Audit report, state of Georgia, University of Georgia, Athens, Georgia, year ended June 30, 1997

AUDIT REPORT STATE OF GEORGIA UNIVERSITY OF GEORGIA ATHENS, GEORGIA YEAR ENDED JUNE 30,1997
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

UNIVERSITY OF GEORGIA - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHIBITS

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

22

F COMBINING STATEMENT OF CHANGES IN FUND BALANCES

CURRENT FUNDS - UNRESTRICTED

23

COMBINING STATEMENTS OF CURRENT FUNDS REVENUES, EXPENDITURES,

AND OTHER CHANGES

G

UNRESTRICTED

24

H

RESTRICTED

25

SCHEDULES

SCHEDULES OF REVENUES AND EXPENDITURES COMPARED TO BUDGET

1

RESIDENT INSTRUCTION

26

2

LOTTERY FOR EDUCATION

29

3

OTHER ORGANIZED ACTIVITIES

30

SCHEDULES OF OTHER ORGANIZED ACTIVITIES

4

BALANCE SHEET

38

5

CHANGES IN FUND BALANCE

40

6

REVENUES, EXPENDITURES AND OTHER CHANGES

42

7 CHANGES IN INVESTMENT IN PLANT

46

8 SCHEDULE OF FUND BALANCES

CURRENT FUNDS AND PLANT FUNDS

48

9 RECONCILIATION OF SALARIES AND TRAVEL

50

UNIVERSITY OF GEORGIA - TABLE OF CONTENTS -
SECTION II COMPLIANCE AND INTERNAL CONTROL REPORT REPORT ON CQMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
SECTIONID CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
November 26, 1997

Honorable Zell Miller, Governor Members of the General Assembly of Georgia Members ofthe Board of Regents ofthe University System of Georgia
and Honorable Michael F. Adams, President University of Georgia
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) ofthe University of Georgia as of and for the year ended June 30, 1997. 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 generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General ofthe United States. 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 fmancial 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 generally accepted accounting principles with respect to the recording of encumbrances as expenditures and liabilities. To conform with generally accepted accounting principles, encumbrances should be recorded as a reservation of fund balance. The effects on the fmancial statements of this departure from generally accepted accounting principles were not reasonably determinable, but are believed to be material.

97ARL-62X

As disclosed in Note 1 to the financial statements, the University did not report the liability and related expenditure for compensated absences in the current funds as required by generally accepted accounting prin~iples. If compensated absences were reported, liabilities would be increased and fund balance would be decreased by $27,564,442.60 as of June 30, 1997, and the net change in fund balance for the year ended June, 30, 1997, would be decreased by $1,456,042.81.
In our opinion, except for the effects on the financial statements of the matters discussed in the third and fourth paragraphs, the fmancial statements referred to above present fairly, in all material respects, the financial position ofthe University of Georgia as of June 30, 1997, and the changes in fund balances and the current operati:ng funds revenues, expenditures, and other changes for the year then ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplementary information (Exhibits E through H and Schedules 1 through 9) is presented for purposes of additional analysis and is not a required part of the financial statements of the University of Georgia. Such information has been subjected to the auditing procedures applied in the audit ofthe financial statements and, in our opinion, except for the effects of the matters discussed in the third and fourth paragraphs, such information is fairly presented in all material respects in relation to the fmancial statements taken as a whole.
Respectfully submitted,
t-~
Claude L. Vickers
State Auditor
CLV:cm 97ARL-62X

FINANCIAL STATEMENTS - 1-

UNIVERSITY OF GEORGIA COMBINED BALANCE SHEET
ALL FUND GROUPS JUNE 30, 1997

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable Inventories . Due from Other Fund Groups Investment in Plant
Total Assets
LIABILITIES AND FUND BALANCES
Liabilities Accounts Payable Salaries Payable Deferred Revenue Tuition and Fees Other Unclaimed Property Deposits Held in Custody for Others Due to Other Fund Groups Capital Lease Obligations Investment by Other Funds
Total Liabilities
Fund Balances U. S. Government Grants Refundable Institutional Loans - Restricted Endowment Net Investment in Plant Restricted Unrestricted
Total Fund Balances
Total Liabilities and Fund Balances

CURRENT FUNDS UNRESTRICTED RESTRICTED

LOAN FUNDS

$ 29,586,382.99

$ 5,881,225.06

8,865.02

35,032,593.77 $ 27,790,914.48 11,173,380.08

8,449,976.23

2,220,677.41

$ 75,289,630.40 $ 27,790,914.48 $ 17,063,470.16

$ 30,998,238.07
3,188,937.11 8,152,693.98 1,630,391.64
68,683.65
$ 2,220,677.41
$ 44,038,944.45 $ 2,220,677.41
$ 10,533,840.13
6,529,630.03
$ 25,570,237.07 $ 31,250,685.95 $ 31,250,685.95 $ 25,570,237.07 $ 17,063,470.16
$ 75,289,630.40 $ 27,790,914.48 $ 17,063,470.16
,

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

EXHIBIT "A"

ENDOWMENT FUNDS

UNEXPENDED

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

AGENCY FUNDS

TOTAL (Memorandum
Only)

$ 6,201,904.45 $ 11,441,649.85 $ 16,461,629.89 1,036,513.87

11,762,151.02 3,649.10

$ 16,047,645.73 $ 214.01

_ _ _ _ _ _ $ 985,172,974.34

80,920,959.10 16,470,494.91 75,037,265.31 8,449,976.23 2,220,677.41 985,172,974.34

$ 22,663,534.34 $ 12,478,163.72 $ 11,765,800.12 $ 985,172,974.34 $ 16,047,859.74 $ 1,168,272,347.30

$ 22,663,534.34 $ 12,478,163.72 $ 11,765,800.12 $ 985,172,974.34 $ 16,047,859.74 $ 1,168,272,347.30 -3-

UNIVERSITY OF GEORGIA COMBINED STATEMENT OF CHANGES IN FUND BALANCES
ALL FUND GROUPS YEAR ENDED JUNE 30, 1997

REVENUES AND OTHER ADDITIONS
Unrestrided Current Fund Revenues State Appropriations
Regular Federal Grants and Contrads State GrantS and Contrads Other States Grants and Contrads Local Grants and Contrads Private Gifts, Grants, and Contrads Investment Income
Endowment Other Sales and Servioes Realized Gains on Investments Interest on Loans Receivable Adjustments Prior Years' Expenditures/Accounts Payable Expended for Plant Facifities Current Funds Plant Funds
Unexpended Renewals and Replacements Georgia State Financing and Investment Commission Other Additions Proceeds from Sale of Plant Assets
Total Revenues and Other Additions
EXPENDITURES AND OTHER DEDUCTIONS
Educational and General Expenditures Auxiliary Enterprises Expenditures Indired Costs Recovered Remiltanoes to the Board of Regents of the
University System of Georgia Prior Year's Unrestrided Fund Balance (SurplUS)
Adjustments Prior Years' RevenUes/Accounts Receivable
Loans Assigned to Federal Govemment Loan Cancellations and Write-Offs Administrative and Colleclion Costs Expended for Plant Facilities
Capitalized Noncapitalized Disposals/Deletions/Adjustments
Total Expenditures and Other Deductions
TRANSFERS BETWEEN FUNDS
Mandatory Investment Income for Principal Investment Income Allocated for Loans Unspent Loan Funds for Principal
Nonmandatory Renewals and Replacements Capital Projeds General Operations Endowment Principal for Objed of Trust
Total Transfers Between Funds
Net Increasel(Decrease) for the Year
FUND BALANCES JULY 1. 1996

FUND BALANCES JUNE 30 1997 The notes to the financial statements are an integral part of this statement.

-4-

CURRENT FUNDS UNRESTRICTED RESTRICTED

LOAN FUNDS

$ 578,079,510,17

$ 148,694,280.74 $ 41,372,456.64 1,166,319.86 2,272,845.43 33,950,395.23
1,303,020.17
4,831,684.27

706,606.85

-3,318.22

-126,576.11
20,041.19 340,637.21 316,690.65

$ 578,786,117.02 $ 233,587,684.12 $ 550,792.94

$ 521,436,472.40 $ 218,043,815.85 43,428,139.75 10,047,953.00

298,417.63 8,753.30

2,530.00 $
60,560.04

13,140.00 52,846.71
1,523.56

$ 565,171,783.08 $ 228,154,858.89 $

67,510.27

$

-50,334.03

-206,004.92 $ 206,004.92

-246,482.08

$ -3,297,423.85 -2,749,823.91 9,936.96

-9,936.96 503,939.11

$ -6.037,310.80 $

237,663.20 $ -40,4n.16

$ 7,sn,023.14 $ 5,670,488.43 $ 442,805.51

23,673,662.81

19,899.748.64 16,620,664.65

$ 31,250,685.95 $ 25,570,237.07 $ 17,063,470.16

EXHIBIT"B"

ENDOWMENT FUNDS

UNEXPENDED

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

TOTAL (Memorandum
Only)

$ 8,222,225.00 3,970,843.93 197,292.62

$ 580,270.08

4,694,570.54

401,623.63

2,2n,141.62

9,464.37 $

110,304.82 $ 981,893.71 $ 19,481,842.90 $

$ 578,079,510.17

8,222,225.00

152,538,548.56

41,569,749.26

1,166,319.86

2,272,845.43

$

416,049.06

39,661,326.10

1,303,020.17 2,617,n8.83 4,831,684.27
401,623.63 316,690.65

2,564.80

715,317.80

56,361,734.24

56,361,734.24

25,452,442.65 2,453,418.08 21,610,599.08

25,452,442.65 2,453,418.08 21,610,599.08

110,304.82

2,564.80 $ 106,294,243.11 $ 939,685,138.60

$

0.00

$ 739,480,288.25 43,428,139.75 10,047,953.00

$

13,881.58 $

5,128.20

317,427.41

11,283.30 13,140.00 52,846.71 62,083.60

25,452,442.65 222,395.75

2,453,418.08 173,034.14 $

12,387,786.06

27,905,860.73 395,429.89
12,387l86.06

$

0.00 $ 25,688,719.98 $

2,631,580.42 $ 12,387,786.06 $ 834,102,238.70

$

50,334.03

246,482.08

$ $ 2,749,823.91

-503,939.11

$ -207,123.00 $ 2,749.823.91 $

$ n4,nO.71 $ -3,457,053.17 $

21 ,888,763.63

4,155,021.33

$

0,00

0.00

0.00

3,297,423.85

0.00

0.00

0.00

3,297,423.85

$

0.00

668,408.23 $ 93,906,457.05 $ 105,582,899.90

9,044,359.09 884l28,349.87

980,010,570.02

$ 22,663,534.34 $ 697,968.16 $

9,712?67.32 $ 978,634,806.92 $ 1,085,593,469.92

-5-

UNIVERSITY OF GEORGIA STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,
AND OTHER CHANGES YEAR ENDED JUNE 30, 1997

EXHIBIT"C"

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXIDBIT"D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY The University of Georgia is one ofthirty-four (34) State supported member institutions of higher education in Georgia which comprise the University System of Georgia, an organizational unit of the State of Georgia. The accompanying fmancial statements reflect the operations of the University of Georgia 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. The University of Georgia does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, the University of Georgia is considered an organizational unit of the Board of Regents of the University System of Georgia reporting entity for fmancial reporting purposes because of the significance of its legal, operational, and financial relationships with the Board of Regents as defined in Section 2100 of the Governmental Accounting Standards Board 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 of the fund balances that are reserved, restricted and/or designated for specific future use by legal covenants, State policies, or institutional policies.
Fund groups and funds presented in the accompanying financial statements are as follows:
CURRENT FUNDS
UNRESTRICTED - The fund used to account for those economic resources over which the University retains full control to use for purposes of performing the primary functions of the University, e.g., instruction, research, public service, etc.
RESTRICTED - The fund used to record externally restricted funds which may 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.
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UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

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 restrictions by the donors requiring that the principal be invested in perpetuity and income only be utilized.
PLANT FUNDS
UNEXPENDED - The fund used to account for fmancial resources utilized to acquire or to construct physical properties for institutional purposes.
RENEWALS AND REPLACEMENTS - The fund used to account for resources set aside for the renewal and replacement of institutional properties.
INVESTMENT IN PLANT - The fund which shows the total amounts representing the book value of all physical properties owned by the University. Net Investment in Plant is an equity account showing the total book value of physical 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 fmancial 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 defined as that method ofaccounting in which expenditures, other than accrued interest on general long-term debt, are recorded at the time liabilities are incurred and revenues are recorded when available and measurable to finance expenditures of the fiscal period.

-8-

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING Contractual obligations for goods and services which have not been received at the end of the 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 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 generally accepted accounting principles, which provide for the recording of encumbrances as a reservation of fund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures determined in accordance with generally accepted accounting principles.

Compensated absences represent obligations of the 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 $27,564,442.60 and the related current year expenditure of$1,456,042.81 have not been reported in the current funds as required by generally accepted accounting principles.

Prior period adjustments and certain other items are reported as additions to and deductions from fund balances of current funds in the accompanying financial statements. This presentation is in accordance with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, but differs from generally accepted accounting principles in that immaterial adjustments should be reported as current period revenues and expenditures. The effect of this departure is deemed to be immaterial to the fair presentation of the financial statements.

To the extent that Current Funds and Plant Funds are used to fmance 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 behalf ofthe 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.

The Statement of Current Funds Revenues, Expenditures, and Other Changes is a statement of fmancial activities of current funds related to the current reporting period. It does not purport to present the results of operations or the net income or loss for the period as would a statement of income or a statement of revenues and expenses.

BUDGET

.

The Board of Regents of the University System of Georgia - Administrative Central Office receives State

appropriation allotments for units ofthe University System of Georgia. The appropriated budget is adopted

at the departmental level and represents appropriations provided by the Amended Appropriations Act of 1996-

1997. The appropriated budget covers current funds and plant funds, except for Auxiliary Enterprises and

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UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUDGET
Student Activities which are not subject to appropriation. The budget allocation and disbursement ofthese funds is made to the various organizational units by the Administrative Central Office. In addition, the organizational units receive Federal funds and other funds directly and include these funds in the budget filed with the Administrative Central Office.

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

Resident Instruction Operating Expenses Education, General and Departmental Services Special Funding Initiative

$ 1.591.009.76 $ 26.431.70

Lottery for Education Agricultural Experiment Stations - Capital Outlay Georgia Research Alliance

$ 1,500,000.00 $ 468,620.60

Other Organized Activities Agricultural Experiment Station Capital Outlay Marine Institute Personal Services Education, General and Departmental Services Sponsored Operations Operating Expenses Education, General and Departmental Services Marine Resources Extension Center Personal Services Education, General and Departmental Services Veterinary Medicine Experiment Station Operating Expenses Education, General and Departmental Services

$ 16,200.00
$ 1.682.81 $ 14,029.66 $ 5.497.28
$ 9.327.24
$ 1.093.06

These overexpenditures of budget constitute a violation of Board of Regents policy, but do not constitute statutory violations of budget authority. Statutory violations of budget authority are reported at the departmental level.

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

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UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS Investments are recorded at cost or in the case of gifts at fair market value on the date of the gift. 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 of allotments due from the Board of Regents of the University System of Georgia - Administrative Central Office, reimbursements due from Federal, State, local, and private grants and contracts, and other receivables disclosed from information available. No provision has been made for an allowance for doubtful accounts within the accompanying fInancial statements.
INVENTORIES Inventories of consumable supplies are recorded on the consumption method and are valued at cost on the Combined Balance Sheet using the weighted average method.
Departments within the University use several costing methods for determining valuations of inventories for resale. Inventories of goods for resale are valued at cost using the fIrst-in, fIrst-out; weighted average; specifIc identifIcation and retail inventory methods.
MEMORANDUM ONLY - TOTAL COLUMNS The total columns on the fInancial statements are captioned "Memorandum Only" because they do not represent consolidated fmancial information and are presented only to facilitate financial analysis. The columns do not present information that reflects fmancial position or changes in fmancial position in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds belonging to the State of Georgia 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 of the following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:
(l) Bonds, bills, certificates of indebtedness, notes, or other direct obligations of the United States or ofthe State of Georgia.
(2) Bonds, bills, certifIcates of indebtedness, notes, or other obligations of the counties or municipalities of the State of Georgia.

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UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT"D"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES (3) Bonds ofany public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose.
(4) Industrial revenue bonds and bonds ofdevelopment authorities created by the laws of the State of Georgia.
(5) Bonds, bills, certificates of indebtedness, notes, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest, or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
(6) Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation.
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 ofthe University System of Georgia) the option of exempting demand deposits from the collateral requirements.
The treasurer of the Board of Regents is responsible for all details relative to furnishing the required depository protection for all units ofthe University System of Georgia.
CATEGORIZATION OF DEPOSITS For purposes of analysis of custodial credit risk, cash deposits consist of all bank balances which include demand deposits and/or interest bearing accounts. The bank balances as of June 30, 1997, 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 market value) held by the University or by its agent in the University's name.
Category 2 - Amounts collateralized with securities (at market value) held by the pledging financial institution's trust department or agent in the University's name.
Category 3 - Amounts collateralized with securities (at market value) held by the pledging financial institution, or by its trust department or agent but not in the University's name, and amounts uncollateralized.

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UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT "D"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

CATEGORIZATION OF DEPOSITS

Carrying Amount

Bank Balances

Risk Categories

2

3

Cash Depo.sits Investment Portfolio Accounts
Total Cash Deposits

$78,795,474.03 $88,265,448.93 $ 381,171.58 $87,435,942.25 $ 448,335.10

-141,102.22

109,512.36

109,512.36

$78,654371.81 $88.374.961 29 $'=,,;4;9g0,6~8~;3;.;9t4 $87 435,942 25 $ 44833510

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, 1997, are categorized below:

Type ofinvestment
Common Stock Corporate Bonds U. S. Government Securities
Investments Not Subject to Categorizations: Loans (Interfund) Real Estate
Total Investments

Risk Categories 2
$ 603,114.79 $ 4,031,849.11 $ 2,596,617.00 2,238,818.44 1, 126,393.48 5,725,638.13
$ 432612527 $11.99630568 $

Carrying

Market

3

Amount

Value

0.00 $ 4,634,963.90 $ 7,011,734.17 4,835,435.44 4,769,522.94 6,852,031.61 7.019.797.09

000 $16,322,430.95 $18,801,054.20

41,128.05 248,038.13

41,128.05 248,038.13

$16611.597.13 $19090,22038

- 13-

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT"D"

NOTE 3: INVESTMENT IN PLANT

The following is a summary of Investment in Plant fixed assets as of June 30, 1997:

Land Buildings Improvements Other Than Buildings Equipment Library Books and Collections

$ 12,083,571.75 527,864,024.72 33,105,052.85 298,688,674.42 113.431,650.60

Total Investment in Plant

$985.172.974.34

NOTE 4: OPERATING LEASES

The University of Georgia has entered into certain agreements to lease buildings which are classified as operating leases (leases on assets not recorded on the balance sheet). These leases generally contain provisions that, at the expiration date of the original term of the lease, the University has the option of renewing the lease on a year-to-year basis. Future minimum lease payments for operating leases as of June 30, 1997, are listed below. Amounts are included only for multi-year leases and for cancellable leases for which an option to renew for the subsequent fiscal year has been exercised.

Fiscal Year Ending June 30

1998

$ 1.106.828.38

Expenditures for rental of buildings under operating leases for the year ended June 30, 1997, totaled $1,048,896.84.

NOTE 5: CAPITAL LEASES

The University of Georgia acquires certain equipment through multi-year capital leases with varying terms and options. These agreements contain fiscal. funding clauses in accordance with Official Code of Georgia Annotated Section 50-5-64 which prohibits the creation of a debt to the State of Georgia for the payment of any sums under such agreements beyond the fiscal year of execution if appropriated funds are not available. If renewal of such agreements is reasonably assured, however, capital leases requiring appropriation by the General Assembly of Georgia are considered noncancellable for fmancial reporting purposes.

As of June 30, 1997, future minimum lease payments under capital leases are as follows:

- 14-

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT "D"

NOTE 5: CAPITAL LEASES

Fiscal Year Ending June 30

1998 .1999 2000 2001 2002

$ 2,341,816.35 2,263,313.48 2,069,956.95 307,736.94 40,364.02

Total Future Minimum Lease Payments

$ 7,023,187.74

Less: Amounts Representing Interest

526,148.37

Present Value of Future Minimum Lease Payments

$ 6.497.039.37

NOTE 6: RISK MANAGEMENT

The University of Georgia is a participant in the Board ofRegents ofthe 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 audit report of the Board of Regents of the University System of Georgia - Administrative Central Office. All units of the University System of Georgia share the risk of loss for claims of the Health Benefits Plan. The Health Benefits Plan is considered a self-sustaining risk fund .that provides health coverage for its members up to a maximum lifetime benefit of $1 ,000,000.00 per person and dental coverage up to an annual maximum of $1,000.00 per person. The Board of Regents has contracted with Blue Cross Blue Shield of Georgia to process claims in accordance with the Health Benefits Plan as established by the Board ofRegents.

The Department of Administrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The University, as an organizational unit of the Board of Regents of the University System of Georgia, is part of the State of Georgia reporting entity, and as such, is covered by the State o~ 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.

- 15 -

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHlBIT"D"

NOTE 6: RISK MANAGEMENT
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 Self-Insurance Fund.
NOTE 7: DEFERRED COMPENSATION PLAN
The State of Georgia offers its employees a deferred compensation plan in accordance with Internal Revenue Code Section 457. The plan, available to employees of the State of Georgia and county health departments, permits such employees to defer a portion of their salary until future years. Participation in the plan is optional. Participants choose the option or options in which they wish to participate. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the employee or other beneficiary) solely the property and rights ofthe State ofGeorgia subject only to the claims ofthe State's general creditors. Participants' rights under the plan are equal to those of a general creditor of the State of Georgia in an amount equal to the fair market value of the deferred account for each participant. Financial information relative to the plan will be presented in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 1997.
A change in the Internal Revenue Code Section 457, effective August 20, 1996, requires that by January I, 1999, all existing eligible deferred compensation plans must be held in trust for the exclusive benefit of participants and their beneficiaries. The State of Georgia's plan will be converted effective July I, 1998.
NOTE 8: RETIREMENTPLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA
Plan Description The University of Georgia participates in the Teachers Retirement System of Georgia (TRS), a cost-sharing multiple-employer public employee retirement system (PERS) established by the General Assembly of Georgia for the purpose of providing retirement allowances and other benefits for teachers of the State of Georgia.
TRS provides service retirement, disability retirement, and survivor's benefits for its members. A member is eligible for service retirement after the member (l) has attained the age of 60 years and has at least ten years of creditable service, or (2) has at least 25 years of creditable service: For those members with 30 years of service or those age 60 with at least ten years of service, normal retirement benefits are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number of years of creditable service up to 40 years. Early retirement benefits are reduced by the lesser of 1/12 of7% for each month the member is below age 60, or by 7% for each year or fraction thereof by which the member has less
- 16-

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHffiIT"D"

NOTE 8: RETIREMENTPLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA
Plan Description than 30 years of service. The nonnal retirement pension is payable monthly for life; however, options are available for distribution ofthe member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement benefits also include death and disability benefits whereby the disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The benefit is based on member's creditable service (minimum of 10 years of service) and compensation up to the date of death or up to the time of disability.
Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employer contributions occurs, but the member's contributions are refunded with interest.
Funding Policy Employees of the University who are covered by TRS are required to pay 5% of their gross earnings to TRS. The University makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees as advised by their independent actuary. For fiscal year 1997, the employer contribution rate was 11.81% for covered employees. In addition, the University contributed 4.24% to the TRS on behalfofemployees electing to participate in the Regents Retirement Plan. The interest rate assumption (rate of return on investments) was 7.50%. The University's payroll for the year ended June 30, 1997, for employees covered by TRS was $256,519,978.11. The University's total payroll for all employees was $367,556,744.00.
Total contributions to the plan made during fiscal year 1997 amounted to $44,350,062.66, of which $32,592,383.89 was made by the University and $11,757,678.77 was made by employees. These contributions represented 12.71% (University) and 5% (employees) of covered payroll.
Total contributions from all employers to TRS for the year ended June 30, 1997, were $652,928,555.00. The University's contribution for the year ended June 30, 1997, of $32,592,383.89 was actuarially determined and represented 4.99% of total contributions made by all participating employers.
Actuarial and Trend Information Actuarial and historical trend infonnation is presented in the TRS June 30, 1997, financial report which can be obtained through TRS.

- 17 -

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXIllBIT "D"

NOTE 8: RETIREMENTPLANS
REGENTS RETIREMENT PLAN
Plan Description The State of Georgia provides optional pension benefits for eligible faculty and principal administrators through a defined contribution plan. In a defmed contribution plan, benefits depend solely on amounts contributed to the plan plus investment earnings.
Funding Policy State legislation requires that prior to January 1, 1997, the employer contribute 4% of the participating employee's earnable compensation, and on and after January 1, 1997, an amount equal to the normal cost contribution determined by the TRS Board ofTrustees. Since January 1,1997, the employer contribution rate was 7.42%. Employees contribute 5% of their earnable compensation. Amounts attributable to all plan contributions are fully vested and non-forfeitable at all times. The University's payroll for employees covered by the Regents Retirement Plan for the year ended June 30,1997, was $54,183,360.75. The University's total payroll for all employees was $367,556,744.00.
The University and the covered employees made the required contributions of $3,206,414.64 (5.92%) and $3,140,696.15 (5%), respectively.
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description The University of Georgia participates in the Georgia Defmed Contribution Plan (GDCP) which is a singleemployer defined contribution plan established by the General Assembly of Georgia for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia.
Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board of Trustees. If a member has less than $ 3,500.00 credited to his/her account, the Board of Trustees has the option of requiring a lump sum distribution to the member in lieu of making periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute.
The Employees' Retirement System of Georgia issues a financial r?port each fiscal year which may be obtained through ERS.

- 18 -

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT"D"

NOTE 8: RETIREMENT PLANS
GEORGIA DEFINED CONTRIBUTION PLAN
Contributions and Vesting Member contributions are seven and one-half percent (7.5%) of gross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member. The University's payroll for the year ended June 30, 1997, for employees covered by GDCP was $11,213,929.94. The University's total payroll for all employees was $367,556,744.00.
Total contributions made by employees during fiscal year 1997 amounted to $841,549.56 which represents 7.5% of covered payroll. These contributions met the requirements of the plan.
NOTE9: LEAVEPOUCffiS
Employees earn annual leave ranging from one and one-quarter days to one and three-quarter days each month depending upon the employees' length of continuous State service with maximum accumulation of forty-five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. See Note 1- Basis of Accounting (Compensated Absences)
Employees earn one day of sick leave each month with no maximum accumulation established. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination of employment.
NOTE 10: CONTINGENCffiS
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditures which are disallowed under grant terms. The amount of expenditures 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 the University (an organizational unit ofthe Board ofRegents of the University System of Georgia), if any, are generally considered to be actions against the State of Georgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 1997.

- 19 -

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT"D"

NOTE 11: POSTEMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS

Pursuant to the general powers conferred by the Official Code of Georgia Annotated Section 20-3-31, the Board of Regents of the University System of Georgia has established group health and life insurance programs for regular employees ofthe University System of Georgia. It is the policy ofthe Board of Regents to permit employees of the University System of Georgia eligible for retirement or that become permanently and totally disabled to continue as members ofthe group health and life insurance programs. Employees who are eligible for retirement or disability under the criteria established by the Teachers Retirement System of Georgia 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 of June 30, 1997, there were 2,556 employees who had retired or were disabled that were receiving these postemployment health and life insurance benefits. For the year ended June 30, 1997, the University of Georgia recognized as incurred $7,086,473.43 ofexpenditures, which was net of$1,493,859.15 ofparticipant contributions.

NOTE 12: ENROLLMENT

The equivalent full-time student enrollment of the University of Georgia was as follows:

Regular Term Fall Quarter, 1996 Winter Quarter, 1997 Spring Quarter, 1997

27,127 25,883 24,504

Average

25.838

Summer School, 1996

7.675

- 20-

SUPPLEMENTARY INFORMAnON - 21 -

UNIVERSITY OF GEORGIA COMBINING BALANCE SHEET CURRENT FUNDS - UNRESTRICTED
JUNE 30, 1997

EXHIBIT"E"

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

RESIDENT INSTRUCTION

LOTIERYFOR EDUCATION

OTHER ORGANIZED ACTIVITIES

AUXILIARY ENTERPRISES

STUDENT ACTIVITIES

TOTAL

$ 4,353,412,03 $ 2,604,003.60 $ 995,574.77 $ 19,678,756.89 $ 1,954,635.70 $ 29,586,382.99

28,466,636.75

2,568,806.00 3,209,345,57

787,805.45

35,032,593.77

2,021,165,86

6,428,810.37

8,449,976.23

10,166,212.38

10,166,212.38

Total Assets

$ 34,841,214.64 $ 15,339,021.98 $ 4,204,920.34 $ 26,895,372.71 $ 1,954,635.70 $ 83,235,165.37

LIABILITIES AND FUND BALANCES

Liabilities Accounts Payable Salaries Payable Deferred Revenue Tuition and Fees Other Unclaimed Property Due to Other Fund Groups

$ 14,555,319,52 $ 12,321,586.38 $ 3,292,408.04 $

2,150,540.81

275.00

611,193.63

7,281,053.98 1,096,788.41
51,776.63 7,945,534.97

4,377.50

828,924.13 426,927,67

$ 30,998,238.07 3,188,937.11

673,540.00 $ 533,603.23
12,262.13

198,100,00 267.39

8,152,693.98 1,630,391.64
68,683.65 7,945,534.97

Total Liabilities

$ 33,081,014.32 $ 12,321,861.38 $ 3,907,979.17 $ 2,475,257.16 $ 198,367.39 $ 51,984,479.42

Fund Balances Unrestricted

1,760,200.32

3,017,160.60

296,941.17 24.420,115.55 1,756,268.31 31,250,685.95

Total Liabilities and Fund Balances $ 34,841:214.64 $ 15,339,021.98 $ 4,204,920.34 $ 26,895,372.71 $ 1,954,635.70 $ 83,235,165.37

See notes to the financial statements.

-22

UNIVERSITY OF GEORGIA COMBINING STATEMENT OF CHANGES IN FUND BALANCES
CURRENT FUNDS - UNRESTRICTED YEAR ENDED JUNE 30, 1997

EXHIBIT "F"

See notes to the financial statements.

-23 -

UNWERSITYOFGEORG~
COMBINING STATEMENT OF CURRENT FUNDS REVENUES. EXPENDITURES. AND OTHER CHANGES UNRESTRICTED
YEAR ENDED JUNE 30.1997

EXHIBIT"G"

UNIVERSITY OF GEORGIA COMBINING STATEMENT OF CURRENT FUND REVENUES, EXPENDITURES.
AND OTHER CHANGES RESTRICTED FUNDS
YEAR ENDED JUNE 30.1997

EXHIBIT"H"

RESIDENT INSTRUCTION

OTHER ORGANIZED ACTIVITIES

TOTAL

REVENUES

Federal Grants and Contracts State Grants and Contracts Other States Grants and Contracts Local Grants and Contracts Private Gifts, Grants, and Contracts Endowment Income Sales and Services of Educational Activities

$ 123,149,215.43 $ 16,267,612.53 $ 139,416,827.96

35,713,229.18

4,543,794.11

40,257,023.29

266,140.85

390,209.71

656,350,56

1,460,864,94

649,679,15

2,110,544,09

24,540,608.70

5,347,832.33

29,888,441.03

1,108,559.00

1,108,559,00

4,606,069.92

4,606,069.92

Total Revenues

$ 186,238,618.10 $ 31,805,197.75 $ 218,043,815.85

EXPENDITURES AND MANDATORY TRANSFERS

Educational and General Instruction Research Public Service Academic Support Student Services Institutional Support Scholarships and Fellowships Mandatory Transfers for: Investment Income for Endowment Principal Investment Income Allocated for Loans

$ 7,796,466,75

$ 7,796,466,75

46,552,047.84 $ 16,749,191.72

63,301,239.56

17;655,040,39 15,031,074.77

32,686,115.16

820,281,53

820,281.53

5,647.75

5,647.75

9,231,385.58

9,231,385.58

104,177,748,26

24,931.26 104,202,679.52

50,334.03 206,004.92

50,334,03 206,004.92

Total Expenditures and Mandatory Transfers

$ 186,494,957.05 $ 31,805,197,75 $ 218,300,154.80

OTHER TRANSFERS AND ADDITIONS/(DEDUCTIONS)

Excess of Restricted Receipts over Transfers to Revenues Transfers for General Operations Transfer of Endowment Principal for Object of Trust Administrative Fees and Collection Costs Prior Period Adjustments (Net)

$ 4,564,698.32 $ 934,535.17 $ 5,499,233.49

-9,936.96

-9,936.96

503,939.11

503,939.11

-60,560,04

-60,560.04

-5,848.22

-5,848.22

Total Other Transfers and Additions/(Deductions) $ 4,992,292.21 $ 934,535.17 $ 5,926,827.38

Net Increase/(Decrease) in Fund Balances

$ 4,735,953.26 $ 934,535.17 $ 5,670,488.43

See notes to the financial statements.

- 25 -

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
RESIDENT INSTRUCTION YEAR ENDED JUNE 30. 1997

REVENUES
State Appropriations Other Revenues Retained

CURRENT FUNDS UNRESTRICTED RESTRICTED

PLANT FUNDS RENEWALS AND
UNEXPENDED REPLACEMENTS

$ 271,665,139.00

$ 7,972,225.00 $

0.00

126,657,296.83 $ 186,238,618.10 11,250,153.53

$ 398,322,435.83 $ 186,238,618.10 $ 19,222,378.53 $

...;;0..;.;.0""-0

EXPENDITURES

Personal Services: Education, General and Departmental Services $ Sponsored Operations
Operating Expenses: Education, General and Departmental Services Sponsored Operations
Capital Outlay Special Funding Initiative Office of Minority Business Enterprise Forestry Research Research Consortium

292,429,467.31 $ 49,562,318.90

104,324,850.26
1,161,403.70 466,046.00 388,329.02
2,043,754.12

136,676,299.20 $ 22,902,865.91 $

2,626,452.22

$ 400,813,850.41 $ 186,238,618.10 $ 22,902,865.91 $ _ _2.:-,6_2....;6,_45_2_.2_2

Excess of Revenues over Expenditures

$ -2,491,414.58 $

..,;;,0.0..0= $ -3,680,487.38 $ -2,626,452.22

(1) To eliminate tuition waivers not bUdgeted and to reclassify current year transfers and prior year fund balances budgeted as revenues. Also, to adjust for Research Consortium revenues and expenditures recorded in Other Organized Activities but budgeted in Resident Instruction.

See notes to the financial statements.

-26 -

SCHEDULE "1"

TOTAL

ADJUSTMENTS (1)

TOTAL (Budget Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$ 279.637,364.00 $

209.240.00 $ 279,846.604.00 $ 279.846.604.00 $

0.00

324.146.068.46

-9.550.919.54 314.595.148.92 366.071,697.00

-51.476,548.08

$ 603,783,432.46 $ -9,341,679.54 $ 594.441.752.92 $ 645.918.301.00 $ -51.476,548.08

$ 292.429.467.31 49,562.318.90

$ 292,429,467.31 $ 293,694,099.00 $

49.562,318.90

55,000.000.00

104,324,850.26 $ 136,676,299.20 25,529.318.13
1,161,403.70 466.046.00 388.329.02
2,043,754.12

-18,380,645.50 209.240.00

85,944,204.76 136,676,299.20 25,529,318.13
1,161,403.70 466.046.00 388,329.02
2,252.994.12

84,353.195.00 145.000.000.00 63,602.804.00
1.134.972.00 466.046.00 388.344.00
2.278.841.00

1,264,631.69 5,437,681.10
-1,591,009.76 8,323.700.80 38,073,485.87
-26,431.70 0.00 14.98
25,846.88

$ 612.581.786.64 $ -18.171.405.50 $ 594,410.381.14 $ 645.918,301.00 $ 51.507,919.86

$ -8.798.354.18 $ 8.829,725.96 $ _ _.3..1....3..7..1...7..8..

$ ....._ ....3.1""'.3.7_1.;,;,,;78=

- 27-

TJUS PAGE LEFT BLAHK

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
LOTTERY FOR EDUCATION YEAR ENDED JUNE 30,1997

SCHEDULE "2"

See notes to the financial statements.

- 29-

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
OTHER ORGANIZED ACTIVITIES
YEAR ENDED JUNE 30, 1997

AGRICULTURAL EXPERIMENT STATION
REVENUES
State Appropriations Other Revenues Retained

CURRENT FUNDS UNRESTRICTED RESTRICTED

PLANT FUNDS UNEXPENDED

TOTAL

$ 38,411,557,00

$

9,043,338,78 $ 15,843,837,90

250,000.00 $ 38,661,557,00 24,887,176,68

$ 47,454,895,78 $ 15,843,837,90 $ 250,000.00 $ 63,548,733,68

EXPENDITURES

Personal Services:

Education, General and Departmental Services $ 35,546,132.97

Sponsored Operations

$ 7,605,145,34

Operating Expenses:

Education, General and Departmental Services

11,715,113,81

Sponsored Operations

8,238,692,56

Research Consortium

209,240.00

Capital Outlay

$

$ 35,546,132.97 7,605,145.34

16,200,00

11,715,113,81 8,238,692.56
209,240,00 16,200.00

$ 47,470,486,78 $ 15,843,837.90 $

16,200.00 $ 63,330,524.68

Excess of Revenues over Expenditures

$

-15,591.00 $

0.00 $ 233,800.00 $_.....,;;2.1.8.,.2.0.-.9_,0.0...

(1) To eliminate Research Consortium bUdgeted in Resident Instruction,

See notes to the financial statements.

- 30-

SCHEDULE "3"

ADJUSTMENTS

TOTAL

(1)

(Budget Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$ -209,240.00 $ 38,452,317.00 $ 38,452,317.00 $

0.00

24,887,176.68 29,375,966.00

-4,488,789.32

$ -209,240.00 $ 63,339,493.68 $ 67,828,283.00 $ -4,488,789.32

$ 35,546,132.97 $ 35,657,984.00 $ 7,605,145.34 9,500,000.00

111,851.03 1,894,854.66

11,715,113.81 12,170,299.00

8,238,692.56 10,500,000.00

$ -209,240.00

0.00

0.00

16,200.00

0.00

455,185.19 2,261,307.44
0.00 -16,200.00

$ -209,240.00 $ 63,121,284.68 $ 67,828,283.00 $ 4,706,998.32

$

0.00 $ 218,209.00

$ ..........2..1..8.,..20..9...0..0.

- 31 -

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
OTHER ORGANIZED ACTIVITIES YEAR ENDED JUNE 30, 1997

SCHEDULE "3"

CURRENT FUNDS

TOTAL

UNRESTRICTED RESTRICTED (Budget Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

ATHENS AND TIFTON VETERINARY LABORATORIES

REVENUES

State Appropriations Other Revenues Retained

$

128,504,00

$ 128,504,00 $ 128,504.00 $

0.00

813,21 $ 3,357,706,06 3,358,519,27 3,500,000.00

-141A80,73

$

129,317,21 $ 3,357,706,06 $ 3A87,023.27 $ 3,628,504,00 $

-141,480,73

EXPENDITURES
Personal Services: Education, General and Departmental Services Sponsored Operations
Operating Expenses: Sponsored Operations

$

126,373,92

$ 126,373.92 $ 128,504.00 $

$ 2,301,478.48 2,301,478.48 2,350,000,00

1,056,227,58 1,056,227,58 1,150,000,00

2,130.08 48,521.52
93,772,42

$

126,373,92 $ 3,357,706,06 $ 3,484,079.98 $ 3,628,504,00 $

144A24.02

Excess of Revenues over Expenditures

$

2,943,29 $

0.00 $

2,943,29

$

2,943,29

See notes to the financial statements.

- 32-

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
OTHER ORGANIZED ACTIVITIES YEAR ENDED JUNE 30, 1997

SCHEDULE "3"

COOP, ERATIVE EXTENSION SERVICE
REVENUES
State Appropriations Other Revenues Retained

CURRENT FUNDS UNRESTRICTED RESTRICTED

TOTAL (Budget Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$ 31,398,407.00

$ 31,398,407.00 $ 31,398,407.00 $

7,523,474.42 $ 11,652,597,88 19,176,072.30 23,077,750.00

0.00 -3,901 ,677.70

$ 38,921,881.42 $ 11,652,597.88 $ 50,574,479.30 $ 54:476,157.00 $

-3,901,677.70

EXPENDITURES
Personal Services: Education, General and Departmental Services Sponsored Operations
Operating Expenses: Education, General and Departmental Services Sponsored Operations

$ 34,351,418.39

$ 34,351,418.39 $ 34,702,259.00 $

$ 7,755,563.88

7,755,563.88

9,800,000.00

4,570,463,03

3,897,034.00

4,570,463.03 3,897,034.00

4,773,898.00 5,200,000.00

350,840.61 2,044:436.12
203,434.97 1,302,966.00

$ 38,921,881,42 $ 11,652,597.88 $ 50,574,479.30 $ 54,476,157.00 $

3,901,677.70

Excess of Revenues over Expenditures

$

0.00 $

0,00 $

0.00

$

0.00

See notes to the financial statements.

- 33-

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
OTHER ORGANIZED ACTIVITIES YEAR ENDED JUNE 30, 1997

SCHEDULE "3"

See notes to the financial statements.

- 34-

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
OTHER ORGANIZED ACTIVITIES YEAR ENDED JUNE 30,1997

SCHEDULE "3"

MARINE RESOURCES EXTENSION CENTER
REVENUES
State Appropriations other Revenues Retained

CURRENT FUNDS UNRESTRICTED RESTRICTED

TOTAL (Budget Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$

1,359,434.00

$ 1,359,434.00 $ 1,359,434,00 $

377,739.86 $ 421,006.51

798,746.37

1,084,800.00

0.00 -286,053.63

$ 1,737,173.86 $ 421,006,51 $ 2,158,180.37 $ 2.444,234.00 $

-286,053.63

EXPENDITURES
Personal Services: Education, General and Departmental Services Sponsored Operations
Operating Expenses: Education, General and Departmental Services Sponsored Operations

$

1,273,240.24

$ 1,273,240,24 $ 1,263,913.00 $

$ 335,168.07

335,168.07

345,000.00

463,933,62

85,838.44

463,933.62 85,838.44

680,321.00 155,000.00

-9,327.24 9,831,93
216,387.38 69,161.56

Excess of Revenues over Expenditures

$ 1,737,173.86 $ 421,006.51 $ 2,158,180,37 $ 2A44,234.00 $

286,053.63

$

0.00 $

0.00 $

0.00

$

0.00

See notes to the financial statements.

- 35-

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
OTHER ORGANIZED ACTIVITIES YEAR ENDED JUNE 30. 1997

SCHEDULE "3"

See notes to the financial statements.

- 36-

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
OTHER ORGANIZED ACTIVITIES YEAR ENDED JUNE 30, 1997

SCHEDULE "3"

VETERINARY MEDICINE TEACHING HOSPITAL
REVENUES
State Appropriations Other Revenues Retained

CURRENT FUNDS UNRESTRICTED RESTRICTED

TOTAL (Budget Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$

527,752.00

3,855,321.47 $

$ 4,383,073.47 $

$ 527,752.00 $ 527,752.00 $ -,,0,;:.0::,.0 3,855,321.47 4,501,962.00

0.00 -646,640.53

..;;O.:.:.O~O $ 4,383,073.47 $ 5.029,714.00 $ _ _-64~6;,:,;,64~0.;,;;;.53;;".

EXPENDITURES
Personal Services: Educetion, General and Departmental Services
Operating Expenses: Education, General and Departmental Services

$ 1,724,108.73 $ 2,593,817.39
$ 4,317,926.12 $

0.00 $ 1,724,108.73 $ 1,745,059.00 $ 2,593,817.39 3,284,655.00

20,950.27 690,837.61

....;;.;0..:;.00;.. $ 4,317,926.12 $ 5,029?14.00 $ _ _...;7-,1.,;,1:":.,7,;:.87;,,.,;.:;,;88:,.

Excess of Revenues over Expenditures

$

65,147.35 $

0.00 $ _....6..5.,.14.-7..3._5

$

6.5._,1.4.7_.3..5..

See notes to the financial statements.

- 37-

UNIVERSITY OF GEORGIA SCHEDULE OF OTHER ORGANIZED ACTIVITIES
BALANCE SHEET JUNE 30,1997

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets
LIABILITIES AND FUND BALANCES Liabilities
Accounts Payable Salaries Payable Unclaimed Property
Total Liabilities Fund Balances
Unrestricted
Total Liabilities and Fund Balances

AGRICULTURAL EXPERIMENT STATION

ATHENS AND TIFTON VETERINARY LABORATORIES

COOPERATIVE EXTENSION SERVICE

$

95,071.17 $

2,265,576.15

2,652.34 $ 685.95

446,597.32 408,794.49

$ 2,360,647.32 $

3,338.29 $ =====8=55=,3=9..1..=8=1

$ 2,051,068.44 283,452.82 2,254.89
$ 2,336,776.15
23,871.17 $
$ 2,360,647.32 $

$

597,130.81

250,436.07

1,550.14

$

849,117.02

3,338.29

6,274.79

3,338.29 $ =====85=5=,3=9=:1.=8=1

See notes to the financial statements.

- 38-

SCHEDULE "4"

UNRESTRICTED

MARINE

RESOURCES

MARINE

EXTENSION

INSTITUTE

CENTER

VETERINARY MEDICINE
EXPERIMENT STATION

VETERINARY MEDICINE TEACHING HOSPITAL

TOTAL

$

88.941.81 $

52,159.80 $ 87.237.73 $ 222,914.60 $

995,574.77

4.00

534.284.98

3.209,345.57

$

88,941.81 $

52,163.80 $ 87,237.73 $ 757.199.58 $ 4,204,920.34

$

66.958.71 $

40,727.43 $ 67,770.22 $ 468,752.43 $ 3,292,408.04

17.046.89

9,155.99

16,331.38

34.770.48

611.193.63

48.00

524.47

4,377.50

$

84,005.60 $

49,931.42 $ 84,101.60 $ 504,047.38 $ 3,907,979.17

4,936.21

2,232.38

3,136.13

253,152.20

296,941.17

$

88,941.81 $

52,163.80 $ 87,237.73 $ 757,199.58 $ 4,204,920.34

- 39-

UNIVERSITY OF GEORGIA SCHEDULE OF OTHER ORGANIZED ACTIVITIES
CHANGES IN FUND BALANCE YEAR ENDED JUNE 3D. 1997

FUND BALANCE JUNE 30, 1997

$

23,871.17 $'

3,338.29 $ ====6=:,2=7.4.....7..9=

See notes to the financial statements,

- 40-

SCHEDULE "5"

UNRESTRICTED

MARINE

RESOURCES

MARINE

EXTENSION

INSTITUTE

CENTER

VETERINARY MEDICINE
EXPERIMENT STATION

VETERINARY MEDICINE TEACHING HOSPITAL

TOTAL

$ 1,053,834.17 $ 1,737,173.86 $ 2,887,931.00 $ 4,383,073.47 $ 96,568,106.91

19.13

3,136.13

8,816.34

59,984.19

$ 1,053,853.30 $ 1,739,406.24 $ 2,891,067.13 $ 4,391,889.81 $ 96,628,091.10

$ 1,048,917.09 $ 1,737,173.86 $ 2,887,931.00 $ 4,317,926.12 $ 96,510,690.19

56.54

2,036.69

2,622.02

53,362.15

3,605.43

3,648.68

$ 1,048,973.63 $ 1,739,210.55 $ 2,890,553.02 $ 4,321,531.55 $ 96,567,701.02

$

4,879.67 $

195.69 $

514.11 $ 70,358.26 $

60,390.08

56.54

2,036.69

2,622.02

182,793.94

236,551.09

$

4,936.21 $

2,232.38 $

3,136.13 $ 253,152.20 $====="2=96=,.9..4...1...1..=7

- 41 -

UNIVERSITY OF GEORGIA SCHEDULE OF OTHER ORGANIZED ACTIVITIES REVENUES, EXPENDITURES AND OTHER CHANGES
YEAR ENDED JUNE 30,1997

REVENUES
State Appropriations Federal Appropriations Federal Grants and Contracts State Grants and Contracts Other States Grants and Contracts Local Grants and Contracts Private Gifts, Grants, and Contracts Sales and Services of Educational Activities Other Sources
Total Revenues
EXPENDITURES
Educational and General Research Public Service Academic Support Operation and Maintenance of Plant Scholarships and Fellowships
Total Expenditures
OTHER TRANSFERS AND ADDITIONS/(DEDUCTIONS)
Excess of Restricted Receipts over Transfers to Revenues Prior Period Adjustments (Net) Remittances to the Board of Regents of the
University System of Georgia Prior Year's Unrestricted Fund Balance (Surplus)
Total Other Transfers and Additions/(Deductions)

AGRICULTURAL EXPERIMENT STATION
UNRESTRICTED RESTRICTED

$ 38,411,557.00

4,325,558.21

591,988.29 $ 10,494,643.78

39,244.45

940,373.47

21,842.73

292,452,09

4,264.08

373,716,64

4,112,104.48

3,541,384,84

149,603,62

$ 47,454,895.78 $ 15.843,837.90

$ 44,667,324.67 $ 15,835,706.64

225,608.95 2,577.553.16

8,131.26

$ 47,470,486.78 $ 15,843,837,90

$

705,320.20

$

39,462.17

-38,107.60

$

1,354.57 $

705,320.20

Net Increase/(Decrease) in Fund Balances

$

-14,236.43 $ =====7..0.5.:=!,:=;32=0...2.=0

See notes to the financial statements.

- 42 -

SCHEDULE "6" Page 1

ATHENS AND TIFTON VETERINARY LABORATORIES UNRESTRICTED RESTRICTED

COOPERATIVE EXTENSION SERVICE
UNRESTRICTED RESTRICTED

MARINE INSTITUTE UNRESTRICTED RESTRICTED

$

128.504.00

$ 31.398,407.00

$

976.989.00

6.703.846.80

4.584.17 $ 5.143.493.51

43.520.21 $

217,776.83

0.21 $ 2.804.214.58

22.611.43

786.511.04

4.021.05

12.531.88

3.947.02

97,757.62

325.11

645.415.07

813.00

553.491.48

2,678.81

373.350.72

13,280.73

299.740.69

644.559.08

4.606.069.92

3.263.18

140,922.00

12.760.00

$

129.317.21 $ 3.357,706.06 $ 38.921.881.42 $ 11.652.597.88 $ 1.053.834.17 $

530.049.40

$

15.486.02

$

977.298.42 $

513,249.40

$

126.373.92

3.342.220.04 $ 38,195,966.49 $ 11.652.597.88

725.914.93

71.618.67

16.800.00

$

126.373.92 $ 3.357.706.06 $ 38.921.881.42 $ 11,652.597.88 $ 1.048,917.09 $

530.049.40

$

$ _ _---'-2:.:7~7..:=.9~9

$

-277.99 $

6.236.23 $

$ 6.274.79

266.046.71 $

6,236.23 $

-10.261.31 -3,986.52 $

266.046.71 $

$ 19.13

-44.528.06

-56.54 -37.41 $ _ _-44....:...:..z.==52::.:8=.0~6

$

2.665.30 $

6.236.23 $

-3,986.52 $

266,046.71 $

4.879.67 $ ==-44"",=,:!:,5=2=8=.0==6

- 43 -

UNIVERSITY OF GEORGIA SCHEDULE OF OTHER ORGANIZED ACTIVITIES REVENUES, EXPENDITURES AND OTHER CHANGES
YEAR ENDED JUNE 30, 1997

Net Increase/(Decrease) in Fund Balances

$

195.69 $ ======1,.4..6.;;,;;;0,;,;;,0:=9

See notes to the financial statements.

- 44 -

SCHEDULE "6" Page 2

VETERINARY MEDICINE EXPERIMENT STATION UNRESTRICTED RESTRICTED

VETERINARY MEDICINE TEACHING HOSPITAL
UNRESTRICTED RESTRICTED

TOTAL UNRESTRICTED RESTRICTED

$ 2,887,931.00 $
$ 2,887,931.00 $

$ 0.00

527,752.00 $

3,855,321.47 0.00 $ 4,383,073.47 $

$ 0.00

75,690,574.00 11,029,405.01
738,881.00 $ 65,877.14 25,789.77
325.11 390,489.20 8,313,680.06 313,085.62

16,267,612.53 4,543,794.11
390,209.71 649,679.15 5,347,832.33 4,606,069.92

0.00 $ 96,568,106.91 $ 31,805,197.75

$ 2,887,931.00 $

$ 2,887,931.00 $

$

$

3,136.13

-2,622.02

$

514.11 $

$

514.11 $

0.00 $

$ 4,317,926.12

0.00 $ 4,317,926.12 $

0.00 $

$ 5,210.91

0.00 $

5,210.91 $

0.00 $

70,358.26 $

0.00 $

48,709,172.08 $ 39,717,978.51 4,543,535.07
3,540,004.53

16,749,191.72 15,031,074.77
0.00 0.00 24,931.26

0.00 $ 96,510,690.19 $ 31,805,197.75

0.00 $
0.00 $

$ 56,335.51

934,535.17

-53,362.15 2,973.36 $ _--,,9=34...:.1.,=53;.;;;5..:...:.1-,-7

0.00 $

60,390.08 $ ====9::.34=,5=:3=5...1..==7

- 45 -

UNIVERSITY OF GEORGIA CHANGES IN INVESTMENT IN PLANT
YEAR ENDED JUNE 30, 1997

BALANCE JULY 1,1996

CURRENT FUNDS UNRESTRICTED RESTRICTED

PLANT UNEXPENDED

Land

$ 11,267,331.33

$ 816,240.42

Buildings

479,403,818.22 $ 3,270,763,21

22,018,586.71

Improvements Other Than Buildings

31,194,945.61

595,080,05

1,423,626,91

Equipment

264,648,584.65

38,581,244.87 $ 5,998,209.81

1,193,988.61

Library Books and Collections

105,515,214.30

7,364,061.32

552,374.98

$ 892,029,894.11 $ 49,811,149.45 $ 6,550,584.79 $ 25,452,442.65

SUMMARY OF INVESTMENT
University Capital Leases University of Georgia
Loan and Endowment Funds

$ 884,728,349.87 $ 49,811,149.45 $ 6,~50,584.79 $ 25,452,442.65 7,209,523.08
92,021.16

$ 892,029,894.11 $ 49,811,149.45 $ 6,550,584.79 $ 25,452,442.65

See notes to the financial statements.

- 46-

SCHEDULE "7"

ADDITIONS
FUNDS RENEWALS AND REPLACEMENTS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

CAPITAL LEASES

PRIVATE GIFTS

DEDUCTIONS DISPOSALS! DELETIONS! ADJUSTMENTS

BALANCE JUNE 30, 1997

$ 12,083,571.75

$

1,654,786.40 $ 21,610,599.08

$

94,528.90 527,864,024.72

141,890.02

250,489.74

33,105,052.85

656,741.66

$ 2,048,777.12 $ 416,049.06

14,854,921.36

298,688,674.42

113,431,650.60

$ 2,453,418.08 $ 21,610,599.08 $ 2,048,777.12 $ 416,049.06 $ 15,199,940.00 $ 985,172,974.34

$

2,453,418.08 $ 21,610,599.08

$ 416,049.06 $ 12,387,786.06 $ 978,634,806.92

$ 2,048,777.12

2,761,260.83

6,497,039.37

50,893.11

41,128.05

$ 2,453,418.08 $ 21,610,599.08 $ 2,048,777.12 $ 416,049.06 $ 15,199,940.00 $ 985,172,974.34

-47 -

UNIVERSITY OF GEORGIA SCHEDULE OF FUND BALANCES CURRENT FUNDS AND PLANT FUNDS
JUNE 30, 1997

NET INVESTMENT IN PLANT Investment in Plant Facilities
RESTRICTED Designated for Subsequent Years' Expenditures
UNRESTRICTED Designated For Capital Outlay For Equipment, Technology and Construction Trust Fund For Georgia Research Alliance For Intercollegiate Athletics For Inventory Reserve For Renewals and Replacements Reserve For Subsequent Years' Expenditures For Timber Reserve For Uncollectible Accounts Surplus Regular Lottery for Education

RESIDENT INSTRUCTION

LOTTERY FOR EDUCATION

CURRENT FUNDS

UNRESTRICTED

OTHER

ORGANIZED

AUXILIARY

ACTIVITIES ENTERPRISES

$ 2,068,303.15 434,400.40
$ 1,457,000.00

$

3,176.29

6,428,810.37

17,953,738.23

6,808.27

$ 253,414.81

34,390.66

296,392.05 514,457.05
$ 1,760,200.32 $ 3,017,160.60 $

43,526.36 296,941.17 $ 24,420,115.55

$ 1,760,200.32 $ 3,017,160.60 $ 296,941.17 $ 24,420,115.55

See notes to the financial statements.

- 48-

SCHEDULE "8"

,STUDENT ACTIVITIES

RESTRICTED

PLANT FUNDS

UNEXPENDED

LOTIERY FOR RENEWALS AND

REGULAR

EDUCATION REPLACEMENTS

INVESTMENT IN PLANT

TOTAL

$ 978,634,806.92 $ 978,634,806.92

$ 25,570,237.07 $ 300,846.94

$ 25,871,084.01

$ 233,800.00

$ 1,756,268.31

153,767.98

$ 9,712,767.32

$

233,800.00

2,068,303.15 434,400.40 3,176.29
7,885,810.37 9,712,767.32 19,710,006.54
153,767.98 294,613.74

$ 1,756,268.31

9,533.24

_ _ _ _ _ $ _ _---'2=0=.0=.0

$ 397,101.22 $

20.00 $

9,712,767.32

349,451.65 514,477.05 $ 41,360,574.49

$ 1,756,268.31 $ 25,570,237.07 $ 697,948.16 $

20.00 $ 9,712,767.32 $ 978,634,806.92 $ 1,045,866,465.42

- 49-

UNIVERSITY OF GEORGIA RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30,1997

SCHEDULE "9"

Totals per Annual Supplement

Accruals June 30, 1997 June 30, 1996 JUly 1, 1996 Accrual Adjustments

Adjustments

Shared Services on Jointly Staffed Personnel

Coastal Georgia Community College

. Francis,

Sybil E,

Clayton College and State University

Hager,

Jerri H.

Dalton College

Currey,

Sue

Darton College

Saville,

James R.

Georgia State University

Stallworth-Clark,

Rose Marie

Macon College

Stirewalt,

Larry K.

North Georgia College and State University

Mitchell,

Larry

Savannah State University

Hardwick,

Clifford

Valdosta State University

Livingston,

Martha

Totals per Report

DISTRIBUTION BY FUND
CURRENT FUNDS Unrestricted Resident Instruction Regular Special Funding Initiative Office of Minority Business Enterprise Forestry Research Research Consortium Lottery for Education Other Organized Activities Regular Research Consortium Agricultural Research Auxiliary Enterprises Student Activities Restricted Resident Instruction Other Organized Activities

See notes to the financial statements.

- 50-

SALARIES

TRAVEL

$ 367,108,578,21 $ 8,401,192,71

3,188,937,11 -2,872,773.59
33,342.31

22,684,00 21,008,00 11,933,00 25,519.00
3,260,00 15,092,00 21,709,00 -32,711.04 10,166,00
$ 367,556,744,00 $ 8A01,192.71

$ 227,731,138.43 $ 734,895,74 250,241.74 388,329,02 888,986,31 6,919,12

3,567,514,70 10,040.86 6,182.67
37,182.19

57,303,502,06 114,061.15 329,862,25
22,689,793,80 242,562,74

1,551,359,08 8,667.86 5,718,98
108,620,19 8,970,18

41,405,751.48 15A70,700,16

2,056,643,65 1,040,292,35

$ 367,556l44.00 $ 8,401,192.71

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORT

CLAUD~ L. VICKERS STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
November 26, 1997

Honorable Zell Miller, Governor Members ofthe General Assembly Members of the Board of Regents of the University System of Georgia
and Honorable Michael F. Adams, President University of Georgia
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the fmancial statements of the University of Georgia as of and for the year ended June 30, 1997, and have issued our report thereon dated November 26, 1997. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the financial statements. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to fmancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether the University of Georgia's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.

97YB-30

Internal Control Over Financial Reporting
.
In planning and performing our audit, we considered the University of Georgia's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on t~e financial statements and not to provide assurance on the internal control over fmancial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over fmancial reporting that, in our judgement, could adversely affect the University ofGeorgia's ability to record, process, summarize and report fin~cial data consistent with assertions ofmanagement in the financial statements. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe the reportable condition described above is not a material weakness.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,
~
Claude L. Vickers State Auditor
CLV:cm 97YB-30

SECTIONID CURRENT YEAR FINDINGS AND QUESTIONED COSTS

UNIVERSITY OF GEORGIA SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1997
FINANCIAL STATEMENT FINDINGS AND QUESTIQNED COSTS
INVENTORIES Inadequate Controls Over Resale Inventory Reconciliation Process Reportable Condition Finding Control Number: FS-518-97-01
The following deficiencies in internal controls over the resale inventory reconciliation process were noted:
(1) The University did not provide a reconciliation ofthe amount of resale inventory derived from a physical count to the amounts reflected by the general ledger for Continuing Education - Food Services and Gift Shop.
(2) The University did not provide for supervisory review and approval of resale inventory reconciliations and related year end adjustments made to the general ledger. As a result, adjusting entries made by the University to correct the general ledger accounts for resale inventories for Continuing Education - Food Services and Gift Shop were incorrect. .
These deficiencies were the result of management's failure to establish and implement the proper internal control procedures over resale inventories. The University should establish and implement the appropriate internal controls to ensure that a physical count of resale inventories is taken annually, the physical count is reconciled appropriately with the accounting records and the appropriate adjustments are made to the general ledger if necessary.