Clayton State University annual financial report, fiscal year 2022

CLAYTON STATE UNIVERSITY
Annual Financial Report Fiscal Year 2022

CLAYTON STATE UNIVERSITY TABLE OF CONTENTS For the Fiscal Year Ended June 30, 2022
Introductory Section....................................................................................................................................................... 1 Message from the President........................................................................................................................... 2 Letter of Transmittal ......................................................................................................................................... 3
Financial Section............................................................................................................................................................. 4 Independent Accountant's Review Report ................................................................................................... 5 Management's Discussion and Analysis ...................................................................................................... 7 Financial Statements (GAAP Basis).............................................................................................................. 19 Statement of Net Position ........................................................................................................................ 20 Statement of Revenues, Expenses, and Changes in Net Position ................................................... 22 Statement of Cash Flows......................................................................................................................... 24 Statement of Fiduciary Net Position....................................................................................................... 26 Statement of Changes in Fiduciary Net Position ................................................................................. 27 Notes to the Financial Statements ......................................................................................................... 28
Required Supplementary Information ....................................................................................................................... 56 Schedule of Contributions for Defined Benefit Pension Plan .................................................................... 58 Schedule of Proportionate Share of Net Pension Liability......................................................................... 59 Notes to the Required Supplemental Information for Pension Plans....................................................... 60 Schedule of Contributions for OPEB Plan.................................................................................................... 61 Schedule of Proportionate Share of the Net OPEB Liability...................................................................... 62 Notes to the Required Supplemental Information for OPEB Plan ............................................................ 63
Supplementary Information.......................................................................................................................................... 64 Balance Sheet (Non-GAAP Basis) ................................................................................................................ 65 Statement of Funds Available and Expenditures Compared to Budget (Non-GAAP Basis) ................ 66 Statement of Changes to Fund Balance by Program and Funding Source (Non-GAAP Basis) ......... 68

Introductory Section

Message from Interim President Kerry Heyward, J.D. Since joining Clayton State University as interim President in April 2022, I quickly have come to realize our campus as a diverse and inclusive academic community. It is an institution with a vibrant history of educating individuals from diverse backgrounds from across the country and around the world. I have been impressed by the University's collective commitment to ensuring that each student at Clayton State receives the knowledge, skills, and tools they need to be successful in achieving their degree and beyond. I am inspired by the dedication exhibited by our faculty, staff, alumni, and friends and believe these individuals motivate our students in their own pursuit of excellence. While these past months and years have undoubtedly been challenging, important, too, are the innumerable successes we have achieved. Clayton State's incredible faculty and research scientists continue to lead the way by conducting pioneering research in their respective fields, receiving exciting grants, and publishing and presenting their work. Our students follow their lead by conducting cutting-edge research of their own, studying abroad at other prestigious universities around the world, and contributing groundbreaking ideas that will positively impact our society. Clayton State's student-athletes also work hard, both in and out of the classroom, while exemplifying positive community engagement and serving as models of servant leadership. It should come as no surprise, then, that Clayton State is quickly becoming the university of choice for more students than ever. Clayton State experienced the highest-ever six-year graduation rate of 36%, (which is a fivepoint increase from the previous year's rate), with over 1,300 students graduating in the last year. This achievement is significant on its own, but even more so considering the challenges of the pandemic over the past two years. Our accomplishments have been great, our growth has been steady, and our student body is more robust and diverse than ever. I can see that the best is yet to come. Now more than ever, it is apparent that Clayton State is an incredible institution filled with bright, talented students, world-class faculty and hardworking staff. The work of yesterday has poised the University to be on the brink of unprecedented excellence for which we are undeniably ready. With a solid foundation on which to build, I have absolute confidence in our ability to grow Clayton State's positive momentum now and for generations to come. With gratitude, Kerry Heyward, J.D. Interim President
2 Clayton State University

Letter of Transmittal
August 15, 2022
To: Kerry Heyward, J.D. Interim President Clayton State University
The Annual Financial Report (AFR) for the Clayton State University includes the financial statements for the year ended June 30, 2022, as well as other useful information to help ensure the University's accountability and integrity to the public. The AFR also includes the Management Discussion and Analysis, with all necessary disclosures to assist the reader in gaining a broader and more thorough understanding of the University's financial position as a result of operations for the fiscal year ended June 30, 2022. Clayton State University management is responsible for the accuracy of this information and for the completeness and fairness of its presentation, including all disclosures. We believe the information is accurate and fairly presents the Institution's financial position, revenues, expenses and other changes in net position. The University's financial records are included in the University System of Georgia's financial report, which is audited by the State of Georgia Department of Audits and Accounts (DOAA) on an annual basis. The audit of the University's financial assistance programs is performed by the DOAA in conjunction with the statewide Single Audit. The Georgia Department of Audits and Accounts (DOAA) was engaged to complete a review engagement at Clayton State University for Fiscal Year 2022. The engagement is in respect to the financial statements of the business type activities and fiduciary funds, including the notes to the institution's financial statements. DOAA performs procedures to the extent necessary so that DOAA might express an opinion on the basic financial statements of the University System of Georgia Annual Financial Report and the Annual Comprehensive Financial Report of the State of Georgia. The procedures will not constitute an audit of the institution's financial statements. For this reason, DOAA did not express an opinion on the financial statements.
Sincerely, Ms. Corlis Cummings Vice President, Business & Operations
2022 Annual Financial Report 3

Financial Section
4 Clayton State University

5 Clayton State University

6 Clayton State University

CLAYTON STATE UNIVERSITY Management's Discussion and Analysis

Introduction Clayton State University (University) is one of the 26 institutions of higher education of the University System of Georgia. The University is located in Morrow, Georgia and was founded in 1969. It cultivates an environment of engagement and experienced-based learning enriched by active community service, that prepares students of diverse ages and backgrounds to succeed in their lives and careers.

Through a distinctive combination of proven and innovative methods of teaching and learning, Clayton State University excels in preparing students from many walks of life to meet the challenges of living and working in a dynamic, global society.

Clayton State currently has more than 40 undergraduate majors in the Colleges of Arts & Sciences, Business, Health, and Information and Mathematical Sciences. The University's School of Graduate Studies has nine master's degree programs and has become known for its state-of-the-art technology and technology programs.

The University offers baccalaureate and master's degrees in a wide variety of subjects. This broad range of educational opportunities attracts a highly qualified faculty and a student body of over 6800 students.

STUDENT HEADCOUNT

STUDENT FTE

FY 2022

6,820

5,433

FY 2021

7,052

5,726

FY 2020

6,879

5,705

Overview of the Financial Statements and Financial Analysis The University is pleased to present its financial statements for fiscal year 2022. The emphasis of discussions about these statements will be on current year data of business-type activities. There are three financial statements presented: the Statement of Net Position; the Statement of Revenues, Expenses and Changes in Net Position; and the Statement of Cash Flows. This discussion and analysis of the University's financial statements provides an overview of its financial activities for the year. Comparative data is provided for fiscal year 2022 and fiscal year 2021.
Statement of Net Position The Statement of Net Position is a financial condition snapshot as of June 30, 2022 and includes all assets and liabilities, both current and noncurrent and deferred inflows and outflows. The differences between current and noncurrent assets are discussed in the Notes to the Financial Statements. The Statement of Net Position is prepared under the accrual basis of accounting which requires revenue and asset recognition when the service is provided, and expense and liability recognition when goods or services are received despite when cash is actually exchanged.
From the data presented, readers of the Statement of Net Position are able to determine the assets available to continue the operations of the University and how much the University owes vendors. The difference between assets, deferred outflow of resources, liabilities, and deferred inflow of resources (net position) is one indicator of the University's financial health. Increases or decreases in net position provide an indicator of the improvement or decline of the University's financial health when considered in conjunction with other non-financial conditions, such as facilities and enrollment. Net Position is divided into three major categories. The first category, net investment in capital assets, provides the University's equity in property, plant, and equipment owned by the University.
The next category is restricted, which is divided into two categories, non-expendable and expendable. The corpus of non-expendable, restricted resources is available only for investment purposes. Expendable, restricted resources are available for expenditure by the University but must be spent for purposes as determined by donors and/or external entities that have placed time or purpose restrictions on the use of the assets.
The final category is unrestricted. Unrestricted resources are available to the University for any lawful purpose.

2022 Annual Financial Report 7

CONDENSED STATEMENT OF NET POSITION ASSETS Current Assets Capital Assets, Net Intangible Right-to-Use Assets, Net Other Assets TOTAL ASSETS

June 30, 2022 June 30, 2021

$ 21,716,400 $ 18,471,551 $

120,177,555

118,246,632

59,587

--

2,233,311

2,233,311

$ 144,186,853 $ 138,951,494 $

Increase/ (Decrease)

% Change

3,244,849 1,930,923
59,587 --
5,235,359

17.57 % 1.63 %
100.00 % -- %
3.77 %

DEFERRED OUTFLOWS

$ 21,425,074 $ 22,744,050 $ (1,318,976) (5.80)%

LIABILITIES Current Liabilities Non-Current Liabilities TOTAL LIABILITIES

9,369,654

9,144,292

132,364,530

164,651,111

$ 141,734,184 $ 173,795,403 $

225,362 (32,286,581) (32,061,219)

2.46 % (19.61)% (18.45)%

DEFERRED INFLOWS

$ 42,789,151 $ 17,665,038 $ 25,124,113 142.23 %

NET POSITION Net Investment in Capital Assets Restricted, Non-Expendable Restricted, Expendable Unrestricted TOTAL NET POSITION

52,653,821

47,937,732

1,650,680

1,650,680

7,335

7,335

(73,223,244)

(79,360,644)

$ (18,911,408.00) $ (29,764,897.00)

4,716,089 -- --
6,137,400 $10,853,489

9.84 % -- % -- %
7.73 % 36.46 %

Total assets increased by $5,235,359 which was due to an increase in current assets of $3,244,849, an increase in net capital assets of $1,930,923, and an increase in net intangible right-to-use assets of $59,587. The increase in current assets is primarily due to an increase in cash position at year end. Prior to year end, federal awards were reconciled and funds due were drawn down from the G5 payment system. We retired library collections that were no longer relevant and adjusted value for leased assets by removing the 10% residual value not applicable per Business Procedures Manual Section 7.1.6. However, this decrease in net capital assets was offset by the addition of the mini central energy plant transferred by GSFIC to the University. The result was an overall increase in net capital assets.
Total deferred outflows of resources decreased by $1,318,976 which was primarily due to a change in the University's proportionate share of the actuarially-determined deferred loss on defined benefit pension plan administered by Teachers Retirement System of Georgia and Employees' Retirement System of Georgia.
Total liabilities decreased by $32,061,219 which was due to an increase in current liabilities of $225,362 and a decrease in non-current liabilities of $32,286,581. The institution changed its percentage of summer revenue deferred from 24% to 40%, thereby increasing advances in current liabilities by 18.60%. Lease purchase obligations decreased by $59,402,405 and notes payable increased by the same amount due to the implementation of GASB 87. GASB 87 requires a different accounting treatment for contracts that transfer ownership of the underlying asset to the purchaser by the end of the contract and does not contain termination options. These contracts, also known as finance purchases, are now accounted for as notes payable. For Clayton State, implementation of GASB 87 meant transferring all liability for public private ventures previously accounted for as lease obligations to notes payable. The Teachers Retirement System (TRS) of Georgia made significant assumption changes between fiscal year 2021 and 2022, resulting in a decrease of $26,589,617 in net pension liability. TRS also updated their experience study which had not been done since 2014 to more closely reflect actual experience. Net other post employment benefits (OPEB) liabilities decreased by $3,446,224 due to changes in calculation of the University's proportionate share of the actuarially-determined liability for defined benefit plans.
Total deferred inflows of resources increased by $25,124,113 which was due to a decrease of $331,191 in deferred inflows for debt refunding, increase of $21,902,199 in the University's deferred inflows related to pension liability and

8 Clayton State University

an increase of $3,553,105 in the category of deferred inflows related to the changes in the University's net OPEB liability.
The combination of the change in total assets and deferred outflows of resources and the change in total liabilities and deferred inflows of resources yielded an increase in net position of $10,853,489. This change in net position is primarily in the category of unrestricted net position.
Statement of Revenues, Expenses and Changes in Net Position Changes in total net position as presented on the Statement of Net Position are based on the activity presented in the Statement of Revenues, Expenses and Changes in Net Position. The purpose of the statement is to present the revenues received by the University, both operating and non-operating, and the expenses paid by the University, operating and non-operating, and any other revenues, expenses, gains and losses received or spent by the University. Generally, operating revenues are received for providing goods and services to the various customers and constituencies of the University. Operating expenses are those expenses paid to acquire or produce the goods and services provided in return for the operating revenues, and to carry out the mission of the University. Non-operating revenues are revenues received for which goods and services are not provided. For example state appropriations are non-operating because they are provided by the Legislature to the University without the Legislature directly receiving commensurate goods and services for those revenues.

CONDENSED STATEMENT OF REVENUES,

Increase/

%

EXPENSES AND CHANGES IN NET POSITION June 30, 2022 June 30, 2021 (Decrease) Change

Operating Revenue

$ 40,263,689 $ 40,941,666 $ (677,977) -1.66 %

Operating Expense

103,193,603 97,782,461

5,411,142 5.53 %

Operating Income/Loss

$ (62,929,914) $ (56,840,795) $ (6,089,119) (10.71)%

Non-Operating Revenue and Expense

66,546,978 52,831,397 13,715,581 25.96 %

Income (Loss) before Other Revenues, Expenses,

Gains, or Losses

$

3,617,064 $ (4,009,398) $ 7,626,462 190.21 %

Other Revenues, Expenses, Gains, Losses and Special Items

7,236,425

5,792,527

1,443,898 24.93 %

Change in Net Position

$ 10,853,489 $ 1,783,129 $ 9,070,360 (508.68)%

Net Position at Beginning of Year

(29,764,897) (31,548,026)

1,783,129 5.65 %

Net Position at End of Year

$ (18,911,408) $ (29,764,897) $ 10,853,489 36.46 %

The Statement of Revenues, Expenses and Changes in Net Position reflects an increase in net position at the end of the year. Some highlights of the information presented on this statement are as follows:
Revenues Clayton State University experienced a decline in enrollment. Fall semester headcount and full time equivalent decreased by 4% and 6% respectively, and credit hour production decreased by 8%. These decreases resulted in a decrease in net student tuition and fees by $2,151,157. The decrease in net tuition and fees was offset by a 63.23% increase in sales and services revenue, 14.04% increase in residence halls revenue, 21.13% increase in food services revenue, and 18.57% increase in other auxiliary units. Resident halls revenue increased due to increase in occupancy and housing rates. Overall, operating revenues decreased by 1.66% which is equivalent to $677,977.
Net nonoperating revenues increased by 25.96% for the following reasons: Clayton State University's state appropriation increased by $3,418,822 (13.00%). The three main contributing factors to this increase are: enrollment earnings, fiscal year 2021 formula allocation adjustment, and allocation for cost of living adjustment in the last quarter of the fiscal year. Federal grants and contracts revenue increased by $8,299,932 (29.84%) due to increase in Higher Education Emergency Relief Funds (HEERF) received from the Department of Education. The CSU Real Estate Foundation LLC reimbursed the University for repairs and maintenance to Laker Village. This made up the majority of the increased gift revenue of $1,723,810 (580.77%).
The Georgia State Financing and Investment Commission (GSFIC) completed the mini central energy plant project and transferred the asset to the University during the fiscal year. The university recognized and recorded $7,236,425 in state capital grants and gifts as a result of this transfer.

2022 Annual Financial Report 9

For the years ended June 30, 2022 and June 30, 2021, revenues by source were as follows:

REVENUES BY SOURCE Tuition and Fees Grants and Contracts Sales and Services Auxiliary Enterprises Other Operating Revenues Total Operating Revenues State Appropriations Grants and Contracts Gifts Investment Income Other Nonoperating Revenues Total Nonoperating Revenues State Capital Gifts and Grants Total Capital Gifts and Grants Total Revenues

Increase/ June 30, 2022 June 30, 2021 (Decrease) % Change

$ 23,849,103

26,000,260 $ (2,151,157) (8.27)%

2,741,637

2,686,073

55,564

2.07 %

1,018,708

624,108

394,600 63.23 %

11,914,262

10,816,667

1,097,595 10.15 %

739,979

814,558

(74,579) (9.16)%

$ 40,263,689 $ 40,941,666 $ (677,977) (1.66)%

29,717,998

26,299,176

3,418,822 13.00 %

37,164,787

28,513,733

8,651,054 30.34 %

2,020,623

296,813

1,723,810 580.77 %

(2,450)

20,389

(22,839) (112.02)%

(39,382)

(16,850)

(22,532) 133.72 %

$ 68,861,576 $ 55,113,261 $ 13,748,315 24.95 %

7,236,425

5,792,527

1,443,898 24.93 %

$ 7,236,425 $ 5,792,527 $ 1,443,898 24.93 %

$ 116,361,690 $ 101,847,454 $ 14,514,236 14.25 %

10 Clayton State University

Revenues by source (state appropriations, grants and contracts, tuition and fees, auxiliaries, gifts and other sources) is depicted by the following chart:
Revenue by Major Source

$7,236,425 $2,020,623
$37,164,787

$23,849,103 $2,741,637 $1,018,708
$11,914,262
$739,979

$29,717,998

Tuition and Fees Sales and Services Other Operating Revenues Grants and Contracts Investment Income

Grants and Contracts Auxiliary Enterprises State Appropriations Gifts Capital Gifts and Grants

2022 Annual Financial Report 11

Revenue by major source for the years ended June 30,2022 and June 30, 2021 is depicted by the following chart:

$40,000,000

Revenue by Major Source (in millions)

$30,000,000

$20,000,000

$10,000,000

$0

Tuition

anGdrFaenetssand

Contracts Sales

and

Services Auxiliary

EnterSprtaisteesApprCoparpiaittaiol nGsifts

and

Grants

June 30, 2022

June 30, 2021

Expenses For the years ended June 30, 2022 and June 30, 2021, expenses by functional classification were as follows:

EXPENSES BY FUNCTIONAL CLASSIFICATION Instruction Research Public Service Academic Support Student Services Institutional Support Plant Operations and Maintenance Scholarships and Fellowships Auxiliary Enterprises Total Operating Expenses Interest Expense Total Nonoperating Expenses
Total Expenses

Increase/ June 30, 2022 June 30, 2021 (Decrease) % Change

$ 32,383,130 $ 30,843,089 $ 1,540,041

4.99 %

599,826

644,036

(44,210) (6.86)%

345,275

218,125

127,150 58.29 %

9,850,744 10,144,885

(294,141) (2.90)%

8,539,637

8,695,273

(155,636) (1.79)%

10,139,491

17,763,116

(7,623,625) (42.92)%

9,222,823

7,681,432

1,541,391 20.07 %

20,017,695 12,510,213

7,507,482 60.01 %

12,094,982

9,282,292

2,812,690 30.30 %

$ 103,193,603 $ 97,782,461 $ 5,411,142

5.53 %

2,314,598

2,281,864

32,734

1.43 %

$ 2,314,598 $ 2,281,864 $

32,734

1.43 %

$ 105,508,201 $ 100,064,325 $ 5,443,876

5.44 %

12 Clayton State University

Total expenses were $105,508,201 in fiscal year 2022, an increase of $5,443,876 compared to fiscal year 2021. Scholarships and fellowships increased by $7,507,482 because we spent more in HEERF funds than last year. Supplies and other services increased because we had more contract expenses related to facility maintenance, Laker Village refinance project, and other major repairs. These increases, however, were offset by a significant decrease in pension expense. TRS made significant assumption changes between last year and this year that decreased the net pension liability from $41.3 million to $14.7 million. This resulted in a decrease in pension expense.
The following chart depicts the fiscal year 2022 operating expenses by functional classification:

Operating Expenses by Functional Classification

Scholarships and Fellowships 19.4%

Auxiliary Enterprises 11.7%

Plant Operations and Maintenance 8.9%
Institutional Support 9.8% Student Services 8.3%

Instruction 31.4%
Research 0.6% Public Service 0.3% Academic Support 9.5%

2022 Annual Financial Report 13

Operating expenses by functional classification for the years ended June 30, 2022 and June 30, 2021 are depicted by the following chart:

Operating Expenses by Functional Classification (in millions)
$40,000,000

$30,000,000

$20,000,000

$10,000,000

$0 Instruction ReseaPrcuhblicAScearvdiecme ic SSuptupdPoelrantntItnSOsetpritveuirctaieotsnioanlSsScauhnpodplaoMrrstahiniptsenaanndcFeeAlluoxwilsiahriypsEnterprises

June 30, 2022

June 30, 2021

14 Clayton State University

The following chart depicts the fiscal 2022 operating expenses by natural classification.
Operating Expenses by Natural Classification

Scholarships and Fellowships 20,857,231 Travel 151,056 Personal Services 412,764 Employee Benefits 11,439,860
Staff Salaries 21,345,536

Utilities 2,629,551
Supplies and Other Services 17,108,037
Depreciation/ Amortization 6,962,024 Faculty Salaries 22,287,544

Faculty Salaries Personal Services Utilities

Staff Salaries Travel Supplies and Other Services

Employee Benefits Scholarships and Fellowships Depreciation/ Amortization

2022 Annual Financial Report 15

Operating expenses by natural classification for the years ended June 30, 2022 and June 30, 2021 are depicted by the following chart:

Operating Expenses by Natural Classification (in millions)
$30,000,000

$20,000,000

$10,000,000

$0 Faculty SalariSetsaff ESmalpalroieysee BPeenrseofintsal SSechrvoiclaersshipsTarnadveFlelloSwusphpipliess anUdtDilOietitephsreercSiaetirovnic/eAsmortization

June 30, 2022

June 30, 2021

Statement of Cash Flows The Statement of Cash Flows presents detailed information about the cash activity of the University during the year and is divided into five sections. The first section is concerned with operating cash flows and reflects the net cash used by the various operating activities of the University. The second section is related to cash flows from non-capital financing activities, which reflects the cash received and spent for non-capital financing purposes. The third section summarizes cash flows from capital and related financing activities and contains cash used for the acquisition and construction of capital and related items. The fourth section is comprised of the cash flows from investing activities and includes the purchases, proceeds and interest received from investing activities. The fifth, and final, section reconciles the net cash used to the operating income or loss as reflected on the Statement of Revenues, Expenses and Changes in Net Position.

16 Clayton State University

Cash Flows for the Years Ended June 30, 2022 and 2021, Condensed

CONDENSED STATEMENT OF NET CASH FLOWS Cash Provided (Used) by: Operating Activities Non-Capital Financing Activities Capital and Related Financing Activities Investing Activities NET CHANGE IN CASH Cash, beginning of year CASH, end of year

June 30, 2022

June 30, 2021

$

(59,482,877) $

(46,296,678)

$

74,013,633 $

50,397,889

$

(7,069,762) $

(4,912,949)

$

(2,449) $

20,390

$

7,458,545 $

(791,348)

10,642,775

11,434,123

$

18,101,320 $

10,642,775

Capital Assets Capital assets, net of accumulated depreciation, at June 30, 2022 and June 30, 2021 were as follows:

CAPITAL ASSETS, net of accumulated depreciation and amortization Land Construction Work-in-Progress Infrastructure Building and Building Improvements Facilities and Other Improvements
Equipment

June 30, 2022 $ 2,416,732
91,408 1,043,600 112,832,746
23,850
2,694,505

June 30, 2021

Increase (Decrease)

2,416,732 $

--

--

91,408

1,095,207

(51,607)

111,712,976

1,119,770

31,079

(7,229)

1,800,509

893,996

% Change 0.00 %
100.00 % (4.71)% 1.00 %
(23.26)%
49.65 %

Library Collections
Capital Assets, net of accumulated depreciation and amortization

1,074,714

1,190,129

$ 120,177,555 $ 118,246,632 $

(115,415) 1,930,923

(9.70)% 1.63 %

For the year ended June 30, 2022, the University retired library collections that were no longer relevant and adjusted value for leased assets by removing the 10% residual value not applicable per Business Procedures Manual Section 7.1.6. The mini central energy plant project managed by GSFIC was completed. GSFIC transferred capital additions valued at $7,236,425 to the University.
For additional information concerning Capital Assets, see Notes 1, 6, 8, and 13 in the Notes to the Financial Statements.
Long Term Liabilities
Clayton State University had long-term liabilities of 59,657,032 of which 3,664,889 was reflected as a current liability at June 30, 2022.
For additional information concerning Long-Term Liabilities, see Note 8 in the Notes to the Financial Statements.
Notes to the Financial Statements
The Notes to the Financial Statements are an integral part of the basic financial statements and communicate information essential for fair presentation. For example, the notes convey information concerning significant accounting policies used to prepare the financial statements, detailed information on cash and investments, receivables, leases, compensated absences, retirement and other postemployment benefits, capital assets and a report of operating expenses by function.

2022 Annual Financial Report 17

Economic Outlook Data from the National Student Clearinghouse Research Center (Clearinghouse) shows that college attendance continues to decline. Unfortunately, Clayton State University is among institutions affected by the national enrollment trend. Higher Education is also grappling with the effects of rising inflation. To cope with these challenges, Clayton State continues to evaluate its value proposition, marketing strategies, and program offerings to attract more students, faculty and staff. Although we anticipate a decrease in revenues for the upcoming fiscal year, we are confident that we have the measures in place to manage cost without compromising service offerings to our students. Overall, Clayton State's economic outlook is positive. The University will continue to monitor its operations and look for cost containment opportunities to ensure an ongoing stable financial position. Requests for Information The financial statements are designed to provide a general overview of the University's finances. Questions concerning any of the information provided should be addressed to the University's Controller at 2000 Clayton State Boulevard Morrow, GA 30260.
18 Clayton State University

Financial Statements (GAAP Basis)
19 Clayton State University

CLAYTON STATE UNIVERSITY STATEMENT OF NET POSITION JUNE 30, 2022
ASSETS Current Assets Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted) Accounts Receivable, net Federal Financial Assistance Affiliated Organizations Other Inventories Prepaid Items Total Current Assets
Non-Current Assets Accounts Receivable, net Affiliated Organizations Due From USO - Capital Liability Reserve Fund Capital Assets, net Intangible Right-to-Use Assets, net
Total Non-Current Assets TOTAL ASSETS
DEFERRED OUTFLOWS OF RESOURCES
The notes to the financial statements are an integral part of this statement.

Clayton State University

$

16,443,305

1,658,015

1,110,773 707,216
1,630,906 2,421
163,764 21,716,400

1,655,106 578,205
120,177,555 59,587
122,470,453 144,186,853

$

21,425,074

20 Clayton State University

CLAYTON STATE UNIVERSITY STATEMENT OF NET POSITION JUNE 30, 2022
LIABILITIES Current Liabilities Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Advances (Including Tuition and Fees) Deposits Deposits Held for Other Organizations Notes Payable Lease Purchase Obligations - External Compensated Absences Total Current Liabilities
Non-Current Liabilities Notes Payable Lease Purchase Obligations - External Compensated Absences Net Other Post Employment Benefits Liability Net Pension Liability
Total Non-Current Liabilities TOTAL LIABILITIES
DEFERRED INFLOWS OF RESOURCES
NET POSITION Net Investment in Capital Assets Restricted for: Nonexpendable Expendable Unrestricted (Deficit)
TOTAL NET POSITION
The notes to the financial statements are an integral part of this statement.

Clayton State University

$

2,599,337

301,254

120,788

6,581

41,690

2,528,337

69,779

36,999

2,381,347

19,042

1,264,500

9,369,654

54,792,461 39,055
1,160,627 61,657,100 14,715,287 132,364,530 141,734,184
42,789,151

52,653,821

1,650,680 7,335
(73,223,244)

$

(18,911,408)

2022 Annual Financial Report 21

CLAYTON STATE UNIVERSITY STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION FOR FISCAL YEAR ENDED JUNE 30, 2022

OPERATING REVENUES Student Tuition and Fees (net) Grants and Contracts Federal State Other Sales and Services Rents and Royalties Auxiliary Enterprises Residence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Other Operating Revenues
Total Operating Revenues
OPERATING EXPENSES Faculty Salaries Staff Salaries Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation and Amortization
Total Operating Expenses
Operating Income (Loss)
The notes to the financial statements are an integral part of this statement.

Clayton State University

$

23,849,103

2,305,255 116,240 320,142
1,018,708 5,701

6,735,243 210,299
1,773,878 433,851 523,894
1,935,270 301,827 734,278

40,263,689

22,287,544 21,345,536 11,439,860
412,764 151,056 20,857,231 2,629,551 17,108,037 6,962,024
103,193,603
(62,929,914)

22 Clayton State University

CLAYTON STATE UNIVERSITY STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION FOR FISCAL YEAR ENDED JUNE 30, 2022

NONOPERATING REVENUES (EXPENSES) State Appropriations Grants and Contracts Federal Other Gifts Investment Loss Interest Expense Other Nonoperating Revenues (Expenses)
Net Nonoperating Revenues
Income (Loss) Before Other Revenues, Expenses, Gains, or Losses
Capital Grants and Gifts State
Total Other Revenues, Expenses, Gains or Losses
Change in Net Position
Net Position, Beginning of Year
Net Position, End of Year
The notes to the financial statements are an integral part of this statement.

Clayton State University

$

29,717,998

36,117,572 1,047,215 2,020,623 (2,450) (2,314,598) (39,382)

66,546,978

3,617,064

7,236,425

7,236,425

10,853,489

(29,764,897)

$

(18,911,408)

2022 Annual Financial Report 23

CLAYTON STATE UNIVERSITY STATEMENT OF CASH FLOWS FOR FISCAL YEAR ENDED JUNE 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES Payments from Customers Grants and Contracts (Exchange) Payments to Suppliers Payments to Employees Payments for Scholarships and Fellowships Other Payments
Net Cash Used by Operating Activities
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES State Appropriations Gifts and Grants Received for Other Than Capital Purposes Other Non-Capital Financing Payments
Net Cash Flows Provided by Non-Capital Financing Activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchases of Capital and Intangible Right-to-Use Assets Principal Paid on Capital Debt and Leases Interest Paid on Capital Debt and Leases
Net Cash Used by Capital and Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES Investment Loss
Net Cash Used by Investing Activities
Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents, Beginning of Year
Cash and Cash Equivalents, End of Year
The notes to the financial statements are an integral part of this statement.

Clayton State University

$

37,027,519

2,948,257

(34,607,349)

(43,982,170)

(20,857,231)

(11,903)

(59,482,877)

29,717,998 44,327,980
(32,345) 74,013,633

(1,837,859) (2,586,113) (2,645,790) (7,069,762)

(2,449) (2,449)

7,458,545 10,642,775

$

18,101,320

24 Clayton State University

CLAYTON STATE UNIVERSITY STATEMENT OF CASH FLOWS FOR FISCAL YEAR ENDED JUNE 30, 2022
RECONCILIATION OF OPERATING LOSS TO NET CASH USED BY OPERATING ACTIVITIES:
Operating Loss Adjustments to Reconcile Net Operating Loss to Net Cash Used by Operating Activities
Depreciation Change in Assets and Liabilities:
Receivables, net Inventories Prepaid Items Accounts Payable Salaries Payable Benefits Payable Contracts Payable Retainage Payable Deposits Advances (Including Tuition and Fees) Other Liabilities Funds Held for Others Compensated Absences Net Pension Liability Other Post-Employment Benefit Liability Change in Deferred Inflows/Outflows of Resources:
Deferred Inflows of Resources Deferred Outflows of Resources
Net Cash Used by Operating Activities
NON-CASH INVESTING, NON-CAPITAL FINANCING, AND CAPITAL AND RELATED FINANCING TRANSACTIONS
Current Year Accruals Related to Non-operating Non-capital Grants and Gifts Current Year Accruals Related to Capital Financing Activities Gift of Capital Assets Gain (Loss) on Disposal of Capital Assets Accrual of Capital Asset Related Payables Amortization of Deferred Gain (Loss) of Capital Debt Refunded
The notes to the financial statements are an integral part of this statement.

Clayton State University

$

(62,929,914)

6,962,024
(620,484) (969)
(5,489) 46,137 16,846 (16,869)
6,581 41,690 24,162 395,355
5,443 (11,902) (133,926) (26,589,617) (3,446,224)
25,455,303 1,318,976
(59,482,877)

$

733,032

$

807,103

$

6,929,986

$

(7,037)

$

18,038

$

331,192

2022 Annual Financial Report 25

CLAYTON STATE UNIVERSITY STATEMENT OF FIDUCIARY NET POSITION FOR FISCAL YEAR ENDED JUNE 30, 2022
ASSETS Cash and Cash Equivalents Receivables Other
Total Assets
LIABILITIES Cash Overdraft Accounts Payable Advances Deposits held for other organizations Other Liabilities
Total Liabilities
NET POSITION Restricted for: Individuals, Organizations, and Other Governments

Custodial Funds

$

--

566,685

566,685

142,275 1,500
146,228 2,000
56,832
348,835

$

217,850

26 Clayton State University

CLAYTON STATE UNIVERSITY STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR FISCAL YEAR ENDED JUNE 30, 2022
ADDITIONS Federal Financial Aid State Financial Aid Other Financial Aid Clubs and Other Organizations Fund Raising
Total Additions
DEDUCTIONS Scholarships and Other Student Support Student Organizations Support
Total Deductions
Net Increase (Decrease) in Fiduciary Net Position
Net Position, Beginning of Year
Net Position, End of Year

Custodial Funds

$

29,041,498

7,271,631

667,833

417,570

37,398,532

36,980,962 284,697
37,265,659 132,873 84,977

$

217,850

2022 Annual Financial Report 27

Notes to the Financial Statements
28 Clayton State University

CLAYTON STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2022
Note 1 Summary of Significant Accounting Policies
Nature of Operations The Clayton State University (University) serves the state and national communities by providing its students with academic instruction that advances fundamental knowledge and by disseminating knowledge to the people of Georgia, the nation, and throughout the world.
Reporting Entity As defined by Official Code of Georgia Annotated (O.C.G.A) 20-3-50, the University is part of the University System of Georgia (USG), an organizational unit of the State of Georgia (the State) under the governance of the Board of Regents (Board). The Board has constitutional authority to govern, control and manage the USG. The Board is composed of 19 members, one member from each congressional district in the State and five additional members from the state-at-large, appointed by the Governor and confirmed by the Senate. Members of the Board serve a seven year term and members may be reappointed to subsequent terms by a sitting governor.
The University does not have the right to sue/be sued without recourse to the State. The University's property is the property of the State and subject to all the limitations and restrictions imposed upon other property of the State by the Constitution and laws of the State. In addition, the University is not legally separate from the State. Accordingly, the University is included within the State's basic financial statements as part of the primary government as defined in section 2100 of the Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial Reporting Standards.
The accompanying basic financial statements are intended to supplement the State's Annual Comprehensive Financial Report (ACFR) by presenting the financial position and changes in financial position and cash flows of only that portion of the business-type activities of the State that is attributable to the transactions of the University. These financial statements do not purport to, and do not, present fairly the financial position of the State as of June 30, 2022, the changes in its financial position or its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
The accompanying basic financial statements should be read in conjunction with the State's ACFR. The most recent State of Georgia ACFR can be obtained through the State Accounting Office, 200 Piedmont Avenue, Suite 1604 (West Tower), Atlanta, Georgia 30334 or online at sao.georgia.gov/annual-comprehensive-financial-reports.
Basis of Accounting and Financial Statement Presentation The financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) as prescribed by the GASB and are presented as required by these standards to provide a comprehensive, entitywide perspective of the University's assets, deferred outflows, liabilities, deferred inflows, net position, revenues, expenses, changes in net position and cash flows.
The University's business-type activities and fiduciary fund financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. Grants and similar items are recognized as revenues in the fiscal year in which eligibility requirements imposed by the provider have been met. All significant intra-fund transactions have been eliminated.
The University reports the following fiduciary fund:
Custodial Funds - Accounts for activities resulting from the University acting as an agent or fiduciary for various governments, companies, clubs or individuals.
2022 Annual Financial Report 29

New Accounting Pronouncements
In June 2017, the GASB issued Statement No. 87, Leases, effective for fiscal years beginning after December 15,
2019. In fiscal year 2020, the University adopted GASB Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance which postponed the effective date of Statement No. 87 to fiscal year 2022. This statement establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use asset, and a lessor is required to recognize a lease receivable and deferred inflow of resources. The adoption of this statement did not result in a restatement of the net position of the businesstype activities.
In June 2018, the GASB issued Statement No. 89, Accounting for Interest Cost Incurred before the End of a
Construction Period, effective for fiscal years beginning after December 15, 2019. In fiscal year 2020, the University adopted GASB Statement No. 95, Postponement of Effective Dates of Certain Authoritative Guidance which postponed the effective dates of Statement No. 89 to fiscal year 2022. The objectives of this statement are to both enhance the relevance and comparability of information about capital assets and the cost of borrowing and to simplify accounting for interest costs incurred before the end of a construction period. The adoption of this statement does not have a significant impact on the financial statements and will be applied prospectively.
In January 2020, the GASB issued Statement No. 92, Omnibus 2020, effective for fiscal years beginning after June 15, 2020. In fiscal year 2020, the University adopted GASB Statement No. 95, Postponement of Effective Dates of Certain Authoritative Guidance which postponed the effective dates of Statement No. 92 to fiscal year 2022. The objective of this statement is to enhance comparability in accounting and financial reporting and improve the consistency of authoritative literature by focusing on practice issues that have been identified during the implementation of various GASB Statements. The adoption of this statement does not have a significant impact on the financial statements.
In March 2020, the GASB issued Statement No. 93, Replacement of Interbank Offered Rates effective for years beginning after June 15, 2020. In fiscal year 2020, the University adopted GASB Statement No. 95, Postponement of Effective Dates of Certain Authoritative Guidance which postponed the effective dates of Statement No. 93 to fiscal year 2022. This statement establishes accounting and financial reporting requirements related to the replacement of Interbank Offered Rates in hedging derivative instruments and leases. This statement also identifies appropriate benchmark interest rates for hedging derivative instruments. The adoption of this statement does not have a significant impact on the financial statements.
In October 2021, the GASB issued Statement No. 98, The Annual Comprehensive Financial Report effective for fiscal years beginning after December 15, 2021. This statement establishes a new designation of the acronym for state and local government annual financial statements, the Annual Comprehensive Financial Report (ACFR). The adoption of this statement resulted in changes to the naming convention used throughout the report, but has no impact on the financial information provided.
In April 2022, the GASB issued Statement No. 99, Omnibus 2022, effective for certain elements of the requirement
effective upon issuance. The objectives of this statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing practice issues that have been identified during implementation. The adoption of this statement does not have a significant impact on the financial statements.
Cash and Cash Equivalents Cash and cash equivalents consist of petty cash, demand deposits and time deposits in authorized financial institutions, and cash management pools that have the general characteristics of demand deposit accounts. This includes the State Investment Pool (Georgia Fund 1) and the Board of Regents Short-Term Investment Pool. Cash and Cash Equivalents that cannot be used to pay current liabilities are classified as non-current assets in the Statement of Net Position. Cash and Cash Equivalents restricted as to use by a third party are reported as externally restricted.
30 Clayton State University

Short-Term Investments Short-Term Investments consist of investments of 90 days - 13 months. These include certificates of deposits or other time-restricted investments with original maturities of six months or more when purchased. Funds are not readily available if there is a penalty for early withdrawal. Short-term investments that cannot be used to pay current liabilities are classified as non-current assets in the Statement of Net Position. Short-term investments restricted as to use by a third party are reported as externally restricted.
Investments Investments include financial instruments with terms in excess of 13 months, certain other securities for the production of revenue, land, and other real estate held as investments by endowments. The University accounts for its investments at fair value. Changes in the fair value of investments are reported as a component of investment income in the Statement of Revenues, Expenses, and Changes in Net Position. The Board of Regents Legal Fund, the Board of Regents Balanced Income Fund, the Board of Regents Total Return Fund, the Board of Regents Diversified Fund, and the Board of Regents Diversified Fund for Foundations are included as investments. Investments that cannot be used to pay current liabilities are classified as non-current assets in the Statement of Net Position. Investments restricted as to use by a third party are reported as externally restricted.
Accounts Receivable Accounts receivable consists of tuition and fees charged to students and auxiliary enterprise services provided to students, faculty and staff, the majority of whom reside in the State of Georgia. Accounts receivable also includes amounts due from federal, state and local governments, or private sources, in connection with reimbursement of allowable expenditures made pursuant to the University's grants and contracts. Accounts receivable are recorded net of estimated uncollectible amounts.
Inventories Consumable supplies are carried at the lower of cost or market on the first-in, first-out ("FIFO") basis. Resale inventories are valued at cost using the average-cost basis.
Prepaid Items Payments made to vendors and state and local government organizations for services that will benefit periods beyond June 30, 2022 are recorded as prepaid items.
Capital Assets Capital assets are recorded at cost at the date of acquisition, or fair market value at the date of donation in the case of gifts. For equipment, the University's capitalization policy includes all items with a unit cost of $5,000 or more, and an estimated useful life of greater than one year. Renovations to buildings, infrastructure, and land improvements that exceed $100,000 and/or significantly increase the value or extend the useful life of the structure are capitalized. Routine repairs and maintenance are charged to operating expense in the year in which the expense was incurred.
Depreciation, which also includes amortization of intangible assets such as water, timber, and mineral rights, easements, patents, trademarks, and copyrights, as well as software, is computed using the straight-line method over the estimated useful lives of the assets, generally 40 to 60 years for buildings, 20 to 25 years for infrastructure and land improvements, 10 years for library books, and 3 to 20 years for equipment. Residual values will generally be 10% of historical costs for infrastructure, buildings and building improvements, and facilities and other improvements.
To fully understand plant additions in the University, it is necessary to look at the activities of the Georgia State Financing and Investment Commission (GSFIC) - an organization that is external to the USG. GSFIC issues bonds for and on behalf of the State of Georgia, pursuant to powers granted to it in the Constitution of the State of Georgia and the Act creating the GSFIC. The bonds so issued constitute direct and general obligations of the State of Georgia, to the payment of which the full faith, credit and taxing power of the State are pledged.
For projects managed by GSFIC, GSFIC retains construction in progress in its accounting records throughout the construction period and transfers the entire project to the institutional unit of the University System when complete. For projects managed by institutions of the USG, the institutions retain construction in progress on their books and are reimbursed by GSFIC.
2022 Annual Financial Report 31

Intangible Right-To-Use Assets The University leases certain academic spaces, administrative offices, and equipment under lease agreements. The University has both leases under which it is obligated as a lessee and leases for which it is a lessor. Leases, as a lessee, are included in intangible right-to-use assets and lease obligations on the Statement of Net Position. Financed leases, which transfer ownership, are included in capital assets and notes payable on the Statement of Net Position.
An intangible right-to-use asset represents the University's right to use an underlying asset for the lease term. Lease obligations represent the University's liability to make lease payments arising from the lease agreement. Intangible right-to-use assets and lease obligations are recognized based on the present value of lease payments over the lease term, where the initial term exceeds 12 months. Residual value guarantees and the value of an option to extend or terminate a lease are reflected to the extent it is reasonably certain to be paid or exercised. Variable payments based on future performance or usage are not included in the measurement of the lease liability. Intangible right-to-use assets are amortized using a straight-line basis over the shorter of the lease term or useful life of the underlying asset.
Capital Liability Reserve Fund The Capital Liability Reserve Fund (Fund) was established by the Board of Regents to protect the fiscal integrity of the USG to maintain the strongest possible credit ratings associated with Public Private Venture (PPV) projects and to ensure that the Board of Regents can effectively support its long-term lease obligations. All USG institutions participating in the PPV program financed the Fund. The Fund serves as a pooled reserve that is managed by the Board of Regents. The Fund shall only be used to address significant shortfalls and only insofar as a requesting USG institution is unable to make the required PPV lease payment to the designated affiliated organization. The Fund will continue as long as the Board of Regents has rental obligations under the PPV program and at the conclusion of the program, funds will be returned to each institution. The balance included on the University's Statement of Net Position as Due from USO - Capital Liability Reserve Fund represents the University's contribution to the Fund.
Deferred Outflows of Resources Deferred outflows of resources consist of the consumption of net position that is applicable to a future reporting period.
Deposits Deposits represent good faith deposits from students to reserve housing assignments, meal plans or other auxiliary services.
Advances Advances include amounts received for tuition and fees and certain auxiliary activities prior to the end of the fiscal year but related to the subsequent accounting period. Advances also include amounts received from grant and contract sponsors that have not yet been earned.
Deposits Held for Other Organizations Deposits held for others result primarily from escheated funds that are the result of unclaimed property.
Claims and Judgments An estimated loss from claims and judgments is recognized when information available prior to issuance of the financial statements indicates it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated.
Pollution Remediation Obligations Pollution remediation obligations are recorded when the University knows that a site is polluted, and one or more obligating events have occurred. The amount recorded is an estimate of the current value of potential outlays for cleanup, calculated using the "expected cash flows" measurement technique.
Compensated Absences Employee vacation pay is accrued at the end of the fiscal year for financial statement purposes. The liability and expense incurred are recorded at the end of the fiscal year as compensated absences in the Statement of Net
32 Clayton State University

Position, and as a component of compensation and benefit expense in the Statements of Revenues, Expenses, and Changes in Net Position.
Non-current Liabilities Non-current liabilities include: (1) liabilities that will not be paid within the next fiscal year; (2) lease obligations with contractual maturities greater than one year; and (3) other liabilities that, although payable within one year, are to be paid from funds that are classified as non-current assets.
Deferred Inflows of Resources Deferred inflows of resources consist of the acquisition of net position that is applicable to a future reporting period.
Other Post-Employment Benefit (OPEB) and Net OPEB Liability The net OPEB liability represents the University's proportionate share of the difference between the total OPEB liability and the fiduciary net position or the fair value of the plan assets as of a given measurement date.
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the Board of Regents Retiree Health Benefit Plan (the Plan) and additions to/deductions from the Plan's fiduciary net position have been determined on the same basis as they are reported by the Plan. For this purpose, the Plan recognizes benefit payments when due and payable in accordance with the benefit terms. Investments are reported at fair value, except for money market investments and participating interest-earning investment contracts that have a maturity at the time of purchase of one year or less, which are reported at cost.
Pensions and Net Pension Liability The net pension liability represents the University's proportionate share of the difference between the total pension liability as a result of the exchange for employee services for compensation and the fiduciary net position or the fair value of the plan assets as of a given measurement date.
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the pension plans' fiduciary net position, additions to/deductions from the plans fiduciary net position have been determined on the same basis as they are reported by Teachers Retirement System of Georgia and Employees' Retirement System of Georgia. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
Net Position The University's net position is classified as follows:
Net investment in capital assets represents the University's total investment in capital assets, net of outstanding debt obligations related to those capital assets and intangible right-to-use assets. To the extent debt has been incurred but not yet expended for capital assets or intangible right-to-use assets, such amounts are not included as a component of net investment in capital assets. The term "debt obligations" as used in this definition does not include debt of the GSFIC as discussed previously in Note 1 - Capital Assets section
Restricted - nonexpendable net position includes endowments and similar type funds in which donors or other outside sources have stipulated, as a condition of the gift instrument, that the principal is to be maintained inviolate and in perpetuity, and invested for the purpose of producing present and future income, which may either be expended or added to principal. For institution-controlled, donor-restricted endowments, the by-laws of the Board of Regents of the University System of Georgia permits each individual institution to use prudent judgment in the spending of current realized and unrealized endowment appreciation. Donor-restricted endowment appreciation is periodically transferred to restricted - expendable accounts for expenditure as specified by the purpose of the endowment. The University maintains pertinent information related to each endowment fund including donor; amount and date of donation; restrictions by the source of limitations; limitations on investments, etc.
Restricted - expendable net position includes resources in which the University is legally or contractually obligated to spend resources in accordance with restrictions by external third parties. Unrestricted net position represents 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 University, and may be used at the discretion of the
2022 Annual Financial Report 33

governing board or management to meet current expenses for those purposes, except for unexpended state appropriations (surplus). Unexpended state appropriations must be refunded 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. When an expense is incurred that can be paid using either restricted or unrestricted resources, the University's policy is to first apply the expense towards unrestricted resources, and then towards restricted resources. Income Taxes The University, as a political subdivision of the State of Georgia, is excluded from Federal income taxes under Section 115(1) of the Internal Revenue Code, as amended. Classification of Revenues and Expenses The Statement of Revenues, Expenses and Changes in Net Position classifies fiscal year activity as operating and nonoperating according to the following criteria:
Operating revenue includes activities that have the characteristics of exchange transactions, such as (1) student tuition and fees, net of scholarship allowances, (2) certain federal, state and local grants and contracts, and (3) sales and services.
Nonoperating revenue includes activities that have the characteristics of non-exchange transactions, such as gifts and contributions, and other revenue sources that are defined as non-operating revenue by GASB Statements No. 9, Reporting Cash Flows of Proprietary and Non-expendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting, and No. 34, Basic Financial Statements-- and Management's Discussion and Analysis--for State and Local Governments, such as state appropriations and investment income.
Operating expense includes activities that have the characteristics of exchange transactions. Nonoperating expense includes activities that have the characteristics of non-exchange transactions, such
as capital financing costs and costs related to investment activity. Scholarship Allowances Scholarship allowances are the difference between the stated charge for goods and services provided by the University, and the amount that is paid by students and/or third parties making payments on the students' behalf. Certain governmental grants, such as Pell grants, and other Federal, state or nongovernmental programs are recorded as either operating or non-operating revenues in the University's financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the University has recorded contra revenue for scholarship allowances. Tuition, fees and other student charges reported on the Statement of Revenues, Expenses and Changes in Net Position are net of discounts and allowances of $11,210,175.
34 Clayton State University

Restatement of Prior Year Net Position

In fiscal year 2022, the University adopted GASB Statement No. 87, which, as previously mentioned, establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this statement, a lessee is required to recognize a lease obligation and an intangible right-to-use asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources. As a lessee, the result is an increase in the liability (lease obligation) of $59,587 and an increase in the intangible right-touse assets of $59,587 for business-type activities. GASB Statement No. 87 requires a different accounting treatment for contracts that transfer ownership of the underlying asset to the purchaser by the end of the contract and does not contain termination options. These contracts, also known as finance purchases, are now accounted for as notes payable. For Clayton State, implementation of GASB 87 meant transferring all liability for public private ventures previously accounted for as lease obligations to notes payable. The July 1, 2021 balance for notes payable was restated to reflect $59,460,502; the beginning balance for lease obligations was restated to reflect a decrease by the same amount. These restatements resulted in a $0 net change to the fiscal year 2022 net position beginning balance. These changes are in accordance with generally accepted accounting principles.

Note 2 Deposits and Investments

Cash and cash equivalents and investments as of June 30, 2022 are classified in the accompanying statement of net position and statement of fiduciary net position as follows:

Statement of Net Position Current Cash and Cash Equivalents Cash and Cash Equivalents (Externally Restricted)
Statement of Fiduciary Net Position Cash and Cash Equivalents

$

16,443,305

1,658,015

(142,275)

$

17,959,045

Cash on hand, deposits and investments as of June 30, 2022 consist of the following:

Cash on Hand

$

Deposits with Financial Institutions

Investments

$

4,303 17,287,339
667,403 17,959,045

A. Deposits with Financial Institutions Deposits include certificates of deposits and demand deposit accounts, including certain interest bearing demand deposit accounts. The custodial credit risk for deposits is the risk that in the event of a bank failure, the University's deposits may not be recovered. Funds belonging to the State of Georgia (and thus the University) 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 (O.C.G.A.) 50-17-59:
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.
2022 Annual Financial Report 35

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 Mortgage Association.
6. Letters of credit issued by a Federal Home Loan Bank.
7. Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation.
The University participates in the State's Secure Deposit Program (SDP), a multi-bank pledging pool. The SDP requires participating banks that accept public deposits in Georgia to operate under the policy and procedures of the program. The Georgia Office of State Treasurer (OST) sets the collateral requirements and pledging level for each covered depository. There are four tiers of collateralization levels specifying percentages of eligible securities to secure covered Deposits: 25%, 50%, 75%, and 110%. The SDP also provides for collateral levels to be increased to amount of up to 125% if economic or financial conditions warrants. The program lists the type of eligible collateral. The OST approves authorized custodians.
In accordance with the SDP, if a covered depository defaults, losses to public depositors are first satisfied with any applicable insurance, followed by demands of payment under any letters of credit or sale of the covered depository's collateral. If necessary, any remaining losses are to be satisfied by assessments made against the other participating covered depositories. Therefore, for disclosure purposes, all deposits of the SDP are considered to be fully collateralized.
At June 30, 2022, the bank balances of the University's deposits totaled $17,423,277. This balance includes deposits in Fiduciary funds as these balances are not separable from the holdings of the USG. Of these deposits, $0 were exposed to custodial credit risk.
B. Investments The University maintains an investment policy which fosters sound and prudent judgment in the management of assets to ensure safety of capital consistent with the fiduciary responsibility it has to the citizens of Georgia and which conforms to Board of Regents investment policy. All investments are consistent with donor intent, Board of Regents policy and applicable federal and state laws. The University holds positions in the Georgia Fund 1 investment pool managed by the Georgia Office of the State Treasurer. The unit of account is each share held, and the value of the position would be the fair value of the pool's share price multiplied by the number of shares held. The University does not "look through" the pool to report a pro rata share of the pool's investments, receivables, and payables.
Board of Regents Pooled Investment Program The USG serves as fiscal agent for various units of the University System of Georgia and affiliated organizations. The USG pools the monies of these organizations with the USG's monies for investment purposes. The investment pool is not registered with the U.S. Securities and Exchange Commission as an investment company. The fair value of the investments is determined daily. The pool does not issue shares. Each participant is allocated a pro rata share of each pooled investment fund balance at fair value along with a pro rata share of the pooled fund's investment returns.
The USG maintains investment policy guidelines for each pooled investment fund that is offered to qualified University System participants. These policies are intended to foster the sound and prudent responsibility each institution has to the citizens of Georgia and which conforms to the Board of Regents investment policy. All investments must be consistent with donor intent, Board of Regents policy, and applicable Federal and state laws. Units of the University System of Georgia and their affiliated organizations may participate in the pooled investment
36 Clayton State University

fund program. The overall character of the pooled fund portfolio should be one of above average quality, possessing at most an average degree of investment risk.
The University's position is the pooled investment fund options are described below.
1. Short-Term Fund The Short-Term Fund is available to both University System of Georgia institutions and their affiliated organizations. The Fund provides a current return and stability of principal while affording a means of overnight liquidity for projected cash needs. Investments are in securities allowed under O.C.G.A. 50-17-59 and 50-17-63. The average maturities of investments in this fund will typically range between daily and four years, and the fund will typically have an overall average duration of - 1 year. The overall character of the portfolio is of Agency quality, possessing a minimal degree of financial risk. The market value of the University's position in the Short-term Fund at June 30, 2022 was $291,162, of which 100% is invested in debt securities. The Effective Duration of the Fund is 0.96 years.

Office of the State Treasurer Investment Pool The Georgia Fund 1 Investment Pool, managed by the Office of the State Treasurer, is not registered with the U.S. Securities and Exchange Commission as an investment company, and the State does not consider Georgia Fund 1 to be a 2a7-like pool. This investment is valued at the pool's share price, $1 per share. The Georgia Fund 1 Investment Pool is an AAAf rated investment pool by Standard and Poor's. The Weighted Average Maturity of the Fund is 43 days.
Interest Rate Risk Interest rate risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of an investment. The University does not have a formal policy for managing interest rate risk for investments.

Fair Value

Less Than 3 Months

4-12 Months

1-5 Years

6-10 Years

More Than 10 Years

Investment Pools Board of Regents
Short-Term Fund Office of the State Treasurer
Georgia Fund 1

$

291,162

376,241

Total Investments

$

667,403

Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The University does not have a formal policy for managing credit quality risk for investments.

2022 Annual Financial Report 37

Note 3 Accounts Receivable
Accounts receivable consisted of the following at June 30, 2022:

Business Type Activities

Fiduciary Fund

Student Tuition and Fees

$

Auxiliary Enterprises and Other Operating Activities

Federal Financial Assistance

Georgia Student Finance Commission

Georgia State Financing and Investment Commission

Due from Affiliated Organizations

Due from Component Units

Due From Other USG Institutions

Other

Less: Allowance for Doubtful Accounts

Net Accounts Receivable

$

3,161,748 1,275,940 1,110,773
-- 311,141 2,362,322
-- 628,605
84,400 8,934,929 3,252,723
5,682,206 $

15,460 -- --
481,333 -- -- -- --
114,377 611,170 44,485
566,685

Note 4 Inventories
Inventories consisted of the following at June 30, 2022: Merchandise for Resale

2,421

Total

$

2,421

Note 5 Notes and Loans Receivable
As of June 30, 2022, Clayton State University had no outstanding Notes/Loan Receivables.

38 Clayton State University

Note 6 Capital and Intangible Right-to-Use Assets
Changes in capital assets for the year ended June 30, 2022 are shown below:

Capital Assets, Not Being Depreciated: Land Construction Work-in-Progress
Total Capital Assets Not Being Depreciated

Balance July 1, 2021

Additions

Reductions

Balance June 30, 2022

$

2,416,732 $

--

2,416,732

-- $ 91,408 91,408

-- $ -- --

2,416,732 91,408
2,508,140

Capital Assets, Being Depreciated/Amortized: Infrastructure Building and Building Improvements Facilities and Other Improvements Equipment Library Collections
Total Capital Assets Being Depreciated/Amortized

1,146,814 189,655,815
150,442 10,157,259
7,522,141 208,632,471

-- 7,236,425
-- 1,393,461
161,202 8,791,088

-- -- -- 58,456 2,461,532 2,519,988

1,146,814 196,892,240
150,442 11,492,264
5,221,811 214,903,571

Less: Accumulated Depreciation/Amortization Infrastructure Building and Building Improvements Facilities and Other Improvements Equipment Library Collections
Total Accumulated Depreciation/Amortization

51,607 77,942,839
119,363 8,356,750 6,332,012 92,802,571

51,607 6,116,655
7,229 492,428 276,617 6,944,536

-- -- -- 51,419 2,461,532 2,512,951

103,214 84,059,494
126,592 8,797,759 4,147,097 97,234,156

Total Capital Assets, Being Depreciated/Amortized, Net

115,829,900

1,846,552

7,037

117,669,415

Capital Assets, net

$

118,246,632 $

1,937,960 $

7,037 $

120,177,555

For projects managed by GSFIC, GSFIC retains construction-in-progress on its books throughout the construction period and transfers the entire project to the University when complete. For projects managed by the University, the University retains construction-in-progress on its books and is reimbursed by GSFIC or funded from alternate sources. For the year ended June 30, 2022, the academic core/mini central energy plant project managed by GSFIC was completed. Consequently, GSFIC transferred capital additions to the University valued at $6,929,986. The University has a campus infrastructure project managed by GSFIC but no construction in progress has been reported on GSFIC's books. In addition, the University had construction in progress of $91,408 related to the Laker Village housing building 300, which is a project managed and funded by the University.

2022 Annual Financial Report 39

Intangible Right-to-Use Assets
Changes in intangible right-to-use assets for the year ended June 30, 2022 are shown below:

(Restated) Beginning Balances July 1, 2021

Intangible Right-to-use Assets Building and Building Improvements Equipment

280,442 77,075

Total Right-to-Use Being Amortized, Net
Less: Accumulated amortization Equipment

357,517 --

Total Intangible Right-to-Used Assets

Being Amortized, Net

--

Additions

Reductions

Ending Balance June 30, 2022

-- -- --
17,488
17,488

280,442 --
280,442
--
--

-- 77,075 77,075
17,488
17,488

Intangible Right-to-use Assets,Net

$

357,517 $

(17,488) $ 280,442 $

59,587

Note 7 Advances (Including Tuition and Fees)
Advances, including tuition and fees, consisted of the following at June 30, 2022:

Prepaid Tuition and Fees Other - Advances
Totals

Current Liabilities

$

2,041,116

487,221

$

2,528,337

Fiduciary fund advances in the amount of $146,228 consists of student support received prior to eligibility requirements being met.

40 Clayton State University

Note 8 Long-Term Liabilities
Changes in long-term liability for the year ended June 30, 2022 was as follows:

Leases Lease Obligations
Other Liabilities Compensated Absences Notes Payable Total
Total Long-Term Obligations

Restated Balance July 1, 2021

Additions

Reductions

Balance June 30, 2022

Current Portion

$

357,517 $

-- $

299,420 $

58,097 $

19,042

2,559,053 59,460,502 62,019,555

$

62,377,072 $

1,594,937 --
1,594,937
1,594,937 $

1,728,863 2,286,694 4,015,557
4,314,977 $

2,425,127 57,173,808 59,598,935
59,657,032 $

1,264,500 2,381,347 3,645,847
3,664,889

See Note 14, Retirement Plans, for information related to net pension liability. See Note 17, Post-Employment Benefits Other Than Pension Benefits, for information related to net other post employment benefits liability.
Due to the adoption of GASB 87, the beginning balance of $59,460,502 for lease obligations was restated. See Note 1 - New Accounting Pronouncements for additional information related to these transactions.

Notes Payable
Financing Lease Agreements The University is obligated under various multi-year financing lease agreements for the acquisition or use of real property and equipment, whereby the asset(s) transfers ownership at the end of the agreement.
In accordance with O.C.G.A. 50-5-64, these agreements shall terminate absolutely and without further obligation at the close of the fiscal year in which it was executed and at the close of each succeeding fiscal year for which it may be renewed. These agreements may be renewed only by a positive action taken by the University In addition, these agreements shall terminate if the State does not provide adequate funding, but that is considered a remote possibility. The University's principal and interest payments related to financing lease agreements for fiscal year 2022 were $2,286,694 and $2,641,988, respectively. Interest rates range from 3.917% to 4.794%..
The University has $57,173,808 in outstanding notes payable due to affiliated organizations and other related party organizations for financing lease agreements.
The following is a summary of the carrying value of assets held under financing lease agreements at June 30, 2022:

Description
Finance Buildings and Building Improvements

Gross Amount ( + )
80,588,876

Less: Accumulated Amortization
( - )
33,138,860

Net Assets Held Under Financing Lease
Arrangements at June 30, 2022 ( = )
47,450,016

Outstanding Balances per Lease Schedules at June
30, 2022
57,173,808

Total Assets Held Under Finance Lease

$ 80,588,876 $ 33,138,860 $

47,450,016 $

57,173,808

2022 Annual Financial Report 41

The following schedule lists the pertinent information for each of the University's financing lease agreements:

Description

Lessor

Original Principal

Lease Term

Begin Month/ Year

End Month/
Year

Outstanding Principal

Laker Hall Student Activity Center Laker Village

CSU Foundation CSU Foundation CSU Foundation

$ 20,166,921 20,766,948 30,140,117

21 years 21 years 30 years

January 2018 January 2018 August 2008

June 2038 June 2038 June 2042

$ 15,816,854 (1) 12,871,954 (1) 28,485,000 (1)

Total Leases

$ 71,073,986

$ 57,173,808

(1) These financing lease agreements are related party transactions.

Below is the annual debt service related to the outstanding notes at June 30, 2022.

Year Ending June 30: 2023 2024 2025 2026 2027 2028 through 2032 2033 through 2037 2038 through 2042

Principal

Interest

$ 2,381,346 $ 2,370,427 2,500,299 2,631,276 2,724,981
14,341,646 17,602,908 12,620,925

2,542,394 2,440,632 2,336,300 2,226,373 2,111,671 8,626,506 4,739,997 1,109,619

Total Minimum Lease Payments

$ 57,173,808 $ 26,133,492

42 Clayton State University

Note 9 Deferred Outflows and Inflows of Resources
Deferred outflows and inflows of resources reported on the Statement of Net Position as of June 30, 2022, consisted of the following:

Deferred Outflow of Resources Deferred Outflows on Defined Benefit Pension Plans (See Note 14) Deferred Outflows on OPEB Plan (See Note 17)
Total Deferred Outflows of Resources

$

11,097,472

10,327,602

$

21,425,074

Deferred Inflow of Resources Deferred Gain on Debt Refunding Deferred Inflows on Defined Benefit Pension Plans (See Note 14) Deferred Inflows on OPEB Plan (See Note 17)
Total Deferred Inflows of Resources

$

10,333,377

22,663,761

9,792,013

$

42,789,151

Deferred Gain on Debt Refunding
In December 2017, the Clayton State Foundation re-funded the bonds associated with the Laker Hall and Student Activities building finance purchases and passed the perceived economic advantages of the refunding to the University. At June 30, 2022, the institution recognized a deferred gain on debt refunding in the amount of $244,629. The unamortized deferred gain on debt refunding at year end related to this transaction is $8,602,129.
In April 2021, the Clayton State Foundation re-funded the bonds associated with the Laker Village building finance purchase and passed the perceived economic advantages of the refunding to the University. The net savings to the institution resulting from this transaction was $1,839,452 for the difference in the cash flow requirements between the original lease and the revised lease. At June 30, 2022, the institution recognized a deferred gain on debt refunding in the amount of $86,562. The unamortized deferred gain on debt refunding at year end related to this transaction is $1,731,248.

Service Concessions Arrangements
At June 30, 2022, the University had no service concession arrangements that met the materiality threshold for discrete financial reporting.

2022 Annual Financial Report 43

Note 10 Net Position

The breakdown of business-type activity net position for the University fund at June 30, 2022 is as follows:

Net Investment in Capital Assets

$

52,653,821

Restricted for Nonexpendable
Permanent Endowment

1,650,680

Expendable Federal Loans

7,335

Unrestricted Auxiliary Enterprises Operations Reserve for Encumbrances Capital Liability Reserve Fund Other Unrestricted
Sub-Total
Total Net Position

6,804,361

7,673,171

578,205

(88,278,981)

$

(73,223,244)

$

(18,911,408)

Other unrestricted net position is reduced by $61,121,511 related to the recording of net OPEB liability, deferred inflows of resources, and deferred outflows of resources related to the OPEB plan. Other unrestricted net position is also reduced by $26,281,576 related to the recording of net pension liability, deferred inflows of resources, and deferred outflows of resources on defined benefit pension plans.

For fiscal year 2022, the institution's OPEB liability decreased by $3,446,224. Pension liability also decreased by $26,589,617 based on actuarial calculations. These changes, as well as changes in deferred inflow and outflow of resources related to OPEB and pensions, accounted primarily for the $6,137,400 increase in unrestricted net position. The OPEB and pension balances are mostly funded through state appropriation and student tuition and fees that are subject to State surplus rules, which prevents the accumulation of budgetary fund balance. Therefore, the University is statutorily unable to maintain accumulated net position to offset these OPEB and pension balances.

Changes in Net Position for the year ended June 30, 2022 are as follows:

Restated Balance July 1, 2021

Additions

Reductions

Balance June 30, 2022

Net Investments in Capital Assets $ 47,937,732 $ 11,188,168 $

6,472,079 $ 52,653,821

Restricted Net Position

1,658,015

47,142,849

47,142,849

1,658,015

Unrestricted Net Position

(79,360,644)

69,258,223

63,120,823

(73,223,244)

Total Net Position

$ (29,764,897) $ 127,589,240 $ 116,735,751 $ (18,911,408)

Note 11 Endowments
Donor Restricted Endowments Investments of the University's endowment funds are pooled, unless required to be separately invested by the donor. For University controlled, donor-restricted endowments, where the donor has not provided specific instructions, the Board of Regents permits institutions to develop policies for authorizing and spending realized and unrealized endowment income and appreciation as they determined to be prudent.

44 Clayton State University

Realized and unrealized appreciation in excess of the amount budgeted for current spending is retained by the endowments. Current year net appreciation on endowment investments available for authorization for expenditure was $74,028 and is reflected as expendable restricted net position.
For endowment funds where the donor has not provided specific instructions, investment return of the University's endowment funds is predicated on the total return concept. Annual payouts from the University's endowment funds are based on a spending policy which applies a payout rate of 4% to a moving average market value (the prior five years' market value as of December 31). To the extent that the total return for the current year exceeds the payout, the excess is added to principal. If current year earnings do not meet the payout requirements, the University uses accumulated income and appreciation from restricted expendable net asset endowment balances to make up the difference.

For the current year, the University did not incur investment losses that exceeded the related endowment's available accumulated income and net appreciation.

Note 12 Significant Commitments

See the Net Position note for amounts reserved for outstanding encumbrances at June 30, 2022. In addition to these encumbrances, the University had other significant unearned outstanding construction or renovation contracts in the amount of $0 executed as of June 30, 2022. This amount is not reflected in the accompanying basic financial statements.

Note 13 Leases

Lease Obligations The University leases facilities, equipment and other assets. Although lease terms vary, many leases are subject to appropriation from the General Assembly to continue the obligation. In accordance with O.C.G.A. 50-5-64, these agreements shall terminate absolutely and without further obligation at the close of the fiscal year in which it was executed and at the close of each succeeding fiscal year for which it may be renewed. These agreements may be renewed only by a positive action taken by the University. In addition, these agreements shall terminate if the State does not provide adequate funding, but that is considered a remote possibility. The University's principal and interest payments related to leases for fiscal year 2022 were $299,419 and $3,802, respectively. Interest rates range from 0.34% - 2.26%. Currently, the institution does not have any outstanding lease obligations due to a related party organizations.
For the fiscal year 2022, the University did not make any residual guaranteed payment, variable payments based on performance, or termination penalties. Also, the institution did not make any payments related to leased facilities
where these funds will be used for future improvements.

The following is a summary of the carrying values of intangible right-to-use assets held under lease at June 30, 2022:

Description

Gross Amount ( + )

Less: Accumulated Amortization
( - )

Net, Assets Held Under Leases at June 30, 2022
( = )

Outstanding Balance per Lease
Schedules at June 30, 2022

Leased Equipment Total Assets Held Under Lease

357,517

297,929

$

357,517 $

297,929 $

59,588 59,588 $

58,097 58,097

2022 Annual Financial Report 45

The following schedule lists the pertinent information for each of the University's leases:

Description

Lessor

Original Principal

Lease Term

Begin Month/ End Month/

Year

Year

Outstanding Principal

DS64i 3 station Special 2 Auto + Special- CIS

Neopost USA

$

IS-5500 PM Postage Equip. Neopost USA

Fayette Instructional Site

Fayette County

19,171 57,904 280,442

5 years 5 years 1 year

September 2021
July 2021
July 2021

August 2025 $ June 2025 June 2022

14,594 43,503
--

Total Leases

$

357,517

$

58,097

Certain leases provide for renewal and/or purchase options. Generally purchase options at bargain prices of one dollar are exercisable at the expiration of the lease terms.
Below are the future commitments related to the outstanding lease obligations as of June 30,2022:

Year Ending June 30: 2023 2024 2025 2026

Principal

Interest

$

19,043 $

170

19,109

104

19,174

38

771

--

Total Minimum Lease Payments

$

58,097 $

312

Note 14. Retirement Plans
The University participates in various retirement plans administered by the State of Georgia under two major retirement systems: Teachers Retirement System of Georgia (TRS) and Employees' Retirement System of Georgia (ERS). These two systems issue separate publicly available financial reports that include the applicable financial statements and required supplementary information. The reports may be obtained from the respective administrative offices.
The University also provides one other retirement plan - the Regents Retirement Plan.
The significant retirement plans that the University 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.
A. Teachers Retirement System of Georgia and Employees' Retirement System of Georgia
General Information about the Teachers Retirement System Plan description All teachers of the University as defined in O.C.G.A. 47-3-60 are provided a pension through the Teachers Retirement System of Georgia (TRS). TRS, a cost-sharing multiple-employer defined benefit pension plan, is administered by the TRS Board of Trustees (TRS Board). Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. TRS issues a publicly available financial report that can be obtained at trsga.com/publications.

46 Clayton State University

Benefits Provided TRS provides service retirement, disability retirement, and death benefits. Normal retirement benefits are determined as 2% of the average of the employee's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. An employee is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. Ten years of service is required for disability and death benefits eligibility. Disability benefits are based on the employee's creditable service and compensation up to the time of disability. Death benefits equal the amount that would be payable to the employee's beneficiary had the employee retired on the date of death. Death benefits are based on the employee's creditable service and compensation up to the date of death.
Contributions Per Title 47 of the O.C.G.A., contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees were required to contribute 6% of their annual pay during fiscal year 2022. The University's contractually required contribution rate for the year ended June 30, 2022 was 19.81% of the University annual payroll. The University's contributions to TRS totaled $4,166,673 for the year ended June 30, 2022.
General Information about the Employees' Retirement System Plan description ERS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. ERS issues a publicly available financial report that can be obtained at ers.ga.gov/financials.
Benefits provided The ERS Plan supports three benefit tiers: Old Plan, New Plan, and Georgia State Employees' Pension and Savings Plan (GSEPS). Employees under the old plan started membership prior to July 1, 1982 and are subject to plan provisions in effect prior to July 1, 1982. Members hired on or after July 1, 1982 but prior to January 1, 2009 are new plan members subject to modified plan provisions. Effective January 1, 2009, new state employees and rehired state employees who did not retain membership rights under the Old or New Plans are members of GSEPS. ERS members hired prior to January 1, 2009 also have the option to irrevocably change their membership to GSEPS.
Under the old plan, the new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 60 or 30 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 25 years of creditable service for members under age 60.
Retirement benefits paid to members are based upon the monthly average of the member's highest 24 consecutive calendar months, multiplied by the number of years of creditable service, multiplied by the applicable benefit factor. Annually, postretirement cost-of-living adjustments may also be made to members' benefits, provided the members were hired prior to July 1, 2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS.
Contributions Member contributions under the old plan are 4% of annual compensation, up to $4,200, plus 6% of annual compensation in excess of $4,200. Under the old plan, the State pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these State contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The required contribution rate for the year ended June 30, 2022 was 24.63% of annual covered payroll for old and new plan members and 21.57% for GSEPS members. The University's contributions to ERS totaled $6,212 for the year ended June 30, 2022. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.
2022 Annual Financial Report 47

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2022, the University reported a liability for its proportionate share of the net pension liability for TRS and ERS. The net pension liability was measured as of June 30, 2021. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2020. An expected total pension liability as of June 30, 2021 was determined using standard roll-forward techniques. The University's proportion of the net pension liability was based on contributions to TRS and ERS during the fiscal year ended June 30, 2021. At June 30, 2021, the University's TRS proportion was 0.165796%, which was an decrease of (0.004351)% from its proportion measured as of June 30, 2020. At June 30, 2021, the University's ERS proportion was 0.002212%, which was a increase of 0.000109% from its proportion measured as of June 30, 2020.

For the year ended June 30, 2022, the University recognized pension expense of $402,897 for TRS and $8,463 for ERS. At June 30, 2022, the University reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

TRS

Deferred Outflows of Resources

Deferred Inflows of Resources

ERS

Deferred Outflows of Resources

Deferred Inflows of Resources

Differences between expected and actual experience

$ 3,499,189 $

-- $

Changes of assumptions

2,838,083

--

Net difference between projected and actual earnings on pension plan investments
Changes in proportion and differences between contributions and proportionate share of contributions

-- 21,448,632

568,258

1,167,313

Contributions subsequent to the measurement

date

4,166,673

--

Total

$ 11,072,203 $ 22,615,945 $

1,224 $ 14,899
--
2,933 6,212 25,268 $

-- -- 47,817
-- -- 47,817

The University's contributions subsequent to the measurement date are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year Ended June 30:

TRS

ERS

2023 2024 2025 2026 2027

$

(2,905,968) $

$

(2,917,213) $

$

(4,468,706) $

$

(5,418,528) $

$

-- $

1,557 (5,925) (11,620) (12,773)
--

Actuarial assumptions The total pension liability as of June 30, 2021 was determined by an actuarial valuation as of June 30, 2020 using the following actuarial assumptions, applied to all periods included in the measurement:

Teachers Retirement System Inflation Salary increases

2.50% 3.00% - 8.75%, average, including inflation

48 Clayton State University

Investment rate of return

7.25%, net of pension plan investment expense, including inflation

Post-retirement benefit increases 1.50% semi-annually

Post-retirement mortality rates for service retirements and beneficiaries were based on the Pub-2010 Teachers Headcount Weighted Below Median Healthy Retiree mortality table (ages set forward one year and adjusted 106%) with the MP-2019 Projection scale applied generationally. The rates of improvement were reduced by 20% for all years prior to the ultimate rate. Post-retirement mortality rates for disability retirements were based on the Pub-2010 Teachers Mortality Table for Disabled Retirees (ages set forward one year and adjusted 106%) with the MP-2019 Projection scale applied generationally. The rates of improvement were reduced by 20% for all years prior to the ultimate rate. The Pub-2010 Teachers Headcount Weighted Below Median Employee mortality table with ages set forward one year and adjusted 106% as used for death prior to retirement. Future improved in mortality rates was assumed using the MP-2019 projection scale generationally. These rates of improvement were reduced by 20% for all years prior to the ultimate rate.

The actuarial assumptions used in the June 30, 2020 valuation were based on the results of an actuarial experience study for the period July 1, 2013 June 30, 2018, with the exception of the long-term assumed rate of return and the assumed annual rate of inflation.

Employees' Retirement System

Inflation

2.50%

Salary increases

3.00 6.75%, including inflation

Investment rate of return

7.00%, net of pension plan investment expense, including inflation

Post-retirement mortality rates were based on the Pub-2010 General Employee Table, with no adjustments, projected generationally with the MP-2019 scale used for both males and females while in active service. Post retirement mortality rates were based on the Pub2010 Family of Tables, with the MP-2019 projection scale applied generationally, as follows: service retirees General Healthy Annuitant mortality table with further adjustments (set forward one year and adjusted 105% and 108% respectively for males and females); disability retirees General Disabled Table (set back three years for males, and adjusted 103% and 106% for males and females, respectively); beneficiaries General Contingent Survivors Table (set forward to two years for both males and females and adjusted 106% and 105% respectively).

The actuarial assumptions used in the June 30, 2020 valuation were based on the results of an actuarial experience study for the period July 1, 2014 June 30, 2019.

The long-term expected rate of return on TRS and ERS pension plan investments was determined using a lognormal distribution analysis in which best-estimate ranges of expected future real rates of return (expected nominal returns, net of pension plan investment expense and the assumed rate of inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset class Fixed income Domestic large equities Domestic small equities International developed market equities International emerging market equities Alternatives
Total

TRS target allocation
30.00 % 46.30 %
1.20 % 11.50 %
6.00 % 5.00 % 100.00 %

TRS Longterm expected
real rate of return*
(0.80)%
9.30 %
13.30 %
9.30 %
11.30 %
10.60 %

ERS target allocation
30.00 % 46.40 %
1.10 % 11.70 %
5.80 % 5.00 % 100.00 %

ERS Longterm expected
real rate of return*
(1.50)%
9.20 %
13.40 %
9.20 %
10.40 %
10.60 %

* Rates shown are net of inflation

2022 Annual Financial Report 49

Discount rate The discount rate used to measure the total TRS and ERS pension liability was 7.25% and 7.00%, respectively. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and State of Georgia contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS and ERS pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Sensitivity of the University's proportionate share of the net pension liability to changes in the discount rate: The following presents the University's proportionate share of the net pension liability calculated using the discount rate of 7.25% for TRS and 7.00% for ERS, as well as what the University's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current rate:

Teachers Retirement System: Proportionate share of the net pension liability

1%

Current

Decrease

discount rate

6.25%

7.25%

$ 39,499,720 $ 14,663,550 $

1% Increase
8.25% (5,687,977)

Employees' Retirement System: Proportionate share of the net pension liability

1%

Current

Decrease

discount rate

6.00%

7.00%

$

94,806 $

51,737 $

1% Increase
8.00% 15,312

Pension plan fiduciary net position Detailed information about the pension plan's fiduciary net position is available in the separately issued TRS and ERS financial reports which are publicly available at trsga.com/publications and ers.ga.gov/financials, respectively.

B. Defined Contribution Plan:
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. 47-21-1 et.seq. and administered by the Board of Regents of the University System of Georgia (Board). O.C.G.A. 47-3-68(a) defines who may participate in the Regents Retirement Plan. An "eligible university system employee" is a faculty member or all exempt full and partial benefit eligible employees, as designated by the regulations of the Board. Under the Regents Retirement Plan, a plan participant may purchase annuity contracts from three approved vendors (VALIC, 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 The institutions of the USG make monthly employer contributions to the Regents Retirement Plan on behalf of participants at rates determined by the Board. The Board reviews the contribution amount every three (3) years. For fiscal year 2022, the employer contribution was 9.24% for the participating employee's earnable compensation. Employees contribute 6.00% of their earnable compensation. Amounts attributable to all plan contributions are fully vested and non-forfeitable at all times.
50 Clayton State University

The University and the covered employees made the required contributions of $1,550,800 (9.24%) and $1,007,013 (6.00%), respectively.
VALIC, Fidelity, and TIAA-CREF have separately issued financial reports which may be obtained through their respective corporate offices.
Note 15 Risk Management
The USG offers its employees and retirees under the age of 65 access to three self insured healthcare plan options and one fully insured plan option. For the USG's Plan Year 2022, the following self-insured health care options were available: Blue Choice HMO plan, (Blue Cross and Blue Shield of Georgia) Consumer Choice HSA plan, and the (Blue Cross and Blue Shield of Georgia) Comprehensive Care plan.
The University's participating employees and eligible retirees pay premiums into the plan fund to access benefits coverage. All units of the USG share the risk of loss for claims associated with these plans. The plan fund is considered to be a self-sustaining risk fund. The USG has contracted with Blue Cross and Blue Shield of Georgia, a wholly owned subsidiary of Anthem, Inc., to serve as the claims administrator for the self-insured healthcare plan options. In addition to the self-insured healthcare plan options offered to the employees and eligible retirees of the USG, a fully insured HMO healthcare plan option also is offered through Kaiser Permanente. The Comprehensive Care plan has a carved-out prescription drug plan administered through CVS Caremark. Pharmacy drug claims are processed in accordance with guidelines established for the Board of Regents' Prescription Drug Benefit Program. Generally, claims are submitted by participating pharmacies directly to CVS Caremark for verification, processing and payment. CVS Caremark maintains an eligibility file based on information furnished by Blue Cross and Blue Shield of Georgia on behalf of the various organizational units of the University System of Georgia. The self-insured dental plan is administered through Delta Dental.
Retirees age 65 and older participate in a secondary healthcare coverage for Medicare-eligible retirees and dependents provided through a retiree health care exchange option. The USG makes contributions to a health reimbursement account, which can be used by the retiree to pay premiums and out-of-pocket healthcare-related expenses.
The Department of Administrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks.
The University 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 O.C.G.A 45-9-1.
The program insures the employees to the extent that they are not immune from liability against personal liability for damages arising out of the performance of their duties or in any way connected therewith. The program is administered by DOAS as a Self-Insurance Fund.
Note 16 Contingencies
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 expenditure disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although the Institution expects such amounts, if any, to be immaterial to its overall financial position.
2022 Annual Financial Report 51

Litigation, claims and assessments filed against the University, 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, 2022.

Note 17 Post-Employment Benefits Other Than Pension Benefits
Board of Regents Retiree Health Benefit Plan
Plan Description and Funding Policy The Board of Regents Retiree Health Benefit Plan (Plan) is a single-employer, defined-benefit, healthcare plan administered by the University System Office, an organizational unit of the USG. The Plan was authorized pursuant to OCGA 47-21-21 for the purpose of accumulating funds necessary to meet employer costs of retiree postemployment health insurance benefits.
Pursuant to the general powers conferred by the OCGA 20-3-31, the USG has established group health and life insurance programs for regular employees of the USG. It is the policy of the USG to permit employees of the USG eligible for retirement or who become permanently and totally disabled to continue as members of the group health and life insurance programs. The USG offers its employees and retirees under the age of 65 access to three selfinsured healthcare plan options and one fully insured plan option. For the USG's Plan Year 2022, the following selfinsured health care options were available: Blue Choice HMO plan, (Blue Cross and Blue Shield of Georgia) Consumer Choice HSA plan, and the (Blue Cross and Blue Shield of Georgia) Comprehensive Care plan. The USG offers a self-insured dental plan administered by Delta Dental.
Retirees age 65 and older participate in a secondary healthcare coverage for Medicare-eligible retirees and dependents provided through a retiree health care exchange option. The USG makes contributions to the retirees' health reimbursement account, which can be used by the retiree to pay premiums and out-of-pocket healthcare related expenses.

The University's membership in the Plan consisted of the following at June 30, 2022:

Active Employees

563

Retirees or Beneficiaries Receiving Benefits

219

Retirees or Beneficiaries Eligible But Not Receiving Benefits

--

Retirees Receiving Life Insurance Only

55

Total

837

The contribution requirements of plan members and the employer are established and may be amended by the Board. The Plan is substantially funded on a "pay-as-you-go" basis; however, amounts above the pay-as-you-go basis may be contributed annually, either by specific appropriation or by Board designation.
The University pays the employer portion for group insurance for eligible retirees. The employer portion of health insurance for its eligible retirees is based on rates that are established annually by the Board for the upcoming plan year. For the 2022 plan year, the employer rate was approximately 88% of the total health insurance cost for eligible retirees and the retiree rate was approximately 12%. For employees hired on or after January 1, 2013 and retirees after January 1, 2018, the amount the USG contributes is tied to years of service, which ranges from 0% to 100%. With regard to life insurance, the employer covers the total premium 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 retiree.
For fiscal year 2022, the University contributed $1,743,858 to the plan for current premiums or claims.

52 Clayton State University

OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB At June 30, 2022, the University reported a liability for its proportionate share of the net OPEB liability. The net OPEB liability was measured as of June 30, 2021. The total OPEB liability used to calculate the net OPEB liability was based on an actuarial valuation as of June 30, 2021 An expected total OPEB liability as of June 30, 2021 was determined using standard roll-forward techniques. The University's proportion of the net OPEB liability was actuarially determined based on employer contributions during the fiscal year ended June 30, 2021. At June 30, 2021, the University's proportion was 1.225037% which was a increase of 0.004438% from its proportion measured as of June 30, 2020. For the year ended June 30, 2022, the University recognized OPEB expense of $2,243,821. At June 30, 2022, the University reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Differences between expected and actual experience

Deferred Outflows of Resources

Deferred Inflows of Resources

$ 3,319,536 $ 210,945

Changes of assumptions

5,085,416

8,503,780

Net difference between projected and actual earnings on OPEB plan investments

--

152,899

Changes in proportion and differences between contributions and proportionate share of contributions

178,792

924,389

Contributions subsequent to the measurement date

1,743,858

--

Total

$ 10,327,602 $ 9,792,013

The University's contributions subsequent to the measurement date of $1,743,858 are reported as deferred outflows of resources and will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Year Ended June 30:

2023

$

2024

$

2025

$

2026

$

2027

$

Thereafter

$

(1,154,311) (570,114) (513,884) (296,425) 737,853 588,612

Actuarial assumptions The total OPEB liability as of June 30, 2021 was determined by an actuarial valuation as of May 1, 2021 using the following actuarial assumptions, applied to all periods included in the measurement:

2022 Annual Financial Report 53

Cost Method Amortization Method Asset Method Interest Discounting and Salary Growth
Mortality Rates Initial Healthcare Cost Trend
Pre-Medicare Eligible Medicare Eligible Ultimate Trend Rate Pre-Medicare Eligible Medicare Eligible Year Ultimate Trend is Reached
Experience Study

Entry Age Normal Closed amortization period for initial unfunded and subsequent actuarial gains/ losses. Fair Value Discount Rate as of 6/30/2021 2.18% GO 20-Municipal Bond Index Rate Discount Rate as of 6/30/2020 2.21% from Bond Buyers GO 20- Municipal Bond Index
Long-term Rate of Return 4.37% General Inflation 2.10% Salary Increase 3.75%
Pub - 2010 for Teachers (headcount weighted) projected with a scale MP-2020
6.4% 4%
4.5% 4% Fiscal Year 2031 for Pre-Medicare Eligible, Fiscal Year 2021 for Medicare Eligible
Economic and demographic assumptions are based on the results of the most recent actuarial experience study over the Plan, which covered a three-year period ending June 30, 2019 with the exception of the disability and salary increase assumptions. These assumptions are based on the results of the most recent actuarial experience study of the Teachers Retirement System of Georgia, which covered the five year period ending June 30, 2018.

Changes in Assumptions Since Prior Valuation
The financial accounting valuation reflects the following assumption changes: Expected claims costs were updated to reflect actual experience. Mortality improvement scale was updated from MP-2019 to MP-2020. The discount rate was updated from 2.21% as of June 30, 2020 to 2.18% as of June 30, 2021. The disability rates were changed to be consistent with the Teacher's Retirement System of Georgia Pension June 30, 2019 valuation report. The salary scale was changed from 4.00% to 3.75% to be consistent with the Teacher's Retirement System of Georgia Pension June 30, 2019 valuation report. The HRA annual increase assumption was updated from 4.50% to 4.00% to reflect general long term HRA employer marketplace trends that show HRA amounts increasing slightly lower than long term medical trends but higher than inflation. The Expected Return on Assets was changed from 3.75% to 4.37%.

The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of geometric real rates of return for each major asset class included in the target asset allocation as of May 1, 2021 are summarized in the following table:

Asset Class Fixed Income Equity Allocation

Long-term Expected Real Rate of Return, Net of Inflation
0.69 %
4.21 %

Target Allocation 70 % 30 %

Discount rate The Plan's projected fiduciary net position at the end of 2025 is $0 based on the valuation completed for the fiscal year ending June 30, 2021. As such, the Plan's fiduciary net position was not projected to be available to make all

54 Clayton State University

projected future benefit payments for current Plan members. The projected "depletion date" when projected benefits are not covered by projected assets is 2025, therefore, the long-term expected rate of return on Plan investments of 4.37% per annum was not applied to all periods of projected benefit payments to determine the total OPEB liability as of June 30, 2021. Instead, a yield or index rate for a 20 year, tax-exempt general obligation municipal bond with an average rating of AA or higher was used. This rate was determined to be 2.18% from the Bond Buyers GO 20Bond Municipal Bond Index.
Sensitivity of the net OPEB liability to changes in the discount rate The following presents the University's proportionate share of the net OPEB liability, as well as what the University's proportionate share of the net OPEB liability would be if it were calculated using a discount rate that is 1% lower (1.18%) or 1% higher (3.18%) than the current discount rate (2.18%):

Proportionate Share of the Net OPEB Liability

1% Decrease

Current Rate

1% Increase

1.18%

2.18%

3.18%

$

74,631,343 $

61,657,100 $

51,652,045

Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates The following presents the University's proportionate share of the net OPEB liability, as well as what the University's proportionate share of the net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1% lower or 1% higher than the current healthcare cost trend rates:

Proportionate Share of the

Net OPEB Liability

$

1% Decrease 52,025,899 $

Current Rate 61,657,100 $

1% Increase 74,335,150

Pre-Medicare Eligible Medicare Eligible

5.4% decreasing to 3.5% 6.4% decreasing to 4.5% 7.4% decreasing to 5.5%

3%

4%

5%

OPEB plan fiduciary net position: Detailed information about the Plan's fiduciary net position is available in the USG Annual Consolidated Financial Report which is publicly available at usg.edu/fiscal_affairs/financial_reporting/.

2022 Annual Financial Report 55

Note 18 Operating Expenses with Functional Classifications

Business-type activity operating expenses by functional classification for fiscal 2022 are shown below:

Functional Classification
Instruction Research Public Service Academic Support Student Services Institutional Support Plant Operations and Maintenance Scholarships and Fellowships Auxiliary Enterprises
Total Operating Expenses

Faculty Salaries

Staff Salaries

Natural Classification
Employee Benefits

Personal Services

$ 20,157,383 $ 54,126 32,657
1,951,905 16,226 72,247 -- -- 3,000

2,161,988 $ 272,802 119,850
3,195,969 4,997,304 5,754,588 2,706,181
-- 2,136,854

6,232,673 $ 74,362 30,761
1,501,899 1,652,820
195,893 1,059,301
-- 692,151

11,173 $ -- 84
4,094 6,669 305,231
-- -- 85,513

$ 22,287,544 $ 21,345,536 $ 11,439,860 $

412,764 $

Travel
66,199 7,163 962
10,779 20,279 24,335
1,935 --
19,404
151,056

Functional Classification Instruction Research Public Service Academic Support Student Services Institutional Support Plant Operations and Maintenance Scholarships and Fellowships Auxiliary Enterprises
Total Operating Expenses

Scholarships and Fellowships

$

-- $

1,500

773

7,344

61,430

50,912

--

20,017,695

717,577

$ 20,857,231 $

Utilities

Natural Classification
Supplies and Other Services

98,290 $

2,173,512

572

159,016

--

160,188

908

2,690,426

6,797

993,853

42,708

3,570,300

1,681,507

2,707,571

--

--

798,769

4,653,171

Depreciation/ Amortization
1,481,912 30,285 --
487,420 784,259 123,277 1,066,328
-- 2,988,543

Total Operating Expenses
$ 32,383,130 599,826 345,275
9,850,744 8,539,637 10,139,491 9,222,823 20,017,695 12,094,982

2,629,551 $ 17,108,037 $

6,962,024 $ 103,193,603

56 Clayton State University

Required Supplementary Information
2022 Annual Financial Report 57

CLAYTON STATE UNIVERSITY REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS DEFINED BENEFIT PENSION PLAN FOR THE LAST TEN YEARS

Employees' Retirement System

Year Ended

Actuarially Determined Contribution
(a)

Contributions in Relation to the
Actuarially Determined Contribution
(b)

Contributio n
Deficiency (Excess)
(b-a)

Covered Payroll
(c)

Contributions as a
Percentage of Covered Payroll (b/c)

June 30, 2022 $ June 30, 2021 $ June 30, 2020 $ June 30, 2019 $ June 30, 2018 $ June 30, 2017 $ June 30, 2016 $ June 30, 2015 $ June 30, 2014 $ June 30, 2013 $

6,212 $ 13,078 $ 13,078 $ 12,884 $ 12,900 $ 12,647 $ 18,077 $ 13,183 $ 11,907 $
7,699 $

6,212 $ 13,078 $ 13,078 $ 12,884 $ 12,900 $ 12,647 $ 18,077 $ 13,183 $ 11,907 $
7,699 $

-- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $

25,223 53,034 53,034 51,994 51,994 50,975 56,106 57,729 57,736 55,000

24.63% 24.66% 24.66% 24.78% 24.81% 24.81% 32.22% 22.84% 20.62% 14.00%

Teachers' Retirement System

June 30, 2022 $ June 30, 2021 $ June 30, 2020 $ June 30, 2019 $ June 30, 2018 $ June 30, 2017 $ June 30, 2016 $ June 30, 2015 $ June 30, 2014 $ June 30, 2013 $

4,166,673 $ 4,090,773 $ 4,659,410 $ 4,463,934 $ 3,354,290 $ 2,715,173 $ 2,651,797 $ 2,183,848 $ 2,214,062 $ 1,996,588 $

4,166,673 $ 4,090,773 $ 4,659,410 $ 4,463,934 $ 3,354,290 $ 2,715,173 $ 2,651,797 $ 2,183,848 $ 2,214,062 $ 1,996,588 $

-- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $

21,033,181 21,462,610 22,040,728 21,358,536 19,954,138 19,027,135 18,543,983 18,430,429 18,090,504 17,498,688

19.81% 19.06% 21.14% 20.90% 16.81% 14.27% 14.30% 11.85% 12.24% 11.41%

58 Clayton State University

CLAYTON STATE UNIVERSITY REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY MULTIPLE EMPLOYER DEFINED BENEFIT PENSION PLANS FOR THE LAST EIGHT YEARS*

Employees' Retirement System
Teachers Retirement System

Year Ended
June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015

Proportion of the Net Pension Liability

Proportionate Share of the Net Pension Liability

Covered Payroll

Proportionate Share of the Net Pension
Liability as a Percentage of Covered Payroll

Plan Fiduciary Net Position as a
Percentage of the Total Pension
Liability

0.002212% $ 0.002103% $ 0.002063% $ 0.002038% $ 0.002078% $ 0.002741% $ 0.002355% $ 0.001814 % $

51,737 $ 88,641 $ 85,130 $ 83,783 $ 84,395 $ 129,661 $ 95,410 $ 68,036 $

53,034 53,034 51,994 51,994 50,975 56,106 57,729 57,736

97.55% 167.14% 163.73% 161.14% 165.56% 231.10% 165.27% 117.84%

87.62% 76.21% 76.74% 76.68% 76.33% 72.34% 81.44% 77.99 %

June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017
June 30, 2016 June 30, 2015

0.165796% $ 0.170147% $ 0.174527% $ 0.167517% $ 0.165556% $ 0.167767% $
0.172889% $ 0.174317 % $

14,663,550 $ 41,216,263 $ 37,528,024 $ 31,094,743 $ 30,769,093 $ 34,612,203 $
26,320,633 $ 22,022,654 $

21,462,610 22,040,728 21,358,536 19,954,138 19,027,135 18,543,983
18,430,429 18,090,504

68.32% 187.00% 175.71% 155.83% 161.71% 186.65%
142.81% 121.74 %

92.03% 77.01% 78.56% 80.27% 79.33% 76.06%
81.44% 84.03 %

*This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

2022 Annual Financial Report 59

CLAYTON STATE UNIVERSITY REQUIRED SUPPLEMENTARY INFORMATION NOTES TO THE REQUIRED SUPPLEMENTAL INFORMATION DEFINED BENEFIT PENSION PLANS METHODS AND ASSUMPTIONS FOR FISCAL YEAR ENDED JUNE 30, 2022
Changes of assumptions Employees' Retirement System: On December 17, 2020, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System based on the experience study prepared for the five-year period ending June 30, 2019. Primary among the changes were the updates to the rates of mortality, retirement, withdrawal, and salary increases. This also included a change in the long-term assumed investment rate of return to 7.00%. Teachers Retirement System: Changes of assumptions: In 2010 and later, the expectation of retired life mortality was changed to the RP-2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010. In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience. In 2010, assumed rates of salary increase were adjusted to more closely reflect actual and anticipated experience. On November 18, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement, disability, withdrawal and salary increases. The expectation of retired life mortality was changed to RP-2000 White Collar Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB (set forward one year for males). On May 15, 2019, the Board adopted and recommended changes from the smoothed valuation interest rate methodology that has been in effect since June 30, 2009, to a constant interest rate method. In conjunction with the methodology, the long-term assumed rate of return in assets (discount rate) has been changed from 7.50% to 7.25%, and the assumed annual rate of inflation has been reduced from 2.75% to 2.50%. In 2019 and later, the expectation of retired life mortality was changed to the Pub-2010 Teachers Headcount Weighted Below Median Healthy Retiree mortality table from the RP-2000 Mortality Tables. In 2019, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience.
60 Clayton State University

CLAYTON STATE UNIVERSITY REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS FOR OPEB PLAN BOARD OF REGENTS RETIREE HEALTH BENEFIT PLAN FOR THE LAST SIX YEARS*

Year Ended June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017

Contractually Required
Contribution (a)
$ 1,743,858
$ 1,437,958
$ 1,254,678
$ 1,966,320
$ 1,946,369
$ 1,251,845

Contributions in Relation to the Contractually
Required Contribution
(b)

$

1,743,858

$

1,437,958

$

1,254,678

$

1,966,320

$

1,946,369

$

1,251,845

Contribution Deficiency (Excess)
(b-a)

$

--

$

--

$

--

$

--

$

--

$

--

Covered Employee Payroll (c) $ 41,104,463 $ 40,121,626 $ 39,987,373
$ 39,228,420
$ 37,128,669 $ 37,178,530

Contributions as a Percentage of Covered Employee Payroll (b/c)
4.24%
3.58%
3.14%
5.01%
5.24%
3.37%

*This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

2022 Annual Financial Report 61

CLAYTON STATE UNIVERSITY REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF NET OPEB LIABILITY BOARD OF REGENTS RETIREE HEALTH BENEFIT PLAN FOR THE LAST FIVE YEARS*

Year Ended June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018

Proportion of the Net OPEB Liability
1.225037%
1.220599%
1.226015%
1.228614%
1.257076%

Proportionate Share of the Net OPEB Liability

Covered Employee
Payroll

Proportionate Share of the Net OPEB Liability as a Percentage of Covered Payroll

Plan Fiduciary Net Position as a
Percentage of the Total OPEB
Liability

$

61,657,100 $ 40,121,626

153.68%

3.74%

$

65,103,324 $ 39,987,373

162.81%

2.91%

$

54,822,094 $ 39,228,420

139.75%

3.13%

$

54,191,106 $ 37,128,669

145.95%

1.69%

$

53,045,161 $ 37,178,530

142.68%

0.19%

*This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

62 Clayton State University

CLAYTON STATE UNIVERSITY REQUIRED SUPPLEMENTARY INFORMATION NOTES TO THE REQUIRED SUPPLEMENTAL INFORMATION FOR OPEB PLAN BOARD OF REGENTS RETIREE HEALTH BENEFIT PLAN METHODS AND ASSUMPTIONS FOR FISCAL YEAR ENDED JUNE 30, 2022 Changes in Assumptions Since Prior Valuation The financial accounting valuation reflects the following assumption changes:
Expected claims costs were updated to reflect actual experience. Mortality improvement scale was updated from MP-2019 to MP-2020. The discount rate was updated from 2.21% as of June 30, 2020 to 2.18% as of June 30, 2021. The disability rates were changed to be consistent with the Teacher's Retirement System of Georgia Pension June 30,
2019 valuation report. The salary scale was changed from 4.00% to 3.75% to be consistent with the Teacher's Retirement System of
Georgia Pension June 30, 2019 valuation report. The HRA annual increase assumption was updated from 4.50% to 4.00% to reflect general long term HRA employer
marketplace trends that show HRA amounts increasing slightly lower than long term medical trends but higher than inflation. The Expected Return on Assets was changed from 3.75% to 4.37%.
2022 Annual Financial Report 63

Supplementary Information
64 Clayton State University

CLAYTON STATE UNIVERSITY BALANCE SHEET (NON-GAAP BASIS) BUDGET FUNDS JUNE 30. 2022 (UNAUDITED)

ASSETS Cash and Cash Equivalents Accounts Receivable
Federal Financial Assistance Other Prepaid Expenditures Other Assets

$

7,199,489.52

1,110,772.51 8,154,754.55
162,057.63 50,400.00

Total Assets

$

16,677,474.21

LIABILITIES AND FUND EQUITY Liabilities
Accrued Payroll Encumbrance Payable Accounts Payable Unearned Revenue Funds Held for Others Other Liabilities

292,432.11 6,988,570.11
775,403.30 2,292,647.93
30,860.20 23,157.52

Total Liabilities

10,403,071.17

Fund Balances Reserved Department Sales and Services Indirect Cost Recoveries Technology Fees Uncollectible Accounts Receivable Tuition Carry - Forward Unreserved Surplus

2,070,411.01 634,111.93 557,686.47
2,234,023.80 754,873.35
23,296.48

Total Fund Balances

6,274,403.04

Total Liabilities and Fund Balances

$

16,677,474.21

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework.

2022 Annual Financial Report 65

CLAYTON STATE UNIVERSITY STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE BUDGET FUND FOR THE FISCAL YEAR ENDED JUNE 30. 2022
Funds Available Compared to Budget

Teaching State Appropriation State General Funds Federal Funds Federal Funds Not Specifically Identified Federal Funds - COVID19

Original Appropriation

Final Budget

Current Year Revenues

Prior Year Reserve Carry-Over

$ 27,140,426.00 $ 29,801,560.00 $ 29,801,560.00 $

--

--

20,219,766.00

18,967,755.68

--

Federal Funds Not Specifically Identified - COVID Other Funds

-- 57,622,595.00

18,503,278.00 42,758,832.00

18,502,116.19 37,182,321.88

-- 3,623,424.23

Total Teaching

84,763,021.00

111,283,436.00

104,453,753.75

3,623,424.23

Total Operating Activity

$ 84,763,021.00 $ 111,283,436.00 $ 104,453,753.75 $ 3,623,424.23

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework.

66 Clayton State University

CLAYTON STATE UNIVERSITY STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE BUDGET FUND FOR THE FISCAL YEAR ENDED JUNE 30. 2022

Funds Available Compared to Budget

Program Transfers or Adjustments

Total Funds Available

Variance Positive (Negative)

Teaching

State Appropriation

State General Funds

$

-- $

29,801,560.00 $

-- $

Federal Funds

Federal Funds Not Specifically Identified

--

18,967,755.68

-1,252,010.32

Federal Funds - COVID19

Federal Funds Not Specifically Identified - COVID

--

18,502,116.19

-1,161.81

Other Funds

--

40,805,746.11

-1,953,085.89

Expenditures Compared to Budget

Actual

Variance Positive (Negative)

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

29,799,861.52 $

1,698.48 $

1,698.48

18,967,755.68

1,252,010.32

--

18,502,116.19 35,651,874.74

1,161.81 7,106,957.26

-- 5,153,871.37

Total Teaching

--

108,077,177.98

(3,206,258.02)

102,921,608.13

8,361,827.87

5,155,569.85

Total Operating Activity

--

108,077,177.98

(3,206,258.02)

102,921,608.13

8,361,827.87

5,155,569.85

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework.

2022 Annual Financial Report 67

CLAYTON STATE UNIVERSITY STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE BUDGET FUND FOR THE FISCAL YEAR ENDED JUNE 30. 2022
Teaching State Appropriation State General Funds Federal Funds Federal Funds Not Specifically Identified Federal Funds - COVID19 Federal Funds Not Specifically Identified - COVID Other Funds
Total Teaching
Total Operating Activity
Prior Year Reserves Not Available for Expenditure Uncollectible Accounts Receivable
Budget Unit Totals

Beginning Fund Balance/(Deficit)

Fund Balance Carried Over from
Prior Year as Funds Available

Return of Fiscal Year 2021
Surplus

Prior Year Adjustments

Other Adjustments

$

6,973.21 $

-- $

-6,973.21 $

20,347.95 $

--

--

--

--

--

--

-- 3,700,013.11

-- -3,623,424.23

-- -76,588.88

-- -1,007,819.43

-- -127,719.13

3,706,986.32

-3,623,424.23

-83,562.09

-987,471.48

-127,719.13

3,706,986.32

-3,623,424.23

-83,562.09

-987,471.48

-127,719.13

2,106,304.67

127,719.13

$ 5,813,290.99 $ -3,623,424.23 $

-83,562.09 $ -987,471.48 $

--

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework.

68 Clayton State University

CLAYTON STATE UNIVERSITY STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE BUDGET FUND FOR THE FISCAL YEAR ENDED JUNE 30. 2022

Teaching State Appropriation State General Funds Federal Funds Federal Funds Not Specifically Identified Federal Funds - COVID19 Federal Funds Not Specifically Identified - COVID Other Funds

Early Return of Fiscal Year 2022
Surplus

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

Ending Fund Balance/(Deficit) June 30, 2022

--

1,698.48

22,046.43

--

--

--

--

--

--

--

5,153,871.37

4,018,332.81

Total Teaching

--

5,155,569.85

4,040,379.24

Total Operating Activity

--

5,155,569.85

4,040,379.24

Prior Year Reserves Not Available for Expenditure Uncollectible Accounts Receivable

2,234,023.80

Analysis of Ending Fund Balance

Reserved

Surplus/(Deficit)

Total

-- -- -- 4,017,082.76 4,017,082.76 4,017,082.76

22,046.43 -- --
1,250.05 23,296.48 23,296.48

22,046.43 -- --
4,018,332.81 4,040,379.24 4,040,379.24

2,234,023.80

2,234,023.80

Budget Unit Totals

--

5,155,569.85

6,274,403.04

6,251,106.56

23,296.48

6,274,403.04

Departmental Sales and Services Indirect Cost Recovery Technology Fees Tuition Carry-Forward Uncollectible Accounts Receivable Surplus

2,070,411.01 634,111.93 557,686.47 754,873.35
2,234,023.80 --

-- -- -- -- -- 23,296.48

2,070,411.01 634,111.93 557,686.47 754,873.35
2,234,023.80 23,296.48

6,251,106.56

23,296.48

6,274,403.04

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework.

2022 Annual Financial Report 69

CLAYTON STATE UNIVERSITY
2000 Clayton State Blvd. Morrow, GA 30260 www.clayton.edu