GAINESVILLE STATE COLLEGE
GAINESVILLE, GEORGIA
INDEPENDENT ACCOUNTANT'S
REPORT ON APPLYING AGREED-
UPON PROCEDURES
FOR FISCAL YEAR ENDED

GAINESVILLE STATE COLLEGE - TABLE OF CONTENTS -
INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES EXHIBITS
A SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT B STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING
SOURCE COMPARED TO BUDGET

RUSSELLW. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMEONFTAUDITASND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
January 1 8 , 2 0 1 1

Members of the State Board of Regents of the UniversitySystem of Georgia Honorable Martha T. Nesbitt, President Gainesville State College
IndewendentAccountant's Report on Applying Agreed-Uwon Procedures
Ladies and Gentlemen:
We have performed the procedures enumerated below, which were agreed to by the College and the UniversitySystem Office (Oversight Unit) of the Board of Regents of the University System of Georgia, solely to assist you in assessing the accuracy of the financial information reported to the University System Office in the College's 2010 Annual Financial Report for inclusion in the UniversitySystem of
Georgia's Annual Financial Report,the State of Georgia's ComprehensiveAnnual Financial Report (CAFR)
and Single Audit Report; and to assist you in assessing the accuracy of the budget basis information provided in the Summary Budget Comparison and Surplus Analyss Report and Statement of Program Revenues and Expenditures by Funding Source Compared to Budget which are attached as Exhibits A and B, respectively. Gainesville State College's management is responsible for the financial information reported to the University System Office in the University'sAnnual Financial Report. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.
The procedures and the associated findings are as follows:
1. Review selected balance sheet items reported on the Annual Financial Report (cash, accounts receivable, accounts payable, deferred revenues, net assets). Confirm that these items have adequate supporting documentation and are properly reconciled to the College's general ledger.
The College incorrectly reported Temporary Investments as Cash. A correcting entry was made by the entity to reclassify Temporary Investments in the amount of
$1,973,493;however, the correcting entry was not made accurately resulting in a $56,242.91misstatement to Cash and Investments.

2. Obtain the College's GAAP basis Statement of Net Assets and Statement of Revenues, Expenses and Changes in Net Assets (SRECNA) submitted for inclusion in the State's CAFR and Single Audit. Utilizing test scripts, confirm that financial information presented in these statements properly supports activity reported in the College's accounting records.
Lease Purchase activity was incorrectly reported on the College's financial statements. Lease Purchase Obligation (current portion) was overstated by $218,391, Lease Purchase Obligation (noncurrent portion) was understated by $515,209, Invested in Capital Assets, net of related debt was overstated by $296,818 and Interest Expense was understated by $296,818 as a result of this error.
3. Obtain the College's Statement of Cash Flows submitted for inclusion in the State's CAFR and Single Audit. Utilizing cash flow worksheets, confirm information reported on Statement of Cash Flows.
The College did not report Non-Cash Activity for the change in accrued interest payable affecting interest paid in the amount of $296,818.
4. Obtain the College's Notes to the Financial Statements submitted for inclusion in the State's CAFR and Single Audit. Utilizing notes worksheets and other supporting documentation confirm that note disclosures related to Cash, Investments, Accounts Receivable, Capital Assets, LongTerm Debt, Lease Obligations and Retirement Plans have been properly reported.
The Lease Obligation activity reported in the Long-Term Liabilities note disclosure was not reported correctly. Reductions were overstated by $296,818, which resulted in the Ending Balance at June 30,2010 being understated by the same amount.
5. Review the College's year end GAAP basis journal entries. Obtain documentation for GAAP journal entries and confirm that the entries were posted to the College's Annual Financial Report.
Year end GAAP entries related to Accounts Payable and Accrued Payroll were not made correctly. An entry to decrease Accounts Payable and to increase Accrued Payroll in the amount of $485,858.14 was made to correct this error.
6. Confirm that State Appropriation revenues, receivables and remittances of prior year surplus balances have been properly recorded in the College's financial records. Prior year surplus balances should be netted against State Appropriation revenues in the GAAP basis financial statements; however, prior year surplus balances should be reflected as fund balance adjustments on the Budget basis financial statements.
We did not note any exceptions as a result of our procedures.
7. Obtain listing of write-off requests for accounts receivable less than $3,000.00 for fiscal year 2010. Confirm that these write-off requests have been approved by the State Accounting Officer and have been posted to the College's financial statements.
We did not note any exceptions as a result of our procedures.

8. Verify that the listing of salaries, travel, and professional services reported to the Department of Audits is in accordance with O.C.G.A. 50-6-27 and reconciles to amounts recorded in the College's financial statements.
We did not note any exceptions as a result of our procedures.
9. Review year end Budgetary Statements including the Summary Budget Comparison and Surplus Analysis Report(Exhibit A) and Statement of Program Revenues and Expenditures by Funding Source Compared to Budget (Exhibit B). Confirm that budget information presented in these statements supports activity reported in the College's accounting records and determine if any budget overexpenditures exist.
We did not note any exceptions as a result of our procedures.
10. Obtain documentation for Budget basis reserves reported by College on the Summaty Budget Comparison and Surplus Anahski Report (Exhibit A). Confirm that the reserves are properly documented, valid and appropriate.
We did not note any exceptions as a result of our procedures.
11.Review the H.O.P.E. Scholarship Program reconciliation between the College and the Georgia Student Finance Commission. Confirm that information reported to the Georgia Student Finance Commission has been reconciled with H.O.P.E. Scholarship activity reported on the College's financial records.
We did not note any exceptions as a result of our procedures.
12. Review the Schedule of Expendituresof Federal Awards information submitted by the College for inclusion in the Statewide Single Audit. Confirm that the information is properly presented and supported by the College's accounting records.
The College'sSchedule of Expenditures of Federal Awards (SEFA) information did not agree with the Federal expenditure activity reflected on the College's accounting
records. State Fiscal Stabilization (CFDA #84.394)expenditures in the amount of $3,234,429was omitted from the original SEFA submitted by the College. An
adjustment was made t o correctly report the Federal expenditures on the SEFA.
13. Review capital asset records to ensure that (1)subsidiary ledgers are appropriately reconciled to the ledgers, (2) capitalization thresholds are being properly followed, and (3) a complete annual physical equipment inventory is being conducted and that issues noted during the physical inventory are being properly addressed by management.
We did not note any exceptions as a result of our procedures.
14. Review bank reconciliations during the year under review to ensure that management is preparing them timely and that reconciling items are being addressed by management timely and in an appropriate manner.
We did not note any exceptions as a result of our procedures.

15. Review documentation to ensure that all subsidiary modules including BANNER are reconciled t o the general ledger at least quarterly in accordance with the Business Procedures Manual Section 10.6.2. and ensure that reconciling items are adequately explained and resolved in a timely manner.
We did not note any exceptions as a result of our procedures.
These agreed-upon procedures do not constitute an audit of the financial statements or any part thereof, the objective of which is to express an opinion on the financial statements or a part thereof. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
This report is intended solely for the information and use of the specified users listed above and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
~ u s k e lWl . Hinton, CPA, CGFM State Auditor

EXHIBITS

GAlNESVlLLE STATE COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT
YEAR ENDED JUNE 30.2010

REVENUES
State Appropriation State General Funds
Federal Funds Other Funds
Total Revenues
CARRY-OVER FROM PRIOR YEAR
Transfer from Reserved Fund Balance
Total Funds Ava~lable
EXPENDITURES
Teaching
Excess of Funds Available over Expenditures
FUND BALANCE JULY 1
Reserved Unrese~ed
ADJUSTMENTS
Prior Year Payables/Expend~tures Unreserved Fund Balance (Surplus) Returned
- to Board of Regents Un~versitySystem Office
Year Ended June 3 0 , 2 0 0 9 Early Remittance of Surplus in Current Fiscal Year Prior Year Resewed Fund Balance Included in Funds Available
FUND BALANCE JUNE 30
SUMMARY OF FUND BALANCE
Reserved Department Sales and Services Indirect Cost Recoveries Technology Fees Uncollectible Accounts Receivable Tuition Carry-Over
Total Resewed
Unreserved Surwlus
Total Fund Balance

BUDGET

ACTUAL

EXHIBIT "A"
- VARIANCE
FAVORABLE (UNFAVORABLE)

GAlNESViLLE STATE COLLEGE STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDINGSOURCE COMPARED TO BUDGEl
YEAR ENDED JUNE 3 0 2 0 1 0

Special Fundlnglnitiativs Stere Appropr~atlon State General Funds
Teschlng State Approprlatlon State General Funds Federal Funds Amrlcan Recoverysnd RemrertmentAcIof 2009 Federal Stablllzatlon Funds Other Funds

Onsnal Appropnatlon

Flnal Budget

Current Year Revenues

FundsAvailable Compared to Budget

Prior Year Carryaver

Total Funds Avallabie

varjance POSI~IY~ (Nemtlve)

Grand T m k . All Programs

Expendorureacomparedto sudget

Varlance

POSI~IW

Actual

(Negtlue)

Actual Funas A v a l l a l e
Ouer/(Under) Expenditures

PrlorPerlod Adjustments

Other Adlustments

Early Remtrtance of Surplus

Program Fund
Balances

Tranmrs

Program Fund Balancer

Resewe

Surplus

Total Fund Balance

Une%pendableReserves Uncollect~bleAccounts Recevable