c;;A A.&>o ,RI ' ', 1)44-1 ~~1-;;tc;i.. ' ' ,', , ' oF -,STATE OF 1GEORGIA - oEPARTM'ENT Auo1Ts AND AccouNTs ',' I j ,- J '' r - \ ,, I . '' .- ' '\ ' \ ' ' GEORGIA PERIMETER COLLEGE ' D' ECATUR. ' G- EORGIA - REPORT ON REVIEW ' , -OF THE-FINANCIAL STATEMENTS .FOR THE.FISCAL YEAR ENDED JUNE"Jo.:2002 rr , ) , -, ' - I i " '- ...~ ' . ; , , f' I ,, '.r ' - - ' ' Russell W. Hinton ''' I ,,- ' '' - ., ' State Auditor \ , , '\ ' ' ' '" " \ '' ,, ' I, ) \ GEORGIA PERIMETER COLLEGE - TABLE OF CONfENTS - SECTION! FINANCIAL INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION REQUIRED SUPPLEMENTARY INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS 2 BASIC FINANCIAL STATEMENTS EXHIBITS A STATEMENT OF NET ASSETS 11 B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS 12 C STATEMENT OF CASH FLOWS 13 D NOTES TO THE FINANCIAL STATEMENTS 15 SUPPLEMENTARY INFORMATION SCHEDULES SCHEDULESOFREVENUESANDEXPENDITURESCOMPAREDTO BUDGET - (NON-GAAP BASIS) RESIDENT INSTRUCTION 33 2 LOTTERY FOR EDUCATION 34 3 RECONCILIATION OF SALARIES AND TRAVEL 35 SECTION II CURREN f YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION I FINANCIAL Ru,~H.1. W. HINTON ~ TATE AUDITOR 14041 656-217 DEPARTMENT OF AUDITS AND ACCOUNTS 254 W.i~hmgton Street, SW Suit(' 214 AtlJnta, Gcorg1J 30314-8400 February 19, 2003 Honorable Sonny Perdue, Governor Members of the General Assembly of Georg1a Members of the Board of Regents of the Umverslly System of Georgia and Honorable Jacquelyn M. Belcher, President Georg1a Penmeter College INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION Ladies and Gentlemen We have reviewed the accompanymg baste financial statements (Exh1b1ts A through D) of Georgia Penmeter College, an organ1zattonal umt of the State ofGeorg1a, as of and for the year ended June 30. 2002, m accordance with Statements on Standards for Accountmg and Review Services issued by the Amencan Institute of Certified Pubhc Accountants All mformatlon included m these financial statements 1s the representation of the management of Georgia Penmeter College A review consists pnnc1pally ofmqumes ofCollege personnel and analytical procedures applied to financial data It 1s substantially less m scope than an audit m accordance with aud1tmg standards generally accepted m the Umted States of Amenca, the obJect:lvc ofwh1ch 1s the expression of an opm1on regardmg the financial statements taken as a whole Accordmgly, we do not express such an opm10n Based on our review, we are not aware of any matenal mod1ficat1ons that should be made to the accompanymg fmanc1al statements m order for them to be m conformity with accountmg pnnc1ples generally accepted m the Umted States of Amenca As descnbed m Note 1, Georgia Penmeter College adopted the prov1s10ns of Governmental Accountmg Standards Board (GASB) Statement No 35, Basic Financial Statemems - and Management's D1scuss1011 and Analysis - for Publ,c Colleges and Umversllles, as amended by GASB Statement No 37, Basic Financial Statements - and Management's D1scuss1on and Ana(vs1s for State and Local Governments, and GASB Statement No 38, Certain Financial Statements Note Disclosures, as of July 1, 2001, to implement a new financial reportmg model 02ARL-66 Management's D1scuss10n and Analysis 1s not a reqmred part ofthe basic financial statements but 1s supplementary informallon required by the GASB. We have apphed certain hm1ted procedures, which consisted pnnc1pally ofmqwnes of management regarding the methods ofmeasurement and presentation oft1ns supplementary information, and we are not aware ofany matenal modifications that should be made thereto. Our review was made for the purpose of expressing hm1ted assurance that there are no matenal modifications that should be made to the financial statements in order for them to be in conformity with accounting pnnc1ples generally accepted in the Umted States of Amenca The accompanying supplementary information (Schedules 1 through 3) 1s presented for add1t10nal analysis purposes Such mformal!on has been subJected to the inqumes and analyt1cal procedures apphed m the review of the financial statements, and we are not aware of any matenal mod1ficat10ns that should be made to such data Respectfully submitted, - t.J. c:Jl : k RWH.as 02ARL-66 State Auditor REQUIRED SUPPLEMENTARY INFORMATION -l- GEORGIA PERIMETER COLLEGE Management's Discussion and Analysis Introduction Georgia Penmeter College 1s one of the 34 mst1tut10ns of the Umvers1ty System of Georgia. The College has six convenient locations along the maJor access comdors of metropohtan Atlanta Georgia Penmeter College was founded by the Dekalb County Board of Education m I958 It became a College m 1964 Georgia Penmeter College 1s the largest two-year College and the thJTd largest 1nst1tut1on m the Umvers1ty System of Georgia The College continues to grow as shown by the companson numbers that follow Faculty Students FY2002 FY2001 FY2000 328 15,372 312 13,708 325 14,091 Overview ofthe Financial Statements and Financial Analysis Georgia Penmeter College 1s proud to present its financial statements for fiscal year 2002 The emphasis ofd1scuss1ons about these statements will be on current year data There are three financial statements presented the Statement of Net Assets; the Statement of Revenues, Expenses and Changes m Net Assets, and, the Statement of Cash Flows Th.ts d1scuss1on and analysis of the College's financial statements provides an overview of its financial activities for the year Georgia Penmeter College has elected to not restate pnor penods for purposes ofprov1dmg the comparative data for this Management's D1scuss1on and Analysts However, m future years, when pnor penod information 1s available, a comparative analysis will be presented. Statement ofNet Assets The Statement ofNet Assets presents the assets, hab1ht1es, and net assets ofthe College as ofthe end of the fiscal year The Statement of Net Assets 1s a pomt oftime financial statement The purpose of the Statement ofNet Assets 1s to present to the readers ofthe financial statements a fiscal snapshot of Georgia Penmeter College The Statement of Net Assets presents end-of-year data concerning Assets (current and non-current), L1ab1ht1es (current and non-current), and Net Assets (assets minus hab1ht1es) The difference between current and non-current assets will be discussed in the notes to the financial statements. From the data presented, readers of the Statement of Net Assets arc able to determmc the assets available to continue the operations ofthe inst1tut1on They are also able to determine how much the institution owes vendors, investors and lendmg institutions -2 - Finally, the Statement ofNet Assets provides a picture ofthe net assets (assets minus hab1ht1es) and theu availab1hty for expenditure by the institution. Net assets are d1v1ded into three maJor categones The first category, invested in capital assets, net ofdebt, proVJdes the institution's cqwty in property, plant and eqwpment owned by the institution The next asset category 1s restncted net assets, wluch 1s d1v1ded into two categones, nonexpendable and expendable The corpus of nonexpendable restncted resources 1s only available for investment purposes Expendable restncted net assets are available for expenditure by the institution but must be spent for purposes as determined by donors and/or external entities that have placed time or purpose restnctlons on the use of the assets. The final category 1s unrestncted net assets. Unrestncted assets are available to the institution for any lawful purpose of the mstltutlon Statement of Net Assets, Condensed (thousands of dollars) Assets Current Assets Capital Assets, Net Other Assets $ 19,826 90,622 66 Total Assets $110,514 Liabilities Current Liab1hhes Non-Current L1ab1hlles $ 10,991 I 5,997 Total Liabilities $ 26,988 Net Assets Invested in Capital Assets, Net of Debt Restnctcd - Nonexpendable Restncted - Expendable Capital ProJects Unrestncted $ 75,143 39 291 1,286 6 767 Total Net Assets Statement ofRevenues, Expenses and Changes in Net Assets $ 83.526 Changes in total net assets as presented on the Statement of Net Assets are based on the act1v1ty presented in the Statement of Revenues, Expenses and Changes in Net Assets The purpose of the statement 1s to present the revenues received by the inshtutlon, both operating and nonoperating, and the expenses paid by the institution, operating and nonoperating, and any other revenues, expenses, gams and losses received or spent by the inslltut10n Generally speaking operating revenues are received for prov1dmg goods and services to the vanous customers and const1tuenc1es of the inslltut1on Operating expenses are those expenses paid to acqmre or produce the goods and services provided in return for the operating revenues, and to carry out the m1ss10n of the institution -3- Nonopcratmg revenues arc revenues received for wluch goods and serY1ces are not provided For example state appropnatlons are nonoperatmg because they are provided by the Legislature to the mstltutlon without the Legislature directly rece1vmg commensurate goods and services for those revenues Statement of-Revenues, Expenses and Changes m Net Assets; Condensed(thousands of dollars) Operatmg Revenues Operatmg Expenses S 34,951 84,771 Operatmg Loss $ -49,820 Nonoperatmg Revenues and Expenses 49.063 Income (Loss) Before Other Revenues, Expenses, Gams or Losses S -757 Other Revenues, Expenses, Gams or Losses 6,624 Increase m Net Assets $ 5,867 Net Assets at Begmmng of Year, as Ongmally Reported $150,041 Cumulative Effect of Changes m Accountmg Pnnc1ple -72,382 Net Assets at Begmnmg of Year Restated $ 77,659 Net Assets at End of Year $ 83.526 The Statement of Revenues, Expenses and Changes m Net Assets reflects a positive year with an mcreasc m the net assets at the end of the year. Some highlights of the mforrnatlon presented on the Statement of Revenues, Expenses and Changes m Net Assets are as follows Nongovernmental grants and contracts decreased nommally from the pnor year This 1s pnmanly a result of the decrease m one grant that had been spent for eqmpment The compensation and employee benefits category mcreased by approximately $5,053,000 The mcrease reflects a pay raise for the employees ofthe mst1tullon of approximately three percent with the associated fnnge benefits The mcrease also reflects an mcreased cost ofhealth insurance for the employees of the 1ns1Itu1Ion As well as an mcrease m both the number of part-time faculty used dunng summer semester because of mcrcased enrollment and an mcrease m part-lime faculty pay -4- Ullhlles mcreased by approximately $255,000 dunng the past year The mcrease was pnmanly associated with the add1t10n of two new fac1ht1es, the Learmng Resource Center on the Dunwoody Campus (occup1ed at the end of fiscal year 2001) and the Gwmnett Umvers1ty Center that opened m November of2001 Under nonoperatmg revenues (expenses) state appropnallons mcreased by approxunately $1,448,474 00 While 11 appears that the mst1tullon rcce1ved a substanllal amount of new money from the state, given the mandatory cost mereases of vanous categones of expenses, the College actually had a relatively flat fundmg year with all thmgs considered. The cumulallve effects of changes m accountmg pnnc1ples are the result of the College adoptmg deprec1at1on on capital assets and recogmllon of compensated absences -5- Revenue By Source (thousands of dollars) For The Year Ended June 30, 2002 Operatmg Revenue Tmtion-and Fees - --- - - - - Grants and Contracts Rents and Royalties Sales and Services of Educational Departments Aux1hary Other Total Operatmg Revenue Nonoperatmg Revenue State Appropnatlons Investment Income Other Total Nonoperatlng Revenue Total Revenues Expenses (thousands of dollars) For The Year Ended June 30, 2002 Operatmg Expenses Instruction Pubhc Service Academic Support Student Services Institutional Support Plant Operations and Mamtenance Scholarships and Fellowships Aux1hary Enterpnses Total Operatmg Expenses Nonoperatlng Expenses Interest Expense (Capital Assets) Total Expenses -6- $ 21,996 I 0,683 48 53 1,810 360 $ 34.950 $ 49,211 263 98 $ 49.572 $ 84.522 $ 35,352 88 8,125 7,703 13,663 11,866 6,310 1.664 $ 84,771 509 $ 85.280 Statement ofCash Flows The final statement presented by Georgia Penmcter College 1s the Statement of Cash Flows The Statement of Cash Flows presents detailed mformatlon about the cash act1V1ty of the mst1tut10n dunng the year. The statement 1s divided mto five parts The first part deals with operatmg cash flows and shows the net cash used by the operatmg act1v1t1es of the mst1tut1on The second section reflects cash flows from non-capital financmg act1V1t1es This section reflects the cash received and spent for nonoperatmg, non-mvestmg, and non-capital financmgpurposes The third section reflects the cash flows from mvestmg act1v1t1es and shows the purchases, proceeds, and mterest received from mvestmg activities The fourth section deals with cash flows from capital and related financmg act1v1t1es Tlus sect10n deals with the cash used for the acqms1t1on and construct10n of capital and related items The fifth section reconciles the net cash used to the operatmg mcome or loss reflected on the Statement of Revenues, Expenses and Changes m Net Assets Cash Flows for the Year Ended June 30, 2002, Condensed (thousands of dollars) Cash Provided (Used) By Operatmg Act1v1tles Non-Capital Fmancmg Actlvltles Investmg Act1v1tles Capital and Related Fmancmg Activities $ -50,107 49,384 118 -2,697 Net Change m Cash Cash, Begmmng of Year S -3,302 9,858 Cash, End of Year $ 6.551; Capital Assets Georgia Penmetcr College completed construction of the Gwmnett Umvers1ty Center bmldmg m fiscal year 2002 For add1t1onal mformat1on concemmg Capital Assets, see Notes 1,5, 7, 8, and 9 m the notes to the financial statements Economic Outlook The adm1mstrat1on 1s not aware of any currently known facts dec1s1ons, or conditions that are expected to have a s1gmficant effect on the financial pos1t1on or results of operations dunng this fiscal year beyond those unknown vanatlons havmg a global effect on virtually all types ofbusmess operations. The College's overall financial position 1s strong The College ant1c1pated the current fiscal year will be much hke last and will mamtam a close watch over resources to mamtam the College's ab1hty to react to unknown mtemal and external issues Jacquelyn M Belcher, President Georgia Penmeter College -7- BASIC FINANCIAL STATEMENTS -9 - GEORGIA PERIMETER COLLEGE STATEMENT OF NET ASSETS JUNE 30 2002 ~ Current Assets Cash and Cash EqUTValents ShortTenn Investments Accounts Receivable Net Federal Fcnanaal Assistance Other Prepaid ttems Inventories Total Current Assets Nonament Assets Cash end Cash Equrvatents Investments Notes ReatlVSble, Net Capital Assets, Net (See Note 5/ Total Noncurrent Assets Totel Assets LIABILITIES Current UatxlltJes Comracts Payable Salanes Payable PayroD Wllhhold1ngs Accounts Payable Deferred Revenue Funds Hold for Others Capital Leases Compensated Absences Total Current l.Jabdrties Noncurrent l.Jablhbe5 Capital Leases Compensated Absences Total NonCJrrent l.Jab1htles Total Liab1trtJes NET ASSETS Invested m Capital Assets Net of Related Debt Restncted for Nonexpendable Expendable Unrestnded Total Net Assets See Independent Accountant's Combmed Report on Review of Basic Fmancaal Statements and Supplementary Information The notes to the finanaal statements are an integral part of this statement - 11 - EXHIBIT"A" s 6,540,029 35 6,026,657 87 1,667,799 85 4 908,594 59 501,447 28 181 691 30 $ 19,826,220 24 $ 16,338 39 33 812 42 15,11099 90,622,41!1 76 s 90,687,743 56 $ 110 513 963 80 s 74,954 97 204,369 73 245,981 78 2,575,269 38 5 772 210 98 492,776 88 366 233 28 1 259 177 58 $ 10,990,974 58 $ 15,113,130 98 884 026 63 s 15 997 157 61 s 26,988,13219 s 75,143,117 50 38 740 22 1,576,590 33 6 767 383 56 s 83,525,831 61 GEORGIA PERIMETER COLLEGE STATEMENT QF REVENUES ExeENSES AND CHANGES IN NET ASSETS YEAR ENPEP JUNE 30 2002 EXHIBIT "B" OPERATING REVENUES Student Tulbon and Fees Lesa Scholarstup Allowances Grants and Contntcts Federal State Nongoyemmantal -Rents and Royalt1n Sales and SeMCeS of Educabclllal Departments AuXl~ary Enterpnaes Food SeMCeS Intercollegiate Athletics Other Orgamzabons Other Operabng Revenuea Tola.I Operabng Revenues OPERATING EXPENSES Salaries Faculty Staff Employee Bensflts Other Panone.I SeMCeS Travel Scholarships and Fellowstups Ubhbes Supphea and Other Sel'VICeS Depreciation Total Operabng Expenses Operabng Income (LOIS) NONOPERATING REVENUES (EXPENSES) Stata Appropnabon.s Interest and Other Investment Income lnteroat Expense (Cap,tal Assets) Other Nonoperal.Jng Revenues Net Nonoperabng Revenues Income Before Other Revenues Expenses, Gems or Losses Capital Grants and Gifts State lncreaae/(Decrease) 1n Net Alaeta NetAaHta Net Assets Begmmng or Year as Ongmally Reported Cumutative Effect of Changes m Accounting Pnnaple Net Aaaeta 8eg1M1ng of Year R&Stated Net Assets. Encl of Year See Independent Accountant's Combined Report on Review of Bask: Flnanclal Statements end Supplementary Information The notes to the finenaal statements ere an integral part of this statement 12 s 25 308 172 91 .3 309 430 01 10,423,345 21 239,800 24 18 971 OS 48 090 00 52 527 91 810 960 02 192815 849 905 70 147 099 36 360 124 es s 34 950 495 38 s 21 395 918 69 25 098 389 68 9 927 804 30 151,753 39 477,109 00 7 279 851 13 2 817,367 09 14,639 143 47 2 983 681 83 s 84 n1 018 58 s -49 820 523 19 s 4921138482 263,239 53 509,416 57 98 271 23 s 49 063 479 01 s 757,04-4 18 6 624 337 73 s 5 867 293 55 s 150 040 704 06 .72 382 166 00 s 77 658 538 06 s 83 525 831 61 GEORGIA PERIMETER COLL.EGE STATEMENT OE CASH FLOWS YEAR ENDED JUNE 30 2002 CASH FLOWS FROM OPERATING ACTMTIES TUlbon and Fees GrantaMd~ Sain and SaMc:H of Educabonal DepartrnMm Payments to Suppien, PoymontatoEm- Payments for Scholarshlp1 and Febnl'up:s -~ Loans LUued to Studants and Employees Calac:bon of Loans to Students and Ernplo)'N1 Au~ Enterprise Cha,ves Food Servk::H lntercoleglate Atttlebca Other Organlutlon Other Receipts (Payments) Not Cuh PreS CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES SlataApprnp""1>cna IYJenc'f Funds TranMICbona Other Nouope,abng Recelpta Not Cuh F - l'nMdod (Uoed) by - Fmanang ActMbeo CASH FLOWS FROM CAPfTAL ANO RELATED FINANCING ACTMTIES Caprtal Granta and Gifts RltCelYed Purchue of Capital Auetl Pnnapal Paid on Caprtal Debt and Lease Interest Paid on Capital Debi and Leue Net Cah Provided (Used) by Capital and Relatad Fmanang ActMtla CASH FLOWS FROM INVESTING ACTMTIES lntarest on Investments Pa.chauoflnvetU'l'lenta Net Cash Provided (Used) by tnvffbng lv::bvdles Nat lncrtt,H&'(O.C,UN) u, Cuh Caah and Caah Equrvalentl - June 30 2001 Leu Short-Tenn Investments CUh and Cash Equivalents - s.gtnnmg ol Year Cash and Cuh EquMtlenb - End ol Year RECONCILIATION OF OPERATING LOSS TO NET CASH PROvtDED (USED) BY OPERATING ACTMTIES Opsallng Income (Lou) Ad,Justmianta to ReconCN Net Income (Lou) to Net Cuh Prov- (UNd) by ()pmatlng - - Depredat,on ,-_--Change 1n Aa9eb and L&abfllbel Accooot1 RecetV&bea Net Notn Recervabla Net Account3Peyab6e Salann Payable Pay,olDeferred Rewnue Compenaated Abaences Net Cuh Pr