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AUDIT REPORT STATE OF GEORGIA UNIVERSITY OF GEORGIA ATHENS, GEORGIA YEAR ENDED JUNE 30, 1998

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

24

COMBINING STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,

AND OTHER CHANGES

G

UNRESTRICTED

26

H

RESTRICTED

29

SCHEDULES

SCHEDULES OF REVENUES AND EXPENDITURES COMPARED TO BUDGET

1

RESIDENT INSTRUCTION

30

2

LOTTERY FOR EDUCATION

33

3

OTHER ORGANIZED ACTIVITIES

34

SCHEDULES OF OTHERORGAMZEDACTIVITIES

4

BALANCE SHEET

42

5

CHANGES IN FUND BALANCE

44

6

REVENUES, EXPENDITURES AND OTHER CHANGES

46

7 CHANGES IN INVESTMENT IN PLANT

50

8 SCHEDULE OF FUND BALANCES

CURRENT FUNDS AND PLANT FUNDS

52

9 RECONCILIATION OF SALARIES AND TRAVEL

54

UNNERSITY OF GEORGIA - TABLE OF CONTENTS -
SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORT REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR 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 20, 1998

Governor of the State of Georgia Members of the General Assembly ('{ Georgia Members of the Board of Regents of the 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) of the University of Georgia as of and for the year ended June 30, 1998. 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.
Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards and Governmental Auditing Standards issued by the Comptroller General of the 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 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.
Governmental Accounting Standards Board Technical Bulletin 98-1, Disclosures About Year 2000 Issues, requires disclosure of certain matters regarding the year 2000 issue. The University of Georgia has included such disclosures in the Notes to the Financial Statements. Because of the unprecedented nature of the year 2000 issue, its effects and the success of related remediation efforts will not be fully determinable until year 2000 and thereafter. Accordingly, insufficient audit evidence exists to support the University of Georgia's disclosures with respect to the year 2000 issue made in the Notes to the Financial Statements. Further, we do not provide assurance that the University of Georgia is or will be year 2000 ready, that the University of Georgia's year 2000 remediation efforts will be successful in whole or in part, or that parties with which the University of Georgia does business will be year 2000 ready.
98ARL-62AX

As described in Note 1 to the financial statements, Georgia Law and State budgetary policy require the University to prepare its financial statements on a basis which is not consistent with generally accepted accounting principles with respect to the recording of encumbrances as expenditures and liabilities. To conform with generally accepted accounting principles, encumbrances should be recorded as a reservation of fund balance. The effects on the financial statements of this departure from generally accepted accounting principles were not reasonably determinable, but are believed to be material.
As disclosed in Note 1 to the financial statements, the University did not report the liability and related expenditure for compensated absences in the current funds as required by generally accepted accounting principles. If compensated absences were reported, liabilities would be increased and fund balance would be decreased by $28,705,933.22 as of June 30, 1998, and the net change in fund balance for the year ended June 30, 1998, would be decreased by $1,141,490.62.
In our opinion, except for the effects of such adjustments, if any, as might have been determined to be necessary had we been able to examine sufficient evidence regarding year 2000 disclosures, and except for the effects on the fmancial statements ofthe matters discussed in the fourth and fifth paragraphs, the fmancial statements referred to above present fairly, in all material respects, the fmancial position of the University of _Georgia as of June 30, 1998, and the changes in fund balances and the current operating funds revenues, -expenditures, and other changes for the year then ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying 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 of the financial statements and, in our opinion, except for the effects of such adjustments, if any, as might have been determined to be necessary had we been able to examine sufficient evidence regarding year 2000 disclosures, and except for the effects ofthe matters discussed in the fourth and fifth paragraphs, such information is fairly presented in all material respects in relation to the financial statements taken as a whole.

CLV:gp 98ARL-62AX

Claude L. Vickers State Auditor

FINANCIAL STATEMENTS - 1-

UNIVERSITY OF GEORGIA COMBINED BALANCE SHEET
ALL FUND GROUPS JUNE 30, 1998

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable Inventories 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 Capital Lease Obligations
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

$ 23,319,577.44 $

9,058,917.76 $

5,911,805.41

37,312.29

41,212,484.61

18,541,402,59

11,504,161.55

8,261,920.48

$ 72,793,982.53 $ 27,600,320.35 $ 17,453,279.25

$ 32,723,153.14
3,693,780.28 8,918,785.34 3,604,563.20
141,278.28
$ 49,081,560.24
$ 10,499,578.41 6,953,700.84
$ 27,600,320.35 $ 23,712,422.29 $ 23,712,422.29 $ 27,600,320.35 $ 17,453,279.25
$ 72,793,982.53 $ 27,600,320.35 $ 17,453,279.25

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)

$ 6,784,985.32 $ 26,878,863.38 $ 10,952,916.83

$ 10,321,535.51 $ 93,228,601.65

21,283,185.61

21,320,497.90

40,945.95

1,216,554.33

712.40

2,712.90

72,518,974.33

8,261,920.48

_ _ _ _ _ _ $ 1,111,908,626.47

1,111,908,626.47

$ 28,109,116.88 $ 28,095,417.71 $ 10,953,629.23 $ 1,111,908,626.47 $ 10,324,248.41 $ 1,307,238,620.83

$ 25,854,704.16 $ $ 25,854,704.16 $

1,423,865.16
$ 1,423,865.16 $

$ 7,938,711.20 $

4,943,071.49

2,385,537.21

4,943,071.49 $ 10,324,248.41 $

67,940,433.66 3,693,780.28
8,918,785.34 3,604,563.20
141,278.28 2,385,537.21 4,943,071.49
91,627,449.46

$ 28,109,116.88
$ 491,080.67 1,749,632.88 $
$ 28,109,116.88 $ 2,240,713.55 $

$ 1,106,965,554.98

9,529,764.07

s 9,529,764.07

1,106,965,554.98

$ 10,499,578.41

6,953,700.84

28,109,116.88

1,106,965,554.98

28,091,401.02

<,

34,991,819.24

$ 1,215,611,171.37

$ 28,109,116.88 $ 28,095,417.71 $

s 10,953,629.23

1,111,908,626.47 $ 10,324,248.41 $ 1,307,238,620.83

-3-

UNIVERSITY OF GEORGIA COMBINED STATEMENT OF CHANGES IN FUNDBALANCES
ALL FUNDGROUPS YEARENDEDJUNE 30, 1998

REVENUES AND OTHERADDITIONS
Unrestricted CurrentFund Revenues StateAppropriations
Regular Federal Grantsand Contracts StateGrantsand Contracts OtherState Grantsand Contracts Local Grantsand Contracts PrivateGifts,Grants,and Contracts Investment Income
Endowment Other Salesand Services Net Increase/Decrease in FairValueof Investments Intereston LoansReceivable Adjustments PriorYears'Expenditures/Accounts Payable Expended for Plant Facilities CurrentFunds Plant Funds
Unexpended Renewals and Replacements GeorgiaState Financing and Investment Commission OtherAdditions Proceeds from Sale of PlantAssets
Total Revenues and OtherAdditions
EXPENDITURES AND OTHERDEDUCTIONS
Educational and GeneralExpenditures AuxiliaryEnterprises Expenditures IndirectCosts Recovered Remittances to the Boardof Regents of the
University Systemof Georgia PriorYear's Unrestricted FundBalance (SurplUS)
Adjustments PriorYears' Revenues/Accounts Receivable
LoanCancellations and Write-Offs Administrative and Collection Costs Expended for Plant Facilities
Capitalized Noncapitalized Disposals/Deletions/Adjustments
Total Expenditures and OtherDeductions
TRANSFERS BElWEEN FUNDS
Mandatory Investment Incomefor Principal Investment IncomeAllocated for Loans UnspentLoan Fundsfor Principal
Nonmandatory Renewals and Replacements Capital Projects GeneralOperations Endowment Principal for Objectof Trust
Total TransfersBetween Funds
Net Increase/(Decrease) for the Year
FUNDBALANCES JULY 1 1997 (Restated - See Note 1)

CURRENT FUNDS

UNRESTRICTED

RESTRICTED

LOAN FUNDS

s

597,523,150,58

s

146,889,273.70 $

49,120,124.47

623,836.63

2,685,052.76

35,527,961.79

1,407,242.08

5,109,504.03

378,843.23

-3,158.44

-227,993.00
735.32
320,563.79 9,732.35
303,446.26

$

597,901,993.81 $

241,359,837.02 $

$

541,966,452.69 $

229,245,759.30

45,306,760.04

9,945,714.13

854,375.46 72,502.25

2,530.00
s
57,333.18

406,484.72
44,916.86 6,246.55

$

588,200,090.44 $

239,251,336.61 s

51,163.41

$

$

-3,384,541,35

-13,865,220.10

9,594.42

s

-17,240,167,03 s

s

-7,538,263.66 s

31,250,685.95

-200,173.64 -215,140.00 $
-9,594.42 346,490.93 -78,417.13 $
2,030,083.28 s
25,570,237.07

215,140.00 -206,124.22
9,015.78 364,337.09 17,088,942.16

FUNDBALANCES JUNE 30,1998 The notesto the financialstatements are an integralpart of this statement.

s
-4-

23,712,422.29 $

27,600,320.35 $

17,453,279.25

EXHIBIT"B"

ENDOWMENT FUNDS

UNEXPENDED

PLANTFUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

TOTAL (Memorandum
Only)

$

$

571,331.85

2,361,292.81

22,951,900.00 4,289,683.00 136,109.67 5,872,660.61 3,033,736.82
9,340.08 $

$

2,932,624.66 $

1,786,664.49 38,080,094.67 $

$ 1,763.67 1,763.67 $

$ 597,523,150.58

9,463,659.21

22,951,900.00 150,950,963.70 49,256,234.14
623,836.63 2,685,052.76 51,436,348.78

1,407,242.08 3,354,300.61 5,109,504.03 2,371,025.16
303,446.26

386,788.54

49,229,911.88

49,229,911.88

50,135,011.49 2,627,967.04
30.521,240.64

50,135,011.49 2,627,967.04
30,521,240.64

1,786,664.49

141,9n,790.26 $ 1,022,660,588.81

$

0.00

$ n1,212,211.99 45,306,760.04 9,945,714.13

$

9,553.24

863,928.70

75,032.25 44,916.86 63,579.73

50,135,011.49 $ 258,004.65

2,627,967.04 941,341.23 $

13,647,042.20

52,762,978.53 1,199,345.88 13,647,042.20

$

0.00 $

50,402,569.38 $

3,569,308.27 $

13,647,042.20 $ 895,121,510.31

~,

$

200,173.64

206,124.22

$

-346,490.93

$

59,806.93 $

$

2,992,431.59 $

25,116,685.29

$

28,109,116.88 $

$ 13,865,220.10
13,865,220.10 $ 1,542,745.39 $ 697,968.16

3,384,541.35
3,384,541.35 -183,003.25 $ 9,712,767.32

$

0.00

0.00

0.00

0.00 0.00 0.00 0.00

$

0.00

128,330,748.06 $ 127,539,078.50

978,634,806.92

1,088,072,092.87

2,240,713.55 $

9,529,764.07 $ 1,106,965,554.98 $ 1,215,611,171.37

- 5

UNIVERSITY OF GEORGIA STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,
AND OTHER CHANGES YEAR ENDED JUNE 30,1998

EXHIBIT"C"

REVENUES

State Appropriations

Tuition and Fees

Federal Appropriations

Federal Grants and Contracts

State Grants and Contracts

Other Slates Grants and Contracts

Local Grants and Contracts

')0

Private Gifts, Grants, and Contracts

Endowment Income

Sales and Services of Educational Activities

Sales and Services of Auxiliary Enterprises

Other Sources

Total Revenues

EXPENDITURES AND MANDATORY TRANSFERS

Educational and General Instruction Research Public Service Academic Support Student Services Institutional Support Operation and Maintenance of Plant Scholarships and Fellowships Mandatory Transfers for: Investment Income for Endowment Principal Investment Income Allocated for Loans
Auxiliary Enterprises Student Housing Food Services Stores and Shops Intercollegiate Athletics Other Service Units

Total Expenditures and Mandatory Transfers

OTHER TRANSFERS AND ADDITIONS/{DEDUCTIONS)

Excess of Restricted Receipts over Transfers to Revenues
Transfers for Renewals and Replacements Transfers for Capital Projects Transfers for General Operations Transfers of Endowment Principal for Object of Trust Administrative Fees and Collection Costs 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)

UNRESTRICTED

RESTRICTED

TOTAL (Memorandum
Only)

$ 378,794,666.00

$ 378,794,666.00

109,343,455.36

109,343,455.36

11,672,329.13

11,672,329.13

7,559,241.75 $ 138,491,982.91

146,051,224.66

720,939.26

49,354,895.72

50,075,834.98

297,552.67

787,010.51

1,084,563.18

34,598.07

2,805,949.86

2,840,547.93

1,554,147.93

32,506,271.36

34,060,419.29

106,734.45

1,153,925.14

1,260,659.59

27,840,870.89

4,145,723.80

31,986,594.69

30,873,491.04

30,873,491.04

28,725,124.03

28,725,124.03

$ 597,523,150.58 $ 229,245,759.30 $ 826,768,909.88

$ 150,341,309.12 $ 7,383,299.35 $ 157,724,608.47

123,202,896.59

60,622,448.32

183,825,344.91

67,705,455.17

36,113,263.51

103,818,718.68

64,412,835.93

381,111.50

64,793,947.43

16,363,216.82

837.44

16,364,054.26

43,280,828.53

8,735,765.15

52,016,593.68

54,220,922.98

54,220,922.98

22,438,987.55

116,009,034.03

138,448,021.58

200,173.64 215,140.00

200,173.64 215,140.00

12,743,076.27 8,691,777.27 4,882,570.23 2,110,987.50
16,878,348.77

12,743,076.27 8,691,777.27 4,882,570.23 2,110,987.50
16,878,348.77

$ 587,273,212.73 $ 229,661,072.94 $ 816,934,285.67

$ $ -3,384,541.35
-13,865,220.10 9,594.42
306,340.98

2,171,522.03 $
-9,594.42 346,490.93 -57,333.18
-5,688.44

2,171,522.03 -3,384,541.35 -13,865,220.10
0.00 346,490.93 -57,333.18 300,652.54

-854,375.46 $ -17,788,201.51 $

-854,375.46 2,445,396.92 $ -15,342,804 .59

Net Increase/(Decrease) in Fund Balances The notes to the financial statements are an integral part of this statement.
-6-

$ -7,538,263.66 $ 2,030,083.28 $ -5,508,180.38

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY The University of Georgia is one of thirty-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 financial reporting purposes because of the significance of its legal, operational, and financial relationships with the Board of Regents as defined in Section 2100 of the Governmental Accounting Standards Board 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 fmancial 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 fmancial 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-

UNNERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998

EXHIBIT"D"

NOTE 1: SUMMARY OF SIGNIFICANTACCOUNTING 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 subjectto 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 financial resources utilized to acquire or to construct physical properties for institutional purposes.
RENEWALS AND REPLACEMENTS - The fund used to accountfor 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 financial statements are prepared on the modified accrual basis ofaccounting,which is materiallythe same as the accrual basis ofaccounting applicableto colleges and universitiesprescribed in the AmericanInstituteofCertified Public Accountants' audit guide reportingmodel. The modified accrual basis ofaccountingis definedas that methodofaccounting 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.
Contractualobligations for goods and serviceswhich have not been received at the end of the fiscal year are recognizedas expendituresand liabilities in the accompanying financial statements. This accountingpractice causes expenditure-driven grant revenuesto be accruedbased, in part, on the unexecutedportion ofcontracts for goods and services. The recognitionofencumbrances as expenditures and liabilitiesis in conformitywith
-8-

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998

EXHIBIT"D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING 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 offund 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$28,705,933.22 and a related net current year expenditure of $1,141,490.62 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 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 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 financial activities of current funds related to the current reporting period. It does not purport to present the results of operations or the net income or loss for the period as would a statement of income or a statement of revenues and expenses.
RESTATEMENT OF PRIOR YEAR FUND BALANCE In fiscal year 1998, the University of Georgia implemented GASB Statement 31, "Accounting and Financial Reporting for Certain Investments and for External Investment Pools". The statement requires certain investments to be reported at fair value rather than at cost. As a result, the beginning fund balance of the Endowment fund and Loan fund have been increased by $2,453,150.95 and $25,472.00, respectively, to implement this change in accounting principle.

-9-

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUDGET The Board of Regents of the University System of Georgia - Administrative Central Office receives State appropriation allotments for units of the University System of Georgia. The appropriated budget is adopted at the departmental level and represents appropriations provided by the Amended Appropriations Act of 19971998. The appropriated budget covers current funds and plant funds, except for Auxiliary Enterprises and Student Activities which are not subject to appropriation. The allocation of the appropriated budget is made to the University by the Administrative Central Office, In addition, the University receives Federal funds and other funds directly and includes these funds in the budget filed with the Administrative Central Office.

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

Resident Instruction Special Funding Initiative

$ 2,778.82

Lottery for Education Equipment, Technology and Construction Trust Fund Georgia Research Alliance

$ 2,013,104.35 $ 434.401.25

Other Organized Activities Athens and Tifton Veterinary Laboratories Personal Services Education, General and Departmental Services Cooperative Extension Service Operating Expenses Education, General and Departmental Services Marine Institute Personal Services Education, General and Departmental Services Veterinary Medicine Experiment Station Operating Expenses Education, General and Departmental Services

$

16.73

$ 189,683.45

$ 9,879.90

$ 1.466.37

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.

-10 -

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1998

EXHIBIT"D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS Investments are reported at fair value. Funds received by the University as endowments or for restricted purposes are invested according to conditions stipulated by the donor, grantor, or in accordance with the Board of Regents authorizing resolutions. Gains and losses on investment transactions are accounted for in the funds where such assets are recorded.
ACCOUNTS RECEIVABLE
Accounts receivable consist 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 fmancial 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 financial information and are presented only to facilitate financial analysis. The columns do not present information that reflects financial position or changes in financial 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 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.

- 11 -

UNNERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998

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 of the bonds for this purpose.
(4) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia.
(5) Bonds, bills, certificates of indebtedness, notes, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest, 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 of the 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 of the University System of Georgia.
CATEGORIZATION OF DEPOSITS For purposes of analysis of custodial credit risk, cash deposits consist of all bank balances which include demand deposits and/or interest bearing accounts. The bank balances as of June 30, 1998, are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk:
Category I - Amounts covered by depository insurance or collateralized with securities (at fair value) held by the University or by its agent in the University's name.
Category 2 - Amounts collateralized with securities (at fair value) held by the pledging financial
institution's trust department or agent in the University's name.
Category 3 - Amounts collateralized with securities (at fair value) held by the pledging financial institution, or by its trust department or agent but not in the University's name, and amounts uncollateralized.

- 12-

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998

EXHIBIT "D"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

CATEGORIZATION OF DEPOSITS

Cash Deposits Investment Portfolio Accounts
Total Cash Deposits

Carrying Amount

Bank Balances

$ 91,324,012.58 $103,340,043.47 $

487,555.43

487.555.43

$ 91.811.568.01 $103,82759890 $

Risk Categories 2

470,977.97 $102,827,294.10 $

0.00

273,613.79

470977 97 $103 100907.89 $

3
41,771.40 213,941.64
255,713 04

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, 1998, are categorized below:

Type of Investment

Risk Categories

1

2

3

Carrying Amount

Common Stock

$ 1,728,583,07 $ 6,270,048,93 $

0.00 $ 7,998,632,00

Corporate Bonds

2,816,002.00 3,080,952.50

5,896,954,50

U. S. Government Securities

1,008,230,33 5,683,617,51

6,691,847.84

"'.

$ 5,552,815.40 $15,034,618,94 $

0,00 $20,587,434.34

Investments Not Subject to Categorizations:

Real Estate Total Investments

245.508,13 $20,832,942.47

- 13 -

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1998

EXHIBIT "D"

NOTE 3: INVESTMENT IN PLANT

The following is a summary oflnvestment in Plant fixed assets as of June 30, 1998:

Land Buildings Improvements Other Than Buildings Equipment Library Books and Collections

$ 12,182,333.48 614,345,282.91 34,511,264.06 328,964,261.11 121,905.484.91

Total Investment in Plant

$1.111,908,626.47

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, 1998, 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

1999

$ 1,042,356.34

Expenditures for rental of buildings under operating leases for the year ended June 30, 1998, totaled $1,018,012.82.

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. Ifrenewal of such agreements is reasonably assured, however, capital leases requiring appropriation by the General Assembly of Georgia are considered noncancellable for financial reporting purposes.

As of June 30, 1998, future minimum lease payments under capital leases are as follows:

- 14-

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998

EXHIBIT "D"

NOTE 5: CAPITAL LEASES

Fiscal Year Ending June 30

1999 2000 2001 2002 2003

$ 2,373,673.45 2,305,081.89 471,335.79 195,320.63 37,734.22

Total Future Minimum Lease Payments

$ 5,383,145.98

Less: Amounts Representing Interest

440,074.49

Present Value of Future Minimum Lease Payments

$~943t071.49

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 ofAdministrative 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 ofthe Board of Regents ofthe University System of Georgia, is part of the State of Georgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment.

- 15 -

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998

EXHIBIT "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 of the 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 of Georgia subject only to the claims of the 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, 1998.

A change in the Internal Revenue Code Section 457, effective August 20, 1996, requires that by January 1, 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 was converted effective July 1, 1998.

NOTE 8: RETrnEMENTPLANS

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 defmed 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 of Georgia. TRS provides service retirement, disability retirement, and survivor's benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

Funding Policy Employees ofthe University who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The University makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. For

- 16-

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998

EXHIBIT "D"

NOTE 8: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Funding Policy fiscal year 1998, the employer contribution rate was 11.81% for covered employees. In addition, the University contributed 3.91% 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

1998 1997 1996

100% 100% 100%

$33,972,844.51 $32,592,383.89 $31,310,648.29

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 ofproviding 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 of Georgia. The employer contributes 7.75% 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 $4,657,966.04 (7.75%) and $3,006,189.84 (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

- 17 -

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998

EXHIBIT "D"

NOTE 8: RETIREMENT PLANS
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description 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 mortalitytables and interest assumptions to be adopted by the Board of Trustees. Ifa member has less than $ 3,500.00 creditedto hislher account, the Board of Trusteeshas 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 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-half percent (7.5%) of gross salary. There are no employer contributions. Contribution rates are established by SUite statute. Earnings are credited to each member's account in a manner establishedby the Board ofTrustees. 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 1998 amounted to $854,963.07 which represents 7.50% of covered payroll. These contributions met the requirements of the plan.
NOTE 9: LEAVE POLICIES
Employeesearn annual leave rangingfrom one and one-quarter daysto one and three-quarter days each month depending upon the employees' length of continuous State servicewith maximum accumulationof 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.
Effective July 1, 1998, certain employees who retire with a minimum of three months of unused sick leave are entitled to additional service credit in the Teachers Retirement System of Georgia.

- 18 -

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998

EXHIBIT "D"

NOTE 10: 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 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, 1998.
: 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 ofJune 30, 1998, there were 2,621 employees who had retired or were disabled that were receiving these postemployment health and life insurance benefits. For the year ended June 30, 1998, the University of Georgia recognized as incurred $7,209,934.64 ofexpenditures, which was net of$1,558,060.84 ofparticipant contributions.
NOTE 12: YEAR 2000 SYSTEMS READINESS
The year 2000 issue is the result of shortcomings in many electronic data processing systems and other electronic equipment that may adversely affect the University's operations as early as calendar year 1999. The University has identified computer systems and other electronic equipment that may be affected by the year 2000 issue and are necessary to conducting University operations. The following stages have been identified as necessary to implement year 2000 compliant systems.
Awareness Stage - Encompasses establishing a budget and project plan for dealing with the year 2000 issue.
Assessment Stage - The actual process of identifying all systems and individual components of systems to check for compliance.
- 19-

UNNERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998

EXHIBIT "D"

NOTE 12: YEAR 2000 SYSTEMS READINESS

Remediation Stage - The time when changes are made to systems and equipment.

ValidationlTesting Stage - The process of ensuring that the changes made to systems and equipment will produce a year 2000 compliant system.

It will be necessary for the University to progress through all four of these stages for each computer and/or

-),

electronic system, not already year 2000 compliant, in order to assure that these systems will not be adversely

affected.

All of the University's computer systems and equipment, except for Human Resources, Payroll and Student Loan Billing and Collection systems, are beyond the validation/testing stage and management considers them year 2000 compliant. The Human Resources, Payroll and Student Loan Billing and Collection systems are in the remediation stage and should move to the validation/testing stage by March 1999. All of the systems have been and will continue to be remediated by in-house staff, therefore there are no outside contracted amounts for this project as of June 30, 1998.

Because ofthe unprecedented nature ofthe year 2000 issue, its effects and the success ofrelated remediation efforts will not be fully determinable until year 2000 and thereafter. While management is confident that the University will be year 2000 ready, it cannot assume that its remediation efforts will be successful in whole or in part, or that parties with whom the University does business will be year 2000 ready.

NOTE 13: ENROLLMENT

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

Regular Term Fall Quarter, 1997 Winter Quarter, 1998 Spring Quarter, 1998

27,477 26,438 25,128

Average

26.348

Summer School, 1997

8.319

- 20-

SUPPLEMENTARY INFORMATION - 21 -

UNIVERSITY OF GEORGIA COMBINING BALANCE SHEET CURRENT FUNDS - UNRESTRICTED
JUNE 30. 1998

ASSETS
Cash and Cash Equivalents Accounts Receivable Inventories Due from Other Fund Groups
Total Assets
LIABILITIES AND FUND BALANCES
Liabilities Accounts Payable Salaries Payable Deferred Revenue Tuition and Fees Other Unclaimed Property Due to Other Fund Groups
Total Liabilities
Fund Balances Unrestricted
Total Liabilitiesand Fund Balances

RESIDENT INSTRUCTION

LOTTERY FOR EDUCATION

$ 5,415,417.30 $ 35,740,833.65 2,068,765.09

1,180,449.03

$ 43,225,016.04 $ 1,180,449.03

$ 25,492,126.43 $ 2,507,492.05
8,080,464.34 2,376,311.03
116,893.48 2,890,998.95
$ 41,464,286.28 $

1,111,416.92 1,111,416.92

1,760,729.76

69,032.11

$ 43,225,016.04 $===:d1:,:1::8.=06,4=4=9=.=0=3=

See notes to the financial statements.

- 22-

EXHIBIT"E"

OTHER ORGANIZED ACTIVITIES

AUXILIARY ENTERPRISES

STUDENT ACTIVITIES

TOTAL

$ 1,819,449.93 $ 12,880,487.90 $ 2,023,773.28 $ 23,319,577.44

4,434,815.36

1,027,089.39

9,746.21

41,212,484.61

30,970.00

6,162,185.39

8,261,920.48

3,324,736.85

3,324,736.85

$ 6,285,235.29 $ 23,394,499.53 $ 2,033,519.49 $ 76,118,719.38

$ 4,647,628.01 $ 1,471,981.78

710,832.90

475,455.33

74,906.72 9,043.56
433,737.90

647,793.50 $ 1,153,345.45
15,011.81

$ 5,876,149.09 $ 3,763,587.87 $

$ 32,723,153.14 3,693,780.28

190,527.50 329.43

8,918,785.34 3,604,563.20
141,278.28 3,324,736.85

190,856.93 $ 52,406,297.09

409,086.20

19,630,911.66

1,842,662.56

23,712,422.29

$ 6,285,235.29 $ 23,394,499.53 $ 2,033,519.49 $ 76,118,719.38

- 23-

UNIVERSITY OF GEORGIA COMBINING STATEMENT OF CHANGES IN FUND BALANCES
CURRENT FUNDS - UNRESTRICTED YEAR ENDED JUNE 30.1998

REVENUES AND OTHER ADDITIONS
Unrestricted Current Fund Revenues Adjustments
Prior Years' Expenditures/Accounts Payable
Total Revenues and Other Aaditions
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 General Operations In Lieu of State Appropriations
Total Transfers Between Funds
Net Increase/(Decrease) for the Year
FUND BALANCES JULY 1,1997
FUND BALANCES JUNE 30.1998

RESIDENT INSTRUCTION

LOTTERY FOR EDUCATION

$ 431,233,307.78 $ 253,048.68
$ 431 ,486,356.46 $

4,329,421.00 13,353.61
4,342,774.61

$ 433,296,067.93 $

4,761,423.05

296,392.05 2,420.14

514,457.05 23.00

$ 433,594,880.12 $

5,275,903.10

$ -2,015,000.00

$

792,852.10

1,316,201.00

$ 2,109,053.10 $ -2,015,000.00

$

529.44 $ -2,948,128.49

1,760,200.32

3,017,160.60

============= $

1,760,729.76 $

69,032.11

See notes to the financial statements.

-24 -

EXHIBIT"F"

OTHER ORGANIZED ACTIVITIES

AUXILIARY ENTERPRISES

STUDENT ACTIVITIES

TOTAL

s 101,691,655.83 $ 56,982,629.97 $

60,551.72

51,889.22

$ 101,752,207.55 $ 57,034,519.19 $

3,286,136.00 $ 597,523,150.58 378,843.23
3,286,136.00 $ 597,901,993.81

$ 101,592,877.64

$

$ 45,306,760.04

2,316,084.07 $ 541,966,452.69 45,306,760.04

43,526.36 3,658.52

66,400.59

854,375.46 72,502.25

$ 101,640,062.52 $ 45,373,160.63 $ 2,316,084.07 $ 588,200,090.44

$ -3,384,541.35 -11,749,820.10 $
-1,316,201.00

$ -100,400.00 -783,257.68

-3,384,541.35 -13,865,220.10
9,594.42 0.00

$ -16,450,562.45 $

-883,657.68 $ -17,240,167.03

$

112,145.03 $ -4,789,203.89 $

86,394.25 $ -7,538,263.66

<;

296,941.17

24,420,115.55

1,756,268.31

31,250,685.95

$

409,086.20 $ 19,630,911.66 $ 1,842,662.56 $ 23,712,422.29

- 25-

UNIVERSITY OF GEORGIA COMBINING STATEMENT OF CURRENT FUNDS REVENUES. EXPENDITURES,
AND OTHER CHANGES UNRESTRICTED
YEAR ENDED JUNE 30. 1998

REVENUES

State Appropriations

Tuition and Fees

Federal Appropriations

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

Sales and Services of Auxiliary Enterprises

Other Sources

Total Revenues

EXPENDITURES

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

Total Expenditures

OTHER TRANSFERS AND ADDITIONS/{DEDUCTIONS)

Transfers for Renewals and Replacements Transfers for Capital Projects Transfers for General Operations Transfers in Lieu of State Appropriations 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)

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

-26 -

RESIDENT INSTRUCTION

LOTIERYFOR EDUCATION

$ 295,533,933.00 $ 106,176,308.30
6,706,920.60 692,495.73 263,068.65 33,738.87
1,122,470.10 106,734.45
18,488,533.51
2,109,104.57
$ 431,233,307.78 $

4,329,421.00 4,329,421.00

$ 149,628,099.42 $ 69,222,596.54 26,007,602.57 59,202,520.19 14,370,446.35 43,280,828.53 49,472,529.28 22,111,445.05

713,209.70 3,160,070.49
587,500.00 296,593.96
4,048.90

$ 433,296,067.93 $ 4,761,423.05

$ -2,015,000.00

$

792,852.10

1,316,201.00

250,628.54

13,330.61

-296,392.05

-514,457.05

$ 2,063,289.59 $ -2,516,126.44

$

529.44 $ -2,948,128.49

EXHIBIT"G"

OTHER ORGANIZED ACTIVITIES

AUXILIARY ENTERPRISES

STUDENT ACTIVITIES

TOTAL

$ 78,931,312.00
$ 11,672,329.13
852,321.15 28,443.53 34,484.02 859.20
431,677.83

9,352,337.38 $
387,891.59

30,873,491.04 26,109,138.93

$ 101,691,655.83 $ 56,982,629.97 $

$ 3,167,147.06
118,988.94

378,794,666.00 109,343,455.36 11,672,329.13
7,559,241.75 720,939.26 297,552.67 34,598.07
1,554,147.93 106,734.45
27,840,870.89 30,873,491.04 28,725,124.03

3,286,136.00 $ 597,523,150.58

$ 50,820,229.56 41,110,352.60 4,913,721.78 $
4,748,393.70 180.00
$ 12,743,076.27 8,691,777.27 4,882,570.23 2,110,987.50
16,878,348.77
$ 101,592,877.64 $ 45,306,760.04 $

$ 1,988,721.57
327,362.50

150,341,309.12 123,202,896.59 67,705,455.17 64,412,835.93
16,363,216.82 43,280,828.53 54,220,922.98 22,438,987.55

12,743,076.27 8,691,777.27 4,882,570.23 2,110,987.50 16,878,348.77

2,316,084.07 $ 587,273,212.73

<c.

$ -3,384,541.35

$ -3,384,541.35

-11,749,820.10 $

-100,400.00

-13,865,220.10

-783,257.68

9,594.42

-1,316,201.00

0.00

$

56,893.20

-14,511.37

306,340.98

-43,526.36

-854,375.46

$

13,366.84 $ -16,465,073.82 $

-883,657.68 $ -17,788,201.51

$

112,145.03 $ -4,789,203.89 $

86,394.25 $ -7,538,263.66

- 27-

TIDS PAGE LEFT BLAHK

UNIVERSITY OF GEORGIA COMBINING STATEMENT OF CURRENT FUNDS REVENUES. EXPENDITURES.
AND OTHER CHANGES RESTRICTED FUNDS
YEAR ENDED JUNE 30. 1998

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

$ 123,657,372.88 $ 14,834,610.03 $ 138,491,982.91

44,188,995.53

5,165,900.19

49,354,895.72

382,590.42

404,420.09

787,010.51

2,009,365.78

796,584.08

2,805,949.86

27,484,445.22

5,021,826.14

32,506,271.36

1,153,925.14

1,153,925.14

4,145,723.80

4,145,723.80

Total Revenues

$ 198,876,694.97 $ 30,369,064.33 $ 229,245,759.30

EXPENDITURES

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

$ 7,383,299.35

$ 7,383,299.35

44,423,171.69 $ 16,199,276.63

60,622,448.32

21,962,955.81

14,150,307.70

36,113,263.51

381,111.50

381,111.50

837.44

837.44

8,735,765.15

8,735,765.15

115,989,554.03

19,480.00

116,009,034.03

200,173.64 215,140.00

200,173.64 215,140.00

Total Expenditures

$ 199,292,008.61 $ 30,369,064.33 $ 229,661,072.94

OTHER TRANSFERS AND ADDITIONS/(DEDUCTIONS)

Excess of Restricted Receipts over Transfers to Revenues

$

-149,447.44 $ 2,320,969.47 $ 2,171,522.03

Transfers for General Operations

-9,594.42

-9,594.42

Transfers of Endowment Principal for Object of Trust Administrative Fees and Collection Costs

346,490.93 -57,333.18

346,490.93

".

-57,333.18

Prior Period Adjustments (Net)

-5,688.44

-5,688.44

Total Other Transfers and Additions/(Deductions)

$

124,427.45 $ 2,320,969.47 $ 2,445,396.92

Net Increase/(Decrease) in Fund Balances

$

-290,886.19 $ 2,320,969.47 $ 2,030,083.28

See notes to the financial statements.

-29 -

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
RESIDENT INSTRUCTION YEAR ENDED JUNE 30, 1998

REVENUES
State Appropriations Other Revenues Retained

CURRENT FUNDS

UNRESTRICTED

RESTRICTED

PLANT FUNDS

RENEWALS AND

UNEXPENDED

REPLACEMENTS

$ 295,533,933.00

$ 22,951,900,00 $

0.00

135,699,374.78 $ 198,876,694,97

15,118,854.59

$ 431,233,307.78 $ 198,876,694.97 $ 38,070,754.59 $

.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

$ 307,090,348.56 $ 51,206,367.17

115,865,734.35
1,376,736.82 481,151.00 741,611.00
7,740,486.20

147,670,327.80 $ 38,480,035.93 $
9,900,000.00

3,569,308.27

Excess of Revenues over Expenditures

$

433,296,067.93 $

198,876,694.97 $

48,380,035.93

$

3,569,308.27
---'--""";""--

$ -2,062,760.15 $ =======~O;;.O=O $ -10,309,281.34 $ ===-3=,5~6=9,=30=8.=27=

(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.

-30 -

SCHEDULE "1"

TOTAL

ADJUSTMENTS (1)

TOTAL (Budget Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$ 318,485,833.00 $

154,352.00 $ 318,640,185.00 $ 318,640,185.00 $

0.00

349,694,924.34

-4,481,531.10 345,213,393.24 403,879,202.00

-58,665,808.76

$ 668,180,757.34 $ -4,327,179.10 $ 663,853,578.24 $ 722,519,387.00 $ -58,665,808.76

$ 307,090,348.56 51,206,367.17

$ 307,090,348.56 $ 315,870,050.00 $

51,206,367.17

60,000,000.00

115,865,734.35 $ 147,670,327.80 42,049,344.20
1,376,736.82 481,151.00 741,611.00
17,640,486.20

-22,111,445.05 154,352.00

93,754,289.30 147,670,327.80 42,049,344.20
1,376,736.82 481,151.00 741,611.00
17,794,838.20

96,413,039.00 160,000,000.00 69,834,724.00
1,373,958.00 481,151.00 741,611.00
17,804,854.00

8,779,701.44 8,793,632.83
2,658,749.70 12,329,672.20 27,785,379.80
-2,778.82 0.00 0.00
10,015.80

$ 684,122,107.10 $ -21,957,093.05 $ 662,165,014.05 $ 722,519,387.00 $ 60,354,372.95

$ -15,941,349.76 $ 17,629,913.95 $ 1,688,564.19

1,688,564.19

- 31 -

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
LOTTERY FOR EDUCATION YEAR ENDED JUNE 30, 1998

SCHEDULE "2"

REVENUES State Appropriations

CURRENT FUNDS UNRESTRICTED

PLANT FUNDS UNEXPENDED

TOTAL (Budget Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$

4,329,421.00 $

0_.0_0_ $ 4,329,421.00 $ 4,329,421.00 $

0.00_

EXPENDITURES

Equipment, Technology and Construction

Trust Fund

$

Georgia Research Alliance

Special Funding Initiatives

3,437,124.14 $ 2,012,980,21 $ 5,450,104.35 $ 3,437,000,00 $

434,401,25

434,401.25

0.00

889,897.66

889,897,66

892,421.00

-2,013,104.35 -434,401.25 2,523,34

$

4,761,423.05 $ 2,012,980,21 $ 6,774,403.26 $ 4,329,421.00 $ -2,444,982.26

Excess of Revenues over Expenditures

$

-432,002.05 $ -2,012,980.21 $ -2,444,982.26

$ -2,444,982.26

See notes to the financial statements.

- 33-

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
OTHER ORGANIZED ACTIVITIES YEAR ENDED JUNE 30,1998

AGRICULTURAL EXPERIMENT STATION REVENUES
State Appropriations Other Revenues Retained
EXPENDITURES Personal Services:
Education, General and Departmental Services Sponsored Operations Operating Expenses: Education, General and Departmental Services Sponsored Operations Research Consortium
Excess of Revenues over Expenditures
(1) To eliminate Research Consortium budgeted in Resident Instruction.

CURRENT FUNDS

UNRESTRICTED

RESTRICTED

TOTAL

$

40,290.745.00

$ 40,290,745.00

9,720,185.26 $ _--:..=1:.5..,:2.:5.:4..,:9:.9.:4.:..6=2=-

24,975,179.88

$

50,010,930.26 $

15,254,994.62 $ 65,265,924.88

$

37,446,002.67

$

12,410,575.59

154,352.00

$ 7,834,974.68
7,420,019.94

37,446,002.67 7,834,974.68
12,410,575.59 7,420,019.94 154,352.00

$

50,010,930.26 $

15,254,994.62 $ 65,265,924.88

$

0.00 $

0.00 $ ======0=.00=

See notes to the financial statements.

- 34-

SCHEDULE "3"

ADJUSTMENTS (1)

TOTAL (Budget Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$

-154,352.00 $ 40,136,393.00 $ 40,136,393.00 $

0.00

24,975,179.88

32,365,186.00

-7,390,006.12

$

-154,352.00 $ 65,111,572.88 $ 72,501,579.00 $

-7,390,006.12

$ 37,446,002.67 $ 39,562,219.00 $

7,834,974.68

9,500,000.00

2,116,216.33 1,665,025.32

$

-154,352.00

12,410,575.59 7,420,019.94
0.00

12,939,360.00 10,500,000.00
0.00

528,784.41 3,079,980.06
0.00

$

-154,352.00 $ 65,111,572.88 $ 72,501,579.00 $

7,390,006.12

--~-'----

$

0.00 $ =========0=.0=0

$ ========0.=00=

- 35-

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
OTHER ORGANIZED ACTIVITIES YEAR ENDED JUNE 30,1998

SCHEDULE "3"

CURRENT FUNDS UNRESTRICTED RESTRICTED

TOTAL (Budget Basis)

BUDGET

VARIANCE FAVORABLE (UNFAVORABLE)

ATHENS AND TIFTON VETERINARY LABORATORIES

REVENUES

StateAppropriations OtherRevenues Retained

$

137,561.00

$ 137,561.00 $ 137,561.00 $

1,377.38 $ 3,524,253.08

3,525,630.46

3,603,970.00

0.00 -78,339.54

$

138,938.38 $ 3,524,253.08 $ 3,663,191.46 $ 3,741,531.00 $

-7-8',3-3_9.5_ 4

EXPENDITURES
Personal Services: Education, Generaland Departmental Services Sponsored Operations
Operating Expenses: Sponsored Operations

$

137,577.73

$ 137,577.73 $ 137,561.00 $

$ 2,419,084.13

2,419,084.13

2,497,454.00

1,105,168.95

1,105,168.95

1,106,516.00

-16.73 78,369.87
1,347.05

$

137,577.73 $ 3,524,253.08 $ 3,661,830.81 $ 3,741,531.00 $ _ _---:.7~.9::,:7..0::0...:.1.;9.;...

Excessof Revenues over Expenditures

$

1,360.65 $

0.00 $ -=====1,=3=60=.-6"5'=

See notesto the financial statements.

- 36-

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
OTHER ORGANIZED ACTIVITIES YEAR ENDED JUNE 30,1998

SCHEDULE "3"

COOPERATIVE EXTENSION SERVICE
REVENUES
State Appropriations Other Revenues Retained

CURRENT FUNDS UNRESTRICTED RESTRICTED

TOTAL (Budget Basis)

BUDGET

VARIANCE FAVORABLE (UNFAVORABLE)

$ 32,518,352,00

$ 32,518,352,00 $ 32,518,352.00 $

8,217,972,56 $ 10,585,996.40

18,803,968,96

25,543,789,00

0.00 -6,739,820.04

$ 40,736,324,56 $ 10,585,996.40 $ 51,322,320,96 $ 58,062,141,00 $ _~~=-6=,:73.9.,8.2;0",0,4.

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

$ 35,045,649,11

$ 35,045,649,11 $ 37,591,149,00 $

$ 7,402,054,56

7,402,054,56

9,800,000,00

5,660,675,45

3,183,941,84

5,660,675,45 3,183,941.84

5,470,992,00 5,200,000,00

2,545,499,89 2,397,945,44
-189,683,45 2,016,058,16

Excess of Revenues over Expenditures

$ 40,706,324,56 $ 10,585,996,40 $ 51,292,320,96 $ 58,062,141,00 $ _~~=6=,:76.9.,8.2;0",0,4.

$

30,000,00 $

======== 0,00 $

30,000,00

$ ======3=0,=00=0=.0=0=

See notes to the financial statements,

37 -

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
OTHER ORGANIZED ACTIVITIES YEAR ENDED JUNE 30,1998

SCHEDULE "3"

$

1,130,849,31 $ 683,358.99 $ 1,814,208.30 $ 1,873,456.00 $

-59,247.70

'),

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

$

534,204.90

$ 534,204.90 $ 524,325.00 $

$ 568,622.48

568,622.48

600,000.00

596,634.75

114,736.51

596,634.75 114,736.51

599,131.00 150,000.00

-9,879.90 31,3n.52
2,496.25 35,263.49

$

1,130,839.65 $ 683,358.99 $ 1,814,198.64 $ 1,873,456.00 $ _ _---5'~9-,-2'5-7:.3;;6...

Excess of Revenues over Expenditures

$

9.66 $

0.00 $

;9;;.,6;;6,;;..

See notes to the financial statements.

- 38-

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
OTHER ORGANIZED ACTIVITIES YEAR ENDED JUNE 30, 1998

SCHEDULE "3"

MARINE RESOURCES EXTENSION CENTER
REVENUES
State Appropriations Other Revenues Retained

CURRENT FUNDS UNRESTRICTED RESTRICTED

TOTAL (Budget Basis)

BUDGET

VARIANCE FAVORABLE (UNFAVORABLE)

$

1,458,968.00

$ 1,458,968.00 $ 1,458,968.00 $

413,607.48 $ 320,461.24

734,068.72

1,084,800.00

0.00 -350,731.28

$

1,872,575.48 $ 320,461.24 $ 2,193,036.72 $ 2,543,768.00 $ _ _.-..3;.5.:0..,;7;.3:.;1.".2--8''--

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

$

1,325,016.22

$ 1,325,016.22 $ 1,378,777.00 $

$ 259,796.73

259,796.73

340,000.00

547,559.26

60,664.51

547,559.26 60,664.51

664,991.00 160,000.00

53,760.78 80,203.27
117,431.74 99,335.49

$

1,872,575.48 $ 320,461.24 $ 2,193,036.72 $ 2,543,768.00 $ _ _...3;.5.:0..,;7;.3:.;1.".2--8''--

Excess of Revenues over Expenditures

$

0.00 $

0.00 $ ==-==,;;;0,;.0;;0...

0.00 $========

See notes to the financial statements.

- 39-

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
OTHER ORGANIZED ACTIVITIES YEAR ENDED JUNE 30,1998

SCHEDULE "3"

VETERINARY MEDICINE EXPERIMENT STATION REVENUES
StateAppropriations

CURRENT FUNDS UNRESTRICTED RESTRICTED

TOTAL (Budget Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$ 2,984,133.00 $

0"",.0_0_ $ 2,984,133.00 $ 2,984,133.00 $

-0'.-00_

EXPENDITURES Personal Services:
Education, General and Departmental Services Operating Expenses:
Education, General and Departmental Services Agricultural Research
Excess of Revenues over Expenditures

$ 1,790,319.63 $
261,824.37 931,989.00

$ 2,984,133.00 $

$

0.00 $

0.00 $ 1,790,319.63 $ 1,791,786.00 $

261,824.37 931,989.00

260,358,00 931,989.00

1,466.37
-1,466.37 0.00

O~.O~O;,.. $ 2,984,133.00 $ 2,984,133.00 $

...0.,;.;0.;.0=_

0.00 $ ...........-.0....0..0"'=

== $ = =...........0..,00

See notesto the financial statements.

-40 -

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
OTHER ORGANIZED ACTIVITIES YEAR ENDED JUNE 30,1998

SCHEDULE "3"

VETERINARY MEDICINE TEACHING HOSPITAL
REVENUES
StateAppropriations OtherRevenues Retained

CURRENT FUNDS UNRESTRICTED RESTRICTED

TOTAL (Budget Basis)

BUDGET

VARIANCE FAVORABLE (UNFAVORABLE)

$

535,878,00

4,282,026,84 $

$ 535,878.00 $ 535,878,00 $

= 0.0~ 0

4,282,026.84

4,582,127.00

0,00 -300,100.16

$

4,817,904.84 $

;;.;0';;.;00,- $ 4,817,904.84 $ 5,118,005.00 $ _ _--:.3.:.0:.:0.;.,.1;,.0.;"0;,.,1;,,6,;...

EXPENDITURES
Personal Services: Education, Generaland Departmental Services
Operating Expenses: Education, Generaland Departmental Services

$

1,919,967.36 $

2,830,529.60

0.00 $ 1,919,967.36 $ 1,935,700.00 $

2,830,529.60

3,182,305.00

15,732.64 351,775.40

Excessof Revenues over Expenditures

$

4,750,496.96 $

$

67,407.88 $

;;.;0...;",00,- $ 4,750,496.96 $ 5,118,005,00 $ _ _-:3..:6,;7..;,.5..08.0:.4..-
0.00 $ ""'===6=7=,4=0=7=.8=8=

See notesto the financialstatements.

41 -

UNIVERSITY OF GEORGIA SCHEDULE OF OTHER ORGANIZED ACTIVITIES
BALANCE SHEET JUNE 3D, 1998

ASSETS

Cash and Cash Equivalents

Accounts Receivable

-."

Inventories

Total Assets

AGRICULTURAL EXPERIMENT STATION

ATHENS AND TIFTON VETERINARY LABORATORIES

COOPERATIVE EXTENSION SERVICE

$

179,500.00 $

3,164,401.92

$

3,343,901.92 $

1,095.65 $ 660.00

983,071.82 643,250.37
30,970.00

1,755.65 $ =====:1::,:6i:5::7i;,;2i=9=2=.1=9=

LIABILITIES AND FUND BALANCES
Liabilities Accounts Payable Salaries Payable Deferred Revenue Other Unclaimed Property Due to Other Fund Groups
Total Liabilities
Fund Balances Unrestricted

$

2,532,803.23

323,842.36

17,188.59 5,797.26
433,737.90

$

3,313,369.34

$

30,532.58 $

Total Liabilities and Fund Balances

$

3,343,901.92 $

$
$ 1,755.65 $

1,242,551.01 307,005.68 57,718.13 2,597.33
1,609,872.15
47,420.04

1,755.65 $ =====1=,6::517::,2=9=2=.1=9=

See notes to the financial statements.

-42 -

SCHEDULE "4"

UNRESTRICTED

MARINE

RESOURCES

MARINE

EXTENSION

INSTITUTE

CENTER

VETERINARY MEDICINE
EXPERIMENT STATION

VETERINARY MEDICINE TEACHING HOSPITAL

TOTAL

$

204,595.92 $

156,528.77 $

144,658.61 $

149,999.16 $

1,819,449.93

17,557.70

608,945.37

4,434,815.36

30,970.00

$

204,595.92 $

174,086.47 $

144,658.61 $

758,944.53 $ =====6=,2=8=5=,2=3=5=.2=9=

$

189,876.05 $

160,924.34 $

126,232.58 $

395,240.80 $

4,647,628.01

8,970.34

12,078.36

16,520.44

42,415.72

710,832.90

152.00

496.97

74,906.72 9,043.56
433,737.90

$

198,846.39 $

173,154.70 $

142,753.02 $

438,153.49 $

5,876,149.09

$

5,749.53 $

931.77 $

1,905.59 $

320,791.04 $

409,086.20

$

204,595.92 $

174,086.47 $

144,658.61 $

============= 758,944.53 $

6,285,235.29

- 43-

UNIVERSITY OF GEORGIA SCHEDULE OF OTHER ORGANIZED ACTIVITIES
CHANGES IN FUND BALANCE YEAR ENDED JUNE 30, 1998

AGRICULTURAL EXPERIMENT STATION

ATHENS AND TIFTON VETERINARY LABORATORIES

COOPERATIVE EXTENSION SERVICE

REVENUES AND OTHER ADDITIONS

Unrestricted Current Fund Revenues

$

50,010,930.26 $

138,938,38 $

40,736,324,56

Adjustments

Prior Years' Expenditures/Accounts Payable
''lo

30,677.93

17,504,04

Total Revenues and Other Additions

$

50,041,608,19 $

138,938.38 $

40,753,828.60

EXPENDITURES AND OTHER DEDUCTIONS

Educational and General Expenditures

$

50,010,930.26 $

Remittances to the Board of Regents of the

University System of Georgia

Prior Year's Unrestricted Fund Balance (Surplus)

23,871.17

Adjustments

Prior Years' Revenues/Accounts Receivable

145,35

137,577.73 $

40,706,324.56

2,943.29

6,274.79 84.00

Total Expenditures and Other Deductions

$

50,034,946,78 $

140,521.02 $

40,712,683.35

Net Increase/(Decrease) for the Year

$

6,661.41 $

-1,582.64 $

41,145.25

FUND BALANCE JULY 1, 1997

23,871,17

3,338.29

6,274.79

FUND BALANCE JUNE 30,1998

$

30,532,58 $

=========== 1,755.65 $

47,420.04

See notes to the financial statements.

-44-

SCHEDULE "5"

UNRESTRICTED

MARINE

RESOURCES

MARINE

EXTENSION

INSTITUTE

CENTER

VETERINARY MEDICINE
EXPERIMENT STATION

VETERINARY MEDICINE TEACHING HOSPITAL

TOTAL

$

1,130,849.31 $

5,739.87

$

1,136,589.18 $

1,872,575.48 $ 931.77
1,873,507.25 $

2,984,133.00 $ 1,905.59
2,986,038.59 $

s 4,817,904.84
3,792.52 4,821,697.36 $

101,691,655.83 60,551.72
101,752,207.55

$

1,130,839.65 $

4,936.21

$

1,135,775.86 $

$

813.32 $

4,936.21

$

5,749.53 $

1,872,575.48 $

2,984,133.00 $

4,750,496.96 $ 101,592,877.64

2,232.38
1,874,807.86 $ -1,300.61 $ 2,232.38

3,136.13
2,987,269.13 $ -1,230.54 $ 3,136.13

132.39 3,429.17 4,754,058.52 $ 67,638.84 $ 253,152.20

43,526.36 3,658.52
101,640,062.52 112,145.03 296,941.17

931.77 $

1,905.59 $

============ 320,791.04 $

409,086.20

-45 -

UNIVERSITY OF GEORGIA SCHEDULE OF OTHER ORGANIZED ACTIVITIES REVENUES, EXPENDITURES AND OTHER CHANGES
YEAR ENDED JUNE 30, 1998

REVENUES

State Appropriations

Federal Appropriations

Federal Grants and Contracts

State Grants and Contracts

-'j,

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)

Net Increase/(Decrease) in Fund Balances

AGRICULTURAL EXPERIMENT

STATION

UNRESTRICTED

RESTRICTED

$ 40,290,745,00

4,572,838,82

675,123.70 $ 9,676,239.21

16,219.88

1,132,615,17

21,709.67

286,119.65

19,014.64

429,893.79

4,141,005.95

3,788,120.45

216,278.95

$ 50,010,930.26 $ 15,254,994.62

$ 46,563,984.82 $ 15,246,168.62

163,224.82 3,283,540.62
180.00

8,826.00

$ 50,010,930.26 $ 15,254,994.62

$

910,902.16

$

30,532.58

-23,871.17

$

6,661.41 $

910,902,16

$

=========== 6,661.41 $

910,902.16

See notes to the financial statements.

- 46-

SCHEDULE "6" Page 1

ATHENS AND TIFTON VETERINARY LABORATORIES UNRESTRICTED RESTRICTED

COOPERATIVE EXTENSION SERVICE
UNRESTRICTED RESTRICTED

MARINE INSTITUTE UNRESTRICTED RESTRICTED

$

137,561.00

$ 32,518,352.00

$ 1,005,675.00

7,099,490.31

4,786.81 $ 4,459,071.24

92,395.32 $ 396,964.63

$ 3,456,054.21

12,046.30

576,053.04

177.35

552.77

1,527.79

118,300.44

11,246.56

859.20

777,569.44

1,377.38

68,198.87

406.66

509,278.44

. 285,841.59

957,203.49

4,145,723.80

1,456.86

141,652.00

19,898.22

$

138,938.38 $ 3,524,253.08 $ 40,736,324.56 $ 10,585,996.40 $ 1,130,849.31 $ 683,358.99

$ 26,742.24

$ 1,055,197.75 $ 673,558.99

$

137,577.73

3,497,510.84 $ 39,478,413.25 $ 10,585,142.40

1,227,911.31

854.00

75,641.90

9,800.00

$

137,577.73 $ 3,524,253.08 $ 40,706,324.56 $ 10,585,996.40 $ 1,130,839.65 $ 683,358.99

$ 150,928.81 $

$ 1,226,837.68

17,420.04

$

$ 5,739.87

-37.55

-2,943.29

-6,274.79

-4,936.21

$

-2,943.29 $ 150,928.81 $

11,145.25 $ 1,226,837.68 $

803.66 $

-~ 37.5~ 5

$

-1,582.64 $ 150,928.81 $

41,145.25$ 1,226,837.68 $

813.32 $ ======-=37=.5=5=

-47 -

UNIVERSITY OF GEORGIA SCHEDULE OF OTHER ORGANIZED ACTIVITIES REVENUES, EXPENDITURES AND OTHER CHANGES
YEAR ENDED JUNE 30, 1998

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/lDEDUCTIONS)
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)
Net Increase/(Decrease) in Fund Balances

MARINE RESOURCES

EXTENSION CENTER

UNRESTRICTED

RESTRICTED

$

1,458,968.00

80,015.32 $

302,334,95 625.00

323,792.16 9,800.00

17,501.29

$

1,872,575.48 $

320,461.24

$

216,913.99 $

252,806.78

1,494,361.62

67,654.46

161,299.87

$

1,872,575.48 $

320,461.24

$

32,338.37

$

931.77

-2,232.38

$

-1,300.61 $

32,338.37

$

============ -1,300.61 $

32,338.37

See notes to the financial statements.

- 48-

SCHEDULE "6" Page 2

VETERINARY MEDICINE EXPERIMENT STATION UNRESTRICTED RESTRICTED

VETERINARY MEDICINE TEACHING HOSPITAL
UNRESTRICTED RESTRICTED

TOTAL UNRESTRICTED RESTRICTED

$ 2,984,133.00 $

$ 0.00

535,878.00 $

$ 2,984,133.00 $

0.00 $

4,281,764.42 262.42
4,817,904.84 $

$ 0.00

78,931,312.00

11,672,329.13

852,321.15 $ 14,834,610.03

28,443.53

5,165,900.19

34,484.02

404,420.09

859.20

796,584.08

431,677.83

5,021,826.14

9,352,337.38

4,145,723.80

387,891.59

0.00 $ 101,691,655.83 $ 30,369,064.33

$ 2,984,133.00 $ $ 2,984,133.00 $

0.00 $

s
4,750,496.96

0.00 $ 4,750,496.96 $

0.00 $

s 50,820,229.56

16,199,276.63

41,110,352.60 14,150,307.70

4,913,721.78

4,748,393.70

180.00

19,480.00

0.00 $ 101,592,877.64 $ 30,369,064.33

$

$

1,905.59

-3,136.13

$

-1,230.54 $

$

s -1,230.54

0.00 $

$ 363.35

0.00 $

-132.39 230.96 $

0.00 $

67,638.84 $

0.00
s

$ 2,320,969.47 56,893.20

0.00 $

-43,526.36

s 13,366.84

2,320,969.47

0.00 $

112,145.03 $ 2,320,969.47

- 49-

UNIVERSITY OF GEORGIA CHANGES IN INVESTMENT IN PLANT
YEAR ENDED JUNE 30,1998

Land Buildings Improvements Other Than Buildings
-:0
Equipment LibraryBooks and Collections
SUMMARY OF INVESTMENT University Capital Leases University of Georgia Loan and Endowment Funds

BALANCE JULY 1,1997

CURRENT FUNDS UNRESTRICTED RESTRICTED

PLANT UNEXPENDED

$ 12,083,571.75

$

5,100.00

527,864,024.72 $

65,105.12

47,124,792.05

33,105,052.85

71,005.45

984,572.08

298,688,674.42

34,038,699.67 $ 6,581,267.33

2,020,547.36

113,431,650.60

8,376,936.85

96,897.46

$ 985,172,974.34 $ 42,551,747.09 $ 6,678,164.79 $ 50,135,011.49

$ 978,634,806.92 $
6,497,039.37

42,551,747.09 $ 6,678,164.79 $ 50,135,011.49

41,128.05

$ 985,172,974.34 $ 42,551,747.09 $ 6,678,164.79 $ 50,135,011.49

See notes to the financial statements.

- 50-

SCHEDULE "7"

ADDITIONS
FUNDS RENEWALS AND REPLACEMENTS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

CAPITAL LEASES

PRIVATE GIFTS

DEDUCTIONS DISPOSALS! DELETIONS! ADJUSTMENTS

BALANCE JUNE 30, 1998

$ 269,775.00 $

176,113.27 $

12,182,333.48

$

945,367.73 $ 30,497,968.19

8,500,000.00

651,974.90

614,345,282.91

390,210.14

23,272.45

62,848.91

34,511,264.06

1,292,389.17

$ 1,175,820.10

693,884.21

15,527,021.15

328,964,261.11

121,905,484.91

$

2,627,967.04 $ 30,521,240.64 $ 1,175,820.10 $ 9,463,659.21 $ 16,417,958.23 $ 1,111,908,626.47

$

2,627,967.04 $ 30,521,240.64

$ 9,463,659.21 $ 13,647,042.20 $ 1,106,965,554.98

$ 1,175,820.10

2,729,787.98

4,943,071.49

41,128.05

0.00

$

2,627,967.04 $ 30,521,240.64 $ 1,175,820.10 $ 9,463,659.21 $ 16,417,958.23 $ 1,111,908,626.47

- 51 -

UNIVERSITY OF GEORGIA SCHEDULE OF FUND BALANCES CURRENT FUNDS AND PLANT FUNDS
JUNE 30, 1998

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 Intercollegiate Athletics

For Inventory Reserve

For Land Sale Reserve

For Renewals and Replacements Reserve

For Subsequent Years' Expenditures

For Timber Reserve

For Uncollectible Accounts

Surplus

Regular

Lottery for Education

RESIDE;NT INSTRUCTION

LOTTERY FOR EDUCATION

CURRENT FUNDS

UNRESTRICTED

OTHER

ORGANIZED

AUXILIARY

ACTIVITIES ENTERPRISES

$ $ 1,457,000.00

41,625.63

$

9,418.43

$ 30,000.00

6,162,185.39

13,410,075.00

8,915.67

321,186.04

49,232.84

294,814.09 $ 1,760,729.76 $

57,900.16 27,406.48 69,032.11 $ 409,086.20 $ 19,630,911.66

$ 1,760,729.76 $

69,032.11 $ 409,086.20 $ 19,630,911.66

See notes to the financial statements.

- 52-

SCHEDULE "8"

STUDENT ACTIVITIES

RESTRICTED

PLANT FUNDS

_ _ _ _ _ _U~N~EX~PENDED

LOTTERY FOR RENEWALS AND

REGULAR

EDUCATION

REPLACEMENTS

INVESTMENT IN PLANT

TOTAL

$ 1,106,965,554.98 $ .1,106,965,554.98

$ 27,600,320.35 $ 491,080.67

$ 28,091,401.02

$ 160,000.00

$ 1,842,662.56

1,450,000.00 126,235.50

$

9,529,764.07

$

160,000.00

41,625.63 9,418,43
7,649,185.39 1,450,000.00 9,529,764.07 15,252,737.56
126,235.50 379,334.55

$ 1,842,662.56

11,377.59

- - - - - - $ -----';;;"2,.,;0;1.,9;=.7:.9,"-

$ 1,747,613.09 $

2,019.79 $ __---=9-,=5:.2:.9:..:7:;6..4:.:..0::7.;...

364,091.84 29,426.27
$ 34,991,819.24

$ 1,842,662.56 $ 27,600,320.35 $ 2,238,693.76 $

2.019.79 $

9,529,764.07 $ 1.106,965,554.98 $ 1,170.048,775.24

- 53-

UNIVERSITY OF GEORGIA RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30.1998

SCHEDULE "9"

Totals per Annual Supplement

Accruals June 30, 1998 June 30, 1997 July 1, 1997 Accrual Adjustments

Adjustments

Shared Services on Jointly Staffed Personnel

Armstrong Atlantic State University

Hardwick,

Clifford

Clayton College and State University

Hager,

Jerri

Coastal Georgia Community College

Francis,

Sybil E.

Darton College

Savill,

James R.

Macon State College

Stirewalt,

Larry K.

North Georgia College and State University

Mitchell,

Larry

Valdosta State University

Livingston,

Martha

SALARIES

TRAVEL

$ 386,607,466.59 $ 8,996,059.23

3,693,780.28 -3,188,937.11
36,814.19

-9,084.65 22,161.00 24,045.00 27,050.00 15,998.00 23,011.00 16,355.70

$ 387,268,660.00 $ 8,996,059.23

See notes to the financial statements.

- 54-

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORT

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 20, 1998

Governor of the State of Georgia Members of the 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 financial statements of the University of Georgia as of and for the year ended June 30, 1998, and have issued our report thereon dated November 20, 1998. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the financial statements. Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Governmental Accounting Standards Board Technical Bulletin 98-1, Disclosures About Year 2000 Issues, requires disclosure of certain matters regarding the year 2000 issue. The University of Georgia has included such disclosures in the Notes to the Financial Statements. Because of the unprecedented nature of the year 2000 issue, its effects and the success of related remediation efforts will not be fully determinable until year 2000 and thereafter. Accordingly, insufficient audit evidence exists to support the University of Georgia's disclosures with respect to the year 2000 issue made in the Notes to the Financial Statements. Further, we do not provide assurance that the University of Georgia is or will be year 2000 ready, that the University of Georgia's year 2000 remediation efforts will be successful in whole or in part, or that parties with which the University of Georgia does business will be year 2000 ready.

98YB-IOX

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.
Internal Control Over Financial Reporting
In planning and performing our audit, we consideted the University of Georgia's internal control over fmancial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the fmancial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over fmancial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more ofthe 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. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses.
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:gp 98YB-IOX

SECTION ill AUDlTEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

UNIVERSITY OF GEORGIA AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1998

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-518-97-01

Previously Reported Corrective Action Implemented