Clayton College and State University, Morrow, Georgia, report on the review of the financial statements for the fiscal year ended June 30, 2001

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CLAYTON COLLEGE AND STATE UNIVERSITY -TABLEOFCONTENTS-

SECTION I

FINANCIAL

INDEPENDENT ACCOUNTANTS COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

EXHIBITS

FINANCIAL STATEMENTS

A COMBINED BALANCE SHEET

ALL FUND GROUPS

2

B COMBINED STATEMENT OF CHANGES IN FUND BALANCES

ALL FUND GROUPS

4

C STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,

AND OTHER CHANGES

7

D NOTES TO THE FINANCIAL STATEMENTS

8

SUPPLEMENTARY INFORMATION

E COMB~GBALANCESHEET

CURRENT FUNDS - UNRESTRICTED

22

F COMB~G STATEMENT OF CHANGES IN FUND BALANCES

CURRENT FUNDS - UNRESTRICTED

24

G COMB~G STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,

AND OTHER CHANGES

UNRESTRICfED

26

SCHEDULES

SCHEDULES OF REVENUES AND EXPENDITURES COMPARED TO BUDGET

1

RESIDENT INSTRUCTION

28

2

LOTIERY FOR EDUCATION

31

3 CHANGES IN INVESTMENT IN PLANT

32

4 SCHEDULE OF FUND BALANCES

CURRENT FUNDS AND PLANT FUNDS

34

5 RECONCILIATION OF SALARIES AND TRAVEL

36

CLAYTON COLLEGE AND STATE UNIVERSITY -TABLEOFCONTENTS-
SECTIONll AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTIONID CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

1USSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
October 11, 2001

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 Thomas K. Harden, President Clayton College and State University
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) ofClayton College and State University 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 Clayton College and State University.
A review consists principally of inquiries ofUniversity 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 opinion.
Based on our review, with the exception ofthe 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 financial statements were not reasonably determinable.
01ARL-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 accounting principles generally accepted in the United States of America. If compensated absences were reported, liabilities would be increased and fund balance would be decreased by $1 ,376,605.77 as of June 30, 2001, and the net change in fund balance for the year ended June 30, 2001, would be decreased by $390.97.
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

R sell W. Hinton State Auditor

FINANCIAL STATEMENTS - 1-

---------------
CLAYTON COLLEGE AND STATE UNIVERSITY COMBINED BALANCE SHEET ALL FUND GROUPS JUNE 30, 2001

ASSETS
Cash and Cash Equivalents Accounts Receivable Inventones Prepaid Items Due from Other Fund Groups Investment in Plant
Total Assets
LIABILITIES AND FUND BALANCES
Liabilities Accounts Payable Salanes Payable Student Deposits Deferred Revenue Tuibon and Fees Deposits Held in Custody for Others Due to Other Fund Groups Capital Lease Obligabons
Total Liabilities
Fund Balances U. S. Govemment Grants Refundable Institutional Loans - Restricted Endowment Net Investment in Plant Restricted Unrestncted
Total Fund Balances
Total liabilities and Fund Balances

CURRENT FUNDS UNRESTRICTED RESTRICTED

LOAN FUNDS

$

1,342,624.40 $

73,775.05 $ 9,985.22

556,460.36

2,210,81321

15,341.32

157,569.92

187,411.41

262,319.09

$

2,506,385,18 $ 2,284,588.26 $ 25,326.54

$

1,008,307.98

474,895,63

9,675.33

240,405,60

$ 1,862,319.09

$

1,733,284,54 $ 1,862,319.09

$ 13,000.61 12,325.93

$ 422,269.17

$

773,100.64

$

773,100,64 $ 422,269,17 $ 25,326,54

$

2,506,385.18 $ 2,284,588.26 $

See Independent Accountant's Combmed Report on Review of Financial Statements and Supplementary Inforrnabon,
The notes to the financial statements are an integral part of thiS statement -2-

EXHIBITWAW

ENDOWMENT FUNDS

UNEXPENDED

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

AGENCY FUNDS

TOTAL (Memorandum
Only)

$ 1,026,985.68 $ 9,270.38

61,257.55 $ 15,880.66

1,000,000.00

294,818.88 3,094.57
500,000.00 $

$ 66,407,259.00

34,417.78 $ 100,000.00

2,843,864.56 2,810,860.50
157,569.92 187,411.41 1,862,319.09 66,407,259.00

$ 1,036,256.06 $ 1,077,138.21 $

797,913.45 $ 66,407,259.00 $ 134,417.78 $ 74,269,284.48

$ 1,002,408.71

$ 1,002,408.71

$ 1,036,256.06
$ $ 1,036,256.06 $

74,729.50 $ 74,729.50 $

$ 49,552.29 $ 2,060,268.98 474,895.63 9,675.33

240,405.60

84,865.49

84,865.49

1,862,319.09

$

9,730.26

9,730.26

$

9,730.26 $ 134,417.78 $ 4,742,160.38

$ 66,397,528.74 797,913.45 797,913.45 $ 66,397,528.74

$

13,000.61

12,325.93

1,036,256.06

66,397,528.74

422,269.17

1,645.743.59

$ 69,527,124.10

$ 1,036,256.06 $ 1,077,138.21 $

797,91345 $ 66,407,25900 $ 134,417.78 $ 74,269,284.48

-3-

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

REVENUES AND OTHER ADDITIONS
Unrestricted Current Fund Revenues State Appropriations
Regular Federal Grants and Contracts State Grants and Contracts Private Gifts, Grants, and Contracts Investment Income
Endowment Other Net Inaeasel(Deaease) in Fair Value of Investments Interest on Loans Receivable Adjustments Prior Years' Expenditures/Accounts Payable Prior Years' Checks Voided Expended for Plant Facilities Current Funds Plant Funds
Unexpended Renewals and Replacements Georgia State Financing and Investment Commission
Total Revenues and Other Additions
EXPENDITURES AND OTHER DEpUCTIONS
Educational and General Expenditures Auxiliary Enterprises Expenditures Indirect Costs Recovered Refunded to Grantors Remittances to the Board of Regents of the
University System of Georgia Prior Year's Unrestricted Fund Balance (Surplus)
Adjustments Pnor Years' Revenues/Accounts Receivable
Loan Cancellations and Wnte-Offs Administrative and Collection Costs Expended for Plant FaciUlles
Capitalized Noncapltalized DlsposalslDelellonsJAdjustments
Total expenditures and Other Deductions
TRANSFERS BETWEEN FUNDS
Nonmandatory Renewals and Replacements
Net Inaease/(Decrease) for the Year
FUND BAlANCES JULY 1. 2000

CURRENT FUNDS

UNRESTRICTED

RESTRICTED

LOAN FUNDS

$ 37,711,799.63
$ 4,357,781.62 5,795,265.00 588,167.73 29,140.13 $
49,205.96 6,452,16

4.58 112.63

$ 37,767,457.75 $ 10,nO,354.48 $

117.21

$ 35,739,474.01 $ 10,576,461,88 1,824,7n,73 17,203.61 61,135.93
97,162.30
4,032.45 $

1,000.00 987.80

$ 37,665.446.49 $ 10,654,801.42 $

1,987.80

$

-111,291.87

$

-9,280.61 $

115,553,06 $

782,381.25

306,716.11

-1,870.59 27,197.13

FUND BAlANCES JUNE 30, 2001

$

773,100.64 $

422,269.17 $

see Independent Accountanfs Combined Report on Revl8w of Financial Statements and Supplementary Information. The notes to the financial statements are an Integral part of this statement.
-4-

25,326.54

EXHIBIT"B"

ENDOWMENT FUNDS

UNEXPENDED

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

TOTAL (Memorandum
Only)

$ 37,711,799.63

$

968,000.00

163,950.74

968,000.00 4,357,781.62 5,959,21574
588,167.73

$

5,095.34

118,652.20 $

13,638.63

29,140.13 132,29541
5,095.34 112.63

12,057.71

61,263.67 6,452.16

$ 6,188,992.59

6,188,992.59

1,139,560.57 9,905.21
2,088,049.93

1,139,560.57 9,905.21
2,088,049.93

$

5,095.34 $ 1,262,660.65 $

13,638.63 $ 9,426,508.30 $ 59,245,832.36

$

0.00

$ 46,315,935.89 1,824,777.73 17,203.61 61,135.93

$

13,149.43

110.311.73

8,959.10 $

714.59

13,706.14 1,000.00 987.80

1,139,560.57 39,411.48

9,905.21 84.90 $

629,142.89

1,149,465.78 39,496.38
629,142.89

$

0.00 $ 1,201,080.58 $

10,704.70 $ 629,142.89 $ 50,163,163.88

$

5,095.34 $

1,031,160.72

$ _ _..:..11~1"",2::;9..:.:1."",87,-

$

0:.:,.0:..:0:....

61,580.07 $

114,225.80 $ 8,797,36541 $ 9,082,668.48

13,149.43

683,687.65

57,600,163.33

60,444,455.62

$ 1,036,256.06 $

74.729.50 $

797,913.45 $ 66,397,528.74 $ 69,527,124.10

-5-

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

EXHIBIT C

REVENUES
State Appropnations TUition and Fees Federal Grants and Contracts State Grants and Contracts Local Grants and Contracts Private Gifts, Grants, and Contracts Endowment Income Sales and Services of Educational Activities Sales and Services of Auxiliary Enterpnses Other Sources
Total Revenues
EXPENDITURES
Educational and General Instruction PublicSeMce Academic Support Student Services Institutional Support Operation and Maintenance of Plant Scholarships and Fellowships
Auxiliary Enterpnses Food Services Stores and Shops Intercollegiate Athletics Other Service Units
Total Expenditures
OTHER TRANSFERS AND ADDITIONS/IDEDUCTIONSl
Excess of Restricted Receipts over Transfers to Revenues
Refunded to Grantors Transfers for Renewals and Replacements Prior Period Adjustments (Net) Remittances to the Board of Regents
of the Umversity System of Georgia Pnor Year's Unrestricted Fund Balance (Surplus)
Total Other Transfers and Addltionsl(DeduclJons)

UNRESTRICTED RESTRICTED

TOTAL (Memorandum
Only)

$ 18,825,579.00

$ 18,825,579.00

11.875,284.38

11,875,284,38

17,203.61 $ 4,287,092.55

4,304,296.16

5,650,780.95

5,650,780.95

1,110.00

1,110.00

613,728.38

613,728.38

23,750.00

23,750.00

4,667,459.08

4,667,459.08

1,775,162.05

1,775,162.05

551,111.51

551,111.51

$ 37,711,799,63 $ 10,576,461.88 $ 48,288,261.51

$ 15,514,489.90 $ 1,192,615.64 $ 16,707,105.54

203,807.89

574,127.04

777,934.93

10,085,395.11

387,429.55

10,472,824.66

2,213,221.07

23,954.00

2,237,175.07

4,848,848.80

590,739.07

5,439,587.87

2,697,971.24

2,697,971.24

175,740.00

7,807,596.58

7,983,336.58

119,517.09 209,036.47 1,134,694.19 361,529.98

119,517.09 209,036.47 1,134,694.19 361,529.98

$ 37,564,251.74 $ 10,576,461.88 $ 48,140,713.62

$ 176,688.99 $ 176,688.99

-61,135.93

-61,135.93

$

-111,291.87

-111,291.87

51,625.67

51,625.67

-97,162.30

-97,162.30

$

-156,82850 $ 115,553.06 $

-41,275.44

Net Increasel(Decrease) in Fund Balances

$

-9,280,61 $

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 -

115,553.06 $ =--=106~r2.7..2_.4=5=

CLAYTON COLLEGE AND STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REPORTING ENTITY Clayton College and State University is one ofthirty-four (34) State supported member institutions ofhigher education in Georgia which comprise the University System ofGeorgia, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations of Clayton College and State University 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. Clayton College and State University does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Clayton College and State University is considered an organizational unit ofthe Board ofRegents ofthe University System ofGeorgia 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 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.

- 8-

CLAYTON COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHffiIT"D"

NOTE I: 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 FUNDS
The fund used to account for gifts that are subject to the restrictions by the donors requiring that the principal be invested in perpetuity and income only be utilized.
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 of physical properties belonging to the University less the amount of any indebtedness to others.
AGENCY FUNDS
The fund used to account for resources held by the University as custodian or fiscal agent for individual students, faculty, staff members, and organizations.
BASIS OF ACCOUNTING Except as otherwise disclosed in these notes, the financial statements are prepared on the modified accrual basis of accounting, which is materially the same as the accrual basis of accounting applicable to colleges and universities prescribed in the American Institute of Certified Public Accountants' audit guide reporting model. The modified accrual basis of accounting is defmed 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.

- 9-

CLAYTON COLLEGE AND STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING 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 offund 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 University relating to employees' rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulated annual leave in which payment is probable and can be reasonably estimated. The compensated absences liability of $1,376,605.77 and a related net current year expenditure of $390.97 have not been reported in the current funds as required by accounting principles generally accepted in the United States of America.
Prior period adjustments and certain other items are reported as additions to and deductions from fund balances of current funds in the accompanying financial statements. This presentation is in accordance with accounting practices prescribed or permitted by statutes and regulations ofthe State ofGeorgia, but differs from accounting principles generally accepted in the United States ofAmerica in that immaterial adjustments should be reported as current period revenues and expenditures. The effect ofthis departure is deemed to be immaterial to the fair presentation ofthe financial statements.
To the extent that Current Funds and Plant Funds are used to finance plant assets, the amounts so provided are accounted for as expenditures. The balances shown on the Combined Balance Sheet as Net Investment in Plant reflect the accumulated expenditures made for plant facilities through Current Funds and Plant Funds and also include expenditures made for plant facilities expended by the Georgia State Financing and Investment Commission on behalfofthe University. Donated fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded values. No depreciation has been provided on physical plant and equipment.
The Statement of Current Funds Revenues, Expenditures, and Other Changes is a statement of financial activities of current funds related to the current reporting period. It does not purport to present the results of operations or the net income or loss for the period as would a statement of income or a statement of revenues and expenses.

- 10-

CLAYTON COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 200 I

EXHIBIT "D"

NOTE I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUDGET The Board ofRegents ofthe University System ofGeorgia - Administrative Central Office receives State appropriation allotments for units of the University System of Georgia. The appropriated budget is adopted at the Board level and represents appropriations provided by the Amended Appropriations Act of 2000-200 1. The appropriated budget covers current funds and plant funds, except for Auxiliary Enterprises and Student Activities which are not subject to appropriation. The allocation ofthe appropriated budget is made to the University by the Administrative Central Office. In addition, the University receives Federal funds and other funds directly and includes these funds in the budget filed with the Administrative Central Office.

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 Capital Outlay
Lottery for Education Equipment, Technology and Construction Trust Fund

$ 293,822.72 $ 93543.16

$

58.77

These overexpenditures of budget constitute a violation of Board of Regents policy, but do not constitute statutory violations of budget authority. Statutory violations of budget authority are reported at the Board object class level.

CASH AND CASH EQUIVALENTS Cash and Cash Equivalents consist 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 ofreimbursements 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 goods for resale are valued at cost using the first-in, first-out method.

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

- 11 -

CLAYTON COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001

EXHffiIT"D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 AND INVESTMENTS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds belonging to the State ofGeorgia cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral anyone or more ofthe following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:
(1) Bonds, bills, certificates of indebtedness, notes, or other direct obligations of the United States or of the State of Georgia.
(2) Bonds, bills, certificates of indebtedness, notes, or other obligations of the counties or municipalities of the State of Georgia.
(3) Bonds of any public authority created by the laws ofthe State ofGeorgia, providing that the statute that created the authority authorized the use 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 requirements.
- 12-

CLAYTON COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 2001

EXHffiIT"D"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES 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 bal~ces which include demand deposits and/or interest bearing accounts. The bank balances as of June 30, 2001, are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk:

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

$ J 234 639 99 $ 2 234 075 98 $ 200 000 00 $'==dO~O~O $ 2 034 075 98

CATEGORIZATION OF INVESTMENTS Investments are summarized as described below:

Type of Investment

Carrying Amount

Board of Regents Short-Term Fund Total- Return Fund
State Investment Pool

$ 300,468.56 1,018,985.68 281,320.33

Total Investments

$ 1.600.774.57

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 of the pool.

- 13-

CLAYTON COLLEGE AND STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001

EXHffiIT"D"

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

$ 640,501.10 33,677,517.22 4,518,699.92 23,113,706.61 4,456,834.15

Total Investment in Plant

$66:407,259.00

NOTE 4: CAPITAL LEASES

Clayton College and State University acquires 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, 2001, future minimum lease payments under capital leases are as follows:

Fiscal Year Ending June 30

2002 2003 2004

$ 3,844.32 3,844.32 3,203.60

Total Future Minimum Lease Payments

$ 10,892.24

Less: Amounts Representing Interest

1,161.98

Present Value of Future Minimum Lease Payments

$ 9.730,26

NOTE 5: DEFICIT FUND BALANCE

The Lottery for Education Fund, a part ofUnrestricted Current Funds, has a deficit fund balance of $58.77 which is not readily apparent from the financial statements.

- 14-

CLAYTON COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001

EXHmIT"D"

NOTE 6: RISK MANAGEMENT
Clayton College and 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 of health 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 ofthe Board of Regents of the University System of Georgia - Administrative Central Office. All units of the 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 $1 ,000.00 per person. Blue Cross Blue Shield of Georgia processes medical and dental claims in accordance with the Health Benefits Plan as established by the Board of Regents. As of January 1, 2001, Express Scripts, Incorporated was contracted with to process pharmacy drug claims in accordance with the Pharmacy Benefit Program portion of the Health Benefits Plan.
The Department of Administrative Services (DOAS) has the responsibility for the State 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 automobile liability, fidelity and certain other risks. The University, as an organizational unit ofthe Board of Regents of the University System of Georgia, is part of the State of Georgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment.
A self-insured program of professional liability for its employees was established by the Board of Regents of the University System of Georgia under powers authorized by the Official Code of Georgia Annotated Section 45-9-1. The program insures the employees to the extent that they are not immune from liability against personal liability for damages arising out of the performance of their duties or in any way connected therewith. The program is administered by DOAS as a SelfInsurance Fund.
NOTE?: RETmEMENTPLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA
Plan Description Clayton College and State University participates in the Teachers Retirement System of Georgia (TRS), a cost-sharing multiple-employer defined benefit pension plan established by the General
- 15 -

---------------------------

CLAYTON COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHffiIT"D"

NOTE 7: RETmEMENTPLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Plan Description Assembly of Georgia for the purpose of providing retirement allowances and other benefits for teachers of the State of Georgia. TRS 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 of Audits and Accounts.

Funding Policy Employees ofthe University who are covered by TRS are require~ by State statute to contribute 5% of their gross earnings to TRS. The University makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2001, the employer contribution rate was 11.29% for covered employees. In addition, the University contributed 2.33% to the TRS on behalf of employees electing to participate in the Regents Retirement Plan. Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2001 2000 1999

100% 100% 100%

$ 1,594,794.46 $ 1,642,212.97 $ 1,769,125.88

REGENTS RETIREMENT PLAN

Plan Description The Regents Retirement Plan, a single-employer defined contribution plan, is an optional retirement plan established and administered by the Board of Regents of the University System of Georgia, under which it may purchase annuity contracts for the purpose of providing retirement and death benefits for eligible faculty and principal administrators. Benefits depend solely on amounts contributed to the plan plus investment earnings. Benefits are payable to participating employees or their beneficiaries in accordance with the tenns 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.

- 16-

CLAYTON COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 2001

EXHIBIT"D"

NOTE 7: RETIREMENT PLANS
REGENTS RETIREMENT PLAN
Funding Policy The University and the covered employees made the required contributions of$431 ,563.80 (8.81 %) and $244,503.48 (5%), respectively.
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description Clayton College and State University participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employer defined contribution plan established by the General Assembly of Georgia for the purpose 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.
Benefits A member may retire and elect to receive periodic payments after attainment ofage 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board ofTrustees. Ifa member has less than $ 3,500.00 credited to his/her account, the Board ofTrustees has the option ofrequiring a lump sum distribution to the member in lieu ofmaking periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute.
Contributions and Vesting Member contributions are seven and one-halfpercent (7.5%) ofgross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member.
Total contributions made by employees during fiscal year 2001 amounted to $120,066.87 which represents 7.5% of covered payroll. These contributions met the requirements of the plan.
NOTE 8: LEAVEPOUCffiS
Employees earn annual leave ranging from one and one-quarter days to one and three-quarter days each month depending upon the employees' length of continuous State service with maximum accumulation of forty-five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. See Note 1 - Basis of Accounting (Compensated Absences)

- 17 -

CLAYTON COLLEGE AND STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHffiIT"D"

NOTE 8: LEAVEPOUCrnS
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 of three months of unused sick leave are entitled to additional service credit in the Teachers Retirement System of Georgia.
NOTE 9: CONTINGENCrnS
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 Clayton College and State University (an organizational unit of the Board of Regents of the University System of Georgia), if any, are generally considered to be actions against the State of Georgia Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 2001.
NOTE 10: POSTEMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
Pursuant to the general powers conferred by the Official Code of Georgia Annotated Section 20-331, the Board ofRegents ofthe University System 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 permit employees ofthe University System ofGeorgia eligible for retirement or that become permanently and totally disabled to continue as members of the group health and life insurance programs. Employees who are eligible for retirement or disability under the criteria established by the Teachers Retirement System ofGeorgia and who have at least ten years ofservice with the University System of Georgia are eligible for these postemployment health and life insurance benefits. Organizational units of the Board of Regents of the University System of Georgia pay the employer portion for group insurance for affected individuals.
As ofJune 30, 2001, there were 80 employees who had retired or were disabled that were receiving these postemployment health and life insurance benefits. For the year ended June 30, 2001, Clayton College and State University recognized as incurred $182,077.82 ofexpenditures, which was net of $59,036.61 ofparticipant contributions.

- 18 -

CLAYTON COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2001

EXHIBIT"D"

NOTE 11: ENROLLMENT

The equivalent full-time student enrollment of Clayton College and State University was as follows:

Regular Term Fall Semester, 2000 Spring Semester, 2001

2,865 2,965

Average

Summer School, 2000

- 19-

SUPPLEMENTARY INFORMATION - 21 -

CLAYTON COLLEGE AND STATE UNIVERSITY 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

LOTIERYFOR EDUCATION

$

888,214.90 $

174,615.56

527,404.50

187,411.41 62,319.09

Total Assets

$ 1,665,349.90 $ =====17=4=,6=15=.=56=

LIABILITIES AND FUND BALANCES
Liabilities Accounts Payable Salaries Payable Student Deposits Deferred Revenue Tuition and Fees
Total Liabilities
Fund Balances Unrestricted
Total liabilities and Fund Balances

$

813,967.58 $

174,674.33

470,877.80

240,405.60
$ 1,525,250.98 $

174,674.33

140,098.92

-58.77

$ 1,665,349.90 $ c::o:::===17=4~,6=1=5.=56=

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 22-

EXHIBIT "En

AUXILIARY ENTERPRISES

STUDENT ACTIVITIES

TOTAL

$

151,155.88 $ 128,638.06 $ 1,342,624.40

28,239.75

816.11

556,460.36

157,569.92

157,569.92

187,411.41

200,000.00

262,319.09

$

536,965.55 $ 129,454.17 $ 2,506,385.18

$

17,908.62 $ 1,757.45 $ 1,008,307.98

4,017.83

474,895.63

9,675.33

9,675.33

240,405.60

$

31,601.78 $ 1,757.45 $ 1,733,284.54

505,363.77

127,696.72

773,100.64

$

536,965.55 $ 129,454.17 $ 2,506,385.18

- 23-

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

REVENUES AND OTHER ADDITIONS
Unrestricted Current Fund Revenues Adjustments
Prior Years' Expenditures/Accounts Payable Prior Years' Checks Voided
Total Revenues and Other Additions
EXPENDITURES AND OTHER DEDUCTIONS
Educational and General Expenditures Auxiliary Enterpnses Expenditures Remittances to the Board of Regents of the
University System of Georgia Prior Year's Unrestricted Fund Balance (Surplus)
Adjustments Prior Years' Revenues/Accounts Receivable
Total Expenditures and Other Deductions
TRANSFERS BETWEEN FUNDS
Nonmandatory Renewals and Replacements General Operations
Total Transfers Between Funds
Net Increase/(Decrease) for the Year
FUND BALANCES JULY 1! 2000
FUND BALANCES JUNE 30, 2001

RESIDENT INSTRUCTION

LOTTERY FOR EDUCATION

$ 34,404,268.72 $
48,484.50 6,226.68
$ 34,458.979.90 $

941,057.00 941.057.00

$ 34.524,491.20 $ 941.115.77

93.803.30 3,414.78

3,359.00

$ 34.621 .709.28 $ 944,474.77

$

75,000.00

$

75,000.00

$

-87.729.38 $

227,828.30

-3,417.77 3.359.00

$

140.098.92 $ ==_"=5=8.=77...

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 24-

EXHIBIT "F"

AUXILIARY ENTERPRISES

STUDENT ACTIVITIES

TOTAL

$ 1,987,189.54 $ 379,284.37 $ 37,711,799.63

39.46 188.58

682.00 36.90

49,205.96 6,452.16

$ 1,987,417.58 $ 380,003.27 $ 37,767,457.75

$ 273,867.04 $ 35,739,474.01

$ 1,824.777.73

1.824,777.73

445.72

171.95

97,162.30 4,032.45

$ 1,825,223.45 $ 274,038.99 $ 37,665,446.49

$ -111,291.87

$ -111,291.87

$ -75,000.00

0.00

$ -111 ,291.87 $ -75,000.00 $ -111,291.87

$

50,902.26 $ 30,964.28 $

-9,280.61

454,461.51

96,732.44

782,381.25

$

505,363.77 $ 127,696.72 $

773,100.64

- 25-

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

REVENUES
State Appropriations TUItion and Fees Federal Grants and Contracts Sales and Services of Educational ActIvities Sales and Services of Auxiliary Enterpnses 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 Food Services Stores and Shops Intercollegiate Athletics Other service Units
Total Expenditures
OTHER TRANSFERS AND ADDITIONS/(DEDUCTIONS)
Transfers for Renewals and Replacements Transfers for General Operations 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 AdditionsJ(Deductions)

RESIDENT INSTRUCTION

LOTIERYFOR EDUCATION

$ 17,884,522.00 $ 11,566,425.11 17,203.61 4,667,459.08
268,658.92
$ 34,404,268.72 $

941,057.00 941,057.00

$ 15,514,489.90 203,807.89
9,144,279.34 $ 1,939,354.03 4,848,848.80 2,697,971.24
175,740.00

941,115.77

$ 34,524,491.20 $

941,115.77

$

75,000.00

51,296.40

-93,803.30 $

$

32,493.10 $

-3,359.00 -3,359.00

Net Increase/(Decrease) in Fund Balances

$

-87,729.38 $ ===-3"",,4;,,;,1.7....=77=

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 26-

EXHIBIT "Goo

AUXILIARY ENTERPRISES

STUDENT ACTIVITIES

TOTAL

$ 18,825,579.00

$ 308,859.27

11,875,284.38

17,203.61

4,667,459.08

$ 1,775,162.05

1,775,162.05

212,027.49

70,425.10

551.111.51

$ 1,987,189.54 $ 379,284.37 $ 37,711,799.63

$ 15,514,489.90

203,807.89

10,085,395.11

$ 273,867.04

2,213,221.07

4,848,848.80

2,697,971.24

175,740.00

$

119,517.09

209,036.47

1,134,694.19

361,529.98

119,517.09 209,036.47 1,134,694.19 361,529.98

$ 1,824,777.73 $ 273,867.04 $ 37,564,251.74

$ -111,291.87

$ -111,291.87

$ -75,000.00

0.00

-217.68

546.95

51,625.67

-97,162.30 $ -111,509.55 $ -74,453.05 $ -156,828.50

$

50,902.26 $ 30,964.28 $ ===-=9'62=80;;,;;.6.1...

- 27-

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

REVENUES
State Appropnabons Other Revenues Retained

CURRENT FUNDS UNRESTRICTED RESTRICTED

PLANT FUNDS RENEWALS AND
UNEXPENDED REPLACEMENTS

$ 17.884.522,00

$

16.519.74672 $ 10.576,461 88

968.000.00 282.60294 $ _ _----'1""3"'.6.::<;38::..;6,..3:..

$ 34.404.26872 $ 10.576,461,88 $, 1.250.602 94 $ _ _----'1~3:.:;.6=.;38;.:;.6:;.:3;."

EXPENDITURES
Personal serviceS: Educabon. General and Departmental seMceS $ Sponsored Operations
Operabng Expenses, Educal1on. General and Departmental serviceS Sponsored Operabons
capital Outlay Special Funding Inlbative

23.585.508,63 $ 1.448.934 75

10,495,47272 443.509.85

9.127.527,13 $ 1.178.97205 $

9.990,11

$ 34.524,49120 $ 10.576.461,88 $ 1.178.972.05 $

...;;;9,:.;;.990;.:;..::....;..11;..,

Excess of Revenues over Expenditures

$

120.222,48 $

0,00 $

71.63089 $ -=-_ _3~.648~~,5;;.2

(1) To eliminate tulbon waivers not budgeted and to reclassify current year transfers budgeted as revenues.

See accompanying notes and Independent Accountanfs Combined Report on ReVIew of Financial Statements and Supplementary Information
28

SCHEDULE "1"

TOTAL

ADJUSTMENTS (1)

TOTAL (Budget BaSIS)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$ 18.852.522 00 27.392,450 17 $

$ 18.852.522 00 $ 18.852.522 00 $

-100.74000

27.291.71017

27.442.59200

0.00 -150,881 83

$ 46.244.972 17 $

-100.74000 $ 46.144.232.17 $ 46.295.114.00 $ _ _-....:.1.::.;50:.:.;.88=..:.,1.::.;83:....

$ 23.585.508 63 1,448.934.75
10,495,472 72 $ 9.127.527.13 1.188.962.16
443.50985

$ 23.585.508.63 $ 23.750.856 00 $

1.448.934.75

1,531.43800

-175.74000

10.319.732.72 9.127.52713 1.188.962.16 443.50985

10.025.910.00 9.419.743.00 1.095,419.00
471.74800

165.347.37 82,50325
-293.822.72 292.21587 -93.54316
28.238.15

$ 46.289,91524 $

-175.740.00 $ 46,114.175.24 $ 46.295,114.00 $ _ _...:.1.:;,:80;.!,;.9:;;:3,:;.8..:.,;76:.,.

$

-44.94307 $

75.000 00 $ _ _3:.:0.0~56~.~93:;;.

$ _ _....3...00~5_6 _93;m

- 29-

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

SCHEDULE "2"

REVENUES State Appropriations

CURRENT FUNDS UNRESTRICTED

BUDGET

VARIANCE FAVORABLE (UNFAVORABLE)

$

941,057.00 $ 941,057.00 $

~O.~OO::....

EXPENDITURES

Equipment, Technology and Construction

Trust Fund

$

Special Funding Initiatives

Internet Connection Initiative

Technology Equipment Initiative

200,058.77 $ 495,000.00
50,000.00 196,057.00

200,000.00 $ 495,000,00
50,000.00 196,057.00

-58.77 0,00 0.00 0.00

$

941,115,77 $ 941,057.00 $

-..:::.5::..:8.~77:......

Excess of Revenues over Expenditures

$ ===-=~-5~8.:;.,77~

$ = ......=-==-=5,;;;,;8.=77=

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
31 -

CLAYTON COLLEGE AND STATE UNIVERSITY CHANGES IN INVESTMENT'IN PLANT YEAR ENDEB JUNE'-SO, 2001

Land Buildings Improvements Other Than BUildings Equipment Ubrary Books and Collections
SUMMARY OF INVESTMENT College Capital Leases

BALANCE JULY 1,2000

CURRENT FUNDS UNRESTRICTED RESTRICTED

$ 640,501.10

30,781,429.26

4,512,485.26

22,137,519.13 $ 5,368.296.26 $ 469,428.08

4,105,565.90

351,268.25

$ 62,177,500.65 $ 5,719.564.51 $ 469,428.08

$ 57.600,163.33 $ 4,577.337.32

5,719.564.51 $ 469,428.08

$ 62.177.500.65 $ 5,719,564.51 $ 469,428.08

See accompanying notes and Independent Accountant's Combined Report /
on Review of Financial Statements and Supplementary Information.
- 32-

SCHEDULE "3"

ADDITIONS
PLANT FUNDS RENEWALS AND
UNEXPENDED REPLACEMENTS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

DEDUCTIONS DISPOSALS! DELETIONS! ADJUSTMENTS

BALANCE JUNE 30, 2001

$

640,501.10

$ 1,020,497.31

$ 1,875,590.65

33,677,517.22

6,214.66

4,518,699.92

112,848.60 $

9,905.21

212,459.28 $ 5,196,749.95

23,113,706.61

4,456,834.15

$ 1,139,560.57 $

9,905.21 $ 2,088,049.93 $ 5,196,749.95 $ 66,407,259.00

$ 1,139,560.57 $ $ 1,139,560.57 $

9,905.21 $

2,088,049.93 $

629,142.89 $ 66,397,528.74

4,567,607.06

9,730.26

9,905.21 $ 2,088,049.93 $ 5,196,749.95 $ 66,407,259.00

33

CLAYTON COLLEGE AND STATE UNIVERSITY SCHEDULE OF FUND BALANCES
CURRENT FUNDS AND PLANT FUNDS JUNE 30, 2001

RESIDENT INSTRUC:nON

CURRENT FUNDS

UNRESTRICTED

LOTTERY FOR

AUXILIARY,

EDUCATION

ENTERPRISES

STUDENT ACTIVITIES

NET INVESTMENT IN PLANT

Investment in Plant Facliltles

RESTRICTED

Designated for Subsequent Years' Expenditures

UNRESTRICTED

Designated .

For Capital Projects (GSFIC)

For Computer Replacements

$

90,000,00

For Intercollegiate Athletics

$

62,124.99

For Inventory Reserve

157,000.00

For Par1<lng

212,313.10

For Renewals and Replacements Reserve

For Subsequent Years' Expenditures

73,925.68 $ 127,696,72

For Uncollectible Accounts

49,640.29

SurplusJDefidt

Regular

458.63

Lottery for Education

$ $ 140,098.92 $

-58.77 -58.77 $

505,363.77 $ 127,696,72

$ 140,098.92 $

-58.77 $ 505,36377 $ 127,696,72

See accompanying notes and Independent Accountant's Combined Report on Review of FinanCIal Statements and Supplementary Information.
- 34-

SCHEDULE "4"

RESTRICTED

UNEXPENDED

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

TOTAL

$ 66,397,52874 $ 66,397,528.74

$ 422,269.17

$ _---"422=,2:.::6.=.;9...:..:17'-

$

34,265.55

$

797,913.45

$

34,265.55

90,000.00

62,124.99

157,000.00

212,313.10

797,913.45

201,622.40

49,640.29

40,463.95

$

74,729.50 $ _ _-:7..;:;9.;..J7'L.;:;.9.:.;:13;..4;.::5c-

40,922.58 -58.77
$ 1,645,743.59

$ 422,269.17 $

74,729.50 $

797,913.45 $ 66,397,528.74 $ 68,465,541.50

- 35-

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

SCHEDULE "5"

Totals per Annual Supplement

Accruals June 30, 2001 June 30, 2000

Adjustments

Shared Services on Jointly Staffed Personnel

Atlanta Metropolitan College

Barton,

Patricia

Board of Regents of the University System of Georgia

Lamb,

Tonya

Weaver,

Brent

Middle Georgia College

Barton,

Patricia

Unreconciled Variance

SALARIES
$ 21,306,214.51 $

TRAVEL 175,641.51

474,895.63 -495,489.55

-3,014.20 -35,971.03 -50,540.00
-966.25 5,193.92
$ 21,200,323.03 $ ======1.7..5.:.1,;,6=4=1.=:5=1

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 36-

SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

CLAYTON COLLEGE AND STATE UNJVERSITY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30,2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-528-99-02 FS-528-00-01

Further Action Not Warranted Unresolved - See Corrective ActionlResponses

CORRECTIVE ACTIONIRESPONSES

GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Finding Control Number: FS-528-00-01

For fiscal year 2001, a physical inventory of equipment was taken; however, when reconciled to the genera11edger there was an unreconciled balance of $184,807.60. This amount was $82,888.70 less than the unreconciled balance of$267,696.30 for fiscal year 2000.

The University has contracted with American Appraisal Association, Incorporated to perform a physical equipment inventory and tag the equipment so it can be scanned in the future. This work will take place in fiscal year 2002. Once the equipment inventory is completed, adjustments will be made to the equipment assets in the general ledger.

The University will take steps to ensure that the subsidiary equipment inventory records are reconciled to the general ledger equipment expenditure accounts.

In fiscal year 2001, the general ledger equipment expenditure accounts were reconciled to the Expended Plant equipment fixed assets.

SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS

CLAYTON COLLEGE AND STATE UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS REVENUES/RECENABLES/RECEIPTS GENERAL LEDGER GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Deficiencies in Accounting Procedures Finding Control Number: FS-528-01-01
Accounting procedures of Clayton College and State University were insufficient to provide adequate internal controls over the Cash and Cash Equivalents, Revenues/Receivables/Receipts, General Ledger and General Fixed AssetslProperty Management control categories as noted below:
Cash and Cash Equivalents
1. The monthly bank statements for the operating account were not reconciled with general ledger balances in a timely manner.
2. Net uncorrected adjustments of $8,247.79 reflected on the bank reconciliations have remained uncorrected for as long as 10 months.
These conditions occurred because of management's failure to establish procedures to promptly reconcile bank statements and record necessary adjustments on a timely basis.
Revenues/Receivables/Receipts
During this review, University officials discovered that revenues of$15,945.59 had not been recorded in the general ledger during fiscal year 2001 and were not deposited to the appropriate bank accounts. Adjusting entries were made to correct the general ledger. Deposits were made to appropriate bank accounts by the University in the subsequent period.
This condition occurred because ofmanagement's failure to establish adequate procedures to ensure all receipts were recorded and deposited in a timely manner.
General Ledger
The detailed listing ofsalary payments made to employees, as submitted by the University to the Georgia Department of Audits, was not reconciled with the general ledger as presented for review. The unlocated difference of $5,193.92 is reflected in the Reconciliation of Salaries and Travel.
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CLAYTON COLLEGE AND STATE UNlVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CASH AND CASH EQUIVALENTS REVENUESfRECElVABLES/RECEIPTS GENERAL LEDGER GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Deficiencies in Accounting Procedures Finding Control Number: FS-528-01-01
This condition occurred because management did not ensure that amounts submitted to the Georgia Department of Audits were reconciled to the University's general ledger. General Fixed AssetslProperty Management At June 30, 2001, the University was unable to reconcile the equipment inventory records to amounts recorded on the accounting records. This deficiency occurred because of management's failure to adequately monitor and maintain the subsidiary equipment inventory records. Management should establish appropriate procedures and controls to ensure accounting records are properly maintained and assets are adequately safeguarded against loss from unauthorized use or disposition.
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