Georgia Perimeter College, Decatur, Georgia, management report for fiscal year ended June 30, 2015

GEORGIA PERIMETER COLLEGE
DECATUR, GEORGIA
MANAGEMENT REPORT FOR FISCAL YEAR ENDED JUNE 30, 2015
A Member Institution of the University System of Georgia
Georgia Department of Audits and Accounts Greg S. Griffin State Auditor

GEORGIA PERIMETER COLLEGE - TABLE OF CONTENTS -

SECTION I FINANCIAL LETTER OF TRANSMITTAL SELECTED FINANCIAL INFORMATION EXHIBITS A STATEMENT OF NET POSITION - (GAAP BASIS) B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION (GAAP BASIS) C STATEMENT OF CASH FLOWS - (GAAP BASIS) D SELECTED FINANCIAL NOTES

Page
2 3 4 7

SUPPLEMENTARY INFORMATION

1 BALANCE SHEET - (STATUTORY BASIS) BUDGET FUND

26

2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT

(STATUTORY BASIS) BUDGET FUND

27

3 STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET

BY PROGRAM AND FUNDING SOURCE

(STATUTORY BASIS) BUDGET FUND

28

4 STATEMENT OF CHANGES TO FUND BALANCE

BY PROGRAM AND FUNDING SOURCE

(STATUTORY BASIS) BUDGET FUND

30

5 RECONCILIATION OF BUDGET TO GAAP

32

6 RECONCILIATION OF SALARIES AND TRAVEL

33

SECTION II FINDINGS, QUESTIONED COSTS AND OTHER ITEMS SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
October 7, 2015

Honorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the State Board of Regents of the University System of Georgia
and Honorable Robert Watts, Interim President Georgia Perimeter College

Ladies and Gentlemen:

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

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

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

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

Respectfully,

GSG:as

Greg S. Griffin State Auditor

SELECTED FINANCIAL INFORMATION - 1 -

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

EXHIBIT "A"
$ 23,552,986 896,639
2,175,761 44,124 93,395
26,762,905
80,145 25,060 431,347 11,457
880 153,902,848 154,451,737 181,214,642
5,169,384
4,396,310 354,643 324,044
4,565,139 270,079 498,287
1,572,612 2,383,012
9,590 14,373,716
73,433,486 960,914
48,627,332 123,021,732 137,395,448
245,000 19,509,846 19,754,846
78,693,522 31,309
344,451 -49,835,550
$ 29,233,732

GEORGIA PERIMETER COLLEGE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION - (GAAP BASIS)
YEAR ENDED JUNE 30, 2015
OPERATING REVENUES
Student Tuition and Fees (Net of Allowance for Doubtful Accounts) Less: Scholarship Allowances
Grants and Contracts Federal State Other
Sales and Services Rents and Royalties Auxiliary Enterprises
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 Loss
NONOPERATING REVENUES (EXPENSES)
State Appropriations Grants and Contracts
Federal Gifts Investment Income (Endowments, Auxiliary and Other) Interest Expense Other Nonoperating Revenues (Expenses)
Net Nonoperating Revenues
Income Before Other Revenues, Expenses, Gains, or Losses
Capital Grants and Gifts State Other
Total Other Revenues, Expenses, Gains or Losses
Increase in Net Position
Net Position - Beginning of Year, Restated
Net Position - End of Year

EXHIBIT "B"
$ 68,999,170 -20,686,100 1,661,205 951,962 230,296 469,711 8,470 1,395,664 86,163 841,931 1,587,642 5,234,976 529,657 61,310,747
29,314,700 42,121,824 19,758,016
633,557 490,073 26,494,946 3,799,765 18,331,945 7,808,831 148,753,657 -87,442,910
52,228,589 43,642,435
468,090 47,108
-3,704,623 -176,174
92,505,425 5,062,515
456,877 43,557
500,434 5,562,949 23,670,783
$ 29,233,732

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GEORGIA PERIMETER COLLEGE STATEMENT OF CASH FLOWS - (GAAP BASIS)
YEAR ENDED JUNE 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Grants and Contracts (Exchange) Sales and Services Payments to Suppliers Payments to Employees Payments for Scholarships and Fellowships Loans Issued to Students and Employees Auxiliary Enterprise Charges: Bookstore Food Services Health Services Intercollegiate Athletics Other Organizations Other Receipts
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 Principal Paid on Installment Debt Interest Paid on Installment Debt Other Nonoperating Receipts
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 Decrease in Cash
Cash and Cash Equivalents - Beginning of Year
Cash and Cash Equivalents - End of Year

EXHIBIT "C"

$

47,823,515

3,001,376

469,711

-45,630,599

-71,437,582

-26,494,946

-1,635

1,483,057 66,654
830,478 1,568,252 5,286,768
937,626

-82,097,325

52,228,589 -128,745
43,864,772 -288,473 -4,925 42,828
95,714,046

456,877 739
-7,693,637 -4,546,714 -3,695,683
-15,478,418

47,144 -36,552 10,592 -1,851,105 25,484,236

$

23,633,131

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GEORGIA PERIMETER COLLEGE STATEMENT OF CASH FLOWS - (GAAP BASIS)
YEAR ENDED JUNE 30, 2015
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: Receivables, Net Prepaid Items Notes Receivable, Net Accounts Payable Salaries Payable Advances (Including Tuition and Fees) Other Liabilities Compensated Absences Change in Deferred Inflows/Outflows of Resources: Deferred Inflows of Resources Deferred Outflows of Resources Net Pension Liability
Net Cash Provided (Used) by Operating Activities
NONCASH ACTIVITY Change in Fair Value of Investments Recognized as a Component of Interest Income Gift Reducing Proceeds of Gifts and Grants Received for Other Than Capital Purposes Gift of Capital Assets Reducing Proceeds of Capital Grants and Gifts Change in Accrued Interest Payable Affecting Interest Paid

EXHIBIT "C"

$

-87,442,910

7,808,831
-128,483 352,565
-880 206,573 -201,462 -300,925
79,657 -49,075
19,509,846 -346,031
-21,585,031

$

-82,097,325

$

-36

$

130,753

$

43,557

$

4,015

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GEORGIA PERIMETER COLLEGE SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY Georgia Perimeter College (College) is one of thirty (30) State supported member institutions of higher education in Georgia which comprise the University System of Georgia, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations of Georgia Perimeter College is 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.
FINANCIAL STATEMENT PREPARATION The financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) as prescribed by the GASB and are presented as required by these standards to provide a comprehensive, entity-wide perspective of the College's assets, deferred outflows, liabilities, deferred inflows, net position, revenues, expenses, changes in net position and cash flows.
BASIS OF ACCOUNTING For financial reporting purposes, the 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.
NEW ACCOUNTING PRONOUNCEMENTS In fiscal year 2015, the College adopted Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions. The provisions of this Statement establish accounting and financial reporting standards for pensions that are provided to the employees of state and local governmental employers through pension plans that are administered through trusts. Implementation of this statement requires a restatement to beginning net position. The adoption of this statement has a significant impact on the College's financial statements.
In fiscal year 2015, the College adopted Governmental Accounting Standards Board (GASB) Statement No. 69, Government Combinations and Disposals of Government Operations. This statement provides specific accounting and financial reporting guidance for combinations in the governmental environment. This statement also requires that disclosures be made by governments about combination arrangements in which they engage and for disposals of government operations. The adoption of this statement does not have a significant impact on the College's financial statements.
In fiscal year 2015, the College adopted Governmental Accounting Standards Board (GASB) Statement 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an amendment of GASB No. 68. The objective of this statement is to improve accounting and financial reporting by addressing an issue in Statement No. 68, Accounting and Financial Reporting for Pensions,
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GEORGIA PERIMETER COLLEGE SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

concerning transition provisions related to certain pension contributions made to defined benefit pension plans prior to implementation of statement. This statement amends paragraph 137 of Statement No. 68 which limited recognition of pension-related deferred outflows of resources and deferred inflows of resources at the transition to circumstances in which it is practical to determine the amounts of all deferred outflows of resources and deferred inflows of resources related to pensions.
CAPITAL LIABILITY RESERVE FUND In fiscal year 2014, the Capital Liability Reserve Fund (Fund) was established by the Board of Regents to protect the fiscal integrity of the University System of Georgia (USG) to maintain the strongest possible credit ratings associated with Public Private Venture (PPV) projects and to ensure that the Board of Regents can effectively support its long-term capital lease obligations. The Fund is financed by all USG institutions participating in the PPV program. The Fund serves as a pooled reserve that is managed by the Board of Regents. The Fund shall only be used to address significant shortfalls and only insofar as a requesting USG institution is unable to make the required PPV capital lease payment to the designated cooperative organization. The Fund will continue as long as the Board of Regents has rental obligations under the PPV program and at the conclusion of the program, funds will be returned to the College. The amount due Georgia Perimeter College as of June 30, 2015 was $431,347.
NET POSITION The College's net position is classified as follows:
Net Investment in Capital Assets: This represents the College's total investment in capital assets, net of outstanding debt obligations and deferred inflows, or resources related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of the net investment in capital assets.
Restricted - nonexpendable: Nonexpendable restricted net position consist of endowment and similar type funds in which donors or other outside sources have stipulated, as a condition of the gift instrument, that the principal is to be maintained inviolate and in perpetuity, and invested for the purpose of producing present and future income, which may either be expended or added to principal. The 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 - expendable: Restricted expendable net position includes resources in which the College is legally or contractually obligated to spend resources in accordance with restrictions imposed by external third parties.
Unrestricted: Unrestricted net position is the net amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of Investment in Capital Assets. Included in the net deficit reported is the College's Net Pension liability of $48.6 million which will be funded by appropriating resources each year as payments come due, rather than accumulating resources in advance.
RESTATEMENT NOTE DISCLOSURE For fiscal year 2015, the College made prior period adjustments due to the adoption of GASB Statement No. 68, Accounting and Financial Reporting for Pensions, and GASB Statement No. 71 Pension Transition for Contributions Made Subsequent to the Measurement Date, which require the restatement of the June 30, 2014, net position. The result is a decrease in Net Position at July 1, 2014 of $65,389,010 of which $70,212,363 is represented in Net Pension Liability and $4,823,353 is represented in deferred outflow. This change is in accordance with generally accepted accounting principles.
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GEORGIA PERIMETER COLLEGE SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

In addition, the College made prior period adjustments for Capital Asset corrections, decreasing Net Position at July 1, 2014 by $167,340.
Total decrease in Net Position at July 1, 2014 from prior period adjustments is $65,556,350.
NOTE 2: DEPOSITS AND INVESTMENTS
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.
6. Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation. The Treasurer of the Board of Regents is responsible for all details relative to furnishing the required depository protection for all units of the University System of Georgia.
At June 30, 2015, the carrying value of deposits was $10,903,727 and the bank balance was $12,648,110. Of the College's deposits, $12,633,138 were uninsured. Of these uninsured deposits, $12,633,138 were 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, 2015, the carrying value of the College's investment was $12,731,471, which is materially the same as fair value. These investments were comprised entirely of funds invested in the Board of Regents and Office of State Treasurer investment pools as follows:

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GEORGIA PERIMETER COLLEGE SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

Investment Pools Board of Regents Short-Term Fund Balanced Income Fund
Office of the State Treasurer Georgia Fund 1
Total Investments

$

8,021,796

36,517

8,058,313

4,673,158

$

12,731,471

The Board of Regents Investment Pool is not registered with the Securities and Exchange Commission as an investment company. The fair value of investments is determined daily. The pool does not issue shares. Each participant is allocated a pro rata share of each investment at fair value along with a pro rata share of the interest that it earns. Participation in the Board of Regents Investment Pool is voluntary. The Board of Regents Investment Pool is not rated. Additional information on the Board of Regents Investment Pool is disclosed in the audited Financial Statements of the Board of Regents of the University System of Georgia - System Office (oversight unit). This audit can be obtained from the Georgia Department of Audits and Accounts - Education Audit Division or on their web site at http://www.audits.ga.gov.

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, and the State does not consider Georgia Fund 1 to be a 2a7-like pool. This investment is valued at the pool's share price, $1.00 per share. The Georgia Fund 1 Investment Pool is an AAAf rated investment pool by Standard and Poor's. The Weighted Average Maturity of the Fund is 56 days.

Both the Board of Regents Short-Term Fund and the Georgia Fund 1 investment pools are reported as Cash and Cash Equivalents in the financial statements of this report.

NOTE 3: ACCOUNTS RECEIVABLE

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

Student Tuition and Fees

$

Auxiliary Enterprises and Other Operating Activities

Federal Financial Assistance

Georgia Student Finance Commission

Georgia State Financing and Investment Commission

Due from Affiliated Organizations

Other

2,962,788 316,692 896,639 527,126 64,268 44,124 260,821

Less Allowance for Doubtful Accounts

5,072,458 1,955,934

Net Accounts Receivable

$

3,116,524

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GEORGIA PERIMETER COLLEGE SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

NOTE 4: CAPITAL ASSETS

Following are the changes in the College's capital assets for the year ended June 30, 2015:

Balance July 1, 2014 (Restated)

Additions

Reductions

Ending Balance June 30, 2015

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

$

5,022,603

$

5,022,603

3,109,915 $

2,541,015 $

2,610,148

3,040,782

Total Capital Assets, Not Being Depreciated

8,132,518

2,541,015

2,610,148

8,063,385

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

3,312,198 118,457,310
9,990,356 14,171,935 80,330,976 14,062,469
11,574

1,770,215 2,193,415 3,486,917
348,009

457,380 234,999 1,825,717 750,468 318,630

3,312,198 119,770,145
11,948,772 15,833,135 79,580,508 14,091,848
11,574

Total Assets Being Depreciated

240,336,818

7,798,556

3,587,194

244,548,180

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

662,782 53,555,864
4,058,593 12,111,717 12,280,266 11,595,389
2,729

115,429 3,179,186
423,929 1,333,826 2,199,679
556,493 289

388,773 167,438 2,492,613
318,630

778,211 56,346,277
4,315,084 10,952,930 14,479,945 11,833,252
3,018

Total Accumulated Depreciation

94,267,340

7,808,831

3,367,454

98,708,717

Total Capital Assets, Being Depreciated, Net

146,069,478

-10,275

219,740

145,839,463

Capital Assets, Net

$

154,201,996 $

2,530,740 $

2,829,888 $

153,902,848

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

Fiscal Year

Depreciation Expense

2015 2014 2013

$

7,808,831

$

7,325,964

$

7,469,471

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GEORGIA PERIMETER COLLEGE SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

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

Prepaid Tuition and Fees Research

$ 4,488,142 76,997

Total Advances

$ 4,565,139

NOTE 6: LONG-TERM LIABILITIES

The College's Long-Term liability activity for the year ended June 30, 2015 was as follows:

Beginning Balance July 1, 2014 (Restated)

Additions

Reductions

Ending Balance June 30, 2015

Current Portion

Leases Lease Obligations

$ 79,841,285 $

0 $ 4,835,187 $ 75,006,098 $ 1,572,612

Other Liabilities Compensated Absences Net Pension Liability

3,393,001 70,212,363

2,678,056

2,727,131 21,585,031

3,343,926 48,627,332

2,383,012

Total

73,605,364

2,678,056

24,312,162

51,971,258

2,383,012

Total Long-Term Obligations $ 153,446,649 $ 2,678,056 $ 29,147,349 $ 126,977,356 $ 3,955,624

NOTE 7: NET POSITION

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

Beginning Balance July 1, 2014 (Restated)

Additions

Reductions

Ending Balance June 30, 2015

Net Investments in Capital Assets

$

74,945,221 $

10,339,571 $

6,591,270 $

78,693,522

Restricted Net Position

237,269

46,349,132

46,210,641

375,760

Unrestricted Net Position

-51,511,707

112,346,221

110,670,064

-49,835,550

Total Net Position

$

23,670,783 $ 169,034,924 $ 163,471,975 $

29,233,732

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GEORGIA PERIMETER COLLEGE SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

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

NET POSITION

Net Investment in Capital Assets Restricted for
Nonexpendable Permanent Endowment
Expendable Organized Activities Federal Loans Institutional Loans Quasi-Endowments

$ 78,693,522
31,309
259,093 17,543 56,399 11,416

Total Expendable

344,451

Unrestricted Auxiliary Operations R & R Reserve Reserve for Encumbrances Other Unrestricted USO Reserve Fund

3,065,772 548,727
7,941,683 -61,823,079
431,347

Total Unrestricted

-49,835,550

Total Net Position

$ 29,233,732

NOTE 8: ENDOWMENTS

Donor Restricted Endowments: Investments of the College's endowment funds are pooled, unless required to be separately invested by the donor. For College controlled, donor-restricted endowments, where the donor has not provided specific instructions, the Board of Regents permits Georgia Perimeter College to budget for current spending an amount of realized and unrealized endowment appreciation as they determined to be prudent. Realized and unrealized appreciation in excess of the amount budgeted for current spending is retained by the endowments. Current year net appreciation for the endowment accounts was $10 and is reflected as restricted net position.

For endowment funds where the donor has not provided specific instructions, investment return of the College's endowment funds is predicated under classical trust doctrines. Unless the donor has stipulated otherwise, capital gains and losses are accounted for as part of the endowment principal and are not available for expenditure.

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.

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GEORGIA PERIMETER COLLEGE SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

CAPITAL LEASES Capital leases are generally payable in installments ranging from monthly to annually and have terms expiring in 2035. Payments for fiscal year 2015 were $8,539,810 of which $3,704,623 represented interest. Total principal paid on capital leases was $4,835,187 for the fiscal year ended June 30, 2015. Interest rates range from 2.33 percent to 4.81 percent. The following is a summary of the carrying values of assets held under capital lease at June 30, 2015:

Description

Gross Amount (+)

Accumulated Depreciation
(-)

Net Capital Assets Held Under Capital Lease
at June 30, 2015 (=)

Outstanding Balances per Lease Schedules at June 30, 2015

Buildings - (PPV)

$

79,580,508 $ 14,479,945 $

65,100,563 $ 75,006,098

Certain capital leases provide for renewal and/or purchase options. Generally purchase options at bargain prices of one dollar are exercisable at the expiration of the lease terms.

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

Description

Lessor (1)

Original Principal Lease Term

Begin Date

End Date

Outstanding Principal Balance at June 30, 2015

Newton Academic Bldg Newton Student Learning Ctr Clarkston International Ctr Clarkston Parking Deck Clarkston Student Success Ctr Decatur Student Success Ctr Dunwoody Student Success Ctr Dunwoody Parking Deck

GPC Foundation Real Estate

Newton, LLC

$

GPC Real Estate Student

Support I

GPC Real Estate Student

Support I

GPC Real Estate Student

Support I

GPC Real Estate Student

Support I

GPC Real Estate Student

Support I

GPC Real Estate Student

Support I

GPC Real Estate Student

Support I

22,682,812 28 Years 12,754,177 26 Years
3,048,768 26 Years 8,281,580 27 Years 6,015,435 26 Years 9,002,865 26 Years 9,358,859 26 Years 8,436,012 27 Years

6/2007 8/2009 9/2009 8/2008 3/2009 5/2009 4/2009 8/2008

5/2035 $ 5/2035 5/2035 5/2035 5/2035 5/2035 5/2035 5/2035

19,376,045 12,216,796
2,908,760 8,319,059 5,877,313 8,726,282 9,107,654 8,474,189

Total Leases

$

79,580,508

(1) All of Georgia Perimeter College's capital leases are with related entities.

$

75,006,098

OPERATING LEASES Georgia Perimeter College's noncancellable operating leases having remaining terms of more than one year expire in 2017. All agreements are cancelable if the State of Georgia does not provide adequate funding, but that is considered a remote possibility. In the normal course of business, operating leases are generally renewed or replaced by other leases. Operating leases are generally payable on a monthly basis. Examples of property under operating leases are copiers, other small business equipment, and buildings.

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GEORGIA PERIMETER COLLEGE SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

FUTURE COMMITMENTS Future commitments for capital leases (which here and on the Statement of Net Position includes other installment purchase agreements) and for noncancellable operating leases having remaining terms in excess of one year as of June 30, 2015, were as follows:

Real Property and Equipment

Capital

Operating

Leases

Leases

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

$

5,347,931 $ 1,055,354

5,438,359

1,086,913

5,526,730

5,624,427

5,711,989

30,085,091

32,837,422

34,850,317

Total Minimum Lease Payments

$

125,422,266 $ 2,142,267

Less: Interest Less: Executory Costs (if paid)

45,085,734 5,330,434

Principal Outstanding

$

75,006,098

Georgia Perimeter College's fiscal year 2015 expense for rental of real property and equipment under operating leases was $1,147,052.
NOTE 10: RETIREMENT PLANS
Georgia Perimeter College participates in various retirement plans administered by the State of Georgia under two major retirement systems: Teachers Retirement System of Georgia (TRS) and Employees' Retirement System of Georgia (ERS). These two systems issue separate publicly available financial reports that include the applicable financial statements and required supplementary information. The reports may be obtained from the respective administrative offices.
The significant retirement plans that 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.
Teachers' Retirement System of Georgia and Employees' Retirement System of Georgia
Summary of Significant Accounting Policies
Pensions: For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Teachers Retirement System of Georgia (TRS) and Employees' Retirement System (ERS), additions to/deductions for TRS's and ERS's fiduciary net position have been

- 15 -

GEORGIA PERIMETER COLLEGE SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

determined on the same basis as they are reported by TRS and ERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
General Information about the Teachers Retirement System
Plan description: All teachers of the College as defined in 47-3-60 of the Official Code of Georgia Annotated (O.C.G.A.) are provided a pension through the Teachers Retirement System of Georgia (TRS). TRS, a cost-sharing multiple-employer defined benefit pension plan, is administered by the TRS Board of Trustees (TRS Board). Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. TRS issues a publicly available financial report that can be obtained at www.trsga.com/publications.
Benefits provided: TRS provides service retirement, disability retirement, and death benefits. Normal retirement benefits are determined as 2% of the average of the employee's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. An employee is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. Ten years of service is required for disability and death benefits eligibility. Disability benefits are based on the employee's creditable service and compensation up to the time of disability. Death benefits equal the amount that would be payable to the employee's beneficiary had the employee retired on the date of death. Death benefits are based on the employee's creditable service and compensation up to the date of death.
Contributions: Per Title 47 of the O.C.G.A., contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees were required to contribute 6.00% of their annual pay during fiscal year 2015. The College's contractually required contribution rate for the year ended June 30, 2015 was 13.15% of annual College payroll. College contributions to TRS were $5,160,451 and $4,811,154 for fiscal year ended June 30, 2015 and June 30, 2014, respectively. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.

General Information about the Employees' Retirement System
Plan description: - ERS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. ERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/formspubs/formspubs.
Benefits provided: The ERS Plan supports three benefit tiers: Old Plan, New Plan, and Georgia State Employees' Pension and Savings Plan (GSEPS). Employees under the old plan started membership prior to July 1, 1982 and are subject to plan provisions in effect prior to July 1, 1982. Members hired on or after July 1, 1982 but prior to January 1, 2009 are new plan members subject to modified plan provisions. Effective January 1, 2009, new state employees and rehired state employees who did not retain membership rights under the Old or New Plans are members of GSEPS. ERS members hired prior to January 1, 2009 also have the option to irrevocably change their membership to GSEPS.
Under the old plan, the new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 60 or 30 years of
- 16 -

GEORGIA PERIMETER COLLEGE SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 25 years of creditable service for members under age 60.
Retirement benefits paid to members are based upon the monthly average of the member's highest 24 consecutive calendar months, multiplied by the number of years of creditable service, multiplied by the applicable benefit factor. Annually, postretirement cost-of-living adjustments may also be made to members' benefits, provided the members were hired prior to July 1, 2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS.
Contributions: Member contributions under the old plan are 4% of annual compensation, up to $4,200, plus 6% of annual compensation in excess of $4,200. Under the old plan, the state pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these state contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The College's contractually required contribution rate, actuarially determined annually, for the year ended June 30, 2015 was 21.96% of annual covered payroll for old and new plan members and 18.87% for GSEPS members. The College's contributions to ERS were $8,933 and $12,199 for fiscal year ended June 30, 2015 and June 30, 2014, respectively. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions
At June 30, 2015, the College reported a liability for its proportionate share of the net pension liability for TRS and ERS totaling $48,627,332. The net pension liability was measured as of June 30, 2014. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2013. An expected total pension liability as of June 30, 2014 was determined using standard roll-forward techniques. The College's proportion of the net pension liability was based on contributions to TRS and ERS during the fiscal year ended June 30, 2014. At June 30 2014, the College's TRS proportion was 0.384031%, which was a decrease of 0.018087% from its proportion measured as of June 30, 2013. At June 30, 2014, the College's ERS proportion was 0.002935%, which was a decrease of 0.000028% from its proportion measured as of June 30, 2013.

- 17 -

GEORGIA PERIMETER COLLEGE SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

For the year ended June 30, 2015, the College recognized pension expense of $2,741,969 for TRS and $6,199 for ERS. At June 30, 2015, the College reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

TRS

Deferred

Deferred

Outflow of

Inflows of

Resources

Resources

ERS

Deferred

Deferred

Outflow of

Inflows of

Resources

Resources

Net difference between projected and

actual earnings on pension plan

$

0$

16,914,142 $

0$

26,867

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

0

2,568,001

0

836

College contributions subsequent to the

measurement date

5,160,451

0

8,933

0

Total

$

5,160,451 $

19,482,143 $

8,933 $

27,703

College contributions subsequent to the measurement date of $5,160,451 for TRS and $8,933 for ERS are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year Ending June 30:

TRS

ERS

2016 2017 2018 2019 2020

$ -4,812,171 $ $ -4,812,171 $ $ -4,812,171 $ $ -4,812,171 $ $ -233,455

-7,239 -7,030 -6,717 -6,717

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

- 18 -

GEORGIA PERIMETER COLLEGE SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

Teachers Retirement System:

Inflation Salary increases Investment rate of return

3.00% 3.75 - 7.00%, average, including inflation 7.50%, net of pension plan investment expense, including inflation

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

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

Inflation Salary increases Investment rate of return

3.00%
5.45 - 9.25%, including inflation 7.50%, net of pension plan investment expense, including inflation

Mortality rates were based on the RP-2000 Combined Mortality Table for the periods after service retirement, for dependent beneficiaries, and for deaths in active service, and the RP2000 Disabled Mortality Table set back eleven years for males for the period after disability retirement.
The actuarial assumptions used in the June 30, 2013 valuation were based on the results of an actuarial experience study for the period July 1, 2004 - June 30, 2009.

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

Asset Class

Target Allocation

Long-Term Expected Real Rate of Return *

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

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

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

100.00% * Rates shown are net of the 3.00% assumed rate of inflation

- 19 -

GEORGIA PERIMETER COLLEGE SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

Discount rate: The discount rate used to measure the total TRS and ERS pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and State of Georgia contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS and ERS pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Sensitivity of the College's proportionate share of the net pension liability to changes in the discount rate: The following presents the College's proportionate share of the net pension liability calculated using the discount rate of 7.50%, as well as what the College's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50 %) or 1-percentage-point higher (8.50%) than the current rate:

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

1% Decrease (6.50%)

Current Discount Rate
(7.50%)

1% Increase (8.50%)

$ 89,410,785 $ 48,517,251 $ 14,842,276

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

1% Decrease (6.50%)

Current Discount Rate
(7.50%)

1% Increase (8.50%)

$

160,519 $

110,081 $

67,145

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

Regents Retirement Plan

Plan Description The Regents Retirement Plan, a single-employer defined contribution plan, is an optional retirement plan that was created/established by the Georgia General Assembly in O.C.G.A. 47-21-1 et.seq. and administered by the Board of Regents of the University System of Georgia. O.C.G.A. 47-3-68(a) defines who may participate in the Regents Retirement Plan. An "eligible university system employee" is a faculty member or all exempt full and partial benefit eligible employees, as designated by the regulations of the Board of Regents. Under the Regents Retirement Plan, a plan participant may purchase annuity contracts from three approved vendors (VALIC, Fidelity, and TIAA-CREF) for the purpose of receiving retirement and death benefits. Benefits depend solely on amounts contributed to the plan plus investment earnings. Benefits are payable to participating employees or their beneficiaries in accordance with the terms of the annuity contracts.

Funding Policy 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 2015, the employer

- 20 -

GEORGIA PERIMETER COLLEGE SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

contribution was 9.24% for the participating employee's earnable compensation. Employees contribute 6% of their earnable compensation. Amounts attributable to all plan contributions are fully vested and non-forfeitable at all times.
Georgia Perimeter College and the covered employees made the required contributions of $2,027,795 (9.24%) and $1,316,751 (6%), respectively.
VALIC, Fidelity, and TIAA-CREF have separately issued financial reports which may be obtained through their respective corporate offices.
NOTE 11: RISK MANAGEMENT
The University System of Georgia offers its employees and retirees access to four different healthcare plan options. For the University System of Georgia's Plan Year 2015, the following healthcare plan options were available:
BlueChoice HMO Comprehensive Care Plan Consumer Choice HSA Plan Kaiser Permanente HMO
Georgia Perimeter College and participating employees and retirees pay premiums to the healthcare plan options to access benefits coverage. The respective health plan options are included in the financial statements of the Board of Regents of the University System of Georgia - University System Office. All units of the University System of Georgia share the risk of loss for claims associated with the self-insured plans; including the BlueChoice HMO, Comprehensive Care Plan and Consumer Choice HSA Plan.
The reserves for these plans are considered to be a self-sustaining risk fund. The Board of Regents has contracted with Blue Cross Blue Shield of Georgia to serve as the claims administrator for the selfinsured healthcare plans. In addition to the self-insured healthcare plan options offered to the employees of the University System of Georgia, a fully insured HMO healthcare plan option is also offered to System employees through Kaiser Permanente.
The Department of Administrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. 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.

- 21 -

GEORGIA PERIMETER COLLEGE SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

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 positions.
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, 2015.
NOTE 13: POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
Pursuant to the general powers conferred by the Official Code of Georgia Annotated Section 20-3-31, the Board of Regents of the University System of Georgia has established group health and life insurance programs for regular employees of the University System of Georgia. It is the policy of the Board of Regents to permit employees of the University System of Georgia eligible for retirement or that become permanently and totally disabled to continue as members of the group health and life insurance programs. The policies of the Board of Regents of the University System of Georgia define and delineate who is eligible for these post-employment health and life insurance benefits. Organizational units of the Board of Regents of the University System of Georgia pay the employer portion for group insurance for affected individuals. With regard to life insurance, the employer covers the total cost for $25,000 of basic life insurance. If an individual elects to have supplemental, and/or, dependent life insurance coverage, such costs are borne entirely by the employee.
The Board of Regents Retiree Health Benefit Plan is a single employer defined benefit plan. Financial statements and required supplementary information for the Plan are included in the publicly available Consolidated Annual Financial Report of the University System of Georgia. The College pays the employer portion of health insurance for its eligible retirees based on rates that are established annually by the Board of Regents for the upcoming plan year. For the 2015 plan year, the employer rate was between 70-75% of the total health insurance cost for eligible retirees and the retiree rate was between 25-30%.
As of June 30, 2015, there were 448 employees who had retired or were disabled that were receiving these post-employment health and life insurance benefits. For the year ended June 30, 2015, Georgia Perimeter College recognized as incurred $1,891,020 of expenditures, which was net of $766,275 of participant contributions.

- 22 -

GEORGIA PERIMETER COLLEGE SELECTED FINANCIAL NOTES
JUNE 30, 2015

EXHIBIT "D"

NOTE 14: AFFILIATED ORGANIZATIONS
The Georgia Perimeter College Foundation, Inc. is legally separate, tax exempt organizations whose activities primarily support Georgia Perimeter College, a unit of the University System of Georgia. Because the University System of Georgia is an organizational unit of the State of Georgia, this affiliated organization is considered a potential component unit of the State of Georgia in accordance with GASB Statements 61, 39 and 14. Therefore, the financial statements of these affiliated organizations are not included in these financial statements. Copies of the financial statements may be obtained from Georgia Perimeter College.

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SUPPLEMENTARY INFORMATION - 25 -

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

SCHEDULE "1"

$

15,425,916.50

385,940.07 3,787,860.92
33,533.63

19,633,251.12

340,408.73 7,761,198.18 1,678,108.61 4,024,899.71
13,804,615.23

492,356.45 776,895.30 1,007,605.18 253,842.92 1,803,347.27 1,467,453.73
27,135.04
5,828,635.89

$

19,633,251.12

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

GEORGIA PERIMETER COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (STATUTORY BASIS)
BUDGET FUND YEAR ENDED JUNE 30, 2015

SCHEDULE "2"

REVENUES
State Appropriation State General Funds
Other Funds
Total Revenues
CARRY-OVER FROM PRIOR YEARS
Transfers from Reserved Fund Balance
Total Funds Available
EXPENDITURES
Teaching
Excess of Funds Available over Expenditures
FUND BALANCE JULY 1
Reserved Unreserved
ADJUSTMENTS
Prior Year Payables/Expenditures Prior Year Receivables/Revenues Unreserved Fund Balance (Surplus) Returned
to Board of Regents - University System Office Year Ended June 30, 2014
Prior Year Reserved Fund Balance Included in Funds Available
FUND BALANCE JUNE 30
SUMMARY OF FUND BALANCE
Reserved Department Sales and Services Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over
Total Reserved
Unreserved Surplus
Total Fund Balance

BUDGET

ACTUAL

VARIANCE FAVORABLE (UNFAVORABLE)

$ 52,238,491.00 $ 52,238,491.00 $

0.00

122,964,515.00

113,772,551.19

-9,191,963.81

175,203,006.00

166,011,042.19

-9,191,963.81

0.00 175,203,006.00

3,819,511.84 169,830,554.03

3,819,511.84 -5,372,451.97

175,203,006.00

$

0.00

165,365,422.39

9,837,583.61

4,465,131.64 $ 4,465,131.64

6,646,768.59 9,901.69

24,939.99 -1,488,692.49

-9,901.69 -3,819,511.84

$

5,828,635.89

$

492,356.45

776,895.30

1,007,605.18

253,842.92

1,803,347.27

1,467,453.73

5,801,500.85

27,135.04

$

5,828,635.89

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

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

Teaching State Appropriation State General Funds Other Funds
Total Operating Activity

Original Appropriation

Amended Appropriation

Final Budget

Current Year Revenues

$

52,092,226.00 $

52,092,226.00 $

52,238,491.00 $ 52,238,491.00

112,984,789.00

112,984,789.00

122,964,515.00

113,772,551.19

$

165,077,015.00 $

165,077,015.00 $

175,203,006.00 $ 166,011,042.19

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

SCHEDULE "3"

Funds Available Compared to Budget

Prior Year

Adjustments and

Total

Carry-Over

Program Transfers

Funds Available

Variance Negative

Expenditures Compared to Budget

Variance

Actual

Positive

Excess of Funds Available
Over Expenditures

$

0.00 $

3,819,511.84

$ 3,819,511.84 $

0.00 $ 52,238,491.00 $

0.00

117,592,063.03

0.00 $ 52,238,491.00 $

-5,372,451.97

113,126,931.39

0.00 $ 9,837,583.61

0.00 4,465,131.64

0.00 $ 169,830,554.03 $

-5,372,451.97 $ 165,365,422.39 $

9,837,583.61 $

4,465,131.64

- 29 -

GEORGIA PERIMETER COLLEGE STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE
(STATUTORY BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2015

Teaching State Appropriation State General Funds Other Funds
Total Teaching
Prior Year Reserves Not Available for Expenditure Uncollectible Accounts Receivable

Beginning Fund Balance July 1

Fund Balance Carried Over from
Prior Period as Funds Available

Return of Fiscal Year 2014
Surplus

Prior Period Adjustments

$

4,461.70 $

0.00 $

3,824,951.83

-3,819,511.84

3,829,413.53

-3,819,511.84

2,827,256.75

0.00

-4,461.70 $ -5,439.99
-9,901.69

9,574.66 -1,473,327.16
-1,463,752.50

0.00

0.00

Budget Unit Totals

$

6,656,670.28 $

-3,819,511.84 $

-9,901.69 $

-1,463,752.50

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

SCHEDULE "4"

Other Adjustments

Early Return Fiscal Year 2015
Surplus

Excess of Funds Available
Over Expenditures

Ending Fund Balance June 30

Analysis of Ending Fund Balance

Reserved

Surplus

Total

$

0.00 $

1,023,909.48

1,023,909.48

-1,023,909.48

$

0.00 $

0.00 $ 0.00
0.00

0.00 $ 4,465,131.64
4,465,131.64

9,574.66 $

0.00 $

4,015,713.96

3,998,153.58

4,025,288.62

3,998,153.58

9,574.66 $ 17,560.38
27,135.04

9,574.66 4,015,713.96
4,025,288.62

0.00

0.00

1,803,347.27

1,803,347.27

0.00

1,803,347.27

0.00 $

4,465,131.64 $ 5,828,635.89 $ 5,801,500.85 $

27,135.04 $ 5,828,635.89

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

$ 492,356.45 776,895.30
1,007,605.18 253,842.92
1,803,347.27 1,467,453.73
$
$ 5,801,500.85 $

$

492,356.45

776,895.30

1,007,605.18

253,842.92

1,803,347.27

1,467,453.73

27,135.04

27,135.04

27,135.04 $ 5,828,635.89

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GEORGIA PERIMETER COLLEGE RECONCILIATION OF BUDGET TO GAAP
YEAR ENDED JUNE 30, 2015
Presented below is a reconciliation of the fund balance of the Budget Fund, as reported on Schedule 1, to Net Position of business-type activities, as reported on Exhibit A.
Total Fund Balances - Budget Fund - Non-GAAP Basis (Schedule "1")
Amounts reported for Business-Type Activities in the Statement of Net Position are different because:
Capital Assets used in Business-Type Activities are not reported in the Budget Fund.
Uncollectible accounts receivable are reported as an asset and reserved fund balance in the Budget Fund and as a contra-asset account on the Statement of Net Position.
Changes in the Fair Market Value of Investments are recognized on the Statement of Net Position, but are not reported in the Budget Fund.
Agency Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Agency Fund Activity
Auxiliary Enterprises Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Auxiliary Enterprises Fund Activity
Endowment Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Endowment Fund Activity
Loan Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Loan Fund Activity
Student Activities Fund activities are not reported as a component of the Budget Fund. Assets Liabilities Total Net Effect of Student Activity Fund Activity
The budgetary basis of accounting implemented by the State of Georgia recognizes expenditures when encumbered. The following adjustments were made to eliminate this activity for reporting on the Statement of Net Position. Payables reported in the Budget Fund that are based on encumbrances are eliminated for GAAP reporting. Reimbursement from grantors reported as revenues in the Budget Fund that are for expenditures based on encumbrances are deferred for GAAP reporting. Total Net Effect of Encumbrance Activity
Certain Liabilities are not due and payable in the current period and therefore are not reported as liabilities in the Budget Fund. Prepaid Expenses Capital Leases Payable Compensated Absences Payable Accrued Payables Contracts Payable Interest Payable Deferred Loss on Defined Benefit Pension Plans Net Pension Liability Deferred Gain on Defined Benefit Pension Plans Total Liabilities
Net Position of Business-Type Activities (Exhibit "A")
The supplementary information presented on Schedules 1, 2, 3 and 4 was prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a special purpose framework. The information was derived from, and relates directly to, the same information used to prepare the financial statements. However, the budgetary statutes and regulations of the State of Georgia require reporting of certain information that is not in accordance with generally accepted accounting principles. Presented on this schedule is a reconciliation of the fund balance of the Budget Fund, as reported on Schedule 1, to Net Position of business-type activities, as reported on Exhibit A.
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SCHEDULE "5"

$

5,828,636

153,902,848

$ 1,924,383 -1,924,719

$ 5,514,823 -963,870

$

42,762

0

$

73,942

0

$ 1,431,169 -155,818

-1,803,347 -23,422 -336
4,550,953 42,762 73,942
1,275,351

$ 7,761,198 -570,996

7,190,202

$

48,999

-75,006,098

-3,343,926

-182,500

-8,691

-343,847

5,169,384

-48,627,332

-19,509,846

-141,803,857

$ 29,233,732

Totals per Annual Supplement
Accruals June 30, 2015 June 30, 2014
Compensated Absences June 30, 2015 June 30, 2014
Adjustments Shared Services on Jointly Staffed Personnel Atlanta Metropolitan College Denson, Heather Eltigani, Hamid Fuller, Greg Rollings, Media Board of Regents Millsaps, John Clayton State University Dupont, Akil Houghton, Stacey Shepard-White, Felisha West, Veronica Columbus State University Harris, Nikita Dalton State College Blair, Samantha Georgia Gwinnett College Abebe, Gebeyehu Morales, Jose Patterson, Hazelyn Georgia Highlands College Clark, Merry Harnden, Tom Georgia Institute of Technology Reddick, Erin Tome, Carla Georgia Southwestern State University Dodds, Priscilla McKinley, Lee Georgia State University Artinian, Liana Karapanou, Arhontia Mirpour, Rachel Stark, Ron Stroeva, Elina Trussell, Melissa Gordon College Broome, Darren Kennesaw State University Hammiller, Meghan Southern Polytechnic State University Adair, Craig Burton, Chad Lewis, Ericka Nelston, Latoya Nourollahi, Marian Payne, Terry Portalatin, Jorge Shabazz, Mya University of Georgia Byrd, Charles Daugherty, Noah Davis, Nicholas Evans, Sharon Hendricks, Andrea McDowell, Robin Veeraghattam, Vijay Yi, Hyangsoon University of North Georgia Gonzalez, Josefina McCoy, Sonya University of West Georgia Chilluffo, Ronald Valdosta State University Elliott, Nathan Tonido, Miguel

GEORGIA PERIMETER COLLEGE RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2015
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SCHEDULE "6"

SALARIES

$

71,319,760 $

TRAVEL 490,073

354,643 -310,261

3,106,294 -3,151,882

-215 -4,521 4,521 4,521
-5,000
-5,878 2,152 4,934 -4,306
2,261
9,904
-3,165 -12,918 -12,918
9,904 7,320
12,380 592
-4,898 -12,918
2,323 -3,230
393 165,864
9,550 2,202
6,782
-2,965
-960 -8,320 -9,870 -2,746 3,141 -20,160 -20,160 -6,720
1,399 -1,800 -1,800 -8,935 -10,877 2,333 4,243 2,476
9,043 -2,584
13,625
-2,476 6,447

$

71,436,524 $

490,073

SECTION II FINDINGS, QUESTIONED COSTS AND OTHER ITEMS

GEORGIA PERIMETER COLLEGE SCHEDULE OF FINDINGS, QUESTIONED COSTS AND OTHER ITEMS
YEAR ENDED JUNE 30, 2015
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
No matters were reported.
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
OTHER ITEMS (NOTED FOR MANAGEMENT'S CONSIDERATION)
Accounting Controls Overall Observation Our examination of Georgia Perimeter College included a review of IT General Controls related to significant financial applications. We noted several conditions of inadequate logical access controls to protect the integrity of information maintained in significant financial applications.
Recommendation Georgia Perimeter College should enhance logical access controls to include general security settings to limit access to unique authorized individuals and formal policies and procedures for rescinding user access to the financial application and access to supporting infrastructure. Formal Logical Access policies and procedures will assist in mitigating the risk of manipulation, corruption, or loss of financial data, to ensure the integrity of information which is utilized by management for decision making and financial reporting.
Management's Response GPC Management agrees with the recommendation and will be working with Georgia State University during FY 2016 to formalize consolidated policies and procedures and implement logical access enhancements that will address the risks identified. We feel it is important to add that no data breach or unauthorized access occurred during FY 2015.
Responsible Official Diane D. Hickey Interim Executive Vice-President for Financial and Administrative Affairs Georgia Perimeter College