funds Arner~canRecoveryand Re~nvestmenAt ct of 2009 Federal Stabilization Funds Other Funds
Total Teachlng
Total Operating Actlvity
Prior Year R ~ s ~ N ~ s Not Available for Expenditure Uncollectible Accounts Receivable

Beglnnlng Fund Balance/(Deticit)
July 1

Fund Balance Carried Over from
Prior Period as Funds Available

Return of Fiscal Year 2010
Surplus

Prior Period Adjustments

Budget Unit Totals

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance wlth budgetarystatutes and regulations of the State of Georgia. which is a comprehensive basis of accounting other than generally accepted accounting prlnclples.
-28-

SCHEDULE "4"

Other Adjustments

Early Return Flscal Year 2011
Surplus

Excess (Defic~ency) of Funds Ava~lable
Over/(Under) Expend~tures

Endlng Fund Balance/(Def~c~t)
June 30

Analys~sof Endlng Fund Balance

Reserved

Surplus/(Dehc~t)

Total

Summary of EndingFund Balance Rese~ed
Department Sales and Sewlces lnd~recCt ost Recoveries Technology Fees Restr~cted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over UnreseNed Surnlus
Total Ending Fund Balance -June 30

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ABRAHAM BALDWIN AGRICULTURAL COLLEGE RECONCILIATION OF SALARIES AND TRAVEL YEAR ENDEDJUNE 30.2011

SCHEDULE "5"

Totals per Annual Supplement

Accruals June 30.2011 June 30.2010

Compensated Absences June 30.2011 June 30.2010

Adjustments

Shared Services on Jointly Staffed Personnel

Armstrong Atlantic State University

Martin,

Vicki

Georgia Southwestern State University

Ellis.

Diantha

Fandel,

Shelley

Murie.

Shawn

Long.

Colette

Kennesaw State University

Dalton,

Susan

Njoroge.

Jospeh

University of Georgia Beasley, Dennis. Diffie. Elad, Hawkins,

John Tamara Stan Renata Gary

Universityof West Georgia

Brown,

Joseph

Campbell.

Erin

Carpenter.

Robert

Cook.

Ronnie

Foote,

Paul

Gunnels,

Bridgette

Hall,

Cynthia

Perry.

Keith

Reddick,

Niles

Reynolds.

Billy

Riven.

Jewrell

Vasileiou.

Luke

Valdosta State University

Chason.

Mike

Kent.

Janet D.

Morgan,

Brenda

Rivers,

Jewrell

Williams,

Amy

Unidentified Variance

SALARIES

$

13,730,809 $

TRAVEL 246,089

SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

ABRAHAM BALDWIN AGRICULTURAL COLLEGE AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30,2011

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER

AUDITEEIS RESPONSVSTATUS

SEE AUDITORS COMMENTS

FS-557-09-0 1

Previously Reported Corrective Action Implemented

FS-557-09-02

Further Action Not Warranted

(1)

FS-557-10-01

Further Action Not Warranted

(1)

FS-557-10-02

Further Action Not Warranted

(1)

AUDITORS COMMENTS

(1) Findings/internal control deficiencies of this nature, that are not deemed significant deficiencies or material weaknesses and do not require reporting in the audit report in accordance with Statemens on Auditing Standards (SAS) 115, will be
communicated in a management letter.

PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS

No matters were reported.

SECTION Ill CURRENT YEAR FINDINGS AND QUESTIONEDCOSTS

ABRAHAM BALDWIN AGRICULTURAL COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30,2011
FINANCIAL STATEMENT FINDINGS AND OUESTlONED COSTS No matters were reported. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.