Audit report, state of Georgia, Albany State University, Albany, Georgia, year ended June 30, 1999

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AUDIT REPORT

STATE OF GEORGIA

ALBANY STATE UNIVERSITY

I

ALBANY, 'GEORGIA

YEAR ENDED JUNE 30, 1999

I
',-~-------~~----------j

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

ALBANY STATE UNIVERSITY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

. EXHIBITS

FINANCIAL STATEMENTS

A COMBINED BALANCE SHEET

ALL FUND GROUPS

2

B COMBINED STATEMENT OF CHANGES IN FUND BALANCES

ALL FUND GROUPS

4

C STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,

AND OTHER CHANGES

6

D NOTES TO THE FINANCIAL STATEMENTS

7

SUPPLEMENTARY INFORMATION

E COMBINING BALANCE SHEET

CURRENT FUNDS - UNRESTRICTED

21

F COMBINING STATEMENT OF CHANGES IN FUND BALANCES

CURRENT FUNDS - UNRESTRICTED

22

G COMBINING STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,

AND OTHER CHANGES

UNRESTRICTED

23

SCHEDULES

1 SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

24

SCHEDULES OF REVENUES AND EXPENDITURES COMPARED TO BUDGET

2

RESIDENT INSTRUCTION

26

3

LOTTERY FOR EDUCATION

29

4 CHANGES IN INVESTMENT IN PLANT

30

5 SCHEDULE OF FUND BALANCES

CURRENT FUNDS AND PLANT FUNDS

32

6 RECONCILIATION OF SALARIES AND TRAVEL

34

ALBANY STATE UNIVERSITY - TABLE OF CONTENTS -
SECTIONn AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTIONID CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

RUSSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
October 19, 1999

Honorable Roy E. Barnes, Governor Members of the General Assembly of Georgia Members ofthe Board ofRegents of the University System of Georgia
and Honorable Portia H. Shields, President Albany State University
INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS
AND SupPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying financial statements (Exhibits A through D) of Albany State University as of and for the year ended June 30, 1999. These financial statements are the responsibility of the University's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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 described in Note 1 to the financial statements, Georgia Law and State budgetary policy require the University to prepare its financial statements on a basis which is not consistent with generally accepted . accounting principles with respect to the recording of encumbrances as expenditures and liabilities. To conform with generally accepted accounting principles, encumbrances should be recorded as a reservation of fund balance. The effects on the financial statements ofthis departure from generally accepted accounting principles were not reasonably determinable, but are believed to be material.
As disclosed in Note 1 to the financial statements, the University did not report the liability and related expenditure for compensated absences in the current funds as required by generally accepted accounting principles. If compensated absences were reported, liabilities would be increased and fund balance would
99ARL-63

be decreased by $1,028,281.48 as of June 30, 1999, and the net change in fund balance for the year ended June 30, 1999, would be decreased by $125,958.51.
As discussed in Note 1 to the financial statements, the University did not report an allowance for estimated uncollectible accounts receivable. To confonn to generally accepted accounting principles, these amounts should be included in the financial statements. The effects on the financial statements of this departure from generally accepted accounting principles were not reasonable determinable, but are believed to be material.
The year 2000 supplementary infonnation on Schedule "1" is not a required part of the basic financial statements but is supplementary infonnation required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally ofinquiries ofmanagement regarding the methods ofmeasurement and presentation ofthe supplementary infonnation. However we did not audit the infonnation and do not express an opinion on it. In addition, we do not provide assurance that Albany State University is or will become year 2000 compliant, that the University's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Albany State University does business are or will become year 2000 compliant.
In our opinion, except for the effects on the financial statements of the matters discussed in the third, fourth, and fifth paragraphs, the financial statements referred to above present fairly, in all material respects, the financial position ofAlbany State University as of June 30, 1999, and the changes in fund balances and the current operating funds revenues, expenditures, and other changes for the year then ended in confonnity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying combining statements (Exhibits E through G) and the financial schedules (Schedules 2 through 6) are presented for purposes of additional analysis and are not a required part of the financial statements of Albany State University. Such infonnation has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, except for the effects of the matters discussed in the third, fourth, and fifth paragraphs, such infonnation is fairly presented in all material respects in relation to the financial statements taken as a whole.
Respectfully submitted,
~4.~0.~ Russell W. Hinton State Auditor
RWH:gp 99ARL-63

FINANCIAL STATEMENTS - 1-

ALBANY STATE UNIVERSITY COMBINED BALANCE SHEET
ALL FUND GROUPS JUNE 30,1999

ASSETS
Cash and Cash Equivalents Accounts Receivable Inventories Due from Other Fund Groups Investment in Plant
Total Assets
LIABILITIES AND FUND BALANCES
Liabilities Accounts Payable Deferred Revenue Tuition and Fees Deposits Held in Custody for Others Due to Other Fund Groups Capital Lease Obligations
Total Liabilities
Fund Balances U. S. Government Grants Refundable Institutional Loans - Restricted Net Investment in Plant Restricted Unrestricted
Total Fund Balances
Total Liabilities and Fund Balances

CURRENT FUNDS

UNRESTRICTED

RESTRICTED

LOAN FUNDS

$

58,260.16

$

731,186.49 $

2,720,829.43

436,934.93

1,067,974.77

4,156.18 387,507.64

$

2,294,356.35 $

2,720,829.43 $ ===3=91=,6=6=3.=82=

$

1,027,285.35 $

65,981.13

341,298.53 973,133.37

$

1,093,266.48 $

1,314,431.90

$

$

1,406,397.53

$

1,201,089.87

$

1,201,089.87 $

1,406,397.53 $

388,949.24 2,714.58
391,663.82

$

2,294,356.35 $

2,720,829.43 $ ===3.9.1.:.=,6:=6.3..:=82=

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

EXHIBIT "A"

UNEXPENDED

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

AGENCY FUNDS

TOTAL (Memorandum
Only)

$

447,525.25 $

1,035,380.99

. 168,524.17

$

- - - - - - $ 40,161,907.96

$ 485,030.87

1,545,322.58 4,493,078.60
436,934.93 1,067,974.n 40,161,907.96

$

616,049.42 $

1,035,380.99 $ 40,161,907.96 $

485,030.87 $ 47,705,218.84

$

614,685.90 $

$

614,685.90 $

2,588.50
$ 2,588.50 $

$
127,652.75 127,652.75 $

72,805.86 $
317,383.61 94,841.40
485,030.87 $

2,058,664.14
65,981.13 317,383.61 1,067,974.n 127,652.75
3,637,656.40

$ 40,034,255.21

$

1,363.52 $

1,032,792.49

$

1,363.52 $

1,032,792.49 $ 40,034,255.21

$

388,949.24

2,714.58

40,034,255.21

1,406,397.53

2,235,245.88

$ 44,067,562.44

$

616,049.42 $

1,035,380.99 $ 40,161,907.96 $

485,030.87 $ 47,705,218.84

-3-

ALBANY STATE UNIVERSITY COMBINED STATEMENT OF CHANGES IN FUND BALANCES
ALL FUND GROUPS YEAR ENDED JUNE 30,1999

REVENUES AND OTHER ADDITIONS
Unrestricted Current Fund Revenues State Appropriations
Regular Federal Grants and Contracts State Grants and Contracts Local Grants and Contracts Private Gifts, Grants, and Contracts Investment Income Interest on Loans Receivable Adjustments
Prior Years' Expenditures/Accounts Payable Prior Years' Checks Voided Expended for Plant Facilities Current Funds Plant Funds
Unexpended Renewals and Replacements Private Gifts Other Additions Recovery of Prior Years' Cancelled Loans Recovery of Prior Years' Collection Costs
Total Revenues and Other Additions
EXPENDITURES AND OTHER DEDUCTIONS
Educational and General Expenditures Auxiliary Enterprises Expenditures Indirect Costs Recovered Remittances to the Board of Regents of the
University System of Georgia Prior Year's Unrestricted Fund Balance (Surplus)
Adjustments Prior Years' Revenues/Accounts Receivable
Loan Cancellations and Write-Offs Administrative and Collection Costs Expended for Plant Facilities
Capitalized Noncapitalized DisposalslDeletions/Adjustments
Total Expenditures and Other Deductions
TRANSFERS BETWEEN FUNDS
Nonmandatory Renewals and Replacements
Net Increase/(Decrease) for the Year
FUND BALANCES JULY 1.1998
FUND BALANCES JUNE 30,1999

CURRENT FUNDS

UNRESTRICTED

RESTRICTED

LOAN FUNDS

$ 31,815,298,50

$

23,510,948.42 $

1,188,221.42

239,114.13

2,208,477.35

51,282.85 2,243.36

28,933.61

-4,202.00
-463.00 330.05 5,210.01

$

31,868,824,71 $

27,175,694.93 $

$ 26,340,317.35 $ 25,850,524.01
5,232,048.05 102,047.55
51,088.02
284.17
$

1,856.00 31.09
2,762.15
1,934.54 2,652.56

$

31,623,737.59 $

25,952,571.56 $

4,587.10

$

-248,885.33

$

-3,798.21 $

1,223,123.37 $

1,204,888.08

183,274.16

-1,824.95 393,488.77

$

1,201,089.87 $

1,406,397.53 $

391,663.82

The notes to the financial statements are an integral part of this statemenl -4-

EXHIBIT"B"

UNEXPENDED

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

TOTAL (Memorandum
Only)

$ 31,815,298.50

$

747,510.00

147,567.00

$

301,275.94

112,059.83

747,510.00 23,654,313.42
1,188,221.42 540,390.07
2,208,014.35 112,389.88 5,210.01

429.00

80,645.46 2,243.36

$

1,807,668.85

1,807,668.85

861,722.31 56,615.00 36,840.00

861,722.31 56,615.00 36,840.00

1,856.00 31.09

$

1,007,565.83 $

301,275.94 $

2,762,846.16 $ 63,118,969.72

$ 52,190,841.36 5,232,048.05 102,047.55

$

2,563.08

53,651.10

284.17 1,934.54 2,652.56

861,722.31 $ 144,480.00

56,615.00 85,023.55
$

962,506.49

918,337.31 229,503.55 962,506.49

$

1,008,765.39 $

141,638.55 $

962,506.49 $ 59,693,806.68

$ _ _.;;;;24.;.;8""",8;;.;;;8.;.;5'.;;.33;;..

$

.:.:O.:.:OO~

$

-1,199.56 $

408,522.72 $

1,800,339.67 $

3,425,163.04

2,563.08

624,269.n

38,233,915.54

40,642,399.40

$

1,363.52 $

1,032,792.49 $ 40,034,255.21 $ 44,067,562.44

-5-

ALBANY STATE UNIVERSITY STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,
AND OTHER CHANGES
YEAR ENDED JUNE 30,1999

EXHIBITC

Net Increasel(Decrease) in Fund Balances

$

-3,798.21 $ 1,223,123.37 $ 1.219,325,16

The.notes to the financial statements are an integral part of this statement -6-

AI ,BAm STATE UNNERSITY
NOTES TO THE FINANCIAL STATEMENTS nJNE 3D. 1999

EXHIBIT"D"

NOTE 1: SUM:MARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY Albany State University is one ofthirty-four (34) State supported member institutions ofhigher 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 Albany State University as a separate reporting entity.
The Board ofRegents 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. Albany State University does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Albany State University is considered an organizational unit ofthe Board ofRegents ofthe 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 Codification of Governmental Accounting and Financial Reporting Standards.
FUND ACCOUNTING In order to ensure observance of limitations and restrictions placed on the use of the resources available to the University, the accounts of the University are maintained in accordance with the principles of fund accounting. This is the procedure by which resources for various purposes are classified for accounting and reporting purposes into funds that are in accordance with activities or objectives specified. Separate accounts are maintained for each fund; however, in the accompanying financial statements, funds that have similar characteristics have been combined into fund groups. Accordingly, all financial transactions have been recorded and reported by fund group.
Within each fund group, the University's fund balance allocations and designations represent those portions ofthe fund balances that are reserved, restricted and/or designated for specific future use by legal covenants, State policies, or institutional policies.
Fund groups and funds presented in the accompanying financial statements are as follows:
CURRENT FUNDS
UNRESTRICTED - The fund used to account for those economic resources over which the University retains full control to use for purposes of performing the primary functions of the University, e.g., instruction, public service, etc.
RESTRICTED - The fund used to record externally restricted funds which may only be utilized in accordance with the purposes established by their source. Restricted current funds are recorded as revenues and expenditures when expended for current operating purposes.
-7-

ALBANY STATE UNIVERSITY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1999

EXHIBIT "D"

NOTE 1; SUMMARy OF SIGNJFICANT ACCOUNTING POLICIES
FUND ACCOUNTING
LOAN FUNDS
The fund used to account for resources which have been made available for financial loans to students.
PLANT FUNDS
UNEXPENDED - The fund used to account for financial resources utilized to acquire or to construct physical properties for institutional purposes.
RENEWALS AND REPLACEMENTS -The fund used to ~count for resources set aside for the renewal and replacement of institutional properties.
INVESTMENT IN PLANT - The fund which shows the total amounts representing the book value of all physical properties owned by the University. Net Investment in Plant is an equity account showing the total book value of physical properties belonging to the University less the amount of any indebtedness to others.
AGENCY FUNDS
The fund used to account for resources held by the University as custodian or fiscal agent for individual students, faculty, staffmembers, and organizations,.
BASIS OF ACCOUNTING Except as otherwise disclosed in these notes, the financial statements are prepared on the modified accrual basis ofaccounting, which is materially the same as the accrual basis ofaccounting applicable to colleges and universities prescribed in the American Institute ofCertified Public Accountants' audit guide reporting model. The modified accrual basis ofaccounting is defined as that method ofaccounting in which expenditures, other than accrued interest on general long-term debt, are recorded at the time liabilities are incurred and revenues are recorded when available and measurable to finance expenditures ofthe fiscal period.
Contractual obligations for goods and services which have not been received at the end ofthe fiscal year are recognized as expenditures and liabilities in the accompanying financial statements. This accounting practice causes expenditure-driven grant revenues to be accrued based, in part, on the unexecuted portion ofcontracts for goods and services. The recognition ofencumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, but is not consistent with generally accepted accounting principles, which provide for the recording of encumbrances as a reservation offund balance. Further, revenue recOgnition for expenditure-driven grants should be based upon expenditures determined in accordance with generally accepted accounting principles.

-8-

AT.BANY STATE UNNERSITY
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1999

EXHIBIT"D"

. NOTE 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING Compensated absences represent obligations of the University relating to employees' rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulated annual leave in which payment is probable and can be reasonably estimated. The compensated absences liability of $1,028,281.48 and a related net current year expenditure of$125,958.51 have not been reported in the current funds as required by generally accepted accounting principles.
Prior period adjustments and certain other items are reported as additions to and deductions from fund balances of current funds in the accompanying financial statements. This presentation is in accordance with accounting practices prescribed or pennitted by statutes and regulations ofthe State of Georgia, but differs from generally accepted accounting principles in that immaterial adjustments should be reported as current period revenues and expenditures. The effect of this dep~e is deemed to be immaterial to the fair presentation of the financial statements.
To the extent that Current Funds and Plant Funds are used to finance plant assets, the amounts so provided are accounted for as expenditures. The balances shown on the Combined Balance Sheet as Net Investment in Plant reflect the accumulated expenditures made for plant facilities through Current Funds and Plant Funds and also include expenditures made for plant facilities expended by the Georgia State Financing and Investment Commission on behalfofthe University. Donated fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded values. No depreciation has been provided on physical plant and equipment.
The Statement of Current Funds Revenues, Expenditures, and Other Changes is a statement of financial activities of current funds related to the current reporting period. It does not purport to present the results of operations or the net income or loss for the period as would a statement ofincome or a statement ofrevenues and expenses.
BUDGET The Board of Regents of the University System of Georgia - AdministrativeCentral Office receives State appropriation allotments for units ofthe University System of Georgia. The appropriated budget is adopted at the Board level and represents appropriations provided by the Amended Appropriations Act of 1998-1999. The appropriated budget covers current funds and plant funds, except for Auxiliary Enterprises and Student Activities which are not subject to appropriation. The allocation of the appropriated budget is made to the College by the Administrative Central Office. In addition, the College receives Federal funds and other funds directly and includes these funds in the budget filed with the Administrative Central Office.
A comparison of anticipated funds available and budgeted expenditures by budget unit object class indicates that the following object classes were overspent by the amounts identified below:

-9-

ALBANY STATE UNIVERSITY
NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1999

EXHIBIT "D"

NOTE 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES

BUDGET Resident fustruction Operating Expenses: Education, General and Departmental Services Capital Outlay Year 2000 Project

$ 212.781.78 $ 152.285.86 $ 12.694.85

These overexpenditures of budget constitute a violation of Board of Regents policy, but do not constitute statutory violations of budget authority. Statutory violations of budget authority are reported at the Board object class level.

CASH AND CASH EQUIVALENTS Cash and Cash Equivalents consist of petty cash, demand deposits, certificates of deposit and temporary investments in authorized financial institutions, and cash management pools that have the general characteristics of demand deposit accounts.

ACCOUNTS RECEIVABLE Accounts receivable consist of reimbursements due from Federal, State, local, and private grants and contracts, and other receivables disclosed from information available. No provision has been made for an allowance for doubtful accounts within the accompanying financial statements.

INVENTORIES fuventories of consumable supplies are recorded on the consumption method and are valued at cost on the Combined Balance Sheet using the weighted average method.

fuventories of goods for resale are valued at cost using the first-in, first-out method.

MEMO~UM ONLY - TOTAL COLUMNS The total columns on the financial statements are captioned "Memorandum Only" because they do not represent consolidated financial information and are presented only to facilitate financial analysis. The columns do not present information that reflects financial position or changes in financial position in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. futerfund eliminations have not been made in the aggregation ofthis data.

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS

STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds belonging to the State ofGeorgia cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. fu lieu of a surety bond, the depository may pledge as collateral anyone or more ofthe following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:

-10 -

ALBANY STATE UNNERSITY
NOTES TO THE ElNANCIAL STATEMENTS ruNE 30. 1999

EXHIBIT "D"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES . (1) Bonds, bills, certificates ofindebtedness, notes, or other direct obligations of the United States or of the State of Georgia.
(2) Bonds, bills, certificates of indebtedness, notes, or other obligations of the counties or municipalities of the State of Georgia.
(3) Bonds ofany public authority created by the laws ofthe State ofGeorgia, providing that the statute that created the authority authorized the use of the bonds for this purpose.
(4) Industrial revenue bonds and bonds ofdevelopment authorities created by the laws of the State of Georgia.
(5) Bonds, bills, certificates ofindebtedness, 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, or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intennediate Credit Bank, the Central Bank for Cooperatives, the Fann 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.
As authorized in the Official Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted policies which allow agencies of the State of Georgia (which includes organizational units of the Board of Regents of the University System of Georgia) the option of exempting demand deposits from the collateral requirements.
The treasurer of the Board of Regents is responsible for all details relative to furnishing the required depository protection for all units ofthe University System of Georgia.
CATEGORIZATION OF DEPOSITS For purposes of analysis of custodial credit risk, cash deposits consist of all bank balances which include demand deposits and/or interest bearing accounts. The bank balances as of June 30, 1999, are categorized below in order to provide infonnation about the extent to which such deposits are exposed to custodial credit risk:
Category 1 - Amounts covered by depository insurance or collateralized with securities (at fair value) held by the University or by its agent in the University's name.
Category 2 - Amounts collateralized with securities (at fair value) held by the pledging financial institution's trust department or agent in the University's name.
- 11-

ALBANY STATE UNNERSITY
NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1999

EXHIBIT"D"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS

CATEGORIZATION OF DEPOSITS Category 3 - Amounts collateralized with securities (at fair value) held by the pledging financial institution, or by its trust department or agent but not in the University's name, and amounts uncollateralized.

Cash Deposits

Carrying Amount

Bank Balances

Risk Categories

2

3

$ 1.540,727.58 $ 3.812,743.86 $ 200,000.00 $ 3,612,743.86 $==~O.O~O

NOTE 3: INVESTMENT IN PLANT

The following is a summary of Investment in Plant fixed assets as of June 30, 1999:

Land Buildings Improvements Other Than Buildings Equipment Library Books and Collections
Total Investment in Plant
NOTE 4: CAPITAL LEASES

$ 1,708,430.97 21,337,815.60
3,527,522.13 8,830,232.04 4.757.907.22
$40.161.907,96

Albany State University acquires certain equipment through multi-year capita1leases with varying terms and options. These agreements contain fiscal funding clauses in accordance with Official Code of Georgia Annotated Section 50-5-64 which prohibits the creation of a debt to the State of Georgia for the payment of any sums under such agreements beyond the fiscal year of execution if appropriated funds are not available. Ifrenewal of such agreements is reasonably assured, however, capita1leases requiring appropriation by the General Assembly of Georgia are considered noncancellable for financial reporting purposes.

As of June 30, 1999, future minimum lease payments under capital leases are as follows:

Fiscal Year Ending June 30
2000 2001 2002 2003 2004
Total Future Minimum Lease Payments
Less: Amounts Representing Interest
Present Value ofFuture Minimum Lease Payments

$ 61,515.84 35,894.16 17,133.36 17,133.36 7.138,90
$ 138,815.62
11.162.87
$ 127.652.75

- 12-

ALBANY STATE UNNERSITY
NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1999

EXHIBIT"D"

NOTE 5: RISK MANAGEMENT
Albany State University is a participant in the Board ofRegents of the University System of Georgia Health Benefits Plan, which is a self-insurance program ofhealth and dental benefits for employees and retirees of the University System of Georgia. The University and participating employees and retirees pay premiums to the Health Benefits Plan for this health insurance coverage. The Health Benefits Plan is included in the financial statements of the Board ofRegents ofthe University System of Georgia - Administrative Central Office. All units ofthe University System of Georgia share the risk of loss for claims of the Health Benefits Plan. The Health Benefits Plan is considered a self-sustaining risk fund that provides health coverage for its members up to a maximum lifetime benefit of $1 ,000,000.00 per person and dental coverage up to an annual maximum of $1,000.00 per person. The Board of Regents has contracted with Blue Cross Blue Shield of Georgia to process claims in accordance with the Health Benefits Plan as established by the Board ofRegents.
The Department ofAdministrative Services (DOAS) has the responsibility for the State of Georgia ofmaking and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purc~ased applicable to property, employee and automobile liability, fidelity and certain other risks. The University, as an organizational unit ofthe Board ofRegents ofthe 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 ofprofessional 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 ofthe performance oftheir duties or in any way connected therewith. The program is administered by DOAS as a Self-Insurance Fund.
NOTE 6: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA
Plan Description Albany State University participates in the Teachers Retirement System of Georgia (TRS), a cost-sharing multiple-employer defined benefit pension plan established by the General Assembly of Georgia for the _purpose of providing retirement allowances and other benefits for teachers of the State of Georgia. 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 Georgia Department ofAudits and Accounts.

- 13-

ALBANY STAIB UNNERSITY
NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1999

EXHIBIT "D"

NOTE 6: RE~PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Funding Policy Employees ofthe University who are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. The University makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. For fiscal year 1999, the employer contribution rate was 11.95% for covered employees. In addition, the University contributed 3.46% to the TRS on behalf of employees electing to participate in the Regents Retirement Plan. Employer contributions for the current fiscal year and the preceding two fiscal years areas follows:

Fiscal Year

Percentage Contributed

Required Contribution

1999 1998 1997

100% 100% 100%

$ 1,810,745.66 $ 1,739,759.66 $ 1,593,786.22

REGENTS RETIREMENT PLAN

Plan Description The Regents Retirement Plan, a single-employer defined contribution plan, is an optional retirement plan established and administered by the Board ofRegents ofthe University System of Georgia, under which it may purchase annuity contracts for the pUIpose ofproviding retirement and death benefits for eligible faculty and principal administrators. 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 ofthe annuity contracts.

Funding Policy Member contribution requirements are established by the Board of Trustees of the Teachers Retirement System. Employer contributions are established by statute and may be amended only by the General Assembly ofthe State of Georgia. The employer contributes 8.34% ofthe participating employee's earnable compensation. Employees contribute 5% oftheir earnable compensation. Amounts attributable to all plan contributions are fully vested and non-forfeitable at all times.

The University and the covered employees made the required contributions of $204,173.57 (8.34%) and $122,406.60 (5%), respectively.

-14 -

ALBANY STATE UNIVERSITY
NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1999

EXHIBIT "D"

NOTE 6: RETIREMENT PLANS
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description Albany State University 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 ofTrustees 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 adppted by the Board ofTrustees. Ifa member has less than $ 3,500.00 credited to his/her account, the Board of Trustees has the option ofrequiring 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 and Vesting 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 ofTrustees. 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 1999 amounted to $53,219.34 which represents 7.5% of covered payroll. These contributions met the requirements ofthe plan.
NOTE 7: LEAYEPOUCrnS
Employees earn annual leave ranging from one and one-quarter days to one and three-quarter days each month depending upon the employees' length ofcontinuous State service with maximum accumulation of forty-five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. See Note 1 - Basis of Accounting (Compensated Absences)
Employees earn one day of sick leave each month with no maximum accumulation established. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination of employment, except as noted in the subsequent paragraph.
Certain employees who retire with a minimum ofthree months ofunused sick leave are entitled to additional service credit in the Teachers Retirement System of Georgia.

- 15-

ALBANY STATE QNNERSITY
NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1999

EXHIBIT"D"

"NOTE 8: CONTINGENCrnS
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 which are disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be detennined at this time although the University expects such amounts, if any, to be immaterial to its overall financial position.
Litigation, claims and assessments filed against Albany State University (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, 1999.
NOTE 9: POSTEMPLOYMENT BENEFITS 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 ofthe University System of Georgia. It is the policy ofthe Board ofRegents .to permit employees ofthe University System of Georgia eligible for retirement or that become permanently and totally disabled to continue as members ofthe group health and life insurance programs. Employees who are eligible for retirement or disability under the criteria established by the Teachers Retirement System of Georgia and who have at least ten years ofservice with the University System ofGeorgia are 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.
As of June 30, 1999, there were 125 employees who had retired or were disabled that were receiving these postemployment health and life insurance benefits. For the year ended June 30, 1999, Albany State University recognized as incurred $275,279.13 of expenditures, which was net of $88,833.46 of participant contributions.
NOTE 10: SIGNIFICANT EVENT
In July of 1994, Albany State University sustained ~ajor flood damage to its campus. Reconstruction expenditures incurred by the University through June 30, 1999, have been reflected in this report and amounts have been deleted from Investment in Plant for losses incurred. Fiscal year 1999 expenditures of $12,394,365.06 for repairs and reconstruction have been incurred by the Board of Regents of the University System of Georgia - Administrative Central Office which are not included in this report. These expenditures, in addition to prior years expenditures capitalized by the Administrative Central Office, will be recorded in the Investment in Plant of Albany State University upon completion of all repairs and reconstruction associated with the flood.

-16 -

ALBANY STATE UNNERSITY
NOTES TO THE FINANCIAL STATEMENTS
nINE 30. 1999

EXHIBIT "D"

NOTE 11: ENROLLMENT

The equivalent full-time student enrollment ofAlbany State University was as follows:

Regular Tenn Fall Semester, 1998 Spring Semester, 1999

2,486 2,462

Average

Summer School, 1998

Summer School, 1999

-17 -

SUPPLEMENTARY INFORMATION -19 -

ALBANY STATE UNIVERSITY COMBINING BALANCE SHEET CURRENT FUNDS UNRESTRICTED
JUNE 30,1999

EXHIBIT "E"

ASSETS
Cash and Cash Equivalents Accounts Receivable Inventories Due from Other Fund Groups

RESIDENT LOTTERY FOR AUXILIARY

STUDENT

INSTRUCTION EDUCATION ENTERPRISES ACTIVITIES

TOTAL

$ 2,845.19 298,723,48 93,549,46 619,544,81 $

$ 171,336.63

54,864,97 $ 550,00 $ 58,260.16

296,785.07 135,677,94

731,186,49

343,385,47

436,934.93

278,816.74

1,069,698.18

Total Assets

$ 1,014,662.94 $ 171,336.63 $ 973,852.25 $ 136,227.94 $ 2,296,079.76

LIABILITIES AND FUND BALANCES
Liabilities Accounts Payable Deferred Revenue Tuition and Fees Due to Other Funds
Total Liabilities
Fund Balances Unrestricted

$ 840,832.48 $ 166,048.37 $ $ 840,832.48 $ 166,048.37 $

16,965.54 $ 3,438.96 $ 1,027,285.35

65,981,13

1,723.41

65,981.13 1,723.41

82,946.67 $ 5,162.37 $ 1,094,989.89

173,830.46

5,288.26

890,905.58 131,065.57 1,201,089.87

Total Liabilities and Fund Balances

$ 1,014,662.94 $ 171,336.63 $ 973,852.25 $ 136,227.94 $ 2,296,079.76

see notes to the financial statements,

-21-

ALBANY STATE UNIVERSITY COMBINING STATEMENT OF CHANGES IN FUND BALANCES
CURRENT FUNDS - UNRESTRICTED YEAR ENDED JUNE 30,1999

EXHIBIT-P

RESIDENT

LOTTERY FOR

AUXILIARY

STUDENT

INSTRUCTION EDUCATION ENTERPRISES ACTIVITIES

TOTAL

REVENUES AND OTHER ADDITIONS

Unrestricted Current Fund Revenues Adjustments
Prior Years' Expenditures/Accounts Payable Prior Years' Checks Voided Funded by the Board of Regents of the University System of Georgia
Prior Year's Unrestricted Fund Balance (Deficit)

$ 25,743,643.28 $
40,326,27 2,243.36

279,500,00 $ 5,412,523.18 $ 379,632,04 $ 31,815,298.50

5,288,20

4,895.11

n3.27

51,282,85 2,243.36

2,812.80

2,812.80

Total Revenues and Other Additions $ 25,789,025.71 $ 284,788.20 $ 5,417,418.29 $ 380,405.31 $ 31,871,637.51

EXPENDITURES AND OTHER DEDUCTIONS

Educational and General Expenditures Auxiliary Enterprises Expenditures Remittances to the Board of Regents of the
University System of Georgia Prior Year's Unrestricted Fund Balance (Surplus)
Adjustments Prior Years' Revenues/Accounts Receivable

$ 25,700,104.80 $

279,499.94

$ 360,712,61 $ 26,340,317,35

$ 5,232,048.05

5,232,048,05

136.00

53,900.82

148.17

53,900.82 284.17

Total Expenditures and Other Deductions

$ 25,700,240.80 $ 333,400.76 $ 5,232,196.22 $ 360,712.61 $ 31,626,550.39

TRANSFERS BETWEEN FUNDS

Nonmandatory Renewals and Replacements

$ -248.885.33

$ -248,885.33

Net Increasel(Decrease) for the Year $

88,784.91 $ -48,612,56 $ -63,663,26 $ 19,692.70 $

-3,798,21

FUND BALANCES JULY 1, 1998

85,045.55

53,900.82

954,568,84 111,372.87

1,204,888.08

FUND BALANCES JUNE 30, 1999

$ 173,830.46 $

5,288.26 $ 890,905.58 $ 131,065.57 $ 1,201,089.87

see notes to the financial statements,

-22-

ALBANY STATE UNIVERSITY COMBINING STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,
AND OTHER CHANGES UNRESTRICTED
YEAR ENDED JUNE 30, 1999

EXHIBIT"G"

REVENUES
State Appropriations Tuition and Fees Federal Grants and Contracts Sales and Services of Educational Activities Sales and Services of Auxiliary Enterprises Other Sources
Total Revenues
EXPENDITURES
Educational and General Instruction Public Service Academic Support Student Services Institutional Support Operation and Maintenance of Plant Scholarships and Fellowships
Auxiliary Enterprises Student Housing Food Services Stores and Shops Intercollegiate Athletics Other Service Units
Total Expenditures
OTHER TRANSFERS AND ADDITIONS/CDEDUCTIONSl
Transfers for Renewals and Replacements Prior Period Adjustments (Net) Remittances to the Board of Regents
of the University System of Georgia Prior Year's Unrestricted Fund Balance (SurplUS)
Total Other Transfers and Additions/(Deductions)

RESIDENT LOTTERY FOR AUXILIARY

STUDENT

INSTRUCTION EDUCATION ENTERPRISES ACTIVITIES

TOTAL

$ 18,079,867,00 $ 7,314,565.37 104,679,55 37,085,41
207,445,95

279,500,00

$ 18,359,367.00

$ 324,073,10

7,638,638,47

104,679.55

37,085.41

$ 5,412,523,18

5,412,523.18

55,558.94

263,004.89

$ 25,743,643,28 $ 279,500,00 $ 5,412,523,18 $ 379,632,04 $ 31,815,298,50

$ 12,692,081,55 $ 262,637,39
2,707,868.62 1,895,730,90 5,418,370,71 2,418,539.77
304,875,86

279,499:94

$ 332,202.61 28,510,00

$ 12,971,581.49 262,637.39
2,707,868,62 2,227,933,51 5,418,370.71 2,418,539.77
333,385.86

$ 1,521,512.36 1,805,995,82 155,502.59 1,251,352,65 497,684,63

1,521,512,36 1,805,995,82
155,502,59 1,251,352,65
497,684,63

$ 25,700,104.80 $ 279,499,94 $ 5,232,048,05 $ 360,712.61 $ 31,572,365.40

$ 42,433,63 $

$ -248,885.33

5,288.20

4,746,94 $

$ -248,885,33

773,27

53,242,04

2,812.80

-53,900,82

-51,088,02

$ 45,246,43 $ -48,612,62 $ -244,138,39 $ 773.27 $ -246,731.31

Net Increasel(Decrease) in Fund Balances

$ 88,784,91 $ -48,612,56 $ -63,663,26 $ 19,692,70 $

-3.,7_9.,8';;,21...

See notes to the financial statements.

-23-

ALBANY STATE UNIVERSITY

SCHEDULE "1"

SCHEDULE OF REQUIRED SuppLEMENTARY INFORMATION

YEAR 2000 DISCLOSURES

YEAR ENDED ruNE 30. 1999

The year 2000 issue is the result of shortcomings in many electronic data processing systems and other electronic equipment that may adversely affect the University's operations beyond calendar year 1999. The University has identified computer systems and other electronic equipment that may be affected by the year 2000 issue and are necessary to conducting University operations. The following stages have been identified as necessary to implement year 2000 compliant systems.
Awareness Stage - Encompasses establishing a budget and project plan for dealing with the year 2000 issue.
Assessment Stage - The actual process ofidentifying all systems and individual components ofsystems to check for compliance.
Remediation Stage - The time when changes are made to systems and equipment.
Validation/Testing Stage - The process of ensuring that the changes made to systems and equipment will produce a year 2000 compliant system.
It will be necessary for the University to progress through all four ofthese stages for each computer and/or electronic system, not already year 2000 compliant, in order to assure that these systems will not be adversely affected.
The following financial systems utilized by the University are supported by the Board ofRegents, University System of Georgia. The Board intends to remediate all systems which it maintains for use by its member institutions.
The College and University Fund Accounting System is beyond the validation/testing stage and management considers it year 2000 compliant.
The Regents Budget Reporting System and Property Inventory System are beyond the validation/testing .stage and management considers them year 2000 compliant.
The Regents Payro11lPersonnei System is beyond ~e validation/testing stage and management considers it year 2000 compliant.
The Banner Student Information System is supported by SCT Banner, Inc. Their Banner 2000 product is year 2000 compliant.

See notes to the financial statements.

-24 -

ALBANY STATE UNNERSITY

SCHEDULE "1"

SCHEDULE OF REQUIRED SUPPLEMENTARY lNFORMAIION

YEAR 2000 DISCLOSURES

YEAR ENDED JUNE 30. 1999

The University has completed an inventory ofcomputer systems and other equipment necessary to University operations. Based on this inventory, the University is in the process of making deficient areas compliant. Following is a summary of systems likely to be affected by year 2000 and the status of remediation, if any:
PC's and other computer hardware - The Division of Information Technology and Administrative Systems has been assigned to verify that all PC's are compliant. ValidationlTesting is complete and management considers them year 2000 compliant.
Physical Plant Equipment - Plant Operations is responsible for assessing compliance for power systems, elevators, emergency generators, chiller and hot water systems. Validation and testing ofthese systems is complete and management considers them year 2000 compliant.
Auxiliary Services - Validation and testing for systems used in the Bookstore and other similar operational activities is complete and management considers them year 2000 compliant. Systems used in Food Services are in the process ofbeing replaced and will be remediated by December 1999.
Because ofthe unprecedented nature ofthe year 2000 issue, its effects and the success ofrelated remediation efforts will not be fully determinable until year 2000 and thereafter. While management is confident that the University will be year 2000 ready, it cannot assume that its remediation efforts will be successful in whole or in part, or that parties with whom the University does business will be year 2000 ready.

See notes to the financial statements.

- 25-

ALBANY STATE UNIVERSITY SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
, RESIDENT INSTRUCTION YEAR ENDED JUNE 30,1999

REVENUES
State Appropriations Other Revenues Retained

CURRENT FUNDS UNRESTRICTED RESTRICTED

PLANT FUNDS RENEWALS AND
UNEXPENDED REPLACEMENTS

$ 18,079,867,00

$

7,663,776.28 $ 25,850,524,01

747,510,00 259,626,83 $ _ _,;;,30""1",,,2~7,;;,5.=94,,-

$ 25,743,643,28 $ 25,850,524,01 $ 1,007,136.83 $ _ _,;;"30,;",1,.:;,2;..,7,;;,,5',;;,,94,;,,,.

EXPENDITURES
Personal Services: Education, General and Departmental Services Sponsored Operations
Operating Expenses: Education, General and Departmental Services Sponsored Operations
Capital Outlay Office of Minority Business Enterprise Special Funding Initiative Year 2000 Project

$ 20,643,081,55 $ 2,045,173,99

4,482,573,78
90,000,00 352,159,62 132,289,85

23,805,350,02 $ 1,006,202,31 $

141,638,55

$ 25,700,104,80 $ 25,850,524,01 $ 1,006,202.31 $ _ _";"14,;,,,1,.:;,6~3,;;,,8',;;,,55,;,,,.

Excess of Revenues over Expenditures

$

43,538,48 $

0,00 $

934.52 $===1:=59::,6:=3:=7=,3==9

(1) To eliminate tuition waivers not budgeted,

See notes to the financial statements,

-26 -

SCHEDULE "2"

TOTAL

ADJUSTMENTS (1)

TOTAL (Budget Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$ 18,827,377.00 34,075,203.06 $

$ 18,827,377.00 $ 18,827,377.00 $ -147,365.00 33,927,838.06 34,419,235.00

0.00 -491,396.94

$ 52,902,580.06 $

-147,365.00 $ 52,755,215.06 $ 53,246,612.00 $_---:-4~91.;.:.,3;..;;9~6.~94.;...

$ 20,643,081.55 2,045,173.99
4,482,573.78 $ 23,805,350.02
1,147,840.86 90,000.00 352,159.62 132,289.85

$ 20,643,081.55 $ 20,757,776.00 $

2,045,173.99

2,688,458.00

-147,365.00

4,335,208.78 23,805,350.02
1,147,840.86 90,000.00 352,159.62 132,289.85

4,122,427.00 24,066,196.00
995,555.00 90,000.00
406,605.00 119,595.00

114,694.45 643,284.01
-212,781.78 260,845.98 -152,285.86
0.00 54,445.38 -12,694.85

$ 52,698,469.67 $

-147,365.00 $ 52,551,104.67 $ 53,246,612.00 $_--.,;;6~95;.:.,5;..;;0.;.;7.~33;;...

$ 204,110.39 $

0.00 $ 204,110.39

$ ===2:.04=,1=1=:0.:=39=

-27 -

ALBANY STATE UNIVERSITY SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
LOTIERY FOR EDUCATION YEAR ENDED JUNE 30,1999

SCHEDULE "3"

REVENUES State Appropriations

CURRENT FUNDS UNRESTRICTED

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$

279,500.00 $

279,500.00 $

0_.0_0_

EXPENDITURES
Equipment, Technology and Construction Trust Fund
Special Funding Initiatives

$

173,999.94 $

174,000.00 $

105.500.00

105,500.00

$

279,499.94 $

279,500.00 $

0.06 0.00
0;....0....;6_

Excess of Revenues over Expenditures

$=====0.=06=

$=====0.:::::06=

See notes to the financial statements.

-29-

ALBANY STATE UNIVERSITY CHANGES IN INVESTMENT IN PLANT
.YEAR ENDED JUNE 30, 1999

Land Buildings Improvements Other Than Buildings Equipment Library Books and Collections
SUMMARY OF INVESTMENT University Capital Leases

BALANCE JULY 1,1998

CURRENT FUNDS

UNRESTRICTED

RESTRICTED

$

1,705,037,84

21,880,802,90

$

15,170,00

2,937,757,18

7,410,400.95 $

914,397,63

560,261,05

4,442,183.46

259,048,58

58,791,59

$ 38,376,182,33 $ 1,173,446.21 $=======6:=34::i:l:,2=2;;:2,:=64=

$ 38,233,915.54 $ 1,173,446,21 $ 142,266.79

634,222.64

$ 38,376,182.33 $ 1,173,446.21 $====6;;:;34i:::i::!i:,222==:,64==

See notes to the financial statements,

-30-

SCHEDULE "4"

ADDITIONS PLANT FUNDS
RENEWALS AND UNEXPENDED REPLACEMENTS

CAPITAL LEASES

PRIVATE GIFTS

DEDUCTIONS DISPOSALS! DELETIONS! ADJUSTMENTS

BALANCE JUNE 30,1999

$

3,393.13

$ 1,708,430.97

157,745.05 $

3,497.50

$ 719,399.85 21,337,815.60

589,764.95

3,527,522.13

110,819.18

53,117.50 $

92,240.00 $

36,840.00

347,844.27

8,830,232.04

2,116.41

4,757,907.22

$ 861,722.31 $

56,615.00 $

92,240.00 $

36,840.00 $ 1,069,360.53 $ 40,161,907.96

$ 861,722.31 $

56,615.00

______ $

$ 9""'2_,2;.;.40;.;..0.;;.,;0'-

36,840.00 $

962,506.49 $ 40,034,255.21

106,854.04

127,652.75

$ 861,722.31 $

56,615.00 $

92,240.00 $

36,840.00 $ 1,069,360.53 $ 40,161,907.96

- 31 -

ALBANY STATE UNIVERSITY SCHEDULE OF FUND BALANCES CURRENT FUNDS AND PLANT FUNDS
JUNE 30,1999

NET INVESTMENT IN PLANT Investment in Plant Facilities
RESTRICTED Designated for Subsequent Years' Expenditures
UNRESTRICTED Designated For Bus Replacement Reserve For Intercollegiate Athletics For Inventory Reserve For Renewals and Replacements Reserve For Subsequent Years' Expenditures
For Year 2000 Project
Surplus Regular Lottery for Education

RESIDENT INSTRUCTION

CURRENT FUNDS

UNRESTRICTED

LOTTERY FOR

AUXILIARY

EDUCATION

ENTERPRISES

$

83,185,16

$

-85,674.74

343,385.47

7,305.15

633,194.85

83,340,15

$ _ _....;5;.:,;;,2;;;;.8.;;.;;8,;;.;26~

$

173,830.46 $

5,288.26 $ _ _.;;.89_0;.:.;,9~0,;;;,;5'.;;.58;;...

$

173,830.46 $

5,288.26 $ ======89=:0=,9:=05=.5=8=

See notes to the financial statements.

-32-

SCHEDULE "5"

STUDENT ACTIVITIES

RESTRICTED

UNEXPENDED REGULAR

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

TOTAL

$ 40.034.255.21 $ 40.034.255.21

$ 1,406.397.53

$ 1,406.397.53

$ 131.065.57

$

117.808.00

914.984.49

$

117.808.00

-85,674.74

426,570.63

914.984.49

764.260.42

7.305.15

$ 131.065.57

$

1.363.52

$

1.363.52 $_.....;,;1.:;;,03;;;,;:2;:,.;.7,,;;;92;;;;,.4.;,;9;..,.

84.703.67 5,288.26
$ 2,235.245.88

$ 131.065.57 $ 1,406,397.53 $

1.363.52 $ 1.032.792.49 $ 40,034.255.21 $ 43.675.898.62

-33-

ALBANY STATE UNIVERSITY RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30.1999

SCHEDULE "6"

Totals per Annual Supplement
Adjustments Shared Services on Jointly Staffed Personnel Abraham Baldwin Agricultural College Baker, Merle M. Medical College of Georgia Odom, Patia

SALARIES $ 18,894,397.59 $

TRAVEL 253,270.60

1,500.00 -4,949.34

$ 18,890,948.25 $ ===2=:53:=,2=7::::0.=60=

See notes to the financial statements.

-34-

SECTIONll AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

ALBANY STATE UNIVERSITY
AUDITEE'S RESPONSE
SUMMARy SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1999

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-521-97-01 FS-521-97-02 FS-521-98-01 FS-521-98-02 FS-521-98-03 FS-521-98-04

Further Action Not Warranted Further Action Not Warranted Unresolved - See Corrective Action/Responses Partially Resolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Partially Resolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

REVENUEIRECEIVABLEIRECEIPTS Student Accounts Receivable Not Supported by Financial Aid Finding Control Number: FS-521-98-01

The University will continue to monitor student accounts receivables. Collections of student accounts have been outsourced and continuous progress is being made in the collection of student account balances. Additionally, the financial aid delivery process will continue to be refined, such that no student is granted a deferment without having approved financial aid.

EMPLOYEE COMPENSATION Failure to Maintain Time Records Finding Control Number: FS-521-98-02

A procedure has been implemented to maintain time and attendance records, to document time actually worked by graduate assistants to assure that they are meeting the terms of their agreement with the University.

INVENTORIES

.

Inadequate Resale Inventory Records

Finding Control Number: FS-521-98-03

The University installed a new computerized point-of-sale system to replace the manual system that was in use previously. With this system, management can ensure adequate monitoring ofinventory costs throughout th~ fiscal year. Mark up on resale items is also done using the new point-of-sale system to ensure consistency. Further training and utilization of data during the Fiscal Year 2000 will eliminate this finding.

- 1-

ALBANY STATE UNNERSITY
AUDITEE'S RESPONSE
SUMMARy SCHEDULE OF PRIOR YEAR FINDINGS AND QIJESIIONED COSTS YEAR ENDED JUNE 30. 1999

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIflNED COSTS

CORRECTIVE ACTIONIRESPONSES

FUND BALANCE Deficits to be Funded from Subsequent Years' Operation Finding Control Number: FS-521-98-04

The action plan developed by the Athletic Director, the Business Office and the Vice President for Fiscal Affairs continues to reduce the deficit in the Athletic Program. For fiscal year 1999, revenues exceeded expenditures by $22,834.00. This action plan will continue untilthe remaining deficit of $85,674.74 is eliminated.

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-521-98-01 FA-521-98-02

Partially Resolved - See Corrective Action/Responses Partially Resolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

ELIGmILITY Overpayment of Student Financial Aid Student Financial Aid Cluster Program Questioned Cost: $19,795.25 Finding Control Number: FA-521-98-01

Procedures were developed to improve the financial aid delivery process to ensure that student financial awards were properly reviewed and approved prior to disbursement. The University has not received any correspondence from the U. S. Department of Education since submission of the audit report containing the findings.

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ALBANY STATE UNNERSITY AUDITEE'S RESPONSE
SUMMARy SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1999
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
CORRECTIVE ACTIONIRESPONSES SPECIAL TESTS AND PROVISIONS Deficiencies ill Student Financial Aid Refund Process Student Financial Aid Cluster Program Questioned Cost: $2,960.80 Finding Control Number: FA-521-98-02 The University implemented procedures to ensure that refunds are correctly calculated and applied to appropriate accounts in a timely manner. Procedures were also developed to identify "unofficial withdrawals" to ensure that refunds are calculated accordingly. This is a continuous monitoring function. The University has not received any correspondence from the U. S. Department of Education since submission of the audit report containing the findings.
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SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS

ALBANY STATE QNNERSITY
SCHEDmE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 1999

FINANCIAL STATEMENT FINDINGS AND QlJESTIONED COSTS

INVENTORIES Inadequate Resale Inventory Records Finding Control Number: FS-521-99-01

The internal accounting control procedures for resale inventories utilized by Albany State University were not adequate to safeguard assets. The following deficiencies were noted regarding the University's records for resale inventories:

(I) We were unable to reconcile the ending inventory through an analysis of yearly purchases/sales activity as reflected on the accounting records. However, the variance resulting from this analysis was not material to the financial statements.

(2) Adequate procedures do not exist for the systematic and consistent mark-up of resale inventories.

(3) Tests of the perpetual inventory system revealed numerous errors between physical counts and the inventory subsidiary records.

These deficiencies are a result of management's failure to implement procedures to ensure adequate monitoring of inventory costs throughout the fiscal year. The University should establish controls to ensure that accounting records accurately document the purchases/sales activity for all resale inventory.

REVENUE/RECEIVABLES/RECEIPTS Inadequate Accounting Procedures Finding Control Number: FS-521-99-02

The University's accounting procedures were found to be deficient in several areas. These deficiencies are summarized as follows:

(1) Subsidiary records provided by management from the Banner Student Receivable System could not be reconciled to the $487,110.70 recorded as student accounts receivable in the general ledger for current funds. Further examination of these student accounts receivable revealed that $428,525.89 were not supported by approved financial aid.

(2) Our audit disclosed cash deficits in the amount of$175,590.64 for certain individual Restricted Funds.

These conditions occurred because of management's failure to reconcile detailed subsidiary records to the

general ledger and because of management's failure to obtain approved documentation to support financial

aid before disbursement of funds. There are no provisions in the policies of the Board of Regents for

deferments of student accounts without the student having approved documentation of financial aid at the

time of registration, nor are there provisions for disbursement of Restricted Funds without approved

documentation from funding sources.

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ALBANY STATE UNNERSITY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED ruNE 30. 1999
. FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
REVENUE/RECEIVABLES/RECEIPTS fuadequate Accounting Procedures Finding Control Number: FS-521-99-02
The University should implement procedures to ensure that appropriate subsidiary records are generated from the Banner Student Receivable System that support the balances recorded on the general ledger. fu addition, the University should implement procedures to ensure that grant funds are available prior to disbursement and that billings to sponsors and grantors are made in a timely manner. The University should also provide funding for the deficit cash balances in Restricted Funds in the subsequent fiscal year.
EMPLOYEE COMPENSATION Failure to Maintain Time Records Finding Control Number: FS-521-99-03
The University typically enters into work agreements with graduate assistants which provide for a set stipend amount that includes payment of tuition and fees for course work with a residual amount to be paid to graduate assistants evenly over a set period of time. Working hours do not exceed twenty hours per week. A review of salary charges for three graduate assistants revealed that time and attendance or equivalent records were not being maintained to document time actually worked by one graduate assistant tested.
Appropriate internal controls should be established by the University to ensure that all salary charges of employees are based on actual hours worked and that time worked is properly documented.
FUND BALANCE Deficits to be Funded from Subsequent Years' Operations Finding Control Number: FS-521-99-04
Our review offutercollegiate Athletics revealed a deficit fund balance of $85,674.74. This deficit is a result of the University's lack of sufficient funds to meet obligations on a current basis. The Board of Regents Policy Manual Section 702.02 states that auxiliary enterprises "will be placed on a self-supporting basis, and the State will not make an appropriation to finance its operation."
The University should take appropriate action to fund this deficit.
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ALBANY STATE UNIVERSITY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1999

FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

REPORTING Report Not Reconciled Student Financial Aid Cluster Program Finding Control Number: FA-521-99-01

The University is required to reconcile their Federal Direct Loan accounts, including cash balances, and submit a reconciliation to the Direct Loan Servicing Center at least once a month. Our examination revealed that the amounts reported by the University did not reconcile to the general ledger of the University. This deficiency is a result of management's failure to adequately reconcile reports submitted to the accounting records. Federal regulations (34 CFR 668.161) require the University to ensure that all required reports are accurate and reconciled as necessary.

The University should implement adequate controls to ensure that reports are accurately completed and supported by the accounting records. Detailed reconciliations should be prepared for any variances and maintained as part ofthe supporting documentation.

Federal Programs/Awards Affected

Student Financial Aid Cluster Program U. S. Department of Education Federal Direct Student Loan Program (CFDA 84.268)

REPORTING Performance Reports Not Filed 'and Not Supported By Accounting Records Higher Education - Institutional Aid (CFDA 84.031) Finding Control Number: FA-521-99-02

The Title ill Final Performance Report for the five year grant period ending September 30, 1997, had not been

filed as of the date of our audit. The University was granted a twelve month extension by the U. S.

Department ofEducation which expired September 30, 1998. Federal regulation 34 CPR 74.71, requires the

University to submit all performance reports with4t 90 calendar days after the final approved date of

completion.

'

In addition, amounts reported in the interim Performance Report for the period ending April 30, 1999, did not agree to the accounting records. Federal regulation 34 CPR 74.21 requires that the University's financial management system provide for accurate and complete disclosure offinancial results ofthe Title ill program consistent with the reporting requirements established in 34 CPR 74.52. This condition occurred because management prepared the financial portion ofthe interim Performance Report using expenditures based on requisitions instead of expenditures based on the accounting records.

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ALBANY STATE UNNERSITY
SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1999
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
REPORTING Performance Reports Not Filed and Not Supported By Accounting Records Higher Education - Institutional Aid (CFDA 84.031) Finding Control Number: FA-S21-99-02
The University should submit the Title III Final Performance Report for the grant period ending September 30, 1997. In addition, the University should implement adequate controls to ensure that reports are filed timely and are accurately completed and supported by the accounting records.
Federal Programs/Awards Affected
U. S. Department of Education Higher Education - Institutional Aid (CFDA 84.031)
SPECIAL TESTS AND PROVISIONS Deficiencies In Student Financial Aid Refund Process Student Financial Aid Cluster Program Questioned Cost: $2,686.00 Finding Control Number: FA-S21-99-03
An examination ofthe University's student financial aid refund process was performed for five students who received all failing and/or incomplete grades, for Spring Semester 1999. Attendance records as well as statements from instructors were used to ascertain ifthe students had dropped out and were due a refund. Our examination revealed three out ofthe five students did not appear to have attended class at all or had ceased attendance prior to the end of the refund period. Failure by management to implement procedures to determine the last day of attendance in order to identify unofficial withdrawal resulted in a questioned cost of $2,686,00,
A projection ofthese errors to the total population resulted in a likely questioned cost in excess of$lO,OOO.OO.
The University should implement procedures to ensure that refunds are calculated for all "unofficial" withdrawals. The University should contact the U, S. Department of Education regarding resolution of this finding.
Federal Programs/Awards Affected
Student Financial Aid Cluster Program U. S. Department of Education Federal Pell Grant Program (CFDA 84.063) Federal Direct Student Loan Program (CFDA 84,268)
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