DARTON COLLEGE ALBANY, GEORGIA INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED- UPON PROCEDURES FOR FISCAL YEAR ENDED JUNE 30,2010 DARTON COLLEGE - TABLE OF CONTENTS - INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES EXHIBITS A SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT B STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING SOURCE COMPARED TO BUDGET RUSSELLW. HINTON STATE AUDITOR (404) 656-2174 DEPARTMEONFTAUDITASND ACCOUNTS 270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 November 30, 2010 Members of the State Board of Regents of the University System of Georgia Honorable Peter J. Sireno, President Darton College Independent Accountant's R e ~ 0 rotn ADDIY~A~gRreed-Upon Procedures Ladies and Gentlemen: We have performed the procedures enumerated below, which were agreed to by the College and the University System Office (Oversight Unit) of the Board of Regents of the University System of Georgia, solely to assist you in assessing the accuracy of the financial information reported to the University System Office in the College's 2010 Annual Financial Report for inclusion in the University System of Georgia's Annual Fliancial Report, the State of Georgia's ComprehensiveAnnual Financial Report (G4FR) and Single Audit Report; and to assist you in assessing the accuracy of the budget basis information provided in the Summary Budget Comparlon and Surplus Analysis Report and Sbtement of Program Revenues and Expenditures by Funding Source Compared to Budget which are attached as Exhibits A and B, respectively. Darton College's management is responsible for the financial information reported to the University System Office in the College's Annual Financial Report. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures and the associated findings are as follows: 1. Review selected balance sheet items reported on the Annual Financial Report (cash, accounts receivable, accounts payable, deferred revenues, net assets). Confirm that these items have adequate supporting documentation and are properly reconciled to the College's general ledger. We did not note any exceptions as a result of our procedures. 2. Obtain the College's GAAP basis Statement of Net Assets and Statement of Revenues Expenses and Changes in Net Assets (SRECNA) submitted for inclusion in the State's CAFR and Single Audit. Utilizing test scripts, confirm that financial information presented in these statements properlysupports activity reported in the College's accounting records. We did not note any exceptions as a result of our procedures. 3. Obtain the College's Statement of Cash Flows submitted for inclusion in the State's CAFR and Single Audit. Utilizing cash flow worksheets, confirm information reported on Statement of Cash Flows. We did not note any exceptions as a result of our procedures. 4. Obtain the College's Notes to the Financial Statements submitted for inclusion in the State's CAFR and Single Audit. Utilizing notes worksheets and other supporting documentation confirm that note disclosures related to Cash, Investments, Accounts Receivable, Capital Assets, LongTerm Debt, Lease Obligations and Retirement Plans have been properly reported. We did not note any exceptions as a result of our procedures. 5. Review the College's year end GAAP basis journal entries. Obtain documentation for GAAP journal entries and confirm that the entries were posted to the College's Annual Financial Report. Year end GAAP entries to record non-capitalized gifts from the Georgia State Financing and Investment Commission (GSFIC) were not made correctly. GSFIC gift revenues of $34,695.74 were recorded as Capital Grants and Contracts - State on the SRECNA instead of Gifts - State as required for correct presentation. This activity was also improperly reported on the Statement of Cash Flows where GSFIC gift revenues were reported as part of Cash Flows from Capital and Related Financing Activities instead of as Cash Flowsfrom Noncapital FinancingActivities. 6. Confirm that State Appropriation revenues, receivables and remittances of prior year surplus balances have been properly recorded in the College's financial records. Prior year surplus balances should be netted against State Appropriation revenues in the GAAP basis financial statements; however, prior year surplus balances should be reflected as fund balance adjustments on the Budget basis financial statements. We did not note any exceptions as a result of our procedures. 7. Obtain listing of write-off requests for accounts receivable less than $3,000.00 for fiscal year 2010. Confirm that these write-off requests have been approved by the State Accounting Officer and have been posted to the College's financial statements. We did not note any exceptions as a result of our procedures. 8. Verify that the listing of salaries, travel, and professional services reported to the Department of Audits is in accordance with O.C.G.A. 50-6-27 and reconciles to amounts recorded in the College's financial statements. We did not note any exceptions as a result of our procedures. 9. Review year end Budgetary Statements including the Summary Budget Comparison and Surplus Anahsis Repod (Exhibit A) and Statement of Program Revenues and Expenditures by Funding Source Compared to Budget (Exhibit B). Confirm that budget information presented in these statements supports activity reported in the College's accounting records and determine if any budget overexpenditures exist. We did not note any exceptions as a result of our procedures. 10. Obtain documentation for Budget basis reserves reported by Darton College on the Summay Budget Comparison andSurplusAnalysis Report(Exhibit A). Confirm that the reserves are properly documented, valid and appropriate. The College's reserves for technology fees, tuition carry-over and surplus were improperly calculated. Reserves Reported Amount Actual Amount Variance Technology Fees Tuition Carry-Over Surplus $ 16,090.56 $ 5,068.56 $ -11,022.00 $ 7.645.28 $ 7.833.46 $ 188.18 $ 2,092.27 $ 12,926.09 $ 10,833.82 The exceptions noted above were corrected on the Budget Basis financial statements. 11.Review the H.O.P.E. Scholarship Program reconciliation between the College and the Georgia Student Finance Commission. Confirm that information reported to the Georgia Student Finance Commission has been reconciled with H.O.P.E. Scholarship activity reported on the College's financial records. We did not note any exceptions as a result of our procedures. 12. Review the Schedule of Expenditures of Federal Awards information submitted by the College for inclusion in the Statewide Single Audit. Confirm that the information is properly presented and supported by the College's accounting records. We did not note any exceptions as a result of our procedures. 13. Review capital asset records to ensure that (1)subsidiary ledgers are appropriately reconciled to the ledgers, (2) capitalization thresholds are being properly followed, and (3) a complete annual physical equipment inventory is being conducted and that issues noted during the physical inventory are being properly addressed by management. We did not note any exceptions as a result of our procedures. 14. Review bank reconciliations during the year under review to ensure that management is preparing them timely and that reconciling items are being addressed by management timely and in an appropriate manner. The payroll bank account was not reconciled timely to the accounting records for eight out of twelve months. 15. Review documentation to ensure that all subsidiary modules including BANNER are reconciled to the general ledger at least quarterly in accordance with the Business Procedures Manual Section 10.6.2. and ensure that reconciling items are adequately explained and resolved in a timely manner. We did not note any exceptions as a result of our procedures. These agreed-upon procedures do not constitute an audit of the financial statements or any part thereof, the objective of which is to express an opinion on the financial statements or a part thereof. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of the specified users listed above and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, G&lxrL9 - d ~ Rus eH W. Hinton, CPA, CGFM ~ t a f Aeuditor EXHIBITS DARTON COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT YEAR ENDEDJUNE 30,2010 REVENUES state Approprlatlon State General Funds Federal Funds Other Funds Total Revenues CARRY-OVER FROM PRIOR YEAR Transfer from Resewed Fund Balance Total Funds Avallable EXPENDITURES Teaching Excess of Funds Avallable over Expend~tures FUND BALANCE JULY l Reserved Unreserved ADJUSTMENTS Pr~oYr ear Payables/Expenditures Prior Year Receivables/Revenues Unreserved Fund Balance (Surplus) Returned to Board of Regents- Unlverslty System Offlce Year EndedJune 30.2009 Early Reminance of Surplus in Current Fiscal Year Prior Year Reserved Fund Balance Included In Funds Available FUND BALANCE JUNE 3 0 SUMMARY OF FUND BALANCE Resewed Department Sales and Servlces Ind~recCt ost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over lnventorles Total Reserved Unreserved Surplus Total Fund Balance BUDGET ACTUAL VARIANCE FAVORABLE (UNFAVORABLE) Spac~aFl unding lnluatlva State Apprapnatlon State General Funds DARTON COLLEGE STATEMENT OF PROGRAM REVENUESAND EXPENDITURESBY FUNDING SOURCECOMPAREDTO BUDGEl YUR ENDED JUNE 30,2010 Orlg~nal Appropr~atlon Flnal Budget CurrentYear Revenuer Funds Available Compared t o Budget Prlor Year carryover To-1 Funds Available v*r,ancc PosltlVe (Negat~ve) Teaching State Appropnatlon State General Funds Federal Funds Amencan Recovery and Re~nvestmenAt m of 2009 Federal Stab~l~zatmFnunds Other Federal Funds Other Funds Total Toachlng Grand Tomlo .All Programs Expendtures Compared to Budget var~ance Actual POSICY~ (Negsllva) Actual ~unas~vallable Over/(Underl Expenditures Prlor Permod Adjustments Other Ad)usrrnents Early Remittance ofsurplus Program Fund Balamss Transfers Program Fund Balances Reserve Surplus Taal Fund Balance Unexpendable Rararves Uncollenlble Accounts RecclvaMc Inventor#es