Albany State University, Albany, Georgia, independent accountant's report on applying agreed-upon procedures for fiscal year ended June 30, 2011

ALBANY STATE UNIVERSITY
ALBANY, GEORGIA
INDEPENDENT ACCOUNTANT'S
REPORT ON APPLYING AGREED-
UPON PROCEDURES
FOR FISCAL YEAR ENDED
JUNE 30,2011
Georgia Department of I
Audits and Ac-cmmt~
Russell M.kinto1
State Aadito:

ALBANY STATE UNIVERSITY -TABLE OF CONTENTS -

INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES

EXHIBITS

A SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT

1

B STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET

BY PROGRAM AND FUNDING SOURCE

2

C STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE

RUSSELLW. HINTON
STATE AUDITOR
(404) 616.2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1- 156 Atlanta, Georgia 30334-8400
November 4 , 2 0 1 1

Members of the State Board of Regents of the UniversitySystem of Georgia
and Honorable Everett Freeman, President Albany State University
Inde~endenAt ccountant's R e ~ o rotn ADDlvinR Aareed-U~onProcedures
Ladies and Gentlemen:
We have performed the procedures enumerated below, which were agreed to by the University and the University System Office (Oversight Unit) of the Board of Regents of the University System of Georgia, solely to assist you in assessing the accuracy of the financial information reported to the University System Office in the University's 2 0 1 1 Annual Financial Report for inclusion in the University System of Georgia's Annual Financial Reporf, the State of Georgia's Comprehensive Annual Fjnancial Report (O1FR) and Single Audit Repoe and to assist you in assessing the accuracy of the budget basis information provided in the Summary Budget Comparison and Surplus Analysis Report, Statement of Funds Available and Expenditures Compared to Budget By Program and Funding Source, and the Statement of Changes To Fund Balance By Program and Funding Sourcewhich are attached as Exhibits A, B and C, respectively. Albany State University's management is responsible for the financial information reported to the University System Office in the University's Annual Financial Report. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.
The procedures and the associated findings are as follows:
1. Review selected balance sheet items reported on the Annual Financial Report (cash, accounts receivable, accounts payable, deferred revenues, net assets). Confirm that these items have adequate supporting documentation and are properly reconciled to the University's general ledger.
The University was unable to provide documentation for $427.58 and $7,302.76 of
accounts receivable - Federal financial assistance and accounts receivable - other,
respectively.
The Universitywas unable to provide documentationfor $2,843.28 of notes receivables.
The Universitywas unable to provide documentationfor $6,168.00 of other liabilities.
The University was unable to provide documentation for $336.68 of deposits held for other organizations.

2. Obtain the University's GAAP basis Statement of Net Assets and Statement of Revenues, Expenses and Changes in Net Assets (SRECNA) submitted for inclusion in the State's CAFR and Single Audit. Utilizing test scripts, confirm that financial information presented in these statements properly supports activity reported in the University's accounting records.
On the SRECNA, NonoperatingFederal Grants and Contracts revenues were understated
by indirect costs of $81,212.45that was not recorded untilfiscal year 2012.
3. Obtain the University'sStatement of Cash Flows submitted for inclusion in the State's CAFR and Single Audit. Utilizing cash flow worksheets, confirm information reported on Statement of Cash Flows.
We did not note any exceptions as a result of our procedures.
4. Obtain the University's Notes to the Financial Statements submitted for inclusion in the State's CAFR and Single Audit. Utilizing notes worksheets and other supporting documentation confirm that note disclosures related to Cash, Investments, Accounts Receivable, Capital Assets, LongTerm Debt, Lease Obligations and Retirement Plans have been properly reported.
The Summary of Significant Accounting Policies note disclosure was not properly
reported. The disclosure of the Restatement of Prior Year Net Assets portion of Note 1
was not reported. Our testing revealed that the University had a restatement of prior
year net assets decreasing beginning net assets by $827,495. This restatement was
due to a revaluation of accumulated depreciationfor the capital lease.
The Lease Obligations note disclosure was not properly reported. The Capital Lease
payment disclosure portion in Note 10 reported that current year expenditures for fiscal year 2011 were $2,052,459of which $1,605,287represented interest and total principal paid on capital leases was $447,172for the fiscal year ended June 30,2011. Our testing revealed that current year expenditures for fiscal year 2011 were $3,068,948of which $1,527,564represented interestand total principal paid on capital leaseswas $1,541,384for the fiscal year ended June 30,2011.
The Post-Employment Benefits Other Than Pension Benefits note disclosure was not
properly reported. Note 14 reported employee contributionsof $342,119and employer contributions of $681,648while documentation revealed contributionsof $732,804.81 and $345,582.49,respectively.
5. Review the University's year end GAAP basis journal entries. Obtain documentation for GAAP journal entries and confirm that the entries were posted to the University's Annual Financial Report.
Year end GAAP entries to record noncapitalized gifts from the Georgia State Financing and Investment Commission (GSFIC) were not made correctly. The noncapitalized gifts
reported on the SRECNA as Gifts - State were reflected as $404,445;however,
documentation revealed noncapitalized gifts were actually $407,096.
Testing revealedthat the Universitydid not adhere to final closingdates and procedures
provided by the Board of Regents. The University reopened the fiscal year 2011
accounting records after submission of the Annual Financial Report to the Board of Regents System Office and made materialjournal entries to the accountingrecords.

6. Confirm that State Appropriation revenues, receivables and remittances of prior year surplus balances have been properly recorded in the University's financial records. Prior year surplus balances should be netted against State Appropriation revenues in the GAAP basis financial statements; however, prior year surplus balances should be reflected as fund balance adjustments on the Budget basis financial statements.

We did not note any exceptions as a result of our procedures.
7. Obtain listing of write-off requests for accounts receivable less than $3,000.00 for fiscal year 2011. Confirm that these write-off requests have been approved by the State Accounting Officer and have been posted to the University'sfinancial statements.
We did not note any exceptions as a result of our procedures.

8. Verify that the listing of salaries and travel reported to the Department of Audits is in accordance with O.C.G.A. 50-6-27 and reconciles to amounts recorded in the University's financial statements.

We did not note any exceptions as a result of our procedures.
9. Review year end Budgetary Statements including the Summary Budget Comparison and Surplus Analysis Report (Exhibit A), Statement of Funds Available and Expenditures Compared to Budget By Program and Funding Source (Exhibit 8 ) and the Statement of Changes To Fund Balance By Program and Fundng Source (Exhibit C). Confirm that budget information presented in these statements supports activity reported in the University's accounting records and determine if any budget overexpenditures exist.
The University's budget comparison reflected an overexpenditure of $4,441.04 in Teaching - State Appropriations. See Exhibits A, B and C.

10. Obtain documentation for Budget basis reserves reported by University on the Summary Budget Comparison and Surplus Analysis Report (Exhibit A). Confirm that the reserves are properly documented, valid and appropriate.

The University'sreservesfor Tuition Carry-over and Surplus were improperly calculated.

Reserves

Originally Reported Amount

Actual Amount

Variance

Tuition Carry-Over Surplus

$ 558,785.64 $ 556,762.97 $ 2,022.67
5 61,757.11 $ 63,779.78 $ -2,022.67

The exceptions noted above were corrected by the University and resubmitted.

11. Review the H.O.P.E. Scholarship Program reconciliation between the University and the Georgia Student Finance Commission. Confirm that information reported to the Georgia Student Finance Commission has been reconciled with H.O.P.E. Scholarship activity reported on the University's financial records.

The University's H.O.P.E. Scholarship Program reconciliation did not reconcile to the University's accounting records as follows:

Report Item

Per Hope Per Accounting Unreconciled

Reconciliation

Records

Difference

Cash disbursed to school

$ 3,401,029$ 3,403,171$

-2,142

Amount awarded to students $ 3,058,306$ 3,066,351$

8,045

12. Review the Schedule of Expenditures of Federal Awards information submitted by the University for inclusion in the Statewide Single Audit. Confirm that the information is properly presented and supported by the University's accounting records.

The University incorrectly reported no loan activity during the year under review associated with the Perkins Loan Program. This error was corrected.

13. Review capital asset records to ensure that (1)subsidiary ledgers are appropriately reconciled to the ledgers, (2) capitalization thresholds are being properly followed, and (3) a complete annual physical equipment inventory is being conducted and that issues noted during the physical inventory are being properly addressed by management.

The capital assets records were not appropriately reconciled to the asset management
module. Equipment - Accumulated Depreciation did not agree between the subsidiary modules and the fixed assets ledger by $7,068.94. Capital Collections - Accumulated
Depreciation did not agree between the subsidiary modules and the fced assets ledger by $185.83.

14. Review bank reconciliations during the year under review to ensure that management is preparing them timely and that reconciling items are being addressed by management timely and in an appropriate manner.

We did not note any exceptions as a result of our procedures.

15. Review documentation to ensure that all subsidiary modules including BANNER are reconciledto the general ledger at least quarterly in accordance with the Business Procedures Manual Section 10.6.2. and ensure that reconciling items are adequately explained and resolved in a timely manner.

We did not note any exceptions as a result of our procedures.

These agreed-upon procedures do not constitute an audit of the financial statements or any part thereof, the objective of which is to express an opinion on the financial statements or a part thereof. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
This report is intended solely for the information and use of the specified users listed above and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
CPA, CGFM

EXHIBITS

ALBANY STATE UNIVERSITY SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT
YEAR ENDED JUNE 30,2011

REVENUES
State Appropriation State General Funds
Other Funds
Total Revenues
ADJUSTMENTS AND PRQGRAMTRANSFERS
CARRY-OVER FROM PRIOR YEARS
Transfers from Reserved Fund Balance
Total Funds Available
EXPENDITURES
Special Funding Initiative Teaching
Total E x ~ e n d l t ~ r e s
Excess of Funds Available over Expenditures
FUND BALANCE JULY 1
Resewed Unreserved
ADJUSTMENTS
Prior Year Payables/Expenditures Prior Year Receivables/Revenues Unreserved Fund Balance (Surplus) Returned
to Board of Regents - University System Office
Year Ended June 30,2010 Prior Year Resewed Fund Balance Included In Funds Available FUND BALANCE JUNE 30
SUMMARY OF FUND BALANCE
Reserved Department Sales and Services lndlrect Cost Recoveries Technology Fees Uncollectible Accounts Receivable Tuit~onCarry-Over
Total Reserved
Unreserved Surplus
Total Fund Balance

BUDGET

ACTUAL

VARIANCE -
FAVORABLE (UNFAVORABLE)

ALBANY STATE UNIVERSITY STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AN0 FUNDING SOURCE
YEAR ENDED JUNE 3 0 . 2 0 1 1

Speclal Fundlng lnltlatlve State Appropriation State General Funds
Teaching State Appropriation State General Funds Federal Funds American Recovery and Retnvestment Act Federal Stab~lizationFunds Other Funds
Total Teaching
Total Operanng Acttv~ty

Or~g~nal Appropriation

Amended Appropriation

F~nal Budget

Current Year Revenues

Funds Available Compared to Budget

Prlor Year

Adjustments and

Total

Carry-Over

Program Transfers Funds Available

Varlance Positive (Negative)

Expenditures Compared to Budget

Actual

Varlance Positive (Negative)

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

ALBANY STATE UNIVERSITY STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE
YEAR ENDEDJUNE 30,2011

Special Funding Initiative State Appropriation State General Funds
Teaching State Appropriatron State General Funds Federal Funds Amer~canRecoveryand ReinvestmentAct Federal Stab~llrat~oFnunds Other Funds
Total Teachlng
Total OperatingAct~v~ty
Pr~oYr ear Reserves Not Ava~lablefor Expenditure Uncollectlble Accounts Rece~vable

Beg~nningFund Balance/(Deficit)
July 1

Fund Balance Carr~edOver from
Prior Period as Funds Available

Return of F~scaYl ear 2010
Surplus

Pnor Period Adjustments

Budget Unit Totals

Other Adjustments

Early Return F~scaYl ear 2011
Surplus

Excess (Defic~ency) of Funds Available
Over/(Under) Expenditures

Ending Fund Balance/(Def~cit)
June 30

Analys~sof EndingFund Balance

Reserved

Surplus/(Deficit)

Total

Summary of EndlngFund Balance Reserved
Department Sales and S e ~ ~ c e s lnd~recCt ost Recover~es Technology Fees Uncollectible Accounts Receivable Tuition Carry-Over UnreSeNed Surplus
Total EndingFund Balance -June 3 0

$ 301.649.31 1,631,887.52 430.236.55 230.681.67 556.762.97
$
$ 3.151.218.02 $
a-

$ 301.649.31 1.631.887.52 430.236.55 230.681.67 556,762.97

63.779.78

63.779.78

- 63.779.78 $ 3.214.997.80