ATLANTA METROPOLITAN COLLEGE ATLANTA, GEORGIA MANAGEMENT REPORT FOR FISCAL YEAR ENDED JUNE 30,2011 I A Member Institution of the --- Georgia Dep-t od - Au r. 7 2 . 7 a7- @-- * a n dAccomts e? is - , . .- R-11 W. State Auditor ATLANTA METROPOLITAN COLLEGE - TABLE OF CONTENTS - SECTION I FINANCIAL SELECTED FINANCIAL INFORMATION EXHIBITS A STATEMENT OF NET ASSETS - (GAAP BASIS) B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS (GAAP BASIS) C STATEMENT OF CASH FLOWS - (GAAP BASIS) D SELECTED FINANCIAL NOTES SUPPLEMENTARY INFORMATION SCHEDULES 1 BALANCE SHEET - (STATUTORY BASIS) BUDGET FUND 14 2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (STATUTORY BASIS) BUDGET FUND 15 3 STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE (STATUTORY BASIS) BUDGET FUND 16 4 STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE (STATUTORY BASIS) BUDGET FUND 18 5 RECONCILIATION OF SALARIES AND TRAVEL 21 SECTION II FINDINGS, QUESTIONED COSTS AND OTHER ITEMS SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS SECTION I FINANCIAL Russell W. Hinton STATE AUDITOR (401) 666-2174 DEPARTMENOTF AUDITSAND ACCOUNTS 270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 December 6,2011 Honorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the State Board of Regents of the University System of Georgia and Honorable Gary A. McGaha, President Atlanta Metropolitan College Ladies and Gentlemen: As part of our audits of the basic financial statements of the University System of Georgia presented in the Annual FinancialReportfor the University System of Georgia, the basic financial statements of the State of Georgia presented in the State of Georgia ComprehensiveAnnual FinancialReportand the issuance of a State of Georgia 9ngIe Audit Reportpursuant to the Single Audit Act Amendments, as of and for the year ended June 30, 2011, we have performed certain audit procedures at Atlanta Metropolitan College. Accordingly, the financial statements and compliance activities of Atlanta Metropolitan College were examined to the extent considered necessary in order to express an opinion as to the fair presentation of the financial statements contained in the foregoing documents and to issue reports on compliance and internal control as required by the Single Audit Act Amendments of 1996. This Management Report contains information pertinent to the financial and compliance activities of Atlanta Metropolitan College as of and for the year ended June 30, 2011. Information contained in this report is a by-product of our audits of the basic financial statements of the University System of Georgia and the basic financial statements of the State of Georgia and is the representation of management. Accordingly, we do not express an opinion or any other form of assurance on it. The particular information provided which includes a section on findings and other items reported in accordance with Commission on Colleges regulation 2.11.1 is enumerated in the Table of Contents. This report is intended solely for the information and use of the management of Atlanta Metropolitan College, members of the Board of Regents of the University System of Georgia and the Southern Association of Colleges and Schools - Commission on Colleges and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, ~ u & e l lW. Hinton, CPA, CGFM State Auditor SELECTED FINANCIAL INFORMATION ATLANTA METROPOLITAN COLLEGE STATEMENT OF NET ASSETS - (GAAP BASIS) JUNE 30,2011 ASSETS Current Assets Cash and Cash Equivalents Accounts Receivable, Net (Note 3) Federal Financial Assistance Other Inventories (Note 4) Prepaid Items Total Current Assets Noncurrent Assets Capital Assets, Net (Note 5) Total Assets LIABILITIES Current Liabilities Accounts Payable Salaries Payable Deferred Revenue (Note 6) Other Liabilities Deposits Held for Other Organizations Com~ensatedAbsences Total Current Liabilities Noncurrent Liabilities Compensated Absences Total Liabilities NET ASSETS Invested in Capital Assets, Net of Related Debt Restricted for: Expendable Unrestricted Total Net Assets EXHIBIT "A" ATLANTA METROPOLITAN COLLEGE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS - (GAAP BASIS) YEAR ENDED JUNE 3 0 , 2 0 1 1 StudentTuitlon and Fees Less: Scholarship Allowances Grants and Contracts Federal Federal Stimulus State Other Sales and Services Rents and Royalties Auxiliary Enterprises Bookstore Food Services Intercollegiate Athletics Other Organizations Other Operating Revenues Total Operat~ngRevenues OPERATING EXPENSES Salaries Faculty Staff Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Deoreciation Total Operating Expenses Operating Income (Loss) NONOPERATING REVENUES (EXPENSES State Appropriations Grants and Contracts Federal Gifts Interest and Other Investment Income Net Nonoperating Revenues Increase (Decrease) in Net Assets Net Assets - Beginning of Year Net Assets - End of Year EXHIBIT 'B" ATLANTA METROPOLITANCOLLEGE STATEMENT OF CASH FLOWS- (GMP BASIS) YEAR ENDED JUNE 30, 2 0 1 1 CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Grants and Contracts Sales and Services Payments to Suppliers Payments to Employees Payments for Scholarships and Fellowshtps Auxiliary Enterprise Charges: Bookstore Food Services Intercollegiate Athletics Other Organizations Other Receipts (Payments) Net Cash Provided (Used) by Operating Activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations Agency Funds Transactions Gifts and Grants Received for Other than Capital Purposes Net Cash Flows Provided (Used) by Noncapital Financing Activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchases of Caoital Assets CASH FLOWS FROM INVESTING ACTIVITIES Interest on Investments Net Increase (Decrease) i n Cash Cash and Cash Equivalents - Beginning of Year Cash and Cash Equivalents -End of Year RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating Income (Loss) Adjustments t o Reconcile Operating Income t o Net Cash Provided (Used) by Operating Activities Depreciation Change in Assets and Liabilities: Accounts Receivable, Net Inventories Prepaid Items Accounts Payable Deferred Revenue Other Liabilities Compensated Absences Net Cash Provided (Used) by OperatingActivities EXHIBIT "C' ATLANTA METROPOLrrAN COLLEGE SELECIED FINANCIAL NOTES JUNE 30, 2011 EXHIBlT "D" Reporting Entity Atlanta Metropolitan College is one of thirty-five (35) State supported member institutions of higher education in Georgia which comprise the University System of Georgia, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations of Atlanta Metropolitan College 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. 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 (GASB) Codification of Governmental Accounting and Financial Reportinp Standards. Net Assets The College's net assets are classified as follows: Investdin capitalassets, net of related debt: This represents the College's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt. Restricted net asse& - expendable: Restricted expendable net assets include resources in which the College is legally or contractually obligated to spend resources in accordance with restrictions imposed by external third parties. Unrestrided net asseb: Unrestricted net assets represent resources derived from student tuition and fees, state appropriations, and sales and services of educational departments and auxiliary enterprises. These resources are used for transactions relating to the educational and general operations of the College, and may be used at the discretion of the governing board to meet current expenses for those purposes, except for unexpended state appropriations (surplus) of $30,385.58. Unexpended state appropriations must be refunded to the Board of Regents of the University System of Georgia, University System Office for remittance to the Office of the State Treasurer. These resources also include auxiliary enterprises, which are substantially self-supporting activities that provide services for students, faculty and staff. Deposits The custodial credit risk for deposits is the risk that in the event of a bank failure, the College's deposits may not be recovered. Funds belonging to the State of Georgia (and thus the College) 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 any one or more of the following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59: ATLANTA METROPOLITAN COLLEGE SELECTED FINANCIAL NOTES JUNE 30,2011 EXHIBIT "D" 1. Bonds, bills, notes, certificates of indebtedness, or other direct obligations of the United States or of the State of Georgia. 2. Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia. 3. Bonds of any public authority created by the laws of the 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 of development authorities created by the laws of the 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 and 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 MortgageAssociation. 6. Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation. 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. At June 30, 2011, the carrying value of deposits was $2,635,466 and the bank balance was $3,047,546. Of the College's deposits, $3,047,546 was uninsured. Of these uninsured deposits, $3,047,546 was collateralized with securities held by the financial institution, by its trust department or agency, but not in the College's name. Accounts receivable consisted of the following at June 30, 2011: Student Tuition and Fees $ Auxiliary Enterprisesand Other OperatingActivities Federal FinancialAssistance Other 712,006 136,188 713,373 1,301,665 LessAllowance for DoubtfulAccounts Net Accounts Receivable $ Note 4: Inventories lnventories consisted of the following at June 30, 2011: Bookstore Food Services Other Total Inventories $ 2,520,501 762,448 ATLANTA METROPOLITAN COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2011 EXHIBIT "D" Note 5: Caoital Assets Following are the changes in the College's capital assets for the year ended June 30, 2011: Beginning Balance July 1 2 0 1 0 AddiQons Reductions Ending Balance June 30,2011 Capital Assets, Not Being Depreciated: Land Capital Assets, Being Depreciated: Building and Building Improvements Facilities and Other Improvements Equipment L~braryCollections $ 15,837,703 1,213,244 $ 2,917,470 1,955,685 96,633 191,932 $ 22,706 $ 12044 98 15,837,703 1,309,877 3,098,358 1,978,293 Total Assetr Being Depreciated $ 21,924,102 $ 311,271 $ 11142 $ 22,224,231 Less: Accumulated Depreciation: Buildingand Building Improvements $ 8,158,177 $ Facilities and Other Improvements 711,482 Equipment 2,053,769 Library Collections 1901,732 407,863 42,935 223,167 $ 14,437 $ 11044 98 8.566.040 754,417 2,265,892 1,916,071 Total Accumulated Depreciation $ 12,825,160 $ 688,402 $ 11,142 $ 13,502,420 Total Capital Assets. Being Depreciated, Net $ 9,098,942 $ -377,131 $ 0 8 8,721811 Capital Assets, Net Deferred revenue consisted of the following at June 30, 2011: Other Deferred Revenue Note 7: Lona-Tenn Liabilities The College's Long-Term liability activity for the year ended June 30, 2011was as follows: Beginning Balance July 1,2010 Additions Reductions Ending Balance June 30,2011 Current Portion Other Liabilities Compensated Absences $ 586,131 $ 416,832 $ 383,856 $ 619,107 $ 312.728 ATLANTA METROPOLrrAN COLLEGE SELECED FINANCIAL NOTES JUNE 30,2011 EXHIBIT "D" Note 8: NetAsseb Changes in Net Asset activity for the year ended June 30,2011 are as follows: Beginning Balance July 1,2010 Additions Reductions Ending Balance June 30,2011 Invested in Capital Assets Net of Related Debt Restricted Net Assets 13,912,318 $ 13,914,561 -2.243 Unrestricted Net Assets 3,419,499 16,292.273 15,915.154 3,796,618 Total Net Assets $ 15,543,874 $ 29,827.460 $ 29.829.715 $ 15,541.619 Note 9: Lease Oblioations Atlanta Metropolitan College is obligated under various operating leases for the use of real property (land, buildings, and office facilities) and equipment. OPERATING LEASES Atlanta Metropolitan College's noncancellable operating leases provide for renewal options for periods from one to three years at their fair rental value at the time of renewal. All agreements are cancellable if the State of Georgia does not provide adequate funding, but that is considered a remote possibility. In the normal course of business, operating leases are generally renewed or replaced by other leases. Operating leases are generally payable on a monthly basis. Examples of property under operating leases are copiers and other small business equipment. Noncancellable operating lease rental expenses in 2 0 1 1 were $223,932 for real property and/or equipment. FUTURE COMMITMENTS Future commitments for noncancellable operating leases having remaining terms in excess of one year as of June 30,2011, were as follows: Real Property and Equipment Operating Leases Year EndingJune 30: 2012 $ 2013 2014 Total Minimum Lease Payments $ 232,876 242,151 249,439 724,466 ATLANTA METROPOLITAN COLLEGE SELECTED FINANCIAL NOTES JUNE 30,2011 EXHIBIT "D" Note 10: Retirement Plans Atlanta Metropolitan College participates in the Teachers Retirement System (TRS) of Georgia, a retirement plans administered by the State of Georgia. TRS issues a separate publicly available financial report that includes the applicable financial statements and required supplementary information. The report may be obtained from the system office. The significant retirement plans that Atlanta Metropolitan College participates in are described below. More detailed information can be found in the plan agreements and related legislation. Each plan, including benefit and contribution provisions, was established and can be amended by State law. Teachers Retirement System of Georgia The Teachers Retirement System of Georgia (TRS) is a cost-sharing multiple-employer defined benefit plan created in 1943 by an act of the Georgia General Assembly to provide retirement benefits for qualifying employees in educational service. A Board of Trustees comprised of active and retired members and ex-officio State employees is ultimately responsible for the administration of TRS. On October 25, 1996, the Board created the Supplemental Retirement Benefit Plan of the Georgia Teachers Retirement System (SRBP-TRS). SRBP-TRS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of TRS. The purpose of SRBP-TRS is to provide retirement benefits to employees covered by TRS whose benefits are otherwise limited by IRC Section 415. Beginning July 1,1997, all members and retired former members in TRS are eligible to participate in the SRBP-TRS whenever their benefits under TRS exceed the IRC Section 415 imposed limitation on benefits. TRS provides service retirement, disability retirement, and survivor's benefits. The benefit structure of TRS is defined and may be amended by State statute. A member is eligible for normal service retirement after 3 0 years of creditable service, regardless of age, or after 1 0 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service. Normal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 4 0 years. Early retirement benefits are reduced by the lesser of onetwelfth of 7% for each month the member is below age 6 0 or by 7% for each year or fraction thereof by which the member has less than 30 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lumpsum distribution in addition to a reduced monthly retirement benefit. Death, disability and spousal benefits are also available. TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 10 years of service. If a member terminates with less than 1 0 years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest. Member contributions are limited by State law to not less than 5% or more than 6% of a member's earnable compensation. Member contributions as adopted by the Board of Trustees for the fiscal year ended June 30, 2 0 1 1 were 5.53% of annual salary. Employer contributions required for fiscal year 2 0 1 1 were 10.28% of annual salary as required by the June 30, 2009 actuarial valuation. ATLANTA METROPOLlTAN COLLEGE SELECED FINANCIAL NOTES JUNE 30,2011 EXHIBrr "D" The following table summarizes the Atlanta Metropolitan College contributions by defined benefit plan for the years ending June 30,2011, June 30,2010, and June 30,2009: Fiscal Year TRS Percentage Contributed Required Contribution Regents Retirement Plan Plan Description The Regents Retirement Plan, a single-employer defined contribution plan, is an optional retirement plan that was created/established by the Georgia General Assembly in O.C.G.A. 47-21-1et.seq. and administered by the Board of Regents of the University System of Georgia. O.C.G.A. 47-3-68(a) defines who may participate in the Regents Retirement Plan. An "eligible College system employee" is a faculty member or a principal administrator, as designated by the regulations of the Board of Regents. Under the Regents Retirement Plan, a plan participant may purchase annuity contracts from four approved vendors (AIG-VALIC, American Century, Fidelity, and TIAA-CREF) for the purpose of receiving retirement and death benefits. Benefits depend solely on amounts contributed to the plan plus investment earnings. Benefits are payable to participating employees or their beneficiaries in accordance with the terms of the annuity contracts. Funding Policy Atlanta Metropolitan College makes monthly employer contributions for the Regents Retirement Plan at rates adopted by the Teachers Retirement System of Georgia Board of Trustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2011, the employer contribution was 9.24% for the participating employee's earnable compensation. Employees contribute 5%of their earnable compensation. Amounts attributable to all plan contributions are fully vested and nonforfeitable at all times. Atlanta Metropolitan College and the covered employees made the required contributions of $129,231 (9.24%) and $69,930 (5%),respectively. AIG-VALIC, American Century, Fidelity, and TIAA-CREF have separately issued financial reports which may be obtained through their respective corporate offices. Georgia Defined Contribution Plan Plan Description Atlanta Metropolitan College participates in the Georgia Defined Contribution Plan (GDCP) which is a singleemployer defined contribution plan established by the General Assembly of Georgia for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia. ATLANTA METROPOLrrAN COLLEGE SELECTED FINANCIAL NOTES JUNE 30, 2011 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 of Trustees. If a member has less than $3,500 credited to his/her account, the Board of Trustees has the option of requiring a lump sum distribution to the member in lieu of making periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute. Contributions 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 of Trustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member. Total contributions made by employees during fiscal year 2 0 1 1 amounted to $83,199 which represents 7.5% of covered payroll. These contributions met the requirements of the plan. The Georgia Defined Contribution Plan issues a financial report each fiscal year, which may be obtained from the ERS offices. Note 11: Post-Em-dovmentBenefits Other ThanPension BenefiOF 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 of the University System of Georgia. It is the policy of the Board of Regents to permit employees of the University System of Georgia eligible for retirement or that become permanently and totally disabled to continue as members of the group health and life insurance programs. The policies of the Board of Regents of the University System of Georgia define and delineate who is 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. With regard to life insurance, the employer covers the total cost for $25,000 of basic life insurance. If an individual elects to have supplemental, and/or, dependent life insurance coverage, such costs are borne entirely by the employee. The Board of Regents Retiree Health Benefit Plan is a single employer defined benefit plan. Financial statements and required supplementary information for the Plan are included in the publicly available Consolidated Annual Financial Report of the University System of Georgia. The College pays the employer portion of health insurance for its eligible retirees based on rates that are established annually by the Board of Regents for the upcoming plan year. For the 2010 and 2 0 1 1 plan years, the employer rate was between 70-75% of the total health insurance cost for eligible retirees and the retiree rate was between 25-30%. As of June 30, 2011, there were 67 employees who had retired or were disabled that were receiving these post-employment health and life insurance benefits. For the year ended June 30, 2011, Atlanta Metropolitan College recognized as incurred $257,558 of expenditures, which was net of $138,899 of participant contributions. (This page left intentionally blank) SUPPLEMENTARY INFORMATION ATLANTA METROPOLITAN COLLEGE BALANCE SHEET (STATUTORY BASIS) BUDGET FUND JUNE 30.2011 ASSETS Cash and Cash Equivalents Accounts Receivable Federal Financial Assistance Other Prepaid Expenditures Inventories Total Assets LlABlLlTlESAND FUND EOUITY Liab~lities Accrued Payroll Encumbrances Payable Accounts Payable Deferred Revenue Other Liabilities Total Liabilities Fund Balances Reserved Department Sales and Services Indirect Cost Recoveries Technology Fees Uncollectible Accounts Receivable Tuition Carry-Over Inventories Unreserved Surplus Total Fund Balances Total Liabilities and Fund Balances SCHEDULE 'l" Statutory Basis financial information was prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles. -14- ATLANTA METROPOLITAN COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (STATUTORY BASIS) BUDGET FUND YEAR ENDED JUNE 30.2011 REVENUES State Appropriation State General Funds Other Funds Total Revenues ADJUSTMENTSAND PROGRAM TRANSFFBS CARRY-OVER FROM PRIOR YEARS Transfers from Resewed Fund Balance Total Funds Ava~lable EXPENDITURES Excess of Funds Available over Exwndltures FUND MLANCE JULY 1 Rese~ed Unreserved ADJUSTMENTS Prior Year Payables/Expenditures Prlor Year Rece~vables/Revenues Unreserved Fund Balance (Surplus) Returned to Board of Regents - University System Office Year Ended June 30,2010 Early Return of Surplus in Current Fiscal Year Prior Year Resewed Fund Balance Included In Funds Available FUND BALANCE JUNE 3Q SUMMARY OF FUND BALANCF Resewed Department Sales and Services Indirect Cost Recoveries Technology Fees Uncollectible Accounts Recetvable Tultion Carry-Over Inventories Total Reserved Unreserved Surplus Total Fund Balance BUDGET Statutory Basis financial Information was prepared on a prescr~bedbass of accounting that demonstrates compliance wlth budgetary statutes and regulations of the State of Georgia, which is a comprehensive basls of accounting other than generally accepted accounting principles. ACTUAL SCHEDULE "2" VARIANCE - FAVORABLE (UNFAVORABLE) ATLANTA METROPOLITAN COLLEGE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURESCOMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE (STATUTORY BASIS) BUDGET FUND YEAR ENDEDJUNE 30.2011 Teaching State Appropriation State General Funds Federal Funds American Recovery and Reinvestment Act FederalStabilizatton Funds Other Funds Total Teaching Total OperatingActivity Original Appropriat~on Amended Appropriation Final Budget Current Year Revenues Statutory Basis financial information was prepared on a prescribed basis of accounting that demonstrates cornpllance with budgetary statutes and regulations of the State of Georgia. which is a comprehensive basis of accounting other than generally accepted accounting pr~nclples. SCHEDULE "3" Funds Available Compared to Budget Prlor Year Adjustments and Toml Carry-Over Program Transfers Funds Available Variance Positive (Negative) Expenditures Compared to Budget Varlance Actual Positive (Negative) Excess (Deficiency) of Funds Available Over/(Under) Expenditures ATLANTA METROPOLITAN COLLEGE STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE (STATUTORY BASIS) BUDGET FUND YEAR ENDEDJUNE 30.2011 Teachlng State Appropriation State General Funds Federal Funds American Recovery and Reinvestment Act Federal Stabilization Funds Other Funds Total Teaching Prior Year Reserves Not Available for Expenditure ~nventwies Uncollectible Accounts Receivable Beginning Fund Balance/(Deficit) July 1 Fund Balance Carried Over from Priw Period as Funds Available Return of FiscalYear 2010 Surplus Prior Period Adjustments Budget Unlt Totals Statutory Basisfinancial information was prepared on a prescribed basis of accountingthat demonstratescompliancewith budgetary statutes and regulationsof the State of Georgia, which is a comprehensivebasts of accountingother than generally accepted accounting principles. SCHEDULE "4" Other Adjustments Early Return Fiscal Year 2011 Surplus Excess (Deficiency) of Funds Available Over/(Under) Expenditures Ending Fund Balance/(Deficit) June 30 Analysis of EndingFund Balance Reserved Surplus/(Deficit) Total Summary of EndingFund Balance Reserved DepartmentSales and Servlces Indirect Cost Recover~es Technology Fees Uncollectible Accounts Receivable Tuition Carry-Over l nventories unreserved Surplus Total Ending Fund Balance - June 30 (This page left intentionally blank) ATLANTA METROPOLITAN COLLEGE RECONCILIATION OF SALARIES AND TRAVEL YEAR ENDEDJUNE 30,2011 SCHEDULE "5" Totals per Annual Supplement Accruals June 3 0 , 2 0 1 1 June 30.2010 Compensated Absences June 30,2011 June 30,2010 Adjustments Shared Serviceson Jointly Staffed Personnel Clayton State University Evans, Angela Smith, Tanshanika Columbus State University Flournoy, Bonita Fort Valley State University Sewell, Said Georgia Perimeter College Benson, Silveree Carney, Ossie Noe, Godfrey Georgia State University Lamar. Tuwaner Gordon College Perry-Stewart, Michele Kennesaw State University Duhart, Sharon Savannah State University Lipscomb. Elisha Southern Polytechnic State University Hill, Quinton Universityof West Georgia Reid. Gail SALARIES 5 11,160,456 $ TRAVEL 155,400 SECTION II FINDINGS, QUESTIONEDCOSTS AND OTHER ITEMS ATLANTA METROPOLITAN COLLEGE SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS YEAR ENDED JUNE 3 0 , 2 0 1 1 FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS REVENUES/RECEIVABLES/RECEIPTS Inadequate Uncollectible Accounts Receivable Procedures Significant Deficiency Finding Control Number: FS-561-11-01 Condition: The accounting procedures of the College are insufficient to ensure that uncollectible receivables are being properly reflected in the financial statements. Criteria: The College's management is responsible for designing and maintaining policies and procedures that ensure that receivable activity is properly documented, processed, and reported. Questioned Cost: N/A Information: Our review of the College's aging analysis and year end GAAP entry to record Allowance for Doubtful Accounts revealed that the College did not set up an allowance for those items 181days and older due to a misinterpretation of the policies and procedures provided by the University System of Georgia. Cause: The College's management failed to implement procedures to ensure that amounts reported on the financial statements were appropriately stated. Effect: Failure to have procedures in place over the aging of receivables could result in the College placing itself in a position where misrepresentation of its financial position and results of operations could occur. Recommendation: The College should design and implement accounts receivable aging procedures and review these balances for uncollectible receivables. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. OTHER ITEMS [NOTED FOR MANAGEMENT'SCONSIDERATION) INVALID BALANCE SHEET ITEMS Testing revealed numerous invalid prepaid expenses, deferred revenues, and other liabilities over one year old. Management should review these balances and make appropriate adjustments. In addition, management should implement year end procedures to review prepaid expenses, deferred revenues, and other liabilities to ensure that related transactions are properly classified within the College's financial statements. ACCOUNTING CONTROLS As part of the engagement of the College's financial statements, we performed certain procedures to determine if accounting transactions were recorded during the proper period. These procedures revealed transactions related to summer tuition and fees that were not recorded in the proper period ATLANTA METROPOLITAN COLLEGE SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS YEAR ENDED JUNE 30,2011 OTHER ITEMS (NOTED FOR MANAGEMENT'S CONSIDERATION) in accordance with generally accepted accounting principles. While we do recognize that Board of Regents' policy does allow certain transactions to be recorded in the wrong period when the net effect is considered immaterial to net assets, we recommend implementing policies that require recording all transactions in accordance with generally accepted accounting principles. RESTRICTED FUND DEFICITS Several restricted fund projects maintained deficit fund balances at year end. Management should review these projects to determine the cause of the deficits and the proper manner of funding the deficits. In addition, management should establish procedures to ensure that all restricted projects are adequately monitored in order to avoid future deficits. D(PENDlTURES/LIABILITIES/DISBURSEMENTS Several payable accounts maintained debit balances at year end. Management should review these accounts to determine the cause of the debit payable balances and make appropriate adjustments. In addition, management should implement year end procedures to review payable balances to ensure that these accounts are properly classified within the College's financial statements.