DALTON STATE COLLEGE DALTON, GEORGIA INDEPENDENT ACCOUNTANT'S REPORT ON APPLYIN'G AGREED- UPON PROCEDURES FOR FISCAL YEAR ENDED JUNE 30,2010 Georgia IIepqI rhnKq I dii Russell W.Hinton State Auditor DALTON STATE COLLEGE - TABLE OF CONTENTS - INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES EXH l BITS A SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT B STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING SOURCE COMPARED TO BUDGET Page RUSSELLW. WINTON STATE AUDITOR (404)656-2174 DEPARTMEONFTAUDITASND ACCOUNTS 270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 November 10,2010 Members of the State Board of Regents of the University System of Georgia Honorable John Schwenn, President Dalton State College lnde~endenAt ccountant's R e ~ o rotn A ~ ~ I v i Anggreed-UDon Procedures Ladies and Gentlemen: We have performed the procedures enumerated below, which were agreed to by the College and the University System Office (Oversight Unit) of the Board of Regents of the University System of Georgia, solely to assist you in assessing the accuracy of the financial information reported to the University System Office in the College's 2010 Annual Financial Report for inclusion in the University System of Georgia's Annual Financial RepG the State of Georgia's ComprehensiveAnnual Financial Report (C4FR) and Single Audit Report and to assist you in assessing the accuracy of the budget basis information provided in the Summary Budget Cbmparison and Surplus Ana&sis Report and Statement of Program Revenues and Eipenditures by Funding 9urce Compared to Budget which are attached as Exhibits A and B, respectively. Dalton State College's management is responsible for the financial information reported to the University System Office in the College's Annual Financial Report. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures and the associated findings are as follows: 1. Review selected balance sheet items reported on the Annual Financial Report (cash, accounts receivable, accounts payable, deferred revenues, net assets). Confirm that these items have adequate supporting documentation and are properly reconciled to the College's general ledger. We did not note any exceptions as a result of our procedures. 2. Obtain the College's GAAP basis Statement of Net Assets and Statement of Revenues, Expenses and Changes in Net Assets (SRECNA) submitted for inclusion in the State's CAFR and Single Audit. Utilizing test scripts, confirm that financial information presented in these statements properly supports activity reported in the College's accounting records. We did not note any exceptions as a result of our procedures. 3. Obtain the College's Statement of Cash Flows submitted for inclusion in the State's CAFR and Single Audit. Utilizing cash flow worksheets, confirm information reported on Statement of Cash Flows. We did not note any exceptions as a result of our procedures. 4. Obtain the College's Notes to the Financial Statements submitted for inclusion in the State's CAFR and Single Audit. Utilizing notes worksheets and other supporting documentation confirm that note disclosures related to Cash, Investments, Accounts Receivable, Capital Assets, LongTerm Debt, Lease Obligations and Retirement Plans have been properly reported. The Capital Assets note disclosure was not properly reported. Note 6 of the Annual Financial Report reported a balance for June 30, 2010, of $31,873,036.00 for Capital Assets (Net); however, the balance for Capital Assets (Net) was $31,449,076.30. This error resulted in a variance of $423,959.70 in financial statement disclosure. This error was corrected. 5. Review the College's year end GAAP basis journal entries. Obtain documentation for GAAP journal entries and confirm that the entries were posted to the College's Annual Financial Report. We did not note any exceptions as a result of our procedures. 6. Confirm that State Appropriation revenues, receivables and remittances of prior year surplus balances have been properly recorded in the College's financial records. Prior year surplus balances should be netted against State Appropriation revenues in the GAAP basis financial statements; however, prior year surplus balances should be reflected as fund balance adjustments on the Budget basis financial statements. We did not note any exceptions as a result of our procedures. 7. Obtain listing of write-off requests for accounts receivable less than $3,000.00 for fiscal year 2010. Confirm that these write-off requests have been approved by the State Accounting Officer and have been posted to the College'sfinancial statements. We did not note any exceptions as a result of our procedures. 8. Verify that the listing of salaries, travel, and professional services reported to the Department of Audits is in accordance with O.C.G.A. 50-6-27 and reconciles to amounts recorded in the College's financial statements. Salaries reported to the Department of Audits were not reconciled with amounts recorded in the financial statements. A variance of $86,599.15 was noted. 9. Review year end Budgetary Statements including the Summary Budget Comparison and Surplus Anahsis Report (ExhibitA) and Statement of Program Revenues and ExpendiCuresby Funding Source Compared to Budget (Exhibit B). Confirm that budget information presented in these statements supports activity reported in the College's accounting records and determine if any budget overexpenditures exist. We did not note any exceptions as a result of our procedures. 10. Obtain documentation for Budget basis reserves reported by College on the Summary Budget Comparison and Surplus Analysis Report (Exhibit A). Confirm that the reserves are properly documented, valid and appropriate. We did not note any exceptions as a result of our procedures. 11.Review the H.O.P.E. Scholarship Program reconciliation between the College and the Georgia Student Finance Commission. Confirm that information reported to the Georgia Student Finance Commission has been reconciled with H.O.P.E. Scholarship activity reported on the College's financial records. We did not note any exceptions as a result of our procedures. 12. Review the Schedule of Expenditures of Federal Awards information submitted by the College for inclusion in the Statewide Single Audit. Confirm that the information is properly presented and supported by the College's accounting records. We did not note any exceptions as a result of our procedures. 13. Review capital asset records to ensure that (1)subsidiary ledgers are appropriately reconciled to the ledgers, (2) capitalization thresholds are being properly followed, and (3)a complete annual physical equipment inventory is being conducted and that issues noted during the physical inventory are being properly addressed by management. We did not note any exceptions as a result of our procedures. 14. Review bank reconciliations during the year under review to ensure that management is preparing them timely and that reconciling items are being addressed by management timely and in an appropriate manner. We did not note any exceptions as a result of our procedures. 15. Review documentation to ensure that all subsidiary modules including BANNER are reconciled to the general ledger at least quarterly in accordance with the Business Procedures Manual Section 10.6.2. and ensure that reconciling items are adequately explained and resolved in a timely manner. We did not note any exceptions as a result of our procedures. These agreed-upon procedures do not constitute an audit of the financial statements or any part thereof, the objective of which is to express an opinion on the financial statements or a part thereof. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of the specified users listed above and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, s ~ u & e l lW. Hinton, CPA, CGFM State Auditor EXHIBITS DALTON STATE COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT YEAR ENDEDJUNE 30,2010 REVENUES State Appropriation State General Funds Federal Funds Other Funds Total Revenues CARRY-OVER FROM PRIOR YEARS Transfersfrom Resewed Fund Balance Total Funds Available EXPENDITURES Teaching 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 30.2009 Early Return of Surplus in Current Fiscal Year Prior Year R e s e ~ e dFund Balance Included in Funds Available FUND BALANCEJUNE 3 0 SUMMARY OF FUND BALANCE Resewed Department Sales and Sewlces Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollect~bleAccounts Rece~vable Tuition Carry-Over Inventories Total Resewed Unreserved Surplus Total Fund Balance BUDGET ACTUAL EXHIBIT 'A" VARIANCE - FAVORABLE (UNFAVORABLE) DALTON STATE COLLEGE STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING SOURCE COMPARED TO BUDGET YEAR ENDED JUNE30.2010 Special Funding lnltistlve State npproprlatlon State General Funds Orcgrnal Appropnatlan Final Budget ~ u n d As vailable Compared to Budget Current Year Revenues Prlor Year CarwOver Total FundsAva~lable Variance Posltrve (Negatlvel Teachlng State Appropriation State General Funds Federal Funds Amerlcan Recovew and Reinvestment Act of 2009 Federal Stabilizatlon Funds Omer Funds - Grana Totals All Programs Expenditures Compared to Budget Variance pos~bve Actual (Nepuve) Actual Funds Available Over/(under) Expenddures Early Program Total Prlor Perlod Other Remmance Fund Program Fund Balances Fund - - Adjustments - Adjustments - of Surplus - Balances - Transfers - Resene - Surplus Balance Unexpendable Reserves Unc0lkctibk Accounts Recelvabk Inventories