\ " '\ " \ '\ \ \' " \ ( \ ... ........ \. , I '-- _ ,I ,, 1\ c, \ " " /) ;I''If' r I j , / !",' (: A V 'r \ 'I ,. , ," I, \ \. v~C '-,.( II \ ~ ,i " r I i "I, ) ~" l - \1,- t , ~ /' ,,'\. \ .. " \,-/ ... -. ,," '1/ J i J" i- :o( ...J . I -I "( ;~ i, ~, /' L. ,--' .' (~ ' \ ' 1 '( '\ ,\ ' " 'l, , :,.1. I" ( ,' , ./ '\ I ~ \\ .r -'-.;, ./' !-t \ 'f ( r u :}, , ) ,) \ \) (\ \. ~ .) -, \. .. r, u I'fl -Vl_~ , -<,h . " \ ' /' ,( ( -\ ,, \ " 'A \ "I"' ,. - TABLE OF CONTENTS - SECTION I . FINANCIAL INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION EXHIDITS 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 7 D NOTES TO THE FINANCIAL STATEMENTS 8 SUPPLEMENTARY INFORMATION E COMBINING BALANCE SHEET CURRENT FUNDS - UNRESTRICTED 20 F COMBINING STATEMENT OF CHANGES IN FUND BALANCES CURRENT FUNDS - UNRESTRICTED 22 G COMBINING STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES, AND OTHER CHANGES UNRESTRICTED 24 SCHEDULES SCHEDULES OF REVENUES AND EXPENDITURES COMPARED TO BUDGET 1 RESIDENT INSTRUCTION 26 2 LOTTERY FOR EDUCATION 29 3 CHANGES IN INVESTMENT IN PLANT 30 4 SCHEDULE OF FUND BALANCES CURRENT FUNDS AND PLANT FUNDS 32 5 RECONCILIATION OF SALARIES AND TRAVEL 34 ATLANTA METROPOLITAN COLLEGE - TABLE OF CONTENTS - SECTION II 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 I:RUSSELl. W. HINTON STATE AUDITOR (404) 6562174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 January 25,2002 Honorable Roy E. Barnes, Governor Members of the General Assembly of Georgia Members of the Board of Regents of the University System of Georgia and Honorable Harold E. Wade, President Atlanta Metropolitan College INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMAnON Ladies and Gentlemen: We have reviewed the accompanying financial statements (Exhibits A through D) of Atlanta Metropolitan College as of and for the year ended June 30,2001, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute ofCertified Public Accountants. All information included in these financial statements is the representation of the management of Atlanta Metropolitan College. . A review consists principally ofinquiries ofCollege personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opmlOn. 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 accounting principles generally accepted in the United States of America. As disclosed in Note 1 to the financial statements, accounting principles generally accepted in the United States of America 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 accounting principles generally accepted in the United States of America on the fmancial statements were not reasonably determinable. 01ARL-67 As disclosed in Note 1 to the financial statements, the College 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 $458,059.74 as of June 30, 2001, and the net change in fund balance for the year ended June 30, 2001, would be decreased by $29,444.72. Our review was made for the purpose of expressing 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 accounting principles generally accepted in the. United States of America. The accompanying combining statements (Exhibits E through G) and the financial schedules (Schedules 1 through 5)are presented for supplementary analysis purposes. Such information 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:gp 01ARL-67 Ru sell W. Hinton State Auditor FINANCIAL STATEMENTS - 1- - - - - - --~--- - - - - ATLANTA METROPOLITAN COLLEGE 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 LIABILITIES AND FUND BALANCES. Liabilities Accounts Payable Salaries Payable Deferred Revenue Other Deposits Held in Custody for Others Due to Other Fund Groups Total Liabilities Fund Balances Net Investment in Plant Restricted Unrestricted Total Fund Balances Total Liabilities and Fund Balances CURRENT FUNDS UNRESTRICTED RESTRICTED $ 808,178.83 512,601.31 $ 406,707.03 177,162.22 14,051.00 278,461.26 $ 1,790,454.62 $ 406,707.03 $ 1,184,827.68 207,673.05 647.00 $ 278,461.26 $ 1,393,147.73 $ 278,461.26 $ 128,245.77 $ 397,306.89 $ 397,306.89 $ 128;245.77 $ 1,790,454.62 $ 406,707.03 See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement. -.2 - EXHIBIT "A" PLANT FUNDS INVESTMENT UNEXPENDED IN PLANT AGENCY FUNDS TOTAL (Memorandum Only) $ 411,481.49 $ ______ $ 26,528,245.25 121,748.30 $ 1,341,408.62 919,308.34 177,162.22 14,051.00 278,461.26 26,528,245.25 $ 411,481.49 $ 26,528,245.25 $ 121,748.30 $ 29,258,636.69 $ 411,278.79 $ 411,278.79 $ 37,376.03 $ 84,372.27 $ 121,748.30 $ 1,633,482.50 207,673.05 647.00 84,372.27 278,461.26 2,204,636.08 $ 26,528,245.25 $ 202.70 $ 202.70 $ 26,528,245.25 $ 26,528,245.25 128,245.77 397,509.59 $ 27,054,000.61 $ 411,481.49 $ 26,528,245.25 $ 121,748.30 $ 29,258,636.69 -3- ATLANTA METROPOLITAN COLLEGE 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 Private Gifts, Grants, and Contracts Investment Income Other Adjustments Prior Years' Expenditures/Accounts Payable Prior Years' Checks Voided Expended for Plant Facilities Current Funds Plant Funds Unexpended Georgia, State Financing and Investment Commission Total Revenues and Other Additions EXPENDITURES AND OTHER DEDUCTIONS Educational and General Expenditures Auxiliary Enterprises Expenditures Indirect Costs Recovered Remittances to the Board of Regents of the University System of Georgia Prior Year's Unrestricted Fund Balance (Surplus) Adjustments Prior Years' Revenues/Accounts Receivable Expended for Plant Facilities Capitalized Noncapitalized Disposals/Deletions/Adjustments Total Expenditures and Other Deductions Net Increase/(Decrease) for the Year FUND BALANCES JULY 1, 2000 CURRENT FUNDS UNRESTRICTED RESTRICTED $ 12,525,630.70 $ 4,328,358.94 300;474.97 257,029.55 54,869.81 3,169.55 $ 12,583,670.06 $ 4.885.863.46 $ 11,655,280.68 $ 4,724,114.79 977.026.22 76.864.12 80.635.46 92,605.18 $ 12.712,942.36 $ 4.893.584.09 $ -129.272.30 $ -7.720.63 526,579.19 135.966.40 FUND BALANCES JUNE 30, 2001 $ 397.306.89 $ ==1=2=8:!::;.2;;;;,45;;;,.;...,7.7... See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement. -4- EXHISIT"S" PLANT FUNDS INVESTMENT UNEXPENDED IN PLANT TOTAL (Memorandum Only) $ 12,525,630.70 $ 499,000.00 499,000.00 4,328,358.94 300,474.97 257,029.55 57,089.88 57,089.88 202.70 55,072.51 3,169.55 $ 723,688.64 723,688.64 2,388.00 799,485.43 2,388.00 799,485.43 $ 556,292.58 $ 1,525,562.07 $ 19,551,388.17 $ 16,379,395.47 977,026.22 76,864.12 $ 1,294.00 81,929.46 92,605.18 2,388.00 553,701.88 $ 86,694.84 2,388.00 553,701.88 86,t394.84 $ 557,383.88 $ 86,694.84 $ 18,250,605.17 $ -1,091.30 $ 1,438,867.23 $ 1,300,783.00 1,294.00 25,089,378.02 25,753,217.61 $ 202.70 $ 26,528,245.25 $ 27,054,000.61 -5- ATLANTA METROPOLITAN COLLEGE STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES, AND OTHER CHANGES YEAR ENDED JUNE 30, 2001 EXHIBIT C UNRESTRICTED RESTRICTED TOTAL (Memorandum Only) REVENUES State Appropriations Tuition and Fees Federal Grants and Contracts State Grants and Contracts Private Gifts, Grants, and Contracts Sales and Services of Educational Activities Sales and Services of Auxiliary Enterprises Other Sources $ 8,298,893.00 $ 8,298,893.00 3,163,421.44 3,163,421.44 55,886.41 $ 4,216,560.92 4,272,447.33 282,899.62 282,899,62 20,977.71 224,654.25 245,631.96 10,136.38 10,136.38 821,808.97 821,808,97 154,506.79 154,506.79 Total Revenues $ 12,525,630.70 $ 4,724,114.79 $ 17,249,745.49 EXPENDITURES Educational and General Instruction PUblic Service Academic Support Student Services Institutional Support Operation and Maintenance of Plant Scholarships and Fellowships Auxiliary Enterprises Stores and Shops Intercollegiate Athletics Other Service Units $ 5,017,848,25 $ 189,412.43 $ 5,207.260.68 200,000.00 333,538.99 533,538.99 934,591.81 934,591.81 1,226,110.29 204,411.71 1,430,522,00 2,627,880,63 161,549.69 2,789,430.32 1,587,167.14 1,587,167.14 61,682.56 3,835,201,97 3,896,884.53 626,520.82 348,253.09 2,252.31 626,520.82 348,253.09 2,252.31 Total Expenditures $ 12,632,306.90 $ 4,724,114.79 $ 17,356,421.69 OTHER TRANSFERS AND ADDITIONSIlDEDUCTIONS) Excess of Restricted Receipts over Transfers to Revenues Prior Period Adjustments (Net) Remittances to the Board of Regents of the University System of Georgia Prior Year's Unrestricted Fund Balance (Surplus) $ 84,884.55 $ 84,884.55 $ 58,039.36 -92,605.18 -34,565.82 -80,635.46 -80,635.46 Total Other Transfers and Additions/(Deductions) $ -22,596.10 $ -7,720.63 $ -30,316.73 Net Increase/(Decrease) in Fund Balances $ -129,272.30 $ -7,720.63 $==-1=3=61.:,9=92;;,;.9=3... See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement -7- ATLANTA METROPOLITAN COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001 EXHIBIT "D" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY Atlanta Metropolitan College is one ofthirty-four (34) State supported member institutions ofhigher education in Georgia which comprise the University System ofGeorgia, an organizational unit ofthe State of Georgia. The accompanying financial statements reflect the operations of Atlanta Metropolitan College as a separate reporting entity. The Board of Regents has constitutional authority to govern, control and manage the University System ofGeorgia. 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. Atlanta Metropolitan College does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Atlanta Metropolitan College is considered an organizational unit of the Board of Regents of the University System of Georgia reporting entity for financial reporting purposes because of the significance of its legal, operational, and financial relationships with the Board of Regents as defined in Section 2100 of the Governmental Accounting Standards Board 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 College, the accounts ofthe College are maintained in accordance with the principles offund 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 College'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 College retains full control to use for purposes of performing the primary functions of the College, 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- ',...: ...... ATLANTA METROPOLITAN COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 200i EXHffiIT"D" NOTE I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FUND ACCOUNTING PLANT FUNDS UNEXPENDED - The fund used to account for financial resources utilized to acquire or to construct physical properties for institutional purposes. INVESTMENT IN PLANT - The fund which shows the total amounts representing the book value of all physical properties owned by the College. Net Investment in Plant is an equity account showing the total book value of physical properties belonging to the College less the amount of any indebtedness to others. AGENCY FUNDS The fund used to account for resources held by the College 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 of accounting is defined as that method of accounting 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 as a reservation of fund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures determined in accordance with accounting principles generally accepted in the United States of America. Compensated absences represent obligations ofthe College 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 $458,059.74 and a related net current year expenditure of -9- ATLANTA METROPOLITAN COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001 EXHillIT"D" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING $29,444.72 have not been reported in the current funds as required by accounting principles generally accepted in the United States of America. Prior peri~d 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 permitted by statutes and regulations ofthe State of Georgia, 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 behalf of the College. 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. 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 proyided 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 College by the Administrative Central Office. In addition, the College receives Federal funds and other funds directly and includes these funds in the budget filed with the Administrative Central Office. A comparison of anticipated funds available and budgeted expenditures by budget unit object class indicates that the following object classes were overspent by the amounts identified below: Resident Instruction Operating Expenses: Education, General and Departmental Services Lottery for Education Special Funding Initiative $ 518,385.98 $ 217.14 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. -10 - ATLANTA METROPOLITAN COLLEGE NOTES TO THE FINANCIA.LSTATEMENTS JUNE 30, 2001 EXHIBIT "D" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CASH AND CASH EQUIVALENTS Cash and Cash Equivalents consist of petty cash and demand deposits in authorized financial institutions. ACCOUNTS RECEIVABLE Accounts receivable consist of reimbursements due from Federal, State, 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 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 of goods and services that will benefit periods subsequent to the balance sheet date. I 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. 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 ofindebtedness, 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. - 11 - ATLANTAMETROPOLITAN COLLEGE 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 (3) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose. (4) Industrial revenue bonds and bonds 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 r~quirements. 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 ofJune 30, 2001, are categorized below in order to provide information about the ~xtent to which such deposits are exposed to custodial credit risk: Category 1 - Amounts covered by depository insurance or collateralized with securities (at fair value) held by the College or by its agent in the College's name... Category 2 - Amounts collateralized with securities (at fair value) held by the pledging financial institution's trust department or agent in the College'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 College's name, and amounts uncollateralized. . - 12 - ATLANTA METROPOLITAN COLiEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001 EXHffiIT"D" NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS CATEGORIZATION OF DEPOSITS Cash Deposits Carrying Amount Bank Balances Risk Categories 2 3 $ 134072133 $ 2,045796.30 $ 145652 86 $,===O~O~O $ 120014344 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 $ 1,647,568.37 15,595,889.38 1,342,13 6. 04 5,921,429.87 2,021,221.59 Total Investment in Plant $26.528.245.25 NOTE 4: RISK MANAGEMENT Atlanta Metropolitan College is a participant in the Board of Regents of the University System of Georgia Health Benefits Plan, which is a self-insUrance program of health and dental benefits for employees and retirees of the University System of Georgia. The College 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 ofGeorgia - Administrative Central Office: All units ofthe University System of Georgia share the risk of loss for claims of the Health Benefits Plan. The Health Benefits Plan is considered a self-sustaining risk fund that provides health coverage for its members up to a maximum lifetime benefit of $2,000,000.00 per person and dental coverage up to an annual maximum of$I,OOO.OO per 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 ofthe Health Benefits Plan. The Department ofAdministrative Services (DOAS) has the responsibility for the State of Georgia 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 - 13- ATLANTA METROPOLITAN COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001 EXHIBIT "D" NOTE 4: RISK MANAGEMENT automobile liability, fidelity and certain other risks. The College, as an organizational unit of the 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 5: RETmEMENTPLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA Plan Description Atlanta Metropolitan College participates in the Teachers Retirement System of Georgia (TRS), a cost-sharing multiple-employer defined benefit pension plan established by the General Assembly of Georgia for the purpose of providing retirement allowance~ and other benefits for teachers of the 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 College who are covered by TRS are required byState statute t9 contribute 5% of their gross earnings to TRS. The College makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees 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 College contributed 2.33% to the TRS on behalfofemployees 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% $ 591,756.96 $ 609,211.55 $ 628,481.32 -,14 - ATLANTA METROPOLITAN COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 200i ' EXHIBIT "D" NOTE 5: RETIREMENT PLANS 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 payabl~ to participating employees or their beneficiaries in accordance with the terrps of the 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. The College and th~ covered employees made the required contributions of$62,256.43 (8.81 %) and $34,924.19 (5%), respectively. GEORGIA DEFINED CONTRIBUTION PLAN Plan Description . Atlanta Metropolitan College 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 part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia. Benefits A member may retire and elect to receive periodic payments after attainment ofage 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board ofTrustees. If a member has less than $ 3,500.00 credited to his/her account, the Board ofTrustees has the option of requiring a lump sum distribution to the member in lieu ofmaking periodic payments. Upon the death ofa 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%) of gross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member. - 15 - ATLANTA METROPOLITAN COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001 EXHffiIT"D" NOTE 5: RETIREMENT PLANS GEORGIA DEFINED CONTRIBUTION PLAN Contributions and Vesting Total contributions made by employees during fiscal year 2001 amounted to $58,667.63 which represents 7.5% of covered payroll. These contributions met the requirements of the plan. NOTE 6: LEAVEPOUCffiS Employees earn allnualleaveranging 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 tennination of employment. See Note 1 - Basis of Accounting (Compensated Absences) Empl~yees 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 tennination 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 7: CONTINGENCffiS 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 terins. The amount ofexpenditures which may be disallowed by the grantor cannot be detennined at this time although the College expects such amounts,if any, to be immaterial to its overall financial position. Litigation, claims and assessments filed against Atlanta Metropolitan College (an organizational unit ofthe' Board ofRegents ofthe University System of Georgia), ifany, are generally considered to he 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 8: POSTEMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS Pursuant to the general powers conferred by the Official Code of Georgia Annotated Section 20-331, the'Board of Regents ofthe University System of Georgia has established group health and life insurance programs for regular employees ofthe University System ofGeorgia It is the policy ofthe Board ofRegents to pennit employees ofthe University System ofGeorgia eligible for retirement or that become pennanently and totally disabled to continue as members of the group health and life' - 16- ' : , ,'.','"..\ " . ATLANTA METROPOLITAN COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001 EXHIBIT"D" NOTE 8: POSTEMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS insurance programs. Employees who are eligible for retirement or disability under the criteria established by the Teachers Retirement System of Georgia and who have at least ten years ofservice with the University System 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 of June 30, 2001, there were 40 employees who had retired or were disabled that were receiving these postemployment health and life insurance benefits. For the year. ended June 30, 2001, Atlanta Metropolitan College recognized as incurred $89,290.27 of expenditures, which was net of $32,337.32 of participant contributions. NOTE 9: ENROLLMENT The equivalent full-time student enrollment of Atlanta Metropolitan College was as follows: Regular Term Fall Semester, 2000 Spring Semester, 2001 1,186 1,258 Average Summer School, 2001 - 17 - SUPPLEMENTARY INFORMAnON - 19- ATLANTA METROPOLITAN COLLEGE COMBINING BALANCE SHEET CURRENT FUNDS - UNRESTRICTED JUNE 30, 2001 ASSETS Cash and Cash Equivalents Accounts Receivable Inventories Prepaid Items Due from Other Fund Groups RESIDENT INSTRUCTION LOTTERY FOR EDUCATION $ 597,302.58 $ 512,223.31 52,592.29 13,757.00 278,461.26 29,234.30 Total Assets $ 1,454,336.44 $ =====2:=9=,2=3.;,,;4.=3.0... LIABILITIES AND FUND BALANCES Liabilities Accounts Payable Salaries Payable Deferred Revenue Other Total Liabilities Fund Balances Unrestricted Total Liabilities and Fund Balances $ 1,091,807.25 $ 206,631.34 647.00 $ 1,299,085.59 $ 29,234.30 29,234.30 155,250.85 0.00 $ 1,454,336.44 $ =====2;;;;;9:.!::,2=3=4.:=3.0... See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. - 20 EXHIBIT"E" AUXILIARY ENTERPRISES STUDENT ACTIVITIES TOTAL $ 132,846.00 $ 48,795.95 $ 808,178.83 378.00 512,601.31 124,569.93 177,162.22 294.00 14,051.00 278,461.26 $ 257,415.93 $ 49,467.95 $ 1,790,454.62 $ 56,275.31 $ 7,510.82 $ 1,184,827.68 786.71 255.00 207,673.05 647.00 $ 57,062.02 $ 7,765.82 $ 1,393,147.73 200,353.91 41,702.13 397,306.89 $ 257,415.93 $ 49,467.95 $ 1.790,454.62 - 21 - ATLANTA METROPOLITAN COLLEGE i_ 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) , Total Expenditures and Other Deductions Net Increase/(Decrease) for the Year FUND BALANCES JULY 1. 2000 RESIDENT INSTRUCTION LOTTERY FOR EDUCATION $ 11,474,249.73 $ 45,093.94 3,169.55 $ 11 ,522,513.22 $ 148,514.00 148,514.00 $ 11,422,262.37 $ 148,514.00 80,634.96 0.50 $ 11 ,502,897.33 $ $ 19,615.89 $ 135,634.96 148,514.50 -0.50 0.50 FUND BALANCES JUNE 30. 2001 $ 155,250.85 $;,.'===,;;;;0',;;;;00= See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Infonnation. -'22 - EXHIBIT"F" AUXILIARY ENTERPRISES STUDENT ACTIVITIES TOTAL $ 826,924.18 $ 75,942.79 $ 12,525,630.70 9,775.87 54,869.81 3,169.55 $ 836,700.05 $ 75,942.79 $ 12,583,670.06 $ 84,504.31 $ 11,655,280.68 $ 977,026.22 977,026.22 80,635.46 $ 977,026.22 $84,504.31 $ 12,712,942.36 $ -140,326.17 $ -8,561.52 $ -129,272.30 340,680.08 50,263.65 526,579.19 $ 200,353.91 $ 41,702.13 $=====3=9.7.,.=3:=06:=.8=9= - 23- ATLANTA METROPOLITAN COLLEGE 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 Private Gifts, 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 Stores and Shops Intercollegiate Athletics Other Service Units Total Expenditures OTHER TRANSFERS AND ADDITIONS/lDEDUCTIONS) 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 LOTIERYFOR EDUCATION $ 8,150,379,00 $ 3,087,723.65 55,886.41 20,977.71 10;136.38 149,146.58 $ 11 ;474,249.73 $ 148,514.00 148,514.00 $ 5,017,848.25 200,000.00 902,509.06 $ 1,141,605.98 2,511,449.38 1,587,167.14 61,682.56 32,082.75 116,431.25 $ 11 ,422,262.37 $ 148,514.00 $ 48,263.49 -80,634.96 $ $ -32,371.47 $ -0.50 -0.50 Net Increase/(Decrease) in Fund Balances $ See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. - 24- 19,615.89 $====-=0.=50,,= EXHIBIT"G" AUXILIARY ENTERPRISES STUDENT ACTIVITIES TOTAL $ 8,298,893.00 $ 75,697.79 3,163,421.44 55,886.41 20,977.71 10,136.38 $ 821,808.97 821,808.97 5.115.21 245.00 154,506.79 $ 826,924.18 $ 75,942.79 $ 12,525,630.70 $ 5,017,848.25 200,000.00 934,591.81 $ 84,504.31 1,226,110.29 2,627,880.63 1,587,167.14 61,682.56 $ 626,520.82 348,253.09 2,252.31 626,520.82 348,253.09 2,252.31 $ 977,026.22 $ 84,504.31 $ 12,632,306.90 $ 9,775.87 $ 58,039,36 $ _ _-=9..1.:.,7..:..7=.;5.'-=-87.:...,. -80.635.46 $ _ _...;;;-2=2=,5.9..6. =...;..;10'- $ -140,326.17 $ -8,561.52 $ ==-1=2=9=,2=72=,3=0,== - 25- ATLANTA METROPOLITAN COLLEGE 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 UNEXPENDED $ 8,150,379.00 $ 499,000.00 3,323,870.73 $ 4,724,114.79 57,089.88 $ 11,474,249.73 $ .4,724,114.79 $ _--.,;;.55~6;..:.;,O~8..;.,;9.c.;;.88;;.... EXPENDITURES Personal Services: Education, General and Departmental Services $ 8,317,313.23 Sponsored Operations $ 549,852.02 Operating Expenses: Educatio!"1, General and Departmental Services 2,746,399.14 Sponsored Operations 4,174,262.77 Capital Outlay $ 556,089.88 Office of Minority Business Enterprise 200,000.00 Special Funding Initiative 158,550.00 Excess of Revenues over Expenditures $ 11,422,262.37 $ 4,724,114.79$ - - -5"56',-08-9.-88- $ 51,987.36 $ 0.00 $ =====,0=:.0:=0... (1) To eliminate tuition waivers not budgeted. See accom"panying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. SCHEDULE "1" TOTAL ADJUSTMENTS (1 ) TOTAL (Budget Basis) BUDGET VARIANCE FAVORABLE (UNFAVORABLE) $ 8.649.379.00 8,105,075.40 $ $ -...::6~4.t..:.1.=..64.:.:....:.;16=_ 8,649.379.00 $ 8.649.379.00 $ 8,040.911.24 8.374,567.00 0.00 -333.655.76 $ 16.754,454.40 $ -64.164.16 $ 16.690.290.24 $ 17.023,946.00 $ -333.655.76 --...;;;..:;..;;..:..;;...;....;;.;.~ $ 8.317.313.23 549.852.02 2.746.399.14 $ 4.174.262.77 556.089.88 200.000.00 158.550.00 $ 8.317.313.23 $ 9.068.840.00 $ 549.852.02 655.979.00 -64.164.16 2.682.234.98 4.174.262.77 556,089.88 200.000.00 158.550.00 2.163.849.00 4.217.028.00 559.700.00 200.000.00 158.550.00 751.526.77 106.126.98 -518.385.98 42.765.23 3.610.12 0.00 0.00 $ 16.702.467.04 $ -64.164.16 $ 16.638.302.88 $ 17.023.946.00 $ _ _..;3;.,;;8,.;;.5.:.;;,6..;.,43;;..;,..:.:12:- $ 51.987.36 $ 0.00 $ ===5:=15.9:.8.7...3=6= $ ===5;;;,;1or.;;.9=8.7...=:36= 27 - ATLANTA METROPOLITAN COLLEGE SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET LOTTERY FOR EDUCATI0N YEAR ENDED JUNE 30, 2001 SCHEDULE "2" REVENUES State Appropriations CURRENT FUNDS UNRESTRICTED BUDGET VARIANCE FAVORABLE (UNFAVORABLE) $ 148,514.00 $ 148,514.00 $ ;;.;..~O;.... EXPENDITURES Equipment, Technology and Construction Trust Fund Special Funding Initiative $ 73,296.86 $ 73,514.00 $ 75,217.14 75,000.00 $ 148,514.00 $ 148,514.00 $ 217.14 -217.14 ....;O;;.;..O~O;.... Excess of Revenues over Expenditures $======0.:=00= $=====0.=00== See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. - 29- I-----------..,-..--------~-------~------ ATLANTA METROPOLITAN COLLEGE CHANGES IN INVESTMENT IN PLANT YEAR ENDED JUNE 30, 2001 Land Buiidings Improvements Other Than Buildings Equipment Library Books and Colle~tions BALANCE JULY 1, 2000 CURRENT FUNDS UNRESTRICTED RESTRICTED $ 1,647,568.37 14,796,403.95 1,342,136.04 5,334,396.00 $ "660,541,94 $ 10,369.55 1,968,873.66 52,777.15 $ 25,089,378,02 $ 713,319.09 $====1=0~.3=69=.5=5;;", See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. - 30- SCHEDULE "3" ADDITIONS PLANT FUNDS UNEXPENDED GEORGIA STATE FINANCING AND INVESTMENT COMMISSION DEDUCTIONS DISPOSALS! DELETIONS! ADJUSTMENTS BALANCE JUNE 30, 2001 $ 1,647,568.37 $ 799,485.43 15,595,889.38 1,342,136.04 $ 2,388.00 $ 86,265.62 5,921,429.87 429.22 2,021,221.59 $ 2,388.00 $ 799,485.43 $ 86,694.84 $ 26,528,245.25 \. If - 31 - ATLANTA METROPOLITAN COLLEGE SCHEDULE OF FUND BALANCES CURRENT FUNDS AND PLANT FUNDS JUNE 3D. 2001 RESIDENT INSTRUCTION C'URRENT FUNDS UNRESTRICTED LOTTERY FOR AUXILIARY EDUCATION ENTERPRISES NET INVESTMENT IN PLANT Investment in Plant Facilities RESTRICTED Designated for Subsequent Years' Expenditures UNRESTRICTED Designated For Intercollegiate Athletics $ 136,449.56 For Inventory Reserve $ 55,000.00 124,569.93 For Subsequent Years' Expenditures -60,665.58 Surplus Regular Lottery for Education 100,250.85 _____ $ $ 155,250.85 $ O:::..:..O~O~ 0.00 $ _--=2:.::0;::.0.r.=,3.:::;53::..:.=.91~ $ 155,250.85 $ 0.00 $ =====2:=0=0.,.3..5..=3.:=91== See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. .;. 32- SCHEDULE "4" STUDENT ACTIVITIES RESTRICTED PLANT FUNDS UNEXPENDED INVESTMENT REGULAR IN PLANT TOTAL $ 26,528,245.25 $' 26,528,245.25 $ 128,245.77 $ --==.;1.2;8;;,.2;4..5;..7.7;'- $ 41,702.13 $ 136,449.56 179,569.93 -18,963.45 $ 41,702.13 $ 202.70 $ =20=.:2::.;..7:..;:0,- 100,453.55 0.00 $ _----::3;.::9~7&=,5.=;.;09::.:..5::.:9~ $ 41,702.13 $ 128,245.77 $====20=2=.7=0,= $ 26,528,245,25 $ 27,054,000.61 - 33- ATLANTA METROPOLITAN COLLEGE RECONCILIATION OF SALARIES AND TRAVEL YEAR ENDED JUNE 30. 2001 SCHEDULE "5" Totals per Annual Supplement Accruals June 30, 2001 Adjustments Shared Services on Jointly Staffed Personnel Clayton College and State University Barton, Patricia Other Arnold, Braswell, Dawson, Dunningan, George, Gray, Jenkins, Lowery, McGraw, Mitchell, Moton-Teague, Okafor, Parks, Spears, Wade, Wilson, Woods, Eunice H. Ruby J. Patrice Iyeshu B. Janice C. JaquelineW. Cynthia Teresa A. Te Nesha Latoya C. Catherine L. Childebe Gregory Kelli ' Harold Author James Unidentified Variance SALARIES $ 7,337,212.74 $ TRAVEL 90,282.79 207,673.05 2,314.48 820.95 29.57 392.18 24.00 125.79 583.83 2,091.20 6.38 15.00 353.03 425.73 -803.01 130.73 519.79 59.13 -538.79 1,592.51 "100.24 97.00 $ 7,551,435.78 $ =~92:=!,;,O~7=2.~54;;.. See accompanying notes and Independent Accountant's Combined Report " on Review of Financial Statements and Supplementary Information. - 34- SECTIONll AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS ATLANTA METROPOLITAN COLLEGE AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2001 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS 561-96-01 561-96-02 FS-561-00-01 FS-561-00-02 FS-561-00-03 Unresolved - See Corrective ActionlResponses Unresolved - See Corrective ActionlResponses Partially Resolved - See Corrective ActionlResponses Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented CORRECTIVE ACTIONIRESPONSES FUND EQUITIES Deficit Fund Balance Finding Control Number: "561-96-01 In addition to previous unsuccessful efforts made by the College to have the fisGal year 1994 Pell Grant Program deficit in the amount of$34,363.31 funded; on August 8, 2001, the College once more contacted the U. S. Department of Education for resolution and closure to the finding. On August 9, 2001, the College received an interim response from the U. S. Department of Education and is currently awaiting a fmal response. FUND EQUITIES Deficit Fund Balance Finding Control Number: 561-96-02 In addition to previous unsuccessful efforts made by the College to have the fiscal year 1995 Pell Grant Program deficit in the amount of$64,595.20 funded; on August 8, 2001, the College once more contacted the U. S. Department of Education for resolution and closure to the finding. On August 9,2001, the College received an interim response from the U. S. Department of Education and is currently awaiting a final response. GENERAL LEDGER Balance Sheet Accounts Not Supported by Detail Listings Finding Control Number: FS-561-00-01 On September 17, 2001, the College began live processing of information from the BANNER System to the accounting system in detail, on a daily basis with student identifications; which currently ensures that the BANNER and accounting records are in balance, and the integrity ofrecords are consistent and reliable. Also, this automatic feed process will enable-prompt reconciliation of the subsidiary BANNER System accounts (1998 - 2001) which includes fiscal year 2000. The College is currently analyzing detail listings of relevant balance sheet accounts in order to effect a full reconciliation of the - 1- ATLANTA METROPOLITAN COLLEGE 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 CORRECTIVE ACTIONIRESPONSES GENERAL LEDGER Balance Sheet Accounts Not Supported by Detail Listings Finding Control Number: FS-561-00-01 BANNER System to the General Ledger. In addition, stale dated checks, most of which are financial aid students unclaimed checks in the amount of$1 08,690.79 that the College recorded as a liability in fiscal year 2000, were reversed in fiscal year 2001, and reissued. Some of these unclaimed checks were voided, some were reissued and cashed by their rightful owners. The unclaimed checks currently totaling $78,053.12 will be returned to the funding entities where appropriate or recorded to an "Unclaimed Property" account where applicable fOf eventual disposition in accordance with the State of Georgia "Disposition of Unclaimed Property Act." PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS 561-96-02 561-96-04 561-96-05 See Prior Year Financial Statement Findings and Questioned Costs Partially Resolved - See Corrective ActionlResponses Previously Reported Corrective Action Implemented CORRECTIVE ACTIONIRESPONSES REPORTING Incorrect Student Payment Summary Report Finding Control Number: 561-96-04 In addition to previous unsuccessful efforts made by the College to have the 1996 excess Pell Grant expenditures in the amount of$41 ,529.14 fully funded; on August 8, 2001, the College once more contacted the U. S~ DepartmentofEducation for resolution and closure to the finding. On August 9, 2001, the College received an interim response from the U. S. Department of Education and is currently awaiting a final response. -2- SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS ATLANTA METROPOLITAN COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS REVENUEIRECEIVABLESIRECEIPTS Theft of Funds Finding Control Number: FS-56l-0l-0l On May.30, 2001, the College experienced an apparent theft of $6,917.00 cash from the P. E. Building Concession area, which is a registration site and collection point for summer semester fees. It was originally believed that the $6,917.00 cash was included in a May 31,2001 deposit which was . picked up by armored car carrier and delivered to the bank. However, subsequent investigation by the bank revealed that no cash was included in the May 31, 2001 deposit. At that point, the College referred the incident to the Atlanta Police Department Criminal Investigation Unit. This condition occurred because management failed to ensure that controls in place to safeguard cash collections were operating effectively. Management should review its system of internal controls, ensure adherence to the controls implemented and monitor their effectiveness. GENERAL LEDGER Balance Sheet Accounts Not Supported by Detail Listings Finding Control Number: FS-561-01-02 At June 30, 2001, the College could not provide supporting documentation for numerous balance sheet accounts, consisting of an accounts receivable/returned check account with a $45,251.74 balance; ten accoUnts payable clearing and unapplied cash accounts with total net balances of $15,810.71; and an agency fund clearing account with a $29,924.99 balance. These account balances resulted from interfaces between the College's Banner Student Registration System and the College's accounting system. Management was unable to produce subsidiary records from the Banner Student Registration System to support ~he balances on the accounting system's general ledger. Further review ofthe College's receivable report revealed additional accounts receivable for which the College could not provide supporting documentation. These amounts totaling $1,720.50 appear to be related in part to the problems associated with the Banner Student Registration System. Several of the receivables discussed above had credit balances. Some of these were due to cash receipts being posted to a receivable account when no receivable had been established. Others were due to cash receipts being posted to a receivable account even though the financial records showed that account had been partially or fully collected. The College should investigate the matters described above and make the appropriate adjustments to the accounting records to ensure the general ledger accounts are accurately reported. Procedures should be implemented to ensure that detailed subsidiary records are maintained that support the balances reported on the general ledger. . - 1- ATLANTA METROPOLITAN COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 FEDERAL AWARD FINDINGS AND QUESTIONED COSTS REPORTING Failure to Reconcile Program Reports Federal Pell Grant Program (CFDA 84.063) Finding Control Number: FA-561-01-01 For the 'year ended June 30,.2001. amounts reported by the ,College to theU. S. Department of Education on thePell Year to Date Data Report and the PellElectronic Statement of Account (ECQA}were not reconciled to the accounting records. Federal Regulations (34 CFR 668.24 and 690.83) require the College to ensure that financial information reported is accurate and reconciled to the accounting records. Management should ensure that reports 'are reconciled to the accounting records prior to being. submitted to the U. S. Department ofEducation. -2-