Columbus State University, Columbus, Georgia, management report for fiscal year ended June 30, 2015

COLUMBUS STATE UNIVERSITY
COLUMBUS, GEORGIA
MANAGEMENT REPORT FOR FISCAL YEAR ENDED JUNE 30, 2015
A Member Institution of the University System of Georgia

COLUMBUS STATE UNIVERSITY - TABLE OF CONTENTS -

SECTION I
FINANCIAL
LETTER OF TRANSMITTAL
SELECTED FINANCIAL INFORMATION
EXHIBITS
A STATEMENT OF NET POSITION - (GAAP BASIS)
B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION (GAAP BASIS)
C STATEMENT OF CASH FLOWS - (GAAP BASIS)
D SELECTED FINANCIAL NOTES
SUPPLEMENTARY INFORMATION
SCHEDULES
1 BALANCE SHEET - (STATUTORY BASIS) BUDGET FUND 2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT
(STATUTORY BASIS) BUDGET FUND 3 STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET
BY PROGRAM AND FUNDING SOURCE (STATUTORY BASIS) BUDGET FUND
4 STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE (STATUTORY BASIS) BUDGET FUND
5 RECONCILIATION OF BUDGET TO GAAP 6 RECONCILIATION OF SALARIES AND TRAVEL

Page
2 3 4 6
26 27 28 30 32 33

SECTION II ENTITY'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

COLUMBUS STATE UNIVERSITY - TABLE OF CONTENTS -
SECTION III FINDINGS, QUESTIONED COSTS AND OTHER ITEMS SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS

SECTION I FINANCIAL

Greg S. Griffin
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
November 5, 2015

Honorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the State Board of Regents of the University System of Georgia
and Dr. Christopher Markwood, President Columbus State University

Ladies and Gentlemen:

As part of our audits of the basic financial statements of the University System of Georgia presented in the Annual Financial Report for the University System of Georgia, the basic financial statements of the State of Georgia presented in the State of Georgia Comprehensive Annual Financial Report and the issuance of a State of Georgia Single Audit Report pursuant to the Single Audit Act Amendments, as of and for the year ended June 30, 2015, we have performed certain audit procedures at Columbus State University. Accordingly, the financial statements and compliance activities of Columbus State University were examined to the extent considered necessary in order to express an opinion as to the fair presentation of the financial statements contained in the foregoing documents and to issue reports on compliance and internal control as required by the Single Audit Act Amendments of 1996.

In addition, we have audited compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on its Federal programs for the year ended June 30, 2015.

This Management Report contains information pertinent to the financial and compliance activities of Columbus State University as of and for the year ended June 30, 2015. Information contained in this report is a by-product of our audits of the basic financial statements of the University System of Georgia and the basic financial statements of the State of Georgia and is the representation of management. Accordingly, we do not express an opinion or any other form of assurance on it. The particular information provided which includes a section on findings and other items reported in accordance with Commission on Colleges regulation 2.11.1 is enumerated in the Table of Contents.

This report is intended solely for the information and use of the management of Columbus State University, members of the Board of Regents of the University System of Georgia and the Southern Association of Colleges and Schools - Commission on Colleges and is not intended to be and should not be used by anyone other than these specified parties.

Respectfully,

GSG:as

Greg S. Griffin State Auditor

SELECTED FINANCIAL INFORMATION - 1 -

COLUMBUS STATE UNIVERSITY STATEMENT OF NET POSITION - (GAAP BASIS)
JUNE 30, 2015
ASSETS
Current Assets Cash and Cash Equivalents Short-Term Investments Accounts Receivable, Net (Note 3) Federal Financial Assistance Other Due from Affiliated Organizations Prepaid Items
Total Current Assets
Noncurrent Assets Noncurrent Cash Investments (Externally Restricted) Due from USO - Capital Liability Reserve Fund Investments Notes Receivable, Net Capital Assets, Net (Note 4)
Total Noncurrent Assets
Total Assets
Deferred Outflows of Resources Related to Defined Benefit Pension Plans
LIABILITIES
Current Liabilities Accounts Payable Salaries Payable Benefits Payable Deposits Advances (Including Tuition and Fees) (Note 5) Other Liabilities Deposits Held for Other Organizations Lease Purchase Obligations Compensated Absences
Total Current Liabilities
Noncurrent Liabilities Lease Purchase Obligations Compensated Absences Net Pension Liability
Total Noncurrent Liabilities
Total Liabilities
Deferred Inflows of Resources Related to Defined Benefit Pension Plans
NET POSITION
Net Investment in Capital Assets Restricted for:
Nonexpendable Expendable Unrestricted
Total Net Position
- 2 -

EXHIBIT "A"
$ 18,447,665 43,923
1,601,220 2,726,546
292,214 529,070 23,640,638
401,367 3,949,095
259,144 537,760 1,012,822 109,856,233 116,016,421 139,657,059
4,019,846
1,558,075 168,187 140,363 150
5,073,742 83,026
1,084,873 1,345,312 1,665,573 11,119,301
45,668,748 756,793
30,132,891 76,558,432 87,677,733
10,488,977
62,842,173 1,838,801 3,813,308
-22,984,087
$ 45,510,195

COLUMBUS STATE UNIVERSITY STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION - (GAAP BASIS)
YEAR ENDED JUNE 30, 2015
OPERATING REVENUES
Student Tuition and Fees (Net of Allowance for Doubtful Accounts) Less: Scholarship Allowances
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
Salaries Faculty Staff
Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation
Total Operating Expenses
Operating Loss
NONOPERATING REVENUES (EXPENSES)
State Appropriations Grants and Contracts
Federal State Other Gifts Investment Income (Endowments, Auxiliary and Other) Interest Expense (Capital Assets) Other Nonoperating Expenses
Net Nonoperating Revenues
Loss Before Other Revenues, Expenses, Gains, or Losses
Capital Grants and Gifts State Other Special Item - Capital Asset Transfer
Total Other Revenues, Expenses, Gains or Losses
Increase in Net Position
Net Position - Beginning of Year, Originally Reported
Prior Year Adjustments
Net Position - Beginning of Year, Restated
Net Position - End of Year
- 3 -

EXHIBIT "B"
$ 62,951,246 -18,853,033
1,631,941 187,903 667,859
3,442,489 41,800
6,529,565 192,065 431,034
1,110,767 647,411
2,817,116 391,999 233,634
62,423,796
24,482,426 27,155,856 14,989,617
293,703 805,364 10,256,998 3,857,040 27,843,781 5,242,358
114,927,143
-52,503,347
33,300,304
15,028,217 6,607
3,682,459 962,681 141,162
-2,694,286 -370,644
50,056,500
-2,446,847
3,666,264 628,888 478,574
4,773,726
2,326,879
80,790,958
-37,607,642
43,183,316
$ 45,510,195

COLUMBUS STATE UNIVERSITY STATEMENT OF CASH FLOWS - (GAAP BASIS)
YEAR ENDED JUNE 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Grants and Contracts (Exchange) Sales and Services Payments to Suppliers Payments to Employees Payments for Scholarships and Fellowships Loans Issued to Students and Employees Collection of Loans to Students and Employees Auxiliary Enterprise Charges: Residence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Other Receipts Other Payments
Net Cash Used by Operating Activities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations Agency Funds Transactions Gifts and Grants Received for Other than Capital Purposes
Net Cash Flows Provided by Noncapital Financing Activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Grants and Gifts Received Purchases of Capital 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 Proceeds from Sales and Maturities of Investments Interest on Investments
Net Cash Provided by Investing Activities
Net Increase in Cash
Cash and Cash Equivalents - Beginning of Year
Cash and Cash Equivalents - End of Year

EXHIBIT "C"

$

44,284,686

2,370,670

3,442,490

-48,906,199

-51,687,507

-10,256,997

-900,535

939,989

6,148,896 192,418 411,280
1,124,862 643,961
2,797,791 392,285 221,297 56,823

-48,723,790

33,300,304 5,154,316
19,679,964
58,134,584

3,666,264 -4,977,481 -1,608,557 -2,694,286
-5,614,060

-9,052 26,692 17,640 3,814,374 15,034,658

$

18,849,032

- 4 -

COLUMBUS STATE UNIVERSITY STATEMENT OF CASH FLOWS - (GAAP BASIS)
YEAR ENDED JUNE 30, 2015
RECONCILIATION OF OPERATING LOSS TO NET CASH USED BY OPERATING ACTIVITIES:
Operating Loss Adjustments to Reconcile Operating Loss to Net Cash
Used by Operating Activities Depreciation Change in Assets and Liabilities: Receivables, Net Prepaid Items Notes Receivable, Net Accounts Payable Salaries Payable Advances (Including Tuition and Fees) Other Liabilities Compensated Absences Net Pension Liability Change in Deferred Inflows/Outflows of Resources: Deferred Inflows of Resources Deferred Outflows of Resources
Net Cash Used by Operating Activities
NONCASH ACTIVITY Change in Fair Value of Investments Recognized as a Component of Interest Income Gift of Capital Assets Reducing Proceeds of Capital Grants and Gifts

EXHIBIT "C"

$

-52,503,347

5,242,358
-97,650 -133,526
39,454 433
39,811 -41,284 -200,726 -63,693 -10,464,623
10,488,977 -1,029,974

$

-48,723,790

$

114,470

$

628,888

- 5 -

COLUMBUS STATE UNIVERSITY SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY Columbus State University is one of thirty (30) State supported member institutions of higher education in Georgia which comprise the University System of Georgia, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations of Columbus State University as a separate reporting entity.
The Board of Regents has constitutional authority to govern, control and manage the University System of Georgia. This authority includes but is not limited to the power to designate management, the ability to significantly influence operations, the authority to control institutions' budgets, the power to determine allotments of State funds to member institutions and the authority to prescribe accounting systems and administrative policies for member institutions. Columbus State University does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Columbus State University is considered an organizational unit of the Board of Regents of the University System of Georgia reporting entity for financial reporting purposes because of the significance of its legal, operational, and financial relationships with the Board of Regents as defined in Section 2100 of the Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial Reporting Standards.
FINANCIAL STATEMENT PREPARATION 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, entity-wide perspective of the University's assets, deferred outflows, liabilities, deferred inflows, net position, revenues, expenses, changes in net position and cash flows.
BASIS OF ACCOUNTING For financial reporting purposes, the University is considered a special-purpose government engaged only in business-type activities. Accordingly, the University's financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting, except as noted in the preceding paragraph. Under the accrual basis, revenues, are recognized when earned, and expenses are recorded when an obligation has been incurred. All significant intra-University transactions have been eliminated.
NEW ACCOUNTING PRONOUNCEMENTS In fiscal year 2015, the University adopted Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions. The provisions of this Statement establish accounting and financial reporting standards for pensions that are provided to the employees of state and local governmental employers through pension plans that are administered through trusts. Implementation of this statement requires a restatement to beginning net position. The adoption of this statement has a significant impact on the University's financial statements.
In fiscal year 2015, the University adopted Governmental Accounting Standards Board (GASB) Statement No. 69, Government Combinations and Disposals of Government Operations. This statement provides specific accounting and financial reporting guidance for combinations in the governmental environment. This statement also requires that disclosures be made by governments about combination arrangements in which they engage and for disposals of government operations. The adoption of this statement does not have a significant impact on the University's financial statements.
In fiscal year 2015, the University adopted Governmental Accounting Standards Board (GASB) Statement 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an amendment of GASB No. 68. The objective of this statement is to improve accounting and financial
- 6 -

COLUMBUS STATE UNIVERSITY SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

reporting by addressing an issue in Statement No. 68, Accounting and Financial Reporting for Pensions, concerning transition provisions related to certain pension contributions made to defined benefit pension plans prior to implementation of statement. This statement amends paragraph 137 of Statement No. 68 which limited recognition of pension-related deferred outflows of resources and deferred inflows of resources at the transition to circumstances in which it is practical to determine the amounts of all deferred outflows of resources and deferred inflows of resources related to pensions. Adoption of this statement in conjunction with GASB No. 68 had a significant impact on the University's financial statements.
NET PENSION LIABLITY 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 fiduciary net position of the Teachers' Retirement System of Georgia (TRS) and Employees' Retirement System (ERS), additions to/deductions for TRS's and ERS's fiduciary net position have been determined on the same basis as they are reported by TRS and ERS. 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.
CAPITAL LIABILITY RESERVE FUND In fiscal year 2014, the Capital Liability Reserve Fund (Fund) was established by the Board of Regents to protect the fiscal integrity of the University System of Georgia (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 capital lease obligations. The Fund is financed by all USG institutions participating in the PPV program. 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 capital lease payment to the designated cooperative 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 the University. Columbus State University's contribution to the fund as of June 30, 2015 was $259,144.
NET POSITION The University's net position is classified as follows:
Net Investment in Capital Assets: This represents the University's total investment in capital assets, net of outstanding debt obligations and deferred inflows, or resources related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of the net investment in capital assets.
Restricted - nonexpendable: Nonexpendable restricted net position consist of endowment 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. The University may accumulate as much of the annual net income of an institutional fund as is prudent under the standard established by Code Section 44-15-7 of Annotated Code of Georgia.
Restricted - expendable: Restricted expendable net position includes resources in which the University is legally or contractually obligated to spend resources in accordance with restrictions imposed by external third parties.

- 7 -

COLUMBUS STATE UNIVERSITY SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

Unrestricted: Unrestricted net position is the net amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of Investment in Capital Assets. Included in the net deficit reported is the University's Net Pension liability of $30.1 million which is required for financial reporting and will not impact the economics of the plan or affect budgets or cash flows.
SPECIAL ITEM TRANSFER On May 15, 2015, Columbus State University transferred Courtyard dormitory building with a reported gross book balance value of $11,504,662 and accumulated depreciation of $1,171,771, for a net book value of $10,332,891 to the University System Office. The University also transferred the associated capital lease in the amount of $10,811,465. The net effect of this transfer of this asset and liability of $478,574 is noted as a Special Item Transfer on the Statement of Revenue, Expenses and Changes in Net Position. This dormitory was included in Public-Private Partnership (P3) master agreement between the University System of Georgia and the vendor established during fiscal year 2015. To help facilitate consistent accounting treatment throughout the life of the 65 year P3 agreement and since the agreement affects nine institutions within the University System of Georgia, the service concession arrangement including the capital assets are being reflected on the University System of Office's accounting records. See the service concession arrangement note disclosure within the University System Office's financial statements for more information.
RESTATEMENT NOTE DISCLOSURE For fiscal year 2015, the University made prior period adjustments due to the adoption of GASB Statement No. 68, Accounting and Financial Reporting for Pensions and GASB Statement No. 71 Pension Transition for Contributions Made Subsequent to the Measurement Date, which requires the restatement of the June 30, 2014, net position. The result is a decrease in Net Position at July 1, 2014 of $37,607,642 attributable to a Net Pension Liability of $40,597,514 less plan contributions of $2,989,872 made during fiscal year 2014. This change is in accordance with generally accepted accounting principles.
NOTE 2: DEPOSITS AND INVESTMENTS
DEPOSITS 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 Section 5017-59:
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.
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.

- 8 -

COLUMBUS STATE UNIVERSITY SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

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. Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation. The Treasurer of the Board of Regents is responsible for all details relative to furnishing the required depository protection for all units of the University System of Georgia.

At June 30, 2015, the carrying value of deposits was $18,761,885 and the bank balance was $20,744,045. Of the University's deposits, $20,744,045 were uninsured. Of these uninsured deposits, $20,744,045 were collateralized with securities held by the financial institution, by its trust department or agency, but not in the University's name.

INVESTMENTS At June 30, 2015, the carrying value of Columbus State University's investment was $4,530,778, which is materially the same as fair value. The University's investments as of June 30, 2015 are presented below:

Investment Maturity

Less than

More than

Fair Value

1 Year

1 - 5 Years 6 - 10 Years

10 Years

Investment Type

Debt Securities U.S. Agencies Explicity Guaranteed Corporate Debt Municipal Obligation Mutual Bond Fund

$

387 $

11,383

5,000

1,717,758

387 11,383
5,000 174,271 $

745,842 $

502,224 $

295,421

1,734,528 $

191,041 $ 745,842 $ 502,224 $

295,421

Other Investments Equity Mutual Funds - Domestic Equity Mutual Funds - International Equity Securities - Domestic Equity Securities - International Miscellaneous Holdings

1,064,926 258,990
1,095,755 332,656 43,923

Total Investments

$ 4,530,778

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.

Custodial Quality Risk Custodial credit risk for investments is the risk that, in the event of a failure of the counterparty to a transaction, the University will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The University does not have a formal policy for managing custodial credit risk for investments.

- 9 -

COLUMBUS STATE UNIVERSITY SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

At June 30, 2015, $3,480,519 of the University's applicable investments were uninsured and held by the investment's counterparty in the University's name.
Credit Quality Risk Credit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The University does not have a formal policy for managing credit quality risk.
The investments subject to credit quality risk are reflected below:

Credit Quality Risk

Fair Value

AA

A

BBB

Unrated

Related Debt Investments

Corporate Debt

$

Municipal Obligation

Mutual Bond Fund

11,383 5,000 $
1,717,758

5,000 520,819 $

677,454 $

$ 519,485

11,383

$

1,734,141 $

525,819 $

677,454 $

519,485 $

11,383

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 concentration of credit risk. As of June 30, 2015, the University does not have any applicable investments in a single issuer where those investments exceed 5% of total investments.

NOTE 3: ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following at June 30, 2015:

Student Tuition and Fees

$

Auxiliary Enterprises and Other Operating Activities

Federal Financial Assistance

Georgia State Financing and Investment Commission

Due From Affiliated Organizations

Other

1,361,750 259,109
1,601,220 283,493 292,214
1,142,120

Less Allowance for Doubtful Accounts

4,939,906 319,926

Net Accounts Receivable

$

4,619,980

- 10 -

COLUMBUS STATE UNIVERSITY SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

NOTE 4: CAPITAL ASSETS Following are the changes in the University's capital assets for the year ended June 30, 2015:

Capital Assets, Not Being Depreciated: Land Construction Work-In-Progress
Total Capital Assets, Not Being Depreciated
Capital Assets, Being Depreciated: Infrastructure Building and Building Improvements Facilities and Other Improvements Equipment Capital Leases Library Collections Capitalized Collections
Total Assets Being Depreciated
Less: Accumulated Depreciation: Infrastructure Building and Building Improvements Facilities and Other Improvements Equipment Capital Leases Library Collections
Total Accumulated Depreciation
Total Capital Assets, Being Depreciated, Net
Capital Assets, Net

Beginning Balance July 1, 2014

Special Item Transfer

Additions

Reductions

Ending Balance June 30, 2015

$

2,680,543 $

132,285

2,812,828

0$

628,888 $

3,974,769

0

4,603,657

0$

3,309,431

4,107,054

0

7,416,485

2,183,116 88,585,578
2,240,227 14,991,569 64,472,579
7,818,786 22,000
180,313,855

-11,504,662 -11,504,662

977,884 24,828
1,002,712

601,277 669,400
1,270,677

2,183,116 87,984,301
2,240,227 15,300,053 52,967,917
7,843,614 22,000
168,541,228

1,713,988 34,757,683
1,934,427 10,035,324
6,957,290 7,532,215

62,930,927

117,382,928

$

120,195,756 $

-1,171,771
-1,171,771 -10,332,891 -10,332,891 $

58,017 1,898,186
17,328 1,161,405 2,056,759
50,663
5,242,358
-4,239,646
364,011 $

291,870 666,753 -58,589
900,034 370,643 370,643 $

1,772,005 36,363,999
1,951,755 10,529,976
7,900,867 7,582,878
66,101,480
102,439,748
109,856,233

A comparison of depreciation expense for the last three fiscal years is as follows:

Fiscal Year

Depreciation Expense

2015 2014 2013

$

5,242,358

$

5,445,682

$

7,451,844

NOTE 5: ADVANCES Advances consisted of the following at June 30, 2015:

Prepaid Tuition and Fees Other Advances

$

3,540,995

1,532,747

Total Advances

$

5,073,742

- 11 -

COLUMBUS STATE UNIVERSITY SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

NOTE 6: LONG-TERM LIABILITIES The University's Long-Term liability activity for the year ended June 30, 2015 was as follows:

Beginning Balance July 1, 2014 (Restated)

Special Item Transfer

Additions

Reductions

Ending Balance June 30, 2015

Current Portion

Leases Lease Obligations

$ 59,434,082 $ -10,811,465 $

0 $ 1,608,557 $ 47,014,060 $ 1,345,312

Other Liabilities Compensated Absences Net Pension Liability

2,486,060 40,597,514

Total

43,083,574

Total Long-Term Obligations $ 102,517,656

0

1,844,180

1,907,874

2,422,366

1,665,573

10,464,623

30,132,891

0

1,844,180

12,372,497

32,555,257

1,665,573

-10,811,465 $ 1,844,180 $ 13,981,054 $ 79,569,317 $ 3,010,885

NOTE 7: NET POSITION Changes in Net Position for the year ended June 30, 2015 are as follows:

Beginning Balance July 1, 2014 (Restated)

Additions

Reductions

Ending Balance June 30, 2015

Net Investment in Capital Assets Restricted Net Position Unrestricted Net Position Total Net Position

$

60,761,674 $

12,784,033 $

10,703,534 $

62,842,173

5,573,172

21,204,986

21,126,049

5,652,109

-23,151,530

99,113,966

98,946,523

-22,984,087

$

43,183,316 $

133,102,985 $

130,776,106 $

45,510,195

- 12 -

COLUMBUS STATE UNIVERSITY SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

The amounts within each category at June 30, 2015 were as follows:

Net Investments in Capital Assets

$

62,842,173

Restricted for Nonexpendable Permanent Endowment

1,838,801

Expendable Restricted E & G and Other Organized Activities Federal Loans Institutional Loans Quasi-Endowments

1,437,919 608,296
1,611,457 155,636

Total Expendable

3,813,308

Unrestricted R & R Reserve Reserve for Encumbrances Other Unrestricted

9,886,624 6,100,667 -38,971,378

Total Expendable

-22,984,087

TOTAL NET POSITION

$

45,510,195

NOTE 8: 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 Columbus State University to budget for current spending an amount of realized and unrealized endowment appreciation as they determined to be prudent. Realized and unrealized appreciation in excess of the amount budgeted for current spending is retained by the endowments. Current year net appreciation for the endowment accounts was $110,415 and is reflected as 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 limits spending between 3% and 4% of the endowments principal's market value. 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.

- 13 -

COLUMBUS STATE UNIVERSITY SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

NOTE 9: LEASE OBLIGATIONS

Columbus State University is obligated under various operating leases for the use of real property (land, buildings, and office facilities) and equipment, and also is obligated under capital leases and installment purchase agreements for the acquisition of real property and equipment.

CAPITAL LEASES Capital leases are generally payable in installments ranging from monthly to annually and have terms expiring in various years between 2015 and 2039. Payments for fiscal year 2015 were $4,535,933 of which $2,694,286 represented interest and $233,090 represented executory costs. Total principal paid on capital leases was $1,608,557 for the fiscal year ended June 30, 2015. Interest rates range from 3.50 percent to 5.535 percent. The following is a summary of the carrying values of assets held under capital lease at June 30, 2015:

Net Capital Assets Outstanding

Held Under

Balances per

Accumulated

Capital Lease Lease Schedules

Description

Gross Amount

Depreciation at June 30, 2015 at June 30, 2015

(+)

(-)

(=)

Equipment Buildings

$

362,633 $

52,605,284

315,231 $ 7,585,636

47,402 $ 45,019,648

19,162 46,994,898

Total Assets Held Under Capital Lease at June 30, 2015

$ 52,967,917 $

7,900,867 $ 45,067,050 $ 47,014,060

Certain capital 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.

The following capital lease schedule lists the pertinent information for each lease including the building name, lessor, total principal amount, lease term, lease begin date, lease end date, and remaining long-term debt as of June 30, 2015:

Carpenters Hall Parking Deck Cummingham Center Maryland Circle Student Housing Student Recreation Center Equipment

(1) Foundation Properties $ (1) Foundation Properties (1) Foundation Properties (1) Foundation Properties (1) USG Real Estate Foundation Hewlett-Packard

Total Leases

$

(1) These capital leases are with related entities.

6,010,597 25 years 12/2006 6/2032 $ 9,180,000 25 years 2/2006 6/2032 4,483,500 20 years 7/2012 6/2033
806,461 18 years 7/2013 6/2031 32,124,727 29 years 7/2010 6/2039
91,997 5 years 7/2011 6/2016

52,697,282

$

4,299,303 7,170,000 4,115,700
754,577 30,655,318
19,162
47,014,060

OPERATING LEASES Columbus State University's noncancellable operating leases provide for renewal options for periods from one to three years at their fair rental value at the time of renewal. All agreements are cancelable if the State of Georgia does not provide adequate funding, but that is considered a remote possibility. In the normal course of business, operating leases are generally renewed or replaced by other leases. Operating leases are generally payable on a monthly basis. Examples of property under operating leases are copiers, other small business equipment, and buildings.
- 14 -

COLUMBUS STATE UNIVERSITY SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

Columbus State University fiscal year 2015 expense for rental of real property and equipment under operating leases was $5,039,678.
FUTURE COMMITMENTS Future commitments for capital leases (which here and on the Statement of Net Position includes other installment purchase agreements) and for noncancellable operating leases having remaining terms in excess of one year as of June 30, 2015, were as follows:

Capital Leases

Operating Leases

Year Ending June 30: 2016 2017 2018 2019 2020 2021 - 2025 2026 - 2030 2031 - 2035 2036 - 2039

$

3,633,458 $ 5,064,743

3,630,014

3,284,868

3,641,336

3,348,732

3,657,434

3,413,867

3,673,218

3,441,599

18,592,758 18,094,773

18,989,827 19,965,913

15,234,511

3,418,421

8,103,588

212,090

Total Minimum Lease Payments

79,156,144 $ 60,245,006

Less: Interest

32,142,084

Principal Outstanding

$

47,014,060

NOTE 10: RETIREMENT PLANS
Columbus State 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 significant retirement plans that Columbus State 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.
Teachers' Retirement System of Georgia and Employees' Retirement System of Georgia
General Information about the Teachers' Retirement System
P lan description: All teachers of the University as defined in 47-3-60 of the Official Code of Georgia Annotated (O.C.G.A.) 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 www.trsga.com/publications.
- 15 -

COLUMBUS STATE UNIVERSITY SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

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 6.00% of their annual pay during fiscal year 2015. The University's contractually required contribution rate for the year ended June 30, 2015 was 13.15% of annual University payroll. University contributions to TRS were $3,231,447 for the year ended June 30, 2015, and $2,972,926 for the measurement period for the year ended June 30, 2014.
General Information about the Employees' Retirement System
P lan 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 www.ers.ga.gov/formspubs/formspubs.
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.

- 16 -

COLUMBUS STATE UNIVERSITY SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

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 University's contractually required contribution rate, actuarially determined annually, for the year ended June 30, 2015 was 21.96% of annual covered payroll for old and new plan members and 18.87% for GSEPS members. The University's contributions to ERS totaled $20,423 for the reporting period (fiscal year ended June 30, 2015) and $16,946 for the measurement period (fiscal year ended June 30, 2014). 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.

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions
At June 30, 2015, the University reported a liability for its proportionate share of the net pension liability for TRS and ERS totaling $30,132,891. The net pension liability was measured as of June 30, 2014. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2013. An expected total pension liability as of June 30, 2014 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, 2014. At June 30 2014, the University's TRS proportion was 0.237%, which was an increase of 0.005% from its proportion measured as of June 30, 2013. At June 30, 2014, the University's ERS proportion was 0.004%, which was an increase of 0.001% from its proportion measured as of June 30, 2013.
For the year ended June 30, 2015, the University recognized pension expense of $2,225,283 for TRS and $20,966 for ERS. At June 30, 2015, the University reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

TRS

Deferred

Deferred

Outflow of

Inflows of

Resources

Resources

ERS

Deferred

Deferred

Outflow of

Inflows of

Resources

Resources

Net difference between projected and actual earnings on pension plan investments

$

10,451,656

$

37,321

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

749,373

$

18,604

University contributions subsequent to the measurement date

3,231,447

20,423

Total

$

3,980,820 $

10,451,656 $

39,027 $

37,321

- 17 -

COLUMBUS STATE UNIVERSITY SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

University contributions subsequent to the measurement date of $3,231,447 for TRS and $20,423 for ERS 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, 2016. 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 Ending June 30:

TRS

ERS

2016 2017 2018 2019 2020

$ -2,442,601 $

$ -2,442,601 $

$ -2,442,601 $

$ -2,442,601 $

$

68,124 $

2,297 -2,354 -9,330 -9,330

Actuarial assum ptions: The total pension liability as of June 30, 2014 was determined by an actuarial valuation as of June 30, 2013 using the following actuarial assumptions, applied to all periods included in the measurement:

Teachers' Retirement System:

Inflation Salary increases Investment rate of return

3.00% 3.75% - 7.00%
7.50%

average, including inflation net of pension plan investment expense
including inflation

Mortality rates were based on the RP-2000 Combined Mortality Table for Males or Females set back two years for males and set back three years for females.

The actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial experience study for the period July 1, 2004 - June 30, 2009.

Employees' Retirement System:

Inflation Salary increases Investment rate of return

3.00% 5.45% - 9.25%
7.50%

average, including inflation net of pension plan investment expense
including inflation

Mortality rates were based on the RP-2000 Combined Mortality Table for the periods after service retirement, for dependent beneficiaries, and for deaths in active service, and the RP-2000 Disabled Mortality Table set back eleven years for males for the period after disability retirement.

The actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial experience study for the period July 1, 2004 - June 30, 2009.

The long-term expected rate of return on TRS and ERS pension plan investments was determined using a log-normal 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)

- 18 -

COLUMBUS STATE UNIVERSITY SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

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

Target Allocation

Long-Term Expected Real Rate of Return *

Fixed Income Domestic large equities Domestic mid equities Domestic small equities International developed market equities International emerging market equities

30.00% 39.70%
3.70% 1.60% 18.90% 6.10%

3.00% 6.50% 10.00% 13.00% 6.50% 11.00%

100.00%
* Rates shown are net of the 3.00% assumed rate of inflation
Discount rate: The discount rate used to measure the total TRS and ERS pension liability was 7.50%. 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 7.50%, 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 (6.50%) or 1-percentage-point higher (8.50%) than the current rate:

Teachers' Retirement System:
University's proportionate share of the net pension liability

1% Decrease (6.50%)

Current Discount Rate
(7.50%)

1% Increase (8.50%)

$ 55,249,076 $ 29,979,978 $ 9,171,400

Employees' Retirement System:
University's proportionate share of the net pension liability

1% Decrease (6.50%)

Current Discount Rate
(7.50%)

1% Increase (8.50%)

$

222,977 $

152,913 $

93,272

- 19 -

COLUMBUS STATE UNIVERSITY SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

P ension 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 publically available at www.trsga.com/publications and www.ers.ga.gov/formspubs/formspubs, respectively.
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. 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 of Regents. 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 Columbus State University makes monthly employer contributions for the Regents Retirement Plan at rates adopted by the Teachers' Retirement System of Georgia Board of Trustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2015, the employer contribution was 9.24% for the participating employee's earnable compensation. Employees contribute 6% of their earnable compensation. Amounts attributable to all plan contributions are fully vested and non-forfeitable at all times.
Columbus State University and the covered employees made the required contributions of $1,737,410 (9.24%) and $1,128,189 (6%), respectively.
VALIC, Fidelity, and TIAA-CREF have separately issued financial reports which may be obtained through their respective corporate offices.
Georgia Defined Contribution Plan
Plan Description Columbus State University participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employer defined contribution plan established by the General Assembly of Georgia for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and parttime and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia.
Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board of Trustees. If a member has less than $3,500 credited to his/her account, the Board of Trustees has the option of requiring a lump sum distribution to the member in lieu of making periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute.

- 20 -

COLUMBUS STATE UNIVERSITY SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

Contributions Member contributions are seven and one-half percent (7.5%) of gross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member.
Total contributions made by employees during fiscal year 2015 amounted to $209,096 which represents 7.5% of covered payroll. These contributions met the requirements of the plan.
The Georgia Defined Contribution Plan issues a financial report each fiscal year, which may be obtained from the ERS offices.
NOTE 11: RISK MANAGEMENT
The University System of Georgia offers its employees and retirees access to four different healthcare plan options. For the University System of Georgia's Plan Year 2015, the following healthcare plan options were available:
BlueChoice HMO Comprehensive Care Plan Consumer Choice HSA Plan Kaiser Permanente HMO
Columbus State University and participating employees and retirees pay premiums to the healthcare plan options to access benefits coverage. The respective health plan options are included in the financial statements of the Board of Regents of the University System of Georgia - University System Office. All units of the University System of Georgia share the risk of loss for claims associated with the self-insured plans; including the BlueChoice HMO, Comprehensive Care Plan and Consumer Choice HSA Plan.
The reserves for these plans are considered to be a self-sustaining risk fund. The Board of Regents has contracted with Blue Cross Blue Shield of Georgia to serve as the claims administrator for the selfinsured healthcare plans. In addition to the self-insured healthcare plan options offered to the employees of the University System of Georgia, a fully insured HMO healthcare plan option is also offered to System employees through Kaiser Permanente.
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. Columbus State University, as an organizational unit of the Board of Regents of the University System of Georgia, is part of the State of Georgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment.

- 21 -

COLUMBUS STATE UNIVERSITY SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

A self-insured program of professional liability for its employees was established by the Board of Regents of the University System of Georgia under powers authorized by the Official Code of Georgia Annotated Section 45-9-1.
The program insures the employees to the extent that they are not immune from liability against personal liability for damages arising out of the performance of their duties or in any way connected therewith. The program is administered by DOAS as a Self-Insurance Fund.
NOTE 12: 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 Columbus State University expects such amounts, if any, to be immaterial to its overall financial positions.
Litigation, claims and assessments filed against Columbus State University (an organizational unit of the Board of Regents of the University System of Georgia), if any, are generally considered to be actions against the State of Georgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 2015.
NOTE 13: POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
Pursuant to the general powers conferred by the Official Code of Georgia Annotated Section 20-3-31, the Board of Regents of the University System of Georgia has established group health and life insurance programs for regular employees of the University System of Georgia. It is the policy of the Board of Regents to permit employees of the University System of Georgia eligible for retirement or that become permanently and totally disabled to continue as members of the group health and life insurance programs. The policies of the Board of Regents of the University System of Georgia define and delineate who is eligible for these post-employment health and life insurance benefits. Organizational units of the Board of Regents of the University System of Georgia pay the employer portion for group insurance for affected individuals. With regard to life insurance, the employer covers the total cost for $25,000 of basic life insurance. If an individual elects to have supplemental, and/or, dependent life insurance coverage, such costs are borne entirely by the employee.
The Board of Regents Retiree Health Benefit Plan is a single employer defined benefit plan. Financial statements and required supplementary information for the Plan are included in the publicly available Consolidated Annual Financial Report of the University System of Georgia. The University pays the employer portion of health insurance for its eligible retirees based on rates that are established annually by the Board of Regents for the upcoming plan year. For the 2015 plan year, the employer rate was between 70-75% of the total health insurance cost for eligible retirees and the retiree rate was between 25-30%.
As of June 30, 2015, there were 281 employees who had retired or were disabled that were receiving these post-employment health and life insurance benefits. For the year ended June 30, 2015, Columbus State University recognized as incurred $1,384,172 of expenditures, which was net of $617,984 of participant contributions.

- 22 -

COLUMBUS STATE UNIVERSITY SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

NOTE 14: AFFILIATED ORGANIZATIONS
The Columbus State University Foundation, Foundation Properties, Columbus State University Alumni Association, and Columbus State Athletic Fund are legally separate, tax exempt organizations whose activities primarily support Columbus State University. These affiliated organizations are considered potential component units of the State of Georgia in accordance with GASB Statement No. 61, The Financial Reporting Entity: Omnibus an amendment of GASB Statements No. 14 and No. 34. Therefore, the financial statements of these affiliated organizations are not included in these financial statements. Copies of the financial statements for the affiliated organizations may be obtained from Columbus State University.

- 23 -

(This page left intentionally blank)

SUPPLEMENTARY INFORMATION - 25 -

COLUMBUS STATE UNIVERSITY BALANCE SHEET (STATUTORY BASIS)
BUDGET FUND JUNE 30, 2015
ASSETS
Cash and Cash Equivalents Investments Accounts Receivable
Federal Financial Assistance Other Prepaid Expenditures
Total Assets
LIABILITIES AND FUND EQUITY
Liabilities Accrued Payroll Encumbrances Payable Accounts Payable Deferred Revenue Other Liabilities
Total Liabilities
Fund Balances Reserved Department Sales and Services Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over Unreserved Surplus
Total Fund Balances
Total Liabilities and Fund Balances

SCHEDULE "1"

$ 9,158,580.33 1,487,836.12 941,071.65 3,057,990.83 372,811.83
$ 15,018,290.76

$

155,889.96

5,665,849.43

40,116.55

4,394,458.02

99,421.93

10,355,735.89

1,449,386.71 824,981.66 434,189.06
1,123,799.81 225,173.72 565,638.87
39,385.04
4,662,554.87

$ 15,018,290.76

Statutory Basis financial information was prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework.
- 26 -

COLUMBUS STATE UNIVERSITY SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (STATUTORY BASIS)
BUDGET FUND YEAR ENDED JUNE 30, 2015

SCHEDULE "2"

REVENUES
State Appropriation State General Funds
Other Funds
Total Revenues
CARRY-OVER FROM PRIOR YEARS
Transfers from Reserved Fund Balance
Total Funds Available
EXPENDITURES
Special Funding Initiative Teaching
Total Expenditures
Excess of Funds Available over Expenditures
FUND BALANCE JULY 1
Reserved Unreserved
ADJUSTMENTS
Prior Year Payables/Expenditures Prior Year Receivables/Revenues Unreserved Fund Balance (Surplus) Returned
to Board of Regents - University System Office Year Ended June 30, 2014
Prior Year Reserved Fund Balance Included in Funds Available
FUND BALANCE JUNE 30

BUDGET

ACTUAL

VARIANCE FAVORABLE (UNFAVORABLE)

$ 33,353,910.00 $ 33,353,910.00 $

0.00

84,169,037.00

76,568,477.34

-7,600,559.66

117,522,947.00

109,922,387.34

-7,600,559.66

0.00 117,522,947.00

3,916,363.83 113,838,751.17

3,916,363.83 -3,684,195.83

150,000.00 117,372,947.00

117,522,947.00

$

0.00

150,000.00 109,198,520.62

0.00 8,174,426.38

109,348,520.62

8,174,426.38

4,490,230.55 $ 4,490,230.55

4,321,007.78 53,606.04

29,597.18 -261,916.81

-53,606.04 -3,916,363.83

$

4,662,554.87

SUMMARY OF FUND BALANCE
Reserved Department Sales and Services Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over
Total Reserved
Unreserved Surplus
Total Fund Balance

$

1,449,386.71

824,981.66

434,189.06

1,123,799.81

225,173.72

565,638.87

4,623,169.83

39,385.04

$

4,662,554.87

Statutory Basis financial information was prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework.
- 27 -

COLUMBUS STATE UNIVERSITY STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE
(STATUTORY BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2015

Special Funding Initiative State Appropriation State General Funds
Teaching State Appropriation State General Funds Other Funds
Total Teaching
Total Operating Activity

Original Appropriation

Amended Appropriation

Final Budget

Current Year Revenues

$

0.00 $

0.00 $

150,000.00 $

150,000.00

33,203,910.00 71,365,627.00
104,569,537.00

33,203,910.00 71,365,627.00
104,569,537.00

33,203,910.00 84,169,037.00
117,372,947.00

33,203,910.00 76,568,477.34
109,772,387.34

$

104,569,537.00 $

104,569,537.00 $

117,522,947.00 $ 109,922,387.34

Statutory Basis financial information was prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework.
- 28 -

SCHEDULE "3"

Funds Available Compared to Budget

Prior Year

Adjustments and

Total

Carry-Over

Program Transfers

Funds Available

Variance Negative

Expenditures Compared to Budget

Variance

Actual

Positive

Excess of Funds Available Over Expenditures

$

0.00 $

0.00 $

150,000.00 $

0.00 $

150,000.00 $

0.00 $

0.00

0.00 3,916,363.83
3,916,363.83

0.00 0.00
0.00

33,203,910.00 80,484,841.17
113,688,751.17

0.00 -3,684,195.83
-3,684,195.83

33,203,910.00 75,994,610.62
109,198,520.62

0.00 8,174,426.38
8,174,426.38

0.00 4,490,230.55
4,490,230.55

$ 3,916,363.83 $

0.00 $ 113,838,751.17 $

-3,684,195.83 $ 109,348,520.62 $

8,174,426.38 $

4,490,230.55

- 29 -

COLUMBUS STATE UNIVERSITY STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE
(STATUTORY BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2015

Special Funding Initiative State Appropriation State General Funds
Teaching State Appropriation State General Funds Other Funds
Total Teaching
Total Operating Activity
Prior Year Reserves Not Available for Expenditure Uncollectible Accounts Receivable

Beginning Fund Balance July 1

Fund Balance Carried Over from
Prior Period as Funds Available

Return of Fiscal Year 2014
Surplus

Prior Period Adjustments

$

667.54 $

0.00 $

-667.54 $

0.00

42,283.58 3,927,018.75
3,969,302.33
3,969,969.87

0.00 -3,916,363.83
-3,916,363.83
-3,916,363.83

-42,283.58 -10,654.92
-52,938.50
-53,606.04

12,855.41 -245,175.04
-232,319.63
-232,319.63

404,643.95

0.00

0.00

0.00

Budget Unit Totals

$

4,374,613.82 $

-3,916,363.83 $

-53,606.04 $

-232,319.63

Statutory Basis financial information was prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework.
- 30 -

SCHEDULE "4"

Other Adjustments

Early Return Fiscal Year 2015
Surplus

Excess of Funds Available Over Expenditures

Ending Fund Balance June 30

Analysis of Ending Fund Balance

Reserved

Surplus

Total

$

0.00 $

0.00 $

0.00 $

0.00 $

0.00 $

0.00 $

0.00

0.00 179,470.23
179,470.23
179,470.23

0.00 0.00
0.00
0.00

0.00 4,490,230.55
4,490,230.55
4,490,230.55

12,855.41 4,424,525.74
4,437,381.15
4,437,381.15

0.00 4,397,996.11
4,397,996.11
4,397,996.11

12,855.41 26,529.63
39,385.04
39,385.04

12,855.41 4,424,525.74
4,437,381.15
4,437,381.15

-179,470.23

0.00

0.00

225,173.72

225,173.72

0.00

225,173.72

$

0.00 $

0.00 $

4,490,230.55 $ 4,662,554.87 $ 4,623,169.83 $

39,385.04 $ 4,662,554.87

Summary of Ending Fund Balance Reserved
Department Sales and Services Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over Unreserved Surplus
Total Ending Fund Balance - June 30

$ 1,449,386.71 824,981.66 434,189.06
1,123,799.81 225,173.72 565,638.87
$
$ 4,623,169.83 $

$ 1,449,386.71 824,981.66 434,189.06
1,123,799.81 225,173.72 565,638.87

39,385.04

39,385.04

39,385.04 $ 4,662,554.87

- 31 -

COLUMBUS STATE UNIVERSITY RECONCILIATION OF BUDGET TO GAAP
YEAR ENDED JUNE 30, 2015
Presented below is a reconciliation of the fund balance of the Budget Fund, as reported on Schedule 1, to Net Position of business-type activities, as reported on Exhibit A.
Total Fund Balances - Budget Fund - Non-GAAP Basis (Schedule "1")
Amounts reported for Business-Type Activities in the Statement of Net Position are different because:
Capital Assets used in Business-Type Activities are not reported in the Budget Fund.
Uncollectible accounts receivable are reported as an asset and reserved fund balance in the Budget Fund and as a contra-asset account on the Statement of Net Position.
Funds placed on deposit with the Georgia State Financing and Investment Commission for use in capital outlay projects are reported as an outlay in the Budget Fund, but are included as a prepaid item on the Statement of Net Position.
Changes in the Fair Market Value of Investments are recognized on the Statement of Net Position, but are not reported in the Budget Fund.
Agency Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Agency Fund Activity
Auxiliary Enterprises Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Auxiliary Enterprises Fund Activity
Endowment Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Endowment Fund Activity
Loan Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Loan Fund Activity
Student Activities Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Student Activity Fund Activity
The budgetary basis of accounting implemented by the State of Georgia recognizes expenditures when encumbered. The following adjustments were made to eliminate this activity for reporting on the Statement of Net Position. Payables reported in the Budget Fund that are based on encumbrances are eliminated for GAAP reporting. Total Net Effect of Encumbrance Activity
Certain Liabilities are not due and payable in the current period and therefore are not reported as liabilities in the Budget Fund. Capital Leases Payable Compensated Absences Payable
Certain assets, deferred outflows of resources, liabilities and deferred inflows of resources are not reported in the Budget Fund Defined Benefit Pension Plans Total Liabilities
Net Position of Business-Type Activities (Exhibit "A")
The supplementary information presented on Schedules 1, 2, 3 and 4 was 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. The information was derived from, and relates directly to, the same information used to prepare the financial statements. However, the budgetary statutes and regulations of the State of Georgia require reporting of certain information that is not in accordance with generally accepted accounting principles. Presented on this schedule is a reconciliation of the fund balance of the Budget Fund, as reported on Schedule 1, to Net Position of business-type activities, as reported on Exhibit A.
- 32 -

SCHEDULE "5"

$

4,662,555

109,856,233

-225,174

$ 1,214,004 -1,214,004
$ 5,988,605 -352,744
$ 1,994,438 0.00
$ 2,256,788 0.00
$ 2,623,725 -360,344

-875,407 314,119
0.00 5,635,861 1,994,438 2,256,788 2,263,381

5,665,849

$ -47,014,060 -2,422,366

-36,602,022

-86,038,448

$ 45,510,195

COLUMBUS STATE UNIVERSITY RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2015

SCHEDULE "6"

Totals per Annual Supplement
Accruals June 30, 2015 June 30, 2014
Compensated Absences June 30, 2015 June 30, 2014
Adjustments Shared Services on Jointly Staffed Personnel Albany State University Porter, Rhonda Dalton State College Pfiester, Josh Georgia Gwinnett College Da Silva, Stephanie McElveen, Kimberly Newby, Jennifer Georgia Institute of Technology Turnitsa, Charles D. Georgia Perimeter College Harris, Nikita Georgia Southern University Keeley, Howard Levernier, Edna Georgia Southwestern State University Wert, Jenine Fittipaldi Georgia State University Gindhart, Maria Kennesaw State University Armer-Giardina, Natashya Dias, Michael Diaz, Manuel Israel, Hannah McGinnis, Harold Savannah State University Hutchinson, Marilyn Moore, Andrea L. University of North Georgia Allen, Avram Allen, Jennifter Gordon, Frederick Waller, Robert University of West Georgia Becker, Becky Daily, Thomas University System Office DeVries, Nicole Valdosta State University Foster, Bruce Williamson, Lowell A.
Car Allowances Cell Phone Allowances

SALARIES

$

51,807,928 $

TRAVEL 805,364

168,187 -152,850

2,250,224 -2,309,392

1,487
2,009
-251 -264 -105
4,575
-5,652
1,077 27,451
-6,644
754
141 680 -507 -323 -9,070
563 282
600 269 -6,372 -16,794
-95 -4,952
420
-3,652 1,234
-29,309 -83,367

- 33 -

$

51,638,282 $

805,364

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

COLUMBUS STATE UNIVERSITY ENTITY'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2015

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

No matters were reported.

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-530-14-01 FA-530-14-02 FA-530-14-03

Previously Reported Corrective Action Implemented Partially Resolved See Corrective Action/Responses Partially Resolved See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

FA-530-14-02 Overpayment of Student Financial Assistance

Compliance Requirement: Eligibility

Internal Control Impact: Significant Deficiency

Compliance Impact:

Nonmaterial Noncompliance

Federal Awarding Agency: U. S. Department of Education

CFDA Number and Title: 84.SFA Student Financial Assistance Cluster

We have implemented procedures to ensure that exception reports are generated and consistently monitored to ensure grade level and awarding comparisons match. Columbus State University (CSU) began using Argos, the Banner companion reporting software package, in January, 2015. We also began using the reporting tool to develop a broader array of comparative information to be certain all funds are properly awarded.

Furthermore, the IT services office completed and released an update to their SAP calculation module (release 8.37) which has allowed CSU to capture and assign SAP status to students who attended but did not apply for aid. This has created a cleaner SAP progression and proper assignment of SAP status.

In addition, the University is awaiting a response from the U.S. Department of Education in regards to the resolution of this finding.

- 1 -

COLUMBUS STATE UNIVERSITY ENTITY'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2015

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

CORRECTIVE ACTION/RESPONSES

FA-530-14-03 Return of Title IV Funds

Compliance Requirement: Special Tests and Provisions

Internal Control Impact: Significant Deficiency

Compliance Impact:

Nonmaterial Noncompliance

Federal Awarding Agency: U. S. Department of Education

CFDA Number and Title: 84.SFA Student Financial Assistance Cluster

We have implemented procedures to ensure that unofficial withdrawals are properly reported to the Office of the Registrar in a timely manner to allow the Office of Financial Aid time to process returns within the 45 day threshold. Columbus State University (CSU) has activated programming within Banner that requires faculty to record a Last Date of Attendance (LDA) when they enter withdrawal grades. This is in addition to established Registrar policy to verify all students with all F and/or WF grades to ensure F grades are earned. To supplement, CSU brought Argos, the Banner companion reporting software package, live in January, 2015. We are using the reporting tool to develop a broader array of comparative information to be certain all students with F and WF grades have an accompanying LDA.

In addition, the University is awaiting a response from the U.S. Department of Education in regards to the resolution of this finding.

- 2 -

SECTION III FINDINGS, QUESTIONED COSTS AND OTHER ITEMS

COLUMBUS STATE UNIVERSITY SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS
YEAR ENDED JUNE 30, 2015
COMMUNICATION OF INTERNAL CONTROL DEFICIENCIES
The auditor is required to communicate to management and those charged with governance control deficiencies identified during the course of the financial statement audit that, in the auditor's judgment, constitute significant deficiencies or material weakness.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Internal control deficiencies identified during the course of this engagement that were considered to be significant deficiencies and/or material weaknesses are presented below:
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
No matters were reported.
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
OTHER ITEMS (NOTED FOR MANAGEMENT'S CONSIDERATION)
Accounting Controls Overall Observation: Our examination of Columbus State University included a review of IT General Controls related to the student information system. We noted that the University does not adequately monitor changes and that multiple employees have the ability to push changes into production. Also, we noted several conditions of inadequate logical access controls to protect the integrity of information maintained in the student information system.
Recommendation: Columbus State University should monitor changes to the student information system. In addition, separation of access should be implemented to assist in mitigating the risk of unauthorized changes, or changes not supporting business needs being migrated into the production environment. The University should also enhance logical access controls to include general security settings to limit access to unique authorized individuals and formal policies and procedures for assigning user access to the financial application, as well as, regular monitoring of assigned access. Formal logical access policies and procedures will assist in mitigating the risk of manipulation, corruption, or loss of financial data, to ensure the integrity of information which is utilized by management for decision making and financial reporting.
- 1 -

COLUMBUS STATE UNIVERSITY SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS
YEAR ENDED JUNE 30, 2015
OTHER ITEMS (NOTED FOR MANAGEMENT'S CONSIDERATION)
Management's Response: Change Management: We concur with this observation. Columbus State has implemented the following process to correct the issue identified. Ellucian upgrades/releases/patches are released by ITS, once release they are placed into the Banner PREP environment, the data owners are notified of testing and sign-off requirements, once signed off/approved the upgrades/releases/patches are placed into the Banner PROD environment and data owners are notified. Any in-house Banner enhancements are placed into the PREP environment by the programming staff, the programming staff submits a request for the enhancement to be placed into the Banner PROD environment. The DBA retains records of all upgrades/releases/patches/in-house enhancements, logged by date and times (and specifications, if needed).
Separation of Duties: The University will complete a quarterly audit of user accounts to insure the documentation, monitoring, and removal of cross-functional modify access (of Banner forms: S-R-T, S-R, and R-T) insuring integrity and accuracy as well as prevent fraud and irregularities.
Unallowable Use of P-cards Observation: A review of purchasing card transactions revealed purchasing card users that did not follow the guidelines for purchasing card transactions as prescribed in the University's Procurement Card (P-Card) manual. Several instances of split purchases were identified.
Recommendation: Management should review procedures in place and implement changes necessary to ensure that all purchasing card transactions adhere to the policies and procedures as outlined in the University's Procurement Card (P-Card) Manual.
Management's Response: We concur with this observation. Purchasing will continue to educate users on what constitutes a split purchase and what steps may be taken to prevent a split purchase
Unrecorded Contracts and Retainages Payable Observation: A review of subsequent year construction expenditure activity revealed that the University did not record contracts and retainages payable amounts totaling $519,179.10 in the appropriate accounting period.
Recommendation: Management should review procedures in place and implement changes necessary to ensure that all expenditure activity is recognized in the correct accounting period.
Management's Response: The Comptroller's Office will work closely with the Contracts Manager and Accounts Payable to determine if there are any construction contracts at year end with contracts and retainages payable.
- 2 -

COLUMBUS STATE UNIVERSITY SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS
YEAR ENDED JUNE 30, 2015
OTHER ITEMS (NOTED FOR MANAGEMENT'S CONSIDERATION)
Subsidiary Reconciliation Observation: According to the Board of Regents' Business Procedures Manual, each institution must reconcile the comprehensive benefits report with the payroll deduction register each month. Our review revealed a lack of documentation of monthly reconciliations of the comprehensive benefits report to the payroll deduction register.
Recommendation: The University should review procedures in place and implement changes necessary to ensure that appropriate reconciliations are completed in accordance with the Business Procedures Manual Section 5.1.1.
Management's Response: The Comptroller's Office will work closely with Human Resources to ensure that the benefits reconciliation is being conducted in a timely manner and that proper documentation is included.
Timely Return of Title IV Funds Observation: Our review of a sample of 38 students to test the University's compliance with 34 CFR 668.173, which is related to the timely return of Title IV funds, revealed that funds were not returned in the appropriate timeframe for 16 students.
Recommendation: We recommend that the University review its process for determining that students have withdrawn, either officially or unofficially, to ensure that Title IV funds are returned in a timely manner.
Management's Response: In 2015, Columbus State University enacted a Corrective Action Plan (CAP) to ensure all withdrawals, official and unofficial will be reported in a timely manner. The CAP was successfully implemented as there were no significant deficiencies noted in the FY 2015 full disclosure management report. However, CSU does recognize that there are further steps to take to ensure all responsibilities are met. CSU uses Argos to pull data from Banner to ensure all withdrawals are processed timely. Additionally we will take the following steps:
CSU will acquire reports periodically from ED through Common Origination and Disbursement (COD) to verify that all processed returns have reached COD at the student level within ED guidelines.
CSU will review withdrawal reporting processes from the faculty to the Office of the Registrar to be certain withdrawals are reported appropriately to allow the Office of Financial Aid processing time to meet ED standards.
Untimely Enrollment Reporting Observation: Our testing of 25 students who withdrew during the Fall 2014 and Spring 2015 semesters revealed that 22 students' withdrawn statuses were reported to the National Student Loan Data System (NSLDS) in an untimely manner. Additionally, 18 students' enrollment statuses transmitted to NSLDS were not correct.
- 3 -

COLUMBUS STATE UNIVERSITY SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS
YEAR ENDED JUNE 30, 2015 OTHER ITEMS (NOTED FOR MANAGEMENT'S CONSIDERATION) Recommendation: The University should implement policies and procedures to ensure that all changes in student enrollment statuses are reported in a timely manner. Management's Response: NSLDS submissions are automatically handled by our Nation Student Clearinghouse submission. Starting with the October 2015 submission, the Office of the Registrar will take over the responsibility for the correction and submission of NSC data. Procedures have already been put in place (the creation of data exception reports) to identify potential data errors and inconsistencies that have either delayed or allowed inaccuracies in previous reporting.
- 4 -