University of Georgia, Athens, Georgia, report on audit of financial statements for fiscal year ended June 30, 2002

C:ift

I I

ASoo

.'R \

(,4

;)..oo J -,;\oo'J.-

.

'

, " STATE OF GEORGIA.

DEPARTMENT O, F AUDITS.AN'D ACCOUNTS

'

I

\

', '\ '' .

-;

, ''
I
\ '

J

''

' I'

) ,
,,
'I

J J ' ,'

,\

UNIVERSITY OF GEORGIA

1,

ATHENS, GEORGIA

\

I

' \

REPORT ON' AUDIT

OF THE FINA.NC/AL STATEMENTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2002

J

,,
r \
I "
t,

,, I
, '
Russell W. Hinton , State Auditor
J '- /

UNNERSITY OF GEORGIA - TABLE OF CONTENTS -

Page

SECTION I

FINANCIAL

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

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

2

BASIC FINANCIAL STATEMENTS

EXHIBITS

A STATEMENT OF NET ASSETS

11

B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS

12

C STATEMENT OF CASH FLOWS

13

D NOTESTOTHEFINANCIALSTATEMENTS

14

SUPPLEMENTARY INFORMATION

SCHEDULES

SCHEDULES OF REVENUES AND EXPENDITURES COMPARED TO

BUDGET - (NON-GAAP BASIS)

I

RESIDENT INSlRUCTION

33

2

LOTTERY FOR EDUCATION

34

3

OTIIER ORGANIZED ACTNITIES

35

4 RECONCILIATION OF SALARIES AND TRAVEL

42

SECTION II
COMPLIANCE AND INTERNAL CONI"ROL REPORT
REPORT ON COMPLIANCE AND ON INTERNAL CONI"ROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

UNNERSITY OF GEORGIA - TABLE OF CONTENTS -
SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

Ru'\s~LL \\'. H1~To~
STATE AUDITOR /40,f,) 656 2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street SW, Suuc 114 Atlanta Georgia 10334-8400
January 30, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly of Georgia Members of the Board of Regents of the University System of Georgia
and Honorable Michael F. Adams, President Uruvers1ty of Georgia
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Laches and Gentlemen
We have audited the accompanymg basic financial statements (Exhibits A through D) of the Uruvers1ty of Georgia, an orgaruzatlonal urut of the State of Georgia, as of and for the year ended June 30, 2002. These financial statements are the respons1b1hty of the University's management. Our respons1b1hty 1s to express an opwon on these financial statements based on our audit.
We conducted our audit m accordance with auditing standards generally accepted m the Uruted States ofAmenca and the standards apphcable to financial audits contained m Government Auditing Standards, issued by the Comptroller General of the Uruted States Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmatenal misstatement An audit mcludes exammmg, on a test basis, evidence supporting the amounts and disclosures m the financial statements An audit also mcludes assessmg the accountmg pnnc1ples used and s1gruficant estimates made by management, as well as cvaluatmg the overall financial statement presentation. We beheve that our audit proVJdes a reasonable basis for our opm1on
As discussed m Note l, the financial statements ofthe Uruvers1tyofGeorg1a are mtended to present
the fmanc1al pos1t10n and changes m financial pos1t1on (mcluding cash flows) ofonly that portion of the busmcss-type acllv11lcs of the State of Georgia that 1s attnbutable to the transactions of the Uruvers1ty of Georgia They do not purport to, and do not, present fairly the financial pos1t1on and changes m financial position (mcludmg cash flows) of the State of Georgia, m confonruty with accounting pnnc1ples generally accepted m the Uruted States of Amenca

02ARL-61X

In our opnuon, the basic financial statements referred to above present fairly, m all matenal respects, the financial pos1t10n of the UmversnyofGeorgia as of June 30. 2002, and its changes m financial pos1t1on (mcludmg cash flows) for the year then ended m confonmty with accountmg pnnc1ples generally accepted m the Umted States of Amenca
As descnbed m Note I, the Umvel"!,1ty of Georgia adopted the prov1s1ons of Governmental Accountmg Standards Board (GASB) Statements No 35, Basic Financial Statements - and Management's Dzscusswn and Ana(vsts - for Publtc Colleges and Umvers111es, as amended by GASB Statement No. 37, Basic Financial Statements -and Management's Dzscusswn and Analysis for State and Local Governments, and GASB Statement No 38, Certain Financial Statements Note Dtsclosures, as of July I, 2001, to unplement a new financial reportmg model
Management's D1scuss1on and Analysis 1s not a required part ofthe basic financial statements but 1s supplementary mfonnatlon reqwred by the GASB. We have applied certain liuuted procedures, which consisted pnnc1pally ofmqwnes ofmanagement regardmg the methods ofmeasurement and presentation oftlus supplementary mfonnatlon However, we did not audit tlus mfonnatlon and express no op1ruon on 1t.
In accordance with Government Auchtmg Standards, we have also issued a report dated January 30, 2003, on our consideration ofthe Uruvers1ty ofGeorgia's mternal control over financial reportmg and our tests of its compliance with certain proV1s1ons oflaws, regulations, contracts and grants That report 1s an mtegral part of an audit performed m accordance with Government Aud1tmg Standards and should be read m conJuncuon with tlus report m cons1dermg the results of our audit.
Our audit was conducted for the purpose of fonnmg an op1mon on the basic fmanc1al statements taken as a whole. The accompanying supplementary mformatlon (Schedules I through 4) 1s presented for purposes of add1Uonal analysis and 1s not a required part of the basic financial statements of the Umvers1ty of Georgia Such mfonnation has been subJected to the aud1tmg procedures applied by us m the audit ofthe basic financial statements and, m our opimon, based on our audit, 1s fairly stated mall matenal respects m relation to the basic financial statements taken as a whole.
Respectfully submitted,
r V.,aoo_ ~.41:~
;~IIW Hmton State Auditor
RWHgp 02ARL-61X

REQUIRED SUPPLEMENTARY INFORMATION - I-

UNIVERSITY OF GEORGIA
Management's Discussion and Analysis

Introduction

The Uruvers1ty of Georgia, a land-grant and sea-grant uruvers1ty with state-wide commitments and
respons1b1ht1es, 1s the state's flagslnp mstltutlon oflngher education. It 1s also the state's oldest, most
comprehensive, and most d1vers1fied institution oflngher education Its motto, "to teach, to serve, and to mqmre mto the nature of tlungs," reflects the Uruvers1ty's mtegral and uruque role m the conservation and enhancement of the state's and nation's mtellectual, cultural, and enVJronmental hentage. The Uruvers1ty of Georgia attracts a lnghly quahfied faculty and a student body of more than 30,000 students each year. The institution continues to grow as shown by the companson numbers that follow.

Faculty

Students

FY2002 FY2001 FY2000

2,655 2,644 2,633

32,941 32,317 31,288

Overview ofthe Financial Statements and Financial Analysis

The Uruvers1ty of Georgia 1s pleased to present its financial statements for Fiscal Year 2002. The emphasis of d1scusS1ons about these statements will be the Fiscal Year 2002 data. Three financial statements are presented: the Statement of Net Assets, the Statement of Revenues, Expenses and Changes m Net Assets; and the Statement of Cash Flows. Tins d1scuss1on and analysis of the Uruvers1ty's financial statements proVJdes an overview of its financial actJ.VJtles for the year The Uruvers1ty of Georgia has elected to not restate pnor penods for purposes of prov1dmg the comparative data for tlus Management's D1scuss100 and Analysis. However, m future years, when pnor penod mfonnatJ.on 1s available, a comparative analysis will be presented.

Statement ofNet Assets

The Statement ofNet Assets proVJdes a pomt oftune financial statement ofthe assets, habihtJ.es, and net assets of the Uruvers1ty for Fiscal Year 2002. The purpose of the Statement of Net Assets 1s to present a fiscal snapshot of the Uruvers1ty of Georgia. The Statement of Net Assets presents data concerning Assets (current and non-current), L1ab1h1:Jes (current and non-current), and Net Assets (assets mmus hab1ht1es) The difference between current and non-current assets 1s discussed m the notes to the financial statements

From the data presented, readers of the Statement of Net Assets are able to determme the assets avmlable to continue the operations ofthe mstitutlon. They are also able to determme how much the 1nst1tut10n owes vendors, mvestors and lendmg 1DStltullons

-2 -

Fmally, the Statement ofNet Assets provides a picture ofthe net assets (assets mmus hab1ht1es) and their availab1hty for expenditure by the mstltutlon Net assets are d1V1ded mto three maJor categones The first category, mvested m capital assets, net ofdebt, provides the mstltutlon's eqmty m propeny, plant and equipment The next asset category 1s restricted net assets, which 1s d1v1ded mto two categones, nonexpendable and expendable The corpus of nonexpendable restricted resources 1s only available for investment purposes Expendable restricted net assets are available for expenditure by the mst1tut:ton but must be spent for purposes as determined by donors and/or external entitles that have placed t:tme or purpose restrictions on the use of the assets The final category 1s unrestricted net assets. Unrestricted assets are available to the 1nst1tutlon for any lawful purpose of the mst1tut:ton.

Statement ofNet Assets, Condensed

Assets Current Assets Capital Assets, Net Other Assets

$ 175,998, II 1.64 643,853,721.21 88,745,017 84

Total Assets

$ 908,596,850.69

Liabilities Current L1abihties Non-Current Liab1h!ies

$ 92,563,223.26 31,724,658 02

Total Liabilities

$ 124.287,881.28

Net Assets Invested m Capital Assets, Net ofDebt Restricted - Nonexpendable Restricted - Expendable Capital Projects Unrestricted

$630,401,365.76 35,827,440.83 36,032,336.49 932,219.42 81,115,606.91

Total Net Assets Statement ofRevenues, Expenses and Changes in Net Assets

$ 784,308,969.41

Changes in total net assets as presented on the Statement of Net Assets are based on the act:tVJty presented m the Statement of Revenues, Expenses and Changes in Net Assets. The purpose of the statement 1s to present the revenues received by the institution, both operatmg and nonoperat:tng, and the expenses paid by the 1nshtuhon, operat:tng and nonoperatmg, and any other revenues, expenses, gains and losses received or spent by the 1nst:ttut:ton Generally speakmg operating revenues are received for proVJdmg goods and serVJces to the vanous customers and constituencies of the 1nst1tut:ton. Operat:tng expenses are payments to acqwre or produce the goods and services proVJded m return for the operat:tng revenues, and to carry out the rmss1on of the mst:ttut:ton. Nonoperatmg

-3-

revenues are revenues received for winch goods and services are not provided For example state appropnahons are nonoperatmg because they are'prov1ded by the Georgia General Assembly to the msutuuon for which direct goods and services are not proVJded

Statement of Revenues, Expenses and Changes m Net Assets, Condensed

Operahng Revenues Operaung Expenses

$ 4 I 5,609,485 76 849.347.217 69

Operating Loss

$ -433,737,731 93

Nonoperatmg Revenues and Expenses

468.556.610 48

Income (Loss) Before Other Revenues, Expenses, Gains or Losses

$ 34,818,878.55

Other Revenues, Expenses, Gains or Losses

I6.443.796 97

Increase m Net Assets

$ 51.262.675.52

Net Assets at Begmrung of Year, as Originally Reported

$1,506,726,029.79

Cumulative Effect of Changes m Accounting Pnnc1ple

-773.679.735 90

Net Assets at Beginning of Year Restated

$ 733,046,293 89

Net Assets at End of Year

S 784.308.969 41

The Statement ofRevenues, Expenses, and Changes m Net Assets reflects a positive year with an mcrease m the net assets at the end ofthe year Some lnghhghts ofthe mformatlon presented on the Statement of Revenues, Expenses and Changes m Net Assets are as follows:

-4-

Revenue By Source
For The Year Ended June 30, 2002
Operating Revenue Tuition and Fees Grants and Contracts Federal Appropnations Rents and Royalties Sales and Services ofEducat1onal Departments Aux1hary Other
Total Operating Revenue
Nonoperatmg Revenue State Appropnat1ons Grants and Contracts Gifts Investment Income Other
Total Nonoperatmg Revenue
Total Revenues
Expenses For The Year Ended June 30, 2002
Operating Expenses Instruction Research Pubhc Service Academic Support Student Services Institutional Support Plant Operations and Mamtenance Scholarslups and Fellowsh1ps Aux1hary Enterpnses
Total Expenses

$118,449,961.71 171,353,594 30 12,153,559.69 275,075.25 33,413,091 94 77,237,524.68 2,726,678 19
$415,609,485.76
$441,798,685.99 17,306,516.07 4,795,760.38 4,083,897 11 571,750.93
$ 468,556,610 48
$ 884, 166,096,24
$177,513,17210 225,028,015.43 129,574,690.63 74,740,243.42 19,325,352.07 75,403,701.31 57,120,447.04 18,391,615 44 72,249.980 25
S 849 347,217.69

-5-

Statement ofCash Flows

The final statement presented by the Urnvers1ty of Georgia 1s the Statement of Cash Flows The Statement of Cash Flows presents detailed mfonnatlon about the cash activity of the mstltutlon dunng the year The statement 1s d1V1ded mto five parts The first part deals with operatmg cash flows and shows the net cash used for the operatmg actlVItles ofthe mst1tut1on. The second section reflects cash flows from non-capital financmg act1v1ties. Tlus section reflects the cash received and spent for nonoperatmg, non-mvestmg, and non-capital financmg purposes. The thrrd section reflects the cash flows from mvestmg activ1t1es and shows the purchases, proceeds, and mterest received from mvestmg act1v1ties. The fourth section deals with cash flows from capital and related financmg activ1t1es Tlus section deals with the cash used for the acqws1tion and construction of capital and related items. The fifth section reconc!les the net cash used to the operatmg mcome or loss reflected on the Statement of Revenues, Expenses and Changes m Net Assets.

Cash Flows for the Year Ended June 30, 2002, Condensed

Cash ProVIded (Used) By. Operating Activ1ties Non-Capital Fmancmg ActlVI!Ies Investing ActIVItles Capital and Related Fmancmg Act1V1tles

$-424,082,624 72 452,126,982.38 4,031,803.77 -44.350.090 64

Net Change in Cash Cash, Begmrnng of Year (Restated)

$ -12,273,929 21 76.232.795 69

Cash, End of Year Capital Assets

$ 63 958,866,48

The Uruvers1ty had two s1gmficant capital asset add1t1ons for fac1hties m Fiscal Year 2002. The Apphed Genetic Technology Resource (AGTEC) Buildmg and the Arnmal Science Arena were completed and placed mto service early m Fiscal Year 2002.

These two capital asset add1Uons were partly funded by the Georgia State F1nancmg and Investment Comm1ss1on (GSFIC) For these proJects, GSFIC funded $11,237,500 00 ofthe$ 13,397,792.49 for the Apphed Genetic Technology Resource bu1ldmg and $4,859,122.97 ofthe $4,900,000.00 for the Arumal Science Arena

For additional mfonnatlon concenung Capital Assets, see Notes 1, 6, 8, and 9 m the notes to the financial statements.

Economic Outlook

The University of Georgia expenenced a 2 percent budget cut m Fiscal Year 2002, and the appropnation for Fiscal Year 2003 reflects a 5 85% decrease Further budget cuts m Fiscal Year 2003 may be forthcommg The !Ill!Ial cuts were absorbed without s1gmficant impact on programs, but further cuts may reqmre deletion or changes to programs currently m place Nonetheless, the

-6-

Umvers1ty's overall financial position 1s strong An aggressive bu!lding program will bnng a number of new fac1ht1es on-hne m Fiscal Year 2003 which will provide much-needed mstruct1onal, research and student housmg space Some ofthese fac1ht1es will be operated under capital leases, which will mcrease the Uruvers1ty's long-term hab1hty for lease obhgauons However, these fac1ht1es should generate sufficient revenues to cover lease payments The Uruvers1ty Adm1mstrat10n will closely momtor the Umvers1ty's fiscal act:JvtUes and resources m order to be able to react qmcklyto mternal and external issues which might anse Michael F. Adams, President Umvers1ty of Georgia
- 7-

BASIC FINANCIAL STATEMENTS -9-

UNIVERSITY OF GEORGIA STATEMENT OF NET ASSETS
JUNE 30. 2002
ASSETS
Current Assets Cash and Cash Equivalents Short-Term Investments Accounts Receivable, Net Federal Financial Assistance Other Prepaid Items lnventones
Total Current Assets
Noncurrent Assets Investments Notes Rece1VBble, Net Capital Assets, Net (See Note 6)
Total Noncurrent Assets
Total Assets
LIABfLmEs
Current 1Jab1ht1es Contracts Payable Salanes Payable Accounts Payable Deferred Revenue Funds Held for Others Caprtal Leases Compensated Absences Other IJablhtles
Total Current IJabdrtJes
Noncurrent IJabdrtJes Capital Leases Compensated Absences
Total Noncurrent 1Jab1lrues
Total 1Jab1h1tes
NET ASSETS
Invested ,n Capital Asse1S, Net of Related Debt Restnded for
Nonexpendable Expendable Caprtal ProJectS Unrestnded
Total Net Assets
The notes to the financial statements are an Integral part of this statement 11

EXHIBIT"A"

$ 63,958,866 48 57,614,463 41
15,416,794 55 28,563,256 17
1,838,447 89 8,606,283 14
$ 175,998,111 64
$ TT,564,414 45 11,180,603 39
643,853,721 21
$ 732,598,739 05
$ 908,596,850 69

$

658,11391

2,821,553 30

12,752,464 48

52,519,605 69

5,974,600 88

788,431 80

16,929,592 40

118,860 80

$ 92,563,223 26

$ 12,663,923 65 19,060,734 37
$ 31,724,658 02
$ 124,287,881 28

$ 630,401,365 76
35,827,440 83 36,032,336 49
932,21942 81,115,606 91
$ 784,308,969 41

UNfVERSfIY OF GEORGIA STATEMENT Of REVENUES EXPENSES ANO CHANGES IN NET ASSETS
VEAR ENDED JUNE 30 2002
OPERATING REVENUES
Student Tuluon and Fees Less Sc:holarehip AllcH/ances
Federlll Appropnat,ons Grants and Contracts
Federal State Local Nongovenynental Rents and Royatues
Sales end SeMCel of EducaUonal Oepel"t.i11e11taa AwuMlry Ente,priaes
ROSldonce Halls Bookstore Food 5eMcea Parl<ng/Transportatlon Hoalth 5eMces lnum:ollogl8le AlhletlCS
Other Orvenization
Other Operat,ng Revenues
Total Operating R_,_
OPERATING EXPENSES
Salanes Faculty Staff
EmployeeBenefito Other Personal Services T'""9l Scholfflhlpa and Fellowllupo
~
Supplies and Other 5efvk:ea Depreao1lon
Tolal Operating"-'-
Operat,ng Income (Loll)
NONOPERATING REVENUES (EXPENSES)
F-Slale Appropnlbons
Grants and Contl1lds
State Nongovemrnemal G<fts , _ and Other lnYftlment Income Other No11op01atb., Revenues
Net Nonoperair,g Revenues
' Income Before Other R.....-iua, Expenees, Gana L.oaea
Capital Grants and G<fts Federal State Nong""8mmental
Total Olher Reven.-
lnc:nl8Hl(Decreeoe) ,n Net AUeta
NetAssets
Net Assel9 - Begrnnmg ol Year, n QnglllOlly Reponed
Cumulabve Effect ol Changes 01 Accou1tlng Pnnaple
Net Asaets - Baginntng of Yeer, Restated
'Net Assets - End of Year
The notes to the finanael statements are an 1ntegn!II part of th lta19ment.
- 12 -

EXHIBIT "B"

$

148 93& 599 52

-30,488,637 81

12,153,55969

109 752 510 36 14 271.~ 31 2 988 071 63 44,341,468 00 275,075 25 33,413,091 94

22 288 483 45 11,577,801 02 17 112,506 89
-149 563 93 1,279 521 50 2 387,845 40 22 760 930 35 2 726 678 19
s 415 609 485 76

s 113,989,751 88
374,414,841 70 120,745 601 07
180 485 00 10 979 53984 24,195,437 30 23,944,932 93 134,557,477 03 461339. 150 94
s 849,347,217 69
s -433 737 731 93

s ...C1,798 685 99

958,013 18 4 637 425 79 11,111,on 10 4,795,760 38 4,083,897 11
571 750 93

s 468 S581610 48

s

34.818,878 55

s

243 014 00

16,096 822 97

104 160 00

s

164437Q8V,

s

61 12efu67& S2

s 1,509 726 029 79
-773 1579 735 90

s

733,046,263 89

s 7&4 308 969 4"1

UNIVERSrTY OE GEORGL"i STATEMENT OE CASH FLOWS
YEAR ENPEP JUNE 30 2002

CASH FLOWS FROM OPERATING ACTMTIES Turbon and Fees Federal AppropnaUons Grants and Contracta Sales and 58MC8S of EducatJonal Departments Paymenu to Suppliers Payments to Employees Payments for Sc:hotarah1pa and FeMowahlps Loans lsaued to Students and Employees
---Collecbon of Loans to Students and EmP'o'lees
Auxiliary Enterpnse Charges Reudence Haus
FoodSeMces Parltlng/Tra-lth SeMces
ln!en:olleglale Athletlce
Other Orvan!zabons
Other RocelpC> (Payment>)
Net Cuh Provided (Used) by Operat,ng Ac1Mbes
CASH FLOWS FROM NONCAPITAL FINANCING ACTlVITIES S1ate Appropr1111lons Agency Funds Transactions Gifts and Grants R8C8Mld fc< Other than COpl1al P Othor Nonoperatng Receipts
Nat C8sh Flows ProVIClod (Used) by Noncapltal F"1anclng ActrvrtJes
CASH FLOWS FROM CAPITAL ANO REIATED FINANCING ACTlVITIES Pun:l1uel of Capital Aasel>
Prtnclpal Paid on Cap,ta1 Debt and Leue
Nol C8sh Provided (Used) by Coplta1 and Related F,nanong AclMbes
CASH FLOWS FROM INVESTING ACTMTIES Proceeds from Sain and Matl.-tties of Investments
1namon-.-
P\.n:hue of Investments
Nat Cuh PloYided (UIOd) by 1"'""'"1g Actrv11Jes
Nat lncreasel(Decreale) m C8sh
Cash and Cash EqUMllents - June 30, 2001 Leu Shon-Term btveltments
Cash and Cash Equlvalonta BegimJng ol Year

Calh and Cash Equ!valen1a End of Year

RECONCILIATION OF OPERATING LOSS TO NET CASH

PROVIDED (USED) BY OPERATING ACTMTIES

----Operating Income (Losa)
A.d.P,JStmentl to Rec:onale Net Income (Loss) to Net Cash

-

(Used) by Operat,ng -

Change in Assets and Uablllties Aa:Clunts Recervables, Net

Prepaid Items

Notes Recetvables, Net

Aa:ountsP~

Salal1oePayable

DelemldRawrue

Other l.1ab111bes

~-Aboencm

Nol Calh Prov1dod (Used) by Clperatmg AdJvfbos The note to the finanoal ibdei1161ds are an integral pert of th1s stzrtement
-13-

EXHIBIT "C"

s 112 468 3e7 12
12 153,559 69 111,232,504 ea
33 417 448 99 -340,099 382 87 -484 58B7e830
-17 000 743 65 -1 984 293 88 2!519,15279
22,293,801 5e 11585399 99 17 009 70227
-149 583 93 1 404 037 36 2 387,845 40 22,6&4,995 27 10543mn
s --124 0B2 624 72

s 441 798 e85 99
-12 34!5 730 9e 22 102 276 ,45
!571 750 93
s 452 126 982 38

s --12 314 560 23
-2 03!5 !530 41
s ~ 3!50 mK>84

s

49,139,009 90

5,518,884 !53

-&O 628 1!50 68

s

4031so3n

s -1212731929 21

s 182 870 814 Q5
-100 638 019 26

s

76 rui7e5 e9

s

631958 866 48

s --133,737,731 93
48 339 1!50 94
5,981,944 30 22 380 30 108762
554 858 93 -SO 148 030 84
3167048 3,079,"82 27
-23,069 37 3 635 4,46 60
s -424 1082 e24 12

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"D"

NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS The Umvers1ty ofGeorgia serves the state, and nalional commumlies byprov1dmg its students with academic mstruclion that advances fundamental knowledge, and by d1ssemmaling knowledge to the people of Georgia and throughout the country
REPORTING ENTITY The Umvers1ty of Georgia is one of thirty-four (34) State supported member mst1tulions of Ingber education in Georgia winch compnse the Umvers1ty System ofGeorgia, an orgamzalional umt ofthe State ofGeorgia The accompanymg financial statements reflect the operalions ofthe Umvers1ty of Georgia as a separate reporting entity.
The Board of Regents has conslitulional authority to govern, control and manage the Umvers1ty System ofGeorgia This authonty includes but 1s not limited to the power to designate management, the ability to s1gmficantly influence operalions, the authonty to control mst1tulions' budgets, the power to determme allotments of State funds to member IIlS!itut1ons and the authonty to prescnbe accounling systems and adnumstralive pohc1es for member mstltulions The Umvers1ty ofGeorgia does not have authontyto retam unexpended State appropnalions (surplus) for any given fiscal year Accordingly, the Umvers1ty of Georgia 1s considered an organizal!onal umt ofthe Board ofRegents ofthe Umvers1ty System of Georgia reportmg entity for financial reporting purposes because of the significance ofits legal, operalional, and financial relalionships with the Board ofRegents as defined m Section 2100 of the Governmental Accountmg Standards Board (GASB) Codification of Governmental Accounling and Fmanc1al Reportmg Standards.
FINANCIAL STATEMENT PRESENTATION In June 1999, the GASB issued Statement No. 34, Basic Financial Statements and Management Discussion and Ana~vs1sfor State and Local Governments This was followed in November 1999 by GASB Statement No 35, Basic Financial Statements and Management's Discussion and Analysis for Public Colleges and Unzvers1t1es The State of Georgia 1s required to implement GASB Statement No. 34 as of and for the year ended June 30, 2002 As an organ12at1onal unit of the State of Georgia, the Umvers1ty 1s also required to adopt GASB Statements No 34 and No. 35 as amended by GASB Statements No. 37 and No 38 The financial statement presentation reqwred by GASB Statements No. 34 and No. 35 as amended by GASB Statements No 37 and No 38 provides a comprehensive, ent1ty-w1de perspeclive of the Umvers1ty's assets, hab1h11es, net assets, revenues, expenses, changes m net assets, cash flows, and replaces the fund group perspective previously reqmred
The Umvers1ty has elected to not restate its 200 I financial statements to conform with the new financial statement presentalion, therefore comparalive financial mformalion will not be presented for fiscal year 2002 S1gmficant accountmg changes made m order to comply with the new requuements mclude (l) adoplion of deprec1alion on capital assets, and (2) recogmlion of compensated absences Generally Accepted Accounting Pnnc1ples (GAAP) reqmres that the
- 14 -

UNNERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT "D"

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FINANCIAL STATEMENT PRESENTATION reporting of summer school revenues and expenses be between fiscal years rather than m one fiscal year Due to the lack ofmatenal1ty, Institutions ofthe Uruvers1ty System ofGeorgia will continue to report summer revenues and expenses in the year in wluch the predommate activity takes place
BASIS OF ACCOUNTING For financial reporting purposes, the Umvers1ty 1s considered a special-purpose government engaged only m business-type actIVJtles Accordingly, the Uruvers1ty"s financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting, except as noted m the preceding paragraph Under the accrual basis, revenues are recogruzed when earned, and expenses are recorded when an obhgat1on has been mcurred. All s1gruficant intrauniversity transactions have been ehmmated.
The Uruvers1ty has the option to apply all Fmancial Accounting Standards Board (FASB) pronouncements issued after November 30, 1989, unless FASB conflicts with GASB. The Uruvers1ty has elected to not apply FASB pronouncements issued after the apphcable date
RESTATEMENT OF NET ASSETS- BEGINNING OF YEAR As a result of the adoption of GASB Statement No. 34, the Umvers1ty was also reqmred to make certain changes m accounting prmc1ples, spec1fically (1) adoption of depreciation on capital assets, and (2) recordmg of compensated absences. GASB Statement No. 34 reqmres certain summer semester revenues be recogruzed between fiscal years rather than the fiscal year m which the semester was predominantly conducted The Uruvers1ty System ofGeorgia has chosen to continue to record summer revenue m the year in which the semester was predommantly conducted. Net assets at July 1, 2001 were reduced by $773,679,735 90 for the cumulative effect of these changes.
CASH AND CASH EQUIVALENTS/SHORT-TERM INVESTMENTS Cash and Cash Eqmvalents consist of petty cash and demand deposits m authonzed financial mstltutlons, and cash management pools that have the general charactenstlcs of demand deposit accounts.
INVESTMENTS The Uruvers1ty accounts for Its mvestments at farr value m accordance with GASB Statement No 31, Accounting and Financial Reportingfor Certain Investments andfor External Investment Pools. Changes in unrealized gam (loss) on the carrying value ofmvestments are reported as a component ofmvestment mcome m the statements of revenues, expenses, and changes m net assets
ACCOUNTS RECEIVABLE Accounts receivable consists oftu1tlon and fee charges to students and aux1hary enterpnse services proVJded to students, faculty and staff, the maJonty of each res1dmg in the State of Georgia. Accounts receivable also mclude amounts due from the Federal government, state and local
- 15 -

UNNERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTS RECEIVABLE governments, or pnvate sources, m connection with reimbursement ofallowable expenchtures made pursuant to the Umvers1ty's grant and contracts Accounts receivable are recorded net of estimated uncollectlble amounts
INVENTORIES Consumable supphes are earned at the average cost basis.
Resale Inventones are valued at cost usmg the first-m, first-out, weighted average, specific 1dent1ficat1on and retail mventory methods.
NON-CURRENT CASH AND INVESTMENTS Cash and mvestments that are externally restncted and cannot be used to pay current hab1ht1es are classified as non-current assets m the statements ofnet assets
CAPITAL ASSETS Capital assets are recorded at cost at the date of acqu1S1tion, or fair market value at the date of donation m the case of gifts. For eqmpment, the Uruvers1ty's cap1tal1zat1on pohey mcludes all items with a urut cost of $5,000.00 or more, and an estimated useful hfe of greater than one year. Renovations to bu1ldmgs, mfrastructure, and land improvements that exceed $100,000 00 and s1gruficantly mcrease the value or extend the useful hfe of the structure are cap1tahzed Routme reparrs and mamtenance are charged to operatmg expense m the year m winch the expense was mcurred Deprec1at1on 1s computed usmg the str.ught-lme method over the estimated useful hves of the assets, generally 40 to 60 years for buildmgs, 20 to 25 years for mfrastructure and land improvements, IO years for library books, and 3 to 7 years for eqmpment
To obtain the total picture ofplant adchtlons m the Uruvers1ty System, it is necessary to look at the acUVIUes ofthe Georgia State Fmancmg and Investment Comnuss1on (GSFIC) - an organization that 1s external to the System. GSFIC issues bonds for and on behalfofthe State ofGeorgia, pursuant to powers granted to 1t m the Consutuuon ofthe State ofGeorgia and the Act creating the GSFIC. The bonds so issued constitute chrect and general obhgaUons of the State of Georgia, to the payment of which the full fiuth, crecht and taxmg power of the State are pledged.
Effective July I, 2001, the GSFIC retams construction m progress on their books throughout the construction penod and transfers the entire project to the Uruvers1ty ofGeorgia when complete. For the year ended June 30, 2002, GSFIC transferred capital adchtlons valued at $16,096,622 97 to the Uruversity of Georgia
DEFERRED REVENUES Deferred revenues mclude amounts received for tuition and fees and certam aux1hary acUV!tles pnor to the end ofthe fiscal year but related to the subsequent accounting penod Deferred revenues also mclude amounts received from grant and contract sponsors that have not yet been earned
- 16 -

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
COMPENSATED ABSENCES Employee vacat10n pay 1s accrued at year-end for financial statement purposes The habihty and expense mcurred are recorded at year-end as accrued vacat10n payable m the Statement of Net Assets, and as a component of compensauon and benefit expense m the Statements of Revenues, Expenses, and Changes m Net Assets. The Umvers1ty of Georgia had accrued hab1hty for compensated absences m the amount of$32,154,880 17 as of July 1, 2001. For Fiscal Year 2002, $23,426,670 00 was earned m compensated absences and employees were paid $19,591,223 40, for a net mcrease of $3,835,446.60.
NON-CURRENT LIABILmES Non-current habiht1es mclude (I) hab1hUes that will not be prud Withm the next fiscal year; (2) capital lease obhgatlons With contractual matunlles greater than one year; and (3) other habihlies that, although payable withm one year, are to be prud from funds that are classified as non-current assets
NET ASSETS The Uruvers1ty's net assets are classified as follows:
Invested in capital assets, net ofrelated debt This represents the University's total mvestment m capital assets, net ofoutstandmg debt obhgat1ons related to those capital assets To the extent debt has been mcurred but not yet expended for capital assets, such amounts are not mcluded as a component of invested in capital assets, net of related debt (The term "debt obhgalions" as used m tins defirulion does not mclude debt ofthe GSFIC as discussed above.)
Restncted net assets - nonexpendable: Nonexpendable restncted net assets consist of endowment and sim1lar type funds m which donors or other outside sources have slipulated, as a condilion ofthe gift mstrument, that the pnncipal 1s to be maJntamed mviolate and m perpetwty, and mvested for the purpose of producmg present and future mcome, wluch may either be expended or added to pnncipal The Uruvers1ty may accumulate as much ofthe armual net mcome ofan mslitulional fund as 1s prudent under the standard estabhshed by Code Seclion 44-15-7 ofAnnotated Code ofGeorgia
Restricted net assets - expendable Restncted expendable net assets mclude resources m wluch the Uruvers1ty 1s legally or contractually obhgated to spend resources m accordance With restncllons rmposed by external tlnrd parlies
Restricted net assets - expendable - Capital Pro;ects Tlus represents resources for which the Uruvers1ty 1s legally or contractually obhgated to spend resources for capital proJects m accordance with restnct1ons imposed by external third parues.

- 17 -

UNNERSIIT OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NET ASSETS Unrestricted net assets Unrestncted net assets represent resources denved from student tu1hon and fees, state appropnalions, and sales and seTV1ces of educalional departments and aux1hary enterpnses. These resources are used for transaclions relaling to the educalional and general operations of the Uruvers1ty, and may be used at the d1scret1on of the governing board to meet current expenses for those pmposes, except for unexpended state appropnalions (surplus) of $139,341 45 Unexpended state appropnatlons must be refunded to the Board of Regents of the Uruvers1ty System of Georgia - Adnurustralive Central Office for remittance to the Office of Treasury and Fiscal Services These resources also mclude aux1hary enterpnses, winch are substanlially self-supporhng acliVIlies that proVIde services for students, faculty and staff
When an expense 1s mcurred that can be paid usmg either restncted or unrestncted resources, the University's pohcy is to first apply the expense towards unrestncted resources, and then towards restncted resources.
INCOME TAXES The Umvers1ty of Georgia, as a poht1cal subchVIS1on of the State of Georgia, 1s excluded from Federal mcome taxes under Seclion 115(1) of the Internal Revenue Code, as amended
CLASSIFICATION OF REVENUES
The Umvers1ty has classified its revenues as either operatmg or non-operatmg revenues m the Statement of Revenues, Expenses, and Changes m Net Assets accordmg to the following cntena:
Operating revenues Operatmg revenues mclude acliVIlies that have the charactenstics ofexchange transaclions, such as (I) student twlion and fees, net ofscholarslup allowances, (2) sales and serVJces of auxihary enterpnscs, (3) most Federal, state and local pts and contracts and Federal appropnalions, and (4) mterest on 1nst1.tut1onal student loans.
Non-opera/mg revenues Non-operating revenues mclude actIV1t1es that have the charactenstics of non-exchange transactions, such as gifts and contnbulions, and other revenue sources that are defined as non-operatmg revenues by GASB No. 9, Reponmg Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entitles That Use Propnetary Fund Accounting, and GASB No. 34, such as state appropnat1ons and mvestment mcome.
SCHOLARSHIP ALLOWANCES Student tuition and fee revenues, and certam other revenues from students, are reported at gross with a contra revenue account of scholarship allowances m the Statement of Revenues, Expenses, and Changes m Net Assets Scholarslup allowances are the difference between the stated charge for goods and services provided by the Umvers1ty, and the amount that 1s paid by students and/or tlurd parties makmg payments on the students' behalf. Certam governmental grants, such as Pell grants,

- 18 -

UNNERSITY OF GEORGIA
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE J SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SCHOLARSHIP ALLOWANCES and other Federal, state or nongovernmental programs, are recorded as either operating or nonoperatlng revenues m the Uruvers1ty's financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the Uruvers1ty has recorded contra revenue for scholarslup allowances.
NOTE 2: CASH AND CASH EOUNALENTS. OTHER DEPOSITS. AND INVESTMENTS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds belongmg to the State of Georgia (and thus the Uruvers1ty of Georgia) cannot be placed ma depository paymg mterest longer than ten days without the depository providmg a surety bond to the State. In heu of a surety bond, the depository may pledge as collateral any one or more of the followmg secunttes as enumerated in the Official Code of Georgia Annotated Section 50-17-59:
I. Bonds, bill, certificates ofmdebtedness, notes, or other direct obhgatlons ofthe Uruted States or of the State of Georgia
2. Bonds, bills, certificates of mdebtedness, notes, or other obhgatlons of the counties or rnuruc1palities of the State of Georgia
3 Bonds ofany pubhe authority created by the laws ofthe State ofGeorgia, providmg that the statute that created the authonty authonzed the use ofthe bonds for tins purpose.
4. Industnal revenue bonds and bonds of development authonties created by the laws of the State of Georgia
5 Bonds, bills, certificates of mdebtedness, notes, or other obhgatJons of a subsuhary
corporation ofthe Umted States government, winch are fully guaranteed by the Uruted States government both as to pnnc1pal and mterest, or debt obligations issued by the Federal Land Bank, the Federal Horne Loan Bank, The Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Horne Loan Mortgage Assoc1at1on, and the Federal NatJonal Mortgage Association
6 Guarantee or msurance ofaccounts provided by the Federal Deposit Insurance Corporation.

- 19 -

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE 2 CASH AND CASH EQUIVALENTS. OTHER DEPOSITS. AND INVESTMENTS

STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES As authonzed m the Official Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted pohc1es winch allow agencies ofthe State ofGeorgia (and thus the Urnvers1ty of Georgia), the option of exempting demand deposits from the collateral requirements

The Treasurer ofthe Board ofRegents 1s responsible for all details relauve to funushmg the reqwred depository protection for all urnts of the Urnvers1ty System of Georgia

CATEGORIZATION OF DEPOSITS The Urnvers1ty"s cash deposits are categonzed by nsk as follows

Category I - Arnmmts covered by depository insurance or collateral1zed with secuntJes (at farr value) held by the Umvers1ty or by its agent m the Urnvers1ty's name.

Category 2 - Amounts collateralized With secunties (at farr value) held by the pledgmg financial mstJtut1on's trust department or agent m the Urnvers1ty's name.

Category 3 - Amounts collateralized With secun!Jes (at fair value) held by the pledgmg financial 1nstJtut1on, or by its trust department or agent but not m the University's name, and amounts uncollateral1zed.

Cash Deposits as of June 30, 2002 are as follows:

Cash Depos,ts Investment Portfoho
Accounts
Total Cash Deposits

Carrymg
Amount

Bank
Balances

Risk Catcgoocs

$S9,873,m 75 $77,429,861 SO $ I 13,12S 24 $77,313,127 07 $

42!.71

42!.71

42!.71

s59 874199 46 sv 430 283 21 s 113 546 95 szz 313 127 07 s

3,609 19
3609 19

CATEGORIZATION OF INVESTMENTS The Urnvers1ty's mvestrnents are categonzed as to credJ.t nsk WJtlun the three categones descnbed below

Category I - Insured or registered, or secuntles held by the Uruversity or its agent m the Urnvers1ty's name.

Category 2 - Unmsured and unregistered, With sec.unties held by the counter party's trust department or agent m the UrnversJty's name.

- 20-

UNTVERSIIT OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT "D"

NOTE 2 CASH AND CASH EOUNALENTS. OTHER DEPOSITS. AND INVESTMENTS

CATEGORIZATION OF INVESTMENTS Category 3 - Uninsured and unregistered, with secuntJes held by the counter party, or by its trust
department or agent, but not in the Umvers1ty's name

At June 30, 2002, the Umvers1ty's investments consisted of the following

Type of Investments
Cormnon Stock Corporate Bonds U S Government Sccunt,cs
and Corporate Obhganons
Totals

B.l~lsi Cl!~g2ag
s s 840,610 35 $ 7,975,882 57
6,722,505 00 5,433,05 I 00
805 657.67 54 340.783 44
s ~Ra :Z:ZJ !J~ s RZ 2~ ZlZ Ill s

Investments Not SubJcet to CatcgOT17llllons Board of Regents
Short-Term Fund lnvcsunent Portfoho Accounts
Mutual Funds Real Estate State Investment Pool

Total Investments

Carrying

l

Amount

0 00 S 8,8 I6,492 92 12, I55,556 00
ss 146.441 I I

Q00 S 76,118,490 03

20,908 68
8,493,242 65 240,469 38
so 305 .345 4 I
SJ35 17& 456 IS

Funds invested in an investment pool managed by another governmental entity are not required to be categonzed since the Umvers1ty did not own any specific, 1dent1fiable investment secuntJes of the pool

NOTE 3 ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following at June 30, 2002

Student Tuition and Fees Aux1hary Enterpnses and Other Operating Act1v1t1es Federal, State, and Pnvate Funds Other

$ 827,253.23 6,310,771.80 32,002,180.25 5,608,238 30

Less Allowance for Doubtful Accounts

$44,748,443.58 768,392.86

Net Accounts Receivable

$43,980 050,72

- 21 -

UNIVERSITY OF GEORGIA NOTES TO TIIE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE 4 INVENTORIES

lnventones consisted of the following at June 30, 2002

Bookstore Food Services Physical Plant Other

$5,194,246 50 622,925.17
1,207,495 45 1,581,616 02

Total
NOTE 5 NOTES/LOANS RECEIVABLE

$ 8,606.283 .14

Notes/Loans receivable at June 30, 2002, pnmanlycons1stofstudent loans made through the Federal Perkms Loan Program (the Program). The Program proVJdes for cancellation of a loan at rates of I 0% to 30% per year up to a maxlillum of l 00% 1fthe participant complies with certam proV1s1ons The Federal government reimburses the Uruvers1ty for amounts cancelled under these proV1s1ons As the Uruvers1ty determmes that loans are uncollectJble and not eligible for reimbursement by the Federal government, the loans are wntten off and assigned to the U.S. Department of Education

NOTE 6 CAPITAL ASSETS

The balance at July I, 2001 was adjusted for accounting changes reqmred m 1mplement1ng GASB Statements 34 and 35 as disclosed m Note 1. Following are the changes m capital assets for the year ended June 30, 2002:

-22-

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"D"

NOTE6 CAPITAL ASSETS

Capital Assets, Not Bemg Deprcc1ated Land and Land Improvements Capitalized Collections Construction Work-In-Progress
Total Capital Assets Not Bemg Deprcc,ated
Capital Assets, Bemg Depreciated Infrastructure Bu1ldmg and Bu1ldmg Improvements Fac1hbes and Other lmprovancnts Equipment Capital Leases Library Collcctlons
Less Accumulaled Deprcc,ahon
Infrastructure Buildmgs and Buildmg Improvements Fac1hhes and Other Improvements Equipment Capital Leases Library Collect1ons
Total Capital Assets, Bemg Deprcc1ated, Net
Capital Aascts, Net

Adjusted Balance
M~J.2QQI

Add1112n~

B~l!!Kll2~

Balance
lune 30, 20Q2

s 16,490,997 32 s 12,500 00
6,403,773 93 OQQ 8 765 974 56

s 16,503,497 32
6,403,773 93 8,765 974 56

s 22,894 77 I 25 s 8 778,474,56

s 31,673,245.8)

s 30,386,997 00
646,550,287 52 17,562,551 00
272,706,885 04 881,283 81
HS 49.Q5145
SJ,113.H? 055 82

$ 32,294,249 19
21,862.246 68 944,733 54
10 32U67.77

S 16,454,674 36 85,443 QQ

s 30,386,997 00
678,844,536 71 17,562,551 00
278,114,457 36 1,826,017 35
)55 725.Q76 22

s 65 422,697, J8 S IM40 JI 7 3{i sl, 162,459,/i3S !i4

s 9,371,636 72
213,334,511 82 6,463,397 56
187,181,399 33 279,283 23
I03,849 898 QQ
s 520 48Q,l 2{i,{i{i

s 918,708 84
14,385,870 95 702,318 00
22,380,1% 52 216,054 63
2 736 222 QQ

S 16,454,674 36 85 443 QQ

s I 0,290,345 56
227,720,382 77 7,165,715 56
193,106,921 49 495,337 86
111 .:iQQ,452 QQ

s 4/i 339 I50.94 s rn.:i40.112.J6 s 5so 222.rnQ 24

$ 593,022 929 l 6 s 12 Q83,54{i 24 s
$ 615 99170041 sp 629200 s

000 s 612,1 80,475 40 000 s 643 8S3 721 21

NOTE 7 DEFERRED REVENUE

Deferred revenue consisted of the followmg at June 30, 2002:

Prepaid TwtJ.on and Fees Research Other Deferred Revenue

$13,509,135.11 32,149,660 15 6,860.810 43

Totals NOTE 8 LONG-TERM LIABILITIES

s,52.s I9.605,69

Long-term liability act1V1ty for the year ended June 30, 2002, was as follows:

- 23 -

UNNERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT "D"

NOTE 8 LONG-TERM LIABILITIES

Leases Lease Obhga11ons
Other Ludnlmes Compensa1ed Absences
Total Long-Term Obhganons

Ba1ancc
/ulv I. 2001
s 5,787,268 43
32 l~H~0 17
s JZ 2~, l~B 6!l

Addn10ns
S 10,283,788 92
23,422 210 Qll
S JJ ZUl ~~B 22

Reducnons
s 2,618,701 90
12 ~2J,a23 ~
S,, ~122 2Z~ Jg

Balance
June 30 2002
S 13,452,355 45
3~ 22!l.:l22 71
~s, S~2 ~~ ~

Current
Ponion
s 788,431 80
12 222 522 ~
s IZZIB!lZ~22

NOTE 9 SIGNmCANT COMMITMENTS

The Uruvers1ty of Georgia had significant unearned, outstanchng, construction or renovation contracts executed in the amount of $18,060,767 99 as of June 30, 2002 This amount 1s not reflected in the accompanying basic financial statements

NOTE 10 LEASE OBLIGATIONS

CAPITAL LEASES The Umvers1ty of Georgia 1s obligated under vanous operating leases for the use of real property (land, bwldings and office facilities) and eqwpment, and also 1s obligated under capital leases and installment purchase agreements for the acqu1S1t1on of real property.

The University of Georgia occupies two real properties and holds vanous equipment items under capital leases. One of the real property leases expire in 2011 and the other in 2031. The equipment capital leases expire between 2003 and 2007. Expenses for fiscal year 2002 were $3,426,748.48, of wluch $808,046.58 represented interest and $2,618,701.90 represented prmc1pal paid on capital leases Interest rates range from 2.25 percent to 8.36 percent. The carrying values of assets held under capital lease, including the current liability portion, at June 30, 2002 were $13,452,355 45

Both of the Uruvers1ty of Georgia's current real property capital leases are with the Umversity of Georgia Real Estate Foundation (UGAREF), a related entity On June of 2001, the Uruvers1ty of Georgia entered into a capital lease with the UGAREF whereby the Uruvers1ty leases a bwldmg for a 10-yearpenod that began June I, 2001 and expires June 30,201 I. In Augustof2001, the Uruvers1ty ofGeorgia entered into a capital lease with the UGAREF, whereby the Uruvers1ty leases the Carlton Street Parking Deck for a 30-year penod that began September 30, 200 I and expires August 31, 2031 The outstanchng liabihty at June 30, 2002 on these capital leases 1s $12,580,386.90.

OPERATING LEASES The Uruvers1ty of Georgia 1s Lessee under a number of one-year operating leases, wluch generally provide for four (4) renewal option penods All agreements are cancelable 1fthe State of Georgia does not provide adequate funding, but that 1s considered a remote possib1hty. In the normal course

-24-

UNNERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"D"

NOTE 10 LEASE OBLIGATIONS

OPERATING LEASES ofbusmess, operatmg leases are generally renewed or replaced by other leases Operatmg leases are generally payable on a monthly basis. Properties are leased for a vanety of functions, from farm acreage to office space to park.mg Jots.

Noncancellable operatmg lease expenses m 2002 were $1,674,553 96 for real property.

SUMMARY OF LEASE OBLIGATION Future commitments for capital leases (which here and on the Statement ofNet Assets mclude other installment purchase agreements) and for noncancellable operatmg leases havmg remaining terms m excess ofone year as of June 30, 2002, were as follows.

Capital Leases

Operating Leases

Year Endmg June 30. 2003 2004 2005 2006 2007 2008 through 2012 2013 through 2017 2018 through 2022 2023 through 2027 2028 through 2032

$ 1,725,261.69 1,582,210.47 1,382,331.98 1,307,513.93 1,324,889.12 6,290,625.58 4,099,999.80 4,099,999.80 4,099,999.80 3,416.666 49

$2,032,841 70

Total Mmimum Lease Payments

$29,329,498.66 $2.032.841.70

Less: Interest Pnnc1pal Outstandmg

15.877,143 21
$}3,452,355:45

NOTE 11 RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Plan Description The Uruvers1ty of Georgia parllc1pates m the Teachers Retirement System of Georgia (TRS), acostsharmg mult1ple-employer defined benefit pension plan estabhshed by the General Assembly of Georgia for the purpose of prov1dmg retirement allowances and other benefits for teachers of the

- 25 -

UNNERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT"D"

NOTE 11 RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Plan Description State of Georgia TRS proVIdes service retirement, disability retirement, and survivor's benefits for its members ID accordance with State statute. The Teachers Retirement System ofGeorgia issues a separate stand alone financial audit report and a copy can be obta1Ded from the Georgia Department of Audits and Accounts.

Funding Policy Employees of the Uruversity of Georgia who are covered by TRS are required by State statute to contnbute 5% ofthe1r gross eam1Dgs to TRS The Uruversity of Georgia makes monthly employer contnbuUons to TRS at rates adopted by the TRS Board ofTrustees ID accordance with State statute and as advised by the1r 1Ddependent actuary For fiscal year 2002, the employer contnbutJ.on rate was 9 24% for covered employees. Employer contnbutJ.ons for the current fiscal year and the preced1Dg two fiscal years are as follows

Fiscal Year

Percentage Contributed

Reqwred Contnbutton

2002 2001 2000

100% 100% 100%

$29, I 56,597.85 $35,340,368 14 $35,362,224 39

REGENTS RETIREMENT PLAN

Plan Description The Regents Ret!Tement Plan, a s1Dgle-employcr defined contnbul!on plan, 1s an opl!onal retJ.rement plan established and adm1rustercd by the Board of Regents of the Uruvers1ty System of Georgia, under which 11 may purchase annmty contracts for the purpose of proVIding rel!rement and death benefits for ehgible faculty and prmc1pal admmtstrators. Benefits depend solely on amounts contnbuted to the plan plus 1DVestment earrungs. Benefits are payable to parl!c1pat1Dg employees or their benefic1anes ID accordance with the terms of the annuity contracts

Funding Policy Member contnbuuon requirements are established by the Board of Trustees of the Teachers Retirement System Employer contnbul!ons are established by statute and may be amended only by the General Assembly ofthe State of Georgia The employer contnbutes 9 62% ofthe part1c1pat1Dg employee's earnable compensal!on. Employees contribute 5% of therr eamable compensation Amounts attnbutable to all plan contnbutJ.ons are fully vested and non-forfe1table at all trrnes.

The Uruversity of Georgia and the covered employees made the reqwred contnbullons of $8,997,204 46 (9.62%) and $4,480,231 79 (5%), respectJ.ve\y

-26-

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"D"

NOTE I I RETIREMENT PLANS
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description The Uruvers1ty ofGeorgia partic1pates m the Georgia Defined Contribution Plan (GDCP) which 1s a smgle-employer defmed contribution plan established by the General Assembly of Georgia for the purpose ofproviding retirement coverage for State employees who are temporary, seasonal, and parttune and are not members of a public retirement or pension system. GDCP 1s adm1rustered by the Board of Trustees of the Employees' Retuement System of Georgia
Benefits A member may retire and elect to receive penodic payments after anamment ofage 65 The payment will be based upon mortality tables and mterest assumplions to be adopted by the Board ofTrustees. Ifa member has less than$ 3,500.00 credited to !us/her account, the BoardofTrustees has the optJ.on ofreqmring a lump sum distnbution to the member m lieu ofmaking penodic payments Upon the death ofa member, a lump sum d1stnbut1on equalmg the amount credited to !us/her account will be p3.1d to the member's designated beneficiary Benefit proVJsions are estabhshed by State statute.
Contributions and Vesting Member contnbulions are seven and one-halfpercent (7.5%) ofgross salary. There are no employer contnbutJons. Contnbulion rates are estabhshed by State statute. Earrungs are credited to each member's account m a manner established by the Board of Trustees. Upon temunabon of employment, the amount of the member's account 1s refundable upon request by the member
Total contnbullons made by employees during fiscal year 2002 amounted to $I, 136,222 00 which represents 7.5% of covered payroll These contribuuons met the reqmrements of the plan.
NOTE 12 RISK MANAGEMENT
The Uruvers1ty of Georgia 1s a participant m the Board of Regents of the Uruvers1ty System of Georgia Health Benefits Plan. wluch is a self-msurance program of health and dental benefits for employees and retuees of the University System of Georgia The University of Georgia and part1c1patJng employees and retuees pay premmms to the Health Benefits Plan for tlus health msurance coverage The Health Benefits Plan 1s mcluded m the financial statements ofthe Board of Regents of the Uruvers1ty System of Georgia - Admlillstrallve Central Office All uruts of the Uruvers1ty System of Georgia share the nsk of loss for claims of the Health Benefits Plan The Health Benefits Plan 1s considered a self-susl3.!rung nsk fund that proVJdes health coverage for its members up to a maximum hfelime benefit of$2,000,000.00 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 Slueld ofGeorgia to process cl3.lms m accordance with the Health Benefits Plan as established by the Board of Regents

- 27 -

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"D"

NOTE 12 RISKMANAGEMENT
The Department of Admmtstralive Services (DOAS) has the respons1b1hty for the State of Georgia of makmg and carrymg out dec1s1ons that will mtrumize the adverse effects of accidental losses that mvolve State government assets The State beheves 11 1s more economical to manage tis nsks mtemally and set aside assets for clwm settlement Accordmgly, DOAS processes clwms for nsk of loss to winch the State ts exposed, mcludmg general hab1hty, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' mdemmficalion. Lmuted amounts of commercial msurance are purchased apphcable to property, employee and automobile hab1hty, fidelity and certwn other nsks The Umvers1ty of Georgia, as an organ1zalional unit of the Board of Regents of the Uruverstty System of Georgia, ts part of the State of Georgia reportmg entity, and as such, ts covered by the State of Georgia nsk management program admuustered by DOAS. Premiums for the nsk management program are charged to the vanous state org3.11Jzalions by DOAS to provide clwms servtcmg and claims payment
A self-insured program of professional habihty for tis employees was estabhshed by the Board of Regents of the Umvers1ty System of Georgia under powers authonzed by the Oflic1al Code of Georgia Annotated Seclion 45-9-1 The program insures the employees to the extent that they are not unmune from hab1llty agwnst personal hab1hty for damages ansmg out of the performance of their duties or many way connected therewith The program 1s adm1mstered by DOAS as a SelfInsurance Fund.
NOTE13: CONTINGENCIES
Amounts received or receivable from grantor agencies are subject to audtt and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditures which are disallowed under grant terms. The amount ofexpenditures which may be dtsallowed by the grantor cannot be determined at this lime although the Uruvers1ty ofGeorgia expects such amounts, ifany, to be 1mmatenal to its overall financial position
Litigation, ci3.IIIls and assessments filed ag3.1Ilst (an organizat10nal urut of the Board of Regents of the Umvers1ty System ofGeorgia), 1fany, are generally considered to be act10ns against the State of Georgia. Accordmgly, s1gruficant htlgatlon, clwrns and assessments pendtng agwnst the State of Georgia are disclosed m the State ofGeorgia Comprehensive Annual Fmanc1al Report for the fiscal year ended June 30, 2002.
NOTE 14 POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
Pursuant to the general powers conferred by the Official Code ofGeorgia Annotated Section 20-331, the Board of Regents of the Uruvers1ty System of Georgia has established group health and hfe insurance programs for regular employees ofthe Uruvers1ty System ofGeorgia It ts the pohcy ofthe Board ofRegents to permit employees ofthe Uruvers1ty System ofGeorgia eligible forretJrement or that become permanently and totally disabled to continue as members of the group health and life
- 28 -

UNNERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE 14. POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS

msurance programs Employees who are eligible for retirement or disability under the cntena established by the Teachers RetlJ'eIIlent System ofGeorgia and who have at least ten years ofservice with the Uruvers1ty System of Georgia are eligible for these post-employment health and life insurance benefits. Orgaruzat1onal uruts of the Board of Regents of the Uruvers1ty System of Georgia pay the employer portion for group insurance for affected md1v1duals.

As of June 30, 2002, there were 3,084 employees who had retired or were disabled that were receiving these post-employment health and life insurance benefits. For the year ended June 30,
2002, the Uruvers1ty ofGeorgia recogruzed as incurred $9,429,625.58 ofexpenses, winch was net of $3,421,673.19 ofparticipant contnbutions.

NOTE 15: NATlJRAL CLASSIFICATIONS WITH FUNCTIONAL CLASSIFICATIONS

The Uruversity's operating expenses by functional class1ficatton are shown below:

Statement of Operatmg Expenses Natlnl VI Funcbma1 Ct.s1ficabons For the FISCIII Year Ended June 30, 2002

FuncbonN C)arnfutmn

Natural Qass1ficabon

ln:ltrucbon

Bnrm:h

Pubhc
Servurs:

Acadermc Support

Student Sgvu;g

SaJanes Faculty Staff
~ Bcnefib Other P=onal S<:Mcos Travel SchoilJ'5hips and
Fellowslups Ublll><S Suppl,es and Other
Semces Dep=tallOn
Toial Operaong Expenses

s s s S 67,787,324 OS S 43,468,579 39

1,702,253 BO

765,113 74

238.309 85

56,397,390 97 93,284,745 43 77,380,855 70 40,642, I77 II 11,041,803 77

23,979,465 85 28,010,001 66 22,948,252.32

9,553,137 84

2,543,88329

2,426,994 99

3,992,587 05

3,245,336 20

573,191 47

203,978 04

1,889,179 67 1,461,666 90

1,028,446 66 732,099.31

33,326 61 1,290,829 I 7

14,330 00 635,423 09

372,727 00 216,06960

11,138,165 68
12 432.983 99

41,249,441 44
13.262 114 49

21,255,704 25
I 718,132 58

11,396,929 31
lJ J59 94Q 86

4,053,940 32
654 64Q 20

s1u ,n 1n 10 S225 92R:9U 43 5129 ,Z4,fflQ 6] s 74 740 74} 42 s 12 ]25 3897

NatlllJI CJNs1ficat10n
SaJanes
Faculty Staff Eff1,loyce Benefib
Other Personal Serv,ce,
Tl'llllvcl Scholarilups and
Fellowslup, l/llhtJes
Supplies and Other
Semces Deprectanon
Total Operatmg Expenses

lnsbtub.onal
SVPP90

Funct1ona:J C1a.utfo11ao

Plant

Openltlons and Scholanlups

AUXJhary

Mamtenancc and FelJCJwshtm &ltqJUJW

Tomi Operatmg Expenses

S 40,449,790 32 S 26,158,145 OS

19,476,630 OS

7,845,075 17

386,434 91

22,961 27

s 28,171 OS 29,0S9,933 35 6,389,I54 89 180,48500 128,055 91

SI 13,989,751 88 374,414,841 70 120,745,601 07
180,485 00 10,979,539 84

586,498 94 440,800 74

S 18,324.243 42 15,180,687 16

1,946,685 00 3,987,356 96

24,195,437 30 23,944,932 93

13,170,305 95
82.l~~~
s 2~ ~J zg1 JI

5,818,655 19
2.094 !WJQ
s ~ l~~ZIM

67.372 02
S IBJ21~1~~

26,406,962 87
~ l2J IZ~ 22
s 2' ~~2 21U~

I34,557,477 03
~.JJ2.I~~
~2J~ZJIZ~

- 29-

SUPPLEMENTARY INFORMATION - 3I -

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDJTURES COMPARED TO
BUDGET - {NON-GAAP BASIS) RESIDENT INSTRUCTION
YEAR ENDED JUNE 30 2002

SCHEDULE "1"

REVENUES
State Appropnations Other Revenues Retained

BUDGET

ACTUAL (1)

VARIANCEFAVORABLE (UNFAVORABLE)

$ 346,747,289 00 $ 345,247,289 00 $

-1,500,000 00

516,002,635 00

340,935,579 11

-175,067,055 89

$ 862,749,924 00 $ 686,182,868 11 $ -176,567,055 89

EXPENDITURES
Personal Services EducatJon. General and Departmental SaM08S
Sponsored Openmons Operatmg Expenses
Educa11on, General and Departmental SeMCeS Sponsored Operabons Capital Outlay Special Funding lnrtumve Office of M1nortty Business Enterpnse Fon,stry R8""ardl Reaeardl ConsortJum

s 374,434,925 00 $ 374,114,498 88 $

75,000,000 00

72,054,355 85

320,42612 2,945,&44 15

115,745,602 00 200,000,000 00
86,960,430 00 2,630,100 00 604,382 00 1,357,737 00 6,016,748 00

110,042,840 60 82,496,885 87 40,356,551 69 2,627,758 22 604,382 00 1,336,074 24 6,003,862 59

5,702,761 40 117,503,11413 46,603,878 31
2,341 78 000
21,662 76 1288541

$ 862.749.924 00 $ 689,637,209 94 $ 173,112,714 06

Excess of Revenues over Expendrtures

$ -3 454 341 83 S

-314541341 83

(1) Actual amounts were prepared on a prescnbed basis of accounting that demonstrates compliance wrth budgetary statutes and ragulat1ons of the Sta1e of Georg,a, which Is a comprahans,ve basis of accounting other than generally accepted accounting pnnaples

Sea notas to the finanaal statements

-33-

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO
BUDGET - INON-GAAP BASIS) LOTTERY FOR EDUCATION
YEAR ENDED JUNE 30. 2002

SCHEDULE "2"

REVENUES State Appropnattons CARRY-OVER FROM PRIOR YEAR Transfer from Reserved Fund Balance

BUDGET

ACTUAL (1)

VARIANCEFAVORABLE (UNFAVORABLE)

$ 3.691.102 00 $ 3.691,102 00 $

000

212551632 00

000

-212551632 00

$ 5,946,734 00 $ 3.691.102 00 $ _ __;-2a:;.2::;55=,63"-2=--"-00:..

EXPENDITURES
Equ:pment, Technology and Construcllon Trust Fund
Special Funding Initiatives Technology Equ:pment lmbabve

$ 5.566,184 00 $ 4,043,068 24 $

376,550 00

378,609 34

000

217501985 93

1,525,095 76 -5934
-21 7501985 93

Excess of Revenues over Expendrtures

$ 5,946,734 00 $ 7.172,683 51 $ _ _-1'-'.22=5"".94""9'-'-51's -3.481.5e1 51 s_..;.;-3;;.,4B;;:..:1..::,5~e.:.1;;.51:.

(1) Actual amounts wera prepared on a prescribed basts of accounting that demonstrates compliance with budge1ary statutes and ragulabons of the State of Georg:a, wh:ch rs a comprahens:ve basis of accounbng other than generally accepted account:ng pnnc,ptes

See notes to the financial statements

- 34-

UNM;RSIJY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO
BUDGET - (NON-GA.AP BASIS} OTHER ORGANIZED ACTMTIES
YEAR ENDED JUNE 30 2002

SCHEDULE "3"

AGRICULTURAL EXPERIMENT STATION REVENUES
State Appropnabons Other Revenues Retained
EXPENDITURES
Personal SeMces Educabon. General and Departmental SeMces Sponsored ()perabons
Operabng Expenses EducatJon, General and Departmental SeMces Sponsored Operabons
Caprtal Outlay
Excess of Revenues over Expendrtures

BUDGET

ACTUAL (1)

VARIANCEFAVORABLE (UNFAVORABLE)

s 46,577,468 00 $ 46,577,468 00 S
33,422,807 00 34,734,593 14

000 1311 78614

s s s_ _ so,000121500

81,312,06114

~1.~3_11~,7_86_1_4

s s s 43,885,915 00 43,532,238 29

11,550,000 00

11,484,802 86

14,084,360 00 10,450,000 00
3000000

13,393,431 06 12,430,307 70
28 841 00

353,676 71 65,19714
690,928 94 -1,980,307 70
1159 00

s s so,0001215 oo

so.869.s20 91 s___-as=9'"',34"""5""9""1

$

M244023 S_ _ _M__.2_M_0_2_3

(1) Actual amounts_,.., prepared on a prescnbed baSls of accounbng that demonstrates compliance wrth budgetary statutes and regulabons of the State of Georgia, winch IS a comprehensrve basis of accounbng other than generally accepted accounbng pnnc,ples

See notes to the financial statements

- 35-

UNIVERSITY OF GEORGIA
SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET - INON-GAAP BASIS) OTHER ORGANIZED ACTMTIES
YEAR ENDED JUNE 30 2002

SCHEDULE "3"

ATHENS AND TIFTON \/ETERINARY LABORATORIES
REVENUES
Stale Appropnat,ons Other Revenues Retained

BUDGET

ACTUAL/1)

VARIANCEFAVORABLE (UNFAVORABLE)

$ 128,389 00 $ 128,389 00 $

4,853,970 00

3,697,691 66

000 -1, 156,278 32

s 419621359 oo s 3.826,oao 66 s_ _--'-1."'1ss=,2""1"'8"'32~

EXPENDITURES
Personal SeMces Educabon, General and Departmental SeMoes Sponsored Operabons
Operating Expenses Education, General and Departmental SeMces Sponsored Operations
Excess of Revenues over Expenditures

$ 128,389 00 $ 128,375 71 $

3,097,454 00

2,992,977 06

000 1,756,516 00

51216 1,708,281 97

13 29 104,476 94
-512 16 4823403

s s 41962135900

4,830,14680 s _ _ _15_2~.2_1_2_10_

s_ _-.. $ -1 10041066 22

1.,004.._066=.:.22aa.

(1) Act\Jal amounts were prepared on a presatbed bas,s of accounbng that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which Is a comprehensr,e basis of accounbng other than generally accepted accounting pr1naples

See noles to the finanaal statemerrts

-36-

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO
BUDGET - /NON-GAAP BASll
OTHER ORGANIZED ACTMTIES YEAR ENDED JUNE 30 2002

SCHEDULE "3"

COOPERATIVE EXTENSION SERVICE
REVENUES
State Appropnabons Other Revenues Retained

BUDGET

ACTUAL (1)

VARIANCEFAVORABLE (UNFAVORABLE)

$ 39,308,082 00 $ 39,308,082 00 $

23,405,629 00

22,096,611 57

000 -1309017 43

$ 62,713,711 00 $ 61,404,693 57 $ _ _-"'1'.c.30:;,;9,.,0'-1"'7_4c.=..3

EXPENDITURES Personal SeMces
Education, General and Departmental SaMces Sponsored Operallons
Operating Expenses
Education, General and Departmental SeMces
Sponsored Operabons
Excess of Revenues over Expendrturas

$ 42,548,068 00 $ 42,421,12250 $

8,500,000 00

7,960,879 14

6,965,643 00 4,700,000 00

6,190,322 89 4,872,933 11

126,945 50 539,120 86
775,320 11 -172 933 11

s 52,713,711 oo s 61.445.25764 s_ _"'1,2S=a.,_.4"'5"'"3""36""

$

-40 564 07 s_ _ _-4.,.0._564....,..,07._

(1) Actual amounts were pn,pared on a presatt>ed basis of accounbng that demonstrates compliance wrth budgetary atatutes and ragulabons of the State of Georgra, which IS a comprehens,ve basis of accounbng
other than generally aa:epted accounbng prinaplea

See notes to the finanaal atatements

-37 -

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO
BUDGET - INON-GAAP BASIS!
OTHER ORGANIZED ACTMTIES YEAR ENDED JUNE 30 2002

SCHEDULE "3"

MARINE INSTITUTE REVENUES
State Appropnabons Other Revenues Retained
EXPENDITURES
Personal Services Educabon, General and Departmental SeMCeS Sponsored Operat,ons
Operat,ng Expenses Education, General and Departmental Serv,oes Sponsored Operabons
Excess of Revenues over Expendrtures

BUDGET

ACTUAL(1)

VARIANCEFAVORABLE (UNFAVORABLE)

s s 1,119,54500

1,119,545 00 $

TT4 651 00

506,889 52

000 -267 761 48

s s 119941196 oo

1,626,434 52 s_ _ _-"'26;,,;1"'.1-"5-'-1-"48""

$

848,37800 $ 852,716 61 $

575,00000

253,764 07

345,818 00 125,000 00

325,54905 194 404 79

-4,338 61 321,235 93
20,26895 -69 404 79

$ 11894119600 $ 1,62643452 $ _ _~26;,,;7~,7_6_1_48_

s

ooo s_____o__oo_

( 1) Actual amounts were prepared on a presa,bed basis of accounting that demonstrates compliance with budgetary statutes and regulabons of the Sta1e of Georgia, Y,inch le a comprehenSIYe basis of accounting other than generally accepted accounting pnnoples

See notes to the financial slatementa

-38-

UNNERSITY Of GEORGIA SCHEDULE Of REVENUES AND EXPENDITURES COMPARER TO
BUDGET - (NON-GAAP BASISl
OTHER ORGANIZED ACTIYJIIES
YEAR ENPEP JUNE 30. 2002

SCHEDULE "3"

MARINE RESOURCES EXTENSJON CENTER
REVENUES
State Appropna1Jons Other Revenues Retained

BUDGET

ACTUAL(1)

VARIANCEFAVORABLE (UNFAVORABLE)

s 1,698.803 00 S 1.698.803 00 $
1,279,800 00 1,192.616 86

000 ~7 18314

s_ _ _ $ 2,978,603 00 $ 2.891.419 86

~:c7cc,.:..:183=...,1c:.4

EXPENPJTURES
Personal Services Educabon. General and Departmental Selvl08S Sponsored Operabons
Operating Expenses Educa1Jon, General and Departmental Services Sponsored Operabons
Excess of Revenues owr Expenditures

$ 1,584.18000 $ 1,616,66116 $

390,00000

405,958 57

794,42300 210,000 00

620,723 86 245492 00

-32,48118 -15,958 57
173,69914 -35 492 00

$ 21978,603 00 S 21668,835 61 $ _ _ _B:::9c..7:.:6:.:.7..:3:::..9

$

s_ _ _ 2 584 25

_.2 _584--:2;:;.5

(1) Actual amounts were prepared on a prescnbed basrs of eccounbng that demons1rales aimplrence with budgetary statu1es and regulabons of the State of Georgia, v.tlrch rs a comprehenS1ve ba816 of accounbng other than generally accep1ed &<=unbng pnnaples

See notes to the finanaal sta1ements

-39-

UNIVERSITY OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO
BUDGET - !NON-GAAP BASIS} OTHER ORGANIZED ACTIVITIES
YEAR ENDED JUNE 30 2002

SCHEDULE "3"

VETERINARY MEDICINE EXPERIMENT STATION REVENUES
State Appropnat,ons

BUDGET

ACTUAL (1)

VARIANCE FAVORABLE (UNFAVORABLE)

s 4,065,564 oo s 4,065,564 oo s____--'o""o"""o

EXPENDITURES
Personal SeMces Education, General and Departmental SeMCeS
Operabng Expenses EducatJon, General and Departmental Services
Agricultural Research

s 2,379,489 00 $ 2,368,351 02 $

343,702 00 1,342,373 00

354,839 98 1,342.373 00

11,137 98
-11,137 98 000

Excess of Revenues over Expenditures

S 4,065,564 00 $ 4,065,564 00 $ ------'0-'00"'-

$

ooo s_____o_oo_

(1) Actual amounls were prepared on a prescnbed basis of accountmg that demonstrates compliance with budge1ary statutes and regulatlons of the State of Georgra, wtuch ts a comprehensrva basis of aCCO\lnbng other than general~ ac:cepted accounbng pnnaplos

See notes to the finanaal statemems

-40-

UNIVERSITY OF GEORGIA
SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO
BUDGET - <NON-GAAi' BAS\S\
OTHER ORGANIZED ACT\Y!TIES
YEAR ENDED JUNE 30 2002

SCHEDULE "3"

VETERINARY MEDICINE TEACHING HOSPITAL REVENUES
State Apprnpnabons Other Revenues Retained
CARRY-OVER FROM PR\QR YEAR Transfer from Reserved Fund Balance

BUDGET

ACTUAL (1)

VARIANCEFAVORABLE (UNFAVORABLE)

$ 569,182 00 $ 569,182 00 $ 7,000.000 00 6,681.082 10
$ 7,569,182 00 $ 7,250,264 10 $

117.952 00

000

000 -318 917 90 -318,917 90
-117 952 00

s s s___ 1sa113400 1,25026410

-"36=,86=9-=-so=-

EXPENDITURES Personal Services
Educabon, General end Departmental Services Operabng Expenses
Educatron, General end Departmental SeMoes
Excess of Revenues over Expendrtures

s 3,349,343 00 $ 3,262,351 97 $
4 337 791 00 3,900,573 72

86,991 03 437 217 28

s

s 11sa11134 oo

1,162,925 69 s_ ___;::s2=-'4"',2:.::oa=3'-1

$

87 338 41 $ ____8_7_3_3..,8.4.1.,

(1) Actual emounta were prepared on a presa,bed basrs of accoun1Jng that demonstra1es cornplrance wrth budgetary statutes end ll!9Ulations of the State of Georgia, wtuch rs a compn,hensr,e baSIS of accounbng other than generally accepted accounbng pnnaples

See notes to the finanaal statements

-41

UNIVERSITY OF GEORGIA RECONCILIATION:OF SALARIES AND TRAVEL
YEAR'ENDED JUNE 30 2002

SCHEDULE "4"

Totals per Annual Supplement
Prepaid Salanes June 30, 2002 June 30, 2001
Accruals
June 30, 2002
June ~o. 2001
July 1, 2001 Accrual AdJUStments
Compensated Absences June 30, 2002 June 30, 2001

SALARIES

TRAVEL

$ 484,801,634 62 $ 10,979,539 84

-1,154,273 06 1,103,309 90

2,821,553 30 -2,785,957 34
55,44032

33,432,723 43 -29,869,837 59

$ 488,404,593 58 $ 10,979,539 84

See notes to the finanaal statements

-42 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORT

Rt'SSELL w. ""TO' STATE AUDITOR (404) 656 2174

0EPARTI\1ENT OF AUDITS AND ACCOUNTS
:!54 W,F,hingron S1rcct ~ \V. Surtc 214 Atlanta. Gcorg,a 10334-MOO
January 30, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the Board of Regents ofthe Uruvers1ty System of Georgia
and Honorable Michael F. Adams, President Uruvers1ty 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 Uruvers1ty of Georgia as of and for the year ended June 30, 2002, and have issued our report thereon dated January 30, 2003. We conducted our audit m accordance with aud1tmg standards generally accepted m the Uruted States of Amenca and the standards applicable to financial audits contamed m Government Aud1tmg Standards, issued by the Comptroller General of the Uruted States.
Compliance
As part of obtammg reasonable assurance about whether the Uruvers1ty of Georgia's financial statements are free of matenal misstatement, we performed tests of its compliance With certam proV1s10ns oflaws, regulations, contracts and grants, noncompliance With wluch could have a direct and matenal effect on the determmatJon of financial statement amounts However, prov1dmg an op1mon on compliance with those prov1s1ons was not an obJectlve ofour audit, and accordmgly, we do not express such an optruon The results ofour tests disclosed no instances ofnoncompliance that are reqmred to be reported under Government Aud1tmg Standards
Internal Control Over Fmanctal Reportmg
In planrung and performmg our audit, we considered the Umvers1ty ofGeorgia's mternal control over financial reporting m order to determme our auditing procedures for the purpose ofexpressmg our opm1on on the financial statements and not to proVIde assurance on the mtemal control over financial reportmg. Our cons1deratlon of the mternal control over financial reporting would not necessanly
2002YB-10X

disclose all matters in the internal control over financial reporting that might be matenal wealmesses A matenal weakness 1s 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 nsk that rrusstatements in amounts that would be matenal in relauon to the financial statements being audited may occur and not be detected w1thm a umely penod 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 matenal wealmesses
This report 1s intended solely for the mformat1on and use of the audit corrumttee, management, Federal awarding agencies and pass-through entitles and 1s not intended to be and should not be used by anyone other than these specified parties
Respectfully submitted,

RWH:gp 2002">:'B-I0X

State Auditor

SECTION ID AUDITEE'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, 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-518-01-01 FS-518-01-02

Previously Reported Corrective ActJ.on Implemented PreV1ously Reported Corrective Action Implemented