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FORT VALLEY STATE uNIvERSITY -TABLEOFCONTENTS- 
 
SECTION I 
 
FINANCIAL 
 
INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION 
 
EXHIDITS 
 
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 OTHER CHANGES 
 
6 
 
D NOTES TO THE 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 
 
29 
 
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- 
SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY 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 
 
 'USSELL W. HINTON 
STATE AUDITOR 
(404) 656-2174 
 
DEPARTMENT OF AUDITS AND ACCOUNTS 
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 
November 16,2001 
 
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 Kofi Lomotey, President Fort Valley State University 
INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION 
Ladies and Gentlemen: 
We have audited the accompanying financial statements (Exhibits A through D) ofFoit Valley State University as of and for the year ended June 30, 2001. These' financial statements are the responsibility of the 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 auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes 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 opinion. 
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 accounting principles generally accepted in the United States of America with respect to the recording of encumbrances as expenditures and liabilities. To conform with accounting principles generally accepted in the United States ofAmerica, encumbrances should be recorded as a reservation offund balance. The effects on the financial statements of this departure from accounting principles generally accepted in the United States of America were not reasonably determinable, but are believed to be material. 
 
01 ARL-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 accounting principles generally accepted in the United States of America. If compensated absences were reported, liabilities would be increased and fund balance would be decreased by $1,784,955.02 as of June 30, 2001, and the net change in fund balance for the year ended June 30, 2001, would be decreased by $28,756.52. 
As discussed in Note 1 to the financial statements, the University did not report an allowance for estimated uncollectible accounts receivable. To conform to accounting principles generally accepted in the United States ofAmerica, these amounts should be included in the financial statements. The .effects on the financial statements ofthis departure from accounting principles generally accepted in the United States of America were not reasonably determinable, but are believed to be material. 
As more fully discussed in Section ill, Current Year Findings and Questioned Costs, material discrepancies were noted in the equipment inventory records of Fort Valley State University. Equipment inventory represents a significant portion of the University's Investment in Plant. We were unable to determine the effects these discrepancies may have on the financial statements. 
In our opinion, except for the effects on the financial statements ofthe matters discussed in the third, fourth, fifth, and sixth paragraphs, the financial statements referred to above present fairly, in all material respects, the financial position ofFort Valley State University as ofJune 30, 2001, and the changes in fund balances and the current operating funds revenues, expenditures, and other changes for the year then ended in conformity with accounting principles generally accepted in the United States of America. . 
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 ofthe financial statements ofFort 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 ofthe matters discussed in the third, fourth, fifth, and sixth 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 IT, Auditee's Response to Prior Year Findings and Questioned Costs and 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 of the resulting questioned costs is uncertain at this time, pending a management decision by the Federal grantor 
01ARL-63X 
 
 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, 
 
Y <l. W4~ . 
 
~eJlJ l 
 
. W. 
 
Hinton 
 
State Auditor 
 
RWH:as 
o1ARL-63X 
 
 FINANCIAL STATEMENTS - 1- 
 
 FORT VALLEY STATE UNIVERSITY COMBINED BALANCE SHEET ALL FUND GROUPS JUNE 30, 2001 
 
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 
 
$ 1,188,230,70 
 
$ 220,301.30 $ 1,543,773.60 
 
1,325.00 
 
866,148.73 $ 1.297,456,58 2,073,626.32 
 
239,838.89 
 
102,684.72 
 
988.862,16 
 
Total Assets 
 
$ 3.385.765.20 $ 1.297.456.58 $ 2.295.252.62 $ 1.543.773.60 
 
LIABILITIES AND FUND BALANCES 
Uabilities Accounts Payable Student Deposits Deferred Revenue Tuition and Fees 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 
 
$ 2.418,778.03 114,654.75 
288,405.21 
$ 988.862.16 
$ 2.821.837.99 $ 988.862,16 
$ 2,291,480.86 3,771.76 $ 1,543,773.60 
$ 308,594,42 $ 563.927.21 
$ 563,927.21 $ 308.594.42 $ 2.295,252.62 $ 1,543,773.60 
 
Total Liabilities and Fund Balances 
 
$ 3,385,765.20 $ 1.297.456,58 $ 2,295,252.62 $ 1.543.773,60 
 
The notes to the financial statements are im integral part of this statement. 
-2- 
 
 ", 
 
., 
 
EXHIBIT "A" 
 
UNEXPENDED 
 
PLANT FUNDS RENEWALS AND REPLACEMENTS 
 
INVESTMENT IN PLANT 
 
AGENCY FUNDS 
 
TOTAL (Memorandum 
Only) 
 
$ 2.068.330.25 $ 
 
1,131,248.10 
 
$ 91,733.37 $ 
 
_ _ _ _ _ _ $ 88,588.674.49 
 
6;243.617.32 1,325.00 
4,237,231.63 239,838.89 102,684.72 988.862.16 
88,588,674.49 
 
$ 2,068,330.25 $ 
 
1,131,248.10 $ 88,588,674.49 $ 91,733.37 $ 100,402,234.21 
 
$ 2,048,675.04 $ $ 2,048,675.04 $ 
 
$ 
 
19,655.21 $ 
 
$ 
 
19,655.21 $ 
 
396,948.33 396,948.33 
 
$ 54,070.97 $ 37,662.40 
$ 91.733.37 $ 
 
4,918,472.37 114,654.75 
288,405.21 37,662.40 
988,862.16 
6,348,056.89 
 
$ 88,588,674.49 734,299.77 734,299.77 $ 88,588,674.49 
 
$ 2,291,480.86 3,771.76 
1,543,773.60 88,588,674.49 
308,594.42 1,317,882.19 
$ 94,054,177.32 
 
$ 2,068,330.25 $ 
 
1,131,248.10 $ 88,588,674.49 $ 91,733.37 $ 100,402,234.21 
 
-3- 
 
 FORT VALLEY STATE UNIVERSITY COMBINED STATEMENT OF CHANGES IN FUND BALANCES 
ALL FUND GROUPS YEAR ENDED JUNE 30 2001 . 
 
REVENUES AND OTHER ADDITIONS 
Unrestricted Current Fund Revenues State Appropriations 
Regular 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 Addition~ 
EXPENDITURES AND OTHER PEDUCTIONS 
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 Government Loan Cancellations and Write-Offs Administrative and Collection Costs Expended for Plant Facilities 
Capitalized Noncapitalized DisposalslDeletions/Adjustments 
Total Expenditures and Other Deductions 
TRANSFERS BETWEEN FUNPS 
Nonmandatory Renewals and Replacements Capital Projects 
Total Transfers Between Funds 
Net Increasel(Decrease) for the Year 
FUND BALANCES JULY 1 2000 
FUND BALANCES JUNE 30 2001 
 
CURRENT FUNDS 
 
UNRESTRICTED 
 
RESTRICTED 
 
LOAN FUNDS 
 
$ 32.047.141.23 
 
$ 24.799.891.23 $ 1.623.258.05 527.245.05 61.561.86 
124,684.94 5,705.68 
 
3.755.00 
3,717.05 38.040.36 
 
$ 32.177,531.85 $ 27,011.956.19 $ 
 
32.510.00 78.022.41 
 
$ 28.839.700.36 $ 27,219,721.10 3.412.939.41 346.712.68 
 
54.941.05 161,710.93 
 
$ 
 
60.053.58 
 
24.013.43 
 
18,163.97 
 
$ 32,469.291.75 $ 27.566,433.78 $ 102.230.98 
 
$ 
 
-243,378.58 
 
-449.241.76 
 
$ 
 
-692.620.34 
 
$ 
 
-984,380.24 $ -554.477.59 $ -24.208.57 
 
1.548,307.45 
 
863.072.01 
 
2.319A61.19 
 
$ 
 
563,927.21 $ 
 
308.594.42 $ 2.295.252.62 
 
The notes to the financial statements are an integral part of this statement. -4- 
 
 EXHiBIT "6" 
 
ENDOWMENT FUNDS 
 
UNEXPENDED 
 
PLANT FUNDS RENEWALS AND REPLACEMENTS 
 
INVESTMENT IN PLANT 
 
TOTAL (Memorandum 
Only) 
 
$ 1,908,940.00 
 
$ 
 
30,008.32 
 
80,496.72 $ 12,988.35 
 
1,090.00 
 
$ 
 
30,008.32 $ 2,003.515.07 $ 
 
$ 5.46 3,017.62 
3,023.08 $ 
 
$ 32,047,141.23 
 
2,530.60 
 
1,908,940.00 24,803,646.23 
1,623,258.05 529,n5.65 
 
61,561.86 84,219.23 30,008.32 38,040.36 
 
140,690.91 5,705.68 
 
2,920,237.25 
 
2,920,237.25 
 
1,979,794.86 506,025.64 
1,188,412.60 
 
1,979,794.86 506,025.64 
1,188,412.60 
 
1,090.00 32,510.00 
 
6,597,000.95 $ 67,901 ,057.87 
 
$ 
 
0.00 
 
$ 56,059,421.46 3,412,939.41 346,712.68 
 
$ 
 
537.99 
 
55,479.04 
 
161,710.93 60,053.58 24,013.43 18,163.97 
 
1,979,794.86 $ 4,065.00 
 
506,025.64 34,983.99 $ 
 
954.33 
 
2,485,820.50 39,048.99 954.33 
 
$ 
 
0.00 $ 1,984,397.85 $ 
 
541,009.63 $ 
 
954.33 $ 62,664,318.32 
 
$ 
 
30,008.32 $ 
 
1,513,765.28 
 
$ 
$ 19,117.22 $ 
537.99 
 
243,378.58 449,241.76 
 
$ 
 
0.00 
 
0.00 
 
692,620.34 
 
$ 
 
0.00 
 
154,633.79 $ 6,596,046.62 $ 5,236,739.55 
 
579,665.98 
 
81,992,627.87 
 
88,817.437.n 
 
$ 1,543,773.60 $ 
 
19,655.21 $ 
 
734,299.77 $ 88,588,674.49 $ 94,054,177.32 
 
-5- 
 
  FORT VALLEY STATE UNIVERSITY STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES, 
AND OTHER CHANGES YEAR ENDED JUNE 30, 2001 
 
EXHIBIT"C" 
 
The notes to the financial statements are an integral part of this statement. -6- 
 
 FORT VALLEY STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30, 2001 
 
EXHffiIT"D" 
 
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
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 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. 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 fmancial 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 it,istitutional 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 only be 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 UNNERSITY NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30, 2001 
 
EXHffiIT"D" 
 
NOTE 1: SUMMARY 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 p,hysical 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 amotints 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 [mancial 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 of accounting is ~efined as that method of accounting in which expenditures, other than accrued interest on geIierallong-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, i001 
 
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 conformity with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, but is not consistent with accounting principles generally accepted in the United States ofAmerica, which provide for the recording ofencumbrances as a reservation of fund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures determined in accordance with accounting principles generally accepted in the United States of America. 
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$1,784,955.02 and a related net current year expenditure of $28,756.52 have not been reported in the current funds as required by accounting principles generally accepted in the United States of America. 
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 accounting principles generally accepted in the United States ofAmerica in that immaterial adjustments should be reported as current period revenues and expenditures. The effect ofthis departure is deemed to be immaterial to the fair presentation ofthe financial statements. 
Tothe 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 
-9- 
 
 FORT VALLEY STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30, 2001 
 
EXHIBIT"D" 
 
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 
BASIS OF ACCOUNTING present the results ofoperations or the net income or loss for the period as would a statement of income or a statement of revenues and expenses. 
 
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 of2000-200l. 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. 
 
.CASH AND CASH EQUIVALENTS Cash and Cash Equivalents consist of petty cash,. demand deposits, certificates of deposit and temporary investments in authorized fmancial institutions, and cash management pools that have the general characteristics of demand deposit accounts. 
 
INVESTMENTS Investments are reported at fair value. (Investments are reported at cost, which is materially the same as 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 ofallotments due from the Board ofRegents ofthe University System of Georgia - Administrative Central Office, reimbursements 4ue 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 of consumable 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. 
 
PREPAID ITEMS Prepaid items are payments made to vendors in advance ofthe receipt of good:s and services that will benefit periods subsequent to the balance sheet date. 
 
- .10- 
 
 -, "' ""\ ,. ,' 
FORT 'VALLEY STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS 
JUNE 3D, 200i 
 
EXHIBIT "D" 
 
NOTE 1: SUMMARY OF .SIGNIFICANT ACCOUNTING POLICIES 
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 of the 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 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 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 Intennediate 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. 
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. 
- 11 - 
 
 FORT VALLEY STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30, 2001 
 
EXHIBIT "D" 
 
NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS 
 
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES 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 ~ll bank balances which include demand deposits and/or interest bearing accounts. The bank balances as of June 30, 2001, 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 fmancial institution, or by its trust department or agent but not in the University's name, and amounts uncollateralized. 
 
Total Cash Deposits 
 
Carrying Amount 
 
Bank Balances 
 
Risk Categories 
 
2 
 
3 
 
$ 477438380 $ 5 495 418,67 $ 267 000,00 $====!O~,O~O $ 5228418,67 
 
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. 
 
The carrying amounts of investment balances as of June 30, 2001, are categorized below: 
 
- 12- 
 
 FORT VALLEY STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30, 2001 
 
EXHIBIT"D" 
 
NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS 
 
CATEGORIZATION OF INVESTMENTS 
 
Type of Investment 
U. S. Government Securities $ 
Investments Not Subject to Categorizations: 
Board ofRegents Balanced Income Fund 
Total Investments 
 
Risk Categories 2 
 
1,325.00 $ 
 
0,00 $ . 
 
Carrying 
 
3 
 
Amount 
 
0.00 $ 1,325.00 
 
1.468,358.52 $1.469,683.52 
 
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 of the pool. 
 
NOTE 3: INVESTMENT IN PLANT 
 
The following is a summary of Investment in Plant fixed assets as of June 30, 200 l: 
 
Land Buildings Improvements Other Than Buildings Equipment Library Books and Collections 
 
$ 1,262,548.17 57,466,056.46 5,256,620.74 19,128,836.57 5,474,612,55 
 
Total Investment in Plant 
 
$88.588.674.49 
 
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 ofloss 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 $2,000,000.00 per person and dental coverage up to an annual maximum of$1 ,000,00 per person. Blue Cross Blue Shield ofGeorgia processes medical and dental 
 
- 13- 
 
 FORT VALLEY STATE UNNERSITY NOTES TO THE FINANCIAL STATEMENTS' 
JUNE 30, 2001 
 
EXHIBIT "D" 
 
NOTE 4: RISK MANAGEMENT 
 
claims in accordance with the Health Benefits Plan as established by the Board ofRegents. A~ of January 1, 2001, Express Scripts, Incorporated was contracted with to process pharmacy drug claims in accordance with the Pharmacy Benefit Program portion ofthe Health Benefits Plan. 
 
The Department of Administrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that wi~l 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 settle!l1ent. 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 ~f Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment. 
 
A self-insured program of professional liability for its employees was established by the Board of Regents of the University System of Georgia, under powers authorized by the Official Code of Georgia Annotated Section 45-9-1. The program insures the employees to the extent that they are not immune from liability against personal liability for damages arising out ofthe performance of their duties or in any way connected therewith. The program is administered by DOAS as a SelfInsurance Fund. 
 
NOTE 5: RETIREMENT PLANS 
 
TEACHERS RETIREMENT SYSTEM OF GEORGIA 
 
Plan Description Fort Valley S~ate University participates in the Teachers Retirement System of Georgia (TRS), a . cost-sharing multiple-employer defined benefit pension plan established by the General Assembly of Georgia for the purpose of providing retirement allowances and other benefits for teachers of the State ofGeorgia. 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 finaricial 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 
 
-14 - 
 
 ,',. 
 
:'"~'.':....' .,.' i, 
 
FORT VALLEY STATEUNNERSITI' NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30; 2001 
 
EXHffiIT"D" 
 
NOTE 5: RETmEMENTPLANS 
 
TEACHERS RETIREMENT SYSTEM OF GEORGIA 
 
Funding Policy independent actuary. For fiscal year 2001, the employer contribution rate was 11.29% for covered employees. In addition, the University contributed 2.33% 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 
 
2001 2000 1999 
 
100% 100% 100% 
 
$ 1,967,019.67 $ 2,013,918.77 $ 2,024,909.52 
 
REGENTS RETIREMENT PLAN 
 
Plan Description The Regents Retirement Plan, a single-employer defmed 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 8.81 % 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$327,811.74 (8.81 %) and $186,306.35 (5%), respectively. 
 
GEORGIA DEFINED CONTRIBUTION PLAN 
 
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 
 
. - 15 - 
 
 FORT VALLEY STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30, 2001 
 
EXHffiIT"D" 
 
NOTE 5: RETIREMENT PLANS 
GEORGIA DEFINED CONTRIBUTION PLAN 
Plan Description purpose ofproviding retirement coverage for State employees who are temporary, seasonal, and part- . time and are not members of a public retirement or pension system. GnCp is administered by the Board of Trustees of the Employees' Retirement System of Georgia. 
Benefits A member may retire and elect to receive periodic payments after attainment ofage 65. Thepayment will be based uponmortality tables and interest assumptions to be adopted by the Board ofTrustees. If a member has less than $ 3,500.00 credited to hislher account, the Board ofTrustees has the option ofrequiring 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 hislher 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 of the member's account is refundable upon request by the member. 
Total contributions made by employees during fiscal year 2001 amounted to $41,660.95 which' represents 7.5% of covered payroll. These contributions met the requirements of the plan. 
NOTE 6: LEAVEPOUCrnS 
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 sen:ice credit in the Teachers Retirement System of Georgia. 
 
- 16- 
 
 FORT VALLEY STATE UNIvERSITY NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30, 2001 
 
EXHffiIT"D" 
 
NOTE 7: 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 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. 
 
Litigation, claims and assessments filed against Fort Valley State University (an organizational unit ofthe Board ofRegents ofthe University System of Georgia), 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 30,2001. 
 
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 ofRegents ofthe University System ofGeorgia 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, 200 I, there were 163 employees who had retired or were disabled that were receiving these postemployment health and life insurance benefits. For the year ended June 30, 2001, Fort Valley State University recognized as incurred $382,437.06 of expenditures, which was net of $132,972.21 of participant contributions. 
 
NOTE 9: ENROLLMENT 
 
The equivalent full-time student enrollment of Fort Valley State University was as follows: 
 
Regular Term Fall Semester, 2000 Spring Semester, 200I 
 
2,117 2,047 
 
Average 
 
Summer School, 2000 
 
- 17 - 
 
 SUPPLEMENTARY INFORMAnON - 19- 
 
 FORT VALLEY STATE UNIVERSITY COMBINING BALANCE SHEET 
CURRENT FUNDS - UNRESTRICTED JUNE 30. 2001 
 
ASSETS 
Cash and Cash Equivalents Accounts Receivable Inventories Prepaid Items Due from Other Fund Groups 
 
RESIDENT INSTRUCTION 
 
LOTTERY FOR EDUCATION 
 
$ 1,010.285.36 $ 450,489.79 30,465.20 42,684.72 
1,243,512.73 
 
151,423.94 
 
Total Assets 
 
$ 2,777,437.80 $ =====15=1=,4=2:=3.=94= 
 
LIABILITIES AND FUND BALANCES 
Liabilities Accounts Payable Student Deposits Deferred Revenue Tuition and Fees Due to Other Fund Groups 
Total Liabilities 
Fund Balances Unrestricted 
Total Liabilities and Fund Balances 
 
$ 2,252,477.22 $ 27,477.29 
288,405.21 
 
151,423.94 
 
$ 2,568,359.72 $ 
 
151,423.94 
 
209,078.08 
 
0.00 
 
$ 2,777,437.80 $ =====15=1=,4=2:=3.=94.... 
 
See notes to the financial statements. 
 
20- 
 
 EXHIBIT"E" 
 
AUXILIARY ENTERPRISES 
 
STUDENT ACTIVITIES 
 
TOTAL 
 
$ 26,521.40 $ 1,188,230.70 
 
$ 
 
371,336.60 
 
44,322.34 
 
866,148.73 
 
209,373.69 
 
239,838.89 
 
60,000.00 
 
102,684.72 
 
1,243,512.73 
 
$ 
 
640,710.29 $ 70,843.74 $ 3,640,415.77 
 
$ 
 
14,019.87 $ 
 
87,177.46 
 
254,650.57 
 
$ 
 
355,847.90 $ 
 
857.00 $ 857.00 $ 
 
2,418,778.03 114,654.75 
288,405.21 254,650.57 
3,076,488.56  
 
284,862.39 
 
69,986.74 
 
563,927.21 
 
$ 
 
640,710.29$ 70,843.74 $ 3,640,415.77 
 
- 21 - 
 
 FORT VALLEY STATE UNIVERSITY COMBINING STATEMENT OF CHANGES IN FUND BALANCES 
CURRENT FUNDS - UNRESTRICTED 
YEAR ENDED JUNE 30, 2001 
 
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) forthe Year 
FUND BALANCES JULY 1. 2000 
FUND BALANCES JUNE 30. 2001 
 
RESIDENT INSTRUCTION 
 
LOTIERYFOR EDUCATION 
 
$ 28,197,786,05 $ 
52,495.93 5,705.68 
$ 28,255,987.66 $ 
 
240,942,00 240,942.00 
 
$ 28,252,399.17 $ 240,942,00 
 
54,941,05 200.00 
$ 28,307,540.22 $ 240,942.00 
 
$ 
 
-51,552.56 $ 
 
0.00 
 
260,630,64 
 
0.00 
 
$ 
 
209,078.08 $======0.=00;:, 
 
See notes to the financial statements, 
 
- 22- 
 
 EXHIBIT"F" 
 
AUXILIARY ENTERPRISES 
 
STUDENT ACTIVITIES 
 
TOTAL 
 
$ 3,275,249.81 $ 333,163.37 $ 32,047,141.23 
 
71,815.29 
 
373.72 
 
124,684.94 5,705.68 
 
$ 3,347,065.10 $ 333,537.09 $ 32,177,531.85 
 
$ 346,359.19 $ 28,839,700.36 
 
$ 3,412,939.41 
 
3,412,939.41 
 
161,510.93 
 
54,941.05 161,710.93 
 
$ 3,574,450.34 $ 346,359.19 $ 32,469,291.75 
 
$ 
 
-243,378.58 
 
-449,241.76 . 
 
$ 
 
-243,378.58 
 
-449,241.76 
 
$ 
 
-692,620.34 
 
$ 
 
-692,620.34 
 
$ 
 
-920,005.58 $ -12,822.10 $ 
 
-984,380.24 
 
1,204,867.97 
 
82,808.84 
 
1,548,307.45 
 
$ 
 
284,862.39 $ 69,986.74 $ 
 
563,927.21 
 
- 23- 
 
 FORT VALLEY STATE UNIVERSITY COMBINING STATEMENT OF CURRENT FUNDS REVENUES. EXPENDITURES, 
AND OTHER CHANGES UNRESTRICTED 
YEAR ENDED JUNE 30. 2001 
 
Net Increase/(Decrease) in Fund Balances 
See notes to the financial statements. 
 
-24 - 
 
$ 
 
-51,552.56 $-===__~O.,;,;OO;;.. 
 
 EXHIBIT"G" 
 
AUXILIARY ENTERPRISES 
 
STUDENT ACTIVITIES 
 
TOTAL 
 
$ 22,078,801.00 
 
$ 292,697.52 
 
6,092,764.13 
 
350,467.23 
 
137,176.56 
 
$ 3,275,249.81 
 
3,275,249.81 
 
40,465.85 
 
112,682.50 
 
$ 3,275,249.81 $ 333,163.37 $ 32,047,141.23 
 
$ 12,044,313.38 
 
1,752,993.19 
 
305,943.53 
 
2,777,981.30 
 
$ 346,359.19 
 
2,681,532.28 
 
5,066,447.28 
 
3,751,010.96 
 
459,478.44 
 
$ 1,615,112.26 22,450.53 
285,617.10 148,712.02 978,556.11 362,491.39 
 
1,615,112.26 22,450.53 
285,617.10 148,712.02 978,556.11 362,491.39 
 
$ 3,412,939.41 $ 346,359.19 $ 32,252,639.77 
 
$ -243,378.58 -449,241.76 . -89,695.64 $ 
 
$ 373.72 
 
-243,378.58 -449,241.76 
-31,320.31 
 
$ -782,315.98 $ 
 
-54,941.05 373.72 $ _ _-.:...;77:..:8"",,8~8.;.;..1:...;70;... 
 
$ -920,005.58 $ -12,822.10 $-===-=984==:=;,3=8=0.=24= -25- 
 
 FORT VALLEY STATE UNIVERSITY SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET 
RESIDENT INSTRUCTION YEAR ENDED JUNE 30, 2001 
 
REVENUES 
State Appropriations Other Revenues Retained 
 
CURRENT FUNDS 
 
UNRESTRICTED 
 
RESTRICTED 
 
PLANT FUNDS RENEWALS AND 
UNEXPENDED REPLACEMENTS 
 
$ 21,837,859.00 
 
$ 1,908,940.00 
 
6,359,927.05 $ 27,219,721.10 
 
81,586.72 $ 
 
5"'.4""6::.. 
 
$ 28,197.786.05 $ 27,219,721.10 $ 1,990,526.72 $ 
 
....=..:5...:.;46:..., 
 
EXPENDITURES 
Personal Services: Education, General and Departmental Services Sponsored Operations 
Operating Expenses: Education, General and Departmental Services Sponsored Operations 
Capital Outlay Special Funding Initiative 
 
$ 19.342,551.45 $ 7,355,523.20 
 
5.963.595.72 2.946,252.00 
 
19.864,197.90 $ 
 
1,412.288.61 $ 571,571.25 
 
541,009.63 
 
$ 28,252,399.17 $ 27,219.721.10 $ 1.983,859.86 $ _ _.-:;.54.;,.,;1,:.;;.0""09",,.6;;;,,;3"- 
 
Excess of Revenues over Expenditures 
 
$ 
 
-54,613.12 $ 
 
0.00 $ 
 
6,666.86 $ _ _~-54-....:o1,.00;;,,4;,;,.1,;,;7_ 
 
(1) To eliminate tuition waivers not budgeted and to reclassify current year transfers and prior year fund balances bUdgeted as revenues. 
 
See notes to the financial statements. 
 
- 26- 
 
 SCHEDULE "1" 
 
TOTAL 
 
ADJUSTMENTS (1 ) 
 
TOTAL (Budget Basis) 
 
BUDGET 
 
VARIANCEFAVORABLE (UNFAVORABLE) 
 
$ 23,746,799.00 33,661 ,240.33 $ 
 
$ 23,746,799.00 $ 23,746,799.00 $ 
 
81,525.73 
 
33,742,766.06 
 
43,625,594.00 
 
0.00 -9,882,827.94 
 
$ 57,408,039.33 $ 
 
81,525.73 $ 57,489,565.06 $ 67,372,393.00 $ 
 
-9,882,827.94 
 
$ 19,342,551.45 7,355,523.20 
5,963,595.72 $ 19,864,197.90 
1,953,298.24 3,517,823.25 
 
$ 19,342,551.45 $ 19,658,948.00 $ 
 
7,355,523.20 
 
8,518,363.00 
 
-459,478.44 
 
5,504,117.28 19,864,197.90 
1,953,298.24 3,517,823.25 
 
5,613,5n.OO 26,529,873.00 
3,533,808.00 3,517,824.00 
 
316,396.55 1,162,839.80 
109,459.72 6,665,675.10 1,580,509.76 
0.75 
 
$ 57,996,989.76 $ 
 
-459,478.44 $ 57,537,511.32 $ 67,372,393.00 $ 
 
9,834,881.68 
 
$ -588,950.43 $ 
 
541,004.17 $ 
 
-47,946.26 
 
$ 
 
-47,946.26 
 
\ 
 
27 
 
 FORT VALLEY STATE UNIVERSITY SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET 
LOTIERY FOR EDUCATION YEAR ENDED JUNE 30, 2001 
 
SCHEDULE "2" 
 
REVENUES State Appropriations 
 
CURRENT FUNDS UNRESTRICTED 
 
BUDGET 
 
VARIANCE FAVORABLE (UNFAVORABLE) 
 
$ 
 
240,942.00 $ 240,942.00 $ 
 
0;;..;..0.;;..;0;... 
 
EXPENDITURES 
 
Equipment, Technology and Construction 
 
Trust Fund 
 
$ 
 
Special Funding Initiatives 
 
$ 
 
120,942.00 $ 120,942.00 $ 
 
120,000.00 
 
120,000.00 
 
240,942.00 $ 240,942.00 $ 
 
0.00 0.00 
0_.0..,..0_ 
 
Excess of Revenues over Expenditures 
 
$ ========0,=00== 
 
$ =====0,=00== 
 
See notes to the financial statements. 
 
- 29- 
 
 r---------------,--------------------~--- 
FORT VALLEY STATE UNIVERSITY CHANGES IN INVESTMENT IN PLANT 
YEAR ENDED JUNE 30, 2001 
 
Land Buildings Improvements Other Than Buildings Equipment Library Books and Collections 
 
BALANCE JULY 1, 2000 
 
CURRENT FUNDS UNRESTRICTED RESTRICTED 
 
$ 1,262,548,17 
 
54,219.795,34 
 
4,879,494.49 
 
16.374,719,13 $ 
 
1,839,952,87 $ 864,273,17 
 
5,256.070.74 
 
216.011,21 
 
$ 81.992,627,87 $ 
 
2.055.964.08 $ 864,273.17 
 
See notes to the financial statements, 
 
- 30- 
 
 SCHEDULE "3" 
 
ADDITIONS 
PLANT FUNDS RENEWALS AND 
UNEXPENDED REPLACEMENTS 
 
GEORGIA STATE FINANCING AND 
INVESTMENT COMMISSION 
 
PRIVATE GIFTS 
 
DEDUCTIONS DISPOSALS! DELETIONS! ADJUSTMENTS 
 
BALANCE JUNE 30, 2001 
 
$ 1,262,548.17 
 
$ 1,563,459.61 $ 
 
494,388.91 $ 
 
1,188,412.60 
 
57,466,056.46 
 
377,126.25 
 
5,256,620.74 
 
39,209.00 
 
11,636.73 
 
$ 
 
954.33 
 
19,128,836.57 
 
$ 2,530.60 
 
5,474,612.55 
 
$ 1,979,794.86 $ 
 
506,025.64 $ 
 
1,188,412.60 $ 2,530.60 $ =.....==9=54=.=33= $ 88,588,674.49 
 
- 31 - 
 
 FORT VALLEY STATE UNIVERSITY SCHEDULE OF FUND BALANCES CURRENT FUNDS AND PLANT FUNDS 
JUNE 30, 2001 
 
RESIDENT INSTRUCTION. 
 
CURRENT FUNDS 
 
UNRESTRICTED 
 
LOTTERY 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 
 
$ 
 
-154,080.07 
 
For Inventory Reserve 
 
$ 
 
29,312.11 
 
209,373.69 
 
For Renewals and Replacements Reserve 
 
For Subsequent Years' Expenditures 
 
-32,933.23 $ 35,748.89 
 
For Uncollectible Accounts 
 
176,177.48 
 
262,502.00 
 
34.237.85 
 
Surplus 
 
Regular 
 
3,588.49 
 
Lottery for Education 
 
$ 
 
0.00 
 
$ 
 
209,078.08 $ 
 
0.00 $ 
 
284,862.39 $ 69.986.74 
 
$ 
 
209,078.08 $ 
 
0.00 $ 
 
284,862.39 $ 69,986.74 
 
See notes to the financial statements. 
 
- 32- 
 
 SCHEDULE "4" 
 
RESTRICTED 
 
UNEXPENDED REGULAR 
 
PLANT FUNDS RENEWALS AND REPLACEMENTS 
 
INVESTMENT IN PLANT 
 
TOTAL 
 
$ 88,588,674.49 $ 88,588,674.49 
 
$ 308,594.42 
 
$ _----'3::,:0""8L:,5.::.94.:.:,.4..:.:2=_ 
 
$ 
 
123,886.32 
 
610,413.45 
 
$ 
 
123,886.32 
 
-154,080.07 
 
238,685.80 
 
610,413.45 
 
2,815.66 
 
472,917.33 
 
$ 
 
19,655.21 
 
$ 
 
19,655.21 $ _ _--'-'734:;..;.1.;;,2;.;.9.:;.;9..;...;77'- 
 
23,243.70 0.00 
$ 1.317,882.19 
 
$ 308,594.42 $ 
 
19,655.21 $ 
 
734,299.77 $ 88,588.674.49 $ 90,215,151.10 
 
- 33- 
 
 FORT VALLEY STATE UNIVERSITY RECONCILIATION OF SALARIES AND TRAVEL 
YEAR ENDED JUNE 30, 2001 
 
SCHEDULE "5" 
 
Totals per Annual Supplement 
Adjustments Shared Services on Jointly Staffed Personnel Middle Georgia College Pasto, John D. 
 
SALARIES 
$ 23.073,044.87 $ 
 
TRAVEL 534,8Q7.62 
 
U07.00 $ 23,074,151.87 $ =====5=3=4=,8:=07=.=62== 
 
See notes to the financial statements. 
 
- 34- 
 
 SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS 
 
 FORT VALLEY STATE UNNERSITY AUDITEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 200 I 
 
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS 
 
FINDING CONTROL NUMBER AND STATUS 
 
FS-533-98-03 FS-533-99-01 FS-533-99-02 FS-533-99-03 FS-533-00-01 FS-533-00-02 FS-533-00-03 FS-533-00-04 
 
Unresolved - See Corrective Action/Responses Further Action Not Warranted Unresolved - See Corrective Action/Responses Further Action Not Warranted Partially Resolved - See Corrective Action/Responses Partially Resolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Partially Resolved - 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 did not concur with finding. Information was submitted to Georgia Student Finance Commission to make a determination of the students' eligibility for the H.O.P.E. Scholarship and Book Allowance. Awaiting response from agency. 
 
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. 
 
INVENTORIES REVENUESIRECEIVABLESIRECEIPTS Inadequate Resale Inventory Procedures Finding Control Number: FS-533-00-01 
 
Since this fmding, the bookstore operation has been contracted out. But prior to this change, the following procedures were established November 2000, to ensure that all resale inventory items were properly accounted for. All items taken to the off-campus sites were recorded and signed out by the bookstore manager and the individual responsible for sales. 
 
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FORT VALLEY STATE UNIVERSITY AUDITEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND- QUESTIONED COSTS 
CORRECTIVE ACTIONIRESPONSES 
INVENTORIES REVENUES/RECENABLES/RECEIPTS Inadequate Resale Inventory Procedures Finding Control Number: FS-533-00-01 
At the completion of each event, a reconciliation was prepared to ensure that all resale items are accounted for. The sales should be recorded separately for each event. A copy of the reconciliation and the sales report for each event was kept in the office of Auxiliary Services. 
REVENUES/RECENABLES/RECEIPTS Student Accounts Receivable Not Supported by Financial Aid Finding Control Number: FS-533-00-02' 
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 off without specific authorization from the legislature. 
EXPENDITURESILIABILITIESIDISBURSEMENTS H.O.P.E. Disbursements Made to Ineligible Students Questioned Costs: $1,422.00 Finding Control Number: FS-533-00-03 
Procedures have been implemented which include the hiring of a H.O.P.E. coordinator to ensure that all H.O.P.E. recipients are checked at each 30th hour benchmark to determine continued academic eligibility. Additional, students who are in jeopardy of losing H.O.P.E. Scholarships (less than 3.00 GPA) are sent warning letters when approaching a checkpoint. The one student, who was disbursed $150 viewed as $75 in excess of the allowable amount, dropped a class and the drop/delete was used by the Registrar's Office _ and did not capture the number ofcredit hours the student was enrolled for when the initial .disbursement was made. The Financial Aid Director has met with the Registrar and others regarding the negative impact of the use of the drop/delete code. 
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FORT VALLEY STATE UNNERSITY AUDITEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FiNDINGS AND QUESTIONED COSTS 
YEAR ENDED JUNE 30, 2001 
 
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS 
 
CORRECTIVE ACTIONIRESPONSES 
 
GENERAL LEDGER Reports Not Reconciled to Accounting Records Finding Control Number: FS-533-00-04 
 
The University has completed the reconciliation of the H.O.P.E. Program for 2000. In addition, procedures have been established to reconcile this account on a quarterly basis. The established procedures will require the Director of Accounting Services or his/her designate and the Director of Financial Aid to resolve any differences between the accounting records and the financial aid records prior to completing the H.O.P.E. reconciliation. To accomplish this the accounting office downloads the disbursements report per GSFA, compares it to Fort Valley State University H.O.P.E. disbursements by student. Any discrepancies are brought to the attention ofthe FAO for correction. A copy of this reconciliation will be maintained on file and furnished to the auditors for their review. 
 
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/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 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 
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FORT VALLEY STATE UNIVERSITY AUDITEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 
 
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 
 
FINDING CONTROL NUMBER AND STATUS 
 
FA-533-00-01 FA-533-00-02 FA-533-00-03 FA-533-00-04 FA-533-00-05 
 
Partially Resolved - See Corrective ActionlResponses Unresolved - See Corrective Action/Responses Partially Resolved - See Corrective ActionlResponses Partially Resolved - See Corrective ActionlResponses Partially Resolved - See Corrective Action/Responses 
 
CORRECTIVE ACTIONIRESPONSES 
 
TYPES OF SERVICES/ALLOWED OR UNALLOWED Disbursement in Excess ofCost of Attendance Finding Control Number: 533-96-14 - 
 
The University has mandated a policy that all payments to students, regardless of the source, must be received and noted in Banner on RPAARSE before disbursement. Therefore, the emphasis that the University now places on the procedure should provide the appropriate enforcement ofthe policy. 
 
ELIGmILITY Funds Disbursed While Enrolled in Excess Remedial Hours Finding Control Number: 533-96-15 
 
- We concur with the audit finding, but are still awaiting a response from U. S. Department of Education for resolution of the questioned cost. 
 
ELIGmILITY Improper Determination ofEnrollment Status Finding Control Number: 533-96-16 
 
We concur with the audit finding, but are still awaiting a response from U. S. Department -of Education for resolution of the questioned cost. 
 
ELIGmILITY Student Financial Aid in Excess of Maximum 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. Still 
 
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 FORT VALLEY STATE UNIVERSITY AUDITEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS 
YEAR ENDED JUNE 30, 2001 
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 
CORRECTIVE ACTIONIRESPONSES 
ELIGffiILITY Student Financial Aid in Excess ofMaximum Time Frame Finding Control Number: 533-96-18 
awaiting response, current procedures require written documentation of any extenuating circumstances deemed appropriate for any changes in excess of the mandated 187 undergraduate hours or 72 graduate hours. Appropriate documentation is located in student file. 
ELIGffiILITY Satisfactory Academic Progress Not Maintained Finding Control Number: 533-96-19 
J 
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 of the Summer 95 period, preceding Fall 95. Therefore, no financial suspension was warranted. Two students had been suspended from financial aid at the end ofSpring 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 of satisfactory academic progress. During the course ofthe school year academic problems prevailed.. However, as long as the University allowed the students to re-enroll during this period, no action was warranted until the end of the 95-96 school year. 
A result of all the aforestated information, we do not concur with audit findings in this . area. 
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 FORT VALLEY STATE UNNERSITY AUDITEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2001 
 
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 
 
CORRECTIVE ACTIONIRESPONSES 
 
ELIGIBILITY Control Procedures Inadequate Finding Control Number: FA-S33-98-02 
 
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-S33-98-03 
 
We are awaiting a response from the U. S. Department of Education for resolution. 
 
ELIGIBILITY Overpayment of Student Financial Aid Finding Control Number: FAS33-98-04 
 
. 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-S33-98-0S 
 
Qur 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-S33,:,98-06 
 
Awaiting final response from the U. S..Department of Education on the Pell Grant 
 
expenditures in question. 
 
. 
 
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 , '. 
FORT VALLEY STATE UNIVERsrty AUDITEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30; 2001 
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 
CORRECTIVE ACTIONIRESPONSES 
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. Effective July 1, 2000, a business and finance person has been identified with primary responsibility of reconciliation of all Title IV programs. 
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 ofFSEOG 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. Policies and procedures in the awarding ofFSEOG were changed and only Pell eligible students are awarded FSEOG funds. 
-7- 
 
 FORT VALLEY STATE UNIVERSITY AUDITEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS 
YEAR ENDED JUNE 30, 2001 
PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS 
CORRECTIVE ACTIONIRESPONSES 
ELIGmILITY 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 detennination. Written procedures were developed requiring each financial aid counselor to notify students of all awards' including any revisions. 
ELIGmILITY Overpayment of Student Financial Aid Finding Control Number: FA-533-99-03 
This fmding has been reported to the U. S. Department ofEducation and we are awaiting their final detennination. A corrective action plan was developed and implemented. Revised fmancial aid policies and procedures. Staff participates in ongoing training at attending sessions sponsored by the U. S. Department of Education, Board of Regents, Georgia Student Finance Commission, GASFAA a.nd SAS.FAA. REPORTING . Expenditures in Excess ofAuthorization 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 detennination. 
REPORTING Inadequate Documentation for Report Finding Control Nlimber: FA-533-99-05 
This finding has been reported to the U. S. Department of Education and we are awaiting their final detennination. Financial aid data submitted in the Fiscal Operations Report is being extracted directly from Banner. The only manual data is for Federal Work-Study, which cannot be tracked because another software (peoplesoft) is used. FWS working papers are available to verify accuracy. 
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 . FORT VALLEY STATE UNNERSITY . AUDITEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 
CORRECTIVE ACTIONIRESPONSES 
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. Effective July 1,2000, a business and finance person has been identified with primary responsibility of reconciliation of all Title N programs. 
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 [mal determination. Students identified in the sample as not having received "exit counseling" were in fact enrolled at least half-time. Therefore, exit interviews were not required. Currently, all first time borrowers must received entrance loan counseling. Loan funds cannot be disbursed until the counselor is able to verify that counseling has been conducted and that the appropriate paperwork is on file. All borrowers who leave the University or drop to below half time must come in for exit counseling or complete and return exit information mailed to hirn/her. 
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. Procedures outlined above are being implemented. 
ELIGffiILITY Improper Disbursement ofFSEOG Funds Student Financial Aid Cluster Program Questioned Cost: $47,199.00 Finding Control Number: FA-533-00-01 
The University is awaiting resolution of this finding from the U. S. Department of Education regarding its interpretation of regulations regarding awarding FSEOG funds to 
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 FORT'VALLEY STATE UNIVERSiTY AUDITEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS 
YEAR ENDED JUNE 30, 2001 
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 
CORRECTIVE ACTIONIRESPONSES 
ELIGIBILITY Improper Disbursement ofFSEOG Funds Student Financial Aid Cluster Program Questioned Cost: $47,199.00 Finding Control Number: FA-533-00-01 
non-Pell eligible students. Until this issue is resolved, FSEOG will only be awarded to Pell eligible students. 
ELIGIBILITY Overpayment of Student Financial Aid Student Financial Aid Cluster Program Questioned Cost: $266,139.18 Finding Control Number: FA-533-00-02 
This finding has been reported to the U. S. Department of Education and we are awaiting their final deterinimition. These were instances where students who did not make satisfactory academic progress appealed fmancial aid suspensions and financial aid was reinstated. Adjustments were made in students' cost of attendance budgets, which led to increased eligibility and revised award notifications.. Also, the University has implemented changes designed to strengthen the internal controls related to student financial aid. 
 The policies and procedures manual related to the awarding process has been revised. 
 Staffmembers have participated in mandatory in-house stafftraining sessions and training sponsored by state and Federal agencies. 
 Satisfactory academic policies have been revised.  Students who have exceeded maximum time frame well beyond the mandated 
maximum hours are denied additional aid at the undergraduate level. 
ELIGIBILITY Failure to Notify Students of Awards Student Financial Aid Cluster Program Questioned Cost: $50,741.74 Finding Control Number: FA-533-00-03 
Corrective action addressing this finding has been fully implemented and includes initial and revised award notifications. In a number ofthe cases identified, the award letters were 
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FORT VALLEY STATE UNNERSITY 
 
AUDITEE'S RESPONSE 
 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS 
 
YEAR ENDED JUNE 30, 2001 
 
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 
CORRECTIVE ACTIONIRESPONSES 
ELIGffiILITY Failure to Notify Students of Awards Student Financial Aid Cluster Program Questioned Cost: $50,741:74 Finding Control Number: FA-533-00-03 
in-house but not filed in the individual files as they should have been. Written procedures were developed so that financial aid counselors could use as guidelines in notifying students. 
REPORTING Reports Not Reconciled Student Financial Aid Cluster Program Finding Control Number: FA-533-00-04 
The reconciliation amounts reported for all federal financial assistance programs have been corrected. The Federal fiscal activity calendar allows for corrections to be made. The following procedures have been implemented to ensure that all programs are reconciled at the end of the fiscal year. The Student Financial Aid Director will ensure that the total disbursements per financial aid's records are in agreement with the general ledger prior to the submission of the FISAP report. Any discrepancies or errors noted after the initial transmission will be corrected in the FISAP edit report prior to December 15th as allowed by the U. S. Department of Education. We are working with the U. S. Department of Education to complete the reconciliation process for the Direct Loan program. 
SPECIAL TESTS AND PROVISIONS Inadequate Control Procedures Student Financial Aid Cluster Program Finding Control Number: FA-533-00-05 
Presently the Office of Financial Aid and the Payroll Office have on file "Authorized Supervisor Signature Forms". The filing system in the Office of Financial Aid was changed and includes individual files for each Federal work-study employee by program year. 
 
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 SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS 
 
  
 
J.' ,: ) 
 
FORT VALLEY STATE UNIVERSITY 
 
SCHEDULE OF FINDINGS AND QUESTIONED COSTS 
 
YEAR ENDED JUNE 30, 2001 
 
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS 
INVENTORIES REVENUESIRECENABLESIRECEIPTS Inadequate Resale Inventory Procedures Finding Control Number: FS-533-01-01 
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 transferred the bookstore operations to a private vendor with an agreement for the vendor to purchase certain stock on hand. At June 30, 2001, the University reported resale inventory on the financial statements of$209,373.69 that was not sold to the vendor. The University was unable to provide a detail listing ofthat amount to enable the auditors to verify the accuracy of the amount or existence of the merchandise. 
3) The University was not able to provide documentation ofsales ofmerchandise that were made at athletic' events until the final regular football game of the 2000 season. 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. 
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/RECENABLESIRECEIPTS Invalid Accounts Receivable Finding Control Number: FS-533-01-02 
At June 30, 2001, the University's financial statements reflected student receivables, for which no supporting documentation could be provided. These accounts included negative amounts' of $76,896.83 for student receivables, of which $63,730.84 (negative) was accumulated prior to Summer Semester 2000.. In addition, the University's records reflected a receivable in the amount of$113,460.40, which is unidentifiable on an individual by individual basis. 
These deficiencies are a result ofmanagement's failure to have adequate policies and procedures to ensure accounts receivable are properly maintained. The University should establish appropriate procedures to strengthen internal accounting controls and ensure all accounts receivable are valid. 
 
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 FORT VALLEY STATE UNNERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS 
YEAR ENDED JUNE 30, 2001 
 
FINANCIAL STATEMEN~ FINDINGS AND QUESTIONED C9STS 
 
REVENUESIRECEIVABLESIRECEIPTS Student Accounts Receivable Not Supported by Financial Aid Finding Control Number: FS-533-01-03 
 
At June 30, 2001, the University had $646,404.94 in student accounts receivables that were not supported by approved financial aid. A review of these receivables revealed that $643,086.94 of the receivables was accumulated prior to Summer Semester 2000. 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. 
 
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 fmancial aid. It is recommended that legal means be used to collect all student accounts receivable, if necessary. 
 
EXPENDITURESILIABILITIESIDISBURSEMENTS Excessive Fee Waivers Finding Control Number: FS-533-01-04 
 
For the year under review, fee waivers by Fort Valley State University for out-of-state students exceeded limits established by the Board of Regents' Policy Manual. Guidelines as set forth in Section 704.0302 state that an institution may waive out-of-state tuition for up to two percent ofthe institution's full-time enrollment for superior out-of-state students in selected programs and/or International students, as selected by the President. The number of fee waivers for these students granted by the University that exceeded the allowable limit for each semester is as follows: 
 
Semester 
 
Limit of Fee Waivers 
Allowed 
 
Actual "Fee Waivers 
Granted 
 
Fee Waivers in Excess of Limit 
 
Fall Semester Spring Semester 
 
44 
 
55 
 
11 
 
42 
 
57 
 
15 
 
Of the one hundred-twelve waivers given during the semesters in question, forty-nine were to international students, forty-seven were to athletes, seven were to presidential awardstudents, four were to band students and five were to students classified as o~er. 
 
This condition occurred because management disregarded the policies of the Board of Regents. The University should implement procedures to ensure that student fee waivers for out-of-state tuition of students does not exceed limits established by the Board ofRegents' Policy Manual. 
 
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FORT VALLEY STATE UNIVERsrty SCHEDULE OF FINDINGS AND QUESTIONED COSTS 
YEAR ENDED JUNE 30; 2001 
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS 
INVESTMENT IN PLANT (EQUIPMENT) Inadequate Equipment Inventory Records Finding Control Number: FS-533-01-05 
A review ofsubsidiary equipment inventory records and a sample ofone hundred items revealed that the records of the University were inadequate as follows: 
1) Fifty-three of the items selected for the sample could not be located. 
2) Three of the items located did not have decals affixed. 
3) During field work, the auditor observed items that were waiting to be surplused which were in an open, unsecured location. 
4) Fiscal year 2001 purchases made after January 2001, were not recorded on the subsidiary equipment inventory records presented for audit, which resulted in a variance of $2; III ,233.97 between the subsidiary records and the fmancial records. 
5) The University has not performed a complete physical equipment inventory since August 1998, which is in violation of the University's policy that requires a complete physical inventory every two years. 
The matters above indicate material deficiencies relative to the University's management of equipment inventory. These deficiencies are a result of management's failure to have adequate policies and procedures to ensure equipment inventories are properly maintained. The University should establish appropriate procedures to strengthen internal accounting controls and ensure that assets are safeguarded against loss from unauthorized use or disposition. 
FUND EQUITIES Deficit to Be Funded from Subsequent Year's Operations Finding Control Number: FS-533-01-06 . 
One June.30, 2001, the University's Intercollegiate Athletics, a sub fund ofauxiliary enterprises, had a deficit fund balance of$154,080.07. This deficit is a result of the University's lack of sufficient funds to meet obligations on a current basis. The Board ofRegents' Policy Manual Section 702.02 states that auxiliary enterpris~s "will be placed on a self-supporting basis, and the State will not make an appropriation to finance its operations". 
The University should take appropriate action to fund this deficit. 
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 FORT VALLEY STATE UNNERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS 
YEAR ENDED JUNE 30, 2001 
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS 
FUND EQUITIES 
Dormant/Deficit Restricted Funds Finding Control Number: FS-533-01-07 
At June 30, 2001, Restricted Funds had twelve programs for which no activity occurred during the year under review. The University could not provide documentation that the grant period for these programs has not expired. Of these programs, four are Federal, two are State and six are private. Also, four ofthese twelve programs were in a deficit at June 30, 2001, and no documentation was provided that funds were available from the grantor. 
These deficiencies are a result ofmanagement's failure to establish controls to ensure that grants are available and that reimbursement requests are made in a timely manner. The University should establish appropriate procedures to strengthen internal accounting controls in monitoring these accounts and determine if all available funding was requested or if any other source of funding can be used to fund the deficits. 
GENERAL LEDGER Financial Statements not Supported by Subsidiary Records Finding Control Number: FS-533-01-08 
An examination of the subsidiary records of the loans made to students from the Perkins Loan Program revealed that the amounts recorded in the general ledger were not reconciled with the University's billing agencys statements. At June 30, 2001, a variance of $50,499.25 was noted between the University's financial statements and their billingagency for notes receivable. During the audit, extensive procedures were performed that located $13,742.21 of errors made on the general ledger, which "were corrected by the auclitor. The remaining $36,757.04 continues to be unidentified. 
These deficiencies are a result ofmanageinent's failure to have adequate policies and procedures to ensure the subsidiary records reconciled to the general ledger. The University should establish appropriate procedures to strengthen internal accounting controls. and ensure the subsidiary records "are reconciled to the general ledger. 
'. GENERAL LEDGER Reports Not ReconCiled to Accounting Records Finding Control Number: "FS-533-01-09 " 
The UniversiiYs H.O.P.E. Scholarship Program reconciliation reports for fiscal year 2001, which were provided to the Georgia Student Finance Commission, did not reconcile with the accounting records as indicated below: 
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  .,~, 
FORT VALLEY STATE UNIVERSITY SCHEDULE OF FINDINGS AND OUESTIONED COSTS 
YEAR ENDED JUNE 30, 200 I 
 
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS 
 
GENERAL LEDGER Reports Not Reconciled to Accounting Records Finding Control Number: FS-533-01-09 
 
Report Item 
 
Per H.O.P.E. Reconciliation 
 
Per Accounting 
Records 
 
Unreconciled Difference 
 
Cash Disbursed to School 
 
$1,285,281.00 $1,315,860.00 
 
$30,579.00 
 
Amount Awarded to Students 
 
$1,276,244.00 $1,312,486.00 
 
$36,242.00 
 
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. 
 
GENERAL LEDGER Unsupported Financial Statements Finding Control Number: FS-533-01-10 
 
An examination ofthe financial statements prepared and submitted to the Board ofRegents revealed the University did not ensure the statements submitted were accurate and reconcilable to the general ledger. 
 
This condition occurred because management failed to compile accurate financial statements. Procedures should be established to ensure that the financial statements submitted to the Board of Regents are prepared accurately and can be reconciled to the University's formal accounting records. 
 
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 
 
CASH MANAGEMENT Excessive Cash Balances Student Financial Aid Cluster Program Finding Control Number: FA-533-01-01 
 
A review of cash management procedures for the Federal Direct Student Loan Program disclosed that, in one instance, a cash draw was made in advance of immediate needs, resulting i.n the accumulation of an excessive cash balance. Attachment F of OMB Circular A-110 requires institutions to minimize the time elapsing between the transfer of funds from the Federal Treasury and the disbursement by the institution. For Fort Valley State University, which uses FEDWIRE, this means need for one day. 
 
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 FORT VALLEY STATE UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS 
YEAR ENDED JUNE 30, 2001 
FEDERAL AWARD FINDINGS AND QUESTIQNED COSTS 
CASH MANAGEMENT Excessive Cash Balances Student Financial Aid Cluster Program Finding Control Number: FA-533-0l-0l 
this error was a result ofthe University inadvertently recording expenditures twice in the accounting records. Action should be taken by the University to ensure that requests for cash advances do not exceed the immediate need. The University should contact the U. S. Department of Education regarding the resolution of this finding. 
Federal Programs/Awards Affected: Student Financial Aid Cluster Program 
U. S. Department of Education Federal Direct Student Loan Program (CFDA 84.268) 
ELIGffiILITY Failure to ,Maintain Adequate Documentation Student Financial Aid Cluster Program Questioned Cost: $11,000.00 Finding Control Number: FA-533-01-02 
A test of the Federal Direct Student Loan Program (Plus) loans disbursed during the year was performed and revealed that two student's files did not contain a PLUS loan application, however the students received a PLUS award and disbursement. Federal regulation (34 CFR 668.24) states that the institution should maintain application data submitted to the lender by the institution on behalfof the student or parent. All files presented for audit should be complete and support all aid awarded. This noncompliance resulted in questioned costs of$ll,OOO.OO. 
The above instance of noncompliance resulted from a weakness in the internal control procedures over the Federal Student Financial Aid Cluster Program. Procedures were not in place to ensure that student financial aid files were complete and properly maintained. The University should develop and implement policies and procedures to ensure adequate controls over the eligibility process. Also, the University should develop and implement a monitoring process to ensure that the controls are being followed. The University should contact the U. S. Department of-Education regarding the resolution ofthese questioned costs. 
Federal Programs/Awards Affected.' Student Financial Aid Cluster Program 
U: S.'Department of Education Federal Direct Student Loan Program (CFDA 84.268) 
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FORT VALLEY STATE UNNERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS 
YEAR ENDED JUNE 30, 2001 
 
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 
ELIGillILITY Failure to Notify Students of Awards Student Financial Aid Cluster Program Questioned Cost: $10,017.82 Finding Control Number: FA-533-01-03 
A sample of fifty financial aid files was selected to detennine if financial aid was properly awarded and disbursed to eligible students. Federal regulation (34 CFR 668.165) states, "Before an institution disburses Title IV, HEA program funds for any award year, the institution must notify a student of the amount of funds that the student can expect to receive under each Title IV, HEA program". The files sampled disclosed five instances where students received fmancial aid in excess oftheir award as shown below: 
(1) Three students received Federal Direct Student Loans; however, the institution failed to notify the student of the award. This noncompliance resulted in questioned costs of $8,582.00. 
(2) Two students received Federal work-study wages in excess of their award. This noncompliance resulted in questioned costs of$1,435.82. 
These questioned costs resulted from management's failure to notify students of their financial aid award before disbursing funds to students. The University should implement procedures to ensure that students are notified of awarded 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 Affected: Student Financial Aid Cluster Program 
U. S. Department of Education Federal Work-Study Program (CFDA 84.033) Federal Direct Student Loan Program (CFDA 84.268) 
ELIGillILITY Undocumented Changes to Student Infonnation Student Financial Aid Cluster Program Questioned Cost: $3,784.00 Finding Control Number: FA-533-01-04 
A sample of fifty financial aid files was selected to detennine if financial aid was properly calculated and disbursed to eligible students. The items sampled contained fmancial aid disbursements of $454,716.48 out of a population of $14,531,384.29. Our examinatio~ revealed that two students received funds in excess of their eligible need. 
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 FORT VALLEY STATE UNIVERSITY SCHEDULE OF FINDINGS AND OUESTIONED COSTS 
YEAR ENDED JUNE 30, 2001 
 
FEDERAL AWARD FINDINGS AND OUESTIONED COSTS 
 
ELIGIBILITY Undocumented Changes to Student Information Student Financial Aid Cluster Program Questioned Cost: $3,784.00 Finding Control Number: FA-533-01-04 
 
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 judgmentbe reasonable and fully documented. This noncompliance resulted in questioned costs of$3,784.00. 
 
A projection of these errors to the total population resulted in likely questioned cost in excess of 
 
$10,000.00. 
 
. 
 
The above instances ofnoncompliance resulted from weaknesses in the internal control procedures. 
 
over the Federal Student Financial Aid Cluster Program. Procedures were not in place to ensure that 
 
student financial aid files were complete and properly maintained. The University should develop 
 
and implement policies and procedures to ensure adequate cOntrols over the eligibility process. Also, 
 
the University should develop and implement a monitoring process to ensure that the controls are . 
 
being followed. The University should contact the U. S. Department of Education regarding the 
 
resolution of these questioned costs. 
 
. 
 
Federal Programs/Awards Affected: Student Financial Aid Cluster Program 
U. S. Department of Education Federal Direct Student Loan Program (CFDA 84.268) 
 
REPORTING Expenditures in Excess of Authorization Student Financial Aid Cluster Program Finding Control Number: FA-533-01-05 
 
The Statement of Account report from the U. S. Department of Education indicated that the University was authorized to expend $3,734,408.25 in Federal Pell Grimt Program funds in state fiscal year 2001. The University's accounting records, however, reflected $3,744,385.00 for fiscal year 2001 Pell Grant expenditures. As a result, the University expended $9,976.75 in excess ofthe authorized amount. In order to be reimbursed for the excess Pell Grant program expenditures, the University, in confonnity with Federal Statutes, must certify the validity ofthese excess payments to the U. S: Department ofEducation. The Federal agency can then provide appropriate adjustments of the fiscal year 2001 authorized amount in order to make the funds available to the University. 
 
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 FORT VALLEY STATE UNNERSITY SCHEDULE OF FINDINGS AND OUESTIONED COSTS 
YEAR ENDED JUNE 30, 2001 
FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 
REPORTING Expenditures in Excess of Authorization Student Financial Aid Cluster Program Finding Control Number: FA-533-01-05 
Federal Programs/Awards Affected: Student Financial Aid Cluster Program 
U. S. Department of Education Federal Pell Grant Program (CFDA 84.063) 
REPORTING Reports Not Reconciled Student Financial Aid Cluster Program Finding Control Number: FA-533-01-06 
For the year under review, amounts reported on several ofthe required reports for Federal Financial Assistance programs submitted by the University to the U. S. Department of Education were not reconciled as follows: 
1) The Pell Year to Date Report and the Statement ofAccount, which reports Federal Pell Grant Program expenditures for the year, were not reconciled to the accounting records. 
2) The Fiscal Operations and Application to Participate (FISAP) report had amounts reported for the Federal Work-Study Program and the Perkins Loan Program that did not reconcile to the accounting records. 
3) The University did not reconcile monthly the Federal Direct Loan Program to the accounting records in accordance with Section 2 of The Blue Book. 
Federal regulations (34 CFR 674.19,675.19,685.309,690.81 and 690.83) require the University ensure that reported information is accurate and reconciled as necessary. The deficiencies identified were a result of management'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. 
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 FORT VALLEY STATE UNIVERSITY SCHEDULE OF-FINDINGS' AND OUESTIONED COSTS 
YEAR ENDED.rUNE30: 2001 
FEDERAL AWARD FINDINGS AND OUESTIONED COSTS REPORTING Reports Not Reconciled Student Financial Aid Cluster Program Finding Control Number: FA-533-01-06 Federal Programs/Awards Affected: Student Financial Aid Cluster Program 
U. S. Department of Education 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) 
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