Albany State University, Albany, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2001

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS

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ALBANY STATE UNIVERSITY
ALBANY, GEORGIA

REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 200 J
Russell W. Hinton State Auditor

ALBANY STATE VNNERSITY - TABLE OF CONTENTS -

Page

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, EXPENDI11JRES,

AND OTHER CHANGES

7

D NOTES TO THE FINANCIAL STATEMENTS

8

SUPPLEMENTARY INFORMATION

E COMBINING BALANCE SHEET

CURRENT FUNDS - UNRESTRICTED

22

F COMBINING STATEMENT OF CHANGES IN FUND BALANCES

CURRENT FUNDS - UNRESTRICTED

24

G COMBINING STATEMENT OF CURRENT FUNDS REVENUES, EXPENDI11JRES,

AND OTHER CHANGES

UNRESTRICTED

26

SCHEDULES

SCHEDULES OF REVENUES AND EXPENDI11JRES COMPARED TO BUDGET

1

RESIDENT INSTRUCTION

28

2

. LOTTERY FOR EDUCATION

31

3 CHANGES IN INVESTMENT IN PLANT

32

4 SCHEDULE OF FUND BALANCES

CURRENT FUNDS AND PLANT FUNDS

34

5 RECONCILIATION OF SALARIES AND TRAVEL

36

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
SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I
FINANCIAL

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washingtoll Strect, S.W., Suitc 214 Atlanta, Gcorgia 3ln34-X400
October 17,2001

Honorable Roy E. Barnes, Governor Members of the General Assembly of Georgia Members of the 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 INFORMATIO.N
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, 2001. These financial statements are the responsibility ofthe 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 auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes 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 accounting principles generally accepted in the United States of America with respect to the recording of encumbrances as expenditures and liabilities. To conform with accounting principles generally accepted in the United States ofAmerica, encumbrances should be recorded as a reservation offund balance. The effects on the financial statements of this departure from accounting principles generally accepted in the United States of America were not reasonably determinable, but are believed to be material.

01ARL-63

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 accounting principles generally accepted in the United States of America. If compensated absences were reported, liabilities would be increased and fund balance would be decreased by $1,167,156.44 as of June 30, 2001, and the net change in fund balance for the year ended June 30, 2001, would be decreased by $87,470.05.
As discussed in Note 1 to the financial statements, the University did not report an allowance for estimated uncollectible accounts receivable. To conform to accounting principles generally accepted in the United States ofAmerica, 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.
In our opinion, except for the effects on the financial statements ofthe matters discussed in the third, fourth, and fifth paragraphs, the financial statements referred to above present fairly, in all material respects, the financial position of Albany State University as of June 30, 2001, and the changes in fund balances and the current operating funds revenues, expenditures, and other changes for the year then ended in conformity with accounting principles generally accepted in the United States of America.

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 1 through 5) are presented for purposes ofadditional analysis and are not a required part of the financial statements of Albany State University. Such information has been subjected to the auditing procedures applied in the audit ofthe financial statements and, in our opinion, except for the effects of the matters discussed in the third, fourth, and fifth paragraphs, such information is fairly presented in all material respects in relation to the financial statements taken as a whole.
Respectfully submitted,

RWH:gp ..
01ARL-63

Ru ell W. Hinton State Auditor

FINANCIAL STATEMENTS - 1-

ALBANY STATE UNIVERSITY COMBINED BALANCE SHEET .
ALL FUND GROUPS JUNE 30, 2001

ASSETS
Cash and Cash Equivalents Accounts Receivable Inventories Prepaid Items Due from Other Fund Groups Investment in Plant
Total Assets

CURRENT FUNDS UNRESTRICTED RESTRICTED

LOAN FUNDS

$

600,350.45

$ 30,836.77

825,811.32 $ 2,440,003.44

365,674.16

548,532.63

$ 1,974,694.40 $ 2,440,003.44 $ 396,510.93

LIABILITIES AND FUND BALANCES
Liabilities Accounts Payable Salaries Payable 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

$ 1,432,525.00 $ 234,075.62 93,139.54
1,037,586.92

$ 1,525,664.54 $ 1,271,662.54

$ 393,796.35



2,714.58

$ 1,168,340.90
$ _...---:4~4~9L:::,0.:::;29~.8~6~

$

449,029.86 $ 1,168,340.90 $ 396,510.93

Total Liabilities and Fund Balances

$ 1,974,694.40 $ 2,440,003.44 $ 396,510.93

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')~_

$ 400,478.62 $
406.111.31

91.098.62
$
1.037,586.92
$ 44,411,424.31

$ 1.122.764.46

793,494.85

4,424.983.77

548.532.63

11.652.00

11.652.00

1,443.698.23

44,411,424.31

$ 806.589.93 $ _.....,;"j,1.=12=8.685.54 $ 44,411,424.31 $ 805.146.85 $ 51,963.055.40

$ 753.944.40 $

19.713.00

$ 40.883.50 $ 2,481.141.52

93,139.54

358.152.04

358,152.04

406.111.31

1.443.698.23

- - - - - - $ 162,418.68

162,418.68

$ 753.944.40 $

19.713.00 $ 162,418.68 $ 805,146.85 $ 4.538,550.01

$ 44,249,005.63

$

52,645.53 $ _---""1."'-'10::;.;:8=.9;..;.7=2.=54"-

$

52,645.53 $

1.108,972.54 $ 44.249.005.63

$ 393,796.35
2,714.58 44,249,005.63
1,168,340.90 1,610,647.93
$ 47,424,505.39

1.128,685.54 $ 44,411,424.31 $ 805,146.85 $ 51,963,055.40



-3-

ALBANY STATE UNIVERSITY COMBINED STATEMENT OF CHANGES IN FUND BALANCES
ALL FUND GROUPS YEAR ENDED JUNE 30, 2001

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 Refunded to Grantors 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 Prior Years' Unfunded Programs
Loans Assigned to Federal Govemment Loan Cancellations and Write-Offs Administrative and Collection Costs Expended for Plant Facilities
Capitalized Noncapitalized Disposals/Deletions/Adjustments
Total Expenditures and Other Deductions
Net Increasel(Decrease) for the Year
FUND BALANCES JULY 1, 2000

CURRENT FUNDS UNRESTRICTED RESTRICTED

LOAN FUNDS

$ 34,617,530.92

$ 22,500,413.34 $
3,495,086.44 524,626.36 189,302.41

-2,062.00
-229.00 808.06 6,701.75

65,224.78 5,984.72

26,501.82

$ 34,688,740.42 $ 26,735,930.37 $

1,660.00 0.01
6,878.82

$ 28,609,786.73 $ 26,670,532.36
6,261,861.83 195,980.31 21,664.30

231,179.07
1,780.00 47,961.21

-47,961.21
$

599.31 4,524.65 1,035.47

$ 35,152.568.84 $ 26,840,215.76 $ 6,159.43

$

-463,828.42 $ -104,285.39 $

719.39

912.858.28

1.272.626.29 395,791.54

FUND BALANCES JUNE 30, 2001

$ _ _44;,;,::,9,029.86 $ 1,168,340.90 $ 396,510.93

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

-4-

EXHIBIT "B"

UNEXPENDED

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

TOTAL (Memorandum
Onl~_ _

$ 748,007.00
224,532.62
$
212.50
$ 972.752.12 $

$ 34,617,530.92

748,007.00 22,498,351.34
3,495,086.44 524,626.36 189,073.41 225,340.68 6,701.75

6.00

91,732.60

6,197.22

$ 1,791,584.74

1,791,584.74

969,782.77 51,515.00 40,100.00

969,782.77 51,515.00 40,100.00

1,660.00 0.01

6::.:,.0::.,:0:.,. $ 2,852,982.51 $ 65,257,290.24

$ 55,280,319.09
6,261,861.83 195,980.31 21,664.30

$

4,412.57

235,591.64

1,780.00 0.00
599.31 4,524.65 1,035.47

969,782.77 $

51,515.00

2,756.82

23,651.71

------$

948,890.69

1,021,297.77 26,408.53
948,890.69

$ 976,952.16 $

75,166.71 $ 948,890.69 $ 63,999,953.59

$

-4,200.04 $

-75,160.71 $ 1,904,091.82 $ 1,257,336.65

56,845.57

1,184,133.25

42,344,913.81

46,167,168.74

$ _...,;;5;=02,645.53 $ _ ....1..,108,972.54 $ 44,249,005.63 $ 47,424,505.39

-5-

ALBANY STATE UNIVERSITY STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,
AND OTHER CHANGES YEAR ENDED JUNE 30, 2001

EXHIBIT "C"

UNRESTRICTED RESTRICTED

TOTAL (Memorandum
Onl'i.lt-_

REVENUES
State Appropriations Tuition and Fees Federal Grants and Contracts State Grants and Contracts Local Grants and Contracts Private Gifts, Grants, and Contracts Sales and Services of Educational Activities Sales and Services of Auxiliary Enterprises Other Sources
Total Revenues

$ 20,296,360.00

$ 20,296,360.00

7,754,354.84

7,754,354.84

197,181.31 $ 22,384,192.96

22,581,374.27

3,493,841.01

3,493,841.01

530,073.81

530,073.81

.
46,329.30

262,424.58

262,424.58 46,329.30

5,998,756.27

5,998,756.27

324,549.20

324,549.20

$ 34,617,530.92 $ 26,670,532.36 $ 61,288,063.28

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/(DEDUCTIONSl

$ 15,447,199.19 $ 3,202,109.67 $ 18,649,308.86

136,463.56

546,194.35

682,657.91

2,258,646.25

629,625.22

2,888,271.47

2,499,246.16

148,533.90

2,647,780.06

5,333,555.14

1,560,206.98

6,893,762.12

2,637,564.23

2,637,564.23

297,112.20

20,583,862.24

20,880,974.44

2,240,796.56 2,056,657.94
143,300.69 1,233,781.33
587,325.31

2,240,796.56 2,056,657.94
143,300.69 1,233,781.33
587,325.31

$ 34,871,648.56 $ 26,670,532.36 $ 61,542,180.92

Excess of Restricted Receipts over

Transfers to Revenues

Refunded to Grantors

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) $

$
21,468.29

-157,084.12 $
-21,664.30 74,463.03

-157,084.12 -21,664.30 95,931.32

-231,179.07
-209,710.78 $

-104,285.39 $

-231,179.07 -313,996.17

Net Increase/(Decrease) in Fund Balances

$ _ _.-.4.;,;;6;;;;,3,828.42 $ -104,285.39 $ _..;-5~6~8J.:,1.:.13~.~81:..



The notes to the financial statements are an integral part of this statement. -7 -

ALBANY STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
Albany State University is one of thirty-four (34) State supported member institutions of higher education in Georgia which comprise the University System ofGeorgia, an organizational unit ofthe State of Georgia. The accompanying financial statements reflect the operations of Albany State University 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. 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 of the University System of Georgia reporting entity for fmancia1 reporting purposes because of the significance ofits legal, operational, and financial relationships with the Board ofRegents 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.
- 8-

ALBANY STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 200 I

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT 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 account 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 ofphysical 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, staff members, and organizations.
BASIS OF ACCOUNTING
Except as otherwise disclosed in these notes, the financial statements are prepared on the modified accrual basis of accounting, which is materially the same as the accrual basis of accounting applicable to colleges and universities prescribed in the American Institute of Certified 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 of the 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 of contracts for goods and services. The recognition of encumbrances 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 accounting principles generally accepted in the United States ofAmerica, which provide for the recording ofencumbrances
-9-

ALBANY STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHmIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
as a reservation offund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures detennined in accordance with accounting principles generally accepted in the United States of America.
Compensated absences represent obligations ofthe 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 $1,167,156.44 and a related net current year expenditure of $87,470.05 have not been reported in the current funds as required by accounting principles generally accepted in the United States of America.
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 ofGeorgia, but differs from accounting principles generally accepted in the United States ofAmerica in that immaterial adjustments should be reported as current period revenues and expenditures. The effect ofthis departure is deemed to be immaterial to the fair presentation ofthe 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 of income or a statement of revenues and expenses.
BUDGET
The Board ofRegents ofthe University System ofGeorgia - Administrative Central Office receives State appropriation allotments for units of the University System of Georgia. The appropriated budget is adopted at the Board level and represents appropriations provided by the Amended Appropriations Act of2000-2001. The appropriated budget covers current funds and plant funds, except for Auxiliary Enterprises and Student Activities which are not subject to appropriation. The allocation ofthe appropriated budget is made to the University by the Administrative Central Office. In addition, the University receives Federal funds and other funds directly and includes these funds in the budget filed with the Administrative Central Office.
- 10-

ALBANY STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUDGET
A comparison of anticipated funds available and budgeted expenditures by budget unit obj ect class indicates that the following object classes were overspent by the amounts identified below:

Resident Instruction Operating Expenses: Education, General and Departmental Services Capital Outlay

$ 607.340.03 $ 299,699.30

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 ofpetty cash and demand deposits.

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

INVENTORIES
Inventories ofconsumable supplies are recorded on the consumption method and are valued at cost on the Combined Balance Sheet using the weighted average method.

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

PREPAID ITEMS
Prepaid items are payments made to vendors in advance ofthe receipt ofgoods and services that will benefit periods subsequent to the balance sheet date.

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

- 11 -

ALBANY STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT "D"

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. In 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:
(1) Bonds, bills, certificates of indebtedness, 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 of any public authority created by the laws ofthe State ofGeorgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose.

(4) Industrial revenue bonds and bonds ofdevelopment authorities created by the laws ofthe 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, or 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.
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 ofthe Board ofRegents is responsible for all details relative to furnishing the required depository protection for all units of the 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, 2001, are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk:
- 12-

ALBANY STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT "D"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS

CATEGORIZATION OF DEPOSITS 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.

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.

Carrying Amount

Bank Balances

Risk Categories

I

2

3

Cash Deposits

$...ll.l.8..l69.4fi $ 3.6J.llj9.6.8 $ IQO,OQO,oo $,==~O.O~O $ 3'sl.8..l.5Ui8


NOTE 3: INVESTMENT IN PLANT

The following is a summary of Investment in Plant fixed assets as of June 30, 2001:

Land Buildings Improvements Other Than Buildings Equipment Library Books and Collections
Total Investment in Plant

$ 1,715,432.85 21,615,898.96 4,813,407.99 11,043,196.89 5,223,487.62
$44,41 ~ ,424.31

NOTE 4: OPERATING LEASES
Albany State University has entered into certain agreements to lease equipment which are classified as operating leases (leases on assets not recorded on the balance sheet). These leases generally contain provisions that, at the expiration date ofthe original term ofthe lease, the University has the option ofrenewing the lease on a year-to-year basis. Future minimum lease payments for operating leases as ofJune 30, 2001, are listed below. Amounts are included only for multi-year leases and for cancellable leases for which an option to renew for the subsequent fiscal year has been exercised.

- 13-

ALBANY STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT "D"

NOTE 4: OPERATING LEASES

Fiscal Year Ending June 30

2002 2003 2004 2005 2006

$ 367,388.40 367,388.40 367,388.40 367,388.40 175,285.40

Total Future Minimum Lease Payments

$ 1,644,839.00

Expenditures for rental ofcopiers and equipment under operating leases for the year ended June 30, 2001, totaled $308,779.78.

NOTE 5: CAPITAL LEASES

Albany State University acquires certain equipment through multi-year capital leases 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 ofsuch agreements is reasonably assured, however, capital leases requiring appropriation by the General Assembly of Georgia are considered noncancellable for financial reporting purposes.

As of June 30, 2001, future minimum lease payments under capital leases are as follows:

Fiscal Year . Ending June 30

2002 2003 2004 2005 2006

$ 88,303.19 55,021.74 15,084.00 15,084.00 15,084.00

Total Future Minimum Lease Payments

$ 188,576.93

Less: Amounts Representing Interest

26,158.25

Present Value of Future Minimum Lease Payments

$ 166.~18.68

- 14-

ALBANY STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHillIT "D"

NOTE 6: RISK MANAGEMENT
Albany State University is a participant in the Board ofRegents ofthe University System ofGeorgia 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 of Regents of the University System of Georgia - Administrative Central Office. All units of the University System of Georgia share the risk ofloss for claims ofthe 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$2,000,000.00perperson and dental coverage up to an annual maximum of$l,OOO.OOper person. Blue Cross Blue Shield ofGeorgia processes medical and dental claims in accordance with the Health Benefits Plan as established by the Board of Regents. As of January 1,2001, Express Scripts, Incorporated was contracted with to process pharmacy drug claims in accordance with the Pharmacy Benefit Program portion of the Health Benefits Plan.
The Department of Administrative Services (DOAS) has the responsibility for the State ofGeorgia ofmaking and carrying out decisions that will minimize the adverse effects ofaccidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The University, as an organizational unit ofthe Board of Regents of the University System of Georgia, is part of the State of Georgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment.
A self-insured program of professional liability for its employees was established by the Board of Regents of the University System of Georgia under powers authorized by the Official Code of Georgia Annotated Section 45-9-1. The program insures the employees to the extent that they are not immune from liability against personal liability for damages arising out of the performance of their duties or in any way connected therewith. The program is administered by DOAS as a SelfInsurance Fund.
NOTE 7: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA
Plan Description Albany State University participates in the Teachers Retirement System of Georgia (TRS), a costsharing 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
- 15 -

ALBANY STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT "D"

NOTE 7: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Plan Description
State ofGeorgia. TRS provides service retirement, disability retirement, and survivor's benefits for its members in accordance with State statute. The Teachers Retirement System ofGeorgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

Funding Policy
Employees ofthe University who are covered by TRS are required by State statute to contribute 5% of their 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 2001, the employer contribution rate was 11.29% for covered employees. In addition, the University contributed 2.33% 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 are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2001 2000 1999

100% 100% 100%

$ 1,761,216.25
$ 1,724,305.16 $ 1,810,745.66

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 of Regents of the University System of Georgia, under which it may purchase annuity contracts for the purpose of providing 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 8.81 % ofthe participating employee's earnable compensation. Employees contribute 5% of their earnable compensation. Amounts attributable to all plan contributions are fully vested and non-forfeitable at all times.

- 16-

ALBANY STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHffiIT "D"

NOTE 7: RETIREMENT PLANS
REGENTS RETIREMENT PLAN
Funding Policy The University and the covered employees made the required contributions of$300,753.04 (8.81 %) and $170,728.67 (5%), respectively.
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description Albany State University participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employer defined contribution plan established by the General Assembly of Georgia for the purpose ofproviding retirement coverage for State employees who are temporary, seasonal, and parttime 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 ofage 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board ofTrustees. Ifa member has less than $ 3,500.00 credited to his/her account, the Board ofTrustees has the option ofrequiring a lump sum distribution to the member in lieu ofmaking 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-halfpercent (7.5%) ofgross 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 2001 amounted to $38,347.96 which represents 7.5% of covered payroll. These contributions met the requirements of the plan.
NOTE 8: LEAVEPOUCffiS
Employees earn annual leave ranging from one and one-quarter days to one and three-quarter days each month depending upon the employees' length of continuous 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)

- 17 -

ALBANY STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHillIT "D"

NOTE 8: LEAVE POLICIES
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 ofemployment, 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.
NOTE 9: CONTINGENCIES
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditures which are disallowed under grant terms. The amount ofexpenditures which may be disallowed by the grantor cannot be determined 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, 2001.
NOTE 10: POSTEMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
Pursuant to the general powers conferred by the Official Code of Georgia Annotated Section 20-331, the Board ofRegents ofthe University System ofGeorgia has established group health and life insurance programs for regular employees ofthe University System ofGeorgia. It is the policy ofthe Board ofRegents to permit employees ofthe University System ofGeorgia eligible for retirement or that become permanently and totally disabled to continue as members of the group health and life insurance programs. Employees who are eligible for retirement or disability under the criteria established by the Teachers Retirement System ofGeorgia and who have at least ten years ofservice with the University System of Georgia 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 ofJune 30, 2001, there were 100 employees who had retired or were disabled that were receiving these postemployment health and life insurance benefits. For the year ended June 30, 2001, Albany State University recognized as incurred $339,353.70 ofexpenditures, which was netof$110,219.08 of participant contributions.

- 18 -

ALBANY STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIDIT "D"

NOTE 11: SIGNIFICANT EVENT

In July of 1994, Albany State University sustained major flood damage to its campus. Reconstruction expenditures incurred by the University through June 30, 2001, have been reflected in this report and amounts have been deleted from Investment in Plant for losses incurred. Fiscal year 2001 expenditures of $113,032.50 for repairs and reconstruction have been incurred by the Board ofRegents ofthe University System ofGeorgia - Administrative Central Office which are not included in this report. These expenditures, in addition to prior years expenditures capitalized by the Administrative Central Office, which total $141,105,764.81 will be recorded in the Investment in Plant of Albany State University upon completion of all repairs and reconstruction associated with
the flood.

NOTE 12: ENROLLMENT

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

Regular Term Fall Semester, 2000 Spring Semester, 2001

2,777 2,672

Average

2,725

Summer School, 2001

905

- 19 -

SUPPLEMENTARY INFORMATION - 21 -

ALBANY STATE UNIVERSITY COMBINING BALANCE SHEET CURRENT FUNDS - UNRESTRICTED
JUNE 30, 2001

ASSETS Cash and Cash Equivalents Accounts Receivable Inventories Due from Other Funds
Total Assets

RESIDENT INSTRUCTION

LOTTERY FOR EDUCATION

$ 388,882.96 $ 210,497.49 379,517.40 84,284.80 699,455.86

$ 1,552,141.02 $ 210,497.49

LIABILITIES AND FUND BALANCES

Liabilities

Accounts Payable



Salaries Payable

Due to Other Funds

Total Liabilities

Fund Balances Unrestricted

Total Liabilities and Fund Balances

$ 1,221,596.62 $
88,523.35

197,766.81

$ 1,310,119.97 $ 197,766.81

242,021.05

12,730.68

$ 1,552,141.02 $ 210,497.49

See notes to the financial statements.

- 22-

EXHIBIT OlE"

AUXILIARY ENTERPRISES

STUDENT ACTIVITIES

TOTAL

$

420.00 $

550.00 $ 600,350.45

299,084.22

147,209.70

825,811.32

464,247.83

548,532.63

699,455.86

$ 763,752.05 $ 147,759.70 $ 2,674,150.26

$

11,649.82 $ 1,511.75 $ 1,432,525.00

4,616.19

93,139.54

590,157.38

109,298.48

699,455.86

$ 606,423.39 $ 110,810.23 $ 2,225,120.40

157,328.66

36,949.47

449,029.86

$ 763,752.05 $ 147,759.70 $ 2z674,150.26

- 23-


ALBANY STATE UNIVERSITY COMBINING STATEMENT OF CHANGES IN FUND BALANCES
CURRENT FUNDS - UNRESTRICTED YEAR ENDED JUNE 30, 2001

REVENUES AND OTHER ADDITIONS
Unrestricted Current Fund Revenues Adjustments
Prior Years' Expenditures/Accounts Payable Prior Years' Checks Voided
Total Revenues and Other Additions
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 Prior Years' Unfunded Programs
Total Expenditures and Other Deductions
Net Increase/(Decrease) for the Year
FUND BALANCES JULY 1, 2000
FUND BALANCES JUNE 30, 2001

RESIDENT INSTRUCTION

LOTIERYFOR EDUCATION

$ 27,926,251.99 $
47,697.47 5,822.72
$ 27,979,772.18 $

306,234.00 12,069.77
318,303.77

$ 27,909,143.90 $ 305,573.09

226,895.73
1,780.00 47,961.21

4,283.34

$ 28,185,780.84 $ $ -206,008.66 $
448,029.71

309,856.43 8,447.34 4,283.34

$

242,021.05 $ ===...;.::12.,7_3~0.,;;;,:68~

See notes to the financial statements.

- 24

EXHIBIT "F"

AUXILIARY ENTERPRISES

STUDENT ACTIVITIES

TOTAL

$ 5,998,756.27 $ 386,288.66 $ 34,617,530.92

4,178.25 35.00

1,279.29 127.00

65,224.78 5,984.72

$ 6,002,969.52 $ 387,694.95 $ 34,688,740.42

$ 395,069.74 $ 28,609,786.73

$ 6,261,861.83

6,261,861.83

231,179.07
1,780.00 47,961.21

$ 6,261,861.83 $ 395,069.74 $ 35,152,568.84

$ -258,892.31 $ -7,374.79 $ -463,828.42

416,220.97

44,324.26

912,858.28

$

157,328.66 $ 36,949.47 $ _~44~9,029.86

- 25-

ALBANY STATE UNIVERSITY COMBINING STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,
AND OTHER CHANGES UNRESTRICTED
YEAR ENDED JUNE 30, 2001

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/(DEDUCTIONS)
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 INSTRUCTION

LOTTERY FOR EDUCATION

$ 19,990,126.00 $ 7,433,624.47 197,181.31 46,329.30

306,234.00

258,990.91

$ 27,926,251.99 $ _....:;3=06=,2=34....;.;;.=00'-

$ 15,141,626.10 $
136,463.56 2,258,646.25 2,114,120.42 5,333,555.14 2,637,564.23
287,168.20

305,573.09

$ 27,909,143.90 $ _.....;3;.;;;0=5=,5'"-73;;.;.0.;.;9;...

$

3,778.98 $

12,069.77

-226,895.73

-4,283.34

$ -223,116.75 $ _ _..:..7.1.:.,7..:.86;;..;....:.;43::...

Net Increase/(Decrease) in Fund Balances
See notes to the financial statements.

- 26-

$ -206,008.66 $====8,447.34

EXHIBIT "G"

AUXILIARY ENTERPRISES

STUDENT ACTIVITIES

TOTAL

$ 20,296,360.00

$ 320,730.37

7,754,354.84

197,181.31

46,329.30

$ 5,998,756.27

5,998,756.27

65,558.29

324,549.20

$ 5,998,756.27 $ 386,288.66 $ 34.617,530.92

$ 15,447,199.19

136,463.56

2,258,646.25

$ 385,125.74

2,499,246.16

5,333,555.14

2,637,564.23

9,944.00

297,112.20

$ 2,240,796.56 2,056,657.94 143,300.69 1,233,781.33 587,325.31

2,240,796.56 2,056,657.94
143,300.69 1,233,781.33
587,325.31

$ 6,261,861.83 $ 395,069.74 $ 34,871,648.56

$

4,213.25 $

1,406.29 $

21,468.29

-231.179.07

$

4,213.25 $

1,406.29 $ -209,710.78

$ -258,892.31 $ -7.374.79 $ -463,828.42

- 27-

ALBANY STATE UNIVERSITY SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
RESIDENT INSTRUCTION YEAR ENDED JUNE 30, 2001

REVENUES
State Appropriations Other Revenues Retained

CURRENT FUNDS UNRESTRICTED RESTRICTED

PLANT FUNDS RENEWALS AND
UNEXPENDED REPLACEMENTS

$ 19,990,126.00

$

7,936,125.99 $ 26,670.532.36

748,007.00 224,532.62 $

~O.~OO~

$ 27.926.251.99 $ 26.670.532.36 $ 972,539.62 $

. ::.O.;;:.OO=_

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

22.223.771.87
$ 2.834.900.27

4.581.621.03
120.000.00 983.751.00

23.835.632.09
$

972.539.59 $

75.166.71

$ 27,909,143.90 $ 26.670.532.36 $ 972.539.59 $ _ _....;7:..::5:.:..:.1~66.:::.:.~71~

Excess of Revenues over Expenditures

$ _ _1:.:.,7,108.09 $

0.00 $

0.03 $

-7.5...166.71

(1) To eliminate tuition waivers not budgeted and to redassify
prior year fund balances budgeted as revenues.

See notes to the financial statements.


28 -

SCHEDULE "1"

TOTAL

ADJUSTMENTS

TOTAL

_ _W,-__ .JBudget BasisL

BUDGET

VARIANCE FAVORABLE .(UNFAVORABLEl

$ 20,738,133.00

$ 20.738.133.00 $ 20,738,133.00 $

0.00

34,831 ,190.97 $ _ _-7:..:3:J.:,8::.::0.:,:3.=29;... 34.757.387.68 38,488,259.00

-3,730.871.32

$ 55,569.323.97 $

-73,803.29 $ 55,495.520.68 $ 59,226.392.00 $ -3,730,871.32

$ 22,223,771.87 2.834,900.27
4.581.621.03 $ 23,835,632.09
1,047.706.30 120,000.00 983.751.00

$ 22.223.771.87 $ 22.997,483.00 $

2.834.900.27

5,050,351.00

-148.970.00

4,432.651.03 23.835,632.09
1,047,706.30 120.000.00 983.751.00

3.825.311.00 25,498.689.00
748.007.00 120.000.00 986.551.00

773,711.13 2,215,450.73
-607.340.03 1,663.056.91 -299.699.30
0.00 2,800.00

$ 55.627.382.56 $ -148.970.00 $ 55,478,412.56 $ 59.2261392.00 $3.747,979.44

$_..;;;-5~8.058.59 $_.....:7;.:;:5.166.71 $ _ _1-.7.108.12

$ _ _..:.17:..:,:10~8~.1,:;.2

- 29-

ALBANY STATE UNIVERSITY SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
LOTIERY FOR EDUCATION YEAR ENDED JUNE 30, 2001

SCHEDULE "2"

REVENUES
State Appropriations
EXPENDITURES
Equipment, Technology and Construction Trust Fund
Special Funding Initiatives
Excess of Revenues over Expenditures

CURRENT FUNDS UNRESTRICTED

BUDGET

VARIANCE FAVORABLE (UNFAVORABLEt

$

306,234.00 $ 306,234.00 $

.....;0:;,.:..0::..:0:_

$

185,581.10 $ 186,234.00 $

119,991.99

120,000.00

652.90 8.01

$

305,573.09 $ 306,234.00 $

. . . .: :.66: : .,:0: . :;.9: . .;1:. . .

$ =-_ _...;;6~60;;:.;.;;;.91:...

$ =-=-_...;6;;,;;;6~0.~91.:.=:

See notes to the financial statements.

- 31 -

ALBANY STATE UNIVERSITY CHANGES IN INVESTMENT IN PLANT
YEAR ENDED JUNE 30, 2001

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

BALANCE JULY 1, 2000

CURRENT FUNDS UNRESTRICTED RESTRICTED

$ 1,708,430.97

21,376,083.96

4,248,521.12

10,220,374.79 $ 1,124,494.61 $ 430,566.88

4,989,214.08

143,025.12

93,498.13

$ 42,542,624.92 $

$ 42,344,913.81 $
197,711.11

1,267,519.73 $ 524,065.01

$ 42,542,624.92 $



See notes to the financial statements.

- 32-

SCHEDULE "3"

ADDITIONS PLANT FUNDS RENEWALS AND
UNEXPENDED REPLACEMENTS

PRIVATE GIFTS

DEDUCTIONS DISPOSALS! DELETIONS! ADJUSTMENTS

BALANCE JUNE 30, 2001

$

7,001.88

$ 1,715,432.85

239,815.00

21,615,898.96

564,886.87

4,813,407.99

158,079.02 $

51,515.00 $

40,100.00 $ 981,933.41

11,043,196.89

2,249.71

5,223,487.62

$ 969,782.77 $.....:====0...5. ;.;.1,515.00 $

40,100.00 $ 984,183.12 $ 44,411,424.31

$ 969,782.77 $

51,515.00 $

40,100.00 $

948,890.69 $ 44,249,005.63

35,292.43.

162,418.68

$ 969,782.77 $

51,515.00 $ ........_4.0.,100.00 $ 984,183.12 $ 44,411,424.31

- 33

ALBANY STATE UNIVERSITY SCHEDULE OF FUND BALANCES CURRENT FUNDS AND PLANT FUNDS
JUNE 30. 2001

RESIDENT INSTRUCTION

CURRENT FUNDS

UNRESTRICTED

LOTTERY FOR

AUXILIARY

EDUCATION

ENTERPRISES

STUDENT ACTIVITIES

NET INVESTMENT IN PLANT Investment in Plant Facilities

RESTRICTED Designated for Subsequent Years' Expenditures

UNRESTRICTED Designated For Bus Replacement Reserve For Capital Projects For Intercollegiate Athletics For Inventory Reserve For Renewals and Replacements Reserve For Subsequent Years' Expenditures For Uncollectible Accounts Surplus Regular Lottery for Education

$ 78.304.97 138.165.67

$

12.288.02

464,247.83

-339.047.50 $ 30.761.51

19.840.31

6.187.96

25.550.41

_ _ _ _ _ $ _........:1:;2..:..73:::0~.6::.::8:...

$ 242.021.05 $

12.730.68 $

157.328.66 $ 36,949.47

$

12.730.68 $ _ _1~5~71328.66 $ 36.949.47

See notes to the financial statements.


- 34

SCHEDULE "4"

RESTRICTED

UNEXPENDED REGULAR

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

TOTAL

$ 44.249.005.63 $ 44.249.005.63

$ 1,168.340.90

$ 1,168,340.90

$

$

52,433.00

19.969.00

1.089.003.54

$

19.969.00

52.433.00

12,288.02

542.552.80

1.089.003.54

-308.285.99

164,193.94

212.53

$

52.645.53 $ _--!.1.l.!.10~8~.9~7~2..:::::54!...

25.762.94 12.730.68 $ 1,610.647.93

$ 1,168,340.90 $_....5. -.2,645.53 $_....:.1.108,972.54 $ 44,249,005.63 $ 47.027.994.46

- 35-

ALBANY STATE UNIVERSITY RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2001

SCHEDULE "5"

Totals per Annual Supplement
Accruals June 30, 2001 June 30, 2000
Unlocated Variance

SALARIES $ 21,032,092.17 $

TRAVEL 334,379.84

93,139.54 -78,054.40
-356.40

$21,046,820.91 $ =~33~4!379.84

See notes to the financial statements.

- 36-



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, 2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-521-99-01 FS-521-99-02 FS-521-00-0l FS-521-00-02

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

CORRECTIVE ACTIONIRESPONSES

INVENTORIES Inadequate Resale Inventory Records Finding Control Number: FS-521-00-01

The University's new computerized point-of-sale system is being enhanced such that management can ensure adequate monitoring ofinventory costs throughout the fiscal year. Markup on resale items is also done, using the system to ensure consistency. Additionally, the University is making preparations to privatize bookstore services.

REVENUEIRECEIVABLEIRECEIPTS Inadequate Accounting Procedures Finding Control Number: FS-521-00-02

The University continues to monitor student accounts receivables. Collections ofstudent 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. The University funded the deficit balances in restricted funds during the current fiscal year. The University is also setting aside student account reserves each year to assist in the process of compliance with Board of Regent's Policy.

The University will make a concerted effort to fund the deficit balances in restricted funds where applicable and when funds are available.

- 1-

ALBANYSTATEU}ITVERSITY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001

. PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-52l-98-0l FA-52 1-98-02 FA-52l-99-0l FA-52 1-99-03 FA-52l-00-0l FA-52l-00-02 FA-52 1-00-03

Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Partially Resolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

SPECIAL TESTS AND PROVISIONS Deficiencies In Student Financial Aid Refund Process Student Financial Aid Cluster Program Questioned Cost: $1,188.75 Finding Control Number: FA-52l-00-03

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 also implemented a process to target and identify financial aid recipients that do not complete at least 60% of the term and received all "F" grades for the term. Every effort will be made to determine the last date of attendance as certified by an instructor ofrecord or an academically related activity. The University will contact the U. S. Department of Education regarding resolution of this finding.

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SECTION III CURRENT YEAR FINDINGS AND QUESTIONED COSTS

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ALBANY STATE UNNERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUNALENTS/GENERAL LEDGER INVENTORIES REVENUESIRECEIVABLESIRECEIPTS PROCUREMENT EXPENDITURESILIABILITIESIDISBURSEMENTS GENERAL FIXED ASSETS Inadequate Accounting Procedures Finding Control Number: FS-521-01-01
Accounting procedures for Albany State University were found to be deficient in the following control categories:
Cash and Cash Equivalents/General Ledger
(1) Bank reconciliations for the operating and payroll accounts, as presented for audit, were not reconciled to the general ledger at June 30, 2001. Extensive audit procedures were performed by the auditors to reconcile the payroll bank account to the general ledger. However, the operating bank account was not reconciled to the general ledger and an unlocated difference of $376.21 remained at June 30,2001. The following deficiencies were noted during our examination:
(a) The outstanding check list provided by the University for the month ofJune totaled $4,389.03 more than the amount ofoutstanding checks reflected on the June 30, 2001 payroll account bank reconciliation. In addition, numerous checks that had neither cleared the bank nor been voided on the general ledger totaling $1,720.86 were not included in the outstanding check list and five checks, totaling $504.70, were identified as having cleared the bank which were improperly listed on the outstanding check list.
(b) Numerous reconciling items reflected on the bank reconciliations were either incorrect and/or documentation could not be located to support the reconciling item.
(c) Numerous reconciling items requiring adjustments totaling $281.02 were not posted to the payroll cash account on the general ledger nor were they on the reconciliation.
(2) Numerous posting errors were identified in the balance sheet and revenue accounts. These items were corrected during the course of our work.
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ALBANY STATE UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS/GENERAL LEDGER INVENTORIES REVENUES/RECEIVABLES/RECEIPTS PROCUREMENT EXPENDITURESILIABILITIESIDISBURSEMENTS GENERAL FIXED ASSETS Inadequate Accounting Procedures Finding Control Number: FS-521-01-01
Inventories
(1) Adequate procedures did not exist for the systematic and consistent mark-up of resale inventories.
(2) Tests ofthe perpetual inventory system revealed numerous errors between physical counts taken by the auditors and the inventory subsidiary records.
Revenues/Receivables/Receipts
An examination of student accounts receivable as ofJune 30, 2001 revealed that $480,836.61 in receivables were over one year old and were not supported by approved financial aid.
Procurement
Three contracts for leases were executed prior to purchase orders being issued. University policies require that purchase orders be issued prior to executing leases.
. Expenditures/LiabilitieslDisbursements
(1) The University entered into a long-term operating lease agreement with lOS Capital for the use oftwo Ricoh Afico Copiers and attachments which exceeded the fair value ofthe leased equipment. Subsequent to June 30, 2001, the Universityreceived $42,136.00 from
lOS Capital which was not adequately disclosed in the terms ofthe agreement between the
University and lOS Capital. Financing agreements, such as this, should not exceed the fair value of the leased equipment and should be supported by written contracts which disclose all relevant terms.
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ALBANY STATE UNNERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUNALENTS/GENERAL LEDGER INVENTORIES REVENUESIRECENABLES/RECEIPTS PROCUREMENT EXPENDITURESILIABILITIESIDISBURSEMENTS GENERAL FIXED ASSETS Inadequate Accounting Procedures Finding Control Number: FS-52l-0l-0l
ExpenditureslLiabilitieslDisbursements
(2) An examination of 150 ofthe University's expenditure vouchers was performed to test the validity and accuracy ofexpenditure transactions. This testing revealed that 27 vouchers had one or more deficiencies. These deficiencies are noted as follows:
(a) Ten vouchers were paid from a copy and/or fax copy rather than original invoices.
(b) One voucher was paid for an incorrect amount.
(c) Fourteen vouchers were posted to incorrect State Chart ofAccounts (SCOA) codes.
(d) One voucher was paid without supporting documentation for services performed.
(e) Six vouchers lacked receiving signatures.
(3) Proper supporting documentation could not be provided for one capital lease and two operating leases.
General Fixed Assets
The University did not follow state guidelines pertaining to the disposition of state surplus personal property when it replaced fourteen copiers. The copiers, with only two or three payments left on them, were refinanced, removed by the lessor, and replaced with new copiers. The Official Code of Georgia Annotated Section 20-3-60 states in part that:
"All properties owned or held by the board ofregents pursuant to this chapter which have been declared to be the public property of the state may be sold, leased, or otherwise disposed ofby the board subject to the approval ofthe Governor, whenever the board may deem such sale, lease, or other disposition in the best interests of the system, if the board shall first determine that such property can no longer be advantageously used in the system."
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ALBANYSTATEU}ITVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUNALENTS/GENERAL LEDGER INVENTORIES REVENUES/RECEIVABLES/RECEIPTS PROCUREMENT EXPENDITURESILIABILITIESIDISBURSEMENTS GENERAL FIXED ASSETS Inadequate Accounting Procedures Finding Control Number: FS-52l-0l-0l
The deficiencies noted in the above control categories occurred because ofmanagement's failure to establish procedures to; analyze and reconcile balances on the general ledger with supporting records, adequately monitor inventory throughout the year, obtain approved documentation to support financial aid before disbursement of funds, adequately monitor procurement and property management operations, implement controls over the disbursement function, and ensure journal entries posted to the general ledger contained adequate supporting documentation and proper explanations.
The University should implement appropriate procedures and controls to ensure that all bank statements are reconciled to the general ledger and ensure that reconciling items are identified and corrected promptly. The University should review the accounting procedures in place, design procedures relative to the above control categories and implement procedures to strengthen the internal controls over the accounting functions.
EXPENDITURESILIABILITIESIDISBURSEMENTS H.O.P.E. Disbursements Made to Ineligible Students Questioned Costs: $3,577.00 Finding Control Number: FS-52l-0l-02
An examination of twenty students receiving H.O.P.E. funds revealed that $3,577.00 was awarded and disbursed to one student that could not be verified as a legal resident of Georgia. H.O.P.E. guidelines state that a student must be classified as a legal resident of Georgia under the Board of Regents policy at the time the student first enrolled in a postsecondary institution. The Board of Regents policy states that a student 18 years or older must show that he/she has been a legal resident of Georgia for a period of at least 12 months proceeding the date of registration.
This questioned cost is the result of management's failure to maintain adequate supporting documentation for students receiving H.O.P.E funds to ensure that the students are legal residents of Georgia per H.O.P.E. guidelines. The University should implement procedures to ensure that documentation is maintained that demonstrates residency requirements for H.O.P.E. eligibilitY are met as determined by the Board of Regents. The University should contact the Georgia Student Finance Commission to resolve this questioned cost.
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ALBANY STATE UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FUND EQUITIES Deficit Restricted Funds Finding Control Number: FS-521-01-03

At June 30, 2001, the University had four Restricted Funds with deficit balances totaling $91,305.81, for which documentation offunds available to cover the deficits was not provided. Funds should not be expended in projects that do not have funds available.

These deficit balances are a result ofmanagement's failure to establish controls to ensure that grants

are available and reimbursement requests are made in a timely manner. The University should

implement procedures to ensure that all grants are current, that funds are available to cover

expenditures and that reimbursement request are made in a timely manner. The University should

review the individual Restricted Funds to determine if all available funding was requested, if the

receipts were correctly posted to the funds, and ifany other source offunding can be used to fund the

deficits.

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FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

CASH MANAGEMENT Excessive Cash Balances Finding Control Number: FA-521-01-01

A review ofthe cash management procedures for the Federal Direct Student Loan Program disclosed that cash draws were made in advance ofimmediate cash needs. During the year under review, the University had excessive cash balances for 88 days with an average cash balance of$91,514.97 for these days.

Federal cash draws should not exceed the immediate need. The excessive cash balances were the result of management's failure to forecast needs of this program and to have controls in place and operational to prevent excess cash balances. Procedures should be implemented by the University to ensure that requests for cash draws do not exceed the immediate need.

Federal Programs/Awards Affected

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

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