Georgia Perimeter College, Decatur, Georgia, annual financial report for the fiscal year ended June 30, 2012 including independent auditor's report

GPC 2012

Annual Financial Report

For the Fiscal Year Ended June 30, 2012
Including Independent Auditor's Report

GPC Annual Financial Report 1

9/28/12 1:42 PM

GEORGIA PERIMETER COLLEGE - TABLE OF CONTENTS -

SECTION I
FINANCIAL
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
REQUIRED SUPPLEMENTARY INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
BASIC FINANCIAL STATEMENTS
EXHIBITS
A STATEMENT OF NET ASSETS
B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
C STATEMENT OF CASH FLOWS
D NOTES TO THE FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
SCHEDULES
1 BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND 2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT
(NON-GAAP BASIS) BUDGET FUND 3 STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET
BY PROGRAM AND FUNDING SOURCE (NON-GAAP BASIS) BUDGET FUND
4 STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE (NON-GAAP BASIS) BUDGET FUND
5 BUDGET TO GAAP RECONCILIATION 6 RECONCILIATION OF SALARIES AND TRAVEL

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GEORGIA PERIMETER COLLEGE - TABLE OF CONTENTS -
SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTION III CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SECTION IV MANAGEMENT'S RESPONSES SCHEDULE OF MANAGEMENT'S RESPONSES

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
December 14, 2012

Honorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the Board of Regents of the University System of Georgia
and Honorable Rob Watts, Interim President Georgia Perimeter College
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying basic financial statements (Exhibits A through D) of Georgia Perimeter College, a unit of the University System of Georgia, which is an organizational unit of the State of Georgia, as of and for the year ended June 30, 2012. These financial statements are the responsibility of the Georgia Perimeter College's management. Our responsibility is to express an opinion on these financial statements based on our audit.
Except as discussed in the following paragraph, we conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of College's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In accordance with section 50-6-1(c) of the Official Code of Georgia Annotated, Greg S. Griffin was appointed State Auditor on July 1, 2012. During the year under review, Mr. Griffin served as the State Accounting Officer. As the State Accounting Officer, Mr. Griffin was responsible for the State's accounting and financial reporting practices.
In our opinion, the basic financial statements referred to above present fairly, in all material respects, the respective financial position of Georgia Perimeter College as of June 30, 2012, and the respective changes in financial position and cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.

12ARL-62

As discussed in Note 1, the financial statements of Georgia Perimeter College are intended to present the financial position and changes in financial position and cash flows of only that portion of the business-type activities of the State of Georgia that is attributable to the transactions of Georgia Perimeter College. They do not purport to, and do not, present fairly the financial position of the State of Georgia as of June 30, 2012, the changes in its financial position or its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis on pages i through vi be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consists of inquires of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements of Georgia Perimeter College taken as a whole. The accompanying supplementary information (Schedules 1 through 6) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting or other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
Respectfully,

GSG:as 12ARL-62

Greg S. Griffin State Auditor

REQUIRED SUPPLEMENTARY INFORMATION

GEORGIA PERIMETER COLLEGE
Management's Discussion and Analysis

Introduction
Georgia Perimeter College is one of the 35 institutions of higher education of the University System of Georgia. The College operates five campuses located along the major access corridors of metropolitan Atlanta. Georgia Perimeter College was founded by the DeKalb County Board of Education in 1964 and later became a state College in 1986. Georgia Perimeter College is the largest two year college and the third largest institution in the University System of Georgia. Georgia Perimeter College enrolls more freshmen, provides more transferring students to other colleges and universities, and offers more online courses than any other institution in the state. The Institution continues to grow as shown by the comparison figures that follow.

Faculty

Students (Headcount)

Students (FTE)

Fiscal Year 2012 Fiscal Year 2011 Fiscal Year 2010

665

26,996

20,466

628

25,113

19,014

579

24,549

18,795

Georgia Perimeter College is used as the name of the Institution throughout the Annual Financial Report. In its May 8-9, 2012, meeting, the Board of Regents changed the name of the Institution to Georgia Perimeter State College. However, at the August 7-8, 2012, meeting, the Board rescinded its action in changing the name and returned the name to Georgia Perimeter College. To avoid confusion, only the one name, Georgia Perimeter College, is used in this report.
Overview of the Financial Statements and Financial Analysis

Georgia Perimeter College is proud to present its financial statements for fiscal year 2012. The emphasis of discussions 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 in Net Assets; and the Statement of Cash Flows. This discussion and analysis of the College's financial statements provides an overview of its financial activities for the year. Comparative data is provided for fiscal year 2012 and fiscal year 2011.

Statement of Net Assets

The Statement of Net Assets presents the assets, liabilities, and net assets of the College as of the end of the fiscal year. The Statement of Net Assets is a point of time financial statement. The purpose of the Statement of Net Assets is to present to the readers of the financial statements a fiscal snapshot of Georgia Perimeter College. The Statement of Net Assets presents end-of-year data concerning Assets (current and noncurrent), Liabilities (current and noncurrent), and Net Assets (assets minus liabilities). The difference between current and noncurrent assets will be discussed in the Notes to the Financial Statements.

From the data presented, readers of the Statement of Net Assets are able to determine the assets available to continue the operations of the institution. They are also able to determine how much the institution owes vendors.

i

Finally, the Statement of Net Assets provides a picture of the net assets (assets minus liabilities) and their availability for expenditure by the institution. Net assets are divided into three major categories. The first category, invested in capital assets, net of debt, provides the institution's equity in property, plant and equipment owned by the institution. The next asset category is restricted net assets, which is divided into two categories, nonexpendable and expendable. The corpus of nonexpendable restricted resources is only available for investment purposes. Expendable restricted 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 restrictions on the use of the assets. The final category is unrestricted net assets. Unrestricted net assets are available to the institution for any lawful purpose of the institution.

Statement of Net Assets, Condensed

June 30, 2012

June 30, 2011*

Assets Current Assets Capital Assets, Net Other Assets

$ 11,840,842 163,963,710 44,705

$ 10,222,415 170,789,694 1,045,176

Total Assets

$ 175,849,257

$ 182,057,285

Liabilities Current Liabilities Noncurrent Liabilities

$ 17,722,299 79,434,517

$ 14,648,386 80,711,681

Total Liabilities

$ 97,156,816

$ 95,360,067

Net Assets Invested in Capital Assets, Net of Debt Restricted - Nonexpendable Restricted - Expendable Restricted - Capital Projects Unrestricted

$ 84,838,082 31,338
121,906
-6,298,885

$ 90,918,866 26,074
-224,278 526,684 -4,550,128

Total Net Assets

$ 78,692,441

$ 86,697,218

* Restatement is not reflected in amounts as of June 30, 2011. See Note 1.
The total assets decreased by $6,208,028. A review of the Statement of Net Assets will reveal that the decrease was primarily due to a decrease of $6,825,984 in the category of Capital Assets, Net. This decrease is the net effect of current year asset additions, retirements and depreciation.

The total liabilities increased for the year by $1,796,749. The combination of the decrease in total assets of $6,208,028 and the increase in total liabilities of $1,796,749 yields a decrease in total net assets of $8,004,777. The decrease in total net assets is primarily in the category of Invested in Capital Assets, Net of Debt, in the amount of $6,080,784.
Statement of Revenues, Expenses and Changes in Net Assets

Changes in total net assets as presented on the Statement of Net Assets are based on the activity presented in the Statement of Revenues, Expenses and Changes in Net Assets. The purpose of the statement is to present the revenues received by the institution, both operating and nonoperating,

ii

and the expenses paid by the institution, operating and nonoperating, and any other revenues, expenses, gains and losses received or spent by the institution. Generally speaking operating revenues are received for providing goods and services to the various customers and constituencies of the institution. Operating expenses are those expenses paid to acquire or produce the goods and services provided in return for the operating revenues, and to carry out the mission of the institution. Nonoperating revenues are revenues received for which goods and services are not provided. For example state appropriations are nonoperating because they are provided by the Legislature to the institution without the Legislature directly receiving commensurate goods and services for those revenues.
Statement of Revenues, Expenses and Changes in Net Assets, Condensed

June 30, 2012

June 30, 2011*

Operating Revenues Operating Expenses

$ 63,462,523 184,948,597

$ 59,745,850 168,480,441

Operating Loss

$ -121,486,074

$ -108,734,591

Nonoperating Revenues and Expenses

115,769,063

102,253,133

Income (Loss) Before Other Revenues, Expenses, Gains or Losses

$ -5,717,011

$ -6,481,458

Other Revenues, Expenses, Gains or Losses

215,944

1,796,666

Decrease in Net Assets

$ -5,501,067

$ -4,684,792

Net Assets at Beginning of Year, as Originally Reported

$ 86,697,218

$ 91,382,010

Prior Year Adjustments

-2,503,710

Net Assets at Beginning of Year, Restated

$ 84,193,508

$ 91,382,010

Net Assets at End of Year

$ 78,692,441

$ 86,697,218

* Restatement is not reflected in amounts as of June 30, 2011. See Note 1.

The Statement of Revenues, Expenses and Changes in Net Assets reflects a decrease in the net assets at the end of the year. A summary of the information presented on the Statement of Revenues, Expenses and Changes in Net Assets are as follows:

iii

Revenue by Source For the Years Ended June 30, 2012 and June 30, 2011

June 30, 2012

June 30, 2011

Operating Revenue

Tuition and Fees

$

Grants and Contracts

Sales and Services of Educational Departments

Auxiliary

Other

50,644,209 3,158,887 473,718 8,775,339 410,370

$ 45,067,999 2,346,821 4,204,301 7,805,011 321,718

Total Operating Revenue

$ 63,462,523

$ 59,745,850

Nonoperating Revenue State Appropriations Grants and Contracts Gifts Investment Income Other

$ 59,707,745 59,543,093 633,779 8,828 -241,328

$ 52,190,921 54,607,009
10,763 -1,522,048

Total Nonoperating Revenue

$ 119,652,117

$ 105,286,645

Capital Grants and Gifts State

$

215,944

$

1,796,666

Total Revenues

$ 183,330,584

$ 166,829,161

Expenses (By Functional Classification) For the Years Ended June 30, 2012 and June 30, 2011

June 30, 2012

June 30, 2011

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

$ 62,698,331 40,000 50,004
21,268,174 18,266,359 21,937,057 20,488,881 35,102,559
5,097,232

$ 58,373,617
5,126 15,366,109 17,179,632 21,354,977 10,461,745 34,531,886 11,207,349

Total Operating Expenses
Nonoperating Expenses Interest Expense (Capital Assets)

$ 184,948,597 3,883,054

$ 168,480,441 3,033,512

Total Expenses

$ 188,831,651

$ 171,513,953

iv

Operating revenues increased by $3,716,673 in fiscal year 2012 due to record fall and spring term enrollment.
Nonoperating revenues increased $14,365,472 for the year primarily due to increases in State Appropriations and Federal Grants and Contracts revenue.
The compensation and employee benefits category increased by $6,495,934 and primarily affected the Instruction, Academic Support and Student Services categories. The increase reflects the addition of faculty members, an increased cost of health insurance for the employees of the institution and separation costs related to a reduction in force that occurred late in the fiscal year.
The supplies and other services expense increased by $9,031,940, primarily affecting Plant Operations and Maintenance category. This category was unusually low in the prior year due to a correction for capitalized expenditures.
Statement of Cash Flows
The final statement presented by the Georgia Perimeter College is the Statement of Cash Flows. The Statement of Cash Flows presents detailed information about the cash activity of the institution during the year. The statement is divided into five parts. The first part deals with operating cash flows and shows the net cash used by the operating activities of the institution. The second section reflects cash flows from noncapital financing activities. This section reflects the cash received and spent for nonoperating, noninvesting, and noncapital financing purposes. The third section deals with cash flows from capital and related financing activities. This section deals with the cash used for the acquisition and construction of capital and related items. The fourth section reflects the cash flows from investing activities and shows the purchases, proceeds, and interest received from investing activities. The fifth section reconciles the net cash used to the operating income or loss reflected on the Statement of Revenues, Expenses and Changes in Net Assets.
Cash Flows for the Years Ended June 30, 2012 and 2011, Condensed

June 30, 2012

June 30, 2011

Cash Provided (Used) By: Operating Activities Noncapital Financing Activities Capital and Related Financing Activities Investing Activities

$

-109,583,758

119,935,777

-8,013,177

8,827

$

-92,479,216

104,357,379

-19,413,192

10,974

Net Change in Cash

$

2,347,669

$

-7,524,055

Cash, Beginning of Year

4,889,748

12,413,804

Cash, End of Year Capital Assets

$

7,237,417

$

4,889,749

The College completed $2,199,455 in building improvement projects at four of its campuses. In addition, $1,693,304 in facilities improvement projects were completed. These included security and lighting improvements at the Clarkston, Dunwoody and Decatur campuses and renovation of the Decatur campus gym.

v

Georgia Perimeter College is in the design stages of a new academic building on the Decatur campus. This project is being funded by the Georgia State Financing and Investment Commission (GSFIC) and will not be reflected in the College's financial statements until its completion which is anticipated to be in fiscal year 2015. For additional information concerning Capital Assets, see Notes 1, 5, 7, and 9 in the Notes to the Financial Statements. Long-Term Liabilities Georgia Perimeter College had Long-Term Liabilities of $82,799,813 of which $3,365,296 was reflected as current liability at June 30, 2012. For additional information concerning Long-Term Liabilities, see Notes 1 and 7 in the Notes to the Financial Statements. Economic Outlook The College is taking actions to reestablish operating reserves, after multiple years of balancing increased costs against decreased state funding. This includes a renewed focus on the College's primary mission as a two-year access institution and emphasis on maintaining enrollment and increasing retention and graduation rates. The College anticipates that fiscal year 2013 will show significant financial improvement over fiscal year 2012. The College will maintain a close watch over both resources and expenses. The College will draft plans for unforeseen contingencies in fiscal year 2013 and for the strategic investments needed in fiscal year 2014, when the revenues available should permit them.
Mr. Robert Watts, Interim President Georgia Perimeter College
vi

BASIC FINANCIAL STATEMENTS - 1 -

GEORGIA PERIMETER COLLEGE STATEMENT OF NET ASSETS JUNE 30, 2012
ASSETS
Current Assets Cash and Cash Equivalents Accounts Receivable, Net (Note 3) Receivables - Federal Financial Assistance Receivables - Other Inventories (Note 4) Prepaid Items
Total Current Assets
Noncurrent Assets Noncurrent Cash Short-Term Investments Capital Assets, Net (Note 5)
Total Noncurrent Assets
Total Assets
LIABILITIES
Current Liabilities Accounts Payable Salaries Payable Contracts Payable Deferred Revenue (Note 6) Other Liabilities Deposits Held for Other Organizations Lease Purchase Obligations Compensated Absences
Total Current Liabilities
Noncurrent Liabilities Lease Purchase Obligations Compensated Absences
Total Noncurrent Liabilities
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Restricted for:
Nonexpendable Expendable Unrestricted (Deficit)
Total Net Assets
The notes to the financial statements are an integral part of this statement.
- 2 -

EXHIBIT "A"

$

7,211,006

463,480 3,827,055
142,111 197,190

$

11,840,842

$

26,411

18,294

163,963,710

$

164,008,415

$

175,849,257

$

5,703,953

1,650,549

87,031

6,073,101

164,417

677,952

1,183,845

2,181,451

$

17,722,299

$

77,941,783

1,492,734

$

79,434,517

$

97,156,816

$

84,838,082

31,338 121,906 -6,298,885

$

78,692,441

GEORGIA PERIMETER COLLEGE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
YEAR ENDED JUNE 30, 2012
OPERATING REVENUES
Student Tuition and Fees Less: Scholarship Allowances
Grants and Contracts Federal State Other
Sales and Services Rents and Royalties Auxiliary Enterprises
Bookstore Food Services 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 Income (Loss)
NONOPERATING REVENUES (EXPENSES)
State Appropriations Grants and Contracts
Federal Gifts Investment Income Interest Expense Other Nonoperating Expenses
Net Nonoperating Revenues
Income (Loss) Before Other Revenues, Expenses, Gains, or Losses
Capital Grants and Gifts State
Increase (Decrease) in Net Assets
Net Assets - Beginning of Year, Restated
Net Assets - End of Year
The notes to the financial statements are an integral part of this statement.
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EXHIBIT "B"

$

77,051,341

-26,407,132

1,801,417 1,135,794
221,676 473,718
26,280

1,332,926 132,212 487,443
1,991,576 4,831,182
384,090

$

63,462,523

$

40,240,138

49,010,813

23,861,697

536,958

832,666

36,439,609

3,803,994

22,738,088

7,484,634

$

184,948,597

$ -121,486,074

$

59,707,745

59,543,093 633,779 8,828
-3,883,054 -241,328

$

115,769,063

$

-5,717,011

215,944

$

-5,501,067

84,193,508

$

78,692,441

GEORGIA PERIMETER COLLEGE STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Grants and Contracts Sales and Services Payments to Suppliers Payments to Employees Payments for Scholarships and Fellowships Collection of Loans to Students and Employees Auxiliary Enterprise Charges: Bookstore Food Services Health Services Intercollegiate Athletics Other Organizations Other Receipts (Payments)
Net Cash Provided (Used) by Operating Activities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations Agency Funds Transactions Gifts and Grants Received for Other than Capital Purposes Other Nonoperating Revenues
Net Cash Flows Provided (Used) by Noncapital Financing Activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Grants and Gifts Received Proceeds from Sale of Capital Assets Purchases of Capital Assets Principal Paid on Capital Debt and Leases Interest Paid on Capital Debt and Leases
Net Cash Provided (Used) by Capital and Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES Interest on Investments Purchase of Investments
Net Cash Provided (Used) by Investing Activities
Net Increase (Decrease) in Cash
Cash and Cash Equivalents - Beginning of Year
Cash and Cash Equivalents - End of Year
RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating Income (Loss) Adjustments to Reconcile Operating Income (Loss) to Net Cash
Provided (Used) by Operating Activities Depreciation Change in Assets and Liabilities: Accounts Receivable, Net Inventories Prepaid Items Notes Receivable, Net Accounts Payable Deferred Revenue Other Liabilities Compensated Absences
Net Cash Provided (Used) by Operating Activities
NONCASH ACTIVITY Fixed Assets Acquired by Incurring Capital Lease Obligations
The notes to the financial statements are an integral part of this statement.
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EXHIBIT "C"

$

51,308,732

5,942,144

473,718

-51,455,957

-88,467,300

-36,439,609

2,211

905,800 138,677 521,122 2,337,810 4,626,240 522,654

$ -109,583,758

$

59,707,745

44,126

60,176,872

7,034

$

119,935,777

$

215,944

2,607

-3,190,974

-1,157,700

-3,883,054

$

-8,013,177

$

8,828

-1

$

8,827

$

2,347,669

4,889,748

$

7,237,417

$ -121,486,074
7,484,634
2,147,271 2,766
-192,239 2,211
2,308,209 1,517,393 -1,264,382
-103,547
$ -109,583,758

$

412,500

GEORGIA PERIMETER COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2012

EXHIBIT "D"

Note 1. Summary of Significant Accounting Policies
Nature of Operations Georgia Perimeter College serves the state and national communities by providing its students with academic instruction that advances fundamental knowledge, and by disseminating knowledge to the people of Georgia and throughout the country.
Reporting Entity Georgia Perimeter College is one of thirty-five (35) 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 Georgia Perimeter College 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. Georgia Perimeter College does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Georgia Perimeter College 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.
Legally separate, tax exempt Affiliated Organizations whose activities primarily support units of the University System of Georgia, which are organizational units of the State of Georgia, are considered potential Component Units of the State. See Note 15 for additional information.
Financial Statement Presentation The financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) as prescribed by the GASB and are presented as required by these standards to provide a comprehensive, entity-wide perspective of the College's assets, liabilities, net assets, revenues, expenses, changes in net assets and cash flows.
Generally Accepted Accounting Principles (GAAP) requires that the reporting of summer school revenues and expenses be between fiscal years rather than one fiscal year. Georgia Perimeter College calculates this split based on the academic calendar of days taught.
Basis of Accounting For financial reporting purposes, the College is considered a special-purpose government engaged only in business-type activities. Accordingly, the College's financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. All significant intra-College transactions have been eliminated.
The College has the option to apply all Financial Accounting Standards Board (FASB) pronouncements issued after November 30, 1989, unless FASB conflicts with GASB. The College has elected to not apply FASB pronouncements issued after the applicable date.

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GEORGIA PERIMETER COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2012

EXHIBIT "D"

Cash and Cash Equivalents Cash and Cash Equivalents consist of petty cash, demand deposits and time deposits in authorized financial institutions, and cash management pools that have the general characteristics of demand deposit accounts. This includes the State Investment Pool.
Short-Term Investments Short-Term Investments consist of investments of 90 days 13 months. This would include certificates of deposits or other time restricted investments with original maturities of six months or more when purchased. Funds are not readily available and there is a penalty for early withdrawal.
Accounts Receivable Accounts receivable consists of tuition and fees charged to students and auxiliary enterprise services provided to students, faculty and staff, the majority of each residing in the State of Georgia. Accounts receivable also includes amounts due from the Federal government, state and local governments, or private sources, in connection with reimbursement of allowable expenditures made pursuant to the College's grants and contracts. Accounts receivable are recorded net of estimated uncollectible amounts.
Inventories Consumable supplies are carried at the lower of cost or market on the first-in, first-out ("FIFO") basis.
Noncurrent Cash and Investments Cash and investments that are externally restricted and cannot be used to pay current liabilities are classified as noncurrent assets in the Statement of Net Assets.
Capital Assets Capital assets are recorded at cost at the date of acquisition, or fair market value at the date of donation in the case of gifts. For equipment, the College's capitalization policy includes all items with a unit cost of $5,000 or more, and an estimated useful life of greater than one year. Renovations to buildings, infrastructure, and land improvements that exceed $100,000 and/or significantly increase the value or extend the useful life of the structure are capitalized. Routine repairs and maintenance are charged to operating expense in the year in which the expense was incurred. Depreciation, which also includes amortization of intangible assets such as water, timber, and mineral rights, easements, patents, trademarks, and copyrights, as well as software is computed using the straight-line method over the estimated useful lives of the assets, generally 40 to 60 years for buildings, 20 to 25 years for infrastructure and land improvements, 10 years for library books, and 3 to 20 years for equipment. Residual values will generally be 10% of historical costs for infrastructure, buildings and building improvements, and facilities and other improvements.
To obtain the total picture of plant additions in the University System, it is necessary to look at the activities of the Georgia State Financing and Investment Commission (GSFIC) an organization that is external to the System. GSFIC issues bonds for and on behalf of the State of Georgia, pursuant to powers granted to it in the Constitution of the State of Georgia and the Act creating the GSFIC. The bonds so issued constitute direct and general obligations of the State of Georgia, to the payment of which the full faith, credit and taxing power of the State are pledged.
For projects managed by GSFIC, the GSFIC retains construction in progress on its books throughout the construction period and transfers the entire project to the College when complete. For projects managed by the College, the College retains construction in progress on its books and is reimbursed by GSFIC. For the year ended June 30, 2012, GSFIC did not transfer any capital additions to Georgia Perimeter College.

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GEORGIA PERIMETER COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2012

EXHIBIT "D"

Deferred Revenues Deferred revenues include amounts received for tuition and fees and certain auxiliary activities prior to the end of the fiscal year but related to the subsequent accounting period. Deferred revenues also include amounts received from grant and contract sponsors that have not yet been earned.

Compensated Absences Employee vacation pay is accrued at year-end for financial statement purposes. The liability and expense incurred are recorded at year-end as compensated absences in the Statement of Net Assets, and as a component of compensation and benefit expense in the Statement of Revenues, Expenses and Changes in Net Assets. Georgia Perimeter College had accrued liability for compensated absences in the amount of $4,228,013 as of July 1, 2011. For fiscal year 2012, $3,188,421 was earned in compensated absences and employees were paid $3,742,249, for a net decrease of $553,828. The ending balance as of June 30, 2012 in accrued liability for compensated absences was $3,674,185.

Noncurrent Liabilities Noncurrent liabilities include (1) liabilities that will not be paid within the next fiscal year; (2) capital lease obligations with contractual maturities greater than one year; and (3) other liabilities that, although payable within one year, are to be paid from funds that are classified as noncurrent assets.

Net Assets The College's net assets are classified as follows:
Invested in capital assets, net of related debt: This represents the College's total investment in capital assets, net of outstanding debt obligations 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 invested in capital assets, net of related debt. The term "debt obligations" as used in this definition does not include debt of the GSFIC as discussed previously in Note 1 Capital Assets section.
Restricted net assets - nonexpendable: Nonexpendable restricted net assets 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 College 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 net assets - expendable: Restricted expendable net assets include resources in which the College is legally or contractually obligated to spend resources in accordance with restrictions imposed by external third parties.

Expendable Restricted Net Assets include the following:

Restricted - E&G and Other Organized Activities

$

35,960

Federal Loans

17,543

Institutional Loans

56,992

Quasi-Endowments

11,411

Total Restricted Expendable

$

121,906

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GEORGIA PERIMETER COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2012

EXHIBIT "D"

Unrestricted net assets: Unrestricted net assets represent resources derived from student tuition and fees, state appropriations, sales and services of educational departments and auxiliary enterprises. These resources are used for transactions relating to the educational and general operations of the College, and may be used at the discretion of the governing board to meet current expenses for those purposes, except for unexpended state appropriations (surplus) of $222,917.50. Unexpended state appropriations must be refunded to the Board of Regents of the University System of Georgia, University System Office for remittance to the Office of the State Treasurer. These resources also include auxiliary enterprises, which are substantially self-supporting activities that provide services for students, faculty and staff. On June 8, 2012, the College received a special allotment of $9,500,000 in State appropriated Funds from the Board of Regents University System Office to support operations.

Unrestricted Net Assets includes the following items which are quasi-restricted by management.

R & R Reserve Reserve for Encumbrances Reserve for Inventory Other Unrestricted

$

93,338

490,031

138,851

-7,021,105

Total Unrestricted Net Assets

$

-6,298,885

When an expense is incurred that can be paid using either restricted or unrestricted resources, the College's policy is to first apply the expense towards unrestricted resources, and then towards restricted resources.
Income Taxes Georgia Perimeter College, as a political subdivision of the State of Georgia, is excluded from Federal income taxes under Section 115(1) of the Internal Revenue Code, as amended.
Classification of Revenues and Expenses The Statement of Revenues, Expenses and Changes in Net Assets classify fiscal year activity as operating and nonoperating according to the following criteria:
Operating Revenues: Operating revenue includes activities that have the characteristics of exchange transactions, such as (1) student tuition and fees, net of scholarship allowances, (2) certain federal, state and local grants and contracts, and (3) sales and services.
Nonoperating Revenues: Nonoperating revenue includes activities that have the characteristics of nonexchange transactions, such as gifts and contributions, and other revenue sources that are defined as nonoperating revenue by GASB No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting, and GASB No. 34, such as state appropriations and investment income.
Operating Expenses: Operating expense includes activities that have the characteristics of exchange transactions.
Nonoperating Expenses: Nonoperating expense includes activities that have the characteristics of nonexchange transactions, such as capital financing costs and costs related to investment activity.

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GEORGIA PERIMETER COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2012

EXHIBIT "D"

Scholarship Allowances Student tuition and fee revenues, and certain other revenues from students, are reported at gross with a contra revenue account of scholarship allowances in the Statement of Revenues, Expenses and Changes in Net Assets. Scholarship allowances are the difference between the stated charge for goods and services provided by the College, and the amount that is paid by students and/or third parties making payments on the students' behalf. Certain governmental grants, such as Pell grants, and other Federal, state or nongovernmental programs are recorded as either operating or nonoperating revenues in the College's financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the College has recorded contra revenue for scholarship allowances.
Restatement of Prior Year Net Assets Georgia Perimeter College has a restatement of prior year net assets decreasing beginning net assets by $2,503,710 based on an analysis of Capital Assets completed during fiscal 2012. The adjustment is comprised of:

Prior Year Depreciation Expense, Understated

$

-2,671,867

Prior Year Library Collections, Understated

168,157

Total Prior Year Adjustment Note 2. Deposits and Investments

$

-2,503,710

Deposits The custodial credit risk for deposits is the risk that in the event of a bank failure, the College's deposits may not be recovered. Funds belonging to the State of Georgia (and thus the College) 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 50-17-59:

1. Bonds, bills, notes, certificates of indebtedness, or other direct obligations of the United States or of the State of Georgia.

2. Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia.

3. Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose.

4. Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia.

5. Bonds, bills, certificates of indebtedness, notes or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association and the Federal National Mortgage Association.

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GEORGIA PERIMETER COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2012

EXHIBIT "D"

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, 2012, the carrying value of deposits was $4,065,332 and the bank balance was $4,577,251. Of the College's deposits, $4,555,838 was uninsured. Of these uninsured deposits, $4,555,838 was collateralized with securities held by the financial institution, by its trust department or agency, but not in the College's name.
Investments At June 30, 2012, the carrying value of the College's investments was $3,155,879, which is materially the same as fair value. These investments were comprised entirely of funds invested in the Office of the State Treasurer investment pool as follows:

Investment Pools Office of the State Treasurer Georgia Fund 1

$

3,155,879

The Georgia Fund 1 Investment Pool, managed by the Office of the State Treasurer, is not registered with the Securities and Exchange Commission as an investment company, but does operate in a manner consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940. This investment is valued at the pool's share price, $1.00 per share. The Georgia Fund 1 Investment Pool is an AAAm rated investment pool by Standard and Poor's. The Weighted Average Maturity of the Fund is 48 days.

Interest Rate Risk Interest rate risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of an investment. The College does not have a formal policy for managing interest rate risk.

Credit Quality Risk Credit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The College does not have a formal policy for managing credit quality risk.

Note 3. Accounts Receivable

Accounts receivable consisted of the following at June 30, 2012:

Student Tuition and Fees

$

Auxiliary Enterprises and Other Operating Activities

Federal Financial Assistance

Due from Affiliated Organizations

Other

3,095,980 325,371 463,480 233,081
1,540,319

Less Allowance for Doubtful Accounts

$

5,658,231

1,367,696

Net Accounts Receivable

$

4,290,535

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GEORGIA PERIMETER COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2012

EXHIBIT "D"

Note 4. Inventories

Inventories consisted of the following at June 30, 2012:

Physical Plant Note 5. Capital Assets

$

142,111

Following are the changes in capital assets for the year ended June 30, 2012:

Beginning Balance July 1, 2011 (Restated)

Additions

Reductions and
Reclassifications

Ending Balance June 30, 2012

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

$

5,022,604

2,663,274 $

370,222 $

$ 2,663,274

5,022,604 370,222

Total Capital Assets, Not Being Depreciated $

7,685,878 $

370,222 $

2,663,274 $

5,392,826

Capital Assets, Being Depreciated: Infrastructure Building and Building Improvements Facilities and Other Improvements Equipment Capital Leases Library Collections Capitalized Collections

$

0

117,164,604 $

10,729,618

13,302,557

79,580,508

13,899,343

0

$ 2,199,455 1,693,304
887,519 412,500 511,209
2,600

-3,312,198 $ 371,419
3,312,198 308,013
488,873

3,312,198 118,992,640
9,110,724 13,882,063 79,993,008 13,921,679
2,600

Total Assets Being Depreciated

$ 234,676,630 $

5,706,587 $

1,168,305 $ 239,214,912

Less: Accumulated Depreciation: Infrastructure Building and Building Improvements Facilities and Other Improvements Equipment Capital Leases Library Collections Capitalized Collections

$

272,003 $

44,188,101

2,905,636

10,229,657

5,747,743

10,733,384

0

146,247 $ 3,239,571
293,071 956,141 2,218,242 631,335
27

-13,674 $ 79,220 13,674 349,037
488,873

431,924 47,348,452
3,185,033 10,836,761
7,965,985 10,875,846
27

Total Accumulated Depreciation

$

74,076,524 $

7,484,634 $

917,130 $

80,644,028

Total Capital Assets, Being Depreciated, Net $ 160,600,106 $

-1,778,047 $

251,175 $ 158,570,884

Capital Assets, Net

$ 168,285,984 $

-1,407,825 $

2,914,449 $ 163,963,710

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GEORGIA PERIMETER COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2012

EXHIBIT "D"

Note 6. Deferred Revenue Deferred revenue consisted of the following at June 30, 2012:

Prepaid Tuition and Fees Other Deferred Revenue

$

5,278,824

794,277

Total Deferred Revenue

$

6,073,101

Note 7. Long-Term Liabilities Long-Term liability activity for the year ended June 30, 2012 was as follows:

Beginning Balance July 1, 2011

Additions

Reductions

Ending Balance June 30, 2012

Current Portion

Leases Lease Obligations

$ 79,870,828 $

412,500 $ 1,157,700 $ 79,125,628 $ 1,183,845

Other Liabilities Compensated Absences

4,228,013

3,188,421

3,742,249

3,674,185

2,181,451

Total Long-Term Obligations

$ 84,098,841 $

Note 8. Significant Commitments

3,600,921 $

4,899,949 $ 82,799,813 $

3,365,296

The College had significant unearned, outstanding, construction or renovation contracts executed in the amount of $126,941 as of June 30, 2012. This amount is not reflected in the accompanying basic financial statements.
Note 9. Lease Obligations

Georgia Perimeter College 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.

CAPITAL LEASES

Capital leases are generally payable in installments ranging from monthly to annually and have terms expiring in various years between 2017 and 2035. Expenditures for fiscal year 2012 were $5,040,754 of which $3,883,054 represented interest. Total principal paid on capital leases was $1,157,700 for the fiscal year ended June 30, 2012. Interest rates range from 4.74 percent to 5.80 percent. The following is a summary of the carrying values of assets held under capital lease at June 30, 2012:

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GEORGIA PERIMETER COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2012

EXHIBIT "D"

Description

Buildings

$

Facilities and Other Improvements

Total Assets Held Under Capital Lease

at June 30, 2012

$

Outstanding

Net Assets Held

Balances

Under Capital

per Lease

Accumulated

Lease at

Schedules at

Gross Amount

Depreciation

June 30, 2012

June 30, 2012

(+)

(-)

(=)

79,580,508 $

-7,880,907 $ 71,699,601 $ 78,855,013

412,500

-85,078

327,422

270,615

79,993,008 $

-7,965,985 $ 72,027,023 $ 79,125,628

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.
Georgia Perimeter College has eight capital leases with Georgia Perimeter College Foundation, Inc., a related entity:
In June 2007, the College entered into a capital lease at $22,682,812 for an academic building on the Newton campus. The lease expires in May 2035 and the outstanding principal balance as of June 30, 2012 is $21,003,003.
In August 2008, the College entered into two capital leases for parking decks at the Clarkston and Dunwoody campuses at $8,281,580 and $8,436,012, respectively. The leases expire in May 2035 and the outstanding principal balances as of June 30, 2012 are $8,651,336 and $8,812,662, respectively.
In March 2009, the College entered into a capital lease at $6,015,435 for a student success center on the Clarkston campus. The lease expires in May 2035 and the outstanding principal balance as of June 30, 2012 is $6,112,061.
In April 2009, the College entered into a capital lease at $9,358,859 for a student success center on the Dunwoody campus. The lease expires in May 2035 and the outstanding principal balance as of June 30, 2012 is $9,471,428.
In May 2009, the College entered into a capital lease at $9,002,865 for a student success center on the Decatur campus. The lease expires in May 2035 and the outstanding principal balance as of June 30, 2012 is $9,074,825.
In August 2009, the College entered into a capital lease at $12,754,177 for a student learning center on the Newton campus. The lease expires in May 2035 and the outstanding principal balance as of June 30, 2012 is $12,704,756.
In September 2009, the College entered into a capital lease at $ 3,048,768 for an international center on the Clarkston campus. The lease expires in May 2035 and the outstanding principal balance as of June 30, 2012 is $3,024,942.
Georgia Perimeter College also has an equipment capital lease with a third party that expires in July, 2017. The outstanding principal balance at June 30, 2012 is $270,615.

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GEORGIA PERIMETER COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2012

EXHIBIT "D"

OPERATING LEASES
Georgia Perimeter College's noncancellable operating leases having remaining terms of more than one year expire in various fiscal years from 2013 through 2017. Certain operating leases provide for renewal options for periods from one to five years at their fair rental value at the time of renewal. All agreements are cancellable 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 office and storage space, copiers and other small business equipment.
FUTURE COMMITMENTS
Future commitments for capital leases (which here and on the Statement of Net Assets include other installment purchase agreements) and for noncancellable operating leases having remaining terms in excess of one year as of June 30, 2012, were as follows:

Real Property and Equipment

Capital

Operating

Leases

Leases

Year Ending June 30: 2013 2014 2015 2016 2017 2018 - 2022 2023 - 2027 2028 - 2032 2033 - 2035

$

5,148,891 $

5,233,539

5,317,750

5,402,659

5,493,087

28,642,603

31,143,611

33,949,144

20,955,346

1,103,367 994,928
1,024,719 1,055,354 1,086,913

Total Minimum Lease Payments

$ 141,286,630 $

5,265,281

Less: Interest Less: Executory Costs (if paid)

56,253,648 5,907,354

Principal Outstanding

$ 79,125,628

Georgia Perimeter College's fiscal year 2012 expense for rental of real property and equipment under operating leases was $1,220,132.

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GEORGIA PERIMETER COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2012

EXHIBIT "D"

Note 10. Retirement Plans
Georgia Perimeter College participates in various retirement plans administered by the State of Georgia under two major retirement systems: Employees' Retirement System of Georgia (ERS System) and Teachers Retirement System of Georgia. 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 system offices. The significant retirement plans that Georgia Perimeter College 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.
Employees' Retirement System of Georgia
The ERS System is comprised of individual retirement systems and plans covering substantially all employees of the State of Georgia except for teachers and other employees covered by the Teachers Retirement System of Georgia. One of the ERS System plans, the Employees' Retirement System of Georgia (ERS), is a cost-sharing multiple-employer defined benefit pension plan that was 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 and has the powers and privileges of a corporation. ERS acts pursuant to statutory direction and guidelines, which may be amended prospectively for new hires but for existing members and beneficiaries may be amended in some aspects only subject to potential application of certain constitutional restraints against impairment of contract.
On November 20, 1997, the Board created the Supplemental Retirement Benefit Plan (SRBP-ERS) of ERS. SRBP-ERS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of ERS. The purpose of the SRBP-ERS is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC Section 415. Beginning January 1, 1998, all members and retired former members in ERS are eligible to participate in the SRBP-ERS whenever their benefits under ERS exceed the limitation on benefits imposed by IRC Section 415.
The benefit structure of ERS is established by the Board of Trustees under statutory guidelines. Unless the employee elects otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July 1, 1982, is an "old plan" member subject to the 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 the modified plan provisions. Effective January 1, 2009, newly hired State employees, as well as rehired State employees who did not maintain eligibility for the "old" or "new" plan, are members of the Georgia State Employees' Pension and Savings Plan (GSEPS). Members of the GSEPS plan may also participate in the GSEPS 401(k) defined contribution component described below. ERS members hired prior to January 1, 2009, also have the option to irrevocably change their membership to the GSEPS plan.
Under the old plan, 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 a formula adopted by the Board of Trustees for such purpose. The formula considers the monthly average of the member's highest 24 consecutive calendar months of salary, the number of years of creditable service, and the member's

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GEORGIA PERIMETER COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2012

EXHIBIT "D"

age at retirement. Post-retirement cost-of-living adjustments may 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.

Member contribution rates are set by law. 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, Georgia Perimeter College pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these Georgia Perimeter College 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. Georgia Perimeter College is required to contribute at a specified percentage of active member payroll established by the Board of Trustees determined annually in accordance with actuarial valuation and minimum funding standards as provided by law. These Georgia Perimeter College contributions are not at any time refundable to the member or his/her beneficiary.

Employer contributions required for fiscal year 2012 were based on the June 30, 2009 actuarial valuation as follows:

Old Plan* New Plan GSEPS

11.63% 11.63%
7.42%

* 6.88% exclusive of contributions paid by the employer on behalf of old plan members
Members become vested after 10 years of service. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contributions; the member forfeits all rights to retirement benefits.

Teachers Retirement System of Georgia

The Teachers Retirement System of Georgia (TRS) is a cost-sharing multiple-employer defined benefit plan created in 1943 by an act of the Georgia General Assembly to provide retirement benefits for qualifying employees in educational service. A Board of Trustees comprised of active and retired members and ex-officio State employees is ultimately responsible for the administration of TRS.

On October 25, 1996, the Board created the Supplemental Retirement Benefit Plan of the Georgia Teachers Retirement System (SRBP-TRS). SRBP-TRS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of TRS. The purpose of SRBP-TRS is to provide retirement benefits to employees covered by TRS whose benefits are otherwise limited by IRC Section 415. Beginning July 1, 1997, all members and retired former members in TRS are eligible to participate in the SRBP-TRS whenever their benefits under TRS exceed the IRC Section 415 imposed limitation on benefits.

TRS provides service retirement, disability retirement, and survivor's benefits. The benefit structure of TRS is defined and may be amended by State statute. A member 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. A member is eligible for early retirement after 25 years of creditable service.

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GEORGIA PERIMETER COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2012

EXHIBIT "D"

Normal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 60 or by 7% for each year or fraction thereof by which the member has less than 30 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lump-sum distribution in addition to a reduced monthly retirement benefit. Death, disability and spousal benefits are also available.

Member contributions as adopted by the Board of Trustees for the fiscal year ended June 30, 2012, were 5.53% of annual salary. Employer contributions required for fiscal year 2012 were 10.28% of annual salary as required by the June 30, 2009, actuarial valuation.

The following table summarizes the Georgia Perimeter College employer contributions by defined

benefit plan for the years ended June 30, 2012, June 30, 2011, and June 30, 2010 (dollars in

thousands):

ERS

TRS

Required

Percentage

Required

Percentage

Fiscal Year

Contribution

Contributed Contribution

Contributed

2012

$

2011

$

2010

$

Regents Retirement Plan

15,329 13,890 11,324

100% 100% 100%

$ 5,151,893 $ 4,769,633 $ 4,188,588

100% 100% 100%

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 a principal administrator, as designated by the regulations of the Board of Regents. Under the Regents Retirement Plan, a plan participant may purchase annuity contracts from four approved vendors (AIG-VALIC, American Century, 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 Georgia Perimeter College 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 2012, the employer contribution was 9.24% for the participating employee's earnable compensation. Employees contribute 5% of their earnable compensation. Amounts attributable to all plan contributions are fully vested and nonforfeitable at all times.

Georgia Perimeter College and the covered employees made the required contributions of $2,331,330 (9.24%) and $1,263,169 (5%), respectively.

AIG-VALIC, American Century, Fidelity, and TIAA-CREF have separately issued financial reports which may be obtained through their respective corporate offices.
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GEORGIA PERIMETER COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2012

EXHIBIT "D"

Georgia Defined Contribution Plan
Plan Description Georgia Perimeter College participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employer defined contribution plan established by the General Assembly of Georgia for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia.
Benefits A member may retire and elect to receive periodic payments after attainment 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.
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 2012 amounted to $779,538 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 three different selfinsured healthcare plan options. Effective January 1, 2012, The Blue Cross Blue Shield of Georgia PPO and HDHP plan names were changed to BCBS Open Access PPO and HSA/HDHP Open Access POS, respectively; both plans will use the Blue Cross Blue Shield Open Access POS network. Also effective January 1, 2012, the Consumer Choice Option was eliminated and the Blue Cross Blue Shield of Georgia HMO and the Kaiser Permanente HMO were frozen for new enrollment for active employees only; the Senior Advantage Plan 65+ remained open for new enrollment.
Georgia Perimeter College and participating employees and retirees pay premiums to either of the self-insured healthcare plan options to access benefits coverage. The respective self-insured healthcare 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 these plans. 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, a wholly owned subsidiary of WellPoint, to serve as the claims administrator for the self-insured healthcare plan products. 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.

- 18 -

GEORGIA PERIMETER COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2012

EXHIBIT "D"

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. Georgia Perimeter College, 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.
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 Georgia Perimeter College expects such amounts, if any, to be immaterial to its overall financial position.
Litigation, claims and assessments filed against Georgia Perimeter College (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, 2012.
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 College pays

- 19 -

GEORGIA PERIMETER COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2012

EXHIBIT "D"

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 2012 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, 2012, there were 350 employees who had retired or were disabled that were receiving these post-employment health and life insurance benefits. For the year ended June 30, 2012, Georgia Perimeter College recognized as incurred $1,476,305 of expenditures, which was net of $608,303 participant contributions.
Note 14. Natural Classifications with Functional Classifications
The College's operating expenses by functional classification for fiscal year 2012 are shown below:

Functional Classification

Natural Classification

Instruction

Research

Public Service

Academic Support

Student Services

Salaries Faculty Staff
Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation

$ 35,460,177 8,223,821
10,406,349
263,614 359,995 109,494 5,809,008 $ 2,065,873

$ 40,000

$ 48,844

4,691,533 $ 9,298,700 2,805,298

34,321 12,129,536
3,379,390

1,160

169,905 3,455
67,206 3,353,816
878,261

223,140 225,981
37,993 2,214,724
21,274

Total Operating Expenses

$ 62,698,331 $

40,000 $

50,004 $ 21,268,174 $ 18,266,359

Natural Classification

Institutional Support

Functional Classification

Plant Operations Scholarships

and

and

Auxiliary

Maintenance

Fellowships Enterprises

Total Operating Expenses

Salaries Faculty Staff
Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation

$ 9,264,613 $ 4,187,188 536,958 98,311 95 459,030 6,204,905 1,185,957

9,063,113 2,863,039
-110,695 22,797 $
3,107,994 4,220,930 1,321,703

$ 35,102,559

54,107 $ 982,186 220,433 110,695
54,899 747,524
22,277 893,545 2,011,566

40,240,138 49,010,813 23,861,697
536,958 832,666 36,439,609 3,803,994 22,738,088 7,484,634

Total Operating Expenses

$ 21,937,057 $

20,488,881 $ 35,102,559 $ 5,097,232 $ 184,948,597

- 20 -

GEORGIA PERIMETER COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2012

EXHIBIT "D"

Note 15. Affiliated Organizations
In accordance with GASB Statement No. 39, Determining Whether Certain Organizations are Component Units, an amendment of GASB Statement No. 14, The Reporting Entity which became effective for the year ended June 30, 2004, Georgia Perimeter College Foundation, Inc. is a legally separate tax exempt organization whose activities primarily support Georgia Perimeter College, a unit of the University System of Georgia (an organizational unit of the State of Georgia). The State Accounting Office determined Component Units of the State of Georgia, as required by GASB Statement No. 39 should not be assessed in relation to their significance to Georgia Perimeter College, but instead based on their significance to the State of Georgia.
Therefore, the financial statements of this affiliated organization are not included in these financial statements. Copies of the financial statements for the affiliated organization may be obtained from Georgia Perimeter College.

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SUPPLEMENTARY INFORMATION - 23 -

GEORGIA PERIMETER COLLEGE BALANCE SHEET (NON-GAAP BASIS)
BUDGET FUND JUNE 30, 2012
ASSETS
Cash and Cash Equivalents Accounts Receivable
Federal Financial Assistance Other Prepaid Expenditures Inventories
Total Assets
LIABILITIES AND FUND EQUITY
Liabilities Accrued Payroll Encumbrances Payable Accounts Payable Deferred Revenue
Total Liabilities
Fund Balances Reserved Indirect Cost Recoveries Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over Inventories Unreserved Surplus
Total Fund Balances
Total Liabilities and Fund Balances

SCHEDULE "1"

$

1,993,933.13

463,480.40 3,279,605.62
193,553.62 150,053.54

$

6,080,626.31

$

248,840.75

400,272.75

1,653,124.79

872,191.99

$

3,174,430.28

$

281,645.13

30,710.46

1,252,569.09

979,502.74

138,851.11

222,917.50

$

2,906,196.03

$

6,080,626.31

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles.
- 24 -

GEORGIA PERIMETER COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GAAP BASIS)
BUDGET FUND YEAR ENDED JUNE 30, 2012

SCHEDULE "2"

REVENUES
State Appropriation State General Funds
Other Funds
Total Revenues
ADJUSTMENT AND PROGRAM TRANSFERS
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, 2011
Prior Year Reserved Fund Balance Included in Funds Available
FUND BALANCE JUNE 30

BUDGET

ACTUAL

VARIANCE FAVORABLE (UNFAVORABLE)

$ 59,821,322.00 $ 59,821,322.00 $

143,011,000.00

140,892,514.57

0.00 -2,118,485.43

$ 202,832,322.00 $ 200,713,836.57 $ -2,118,485.43

0.00

502,883.51

502,883.51

0.00

35,723.57

35,723.57

$ 202,832,322.00 $ 201,252,443.65 $ -1,579,878.35

$

105,000.00 $

104,783.90 $

202,727,322.00

200,037,431.68

216.10 2,689,890.32

$ 202,832,322.00 $ 200,142,215.58 $ 2,690,106.42

$

0.00 $

1,110,228.07 $ 1,110,228.07

2,280,128.20 113,576.62

6.20 -448,442.87

-113,576.62 -35,723.57

$

2,906,196.03

SUMMARY OF FUND BALANCE
Reserved Indirect Cost Recoveries Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over Inventories
Total Reserved
Unreserved Surplus

$

281,645.13

30,710.46

1,252,569.09

979,502.74

138,851.11

$

2,683,278.53

222,917.50

Total Fund Balance
Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles.
- 25 -

$

2,906,196.03

GEORGIA PERIMETER COLLEGE STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE
(NON-GAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2012

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

$

105,000.00 $

105,000.00 $

105,000.00 $

105,000.00

$

51,241,145.00 $ 51,241,145.00 $ 59,716,322.00 $ 59,716,322.00

123,848,086.00

123,848,086.00

143,011,000.00

140,892,514.57

$

175,089,231.00 $ 175,089,231.00 $ 202,727,322.00 $ 200,608,836.57

$

175,194,231.00 $ 175,194,231.00 $ 202,832,322.00 $ 200,713,836.57

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles.
- 26 -

SCHEDULE "3"

Funds Available Compared to Budget

Prior Year

Adjustments and

Total

Carry-Over

Program Transfers

Funds Available

Variance Positive (Negative)

Expenditures Compared to Budget

Variance

Actual

Positive (Negative)

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

$

0.00 $

0.00 $

105,000.00 $

0.00 $

104,783.90 $

216.10 $

216.10

$

0.00 $

35,723.57

$

35,723.57 $

0.00 $ 59,716,322.00 $

502,883.51

141,431,121.65

502,883.51 $ 201,147,443.65 $

0.00 $ 59,714,937.02 $

-1,579,878.35

140,322,494.66

-1,579,878.35 $ 200,037,431.68 $

1,384.98 $ 2,688,505.34
2,689,890.32 $

1,384.98 1,108,626.99
1,110,011.97

$

35,723.57 $

502,883.51 $ 201,252,443.65 $

-1,579,878.35 $ 200,142,215.58 $

2,690,106.42 $

1,110,228.07

- 27 -

GEORGIA PERIMETER COLLEGE STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE
(NON-GAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2012

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 Inventories Uncollectible Accounts Receivable

Beginning Fund Balance/(Deficit)
July 1

Fund Balance Carried Over from
Prior Period as Funds Available

Return of Fiscal Year 2011
Surplus

Prior Period Adjustments

$

1,573.86 $

0.00 $

-1,573.86 $

0.00

$

66,020.42 $

81,705.91

$

147,726.33 $

$

149,300.19 $

0.00 $ -35,723.57
-35,723.57 $
-35,723.57 $

-66,020.42 $ -45,982.34

0.00 -448,436.67

-112,002.76 $ -448,436.67

-113,576.62 $ -448,436.67

137,466.13 2,106,938.50

0.00 0.00

0.00 0.00

0.00 0.00

Budget Unit Totals

$ 2,393,704.82 $

-35,723.57 $

-113,576.62 $ -448,436.67

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles.
- 28 -

SCHEDULE "4"

Other Adjustments

Early Return Fiscal Year 2012
Surplus

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

Ending Fund Balance/(Deficit)
June 30

Analysis of Ending Fund Balance

Reserved

Surplus/(Deficit)

Total

$

0.00 $

$

-1,384.98 $

854,369.41

$ 852,984.43 $

$ 852,984.43 $

1,384.98 -854,369.41

$

0.00 $

0.00 $

216.10 $

216.10 $

0.00 $

216.10 $

216.10

0.00 $ 0.00
0.00 $
0.00 $

1,384.98 $ 1,108,626.99
1,110,011.97 $
1,110,228.07 $

0.00 $

0.00 $

1,514,559.73 1,291,858.33

1,514,559.73 $ 1,291,858.33 $

1,514,775.83 $ 1,291,858.33 $

0.00 $

0.00

222,701.40 1,514,559.73

222,701.40 $ 1,514,559.73

222,917.50 $ 1,514,775.83

0.00 0.00

0.00 0.00

138,851.11 1,252,569.09

138,851.11 1,252,569.09

0.00 0.00

138,851.11 1,252,569.09

0.00 $

1,110,228.07 $ 2,906,196.03 $ 2,683,278.53 $

222,917.50 $ 2,906,196.03

Summary of Ending Fund Balance Reserved
Indirect Cost Recoveries Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over Inventories Unreserved Surplus
Total Ending Fund Balance - June 30

$ 281,645.13 30,710.46
1,252,569.09 979,502.74 138,851.11
$
$ 2,683,278.53 $

$ 281,645.13 30,710.46
1,252,569.09 979,502.74 138,851.11

222,917.50

222,917.50

222,917.50 $ 2,906,196.03

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GEORGIA PERIMETER COLLEGE BUDGET TO GAAP RECONCILIATION
JUNE 30, 2012
Total Fund Balances - Budget Fund - Non-GAAP Basis (Schedule "1")
Amounts reported for Business-Type Activities in the Statement of Net Assets 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 Assets.
Portion of the allowance for uncollectible on the statement of net assets was not reported as reserved fund balance in the budget fund.
Certain summer tuition and fees are reported as deferred revenues on the Statement of Net Assets but are recognized as revenue in the Budget Fund.
Liabilities created through the reduction in force plan are reported on the Statement of Net Assets but are not recognized as expenditures 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 Assets. Payables reported in the Budget Fund that are based on encumbrances are eliminated for GAAP reporting.
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 Contracts Payable Total Liabilities
Rounding Variance
Net Assets 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 comprehensive basis of accounting other than generally accepted accounting principles. 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 Assets of business-type activities, as reported on Exhibit A.
- 30 -

SCHEDULE "5"

$ 2,906,196.03

163,963,710.00

$ 3,494,506.97 -3,494,506.97

$ 3,028,281.72 -1,499,942.93

$

42,748.98

0.00

$

74,534.64

0.00

$

423,475.49

-165,263.45

-1,252,569.09 -8,524.30
-4,656,262.28 -1,677,373.00
0.00 1,528,338.79
42,748.98 74,534.64 258,212.04

400,272.75

$ -79,125,628.00 -3,674,185.00 -87,031.00

-82,886,844.00 0.44

$ 78,692,441.00

GEORGIA PERIMETER COLLEGE RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2012

SCHEDULE "6"

Totals per Annual Supplement
Accruals June 30, 2012 June 30, 2011
Compensated Absences June 30, 2012 June 30, 2011
Adjustments Shared Services on Jointly Staffed Personnel Atlanta Metropolitan College Lanisha Thomas Ossie Carney Silveree Benson Fort Valley State University Teah Moore Georgia Gwinnett College Niaz Kahn Stephanie Whittington Georgia Highlands College Merry Clark Thomas Harnden Georgia Institute of Technology Erin Reddick Paul Foster Georgia State University Chandan Robbins David Marcus Jason Holloway Miles Irving Rodney Averett Ron Stark Samba Sy Gordon College Darren Broome Kennesaw State University Queen Harris University of Georgia Charles Byrd Hyangsoon Yi University of West Georgia Media Rollings Ronald Chilluffo Board of Regents of the University System of Georgia - University System Office Felita William Rob Watts Virginia Michelich
Rounding Variance

SALARIES $ 88,406,854.53 $

TRAVEL 838,391.51

1,650,549.00 -287,287.00

-5,725.56

3,358,663.35 -3,904,570.01

-3,014.20 7,949.42 8,257.21
250.00
10,500.00 11,733.44
7,557.48 7,557.48
9,200.00 1,200.00
2,368.32 2,583.60 8,400.00
215.30 5,866.68 35,895.13 -2,700.00
9,042.60
-3,229.50
1,507.10 861.20
4,576.53 21,388.53
-136,949.64 22,224.07 -6,500.00
0.38

0.05

$ 89,250,951.00 $ 832,666.00

- 31 -

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

GEORGIA PERIMETER COLLEGE AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2012

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-571-10-01 FS-571-11-01 FS-571-11-02

Further Action Not Warranted Partially Resolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

FINANCIAL REPORTING Errors noted in Financial Statement Preparation Finding Control Number: FS-571-11-01

Georgia Perimeter College has taken the following actions to resolve the material weakness finding in Financial Statement Preparation received for fiscal year 2011 reporting:
1. Reconciliation of Restricted and Agency funds; deficit balances corrected; accounts receivable balances supported.
2. Reconciliation and agreement between the Asset Management subsystem, the General Ledger, and the amounts reported in the Annual Financial Report.
3. Cash Flow line items accurately reported and supported in the fiscal year 2012 Annual Financial Report.
4. Review of final draft of Annual Financial Report ensuring balances reported are in agreement with the underlying accounting records and use of checkpoints for key amounts that should agree between schedules.

FINANCIAL REPORTING Inadequate Accounting Procedures over Budget Preparation and Execution Finding Control Number: FS-571-11-02

Georgia Perimeter College has taken significant steps in resolving this finding during the last two months within fiscal year 2012 and believes that the finding will be completely resolved for fiscal year 2013. Actions already taken include:
1. Recasting the fiscal year 2013 budget with the appropriate reductions. 2. Ceasing the use of budget overrides and limiting employees with budget override
access. 3. Implementation of i-Strategy for use by the campus to better monitor budget
spending. 4. Proper use of the PeopleSoft budgeting system controls including reconciliation of
revenue and expense budgets by funding source to the approved budget on record with the Board of Regents. 5. Fiscal year 2012 Budgetary Compliance Reporting (BCR) will not be submitted until August 15th. Management believes that the BCR submission will be free from significant or material misstatement.

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

No matters were reported.

SECTION III CURRENT YEAR FINDINGS AND QUESTIONED COSTS

GEORGIA PERIMETER COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2012

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

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 controls 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 misstatements on a timely basis. A material weakness deficiency is a deficiency, or combination of deficiencies in internal controls, such that there is a reasonable possibility that a material misstatement of the Georgia Perimeter College's financial statements will not be prevented or detected and corrected, on a timely basis, by the Georgia Perimeter College's internal control.

A significant deficiency, is a deficiency or combination of deficiencies, in internal controls 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:

CAPITAL ASSETS Inadequate Internal Controls Material Weakness Finding Control Number: FS-571-12-01

Condition:

The accounting procedures of the College were insufficient to provide adequate control over Capital Assets.

Criteria:

The College should maintain capital asset records in accordance with capitalization guidelines and instructions provided in Chapter 7 of the Board of Regents' Business Procedures Manual.

Questioned Cost:

N/A

Information:

The following deficiencies were noted relating to Capital Assets:

1. Periodic reconciliations of capital asset additions to capital outlay expenses were not performed for the period under review.

2. During the financial statement preparation process, the College identified and corrected numerous errors related to unrecorded capital assets, unsupported acquisition costs, and inaccurate depreciation expense.

Cause:

The College's previous management failed to implement appropriate internal controls and procedures necessary to properly record, maintain and track capital assets.

- 1 -

GEORGIA PERIMETER COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2012

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CAPITAL ASSETS Inadequate Internal Controls Material Weakness Finding Control Number: FS-571-12-01

Effect:

By failing to accurately record and track capital assets, the College could place itself in a position where potential misappropriation of assets could occur and impact reporting of its financial position and results of operations.

Recommendation:

While clean-up efforts were completed by the end of the fiscal year, the College should ensure that appropriate procedures and controls exist throughout the year to ensure that capital asset activity is properly recorded, maintained and reported on the financial accounting system.

REVENUES/RECEIVABLES/RECEIPTS GENERAL LEDGER Inadequate Controls over Restricted Funds Material Weakness Finding Control Number: FS-571-12-02

Condition:

The accounting procedures of the College were insufficient to provide adequate controls over the Restricted Fund activity.

Criteria:

NCGA Statement 1, paragraph 1, prescribes that an accounting system (1) present fairly and fully disclose the funds of the governmental unit in accordance with generally accepted accounting principles and (2) demonstrate compliance with finance related legal and contractual provisions. Additional administrative requirements are contained in the University System of Georgia, Board of Regents Business Procedure Manual and pertinent sections of the Official Code of Georgia Annotated (O.C.G.A.).

Questioned Costs: N/A

Information:

The following deficiencies were noted in the review of the Restricted Grant Activity:

1. Revenues/Receivables/Receipts Numerous accounts receivable and revenues associated with Restricted Grant funds were inadequately documented and/or inaccurately recorded on the general ledger. The College made significant adjustments throughout the fiscal year in an effort to correct these issues.

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GEORGIA PERIMETER COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2012

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

REVENUES/RECEIVABLES/RECEIPTS GENERAL LEDGER Inadequate Controls over Restricted Funds Material Weakness Finding Control Number: FS-571-12-02

2. General Ledger Reconciliations of net assets by Restricted fund project were not performed to ensure that revenues equaled expenditures. At the beginning of fiscal year 2012, deficit balances existed totaling $1,433,607.29 within 18 restricted projects. The College has performed procedures to correct errors related to these deficits. A net unidentified excess fund balance of approximately $108,000 remained as of the end of fieldwork. The College is continuing efforts to identify the proper restricted projects related to the unidentified fund balance.

Cause:

The College's previous management failed to implement satisfactory controls to ensure that activity for the Restricted Grant Funds is properly documented and recorded in the accounting records.

Effect:

Failure to implement satisfactory accounting controls and procedures could cause internal reports to management, grantor reimbursement request and other restricted grant information generated from the general ledger to be inaccurate and misleading. In addition, the College could place itself in a position where potential misrepresentations of financial activities could occur.

Recommendation:

The College should review the accounting controls and procedures currently in place, identify weaknesses, and design and implement procedures necessary to strengthen controls over the accounting function for Restricted Grant Funds.

FINANCIAL REPORTING Inadequate Accounting Procedures over Budget Preparation and Execution Material Weakness Finding Control Number: FS-571-12-03

Condition:

The College failed to properly monitor budgetary financial activity during the year.

Criteria:

Management is responsible for establishing, maintaining and monitoring procedures, the purpose of which is to ensure the fair presentation of the budget basis financial statements provided for inclusion in the State of Georgia Budgetary Compliance Report.

Questioned Cost:

N/A

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GEORGIA PERIMETER COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2012

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINANCIAL REPORTING Inadequate Accounting Procedures over Budget Preparation and Execution Material Weakness Finding Control Number: FS-571-12-03

Information:

The following deficiencies were noted in the College's budget preparation and execution:

1. Budget amendments submitted to the Board of Regents were not accurately loaded into the College's financial system until the end of the fiscal year.

2. Budgets that were loaded were consistently overridden, and up to 16 College personnel had authority to override financial system budget controls.

3. Management relied on inaccurate, internally generated spreadsheets that did not correspond to the General Ledger.

4. Evidence to support periodic monitoring of budgeted activity to actual activity could not be provided.

Due to the deficiencies in budget preparation and execution, the College experienced a significant financial shortfall during the current fiscal year. In an effort to reduce the budgetary deficit and to provide cash flow, the College made the following entries:

1. The College moved $4.7 million in summer 2012 tuition and fee revenue from fiscal year 2013 to fiscal year 2012. This created a situation where both summer 2011 and summer 2012 tuition and fee revenue is reported in the same period for budgetary reporting. This treatment is unsustainable and overstates the College's budgetary financial position at year end. Tuition and fee revenue is correctly reported in the 2012 GAAP basis financials.

2. In an effort to provide immediate cash flow to cover current liabilities, the Board of Regents of the University System of Georgia provided a special appropriation of $9.5 million on June 8, 2012.

Cause:

These deficiencies occurred due to inadequate procedures over the College's budget preparation and execution by the College's previous management.

Effect:

Failure to implement adequate procedures over budget preparation and execution did cause significant financial shortfalls during the current year. The inability to provide accurate budget basis statements prohibits users from having access to pertinent financial information needed for decision making.

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GEORGIA PERIMETER COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2012

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINANCIAL REPORTING Inadequate Accounting Procedures over Budget Preparation and Execution Material Weakness Finding Control Number: FS-571-12-03

Recommendation:

The College should design and implement procedures to ensure appropriate budget preparation and execution and the consistent application of budgetary revenue recognition.

EMPLOYEE COMPENSATION Inadequate Internal Controls Significant Deficiency Finding Control Number: FS-571-12-04

Condition:

The accounting procedures of the College were insufficient to provide for adequate internal controls over employee compensation (salaries).

Criteria:

The College's management is responsible for maintaining internal controls that provide reasonable assurance that employee compensation expense reflected on the financial statements is properly documented, processed and reported.

Questioned Cost:

N/A

Information:

A review of internal control procedures over the employee compensation process revealed that individuals responsible for ensuring the accuracy of payroll amounts did not adequately monitor the payroll wages disbursed during the entire fiscal year.

Additionally, a sample of 30 employees revealed the following deficiencies:

1. Eleven employees did not have adequate approval on the Personnel Action Request (PAR) form according to the College's policy. Several instances were noted of a stamp rather than a signature being used. The College should monitor the PAR forms to ensure the policy is being adhered to.

2. One employee had unsupported pay. The College should ensure all documentation for pay rate changes are maintained.

3. One employee was paid 5 checks outside of the end date as noted on the PAR forms. The College should monitor terms of agreements to ensure the approved payments are supported.

Cause:

These deficiencies were the result of the weaknesses in the design and operation of the internal controls over employee compensation by the College's previous management.

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GEORGIA PERIMETER COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2012

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

EMPLOYEE COMPENSATION Inadequate Internal Controls Significant Deficiency Finding Control Number: FS-571-12-04

Effect:

Without proper accounting controls and procedures in place, employee compensation abuse could occur and the employee compensation expense could be misstated on the financial statements.

Recommendation:

The College should implement policies and procedures to ensure that the processing and reporting of employee compensation expense is properly documented. The College should review employee compensation expenses periodically for accuracy.

CASH AND CASH EQUIVALENTS Inadequate Separation of Duties Significant Deficiency Finding Control Number: FS-571-12-05

Condition:

The College did not maintain adequate separation of duties involving key accounting functions.

Criteria:

Management of the College is responsible for designing and maintaining internal controls that provide reasonable assurance that the transactions are properly processed and reported. Separation of duties involving key accounting functions, both manual and automated, is the basis for achieving an adequate system of internal control.

Questioned Cost:

N/A

Information:

A review of the College's cash process revealed inadequate separation of duties. One employee reconciled cash, initiated and performed wire transfers, had the ability to prepare and approve cash journal entries and performed several budget overrides during the fiscal year.

Cause:

The College did not adequately segregate the functions of initiating, authorizing and recording transactions, reconciliations, and maintaining the custody of assets.

Effect:

Without satisfactory accounting policies and procedures requiring separation of duties, the College could place itself in a position where potential misappropriation of assets, fraud, errors and/or irregularities could occur. In addition, the lack of controls could impact reporting of the College's financial position and results of the operations.

Recommendation:

Management should review the established internal control structure and revise or implement controls to ensure that proper separation of duties exists.

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GEORGIA PERIMETER COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2012

FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

REPORTING Reports Not Reconciled Material Weakness U. S. Department of Education Student Financial Assistance Cluster Program Finding Control Number: FA-571-12-01

Condition:

Fiscal year 2011 amounts reported on the Fiscal Operations and Application to Participate (FISAP) report submitted by the College to the U. S. Department of Education were not properly reconciled.

Criteria:

Federal regulations (34 CFR 668.24, 34 CFR 675.19, 34 CFR 690.81 and 34 CFR 690.83) require the College to ensure that reported information is accurate and reconciled as necessary.

Questioned Cost:

N/A

Information:

The fiscal year 2011 FISAP report included amounts reported for Tuition and Fees for Undergraduates, State Grant and Scholarships Made to Undergraduates, Information on Eligible Aid Applicants Enrolled in the College, the Pell Grant Program, the Federal Work-Study Program and the Federal Supplemental Educational Opportunity Grant Program that did not reconcile to the accounting records.

Cause:

This deficiency was a result of management's failure to adequately reconcile information submitted on the FISAP with activity recorded in the accounting records.

Effect:

Information submitted to the U. S. Department of Education was not accurate and was not supported by the accounting records.

Recommendation:

The College should implement policy and procedures to ensure that all reports submitted to the U. S. Department of Education are accurately completed and supported by the accounting records. The College should also contact the U. S. Department of Education regarding the resolution of this finding.

SPECIAL TESTS AND PROVISIONS Inadequate Control Procedures over Unofficial Withdrawals Material Weakness U. S. Department of Education Student Financial Assistance Cluster Program Finding Control Number: FA-571-12-02

Condition:

The College did not have adequate internal control procedures in place to identify students who unofficially withdraw during an academic semester.

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GEORGIA PERIMETER COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2012

FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

SPECIAL TESTS AND PROVISIONS Inadequate Control Procedures over Unofficial Withdrawals Material Weakness U. S. Department of Education Student Financial Assistance Cluster Program Finding Control Number: FA-571-12-02

Criteria:

34 CFR 668.22 provides requirements over the treatment of Title IV funds when a student withdraws. The College is required to determine the amount of Title IV grant that the student earned as of the student's withdrawal date when a recipient of a Title IV grant withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance. A refund must be returned to Title IV programs when the total amount of Title IV grant that the student earned is less than the amount of Title IV grant that was disbursed to the student as of the withdrawal date.

Questioned Cost:

Questioned costs of $16,736 were identified for students who received student financial assistance in excess of the amount earned as of the determined withdrawal date. The College performed procedures to estimate likely questioned costs of $897,366. Auditor performed procedures to ensure the College's estimate was reasonable.

Information:

A sample of twenty-five financial assistance files was selected to determine if financial assistance was properly calculated and disbursed to students. This sample revealed six students that unofficially withdrew from the College.

This matter was brought to the attention of the College. The College was asked to determine the number of students and the amount of the refunds related to the unofficial withdrawals.

The College determined that 4,243 students earning less than 60% of Title IV aid disbursed unofficially withdrew during the period under review. The likely estimated refunds related to these unofficial withdrawals were $897,366.

As of the end of fieldwork, the College was in the process of performing the required refund calculations and refunding Title IV aid to the U. S. Department of Education.

Cause:

This deficiency occurred because the College's management did not have procedures in place to identify unofficial withdrawals that received Title IV funds.

Effect:

The College did not properly calculate a refund for students who unofficially withdrew. Unearned Title IV funds are not being returned as required.

Recommendation:

The College should implement policies and procedures to ensure that unofficial withdrawals that received Title IV funds are identified and the required refund calculation is performed. The College should also contact the U. S. Department of Education regarding the resolution of this finding.

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SECTION IV MANAGEMENT'S RESPONSES

GEORGIA PERIMETER COLLEGE SCHEDULE OF MANAGEMENT'S RESPONSES
YEAR ENDED JUNE 30, 2012
Auditor's note: Georgia Perimeter College's response to the findings identified in our audit is
described in the accompanying Schedule of Management's Responses. We did not audit Georgia Perimeter College's response and, accordingly, we express no opinion on it.
Management's response:
CAPITAL ASSETS Inadequate Internal Controls Material Weakness Finding Control Number: FS-571-12-01
Management agrees with this recommendation. As a result of current management's efforts, the College's capital assets reported as of June 30, 2012 are materially correct and reconciled with the subsidiary ledger. Depreciation expense and accumulated depreciation are also correctly stated as of the balance sheet date. Periodic reconciliations to the subsidiary ledger were put into place in the last quarter of fiscal year 2012.
REVENUES/RECEIVABLES/RECEIPTS GENERAL LEDGER Inadequate Controls over Restricted Funds Material Weakness Finding Control Number: FS-571-12-02
Management agrees with this recommendation. In the last quarter of fiscal year 2012, Restricted Grant Funds by project were analyzed and corrected to within a tolerable variance that will be further analyzed in fiscal year 2013. Management has already put into place new Restricted fund reconciliation formats and procedures to ensure that these funds are properly monitored and reported.
FINANCIAL REPORTING Inadequate Accounting Procedures over Budget Preparation and Execution Material Weakness Finding Control Number: FS-571-12-03
Management agrees with this finding. GPC management has remedied the absence of budgetary controls in fiscal year 2013 by eliminating budget override access to all except key personnel; recasting the fiscal year 2013 budget; requiring Dean or Director approval for all expenditures; implementing an automated system (i-Strategy) that gives departments and senior management an easy-to-use tool to manage their budget; and putting in place a system of periodic budget reporting to executive management. It is also worthwhile to note that there were no audit adjustments to fiscal year 2012 budgetary reporting.
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GEORGIA PERIMETER COLLEGE SCHEDULE OF MANAGEMENT'S RESPONSES
YEAR ENDED JUNE 30, 2012
Management's response: EMPLOYEE COMPENSATION Inadequate Internal Controls Significant Deficiency Finding Control Number: FS-571-12-04
Management agrees with this recommendation. It should be noted that the significant deficiency in this case relates to the possibility of significant misstatement. The audit did not uncover any significant misstatement related to employee compensation. In fiscal year 2013, Human Resources management has already put into place a system for reviewing changes to employee compensation and ensuring those changes are authorized. Payroll put into place a documented review and sign off procedure for extra pay that is keyed by clerical staff.
CASH AND CASH EQUIVALENTS Inadequate Separation of Duties Significant Deficiency Finding Control Number: FS-571-12-05
Management agrees with this recommendation. It should be noted that the significant deficiency in this case relates to the possibility of significant misstatement. The audit did not uncover any significant misstatement or impropriety related to Cash. This control deficiency was corrected in the fourth quarter of fiscal year 2012, when responsibility for cash wires and cash journals was moved to a different staff member than the one reconciling the bank account.
REPORTING Reports Not Reconciled Material Weakness U. S. Department of Education Student Financial Aid Cluster Program Finding Control Number: FA-571-12-01
Management agrees with this recommendation. The current management was not in place when the 2011 FISAP report was submitted. The 2012 FISAP report that will be audited in 2013 was reconciled to the 2012 financial statements and is believed accurate.
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GEORGIA PERIMETER COLLEGE SCHEDULE OF MANAGEMENT'S RESPONSES
YEAR ENDED JUNE 30, 2012 Management's response: SPECIAL TESTS AND PROVISIONS Inadequate Control Procedures over Unofficial Withdrawals Material Weakness U. S. Department of Education Student Financial Aid Cluster Program Finding Control Number: FA-571-12-02 Management agrees with this recommendation. GPC management has already corrected the inability to identify unofficial withdrawals by creating a new field in Banner for faculty to input the last date of academic activity for each student receiving an "F" grade. This is in place with the Fall 2012 term. Title IV returns for the Fall 2012 term will be completed within the prescribed Federal timeline. In addition, last dates of academic activity have been determined for potential unofficial withdrawals in the Summer 2011 through Summer 2012 terms. The College is actively in the process of returning Title IV funds for students that are deemed unofficial withdrawals for these terms.
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