Darton College, Albany, Georgia, management report for fiscal year ended June 30, 2011

D m T O N COLLEGE
ALBANY, GEORGLA
I MANAGEMENT REPORT FOR FISCAL YEAR ENDED
1JUNE 30,2011 A Member Institution of the University System of Georgia
1 Georgia Department Audits and Accounts Russell w.Hinton
L State Auditor

OARTON COLLEGE - TABLE OF CONTENTS -

SECTION I

FINANCIAL

LETTER OF TRANSMITTAL

SELECTED FINANCIAL INFORMATION

EXHIBITS

A STATEMENT OF NET ASSETS - (GAAP BASIS)

B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS (GAAP BASIS)

C STATEMENT OF CASH FLOWS - (GAAP BASIS)

D SELECTED FINANCIAL NOTES

SUPPLEMENTARY INFORMATION

SCHEDULES

1 BALANCE SHEET - (STATUTORY BASIS) BUDGET FUND

18

2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT

(STATUTORY BASIS) BUDGET FUND

19

3 STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET

BY PROGRAM AND FUNDING SOURCE

(STATUTORY BASIS) BUDGET FUND

20

4 STATEMENT OF CHANGES TO FUND BALANCE

BY PROGRAM AND FUNDING SOURCE

(STATUTORY BASIS) BUDGET FUND

2 2

5 RECONCILIATION OF SALARIES AND TRAVEL

2 5

SECTION II FINDINGS, QUESTIONED COSTS AND OTHER ITEMS SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS

SECTION I FINANCIAL

Russell W. Hinton
STATE AUDITOR
(404) 666-2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
November 18,2011

Honorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the State Board of Regentsof the University System of Georgia
and Honorable Peter J. Sireno, President Darton College

Ladies and Gentlemen:

As part of our audits of the basic financial statements of the University System of Georgia presented in the Annual FinancialReportfor the University System of Georgia, the basic financial statements of the State of Georgia presented in the S&te of Georgia ComprehensiveAnnual FinancialReportand the issuance of a State of Georgia SingleAudit Reportpursuant to the Single Audit Act Amendments, as of and for the year ended June 30, 2011, we have performed certain audit procedures at Darton College. Accordingly, the financial statements and compliance activities of Darton College were examined to the extent considered necessary in order to express an opinion as to the fair presentation of the financial statements contained in the foregoing documents and to issue reports on compliance and internal control as required by the Single Audit Act Amendments of 1996.

This Management Report contains information pertinent to the financial and compliance activities of Darton College as of and for the year ended June 30, 2011. Information contained in this report is a by-product of our audits of the basic financial statements of the UniversitySystem of Georgia and the basic financial statements of the State of Georgia and is the representation of management. Accordingly, we do not express an opinion or any other form of assurance on it. The particular information provided which includes a section on findings and other items reported in accordance with Commission on Colleges regulation 2.11.1 is enumerated in the Table of Contents.

This report is intended solely for the information and use of the management of Darton College, members of the Board of Regents of the University System of Georgia and the Southern Association of Colleges and Schools - Commission on Colleges and is not intended to be and should not be used by anyone other than these specified parties.

Respectfully submitted,

.

Russell W. Hinton, CPA, CGFM State Auditor

SELECTED FINANCIAL INFORMATION

DARTON COLLEGE STATEMENT OF NET ASSETS - (GAAP BASIS)
JUNE 3 0 , 2 0 1 1
ASSETS
Current Assets Cash and Cash Equivalents Accounts Receivable, Net (Note 3) Federal Financial Assistance Other Inventories Prepaid Items
Total Current Assets
Noncurrent Assets Capital Assets, Net (Note 4)
Total Assets
LIABILITIES
Current Liabilities Accounts Payable Salaries Payable Deposits Deferred Revenue (Note 5) 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"

DARTON COLLEGE STATEMENT OF REVENUES. EXPENSESAND CHANGES IN NET ASSETS - (GAAP BASIS)
YEAR ENDEDJUNE 3 0 . 2 0 1 1
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
Residence Halls Bookstore Food Services 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 lncome (Loss)
NONOPERATING REVENUES (EXPENSES)
State Appropriations Grants and Contracts
Federal Gifts Investment lncome (Endowments, Auxiliaty and Other) Interest Expense (Capital Assets)
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 i n Net Assets
Net Assets - Beginning of Year
Net Assets - End of Year

DARTON COLLEGE
STATEMENTOF CASH FLOWS - ( W P BASIS)
YEAR ENDEDJUNE 30.2011
CASH FLOWS FROM OPERATING ACTIVITIES Tuivon and Fees Grants and Contracts Sales and Servicesof Educat~onaDl epartments Paymentsto Suppliers Paymentsto Employees Paymentsfor Scholarships and Fellowships Auxiliary Enterprise Charges: Residence Halls Bookstore Food Services Health Sewices Intercollegiate Athletics Other Organizations Other Receipts (Payments)
Net Cash Provlded (Used)by OperatingActiv~ties
CASH FLOWS FROM NONCAPiTAL FINANCING ACTIVITIES State Appropriations Agency Funds Transactions Gifts and Grants Recelvedfor Other than Capital Purposes
Net Cash Flows Provided (Used) by Noncapital FinancingAct~vittes
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Gifts and Grants Received Purchasesof Capital Assets Prtncipal Paid on Capital Debt and Leases lnterest Paid on Caoital Debt and Leases
Net Cash Provided (Used)by Capital and Related F~nancingActivities
CASH FLOWS FROM INVESTING ACTIVITIES Interest on Investments
Net Increase (Decrease)in Cash
Cash and Cash Equivalents - Begrnn~ngof Year
Cash and Cash Equivaients- End of Year
RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
operattng Income (Loss) Adjustments to ReconcileOperating Income to Net Cash
Provided (Used) by Operating Activities Deprec~ation Change In Assets and Llabllltles: Accounts Receivable, Net Inventories Prepaid Items Accounts Payable Deferred Revenue Other Liabilities Compensated Absences
Net Cash Provided(Used)by OperatingActivities
NONCASH ACTIVITY Fixed Assets Acquired by lncurrlng Capital Lease Obligations Change in Accrued lnterest Payable Affecting lnterest Paid

DARTON COLLEGE SELECTED FINANCIAL NOTES
JUNE 30, 2011

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 2100 of the Governmental Accounting Standards Board (GASB) Codification of Governmental Accountine; and Financial Reporting Standards.
NET A S S m The College's net assets are classified as follows:
Investedin capitalassets, net of refateddebt: 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.
Unrestridednet 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 $20,335.31. 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 State Treasurer. These resources also include auxiliary enterprises, which are substantially self-supporting activities that provide services for students, faculty and staff.
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.

DARTON COLLEGE SELECTED FINANCIAL NOTES
JUNE 30,2011

EXHIBIT "D"

NOTE 2: DEPOSITS

DEPOSITS

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 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, 2011, the carrying value of deposits was $3,893,270 and the bank balance was $5,487,787. Of the College's deposits, $5,242,763 were uninsured. Of these uninsured deposits, $5,242,763 were collateralized with securities held by the financial institution, by its trust department or agency.

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, State and Private Funds

Other

137,066 30,692
518,965 3,555,861

Less Allowance for Doubtful Accounts Net Accounts Receivable

DARTON COLLEGE SELECTED FINANCIAL NOTES
JUNE 30,2011

EXHIBIT "Dl'

NOTE 4: CAPITAL ASSETS
Followingare the changes in the College's capital assets for the year ended June 30,2011:

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

Beginning Balance
July 1.2010

Additions

Reductions

Ending Balance
June 30,2011

$

989,113

5,718,132$

465,517 $

$
4,549,488

989,113 1,634,161

Total Capital Assets. Not Being Depreciated $

6,707.245 $

465,517 $

4,549,488 $

2,623,274

Capital Assets. Being Depreciated: Building and B u ~ l d ~ Inmgprovements Facilit~esand Other Improvements Equipment Capital Leases Library Collections

$

41,188,196 $

1,537,473

4,272,325

4,361,075
$
599.293

$ 18,546 436.909

45.549.271 1518,927 4.433.709

Total Assets Being Depreciated

$

51,422,957 $

36,930.534 $

678,384 $

87,675,107

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

$

12,264,570 $

1,256.036

3,152,705

826.850

2,989,007

$

20,489,168 $

1,119,468 60.147 $
363.552 535.421 95,507
2,174,095 $

$ 18,546
436.909 216,751
6.178
678,384 $

U.384,038 1,297,637 3,079,34% 1,145,520 3,078,336
21984,879

Total Capital Assets. Being Depreciated, Net $ Capital Assets, Net

30,933,789 $

34,756,439$

0 $

65,690.228

NOTE 5: DEFERRED REVENUE
Deferred revenue consisted of the following at June 30,2011.
Prepaid Tuition and Fees Other Deferred Revenue
Total Deferred Revenue
Long-Term deferred revenue totaling $600,000related to the donation for the new bookstore facility.

DARTON COLLEGE SELECTED FINANCIAL NOTES
JUNE 30, 2011

EXHIBIT "D"

NOTE 6: LONG-TERM LIABILITIES

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

Beginning Balance
July 1,2010

Additions

Reductions

Ending Balance
June 30, 2011

Current Portion

Leases Lease Obligations

$

153,264 $ 31,938,236 $

153,264 $ 31,938,236 $

92,925

Other Liabilities Compensated Absences

907,515

663,090

597,805

972,800

577,420

Total Long-TermObligations $ 1,060,779$ 32,601,326 $

751,069 $ 32,911036 $

670.345

NOTE 7: NET ASSETS Changes in Net Asset activity for the year ended June 30, 2 0 1 1 are as follows:

Beginning Balance
July i, 2010

Additions

Reductions

Ending Balance
June 30,2011

Invested i n Capital Assets Net of Related Debt

Restricted Net Assets

0

17,603,827

17,603,827

0

Unrestricted Net Assets

Total Net Assets

NOTE 8: LEASE OBLIGATIONS

Darton 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 and equipment.
CAPITAL LEASES Capital leases are generally payable in installments ranging from monthly to annually and have terms expiring between 2040 and 2041. Expenses for fiscal year 2 0 1 1 were $1,459,844 of which $1,306,580 represented interest. Total principal paid on capital leases was $153,264 for the fiscal year ended June 30, 2011. Interest rates range from 5.78 percent to 6.14 percent.
Darton College had two capital leases with related entities during the current fiscal year. In July 2 0 1 1 the College entered into a capital lease with GHEFA whereby the College leases a student center building for a thirty-year period that expires June 2041. The liability for the capital lease for the student center was $21,240,731 at June 30, 2011. The interest rate on the bond is $6.14%.

DARTON COLLEGE SELECTED FINANCIAL NOTES
JUNE 30,2011

EXHIBlT "D"

NOTE 8: LEASE OBLIGATIONS
CAPITAL LEASES In December 2010 the College entered into a capital lease with the Darton Boosters Inc. to lease a student housing building. The lease is for thirty years and will expire in December 2041. The lease carries an interest rate of 5.78%. The outstanding balance at June 30, 2 0 1 1was $10,697,505.
OPERATING LEASES Darton College's noncancellable 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 cancelable 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. Examples of property under operating leases are copiers, other small business equipment, and buildings.

Noncancellable operating lease rental expenses in 2 0 1 1 were $96,412 for real property and/or 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:

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 - 2041

Total Minimum Lease Payments $

75,232,326 $

84,980

Less: Interest Less: Executory Costs (if paid)

38,406,024 4,888,066

Principal Outstanding

$

31,938,236

DARTON COLLEGE SELECTED FINANCIAL NOTES
JUNE 30,2011

EXHIBIT "D"

NOTE 9: RETIREMENT PLANS
Darton 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 Darton 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' Retirement System 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 multipleemployer 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.
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 10 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 25 years of creditable service for members under age 60.

DARTON COLLEGE SELECED FINANCIAL NOTES
JUNE 30,2011

EXHIBIT "D"

NOTE 9: RETIREMENT PLANS

Employees' Retirement System of Georgia

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 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, Darton College pays member contributions in excess of 1.25%of annual compensation. Under the old plan, these Darton 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. Darton 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 Darton 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

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 multipleemployer 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

DARTON COLLEGE SELECTED FINANCIAL NOTES
JUNE 30, 2011

NOTE 9: RETIREMENT PLANS

Teachers Retirement System of Georgia

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 40 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 6 0 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.

The following table summarizes the Darton College contributions by defined benefit plan for the years ending June 30,2011, June 30,2010, and June 30, 2009 (dollars in thousands):

Fiscal Year

ERS

Required

Percentage

Contribution Contributed

TRS

Required

Percentage

Contribution Contributed

DARTON COLLEGE SELECTED FINANCIAL NOTES
JUNE 30, 2011

EXHIBIT "Dm

NOTE 9: RETIREMENT PLANS
Regents Retirement Plan
Plan Description The Regents Retirement Plan, a singleemployer 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 TIM-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 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.
Darton College and the covered employees made the required contributions of $356,444 (9.24%)
and $192,881 (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 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 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.

DARTON COLLEGE SELECTED FINANCIAL NOTES
JUNE 30,2011

EXHIBIT "D"

NOTE 9: RETIREMENT PLANS
Georgia Defined Contribution Plan
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 2 0 1 1 amounted to $171,962 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 10: POST-EMPLOYMENTBENEFITS OTHER THAN PENSION 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 UniversitySystem of Georgia define and delineate who is eligible for these postemployment 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 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 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 99 employees who had retired or were disabled that were receiving these postemployment health and life insurance benefits. For the year ended June 30, 2011, Darton College recognized as incurred $425,896 of expenditures, which was net of $180,171 of participant contributions.

DARTON COLLEGE SELECTED FINANCIAL NOTES
JUNE 30, 2011

EXHIBIT "D"

NOTE 11: AFFILIATED ORGANIZATIONS
The Darton College Foundation, Inc., and the Darton Boosters, Inc., are legally separate, tax exempt organizations whose activities primarily support Darton College. These affiliated organizations are considered potential component units of the State of Georgia in accordance with GASB Statement No. 39, Determining Whether Certain Organizations are Component Units. Theref0re, the financiaI statements of these affiliated organizations are not included in these financial statements. Copies of the financial statements for the affiliated organizations may be obtained from Darton College.

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SUPPLEMENTARY INFORMATION

DARTON COLLEGE BALANCE SHEET (STATUTORY BASIS)
BUDGET FUND JUNE 3 0 , 2 0 1 1
ASSETS
Accounts Receivable Federal Financial Assistance Other
Inventories
Total Assets
LIABILITIES AND FUND EOUlTY
Liabilities Cash Overdraft Accrued Payroll Encumbrances Payable Accounts Payable Deferred Revenue
Total Liabilities
Fund Balances Reserved Department Sales and Services Indirect Cost Recoveries Technology Fees Uncollectible Accounts Receivable Tuition Carry-Over lnventories Unreserved Surplus
Total Fund Balances
Total Liabilities and Fund Balances

SCHEDULE "1"

Statutory Basis financial information was 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.
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DARTON COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (STATUTORY BASIS)
BUDGET FUND YEAR ENDEDJUNE 30,2011

REVENUES State Appropriation State General Funds Other Funds Total Revenues
ADJUSTMENTS AND PROGRAM TRANSFERS CARRY-OVER FROM PRIOR YEARS
Transfers from Resewed Fund Balance Total Funds Available
EXPENDITURES
Excess of Funds Available over Expenditures FUND BALANCE JULY 1
Reserved Unreserved
Prior Year Payables/Expenditures Unreserved Fund Balance (Surplus) Returned
to Board of Regents - Univers~tySystem Office
Year Ended June 30.2010 Prlor Year Reserved Fund Balance Included In Funds Available

BUDGET

ACTUAL

SCHEDULE "2"
VARIANCE FAVORABLE (UNFAVORABLE)

SUMMARY OF FUND BALANCE
Resewed Department Sales and Servlces Indirect Cost Recoveries Technology Fees Uncollectible Accounts Receivable Tuition Carry-Over lnventorles
Total Reserved
Unreserved Surplus
Total Fund Balance

Statutory Bass financial lnforrnatlon was 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 princ~ples.

DARTON COLLEGE STATEMENTOF FUNDS AVAILABLE AND EXPENDITURESCOMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE
(STATUTORY BASIS) BUDGET FUND YEAR ENDEDJUNE 30.2011

Teaching State Approprlatlon State General Funds Federal Funds Amencan Recoveryand Reinvestment Act Federal Stablllzat~onFunds Other Funds
Total Teaching

Original Appropriation

Amended Appropriat~on

F~nal Budget

Current Year Revenues

Statutory Baslsfinancial ~nformabonwas prepared on a prescr~bedbass of accountlng that demonstrates compliance wlth budgetary statutes and regulations of the State of Georaa. whlch IS a comprehenslve bas~sof accountlng other than generally accepted accounttng prlnclples.

SCHEDULE "3"

Funds Available Compared to Budget

Prior Year

Adjustments and

Total

Carry-Over

Program Transfers Funds Available

Variance Pos~tive(Negative)

Expenditures Compared to Budget

Actual

Var~ance Positwe (Negative)

Excess (Deficiency) of Funds Ava~lable
Over/(Under) Expenditures

SCHEDULE "4"

Other Adjustments

Early Return F~scaYl ear 2011
Surplus

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

Ending Fund Balance/(Defic~t)
June 30

Analysis of Ending Fund Balance

Resewed

Surplus/(Deficit)

Total

Summary of Endlng Fund Balance Reserved
Department Sales and S e ~ ~ c e s lnd~recCt ost Recoveries Technology Fees Uncollectlble Accounts Rece~vable Tuition Carry-Over Inventories UnreseNed Surplus
Total Ending Fund Balance - June 30

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DARTON COLLEGE RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 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

Albany State University

Dunkwa,

Kwame 0.

Jackson,

Erica

Armstrong Atlantic State University

McCarthy,

M~chael

Georgia Southern University

Bretti,

Anthony

Unidentified Variance/Rounding

SALARIES $ 19,981,110.10 $

TRAVEL 160,284.99

SECTION II FINDINGS, QUESTIONED COSTS AND OTHER ITEMS

DARTON COLLEGE SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS
YEAR ENDED JUNE 3 0 , 2 0 1 1
FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS No matters were reported. FEDERAL AWARD FINDINGS AND OUESTIONED COSTS No matters were reported. OTHER ITEMS (NOTED FOR MANAGEMENT'S CONSIDERATION1 No matters were reported.