Darton College, Albany, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2009

DARTON COLLEGE
ALBANY, GEORGIA
REPORT ON AUDIT OF THE FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED
JUNE 30,2009

DARTON COLLEGE
- TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

1

BASIC FINANCIAL STATEMENTS

EXHIBITS

A STATEMENT OF NET ASSETS

2

B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS

3

C STATEMENT OF CASH FLOWS

5

D NOTES TO THE FINANCIAL STATEMENTS

6

SUPPLEMENTARY INFORMATTON

SCHEDULES

1 BALANCE SHEET WON-GAAP BASIS) BUDGET FUND

24

2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT

WON-GAAP BASIS) BUDGET FUND

2 5

3 STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING

SOURCE COMPARED TO BUDGET

(NON-GAAP BASIS) BUDGET FUND

26

4 RECONCILIATION OF SALARIES AND TRAVEL

29

SECTION I1 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 1-156 Atlanta, Georgia 30334-8400
November 16,2009

Honorable Sonny Perdue, Governor Members of the General Assembly of Georgia Members of the Board of Regents of the University System of Georgia
and Honorable Peter J. Sireno, President Darton 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 Darton College, an organizational unit of the State of Georgia, as of and for the year ended June 30,2009. These financial statements are the responsibility of the Darton 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 Darton 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 Darton 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 statementsreferred to above present fairly, in all material respects, the financialposition of Darton College as of June 30,2009, and its changes in financialposition 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 Darton College taken as a whole. The accompanying supplementary information (Schedules 1 through 4) 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 $ s e lWl . Hinton, CPA, CGFM State Auditor

REQUIRED SUPPLEMENTARY INFORMATION

DARTON COLLEGE
Management's Discussion and Analysis

Introduction

Darton College is one of the 35 institutions of higher education of the University System of Georgia. The College, located in Albany, Georgia, was founded in 1963 and has become known for its state-of-the-art technology and allied health programs. The College offers associates degrees in a wide variety of subjects. This wide range of educational opportunities attracts a highly qualified faculty and a student body of approximately 5,000 students each year. The institution continues to grow as shown by the comparison numbers that follow.

Students Faculty {Headcount)

Students (FTE)

Fiscal Year 2009

142

5,019

Fiscal Year 2008

147

4,760

Fiscal Year 2007

143

4,679

3,697 3,438 3,357

Overview of the Financial Statements and Financial Analysis

Darton College is proud to present its financial statements for fiscal year 2009. 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, Expenses and 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 2009 and fiscal year 2008.

Stutement of 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 Darton College. The Statement of Net Assets presents end-of-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 two 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 final category is unrestricted net assets. Unrestricted net assets are available to the institution for any lawhl purpose of the institution.

Statement of Net Assets, Condensed

June 30.2009

June 30,2008

Assets Current Assets Capital Assets, Net

Total Assets

$ 42.863.263

$ 40,970,810

Liabilities Current Liabilities Noncurrent Liabilities

Total Liabilities

$ 4,454,399

$ 3,369,213

Net Assets Invested in Capital Assets, Net of Debt Unrestricted

$ 34,972,619 3,436.245

$ 34,459,181 3,142,416

Total Net Assets

The total assets of the institution increased by $1,892,453. A review of the Statement of Net Assets will reveal that the increase was primarily due to an increase of $1,068,837 in the Receivables Category. There was also an increase of $363,798 in Capital Assets, Net.

The total liabilities for the year increased by $1,085,186. The combination of the increase in total assets of $1,892,453 and the increase in total liabilities of $1,085,186 yields an increase in total net assets of $807,267. The increase in total net assets is primarily in the category of Invested in Capital Assets, Net of Debt, in the amount of $5 13,438.

Statement of Revenues, Expenses and Changes in Net Assets

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 30,2009
Operating Revenues Operating Expenses
Operating Loss Nonoperating Revenues and Expenses Income (Loss) Before Other Revenues,
Expenses, Gains or Losses Other Revenues, Expenses, Gains or Losses Increase (Decrease) in Net Assets Net Assets at Beginning of Year Net Assets at End of Year

June 30,2008

The Statement of Revenues, Expenses and Changes in Net Assets reflect 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 30,2009 and June 30,2008

June 30,2009

June 30,2008

Operating Revenue Tuition and Fees Grants and Contracts Sales and Services of Educational Departments Auxiliary Other

Total Operating Revenue

Nonoperating Revenue State Appropriations Grants and Contracts Gifts Investment Income

Total Nonoperating Revenue

Capital Grants and Gifts State Other

Total Capital Grants and Gifts

Total Revenues

Expenses (By Functional Classification) For The Years Ended June 30,2009 and June 30,2008

June 30.2009

June 30,2008

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

Total Operating Expenses

$ 36,798,756

$ 35,676,766

Nonoperating Expenses Interest Expense (Capital Assets)

22,344

30,587

Total Expenses

Operating revenues decreased by $5,383,952 in fiscal year 2009. This decrease was caused by the transfer of Federal Pell grant revenue from operating to nonoperating revenue. Tuition and Fees included a 33% increase which primarily consisted of the $100 increase per semester in the Student Activity Fee to fund the Student Center Expansion.

The Auxiliary revenue decrease of $653,708 is a result of the termination of the Bookstore operation. The College has outsourced this function to a third party provider.

Nonoperating revenues increased by $6,028,427 for the year primarily due to shifting the Federal Pell and other Federal grants from operating to nonoperating revenue. This amount excludes the change in annual interest expense. In the nonoperating revenue category, state appropriation revenue was reduced $1,755,260 due to state mandated budget cuts.

The compensation and employee benefits category increased by $969,520 and primarily affected the Instruction, Academic Support, and Student Services categories. The increase reflects the addition of numerous part time faculty members, merit increases and an increased cost of health insurance for the employees of the institution.

Utilities increased by $48,065 during the past year. The increase was primarily associated with the increased electricity rates paid by the College during fiscal year 2009. The increased cost affected the Plant Operations and Maintenance category.

Statement of Cash Flows

The final statement presented by the Darton 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 30,2009 and 2008, Condensed

June 30,2009

June 30,2008

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

$ -22,39 1,992 23,501,878 -587,734 72,138

$ - 15,866,971
17,376,164 - 1,262,746
104,872

Net Change in Cash Cash, Beginning of Year

Cash, End of Year

$ 4.791,192

$ 4,196,902

Capital Assets

The College had one significant capital asset addition for facilities in fiscal year 2009. The Academic Services Building was completed and added to the Asset Management System this year.

Darton College also has a new Nursing and Health Sciences Building under construction, and this building should be completed in fiscal year 2010. The College is managing the construction for this project and is being reimbursed by Georgia State Financing and Investment Commission for the construction expenditures. Most of the balance in Construction Work in Process is attributed to this project. When completed, this building will cost over $4,000,000.

For additional information concerning Capital Assets, see Notes 1, 5, 7 and 9 in the Notes to the Financial Statements.

Long- Term Liabilities
Darton College had Long-Term Liabilities of $1,157,887 of which $585,348 was reflected as current liability at June 30, 2009,
For additional information concerning Long-Tenn Liabilities, see Notes 1 and 7 in the Notes to the Financial Statements,
Economic Outlook
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 state mandated budget cut of $1,755,260, 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.
Peter J. Sireno, President Darton College

BASIC FINANCIAL STATEMENTS

DARTON COLLEGE STATEMENT OF NET ASSETS
JUNE 30.2009
ASSETS
Current Assets Cash and Cash Equivalents Accounts Receivable, Net (Note 3) Federal Financial Assistance Other Inventories (Note 4)
Total Current Assets
Noncurrent Assets Capital Assets, Net (Note 5)
Total Assets
LIABILITIES
Current Liabilities Accounts Payable Salaries Payable Deferred Revenue (Note 6) Deposits Held for Other Organizations Lease Purchase Obligations Compensated Absences
Total Current Liabilities
Noncurrent Liabilities Lease Purchase Obligations Deferred Revenue Compensated Absences
Total Noncurrent Liabilities
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Unrestricted
Total Net Assets

EXHIBIT " A

The notes to the financial statements are an integral part of this statement -2-

DARTON COLLEGE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
YEAR ENDED JUNE 30.2009
OPERATING REVENUES
Student Tuition and Fees Less: Scholarship Allowances
Grants and Contracts Federal State Other
Sales and Services of Educational Departments Rents and Royalties Auxiliary Enterprises
Bookstore Food 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 lncorne (Loss)
NONOPERATING REVENUES (EXPENSES)
State Appropriations Federal Stimulus Stabilization Grants and Contracts
Federal Gifts lnterest and Other Investment Income Interest Expense
Net Nonoperating Revenues
Income (Loss) Before Other Revenues, Expenses, Gains, or Losses
Capital Grants and Gifts State Other
Total Other Revenues, Expenses, Gains or Losses
Increase (Decrease) in Net Assets
Net Assets - Beginning of Year
Net Assets - End of Year
The notes to the financial statements are an integral part of this statement.

EXHIBIT " 0

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DARTON COLLEGE STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30.2009
CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Grants and Contracts Sales and Services of Educational Departments Payments to Suppliers Payments to Employees Payments for Scholarships and Fellowships Auxiliary Enterprise Charges: Bookstore Food Services IntercollegiateAthletics Other Organizations Other Receipts (Payments)
Net Cash Provided (Used) by Operating Activities
CASH FLOWS FROM NONCAPITAL FINANCINGACTIVITIES State Appropriations Agency Funds Transactions Gifts and Grants Received for Other than Capital Purposes
Net Cash Flows Provided (Used) by Noncapital Financing Activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Grants and Gifts Received Purchases of Capital Assets Principal Paid on Capital Debt and Leases InterestPaid on Capital Debt and Leases
Net Cash Provided (Used) by Capital and Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES Interest on Investments
Net Increase (Decrease) in Cash
Cash and Cash Equivalents - Beginning of Year
Cash and Cash Equivalents - End of Year
RECONClLlATiON OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating Income (Loss) Adjustments to Reconcile Operating Income to Net Cash
Provided (Used) by Operating Activities Depreciation Change in Assets and Liabilities: Accounts Receivable, Net Inventories Accounts Payable Deferred Revenue Other Liabilities Compensated Absences
Net Cash Provided (Used) by Operating Activities
The notes to the financial statements are an integral part of this statement.
- 5-

EXHIBIT "C"

DARTON COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2009

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS Darton 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 Darton 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 Darton 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. Darton College does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Darton 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 2 100 of the Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial report in^ 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 15 for additional information.
FINANCIAL STATEMENT PRESENTATION In June 1999, the GASB issued Statement No. 34, Basic Financial Statements and Management Discussion and Analysis for State and Local Governments. This was followed in November 1999 by GASB Statement No. 35, Basic Financial Statements and Management's Discussion and Analysis for Public Colleges and Universities. The State of Georgia implemented GASB Statement No. 34 as of and for the year ended June 30, 2002. As an organizational unit of the State of Georgia, the College was also required to adopt GASB Statements No. 34 and No. 35 as amended by GASB Statements No. 37 and No. 38. 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, cash flows, and replaces the h n d group perspective previously required.

DARTON COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2009

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FINANCIAL STATEMENT PRESENTATION 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 to 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.
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 sewices 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 Consumable supplies are carried at cost using the weighted average method.
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 is computed using the straight-line method over the estimated usehl lives of the assets, generally 40 to 60 years for buildings, 20 to 25 years for infrastructure and land

DARTON COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2009

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL ASSETS 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 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 projects managed by GSFIC, the 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, 2009, GSFIC did not transfer any capital additions to Darton College.
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 received from grant and contract sponsors that have not yet been earned.
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 Statements of Revenues, Expenses and Changes in Net Assets. Darton College had accrued liability for compensated absences in the amount of $819,229 as of July 1, 2008. For fiscal year 2009, $628,334 was earned in compensated absences and employees were paid $601,301, for a net increase of $27,033. The ending balance as of June 30, 2009 in accrued liability for compensated absences was $846,262.
NONCURRENT LIABILITIES Noncurrent liabilities include (1) liabilities that will not be paid within the next fiscal year; (2) capital 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 noncurrent assets.

DARTON COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2009

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 GSFIC as discussed previously in Note 1 - Capital
Assets section.

Unrestricted net assets: 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 $108,864.18. 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 Treasury and Fiscal Services. These resources also include auxiliary enterprises, which are substantially self-supporting activities that provide services for students, faculty and staff.

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

R & R Reserve Reserve for Encumbrances Reserve for Inventory Other Unrestricted

Total Unrestricted Net Assets

$ 3.436.245

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 Darton College, as a political subdivision of the State of Georgia, is excluded from Federal income taxes under Section 1 15(1) of the Internal Revenue Code, as amended.

CLASSIFICATION OF REVENUES The College has classified its revenues as either operating or nonoperating revenues in the Statement of Revenues, Expenses and Changes in Net Assets according to the following criteria:

DARTON COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2009

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CLASSIFICATION OF REVENUES Operating revenues: Operating revenues include activities that have the characteristics of exchange transactions, such as ( I ) student tuition and fees, net of scholarship allowances, (2) sales and services of auxiliary enterprises, net of scholarship allowances, and (3) Federal, state and local grants and contracts and Federal appropriations.
Nonopevating revenues: Nonoperating revenues include activities that have the characteristics of nonexchange transactions, such as gifts and contributions, and other revenue sources that are defined as nonoperating revenues by GASB No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting, and GASB No. 34, such as state appropriations and investment income.
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 Pel1 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.

DARTON COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2009

EXHIBIT "D"

NOTE 2: DEPOSITS
DEPOSITS 4. Industrial revenue bonds and bonds of development authorities created by the laws of the
State of Georgia.
5 . Bonds, bills, certificates of indebtedness, notes or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association and the Federal National Mortgage Association,
6. 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, 2009, the carrying value of deposits was $4,783,092 and the bank balance was $5,109,940. Of the College's deposits, $4,510,225 was uninsured. Of these uninsured deposits, $4,334,745 were collateralized with securities held by the pledging financial institution's trust department or agent and $175,480 were uncollateralized.
NOTE 3: ACCOUNTS RECEIVABLE
Accounts receivable consisted of the following at June 30,2009.
Student Tuition and Fees Auxiliary Enterprises and Other Operating Activities Federal Financial Assistance Other
Less Allowance for Doubtful Accounts
Net Accounts Receivable
NOTE 4: INVENTORIES
Inventories consisted of the following at June 30,2009:
Other

DARTON COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2009

EXHIBIT "D"

NOTE 5: CAPITAL ASSETS

Following are the changes in capital assets for the year ended June 30,2009:

Capital Assets, Not Being Depreciated: Land Construction Work-In-Progress
Total Capital Assets Not Being Depreciated
Capital Assets, Being Depreciated: Building and Building Improvements Facilities and Other Improvements Equipment Capital Leases Library Collections
Total Assets Being Depreciated
Less: Accumulated Depreciation: Building and Building Improvements Facilities and Other Improvements Equipment Capital Leases Library Collections
Total Accumulated Depreciation
Total Capital Assets, Being Depreciated, Net
Capital Assets, Net

Beginning
Balance July I . 2008

Additions

Reductions

$ 989,113 7.146.149 $ 1.674.741 $ 6.632.622

$ 8,135,262 $ 1,674,741 $ 6.632.622

$ 34,527,282 $ 6,65 1,914

1,537,473

3,861,917

213,549

963,811

3,287.8 14

99,186 $

$ 44,178.297 $ 6.964.649 $

3.262 3.262

$ 10,139,628 $ 1,137,l 19 2,769,469 528,026 2.818.871
$ 17,393,113 $

1,028,963 59,74 1 309,553 149,412 95.301 $
1.642,970 $

3,262 3.262

$ 26,785.184 $ 5,321.679 $

0

$ 34920,446 $6.996_420 $ 6432,622

Ending Balance June 30.2009
$ 989,113 2.188.268
$ 3,177,381
$ 41,179,196 1,537,473 4,075,466 963,811 3,383,738
$ 51,139.684
$ 11,168,591 1,I 96,860 3,079,022 677,438 2,910,910
$ 19.032.821
$ 32,106.863
$ 35.284344

NOTE 6: DEFERRED REVENUE

Current deferred revenue consisted of the following at June 30, 2009:

Other Deferred Revenue

Long-term deferred revenue totaled $416,667.

NOTE 7: LONG-TERM LIABILITIES

Long-term liability activity for the year ended June 30,2009 was as follows:

DARTON COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2009

EXHIBIT "D"

NOTE 7: LONG-TERM LIABILITIES

Leases Lease Obligations
Other Liabilities Compensated Absences
Total Long-Term Obligations

Beginning Balance Julv 1,2008

Additions

Reductions

Ending Balance June 30.2009

Current Portion

$ 461,265

819,229 $ $ 1,280.494 $

628,334 628,334 $

601,301 750,941

846,262 $ 1,157.887

426.986 $_585.348

NOTE 8: SIGNIFICANT COMMITMENTS

The College had significant unearned, outstanding, construction or renovation contracts executed in the amount of $2,136,563 as of June 30, 2009. This amount is not reflected in the accompanying basic financial statements. The College also has a commitment with Georgia Higher Education Facilities Authority for the construction of an $18 million expansion of the Darton College Student Center. The commitment will be in the form of a capital lease when the construction is finished in 20 10.

NOTE 9: LEASE OBLIGATIONS

Darton College is obligated under various operating leases for the use of equipment, and also is obligated under a capital lease for the acquisition of telephone equipment.

CAPITAL LEASES Expenditures for fiscal year 2009 were $1 7 1,983 of which $22,343 represented interest. Total principal paid on capital leases was $149,640 for the fiscal year ended June 30, 2009. The following is a summary of the carrying values of assets held under capital lease at June 30,2008:

Telephone Equipment

Darton College has one capital lease executed for the purchase of telephone equipment in the amount of $747,060. The lease is financed through Sun Trust Bank and carries an interest rate of 5.68 percent. The term of the lease will extend until June 201 1, and the outstanding liability on this lease at June 30,2009 was $311,625.

OPERATING LEASES Darton College's noncancellable operating leases having remaining terms of more than one year expire in various fiscal years from 2010 through 2012. Certain operating leases provide for renewal options for periods from one to three years at their fair rental value at the time of renewal. All agreements are 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. Operating leases are generally payable on a monthly basis.

DARTON COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2009

EXHIBIT "D"

NOTE 9: LEASE OBLIGATIONS

OPERATING LEASES 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 30,2009, were as follows:

Real Property and Equipment

Capital

Operating

Leases

Leases

Year Ending June 30: 20 10 201 1 2012

Total Minimum Lease Payments

$ 329,631 $ 171,635

Less: Interest

18,006

Principal Outstanding

$ 311,625

Darton College's fiscal year 2009 expense for rental of real property and equipment under operating leases was $150,935.

NOTE 10: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Plan Description Darton College participates in the Teachers Retirement System of Georgia (TRS), a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly. TRS provides retirement allowances and other benefits for plan participants. TRS provides service retirement, disability retirement, and survivor's benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the TRS offices or from the Georgia Department of Audits and Accounts.

Funding Policy Employees of Darton College who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. Darton College makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2009, the employer contribution rate was 9.28% for covered employees. Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

DARTON COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2009

EXHIBIT "D"

NOTE 10: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Funding Policy

Fiscal Year

Percentage Contributed

Required Contribution

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA
Plan Description Darton College participates in the Employees' Retirement System of Georgia (ERS), a singleemployer defined benefit pension plan established by the General Assembly of Georgia for the purpose of providing retirement allowances for employees of the State of Georgia.
The ERS Board of Trustees created the Supplemental Retirement Benefit Plan (SRBP) effective January 1, 1998. The SRBP 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 SRBP is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC 4 15.
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 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 a formula adopted by the Board of Trustees for such purpose. The formula considers the monthly average of the member's highest 24 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

DARTON COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2009

EXHIBIT "D"

NOTE 10: RETIREMENT PLANS

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA

Plan Description 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.

Funding Policy As established by State statute, all full-time employees of the State of Georgia and its political subdivisions, who are not members of other state retirement systems, are eligible to participate in the ERS. Both employer and employee contributions are established by State statute. The College's payroll for the year ended June 30, 2009, for employees covered by ERS was $18,063. The College's total payroll for all employees was $17,162,324.

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, the College pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these 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. The 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 hnding standards as provided by law. These College contributions are not at any time refundable to the member or hisher beneficiary.

Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

Actuarial and Trend Information Actuarial and historical trend information is presented in the ERS June 30, 2009 financial report, which may be obtained through ERS.

DARTON COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2009

EXHIBIT "DM

NOTE 10: RETIREMENT PLANS
REGENTS RETIREMENT PLAN
Plan Description The Regents Retirement Plan, a single-employer defined contribution plan, is an optional retirement plan that was createdlestablished by the Georgia General Assembly in O.C.G.A. 472 1-1 et.seq. and is 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 College 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 Darton 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 2009, the employer contribution was 8.15% for the first six months and 9.24% for the last six months of the participating employee's earnable compensation. Employees contribute 5% of their earnable compensation. Amounts attributable to all plan contributions are hlly vested and nonforfeitable at all times.
Darton College and the covered employees made the required contributions of $328,040 (8.15% or 9.24%) and $188,798 (5%), respectively.
AIG-VALIC, American Century, Fidelity, and TIAA-CREF have separately issued financial reports which may be obtained through their respective corporate offices.
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description Darton College participates in the Georgia Defined Contribution Plan (GDCP) which is a singleemployer defined 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.
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

DARTON COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2009

EXHIBIT "D"

NOTE 10: RETIREMENT PLANS
GEORGIA DEFINED CONTRIBUTION PLAN
Benefits of Trustees. If a member has less than $3,500 credited to histher 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 one-half 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 2009 amounted to $145,753 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 fi-om the ERS offices.
NOTE 11: RISK MANAGEMENT
The University System of Georgia offers its employees and retirees access to two different selfinsured healthcare plan options - a PPOIPPO Consumer healthcare plan, and an indemnity healthcare plan. Darton College and participating employees and retirees pay premiums to either of the self-insured healthcare plan options to access benefits coverage. The respective selfinsured 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 two plans are considered to be a self-sustaining risk fund. Both self-insured healthcare plan options provide a maximum lifetime benefit of $2,000,000 per person. 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 two self-insured healthcare plan products. In addition to the two different self-insured healthcare plan options offered to the employees of the University System of Georgia, a fully insured HSAIHigh Deductible PPO healthcare plan and two hlly insured HMO healthcare plan options are also offered to System employees.
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

DARTON COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2009

EXHIBIT "DM

NOTE 11: RISK MANAGEMENT
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. Darton 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.
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 12: 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 expenditures that are disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although Darton College expects such amounts, if any, to be immaterial to its overall financial position.
Litigation, claims and assessments filed against Darton 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 Comprehensive Annual Financial Report for the fiscal year ended June 30,2009.
NOTE 13: POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
Pursuant to the general powers conferred by the Official Code of Georgia Annotated Section 203-3 1, 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

DARTON COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2009

EXHIBIT "D"

NOTE 13: POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
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, andlor, 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 University System 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 2008 and 2009 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, 2009, there were 95 employees who had retired or were disabled that were receiving these post-employment health and life insurance benefits. For the year ended June 30, 2009, Darton College recognized as incurred $397,193 of expenditures, which was net of $185,244 of participant contributions.
NOTE 14: NATURAL CLASSIFICATIONS WITH FUNCTIONAL CLASSIFICATIONS
The College's operating expenses by functional classification for fiscal year 2009 are shown below:

DARTON COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2009

EXHIBIT "D"

NOTE 14: NATURAL CLASSIFICATIONS WITH FUNCTIONAL CLASSIFICATIONS

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

Instruction

Functional Classification

Public Service

Academic Suuuort

Student Services

Institutional SURDO~~

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 Fellowshius

Auxiliary Enternrises

Total Operating Exvenses

NOTE 15: AFFILIATED ORGANIZATIONS

In accordance with GASB Statement No, 39, Determining Whether Certain Organizations are Component Units, an amendment of GASB Statement No. 14, The Reporting Entity, which became effective for the year ended June 30, 2004, Darton College Foundation is a legally separate, tax exempt organization whose activities primarily support Darton College, a unit of the University System of Georgia (an organizational unit of the State of Georgia). The State Accounting Office determined Component Units of the State of Georgia, as required by GASB Statement No. 39, should not be assessed in relation to its significance to Darton College, but instead based on its significance to the State of Georgia. Accordingly, Darton College has not included financial activity for this affiliated organization in these financial statements.

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SUPPLEMENTARY INFORMATION

DARTON COLLEGE BALANCE SHEET (NON-GAAP BASIS)
BUDGET FUND JUNE 30,2009
ASSETS
Cash and Cash Equivalents Accounts Receivable
Federal Financial Assistance Other Inventories
Total Assets
LIABILITIESAND FUND EQUITY
Liabilities Accrued Payroll Accounts Payable Encumbrances Payable Deferred Revenue
Total Liabilities
Fund Balances Resewed Departmental Sales and Services Indirect Cost Recoveries Technology Fees RestrictedISponsored Funds UncollectibleAccounts Receivable Inventories Tuition Carry-Over Unreserved Surplus
Total Fund Balances
Total Liabilities and Fund Balances

SCHEDULE "1"

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.
- 24 -

DARTON COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GAAP BASIS)
BUDGET FUND YEAR ENDED JUNE 30.2009

SCHEDULE "2"

REVENUES
State Appropriation State General Funds
Federal Funds Other Funds
Total Revenues
CARRY-OVER FROM PRIOR YEAR
Transfer from Resewed Fund Balance
Total Funds Available
EXPENDITURES
Special Funding Initiative Teaching
Total Expenditures
Excess of Funds Available over Expenditures
FUND BALANCE JULY I
Resewed
ADJUSTMENTS
Prior Year PayableslExpenditures Prior Year Rece~vableslRevenues Prior Year Reserved Fund Balance Included in Funds Available
FUND BALANCE JUNE 30

BUDGET

SUMMARY OF FUND BALANCE
Reserved Departmental Sales and Sewices Indirect Cost Recoveries Technology Fees RestrictedlSponsoredFunds UncollectibleAccounts Receivable Inventories Tuition Carry-Over
Total Reserved
Unreserved Surplus

Total Fund Balance
Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georg~aw, hich is a comprehensive basis of accounting other than generally accepted accounting principles.

ACTUAL

VARIANCE -
FAVORABLE (UNFAVORABLE)

DARTON COLLEGE STATEMENT OF PROGRAM REVENUES AND EXPENDITURESBY FUNDINGSOURCE COMPARED TO BUDGET
(NON-GAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30,2009

Special Funding Initiatives
State Appropriation State General Funds

Original Appropriation

Final Budget

Current Year Revenues

Funds Available Compared to Budget

Prior Year Carrv-Over

Total Funds Available

Variance Positive
(Negative)

Teaching State Appropriation State General Funds Federal Funds American Recoveryand ReinvestmentAct of 2009 Federal Stabilization Funds Other Funds
Total Teaching

Grand Totals - A l l Programs

Actual amountswere prepared on a prescribedbasisof accounting that demonstrates compliancew~thbudgetaiystatutes and regulations of the Stateof Georgia,which is a comprehensivebasis of accounting other than generallyaccepted accounting principles.

- 26 -

ExpendauresCompared to Budget

Variance

Positive

Actual

(Negative)

Actual Funds Available
Over/(Under) Exwnditures

Prior Period Adjustments

Other Adjustments

Program Fund
Balances

Transfers

Program Fund Balances

Reserve

Surplus

Total Fund Balance

Unexpendable Reselves UncollectibleAcwunts Receivable Inventories

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DARTON COLLEGE RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30,2009

SCHEDULE "4"

Totals per Annual Supplement
Accruals June 30,2009 June 30.2008
Compensated Absences June 30,2009 June 30,2008
Unidentified Variance

SALARIES

TRAVEL

$ 17,066,311.95 $

122,894.00

SECTION I1 CURRENT YEAR FINDINGS AND QUESTIONED COSTS

DARTON COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30,2009
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. FEDERAL AWARD FINDINGS AND OUESTIONED COSTS No matters were reported.