~t>O lZ\ loll lqqcg-~~ REVIEW REPORT STATE OF GEORGIA ARMSTRONG ATLANTIC STATE UNIVERSITY SAVANNAH, GEORGIA YEAR ENDED JUNE 30,1999 STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS 254 WASHINGTON STREET ATLANTA, GEORGIA 30334-8400 ARMSTRONG ATLANTIC STATE UNIVERSITY - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION ~:XHIBITS 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 20 F COMBINING STATEMENT OF CHANGES IN FUND BALANCES CURRENT FUNDS - UNRESTRICTED 21 G COMBINING STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES, AND OTHER CHANGES UNRESTRICTED 22 SCHEDULES 1 SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION 23 SCHEDULES OF REVENUES AND EXPENDITURES COMPARED TO BUDGET 2 RESIDENT INSTRUCTION 24 3 LOTTERY FOR EDUCATION 27 4 CHANGES IN INVESTMENT IN PLANT 28 5 SCHEDULE OF FUND BALANCES CURRENT FUNDS AND PLANT FUNDS 30 6 RECONCILIATION OF SALARIES AND TRAVEL 32 SECTIONll 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 January 14, 2000 Honorable Roy E. Barnes, Governor Members ofthe General Assembly of Georgia Members ofthe Board ofRegents ofthe University System of Georgia and Honorable Frank A. Butler, President Armstrong Atlantic State University INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SupPLEMENTARY INFORMATION Ladies and Gentlemen: We have reviewed the accompanying financial statements (Exhibits A through D) ofArmstrong Atlantic State University as of and for the year ended June 30, 1999, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the management of Armstrong Atlantic State University. A review consists principally of inquiries of University personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective ofwhich is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, with the exception of the matters described in the fourth and fifth paragraphs, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles. As disclosed in Note 1 to the financial statements, generally accepted accounting principles require encumbrances to be recorded as a reservation of fund balance. However, in accordance with Georgia Law and State budgetary policy, management recorded encumbrances as expenditures and liabilities. The effects of this departure from generally accepted accounting principles on the financial statements were not reasonably determinable. 99ARL-67 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 . be decreased by $993,684.99 as of June 30, 1999, and the net change in fund balance for the year ended June 30, 1999, would be decreased by $149,046.44. Our review was made for the purpose ofexpressing limited assurance that there are no material modifications that should be made to the financial statements in order for them to be in conformity with generally accepted accounting principles. The year 2000 supplementary infonnation on Schedule" I" is not a required part of the basic financial statements but is supplementary infonnation required by the Governmental Accounting Standards Board. The accompanying combining statements (Exhibits E through G) and the financial schedules (Schedules 2 through 6) are presented for supplementary analysis purposes. Such infonnation has . been subjected to the inquiries and analytical procedures applied in the review ofthe financial statements, and except for the effects of the matters discussed in the fourth and fifth paragraphs, we are not aware of any material modifications which should be made thereto. Respectfully submitted, RWH:jb 99ARL-67 ussell W. Hinton State Auditor F1NANCIAL STATEMENTS -1 - ARMSTRONG ATLANTIC STATE UNIVERSITY COMBINED BALANCE SHEET ALL FUND GROUPS JUNE 30, 1999 ASSETS Cash and Cash Equivalents Accounts Receivable Inventories Prepaid Items Due from Other Fund Groups Investment in Plant Total Assets LIABILITIES AND FUND BALANCES Liabilities Accounts Payable Student Deposits Deferred Revenue Tuition and Fees Other 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 Endowment Term Endowment Net Investment in Plant Restricted Unrestricted Total Fund Balances Total Liabilities and Fund Balances CURRENT FUNDS UNRESTRICTED RESTRICTED LOAN FUNDS $ 2,551,238.66 $ 528,127.20 441,020.46 22,335.81 168,686.06 64,426.60 $ 921,609.03 30,049.64 16,193.31 $ 3,711,408.19 $ 986,035.63 $ ===4=:6=,2:::42=:.=:95= $ 1,059,938.68 27,318.n 1,357,509.12 88,635.82 $ $ 2,533,402.39 $ 79,385.84 79,385.84 $ 13,710.38 32,532.57 $ $ 1,178,005.80 $ 1,178,005.80 $ 906,649.79 906,649.79 $ 46,242.95 $ 3,711,408.19 $ 986,035.63 $ ===4=6=:,2..4.=2,=95= See Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement -2- ENDOWMENT AND SIMILAR FUNDS UNEXPENDED PLANT FUNDS RENEWALS AND REPLACEMENTS INVESTMENT IN PLANT AGENCY FUNDS TOTAL (Memorandum Only) $ 2,167,704.78 $ $ 2,167,704.78 $ 300,000.00 $ 1,240,098.22 $ - - - - - - $ 57,660,024.27 300,000.00 $ 1,240,098.22 $ 57,660,024.27 $ 867,651.15 $ 7,221,169.05 1,465,929.54 441,020.46 22,335.81 168,686.06 57,660,024.27 867,651.15 $ =====6=6,=97:=9=,1::65;;;,:.::19=' $ $ $ 2,134,234.96 33,469.82 $ $ 2,167,704.78 $ 205,531.59 $ 89,300.22 294,831.81 $ 5,168.19 $ 5,168.19 $ 519,963.00 $ $ 519,963.00 $ 4,717.67 4,717.67 $ $ 720,135.22 720,135.22 $ 57,655,306.60 57,655,306.60 276,021.67 $ 591,629.48 867,651.15 $ 2,061,454.94 27,318.n 1,357,509.12 88,635.82 591,629.48 168,686.06 4,717.67 4,299,951.86 $ 13,710.38 32,532.57 2,134,234.96 33,469.82 57,655,306.60 906,649.79 1,903,309.21 $ 62,679,213.33 $ 2,167,704.78 $ 300,000.00 $ 1,240,098.22 $ 57,660,024.27 $ 867,651.15 $ =====66=,=97:=9=,1=:65;;;,:.1,;;;9= -3- ARMSTRONG ATLANTIC STATE UNIVERSITY COMBINED STATEMENT OF CHANGES IN FUND BALANCES ALL FUND GROUPS YEAR ENDED JUNE 30.1999 EXHIBIT"B" ENDOWMENT AND SIMILAR FUNDS UNEXPENDED PLANT FUNDS RENEWALS AND REPLACEMENTS INVESTMENT IN PLANT TOTAL (Memorandum Only) $ $ 2,150.00 -78,669.81 $ -76,519.81 $ 200,000.00 $ 252,459.95 5,168.19 457,628.14 $ 782,000.00 7,336.50 1,728.50 $ 791,065.00 $ $ 2,287,202.24 392,305.94 1,082,299.00 1,130,856.39 4,892,663.57 $ 39,881,267.49 982,000.00 4,259,905.81 2,852,959.67 842,274.96 110,717.42 260,200.91 -80,230.15 47.00 93,653.23 -1,858.57 2,287,202.24 392,305.94 1,082,299.00 1,130,856.39 54,093,601.34 $ 0.00 $ 45,243,366.16 2,275,138.05 25,402.37 $ 4,834.50 157,019.98 2,068.38 392,305.94 $ 112,528.63' 1,082,299.00 $ 290,130.37 1,474,604.94 112,528.63 290,130.37 $ 0.00 $ 509,669.07 $ 1,082,299.00 $ 290,130.37 $ 49,580,258.88 $ $ $ -76,519.81 $ 2,244,224.59 $ 2,167,704.78 $ $ 52,374.62 52,374.62 . $ 333.69 $ 4,834.50 157,664.09 157,664.09 -133,569.91 $ 853,705.13 $ $ 4,602,533.20 $ 53,052,n3.40 0.00 0.00 0.00 4,513,342.46 58,165,870.87 5,168.19 $ 720,135.22 $ 57,655,306.60 $ 62,679,213.33 -5- ARMSTRONG ATLANTIC STATE UNIVERSITY STATEMENT OF CURRENT FUNDS REVENUES. EXPENDITURES, AND OTHER CHANGES YEAR ENDED JUNE 30.1999 EXHIBIT .C" REVENUES State Appropriations Tuition and Fees Federal Grants and Contracts State Grants and Contracts Private Gifts, Grants, and Contracts Endowment Income Sales and Services of Educational Activities Sales and Services of Auxiliary Enterprises Other Sources Total Revenues EXPENDITURES Educational and General Instruction Research 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 Expendnures OTHER TRANSFERS AND ADDITIONS/(DEDUCTIONS) Excess of Restricted Receipts over Transfers to Revenues Transfers for Renewals and Replacements Transfers for Capital Projects 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 Additionsl(Deductions) UNRESTRICTED RESTRICTED TOTAL (Memorandum Only) $ 23,799,597,00 12,811,535,59 25,402.37 $ 70,357.60 1,382,847,21 1,791,527.72 $ 39,881,267,49 $ $ 4,234,173.84 2,812,542,91 727,609.55 66,717,76 7,841,044.06 $ 23,799,597,00 12,811,535,59 4,259,576.21 2,812,542.91 727,609,55 66,717.76 70,357.60 1,382,847.21 1,791,527,72 47,722,311.55 $ 18,691,130.48 $ 48,189.92 510,430,48 6,224,331.16 2,498,412.90 4,251,928.84 2,818,441,81 2,359,456.51 384,557,98 . 306,930.07 289,151.86 1,288,249.60 6,248.54 $ 39,6n,460,15 $ 483,201.14 $ 5,817.50 932,278.48 6,936,32 115,278.50 6,297,532.12 7,841,044.06 $ 19,174,331.62 54,007.42 1,442,708.96 6,231,267,48 2,498,412.90 4,367,207.34 2,818,441.81 8,656,988,63 384,557.98 306,930.07 289,151.86 1,288,249.60 6,248.54 47,518,504,21 $ $ -157,664.09 -52,374.62 82,829.59 196,40325 $ 196,40325 -157,664.09 -52,374.62 82,829.59 -152,185.48 $ -279,394.60 $ 196,403.25 $ -152,185.48 -82,991.35 Net Increase/(Decrease) in Fund Balances $ -75,587.26 $ See Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement -6- 196,403.25 $ =======12=0=,8..1.5=.=99= ARMSTRONG ATLANTIC STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1999 EXHIBIT "D" NOTE 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY Armstrong Atlantic State University is one oftbirty-four (34) State supported member institutions ofhigher education in Georgia which comprise the University System of Georgia, an organizational unit ofthe State of Georgia. The accompanying financial statements reflect the operations of Armstrong Atlantic 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. Annstrong Atlantic State University does not have authority . to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Armstrong Atlantic State University is considered an organizational unit of the Board of Regents of the University System of Georgia reporting entity for financial reporting purposes because ofthe significance ofits legal, operational, and financial relationships with the Board of Regents as defined in Section 2100 of the Goverilmental Accounting Standards Board Codification of Governmental Accounting and Financial Re.porting 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, research, 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- ARMSTRONG ATLANTIC STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1999 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. ENDOWMENT AND SIMILAR FUNDS The fund used to account for endowment funds and term endowment funds. Endowment funds are subject to the restrictions ofgift instruments requiring that the principal be invested in perpetuity and income only be utilized. Term endowment funds are similar to endowment funds except that upon the passage of a stated period oftime or the occurrence ofa particular event, all or part ofthe principal may be expended. 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, 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 of the 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 -8- ARMSTRONG ATLANTIC STAIE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1999 EXHIBIT "0" NOTE 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING for goods and services. The recognition ofencumbrances as expenditures and liabilities is in confonnity with accounting practices prescribed or pennitted by statutes and regulations ofthe State of Georgia, but is not consistent with generally accepted accounting principles, which provide for the recording of encumbrances as a reservation of fund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures detennmed in accordance with generally accepted accounting principles. 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$993,684.99 and a related net current year expenditure of$149,046.44 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 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 behalf of the University. 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 ofcurrent 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 - Administrative Central 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 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 fi;mds in the budget filed with the Administrative Central Office. -9- ARMSTRONG ATLANTIC STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1999 EXHIBIT "D" . NOTE 1: SUMMARy OF SIGNlFICANI ACCOUNTING POLICIES BUDGET 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: Resident Instruction Personal Services: Sponsored Operations Operating Expenses: Education, General and Departmental Services Sponsored Operations Special Funding Initiative Year 2000 Project $ 78.333.67 $ 240.678.56 $ 302.032.39 $ 500.000.00 $ 28.956.00 These overexpenditures of budget constitute a violation of Board of Regents policy, but do not constitute statutory violations of budget authority. Statutory violations ofbudget 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 Inventories of consumable supplies are recorded on the consumption method and are valued at cost on the Combined Balance Sheet using the first-in, first-out method. Inventories of goods for resale are valued at cost using the weighted average method. PREPAID ITEMS Prepaid items are payments.made to vendors in advance ofthe receipt of goods 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 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. Interfund eliminations have not been made in the aggregation ofthis data. -10 - ARMSTRONG ATLANTIC STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1999 EXHIBIT"D" NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds belonging to the State of Georgia 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 ofthe 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 ofthe bonds for this purpose. (4) Industrial revenue bonds and bonds of development authorities created by the laws ofthe 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 Intermediate Credit BaDk, 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 ofaccounts 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 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, 1999, are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk: -11- ARMSTRONG ATLANTIC STAIB UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS WNE30.1999 EXHIBIT "D" NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS 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. Cash Deposits Carrying Amount Bank Balances Risk Categories 2 3 $ 4,755,271.65 $ 6,041.401.97 $ 250,000.00 $ 4,866.359,03 $ 925,042.94 CATEGORIZATION OF INVESTMENTS The carrying amounts of investment balances as of June 30, 1999, are categorized below: Board ofRegents Legal Fund Total Return Fund Total Investments $ 237,848,06 2,209.939.34 $2.447.787.40 Funds invested in an investment pool managed by another governmental entity are not required to be categorized since the University did not own any specific, identifiable investment securities ofthe pool. . . NOIE 3: INVESTMENT IN PLANT The following is a summary ofInvestment in Plant fixed assets as of June 30, 1999: Land Buildings Improvements Other Than Buildings Equipment Library Books and Collections $ 258,253.82 38,446,653.81 3,198,092.24 8,980,898.55 6.776,125.85 Total Investment in Plant $57.660.024.27 -12 - ARMSTRONG ATLANTIC STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1999 EXHIBIT"D" NOTE 4: CMITAL LEASES Armstrong Atlantic 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. If renewal of such 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, 1999, future minimum lease payments under capital leases are as follows: Fiscal Year 2000 $ 4,785.22 Less: Amounts Representing Interest 67.55 Present Value of Future Minimum Lease Payments $ 4.717.67 NOTE5: RISKMANAGEMENT Armstrong Atlantic State University is a participant in the Board of Regents 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 of Regents of the University System of Georgia Administrative Central Office. All units ofthe University System of Georgia share the risk of loss 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 $1,000,000.00 per person and dental coverage up to an annual maximum of$l,OOO.OO per person. The Board ofRegents has contracted with Blue Cross Blue Shield ofGeorgia 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 purchased 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. -13 - ARMSTRONG ATLANTIC STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1999 EXIllBIT "0" NOTES: RISKMANAGEMENI A self-insured program of professional liability for its employees was established by the Board ofRegents 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 Self-Insurance Fund. NOTE 6: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA Plan Description Armstrong Atlantic State University participates in the Teachers Retirement System ofGeorgia (IRS), a costsharing multiple-employer defined benefit pension plan established by the General Assembly of Georgia for the purpose ofproviding retirement allowances and other benefits for teachers of the State of Georgia. IRS 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. Funding Policy Employees ofthe University who are covered by IRS are required by State statute to contribute 5% of their gross earnings to IRS. The University makes monthly employer contributions to TRS at rates adopted by the IRS 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 IRS on behalf of employees electing to participate in the Regents Retirement Plan. Employer contributions for the c~t fiscal year and the preceding two fiscal years are as follows: Fiscal Year Percentage Contributed Required Contribution 1999 1998 1997 100% 100% 100% $ 1,717,069.74 $ 1,623,042.71 $ 1,567,442.22 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 Umversity System ofGeorgia, under which it may purchase annuity contracts for the purpose ofproviding retirement and death benefits for eligible faculty -14 - ARMSTRONG ATLANTIC STATE UNNERSITY NOTES TO THE FlNANCIAL STATEMENTS JUNE 30. 1999 EXHIBIT"D" NOTE6: RETmEMENTPLANS REGENTS RETIREMENT PLAN Plan Description 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 tenns 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 ofGeorgia. 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 $533,526.69 (8.34%) and $319,862.59 (5%), respectively. ' GEORGIA DEFINED CONTRIBUTION PLAN Plan Description Annstrong Atlantic 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 pmpose ofproviding 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 ofthe Employees' Retirement System of Georgia. Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted-by the Board 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 hislher 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 tennination of employment, the amount of the member's account is refundable upon request by the member. -15 - ARMSTRONG ATLANTIC STAlE lJNNERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1999 EXHIBIT "D" NOTE 6: RETIREMENT PLANS GEORGIA DEFINED CONTRIBUTION PLAN Contributions and Vesting Total contributions made by employees during fi~cal year 1999 amounted to $78,951.63 which represents 7.5% of covered payroll. These contributions met the requirements of the plan. NOTE 7: LEAVB POLICIES 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 (Compensat~dAbsences) 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. NOTE 8: CONTrnGENCIES 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 Armstrong Atlantic State University (an organizational unit ofthe Board ofRegents ofthe 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 ofGeorgia are disclosed in the State ofGeorgia 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 ofGeorgia It is the p~licy 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 -16 - ARMSTRONG ATLANTIC STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1999 EXHIBIT "D" . NOTE 9: POSTEMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS 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. no As of June 30, 1999, there were employees who had retired or were disabled that were receiving these postemployment health and life insurance benefits. For the year ended June 30, 1999, Annstrong Atlantic State University recognized as incurred $191,969.63 of expenditures, which was net of $64,519.99 of participant contributions. NOTE 10: ENROLLMENT The equivalent full-time student emollment ofAnnstrong Atlantic State University was as follows: Regular Term Fall Semester, 1998 Spring Semester, 1999 3,872 3.689 Average Summer School, 1998 - 17- supPLEMENTARY INFORMATION -19 - ~ Cash and Cash Equivalents Accounts Receivable Inventories Prepaid Items Due from Other Fund Groups Total Assets ARMSTRONG ATLANTIC STATE UNIVERSITY COMBINING BALANCE SHEET CURRENT FUNDS - UNRESTRICTED JUNE 30. 1999 EXHIBIT "I:" RESIDENT INSTRUCTION LOTTERY FOR EDUCATION AUXILIARY ENTERPRISES STUDENT ACTIVITIES TOTAL $ 1,813,674.38 $ 54,649.20 71,914.82 168,686.06 1,460.00 $ 609,n4.70 $ 472,385.50 369,105.64 22,335.81 126,329.58 $ 1,092.50 2,551,238.66 528,127.20 441,020.46 22,335.81 168,686.06 $ 2,108,924.46 $ 1,460.00 $ 1,473,601.65 $ 127,422.08 $ 3,711,408.19 See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. -20- ARMSTRONG ATLANTIC STATE UNIYERSITY COMBINING STATEMENT OF CHANGES IN FUND BALANCES CURRENT FUNDS - UNRESTRICTED YEAR ENDEp JUNE 30,1999 EXHIBIT"P 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' RevenueslAccounts Receivable Total Expenditures and Other Deductions TRANSFERS BETWEEN FUNDS Nonmandatory Renewals and Replacements Capital Projects Total Transfers Between Funds Net IncreaseJ(Decrease) for the Year FUND BALANCES JULY 1, 1998 RESIDENT INSTRUCTION LOTIERYFOR EDUCATION AUXILIARY ENTERPRISES STUDENT ACTIVITIES TOTAL $ 36,480,614.24 $ 85,546.74 -1,858,57 $ 36,564,302.41 $ 345,500,00 $ 2,620,558,29 $ 1,174,30 345,500.00 $ 2,621,732,59 $ 434,594.96 $ 39,881,267.49 35,50 86,756.54 -1,858,57 434,630.46 $ 39,966,165.46 $ 36,626,701.35 $ 345,500,00 $ $ 2,275,138.05 430,120.75 $ 37,402,322,10 2,275,138.05 152,185,48 2,068,38 152,185.48 2,068,38 $ 3G,n8,88G,83 $ 345,500.00 $ 2,2n,206.43 $ 430,120.75$ 39,831,114.01 $ -214,564,42 $ 219,185.48 $ $ 0,00 $ 0,00 -157,664.09 -52,374,62 -210,038,71 134,487,45 $ 998,182,82 $ -157,664,09 -52,374.62 $ -210,038,71 4,509.71 $ -75,587,26 36,224.76 1,253,593,06 FUND BALANCES JUNE 30, 1999 $ 4,601,06 $ 0.00 $ 1,132,670,27 $ 40,734,47 $ 1,178,005,80 See accompanying1lOtes and Independent Accountanfs Combined Report on Review of Financial Statements' and Supplementary Infonnation, -21- ARMSTRONG ATLANT'C STATE UNIVERSITY COMBINING STATEMENT OF CURRENT FUNDS REVENUES EXPENDITURES, AND OTHER CHANGES UNRESTRICTED YEAR ENDED JUNE 30, 1999 EXHIBIT"G" RESIDENT INSTRUCTION LOTTERY FOR EDUCATION AUXILIARY ENTERPRISES STUDENT ACTIVITIES TOTAL REVENUES State Appropriations Tuition and Fees Federal Giants and Contracts Sales and Services of Educational Activities Sales and Services of Auxiliary Enterprises Other Sources $ 23,454,097,00 $ 11.207.228.69 25,402.37 70,357.60 1,723,528.58 345,500.00 $ 1,183,732.24 $ 1,382,847.21 53,978.84 $ 23.799,597.00 420,574.66 12.811,535.59 25,402.37 70.357.60 1,382.847.21 14,020.30 1,791.527.72 Total Revenues $ 36,480,614.24 $ 345,500.00 $ 2,620,558.29 $ 434,594.96 $ 39,881,267.49 EXPENDITURES Educational and General Instruction Research 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 $ 18.532.404.18 $ 48,189.92 507,411.53 6,057,615.03 2,068,292.15 4.234,890.22 2,818,441.81 2,359,456.51 158,726.30 3,018.95 166.716.13 $ 17.038.62 $ 384.557.98 306.930.07 289,151.86 1,288.249.60 6,248.54 $ 18,691,130,48 48,189.92 510,430.48 6,224,331.16 430,120.75 2,498,412.90 4.251,928.84 2,818,441.81 2.359,456.51 384,557.98 306,930.07 289,151.86 1.288,249.60 6,248.54 Total Expenditures $ 36,626,701.35 $ 345.500.00 $ 2.275,138.05 $ 430,120.75 $ 39.677,460.15 OTHER TRANSFERS AND ADDITIONS/CDEDUCIIONS) Transfers for Renewals and Replacements Transfers for Capital Projects Prior Period Adjustments (Net) Remittances to the Board of Regents of the University System of Georgia Prior Year's Unrestricted Fund Balance (Surplus) $ 83.688.17 -152,185.48 $ -157.684.09 -52,374.62 -894.08 $ $ 35.50 -157.664.09 -52,374.62 82,829.59 -152,185.48 Total Other Transfers and Additionsl(Deductions) $ -88.497.31 $ -210,932.79 $ 35.50 $ -279,394.60 Net Increasel(Decrease) in Fund Balances $ -214,584.42 $ 0.00 $ 134,487.45 $ 4,509.71 $ -75,587.26 See accompanying notes and Independent Accountanrs Combined Report on Review of Financial Statements and Supplementary Infonnation. -22- ARMSTRONG ATLANTIC STAIE UNNERSITY SCHEDULE "1" SCHEDULE OF REQ!lIRED 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. Armstrong Atlantic State University has completed an inventory of computer systems and other electronic equipment that may be effected by the year 2000 issue and that are necessary to conducting institutional 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 of systems 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. Armstrong Atlantic State University has identified the following financial systems requiring year 2000 remediation that are supported by the Board of Regents, University System of Georgia and have been remediated by the Board. The College and University Fund Accounting System is reportedly year 2000 compliant. The awareness, assessment, validation/testing phases were completed in 1999. The Regents Budget Reporting System is reportedly year 2000 compliant. The awareness, assessment, validation/testing phases were completed in 1997. The Regents Payroll/Personnel System is reportedly year 2000 compliant. The awareness, assessment, validation/testing phases were completed in 1999. The Regents Property Inventory System is reportedly year 2000 compliant. The awareness, assessment, validation/testing phases were completed in 1999. The Banner Student Information System is supported by SCT Banner, Inc. Their year 2000 version has been released and distributed to the University. 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 accompanying notes and Independent Accountant's Combined Report on Review ofFinancial Statements and Supplementary Information. - 23- ARMSTRONG AD.ANTIC STATE UNIVERSITY SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET RESIDENT INSTRUCTION YEAR ENDEp JUNE 30,1999 REVENUES State Appropriations Other Revenues Retained CURRENT FUNDS UNRESTRICTED RESTRICTED PLANT FUNDS RENEWALS AND UNEXPENDED REPLACEMENTS $ 23,454,097.00 $ 13,026,517,24 $ _ _..:.7z.:::;,84.:.,1:.z.;:,044:.:.:.:,06::::- 200,000,00 $ 252,459,95 782,000,00 7,336,50 $ 36,480,614,24 $ 7,841,044.06 $ 452,459.95 $ _ _.;.;78:.,;;9.:,;:,3;;;;;36;;.:,.50=. EXPENDITURES Personal Services: Education, General and Departmental Services Sponsored Operations Operating Expenses: Education, General and Departmental Services Sponsored Operations Capital Outlay Special Funding Initiative Year 2000 Project $ 24,687,539.28 $ 10,530,558.07 1,379,648.00 28,956.00 749,511,67 7,091,532.39 $ 504,834.57 $ 1,082,299,00 $ 36,626,701.35 $ 7,841,044.06 $ 504,834.57 $ _--:.:1,0.:;;8:.;;2::::,2:.;;;99;;.:,.0.:;;0;.. Excess of Revenues over Expenditures $ -146,087.11 $ 0.00 $ -52,374.62 $ _ _-2.9.2.,9.6.2.5.0. (1) To eliminate tuition waivers not budgeted and to reclassify current year transfers and prior year fund balances budgeted as revenues. See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information, -24- SCHEDULE "2. TOTAL ADJUSTMENTS (1) TOTAL (Budget Basis) BUDGET VARIANCEFAVORABLE (UNFAVORABLE) $ 24,436,097.00 $ 24,436,097.00 $ 24,436,097.00 $ 21,127,357.75 $ -2,014,119.39 19,113,238.36 18,748,356.00 0.00 364,882.36 $ 45,563,454.75 $ -2,014,119.39 $ 43,549,335.36 $ 43,184,453.00 $ 364,882.36 $ 24,687,539.28 749,511.67 $ 24,687,539.28 $ 25,304,969.00 $ 749,511.67 671,178.00 10,530,558.07 $ -2,359,456.51 7,091,532.39 1,587,133.57 1,379,648.00 28,956.00 8,171,101.56 7,091,532.39 1,587,133.57 1,379,648.00 28,956.00 7,930,423.00 6,789,500.00 1,608,735.00 879,648.00 0.00 617,429.72 -78,333.67 -240,678.56 -302,032.39 21,601.43 -500,000.00 -28,956.00 $ 46,054,878.98 $ -2,359,456.51 $ 43,695,422.47 $ 43,184,453.00 $ -510,969.47 $ -491,424.23 $ 345,337.12 $ _ _-.1.4.6.,0.87;,;.1..1... $ _ ...-1._4.6.,0,.8.7.1..1.. -25- ARMSTRONG ATLANTIC STATE UNIVERSITY SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET LOTTERY FOR EDUCATION YEAR ENDED JUNE 30,1999 SCHEDULE "3" REVENUES State Appropriations CURRENT FUNDS UNRESTRICTED BUDGET VARIANCEFAVORABLE (UNFAVORABLE) $ 345,500,00 $ 345,500,00 $ 0_,0_0_ EXPENDITURES Equipment, Technology and Construction Trust Fund Special Funding Initiatives $ 228,000,00 $ 228,000,00 $ 117,500,00 117,500.00 $ 345,500,00 $ 345,500.00 $ 0.00 0.00 0;";,,,0;;..0_ Excess of Revenues over Expenditures $ =====0,=00= $ =====0,=00,= See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Infonnation. -27 - ARMSTRONG ATLANTIC 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 JULY1,1998 CURRENT FUNDS UNRESTRICTED RESTRICTED $ 258,253.82 36,204,651.36 2,968,854.22 7,584,569.24 $ 1,415,969.15 $ 149,777.74 6,054,670,50 721,073.05 382.30 $ 53,070,999.14 $ 2,137,042.20 $ ======15:::0=,1:=60=.:::::04= $ 53,052,773.40 $ 18,225.74 2,137,042.20 $ 150,160.04 $ 53,070,999.14 $ 2,137,042,20 $ ======15:::0=,1:=60=.=04= See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information. -28- SCHEDULE "4" ADDITIONS PLANT FUNDS RENEWALS AND UNEXPENDED REPLACEMENTS GEORGIA STATE FINANCING AND INVESTMENT COMMISSION DEDUCTIONS DISPOSALS! DELETIONS! ADJUSTMENTS $ $ 28,847.06 $ 1,082,299.00 $ 1,130,856.39 229,238.02 134,220.86 $ 303,638.44 BALANCE JUNE 30, 1999 258,253.82 38,446,653.81 3,198,092.24 8,980,898.55 6,776,125.85 $ 392,305.94 $ 1,082,299.00 $ 1,130,856.39 $ 303,638.44 $ =====57=,=66=:0.,.0.:=24::::.2=7= $ 392,305.94 $ 1,082,299.00 $ 1,130,856.39 $ 290,130.37 $ 57,655,306.60 13,508.07 4,717.67 $ 392,305.94 $ 1,082,299.00 $ 1,130,856.39 $ 303,638.44 $ =====5=7,=66=:0.,.0.:=24::::.2=7= -29- ARMSTRONG ATLANTIC STATE UNIVERSllY SCHEDULE OF FUND BALANCES CURRENT FUNDS AND PLANT FUNDS JUNE 30,1999 RESIDENT INSTRUCTION CURRENT FUNDS UNRESTRICTED LOTIERY 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 Intercollegiate Athletics $ 412,365.01 For Inventory Reserve $ 75,000.00 369,105,64 For Renewals and Replacements Reserve For Subsequent Years' Expenditures 351,199.62 $ 40,734.47 SurpluslDeficit Regular Lottery for Education -70,398.94 ______ $ ...;0:.;;.0:;.:0;.. $ 4.601.06 $ 0,00 $' 1,132,670.27 $ _ _~4:.::.0:.:.,7:.;34:.:..4.:.:.7_ $ 4,601.06 $ 0.00 $ 1.132,670.27 $ _ _....4.0-.r=,7.3.4...4.7. . see accompanying notes and Independent Accountanrs Combined Report on Review of Financial Statements and Supplementary Infonnation. -30- SCHEDULE-S" RESTRICTED UNEXPENDED REGULAR PLANT FUNDS RENEWALS AND REPLACEMENTS INVESTMENT IN PLANT TOTAL $ 57,655,306.60 $ 57,655,306.60 $ _ _.::.90::.::6:.l.:,64:.:.::;9.;.;.79=- $ _--=90~6~,64:..:.:.:9.:..:79:... $ 60,676.17 659,459.05 $ 60,676.17 412,365.01 444,105.64 659,459.05 391,934.09 $ 5,168.19 $ 5,168.19 $ _ _..:.7=20~,1:.:3=:5.=22:.. -65,230.75 0.00 $ 1,903,309.21 $ 906,649.79 $ 5,168.19 $ 720,135.22 $ 57,655,306.60 $ 60,465,265.60 - 31 ARMSTRONG ATLANTIC 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 Coastal Georgia Community College Barber, Henry E. Chapman, Lynn Doster, Janet Dowdy, Deborah D. Hambright, Karen Hillegass, Annette Howe, Stacy Toler, Darryl Wallace, Andrea Wege, Anthony Student Assistants Kennesaw State University Pruden, George Savannah State University Eason, Thomas Skidaway Institute of Oceanography Holliman, Patricia SALARIES $ 21,508,548.93 $ TRAVEL 361,240.74 27,232.00 2,018.44 9,153.00 1,643.46 2,196.06 8,251.00 25,886.00 1,851.58 1,154.73 3,703.16 10,500.00 -1,000.00 10,523.61 -3,390.98 $ 21,608,270.99 $ ====36=:1:5.2::::40::::.7=4= See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information. - 32- SECTIONn CURRENT YEAR FINDINGS AND QUESTIONED COSTS ARMSTRONG ATLANTIC STATE UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED ruNE 30, 1999 FEDERAL AWARD FlNDINGS AND QUESTIONED COSTS CASH MANAGEMENT Weaknesses in Intemal Control Structure for Student Financial Assistance Programs Student Financial Assistance Cluster Programs Finding Control Number: FA-524-99-01 Our tests of the University's intemal control structure for administering Student Financial Assistance Programs indicated the following weaknesses in controls over drawdown ofFederal funds: 1) The University failed to perfonn a reconciliation of electronic funds transfer drawdowns from the Grant Administration and Payment System to the accounting records. 2) Cash drawdowns were made without an appropriate level of supervisory review, Federal regulations require that the University administer Student Financial Assistance Programs with adequate checks and balances in its system of intemal controls, These conditions resulted from management's failure to establish administrative procedures and to provide an adequate system of internal controls for the Student Financial Assistance Programs, Appropriate procedures and controls should be established by the University to ensure that the drawdowns of the Student Financial Assistance Programs are made and accounted for properly, Federal Programs/Awards Affected: . Student Financial Aid Cluster Program U, S, Department of Education Federal Supplemental Educational Opportunity Grant (CFDA 84,007) Federal Work-Study Program (CFDA 84,033) Federal Pell Grant Program (CFDA 84,063) REPORTING Reports not Adequately Supported Federal Pell Grant Program (CFDA 84.063) Finding Control Number: FA-524-99-02 For the year under review, the Universityfailed to adequately support the Pell Grant payment data reported to the United States Department ofEducation. The University must report student payment data to the United States Department of Education within 30 days after the school makes a payment or becomes aware of the need to make adjustments to previously reported student payment data or expected student payment data . based upon the standards in 34 CPR 690.83. The Pell Grant payment data reported to the United States Department of Education was supported by reports obtained through the University's ;Banner Subsystem. However, these reports did not agree with the general ledger and the University was unable to reconcile the variances. - 1- ARMSTRONG AUANIIC STAIE UNNERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1999 FEDERAL AWARD FINDINGS AND QUESTIONED COSTS REPORTING Reports not Adequately Supported Federal Pell Grant Program (CFDA 84.063) Finding Control Number: FA-524-99-02 The University should implement adequate safeguards to ensure that the Pell payment data can be reconciled to the University's general ledger. Ifthe University is using subsystem reports to support the Pell payment data, then these subsystem reports should be reconciled to the general ledger. SPECIAL TESTS AND PROVISIONS Refunds not Calculated Correctly .Student Financial Assistance Cluster Program Finding Control Number: FA-524-99-03 Our examination ofthe University's Student Financial Assistance refund procedures revealed that refunds are not being calculated as required by Federal Regulation 34 CFR 668.22. The University did not calculate a refund for students who dropped out ofthe University without notifying the University. The University should implement procedures to ensure that Student Financial Assistance refunds are accurately calculated on all students who withdraw from the University. Federal Programs/Awards Affected: Student Financial Aid Cluster Program U. S. Department ofEducation Federal Suppl~ental Educational Opportunity Grant (CFDA 84.007) Federal Family Education Loans (CFDA 84.032) Federal Pell Grant Program (CFDA 84.063) Scholarships for Health Professions Students from Disadvantaged Backgrounds (93.925) -2-