Fort Valley State University, Fort Valley, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2000

FORT VALLEY STATE UNIVERSITY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

EXHffiITS

FINANCIAL STATEMENTS

A COMBINED BALANCE SHEET

ALL FUND GROUPS

2

B COMBINED STATEMENT OF CHANGES IN FUND BALANCES

ALL FUND GROUPS

4

C STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,

AND OTIlER CHANGES

6

D NOTES TO TIlE FINANCIAL STATEMENTS

7

SUPPLEMENTARY INFORMATION

E COMBINING BALANCE SHEET

CURRENT FUNDS - UNRESTRICTED

20

F COMBINING STATEMENT OF CHANGES IN FUND BALANCES

CURRENT FUNDS - UNRESTRICTED

22

G COMBINING STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,

AND OTHER CHANGES

UNRESTRICTED

24

SCHEDULES

SCHEDULES OF REVENUES AND EXPENDITURES COMPARED TO BUDGET

1

RESIDENT INSTRUCTION

26

2

LOTTERY FOR EDUCATION

28

3 CHANGES IN INVESTMENT IN PLANT

30

4 SCHEDULE OF FUND BALANCES

CURRENT FUNDS AND PLANT FUNDS

32

5 RECONCILIATION OF SALARIES AND TRAVEL

34

FORT VALLEY STATE UNIVERSITY - TABLE OF CONTENTS -
SECTIONll AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS '1r>. Y SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

-
SECTION I . FINANCIAL

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
November 21,2000

Honorable Roy E. Barnes, Governor Members of the General Assembly of Georgia Members of the Board of Regents of the University System of Georgia
and Honorable Oscar L. Prater, President Fort Valley State University
INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMAnON
Ladies and Gentlemen:
We have audited the accompanying financial statements (Exhibits A through D) ofFort Valley State University as of and for the year ended June 30, 2000. These financial statements are the responsibility ofthe University's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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 OpI nIOn.
As described in Note 1 to the financial statements, Georgia Law and State budgetary policy require the University to prepare its financial statements on a basis which is not consistent with generally accepted accounting principles with respect to the recording of encumbrances as expenditures and liabilities. To conform with generally accepted accounting principles, encumbrances should be recorded as a reservation of fund balance. The effects on the financial statements of this departure from generally accepted accounting principles were not reasonably determinable, but are believed to be material.

00ARL-63X

As disclosed in Note 1 to the financial statements, the University did not report the liability and related expenditure for compensated absences in the current funds as required by generally accepted accounting principles. If compensated absences were reported, liabilities would be increased and fund balance would be decreased by $1,756,198.50 as ofJune 30, 2000, and the net change in fund balance for the year ended June 30, 2000, would be decreased by $52,636.93.
As discussed in Note 1 to the financial statements, the University did not report an allowance for estimated uncollectible accounts receivable. To conform to generally accepted accounting principles, these amounts should be included in the financial statements. The effects on the financial statements of this departure from generally accepted accounting principles were not reasonably determinable, but are believed to be material.
In our opinion, except for the effects on the financial statements ofthe matters discussed in the third, fourth, and fifth paragraphs, the financial statements referred to above present fairly, in all material respects, the financial position of Fort Valley State University as ofJune 30, 2000, and the changes in fund balances and the current operating funds revenues, expenditures, and other changes for the year then ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying combining statements (Exhibits E through G) and the financial schedules (Schedules 1 through 5) are presented for purposes of additional analysis and are not a required part of the financial statements of Fort Valley State University. Such information has been subjected to the auditing procedures applied in the audit ofthe financial statements and, in our opinion, except for the effects of the matters discussed in the third, fourth, and fifth paragraphs, such information is fairly presented in all material respects in relation to the financial statements taken as a whole.
As more fully discussed in Section ill, Current Year Findings and Questioned Costs, Fort Valley State University expended certain Federal grant funds ofthe Student Financial Aid Cluster Program in a manner that may have violated certain program compliance requirements. The outcome ofthe resulting questioned costs is uncertain at this time, pending a management decision by the Federal grantor agency. Accordingly, no provision for any liability has been made in the financial statements for possible Federal claims for refunds of those grant monies.
Respectfully submitted,

RWH:jb OOARL-63X

~.~-...
R ssell W. Hinton State Auditor

FINANCIAL STATEMENTS - 1-

FORT VALLEY STATE UNIVERSITY COMBINED BALANCE SHEET ALL FUND GROUPS JUNE 30, 2000

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable Inventories Prepaid Items Due from Other Fund Groups Investment in Plant

CURRENT FUNDS UNRESTRICTED RESTRICTED

LOAN FUNDS

ENDOWMENT FUNDS

$

1.367,595.80

$ 101,791.85 $ 1,438,350.20

2,682.32

67,000.00

797,420.84 $ 1.453.050.45

2.214,987.02

8,415.08

308,604.72

60,000.00

589.978.44

Total Assets

$_....::3.123,599.80 $ 1,453.050.45 $ 2,319.461.19 $ 1.513.765.28

LIABILITIES AND FUND BALANCES
Liabilities Accounts Payable Student Deposits Deferred Revenue Tuition and Fees Other Deposits Held in Custody for Others Due to Other Fund Groups
Total Liabilities
Fund Balances U. S. Government Grants Refundable Institutional Loans - Restricted Endowment Net Investment in Plant Restricted Unrestricted
Total Fund Balances



$

1,224,032.89

118,547.46

227,959.00 4,753.00

_ _ _ _ _ _ $ _~58~9.::::97~8::.:::.44:::...

$

1,575.292.35 $ _--:::58=.:9:.:,9~7~8.c::::44~

$ $ _---'1~.54:::;8~,3~0:.:..7::::.45:::...

$

1,548,307.45 $

$ 2,315.762.76 3.698.43 $ 1,513,765.28
863,072.01
863.072.01 $ 2,319,461.19 $ 1,513.765.28

Total Liabilities and Fund Balances

$_~3,123.599.80 $ 1,453.050.45 $ 2,319,461.19 $ 1,513,765.28

The notes to the financial statements are an integral part of this statement.
-2-

EXHIBIT "A"

UNEXPENDED

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

AGENCY FUNDS

TOTAL (Memorandum
Only)L....-_

$ 1,480,841.02 $

839,057.20

$

70,196.01

_ _ _ _ _ _ $ 81,992,627.87

76,801.12 $

5,304,437.19 69,682.32
4,544,069.40 308,604.72 60,000.00 589,978.44
81,992,627.87

$ 1,551,037.03 $ _ _,..:;::83~9,057.20 $ 81,992,627.87 $


76,801.12 $ 92,869,399.94

$ 1,550,499.04 $

$ 1,550,499.04 $

$

537.99 $

$

537.99 $

259,391.22

$

259,391.22

$

$ 81,992.627.87
579,665.98
579,665.98 $ 81.992.627.87

28,089.73 $
48,711.39
76,801.12 $

3,062,012.88 118,547.46
227,959.00 4,753.00
48,711.39 589,978.44
4,051,962.17

$ 2,315,762.76
3,698.43 1,513,765.28 81,992,627.87
863.072.01 2,128,511.42
$ 88,817,437.77

$ 1,551,037.03 $ _ _,..:;::83~9.057.20 $ 81,992,627.87 $ _~7~6,801.12 $ 92,869,399.94

-3-

FORT VALLEY STATE UNIVERSIIY COMBINI;D STATEMENT OF CHANGI;S IN FUND BALANCES
ALL FUND GROUPS YEAR ENDED JUNE 30, 2QOO

RI;VENUES AND OTHER ADDITIONS
Unrestricted Current Fund Revenues State Appropriations
Regular Lottery Proceeds Federal Grants and Contracts State Grants and Contracts Private Gifts, Grants, and Contracts Investment Income Endowment Other Net Increase/Decrease in Fair Value of Investments Interest on Loans Receivable Adjustments Prior Years' Expenditures/Accounts Payable Prior Years' Checks Voided Expended for Plant Facilities Current Funds Plant Funds
Unexpended Renewals and Replacements Georgia State Financing and Investment Commission Other Additions Insurance Recoveries Recovery of Prior Years' Cancelled Loans
Total Revenues and Other Additions
EXPENDITURES AND OTHER DEDUCTIQNS
Educational and General Expenditures Auxiliary Enterprises Expenditures Indirect Costs Recovered Remittances to the Board of Regents of the
University System of Georgia Prior Year's Unrestricted Fund Balance (Surplus)
Adjustments Prior Years' Revenues/Accounts Receivable
Loans Assigned to Federal Govemment Loan Cancellations and Write-Offs Administrative and Collection Costs Expended for Plant Facilities
Capitalized Noncapitalized Disposals/Deletions/Adjustments
Total Expenditures and Other Deductions
TRANSFERS BETW~N FUNDS
Nonmandatory Renewals and Replacements Capital Projects
Total Transfers Between Funds
Net Increase/(Decrease) for the Year
FUNP BALANCI;S JULY 1. 1999

CURRENT FUNDS

UNRESTRICTED

RESTRICTED

LOAN FUNDS

$ 30,551,558.67

$ 26,376,198.56 $
1,158,227.15 409,726.82 49,993.84
46,789.37 38,559.97

30,990.30 11,000.00
4,511.98 43,345.41

..

22,756.00

$

30,636,908.01 $ 27,994,146.37 $ _---:1~12~,6~0~3~.6:::..9

$ 26,902,217.23 $ 27.688.000.27
3,478,893.99 324,537.57
24.102.93
12,581.37
$

27.214.86 23,435.05 54.638.78

$ 30,417,795.52 $ 28,012,537.84 $ _---:.10"'5...,,2:::::8:=;8.""69:<...

$

-244,407.99

-258,803.84

$ _ _...:-5""03"",2:.;1,,,,1;.::.8=-3

$

-284,099.34 $

1,832,406.79

-18,391.47 $
881,463.48

7,315.00 2.312,146.19

FUNQ.BALANQES JUNE 30. 2000

$

The notes to the financial statements are an integral part of this statement.

-4-

1.548,307.45 $

863,072.01 $ _.:;2,319,461.19

EXHIBIT "B"

ENDOWMENT FUNDS

UNEXPENDED

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

TOTAL (Memorandum
Only},--_

$

1,389,674.00

116,000.00

101,791.57

$

79,330.39

82,440.27
537.99 $

56,283.92

$

79,330.39 $

1,746,727.75 $

$ 947.30
947.30 $

$ 30,551,558.67

49,746.28

1,389,674.00 116,000.00
26,508,980.43 1,158,227.15 470,473.10

49,993.84 86,952.25 79,330.39 43,345.41

48,274.66 38,559.97

1,636,164.25

1,636,164.25

1,734,484.48 367,774.78 335,246.70

1,734,484.48 367.774.78 335.246.70

56.283.92 22,756.00

4,123,416.49 $ 64,694.080.00

$

0.00

$ 54.590,217.50 3,478,893.99 324.537.57

$

116,326.25

140,429.18
12.581.37 27.214.86 23,435.05 54.638.78

1,734,484.48 $ 11.705.28

367,774.78 43.922.46 $

340,887.20

2,102.259.26 55.627.74
340,887.20

$

0.00 $

1,862,516.01 $

411.697.24 $

340,887.20 $ 61.150,722.50

$

79,330.39 $

1,434,434.89

$

244,407.99

258.803.84

$ _ _~50~3~.2~11~.8~3~

-115.788.26 $

92,461.89 $

116,326.25

487.204.09

$
$ 3.782,529.29 $
78.210,098.58

0.00 0.00
~O~.oo~
3.543.357.50
85,274,080.27

$ _..:.1,513,765.28 $

537.99 $

579,665.98 $ 81,992,627.87 $ 88,817,437.77

-5-

FORT VALLEY STATE UNIVERSITY STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES.
AND OTHER CHANGES YEAR ENDED JUNE 30. 2000

EXHIBIT"C"

UNRESTRICTED

RESTRICTED

TOTAL (Memorandum
Onl>1I.-_ _

REVENUES
State Appropriations Tuition and Fees Federal Grants and Contracts State Grants and Contracts Private Gifts, Grants, and Contracts Endowment Income Sales and Services of Educational Activities Sales and Services of Auxiliary Enterprises Other Sources
Total Revenues

$ 19,828,738.00
6,394,584.03

$ 19,828,738.00
6,394,584.03

326,344.57 $ 25,931,761.47

26,258,106.04

3,190.00

1,144,270.51

1,147,460.51

3,990.00

561,946.29

565,936.29

50,022.00

50,022.00

24,815.20

24,815.20

3,621,349.05

3,621,349.05

348,547.82

348,547.82

$ 30,551,558.67 $ 27,688,000.27 $ 58,239,558.94

EXPENDITURES
Educational and General Instruction Research Public Service Academic Support Student Services Institutional Support Operation and Maintenance of Plant Scholarships and Fellowships
Auxiliary Enterprises Student Housing Faculty and Staff Housing Food Services Stores and Shops Intercollegiate Athletics Other Service Units
Total Expenditures

$

11,806,437.88 $

1,734,891.29 $ 13,541,329.17

350,875.61

2,419,305.56

2,770,181.17

383,462.74

2,312,416.73

2,695,879.47

2,144,306.76

2,916,444.36

5,060,751.12

2,563,480.43

1,054,810.24

3,618,290.67

5,677,460.90

1,002,261.49

6,679,722.39

3,586,618.91

3,586,618.91

389,574.00

16,247,870.60

16,637,444.60

1,588,657.01 21,827.31 312,059.67 182,806.20 997,025.61 376,518.19

1,588,657.01 21,827.31 312,059.67 182,806.20 997,025.61 376,518.19

$

30,381,111.22 $ 27,688,000.27 $ 58,069,111.49

OTHER TRANSFERS AND ADDITIONSILDEDUCTIONS)

Excess of Restricted Receipts over

Transfers to Revenues

Transfers for Renewals and Replacements

$

Transfers for Capital Projects

Prior Period Adjustments (Net)

Remittances to the Board of Regents

of the University System of Georgia

Prior Year's Unrestricted Fund

Balance (SurplUS)

Total Other Transfers and Additionsl(Deductions) $

$
-244,407.99 -258,803.84
72,767.97

-18,391.47 $

-18,391.47 -244,407.99 -258,803.84
72,767.97

-24,102.93
-454,546.79 $

-24,102.93 -18,391.47 $ _-=-4:!.:7~2:e:,9~3~8.~26~

Net Increase/(Decrease) in Fund Balances

$ _ _..;;,-2~84:;;:;,099.34 $ _ _-1,;,;;;8,391.47 $

-3..,;0;:;,2,490.81

The notes to the financial statements are an integral part of this statement.
-6-

FORT VALLEY STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000

EXHIBIT "D"

NOTE 1: S:o.= ~~~Y~O~F~S~I~G~NIF~IC~AN~TL.:!A~C~C~O~UNT~IN~G:!..!P~O~L::!:!.IC~IE~S
REPORTING ENTITY Fort Valley State University is one ofthirty-four (34) State supported member institutions ofhigher education in Georgia which comprise the University System ofGeorgia, an organizational unit ofthe State ofGeorgia. The accompanying financial statements reflect the operations ofFort Valley State University as a separate reporting entity.
The Board of Regents has constitutional authority to govern, control and manage the University System ofGeorgia. 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. Fort Valley State University does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Fort Valley State University is considered an organizational unit of the Board of Regents of the University System of Georgia reporting entity for financial reporting purposes because of the significance of its legal, operational, and financial relationships with the Board of Regents as defined in Section 2100 ofthe Governmental Accounting Standards Board Codification of Governmental Accounting and Financial Reporting Standards.
FUND ACCOUNTING In order to ensure observance of limitations and restrictions placed on the use of the resources available to the University, the accounts of the University are maintained in accordance with the principles of fund accounting. This is the procedure by which resources for various purposes are classified for accounting and reporting purposes into funds that are in accordance with activities or objectives specified. Separate accounts are maintained for each fund; however, in the accompanying financial statements, funds that have similar characteristics have been combined into fund groups. Accordingly, all financial transactions have been recorded and reported by fund group.
Within each fund group, the University's fund balance allocations and designations represent those portions ofthe fund balances that are reserved, restricted and/or designated for specific future use by legal covenants, State policies, or institutional policies.
Fund groups and funds presented in the accompanying financial statements are as follows:
CURRENT FUNDS
UNRESTRICTED - The fund used to account for those economic resources over which the University retains full control to use for purposes of performing the primary functions of the University, e.g., instruction, research, public service, etc.
RESTRICTED - The fund used to record externally restricted funds which may onlybe utilized in accordance with the purposes established by their source. Restricted current funds are recorded as revenues and expenditures when expended for current operating purposes.
-7-

FORT VALLEY STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000

EXHIBIT "0"

NOTE 1: S ~~ Y OF SIGNIFICANT ACCOUNTING POLICIES
FUND ACCOUNTING
LOAN FUNDS
The fund used to account for resources which have been made available for financial loans to students.
ENDOWMENT FUNDS
The fund used to account for gifts that are subject to the restrictions by the donors of gift instruments requiring that the principal be invested in perpetuity and income only be utilized.
PLANT FUNDS
UNEXPENDED - The fund used to account for financial resources utilized to acquire or to construct physical properties for institutional purposes.
RENEWALS AND REPLACEMENTS - The fund used to account for resources set aside for the renewal and replacement of institutional properties.
INVESTMENT IN PLANT - The fund which shows the total amounts representing the book value of all physical properties owned by the University. Net Investment in Plant is an equity account showing the total book value ofphysical properties belonging to the University less the amount of any indebtedness to others.
AGENCY FUNDS
The fund used to account for resources held by the University as custodian or fiscal agent for individual students, faculty, staff members, and organizations.
BASIS OF ACCOUNTING Except as otherwise disclosed in these notes, the financial statements are prepared on the modified accrual basis of accounting, which is materially the same as the accrual basis of accounting applicable to colleges and universities prescribed in the American Institute of Certified Public Accountants' audit guide reporting model. The modified accrual basis ofaccounting is defined as that method ofaccounting in which expenditures, other than accrued interest on general long-term debt, are recorded at the time liabilities are incurred and revenues are recorded when available and measurable to finance expenditures of the fiscal period.
Contractual obligations for goods and services which have not been received at the end ofthe fiscal year are recognized as expenditures and liabilities in the accompanying financial statements. This accounting practice causes expenditure-driven grant revenues to be accrued based, in part, on the
-8-

FORT VALLEY STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
unexecuted portion of contracts for goods and services. The recognition of encumbrances as expenditures and liabilities is in confonnity with accounting practices prescribed or pennitted by statutes and regulations of the State of Georgia, but is not consistent with generally accepted accounting principles, which provide for the recording of encumbrances as a reservation of fund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures detennined in accordance with generally accepted accounting principles.
Compensated absences represent obligations ofthe University relating to employees' rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulated annual leave in which payment is probable and can be reasonably estimated. The compensated absences liability of $1,756,198.50 and a related net current year expenditure of $52,636.93 have not been reported in the current funds as required by generally accepted accounting principles.
Prior period adjustments and certain other items are reported as additions to and deductions from fund balances of current funds in the accompanying financial statements. This presentation is in accordance with accounting practices prescribed or permitted by statutes and regulations ofthe State ofGeorgia, but differs from generally accepted accounting principles in that immaterial adjustments should be reported as current period revenues and expenditures. The effect of this departure is deemed to be immaterial to the fair presentation of the fmancial statements.
To the extent that Current Funds and Plant Funds are used to finance plant assets, the amounts so provided are accounted for as expenditures. The balances shown on the Combined Balance Sheet as Net Investment in Plant reflect the accumulated expenditures made for plant facilities through Current Funds and Plant Funds and also include expenditures made for plant facilities expended by the Georgia State Financing and Investment Commission on behalfofthe University. Donated fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded values. No depreciation has been provided on physical plant and equipment.
It is the policy of Fort Valley State University to record assets acquired through capital leases as additions to Investment in Plant at the end ofthe lease. The liability for such leases at fiscal year-end is not recorded on the Combined Balance Sheet. This presentation differs from generally accepted accounting principles in that the assets and the related liability resulting from capital leases should be recorded in Investment in Plant at the inception ofthe agreement at the net present value ofthe future minimum lease payments, not to exceed the fair value of the leased property. The effect of this departure is deemed to be immaterial to the fair presentation of the financial statements.
The Statement of Current Funds Revenues, Expenditures, and Other Changes is a statement of financial activities of current funds related to the current reporting period. It does not purport to present the results of operations or the net income or loss for the period as would a statement of income or a statement of revenues and expenses.
- 9-

FORT VALLEY STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUDGET The Board ofRegents ofthe University System ofGeorgia - Administrative Central Office receives State appropriation allotments for units of the University System of Georgia. The appropriated budget is adopted at the Board level and represents appropriations provided by the Amended Appropriations Act of 1999-2000. The appropriated budget covers current funds and plant funds, except for Auxiliary Enterprises and Student Activities which are not subject to appropriation. The allocation ofthe appropriated budget is made to the College by the Administrative Central Office. In addition, the College receives Federal funds and other funds directly and includes these funds in the budget filed with the Administrative Central Office.

A comparison of anticipated funds available and budgeted expenditures by budget unit object class indicates that the following object class was overspent by the amount identified below:

Resident Instruction Capital Outlay

$ 652.2J3.00

This overexpenditure of budget constitutes a violation of Board of Regents policy, but does not constitute a statutory violation of budget authority. Statutory violations of budget authority are reported at the Board object class level.

CASH AND CASH EQUIVALENTS Cash and Cash Equivalents consist of petty cash, demand deposits, certificates of deposit and temporary investments in authorized financial institutions, and cash management pools that have the general characteristics of demand deposit accounts.

INVESTMENTS Investments are reported at fair value. Funds received by the University as endowments or for restricted purposes are invested according to conditions stipulated by the donor, grantor, or in accordance with the Board of Regents authorizing resolutions. Gains and losses on investment transactions are accounted for in the funds where such assets are recorded.

ACCOUNTS RECEIVABLE Accounts receivable consist ofreimbursements due from Federal, State, local, and private grants and contracts, and other receivables disclosed from information available. No provision has been made for an allowance for doubtful accounts within the accompanying financial statements.

INVENTORIES Inventories ofconsumable supplies are recorded on the consumption method and are valued at cost on the Combined Balance Sheet using the first-in, first-out method.

Inventories of goods for resale are valued at cost using the first-in, first-out method.

-10 -

FORT VALLEY STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000

EXHIBIT "D"

NOTE 1: S

Y OF SIGNIFICANT ACCOUNTING POLICIES

PREPAID ITEMS Prepaid items are payments made to vendors in advance ofthe receipt ofgoods and services that will benefit periods subsequent to the balance sheet date.

MEMORANDUM ONLY - TOTAL COLUMNS The total columns on the financial statements are captioned "Memorandum Only" because they do not represent consolidated financial infonnation and are presented only to facilitate financial analysis. The columns do not present infonnation that reflects financial position or changes in financial position in confonnity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation ofthis data.

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds belonging to the State ofGeorgia 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 anyone or more ofthe following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:

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

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

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

(4) Industrial revenue bonds and bonds ofdevelopment authorities created by the laws ofthe 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, or 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.

- 11 -

FORT VALLEY STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000

EXHffiIT "0"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES As authorized in the Official Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted policies which allow agencies of the State of Georgia (which includes organizational units of the Board of Regents of the University System of Georgia) the option of exempting demand deposits from the collateral requirements.

The treasurer ofthe Board ofRegents is responsible for all details relative to furnishing the required depository protection for all units of the University System of Georgia.

CATEGORIZATION OF DEPOSITS For purposes of analysis of custodial credit risk, cash deposits consist of all bank balances which include demand deposits and/or interest bearing accounts. The bank balances as of June 30, 2000, are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk:

Category 1 - Amounts covered by depository insurance or collateralized with securities (at fair value) held by the University or by its agent in the University's name.

Category 2 - Amounts collateralized with securities (at fair value) held by the pledging financial institution's trust department or agent in the University's name.

Category 3 - Amounts collateralized with securities (at fair value) held by the pledging financial institution, or by its trust department or agent but not in the University's name, and amounts uncollateralized.

Total Cash Deposits

Carrying

Bank

Amount

Balances

I

3

$ J.932.39.3 ~ $ 5,892.~~ $ 2!i7'().ill4OO $ 532,Q9.56 $ 5.09],62.U&

CATEGORIZATION OF INVESTMENTS Investments are summarized and classified as to custodial credit risk within the three categories described below:

Category 1 - Insured or registered, or securities held by the University or its agent in the University's name.

Category 2 - Uninsured and unregistered, with securities held by the counterparty's trust department or agent in the University's name.

Category 3 - Uninsured and unregistered, with securities held by the counterparty, or by its trust department or agent but not in the University's name.

- 12-

FORT VALLEY STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000

EXHIBIT "D"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

CATEGORIZATION OF INVESTMENTS
The carrying amounts of investment balances as of June 30, 2000, are categorized below:

TYPe of Investment U. S. Government Securities $

Risk Categ~on~e::2.s

1

2

1.325.QQ $

0.00 $

_
3

Carrying Amount

0.00 $ 1,325.00

Investments Not Subject to Categorizations:

Board of Regents Balanced Income Fund
Total Investments

1,438,350.20
$...1 .439,675.2Q

Funds invested in an investment pool managed by another governmental entity are not required to be categorized since the University did not own any specific, identifiable investment securities ofthe
pool.

NOTE 3: INVESTMENT IN PLANT

The following is a summary of Investment in Plant fixed assets as of June 30, 2000:



Land Buildings Improvements Other Than Buildings
Equipment Library Books and Collections

$ 1,262,548.17 54,219,795.34 4,879,494.49 16,374,719.13 5,256,070.74

Total Investment in Plant

$~922.62Z.87

NOTE 4: RISK MANAGEMENT
Fort Valley State University is a participant in the Board of Regents of the University System of Georgia Health Benefits Plan, which is a self-insurance program of health and dental benefits for employees and retirees of the University System of Georgia. The University and participating employees and retirees pay premiums to the Health Benefits Plan for this health insurance coverage. The Health Benefits Plan is included in the financial statements of the Board of Regents of the University System ofGeorgia - Administrative Central Office. All units ofthe University System of Georgia share the risk of loss for claims of the Health Benefits Plan. The Health Benefits Plan is considered a self-sustaining risk fund that provides health coverage for its members up to a maximum lifetime benefit of $1,000,000.00 per person and dental coverage up to an annual


- 13 -

FORT VALLEY STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000

EXHmIT "D"

NOTE 4: RISK MANAGEMENT

maximum of $1,000.00 per person. The Board of Regents has contracted with Blue Cross Blue

Shield ofGeorgia to process claims in accordance with the Health Benefits Plan as established bythe

Board of Regents.

.

The Department ofAdministrative Services (DOAS) has the responsibility for the State of Georgia ofmaking and carrying out decisions that will minimize the adverse effects ofaccidental 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. The University, as an organizational unit ofthe 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 ofprofessional 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 SelfInsurance Fund.

NOTES: RETffiEMENTPLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Plan Description
Fort Valley State University participates in the Teachers Retirement System of Georgia (TRS), a cost-sharing multiple-employer defined benefit pension plan established bythe General Assembly of Georgia for the purpose of providing retirement allowances and other benefits for teachers of the State of Georgia. TRS provides service retirement, disability retirement, and survivor's benefits for its members in accordance with State statute. The Teachers Retirement System ofGeorgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

Funding Policy
Employees ofthe University who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The University makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2000, the employer contribution rate was 11.29% for covered

- 14-

FORT VALLEY STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000

EXHIBIT "D"

NOTE 5: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Funding Policy
employees. In addition, the University contributed 2.35% to the TRS on behalf of employees electing to participate in the Regents Retirement Plan. Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2000 1999 1998

100% 100% 100%

$ 2,013,918.77 $ 2,024,909.52 $ 1,884,551.77

REGENTS RETIREMENT PLAN

Plan Description
The Regents Retirement Plan, a single-employer defined contribution plan, is an optional retirement plan established and administered by the Board of Regents of the University System of Georgia, under which it may purchase annuity contracts for the purpose of providing retirement and death benefits for eligible faculty and principal administrators. 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
Member contribution requirements are established by the Board of Trustees of the Teachers Retirement System. Employer contributions are established by statute and may be amended only by the General Assembly ofthe State ofGeorgia. The employer contributes 8.79% ofthe participating employee's earnable compensation. Employees contribute 5% of their earnable compensation. Amounts attributable to all plan contributions are fully vested and non-forfeitable at all times.

The University and the covered employees made the required contributions of$319,220.09 (8.79%) and $181,581.99 (5%), respectively.

Plan Description
Fort Valley State University participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employer defined contribution plan established by the General Assembly ofGeorgia for the purpose ofproviding retirement coverage for State employees who are temporary, seasonal, and parttime and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees ofthe Employees' Retirement System of Georgia.

- 15 -

FORT VALLEY STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000

EXHIBIT "0"

NOTE 5: RETIREMENT PLANS
GEORGIA DEFINED CONTRIBUTION PLAN
Benefits
A member may retire and elect to receive periodic payments after attainment ofage 65. Thepayment will be based upon mortality tables and interest assumptions to be adopted by the Board ofTrustees. Ifa member has less than $ 3,500.00 credited to his/her account, the Board ofTrustees has the option of requiring a lump sum distribution to the member in lieu ofmaking 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 and Vesting
Member contributions are seven and one-halfpercent (7.5%) ofgross 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 ofthe member's account is refundable upon request by the member.
Total contributions made by employees during fiscal year 2000 amounted to $46,451.78 which represents 7.5% of covered payroll. These contributions met the requirements of the plan.
NOTE 6: LEAVEPOUCffiS
Employees earn annual leave ranging from one and one-quarter days to one and three-quarter days each month depending upon the employees' length of continuous State service with maximum accumulation of forty-five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. See Note 1 - Basis of Accounting (Compensated
Absences)
Employees earn one day of sick leave each month with no maximum accumulation established. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination of employment, except as noted in the subsequent paragraph.
Certain employees who retire with a minimum ofthree months of unused sick leave are entitled to additional service credit in the Teachers Retirement System of Georgia.
NOTE 7: CONTINGENCffiS
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 expenditures which are disallowed under grant terms. The amount ofexpenditures which may be disallowed by the grantor cannot be determined at this time although the University expects such amounts, if any, to be immaterial to its overall financial position.
- 16 - .

FORT VALLEY STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000

EXHIBIT "0"

NOTE 7: CONTINGENCIES

Litigation, claims and assessments filed against Fort Valley State University (an organizational unit ofthe Board ofRegents ofthe University System ofGeorgia), ifany, 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, 2000.

NOTE 8: POSTEMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS

Pursuant to the general powers conferred by the Official Code ofGeorgia Annotated Section 20-331, the Board of Regents ofthe University System of Georgia has established group health and life insurance programs for regular employees ofthe University System ofGeorgia. It is the policy ofthe Board ofRegents to permit employees ofthe University System ofGeorgia eligible for retirement or . that become permanently and totally disabled to continue as members of the group health and life insurance programs. Employees who are eligible for retirement or disability under the criteria established by the Teachers Retirement System ofGeorgia and who have at least ten years ofservice with the University System of Georgia are eligible for these postemployment 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.

As ofJune 30, 2000, there were 110 employees who had retired or were disabled that were receiving these postemployment health and life insurance benefits. For the year ended June 30, 2000, Fort Valley State University recognized as incurred $137,166.72 of expenditures, which was net of $50,695.71 of participant contributions.

NOTE 9: ENROLLMENT

The equivalent full-time student enrollment of Fort Valley State University was as follows:

Regular Term Fall Semester, 1999 Spring Semester, 2000

2,182 2,127

Average

U55

Summer School, 1999

559

- 17 -

SUPPLEMENTARY INFORMATION
- 19-

FORT VALLEY STATE UNIVERSITY COMBINING BALANCE SHEET
CURRENT FUNDS - UNRESTRICTED JUNE 30, 2000

ASSETS
Cash and Cash Equivalents Accounts Receivable Inventories Prepaid Items Due from Other Fund Groups

,

Total Assets

RESIDENT INSTRUCTION

LOTTERY FOR EDUCATION

$

506,308.27 $

218,817.86

279,324.01

43,772.51

589,978.44

$ 1,419,383.23 $ =~2;.;.1,;;:8':;;;.8.;.,;17~.8=6~

LIABILITIES AND FUND BALANCES
Liabilities Accounts Payable Student Deposits Deferred Revenue Tuition and Fees Other
Total Liabilities
Fund Balances Unrestricted

$

930,793.59 $

218,817.86

227,959.00

$ 1,158,752.59 $

218,817.86

260,630.64

0.00

Total Liabilities and Fund Balances

$ 1,419,383.23 $ =====2.1.8..0:!::,8=1=7.=86=

See notes to the financial statements.

- 20-

EXHIBIT "E"

AUXILIARY ENTERPRISES

STUDENT ACTIVITIES

TOTAL

$

603,252.87 $ 39,216.80 $ 1,367,595.80

473,684.49

44,412.34

797,420.84

264,832.21

308,604.72

60,000.00

60,000.00

589,978.44

$ 1,401,769.57 $ 83,629.14 $ 3,123,599.80

$

73,601.14 $

118,547.46

4,753.00

$

196,901.60 $

820.30 $ 1,224,032.89
118,547.46
227,959.00 4,753.00
820.30 $ 1,575,292.35

1,204,867.97

82,808.84

1,548,307.45

$ 1,401,769.57 $ 83,629.14 $ 3,123,599.80

- 21

FORT VALLEY STATE UNIVERSITY COMBINING STATEMENT OF CHANGES IN FUND BALANCES
CURRENT FUNDS - UNRESTRICTED YEAR ENDED JUNE 30, 2000

REVENUES AND OTHER ADDITIONS
Unrestricted Current Fund Revenues Adjustments
Prior Years' Expenditures/Accounts Payable Prior Years' Checks Voided
Total Revenues and Other Additions
EXPENDITURES AND OTHER DEDUCTIONS
Educational and General Expenditures Auxiliary Enterprises Expenditures Remittances to the Board of Regents of the
University System of Georgia Prior Year's Unrestricted Fund Balance (SurplUS)
Adjustments Prior Years' Revenues/Accounts Receivable
Total Expenditures and Other Deductions
TRANSFERS BETWEEN FUNDS
Nonmandatory Renewals and Replacements Capital Projects
Total Transfers Between Funds
Net Increase/(Decrease) for the Year
FUND BALANCES JULY 1, 1999
FUND BALANCES JUNE 30, 2000

RESIDENT INSTRUCTION

LOTTERY FOR EDUCATION

$ 26,271,113.72 $

267,606.00

46,237.39 37,893.57

$ 26,355,244.68 $ _--=.26::.:7...1.:,6~0.=.:6..=.:00::...

$ 26,279,265.20 $

267,606.00

23,849.40 _ _...:1:.:.;1,459.68

253.53

$ 26,314,574.28 $ _--=2:.::::6~7'L:::8~59::..::.5~3::-

$

40,670.40 $

219,960.24

-253.53 253.53

$

260,630.64 $ =====O=,O;;;.;O~

See notes to the financial statements.

- 22-

EXHIBIT "F"

AUXILIARY ENTERPRISES

STUDENT ACTIVITIES

TOTAL

$ 3.621.318.07 $ 391.520.88 $ 30.551.558.67

484.00 666.40

67.98

46.789.37 38.559.97

$ 3.622,468.47 $ 391,588.86 $ 30.636,908.01

$ 355.346.03 $ 26.902.217.23

$ 3,478.893.99

3,478.893.99

574.69

547.00

24.102.93 12.581.37

$ 3.479,468.68 $ 355,893.03 $ 30,417.795.52

$

-244,407.99

-258,803.84

$

-244,407.99

-258.803.84

$

-503,211.83

$

-503,211.83

$

-360.212.04 $ 35.695.83 $

-284,099.34

1,565.080.01

47.113.01

1,832,406.79

$ 1.204,867.97 $ 82,808.84 $ 1.548,307.45

- 23-

FORT VALLEY STATE UNIVERSITY COMBINING STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,
AND OTHER CHANGES UNRESTRICTED
YEAR ENDED JUNE 30, 2000

REVENUES
State Appropriations Tuition and Fees Federal Grants and Contracts State Grants and Contracts Private Gifts, Grants, and Contracts Sales and Services of Educational Activities Sales and Services of Auxiliary Enterprises Other Sources
Total Revenues
EXPENDITURES
Educational and General Instruction Research Public Service Academic Support Student Services Institutional Support Operation and Maintenance of Plant Scholarships and Fellowships
Auxiliary Enterprises Student Housing Faculty and Staff Housing Food Services Stores and Shops Intercollegiate Athletics Other Service Units
Total Expenditures
OTHER TRANSFERS AND ADDITIONS/{DEDUCTIONSl
Transfers for Renewals and Replacements Transfers for Capital Projects Prior Period Adjustments (Net) Remittances to the Board of Regents
of the University System of Georgia Prior Year's Unrestricted Fund Balance (Surplus)
Total Other Transfers and Additions/(Deductions)

RESIDENT INSTRUCTION

LOTIERYFOR EDUCATION

$ 19,561,132.00 $
6,039,598.13 326,344.57 3,190.00 3,990.00 24,815.20

267,606.00

312,043.82

$ 26,271 ,113.72 $ _--=26~7....t.:,6:=0.:.:6..:.:00:...

$ 11,538,846.42 $
350,875.61 383,462.74 2,144,292.22 2,208,134.40 5,677,460.90 3,586,618.91 389,574.00

267,591.46 14.54

$ 26,279,265.20 $ _--=:;26~7..c:,6~06::::,.:::,:00::....

$

72,671.28

-23,849.40 $ _ _--=-2::.::5.:.:3.;;:.;53::...

$

48,821.88 $ _ _---=:-2;:::::5::::,3.:::,:53::....

Net Increase/(Decrease) in Fund Balances
See notes to the financial statements.

- 24-

$

40,670.40 $

-2o;;;5,;,;3.~53~

EXHIBIT "Gil

AUXILIARY ENTERPRISES

STUDENT ACTIVITIES

TOTAL

$ 19,828,738.00

$ 354,985.90

6,394,584.03

326,344.57

3,190.00

3,990.00

$ 3,621,349.05

24,815.20 3,621,349.05



-30.98

36,534.98

348,547.82

$ 3,621,318.07 $ 391,520.88 $ 30,551,558.67

$ 11,806,437.88

350,875.61

383,462.74

2,144,306.76

$ 355,346.03

2,563,480.43

5,677,460.90

3,586,618.91

389,574.00

$ 1,588,657.01 21,827.31
312,059.67 182,806.20 997,025.61 376,518.19

1,588,657.01 21,827.31 312,059.67 182,806.20 997,025.61
_--:.;37:..:::6,518.19

$ 3,478,893.99 $ 355,346.03 $ 30,381,111.22

$

-244,407.99

-258,803.84

575.71 $

$ -479.02

-244,407.99 -258,803.84
72,767.97

$

-502,636.12 $

-24,102.93 -479.02 $ _---:-4~5:::.4.L::,54::;:6::.:..7:....:9~

$ =-=--3;;;;6.0..,212.04 $ 35,695.83 $ =-=====-2_8;",;o4,~09_9_.3_4... - 25-

FORT VAl,LEY STATE UN\y&RSID: SCHEDULE OF REVENUES ANQ..EXPENQ!IlJRES COMPARI;D IQjlUDGET
RESIDENT INSTRUCTIQN YEAR ENDED JUNE 30, 2000

REVENUES
State Appropriations Other Revenues Retained

CURRENT FUNDS

UNRESTRICTED

RESTRICTED

PLANT FUNDS

RENEWALS AND

UNEXPENDED

REPLACEMENTS

$ 19,561,132.00

$

1,389,674.00 $

0.00

6,709,981.72 $ 27,688,000.27

240,515.76

$ 26,271,113.72 $ 27,688,000.27 $

1,630,189.76 $

....:0:::;.00::;:..

EXPENDITURES
Personal Services:
Education, General and Departmental Services $
Sponsored Operations Operating Expenses:
Education, General and Departmental Services Sponsored Operations Capital Outlay Special Funding Initiative Year 2000 Project

20,185,026.37
$
4,764,883.83
1,209,828.00 119,527.00

7,268,589.66
20,419,410.61
$

1,562,015.76 $
68,174.00

411,697.24

$ 26,279,265.20 $ 27,688,000.27 $

1,630,189.76 $ _ _~41:..:1..:::,6::::.97~.2::::4:...

Excess of Revenues over Expenditures

$

-8~,'5'.48 $

0.00 $

0.00 $

-.4.';,,;,',697.24

(1) To eliminate tuition waivers not budgeted and to reclassify cunent year transfers and prior year fund balances budgeted as revenues.

See notes to the financial statements.


26 -

SCHEDULE "1"

TOTAL

ADJUSTMENTS

TOTAL

_ _-,W,-_ _ -!Budget BasisL

BUDGET

VARIANCE FAVORABLE --1UNFAVORABLE) _

$ 20,950,806.00 34,638,497.75 $

$ 20,950,806.00 $ 20,950,806.00 $

22,123.24

34,660,620.99

39,821,754.00

0.00 -5,161,133.01

$ 55,589,303.75 $

22,123.24 $ 55,611,426.99 $ 60,772,560.00 $ _---:-5:::,..:,.:16:.,:.1!..1:,.:::33::::.0~1_

$ 20,185,026.37 7,268,589.66
4,764,883.83 $ 20,419,410.61
1,973,713.00 1,278,002.00
119,527.00

$ 20,185,026.37 $ 20,244,938.00 $

7,268,589.66

9,938,543.00

-389,574.00

4,375,309.83 20,419,410.61
1,973,713.00 1,278,002.00
119,527.00

4,408,836.00 23,461,146.00
1,321,500.00 1,278,002.00
119,595.00

59,911.63 2,669,953.34
33,526.17 3,041,735.39 -652,213.00
0.00 68.00

$ 56,009,152.47 $

-389,574.00 $ 55,619,578.47 $ 60,772,560.00 $ _ _.::l5,~15::2:::,9:.::8~1.:::.53::..

$ -419,848.72 $ _ _,.;4;.1:.:,1,697.24 $

-6,151.48

$

,;;;-8:.."1~5~1.:;;:;48::..

- 27-

FORT VALLEY STATE UNIVERSITY SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
LOTTERY FOR EDUCATION YEAR ENDED JUNE 30, 2000

REVENUES
State Appropriations
EXPENDITURES
Equipment, Technology and Construction Trust Fund
Special Funding Initiatives
Excess of Revenues over Expenditures

CURRENT FUNDS UNRESTRICTED

PLANT FUNDS UNEXPENDED

$

267,606.00 $ _ _1.;..;1....;;.6.:.;;,0..;;.,00.;.;..0,;;.;0~

$

117,606.00 $

116,000.00

150,000.00

$

267,606.00 $ _ _1.:..1;.,;:6.:.:,0;,.:;.00,;.;.,;.;00:..

$

0.00 $ ============0',;,;00=

See notes to the financial statements.

- 28-

SCHEDULE "2"

TOTAL
-<Budget BasisL

BUDGET

VARIANCE FAVORABLE (UNFAVORABLEL

$

383,606.00 $ 383,606.00 $

----::..0.:.:,.00;:...

$

233,606.00 $ 233,606.00 $

0.00

150,000.00

150,000.00

0.00

$

383,606.00 $ 383,606.00 $

----::..0.:.:,.00;:...

$===~O.=oo=

$====~O.=OO=

- 29-

FORT VALLEY STATE UNIVERSITY CHANGES IN INVESTMENT IN PLANT
YEAR ENDED JUNE 30, 2000

ADDITIONS

BALANCE JULY 1,1999

CURRENT FUNDS UNRESTRICTED RESTRICTED

PLANT UNEXPENDED

Land

$ 1,262,548.17

Buildings

52,053,257.85

Improvements Other Than Buildings

4,790,803.34

Equipment

15,157,115.43 $

Library Books and Collections

4,946,373.79

683,432.58 $
309,696.95

$ 1,567,533.74

88,691.15

643,034.72

78,259.59

$ 78,210,098.58 $

993,129.53 $ _ ..6..4-.3,034.72 $ 1,734,484.48

See notes to the financial statements.

- 30-

FUNDS RENEWALS AND REPLACEMENTS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

263,757.05 $

335,246.70

104,017.73

$

PRIVATE GIFTS

DEDUCTIONS DISPOSALS! DELETIONS! ADJUSTMENTS

BALANCE JUNE 30, 2000

$

1,262,548.17

54,219,795.34

4,879,494.49

49,746.28 $

340,887.20

16,374,719.13

5,256,070.74

$

367,774.78 $ _ _..;3~3~5.246.70 $ _.....;;4;,;:,9.746.28 $

340,887.20 $ 81,992,627.87

- 31 -

FORT VALLEY STATE UNIVERSITY SCHEDULE OF FUND BALANCES CURRENT FUNDS AND PLANT FUNDS
JUNE 30, 2000

RESIDENT INSTRUCTION

CURRENT FUNDS

UNRESTRICTED

LOTIERY FOR

AUXILIARY

EDUCATION

ENTERPRISES

STUDENT ACTIVITIES

NET INVESTMENT IN PLANT Investment in Plant Facilities
RESTRICTED Designated for Subsequent Years' Expenditures

UNRESTRICTED Designated For Bus Replacement Reserve For Intercollegiate Athletics For Inventory Reserve For Renewals and Replacements Reserve For SUbsequent Years' Expenditures For Uncollectible Accounts Surplus RegUlar Lottery for Education

$

29,312.11

176,377.48
54,941.05
_____ $ $ 260,630.64 $

$

16,075.10

264,832.21

661,424.16 $ 262,536.50

48,480.99 34,327.85

~O.~OO~
0.00 $

1,204,867.97 $ _ _....l8~2:.C,8~0~8.~84::!....

$ 260,630.64 $

0.00 $ _..:01.204,867.97 $ _ _,.:;8::;,2,808.84

See notes to the financial statements.

32 -

SCHEDULE "4"

RESTRICTED

PLANT FUNDS

UNEXPENDED LOTTERY FOR

RENEWALS AND

REGULAR

EDUCATION

REPLACEMENTS

INVESTMENT IN PLANT

TOTAL

$ 81,992,627.87 $ 81,992,627.87

$ _~86~3~,0~7.:.:2.~01~

$ _~8~6::::;3,~07~2:..:;.0~1~

$

537.99

_____ $


$

537.99 $

$

863,072.01 $

537.99 $

$

95,571.13

484,094.85

$

95,571.13

16,075.10

294,144.32

484,094.85

709,905.15

473,241.83

...:::O~.O~O
0.00 $ _ _~57:...::9:...::,6::::65~9.,:::8::..,

55,479.04 0.00
$ 2,128,511.42

0.00 $

5;;;,;7..;;;9,665.98 $ 81,992,627.87 $ 84,984,211.30

- 33-

FORT VALLEY STATE UNIVERSITY RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2000

SCHEDULE "5"

Totals per Annual Supplement

Adjustments

Shared Services on Jointly Staffed Personnel

Georgia College and State University

Yasin,

Jehad

Savannah State University

Lamhut, Lester

SALARIES
$ 23,165,475.58 $

TRAVEL 504,529.96

-4,100.00 _ _---:.1,250.00
$ 23,162,625.58 $ ====:;.;;;;504~,5~2,;;;,;9',;;;,;96~

See notes to the financial statements.

- 34-

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

FORT V. ALLEY STATE UNNERSITY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-533-98-02 FS-533-98-03 FS-533-98-06 FS-533-99-01 FS-533-99-02 FS-533-99-03

Further Action Not Warranted See FS-533-99-01 Umesolved - See Corrective Action/Responses Further Action Not Warranted See FS-533-99-03 Partially Resolved - See Corrective Action/Responses Umesolved - See Corrective Action/Responses Umesolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

EXPENDITURESILIABILITIESIDISBURSEMENTS H.O.P.E. Disbursements Made to Ineligible Students Questioned Costs: $743.00 Finding Control Number: FS-533-98-03
The then Financial Aid Director does not concur with finding. Information is to be submitted to Georgia Student Finance Commission to make a determination of the students' eligibility for the H.O.P.E. Scholarship and Book Allowance.

REVENUESIRECEIVABLESIRECEIPTS Improper Student Accounts Receivables Finding Control Number: FS-533-99-01
The majority of the balances represented in this finding are ten or more years old. The university is working diligently to ensure that current receivables do not increase. However, the older receivables cannot be written offwithout specific authorization from the legislature.
EXPENDITURESILIABILITIESIDISBURSEMENTS H.O.P.E. Disbursements Made to Ineligible Students Questioned Costs: $5,265.00 Finding Control Number: FS-533-99-02
This item has been reported to Georgia Student Finance Commission and we are awaiting their final determination.

- 1-

FORT VALLEY STATE UNNERSITY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000


PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CORRECTIVE ACTIONIRESPONSES

GENERAL LEDGER H.O.P.E. Program Reconciliation Report Not Reconciled to Accounting Records
Finding Control Number: FS-533-99-03

The accounting office has assigned an individual to work with the financial aid office in order to reconcile the H. O. P. E. report. To accomplish this the accounting office downloads the disbursements report per the Georgia Student Finance Commission and compares it to the university's disbursements by student. Any discrepancies are brought to the attention of the financial aid office for correction.

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

533-96-14 533-96-15 533-96-16 533-96-18 533-96-19 FA-533-98-02 FA-533-98-03 FA-533-98-04 FA-533-98-05 FA-533-98-06 FA-533-98-07 FA-533-98-08 FA-533-98-09 FA-533-99-01 FA-533-99-02 FA-533-99-03 FA-533-99-04 FA-533-99-05 FA-533-99-06 FA-533-99-07 FA-533-99-08

Unresolved - See Corrective Action/Response Unresolved - See Corrective Action/Response Unresolved - See Corrective Action/Response Unresolved - See Corrective Action/Response Unresolved - See Corrective Action/Response Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Partially Resolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Partially Resolved - See Corrective Action/Responses Partially Resolved - See Corrective Action/Responses Partially Resolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Partially Resolved - See Corrective Action/Responses

-2-

FORT VALLEY STATE UNNERSITY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
CORRECTIVE ACTIONIRESPONSES
TYPES OF SERVICES/ALLOWED OR UNALLOWED Disbursement in Excess of Cost of Attendance Finding Control Number: 533-96-14
The institution has mandated a policy that all payments to students, regardless of the source, must be approved by the financial aid office before disbursement. This policy was already in effect, but apparently not adhered to sufficiently. Therefore, the emphasis that the institution now places on the procedure should provide the appropriate enforcement of the policy.
ELIGIBILITY Funds Disbursed While Enrolled in Excess Remedial Hours Finding Control Number: 533-96-15
We concur with the audit finding, but are awaiting a response from U. S. Department of Education for resolution of the questioned cost.
ELIGIBILITY Improper Determination of Enrollment Status Finding Control Number: 533-96-16
We concur with the audit finding, but are awaiting a response from U. S. Department of Education for resolution of the questioned cost.
ELIGIBILITY Student Financial Aid in Excess ofMaximum Time Frame Finding Control Number: 533-96-18
We submitted information to the federal government concerning this student's specific situation. Documentation supporting this was available in the student's folder, but was not appropriately listed for the audit year. We have appealed this finding with the understanding that documentation will always be appropriately listed in the future.
-3-

FORT VALLEY STATE UNNERSITY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
CORRECTIVE ACTIONIRESPONSES
ELIGIBILITY Satisfactory Academic Progress Not Maintained Finding Control Number: 533-96-19
We do not concur with this finding. Satisfactory Academic Progress (SAP) reviews are made at the end of the Spring quarter, with allowances for Summer enrollment before suspension takes place. The auditors were informed of this policy. Beginning the 95-96 school year appeals were approved for the same period. The auditors were given this information and requested not to use the old catalogs since the latest one had not been received from the printing company. Further, an analysis ofthe cases cited by the auditors revealed the following:
The two students cited for incremental measurement violation had complied with requirements at the end ofthe Summer 95 period, preceding Fall 95. Therefore, no financial suspension was warranted. Two students had been suspended from financial aid at the end of Spring 95, had appealed their suspension and been approved for 95-96, and documentation was available in the respective student's records attesting to action taken. Two students began the 1995-1996 school year in compliance ofsatisfactory academic progress. During the course ofthe school year academic problems prevailed. However, as long as the institution allowed the students to re-enroll during this period, no action was warranted until the end ofthe 95-96 school year.
A result of all the aforestated information, we do not concur with audit findings in this area.
ELIGIBILITY Control Procedures Inadequate Finding Control Number: FA-533-98-02
We are awaiting a response from the U. S. Department of Education for resolution.
ELIGIBILITY Failure to Disburse FSEOG Funds to All Pell Recipients Finding Control Number: FA-533-98-03
We are awaiting a response from the U. S. Department of Education for resolution.
-4-

FORT VALLEY STATE UNIVERSITY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

CORRECTIVE ACTIONIRESPONSES

ELIGffiILITY Overpayment of Student Financial Aid Finding Control Number: FA-533-98-04

We are awaiting a response from the U. S. Department of Education for resolution ofthe questioned cost.

PERIOD OF AVAILABILITY Funds Awarded in Excess of Annual Limits Finding Control Number: FA-533-98-05

Our concurrence was with one error in Pell Grant payment, whereas the auditors cited two. We will reimburse the Pell Grant program upon direction from the U. S. Department of Education when final resolution is received.

REPORTING Expenditures in Excess of Authorization Finding Control Number: FA-533-98-06

Awaiting final response from the U. S. Department of Education on the Pell Grant expenditures in question.

REPORTING Inadequate Documentation for Report Finding Control Number: FA-533-98-07
Documentation to support the FISAP report is maintained on file in the Financial Aid and Accounting Services Offices. Information used to prepare the report is generated through the University's Banner Student Information System and CUFA then summarized into appropriate data files.

REPORTING Reports Not Reconciled Finding Control Number: FA-533-98-08

The Financial Aid and Accounting Service Offices have taken steps to ensure that all



reports are reconciled on a timely basis. A new Financial Aid Director was appointed in

October 1999. The University will engage a consultant to assist with documenting all

reconciliation and reporting procedures.

-5-

FORT VALLEY STATE UNNERSITY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
CORRECTIVE ACTIONIRESPONSES
SPECIAL TESTS AND PROVISIONS Entrance and Exit Counseling not Conducted Finding Control Number: FA-533-98-09
The Financial Aid Office will adhere more strongly to its procedures on entrance and exit counseling.
ELIGffiILITY Improper Disbursement of FSEOG Funds Finding Control Number: FA-533-99-01
This finding has been reported to the U. S. Department of Education and we are awaiting their final determination.
ELIGffiILITY Failure to Notify Student of Awards Finding Control Number: FA-533-99-02
This finding has been reported to the U. S. Department of Education and we are awaiting their final determination.
ELIGffiILITY Overpayment of Student Financial Aid Finding Control Number: FA-533-99-03
This finding has been reported to the U. S. Department of Education and we are awaiting their final determination.
REPORTING Expenditures in Excess of Authorization Finding Control Number: FA-533-99-04
This finding has been reported to the U. S. Department of Education and we are awaiting their final determination.
- 6-

FORT VALLEY STATE UNIVERSITY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
CORRECTIVE ACTIONIRESPONSES
REPORTING Inadequate Documentation for Report Finding Control Number: FA-533-99-05 This finding has been reported to the U. S. Department of Education and we are awaiting their final determination.
REPORTING Reports Not Reconciled Finding Control Number: FA-533-99-06 This finding has been reported to the U. S. Department of Education and we are awaiting their final determination. SPECIAL TESTS AND PROVISIONS Entrance and Exit Counseling Not Conducted Finding Control Number: FA-533-99-07 This finding has been reported to the U. S. Department of Education and we are awaiting their final determination. SPECIAL TESTS AND PROVISIONS Inadequate Control Procedures Finding Control Number: FA-533-99-08 The financial aid office, personnel and payroll departments have now implemented procedures to ensure that time sheets are approved only after the last date indicated as worked on the time sheet. Procedures were also implemented to ensure that the supervisor actually signed student's time sheet and that each participant in the work-study program completes federal and state tax forms.
-7-


SECTIONID CURRENT YEAR FINDINGS AND QUESTIONED COSTS

FORT VALLEY STATE UNNERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
INVENTORIES REVENUES/RECENABLES/RECEIPTS Inadequate Resale Inventory Procedures Finding Control Number: FS-533-00-01
For the year under review, the internal control procedures for resale inventories utilized by Fort Valley State University were found to be inadequate. The following deficiencies were noted:
1) We were unable to reconcile beginning resale inventories and ending resale inventories through an analysis of yearly purchases/sales activity.
2) The University was not able to provide documentation ofsales ofmerchandise that were made at athletic events. As a result, no verification could be performed to ensure that merchandise sold at those events was reported in the general ledger and unsold merchandise was returned to the bookstore.
3) Sales reported on the accounting records are $40,429.75 less than the sales summary provided from the Point of Sale system used in the bookstore to record daily sales.
4) Variances were noted between physical counts and the perpetual inventory records. Variances were found in thirty-seven of the one-hundred items selected from the inventory records. In addition, ten items were selected from the site and three variances were found in the attempt to trace them back to the inventory records.
These deficiencies are a result ofmanagement's failure to have adequate policies and procedures to ensure inventories are properly maintained and to ensure all sales are recorded on the accounting records. The University should develop and implement procedures to ensure that inventories are properly maintained and sales are reported appropriately.
REVENUES/RECENABLES/RECEIPTS Student Accounts Receivable Not Supported by Financial Aid Finding Control Number: FS-533-00-02
At June 30, 2000, the University had $588,620.93 in student accounts receivables that were not supported by approved financial aid. A review ofthese receivables revealed that $588,280.93 of the receivables was accumulated prior to Summer Quarter 1999. There is no provision in the policies of the Board of Regents for deferments of student accounts without the student having approved documentation of financial aid at the time of registration. This condition occurred because management disregarded the policies of the Board of Regents.
- 1-

FORT VALLEY STATE UNNERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

REVENUESIRECENABLESIRECEIPTS Student Accounts Receivable Not Supported by Financial Aid Finding Control Number: FS-533-00-02

Collections of student accounts receivable should be made on at least a quarterly basis, and no student should be granted a deferment without having approved financial aid. It is recommended that legal means be used to collect all student accounts receivable, if necessary.

EXPENDITURESILIABILITIESIDISBURSEMENTS H.O.P.E. Disbursements Made to Ineligible Students Questioned Costs: $1,422.00 Finding Control Number: FS-533-00-03

An examination of eleven students receiving H.O.P.E Scholarship funds during fiscal year 2000 revealed $1,347.00 was awarded and disbursed to two students who had not met satisfactory academic progress requirements. The H.O.P.E. Scholarship Program requires a minimum of3.0 grade point average to maintain satisfactory academic progress. In addition, one student was disbursed $75.00 in excess ofthe allowable amount based on enrollment status. These deficiencies occurred because the Financial Aid Office failed to adequately monitor the students' academic progress and enrollment status before disbursing the funds.

The University should establish procedures to ensure that financial aid payments are made in accordance with appropriate H.O.P.E. Scholarship Program regulations. The University should contact the Georgia Student Finance Commission regarding the resolution of these questioned costs.

GENERAL LEDGER Reports Not Reconciled to Accounting Records Finding Control Number: FS-533-00-04

The University's H.O.P.E. Scholarship Program reconciliation reports for fiscal year 2000, which were provided to the Georgia Student Finance Commission, did not reconcile with the accounting records as indicated below:

Report Item

Per RO.P.E. Reconciliation

Per Accounting
Records

Unreconciled Difference

Cash Disbursed to School

$612,030.00

$641,759.00 $ 29,729.00

Amount Awarded to Students

$631,594.00

$640,312.00 $ 8,718.00

-2-

FORT VALLEY STATE UNNERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL LEDGER Reports Not Reconciled to Accounting Records Finding Control Number: FS-533-00-04
The unreconciled differences identified above occurred because management failed to reconcile accounting records to the H.O.P.E. Scholarship Program reconciliation reports at year-end.
Procedures should be established to ensure that all H.O.P.E. Scholarship Program reconciliation reports are reconciled to the University's formal accounting records and submitted on a timely basis.
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ELIGffiILITY Improper Disbursement ofFSEOG Funds Student Financial Aid Cluster Program Questioned Cost: $47,199.00 Finding Control Number: FA-533-00-01
For fiscal year 2000, it was noted that eighty-five students received $47,199.00 in Federal Supplemental Educational Opportunity Grant (FSEOG) funds that did not receive Federal Pell Grants. Federal regulations (34 CFR 676.10) state that an institution shall award FSEOG funds to those students with the lowest expected family contributions who will also receive Federal Pell Grants. If the institution has FSEOG funds remaining after awarding FSEOG funds to all Federal Pell Grant recipients at the institution, the institution shall award the remaining FSEOG funds to those eligible students with the lowest expected family contributions who will not receive Federal Pell Grants. It appears very unlikely that the eighty-five students that received FSEOG funds were entitled to the funding because the University had 1,326 students having a higher need, as these students received Pell Grants but did not receive FSEOG funds. The University could not provide documentation that the lowest expected family contributions ofthese 1,326 students were considered prior to awarding the FSEOG funds to non-Pell recipients.
This questioned cost of $47,199.00 was a result ofmanagement's failure to properly award FSEOG funds to those students with the lowest expected family contribution who also received Federal Pell Grants. The University should contact the U. S. Department of Education regarding resolution of these questioned costs.
Federal Programs/Awards Affected:
Student Financial Aid Cluster Program U. S. Department of Education Federal Supplemental Educational Opportunity Grant (CFDA 84.007) Federal Pell Grant Program (CFDA 84.063)
-3-

FORT VALLEY STATE UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2000
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ELIGIBILITY Overpayment of Student Financial Aid Student Financial Aid Cluster Program Questioned Cost: $266,139.18 Finding Control Number: FA-533-00-02
A sample of seventy-five financial aid files was selected to determine if financial aid was properly calculated and disbursed to eligible students. The items sampled contained financial aid disbursements of$I,039,538.91 out ofa population of$16,224,438.64. Our examination revealed that forty- five students received funds in excess oftheir eligible need totaling $266,139.18 as shown below:
(1) Thirteen students were not in compliance with the University's published satisfactory academic progress policies. Federal regulations (34 CFR 668.32 and 668.34) state that a student must maintain satisfactory academic progress to be eligible to receive financial assistance under the Title IV programs. The noncompliance with established published standards of satisfactory progress is as follows:
(a) The University's policy states that a graduate student must maintain a grade point average of 3.0 or higher. Four students were found with a grade point average below the required grade point average.
(b) The University's policy states that undergraduate students must maintain cumulative grade point averages at various levels throughout their college career. Five students were found with grade point averages below the required grade point average for their educational level.
(c) The University's policy states that the maximum time frame an undergraduate student is allowed to successfully complete a course ofstudy is 150% ofrequired hours for the selected course ofstudy or six academic years, whichever come first. Four students were found that had not successfully completed their course ofstudy within the required time frame.
This noncompliance resulted in questioned costs of$166,712.00.
(2) Eighteen students had no remaining need after the expected family contribution was . deducted from their cost of attendance, however they were disbursed Federal Direct Subsidized Loans and Federal Supplemental Educational Opportunity Grants and were allowed to earn Federal College Work-Study wages. Students that receive these loans and wages must demonstrate financial need as described in Federal regulations (34 CFR 673.5,34 CFR 674.9,34 CFR 675.9 and 34 CFR 685.200). This noncompliance resulted in questioned costs of$30,790.18.
-4-

FORT VALLEY STATE UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ELIGffiILITY Overpayment of Student Financial Aid Student Financial Aid Cluster Program Questioned Cost: $266,139.18 Finding Control Number: FA-533-00-02
(3) Six students' cost of attendance was adjusted without the necessary documentation or a reasonable explanation for the adjustment. Federal regulations require that all adjustments based on professional judgment be reasonable and fully documented. This noncompliance resulted in questioned costs of$16,000.00.
(4) One student, who was also an employee of the University, received financial aid during the year using financial information that conflicted with information in their employment personnel file. The auditor was unable to determine which information was correct. This noncompliance resulted in questioned costs of $13,000.00.
(5) Three students classified by the Financial Aid Office as graduate students were taking undergraduate classes and paying undergraduate fees. This misclassification resulted in the University disbursing Federal Direct Student Loans for which the students did not qualify. This noncompliance resulted in questioned costs of $9,841.00.
(6) One student received Federal Direct Student Loans and did not appear to meet the requirements for "ability to benefit" regulation. The student in question is an eighty-six year old male who was enrolled in the University's Education Program. Federal regulation (34 CFR 685.214) states that a student's eligibility to borrow is to have been falsely certified by the school, if the school certifies the eligibility of a student who, because of age, would not meet the requirements for employment in the occupation for which the training program supported by the loan was intended. This noncompliance resulted in questioned costs of$8,500.00.
(7) One student's file did not contain a PLUS loan application, however the student received a PLUS award and disbursement. Federal regulation (34 CFR 668.24) states that the institution should maintain application data submitted to the lender by the institution on behalf of the student or parent. All files presented for audit should be complete and support all aid awarded. This noncompliance resulted in questioned costs of$7,825.00.
(8) Two students' dependency status was adjusted without the necessary documentation or a reasonable explanation for the adjustment. Federal regulation (34 CFR 685.203) requires that all adjustments based on professional judgment be reasonable and fully documented. This noncompliance resulted in questioned costs of$7,555.00.
-5-

FORT VALLEY STATE UNNERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ELIGillILITY Overpayment of Student Financial Aid Student Financial Aid Cluster Program Questioned Cost: $266,139.18 Finding Control Number: FA-533-00-02
(9) One student received Federal financial aid funds when the student was in default status at the time of the award and disbursement of funds. Federal regulation (34 CFR 668.32)
states that "A student is eligible to receive Title N, HEA program assistance ifthe student
is not in default, and certifies that he or she is not in default, on a loan made under any
Title N, HEA loan program". This noncompliance resulted in questioned costs of
$5,916.00.
(10) Nine students received other financial aid that was not considered in their financial need calculation. Federal regulation (34 CFR 673.5) states that the institution must consider those resources it can reasonably anticipate at the time it awards funds. When these resources were considered, disbursements over the student's need resulted and are included in category (2) above.
The above instances ofnoncompliance resulted from weaknesses in the internal control procedures over the Federal Student Financial Aid Cluster Program. The following weaknesses were noted:
Procedures were not in place at the time ofthe disbursement to ensure that student financial aid files were complete and properly maintained.
Procedures were not in place at the time of the disbursement to ensure that the financial aid office was monitoring the student's progress throughout the award year.
Procedures were not being followed or were not in place to ensure all resources were considered when awards were made to students.
Procedures were not in place at the time ofthe disbursement to ensure that student financial aid awarded to friends and relatives of the employees of the Financial Aid Department were reviewed by an independent member of management.
The weaknesses identified in the Federal Student Financial Aid Cluster Program were a result of management's failure to perform a risk assessment of the critical areas of the program and to implement appropriate controls in the financial aid department. The University should contact the
U. S. Department of Education regarding the resolution of these questioned costs.
- 6-

FORT VALLEY STATE UNNERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ELIGIBILITY Overpayment of Student Financial Aid Student Financial Aid Cluster Program Questioned Cost: $266,139.18 Finding Control Number: FA-533-00-02
Federal Programs/Awards Affected:
Student Financial Aid Cluster Program
u. S. Department of Education
Federal Supplemental Educational Opportunity Grant (CFDA 84.007) Federal Family Education Loan Program (CFDA 84.032) Federal Work-Study Program (CFDA 84.033) Federal Perkins Loan Program (CFDA 84.038) Federal Pell Grant Program (CFDA 84.063) Federal Direct Student Loan Program (CFDA 84.268)
ELIGIBILITY Failure to Notify Students of Awards Student Financial Aid Cluster Program Questioned Cost: $50,741.74 Finding Control Number: FA-533-00-03
A sample of seventy-five financial aid files was selected to determine if financial aid was properly awarded and disbursed to eligible students. Federal regulation (34 CFR 668.165) states that "before an institution disburses Title IV, REA program funds for any award year, the institution must notify a student ofthe amount of funds that the student or his or her parent can expect to receive under each Title IV, HEA program". The files sampled disclosed twenty-four instances where students received financial aid in excess of their award as shown below:
(1) Twenty-two students received Federal work-study wages when either the institution failed to notify the student of the award or the student received Federal work-study wages in excess of their award. This noncompliance resulted in questioned costs of$74,651.92.
(2) One student received a Federal Direct Student Loan; however, the institution failed to notify the student of the award. This noncompliance resulted in questioned costs of $8,116.00.
(3) One student received a Federal Family Education Loan, however the institution failed to notify the student of the award. This noncompliance resulted in questioned costs of $2,500.00.
-7-

FORT VALLEY STATE UNNERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ELIGIBILITY Failure to Notify Students of Awards Student Financial Aid Cluster Program Questioned Cost: $50,741.74 Finding Control Number: FA-533-00-03
Ofthe questioned cost described above, $34,526.18 resulted in students receiving funds in excess of
their eligible need and therefore is included in finding FA-533-00-02, which leaves a net amount of $50,741.74 in unduplicated questioned costs.
These questioned costs resulted from management's failure to notify students of their financial aid awards before disbursing funds to students. At the time ofthe disbursement, procedures were not in place to ensure that students are notified ofawarded financial aid before disbursements are made and that disbursements do not exceed individual awards. The University should contact the U. S. Department of Education regarding the resolution of these questioned costs.
Federal Programs/Awards Alfected:
Student Financial Aid Cluster Program U. S. Department of Education Federal Family Education Loans (CFDA 84.032) Federal Work-Study Program (CFDA 84.033) Federal Direct Student Loan Program (CFDA 84.268)
REPORTING Reports Not Reconciled Student Financial Aid Cluster Program Finding Control Number: FA-533-00-04
For the year under review, expenditures reported on several of the required reports for Federal Financial Assistance programs submitted by the University to the U. S. Department of Education were not reconciled as follows:
The Pell RFMS Miscellaneous Year to Date Report dated November 15, 2000 and the Statement of Account, which reports Federal Pell Grant Program expenditures for the year, were not reconciled to the accounting records.
The Fiscal Operations and Application to Participate (FISAP) report had amounts reported for the Federal Work-Study Program expenditures that did not reconcile to the accounting records.
The University did not reconcile the Federal Direct Loan Program monthly to the accounting records in accordance with Section 2 of The Blue Book.
- 8-

FORT VALLEY STATE UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
REPORTING Reports Not Reconciled Student Financial Aid Cluster Program Finding Control Number: FA-533-00-04
Federal regulations (34 CFR 675.19,685.309,690.81 and 690.83) require the University to ensure that reported information is accurate and reconciled as necessary. The deficiencies identified were a result ofmanagement's failure to adequately reconcile reports submitted to the accounting records.
The University should implement adequate controls to ensure that all reports submitted to the U. S. Department of Education are accurately completed and supported by the accounting records. Detailed reconciliations should be prepared for any variances and maintained as part of the supporting documentation.
Federal Programs/Awards Affected:
Student Financial Aid Cluster Program U. S. Department of Education Federal Work-Study Program (CFDA 84.033) Federal Pell Grant Program (CFDA 84.063) Federal Direct Student Loan Program (CFDA 84.268)
SPECIAL TESTS AND PROVISIONS Inadequate Control Procedures Student Financial Aid Cluster Program Finding Control Number: FA-533-00-05
The internal control procedures ofFort Valley State University were found to be inadequate over the Federal Work-Study Program. The following weaknesses were noted in the program:
Procedures were not in place to ensure that students had received a Federal work-study award and/or signed a work agreement prior to being allowed to work and receive wages.
Procedures were not in place to ensure that time sheets were always approved or approved only after the last date indicated as worked on the time sheet.
Procedures were not in place to ensure that the supervisor's name on the time sheet was actually signed by the supervisor.
The weaknesses identified in the program were a result of management's failure to perform a risk assessment ofthe critical areas ofthe program and to implement appropriate controls in the Financial Aid Department. The University should develop and implement policies and procedures to ensure
- 9-

FORT VALLEY STATE UNNERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2000 FEDERAL AWARD FINDINGS AND QUESTIONED COSTS SPECIAL TESTS AND PROVISIONS Inadequate Control Procedures Student Financial Aid Cluster Program Finding Control Number: FA-533-00-05 adequate controls over the program. Also, the University should develop and implement a monitoring process to ensure that the controls are being followed. Federal Programs/Awards Affected: Student Financial Aid Cluster Program
U. S. Department of Education Federal Work-Study Program (CFDA 84.033)
I
- 10-