UNIVERSITY OF GEORGIA
ATHENS, GEORGIA
REPORT ON AUDIT OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009
Georgia Department of Audits and Accounts Russell W. Hinton State Auditor

UNIVERSITY OF GEORGIA - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

BASIC FINANCIAL STATEMENTS

EXHIBITS

A STATEMENT OF NET ASSETS

2

B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS

3

C STATEMENT OF CASH FLOWS

4

D NOTES TO THE FINANCIAL STATEMENTS

6

SUPPLEMENTARY INFORMATION

SCHEDULES

I BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND

30

2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT

(NON-GAAP BASIS) BUDGET FUND

31

3 STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING

SOURCE COMPARED TO BUDGET

(NON-GAAP BASIS) BUDGET FUND

32

4 RECONCILIATION OF SALARIES AND TRAVEL

37

SECTION II CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
November 17, 2009

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 University of Georgia
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying basic financial statements (Exhibits A through D) of the University of Georgia, an organizational unit of the State of Georgia, as of and for the year ended June 30, 2009. These financial statements are the responsibility of the University of Georgia's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of University's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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.

09ARL-62

In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of University of Georgia as of June 30, 2009, and its changes in financial position and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Management's Discussion and Analysis is not a part ofthe basic financial statements but is required supplementary information required by accounting principles generally accepted in the United States ofAmerica. We have applied certain limited procedures, which consisted principally ofinquiries of management regarding the methods ofmeasurement and presentation ofthis required supplementary information. However, we did not audit this information and express no opinion on it.

Our audit was conducted for the purpose of forming an opinion on the basic financial statements of University ofGeorgia taken as a whole. The accompanying supplementary information (Schedules 1 through 4) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

Respectfully submitted,

..

~=on~~1~

State Auditor

RWH:as 09ARL-62

REQUIRED SUPPLEMENTARY INFORMATION

UNIVERSITY OF GEORGIA Management's Discussion and Analysis

Introduction

The University of Georgia is one of the 35 institutions of higher education of the University System of Georgia. The University of Georgia was incorporated by an act of the General Assembly on January 27, 1785. Georgia became the first state to charter a state-supported university.

The University of Georgia, a land-grant and sea-grant university with state-wide commitments and responsibilities is the state's flagship institution of higher education. It is also the state's oldest, most comprehensive and most diversified institution of higher education. Its motto, "to teach, to serve, and to inquire into the nature of things," reflects the University's integral and unique role in the conservation and enhancement of the state's and nation's intellectual, cultural, and environmental heritage. As a comprehensive land-grant and sea-grant institution, the University of Georgia offers baccalaureate, master's, doctoral and professional degrees in the arts, humanities, social sciences, biological sciences, physical sciences, agricultural and environmental sciences, business, environmental design, family and consumer sciences, forest resources, journalism and mass communication, education, law, pharmacy, social work, and veterinary medicine. A comparison of Faculty and Student numbers follow:

Fiscal Year 2009 Fiscal Year 2008 Fiscal Year 2007

Faculty
1,848 1,822 1,848

Students (Headcount)
34,180 33,831 33,959

Students (FTE)
32,261 31,818 31,987

Overview ofthe Financial Statements and Financial Analysis

The University of Georgia is proud to present its financial statements for fiscal year 2009. The emphasis of discussions about these statements will be on current year data. There are three financial statements presented: the Statement of Net Assets; the Statement of Revenues, Expenses and Changes in Net Assets; and the Statement of Cash Flows. This discussion and analysis of the University's financial statements provides an overview of its financial activities for the year. Comparative data is provided for fiscal year 2009 and fiscal year 2008.

Statement ofNet Assets

The Statement of Net Assets presents the assets, liabilities, and net assets of the University as of the end of the fiscal year. The Statement of Net Assets is a point of time financial statement. The purpose of the Statement of Net Assets is to present to the readers of the financial statements a fiscal snapshot of the University of Georgia. The Statement of Net Assets presents end-of-year data concerning Assets (current and noncurrent), Liabilities (current and noncurrent), and Net Assets (assets minus liabilities). The difference between current and noncurrent assets will be discussed in the Notes to the Financial Statements.

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From the data presented, readers of the Statement of Net Assets are able to determine the assets available to continue the operations of the institution. They are also able to determine how much the institution owes vendors.

Finally, the Statement of Net Assets provides a picture of the net assets (assets minus liabilities) and their availability for expenditure by the institution. Net assets are divided into three major categories. The first category, invested in capital assets, net of debt, provides the institution's equity in property, plant and equipment owned by the institution. The next asset category is restricted net assets, which is divided into three categories, nonexpendable, expendable and capital projects. The corpus of nonexpendable restricted resources is only available for investment purposes. Expendable restricted net assets are available for expenditure by the institution but must be spent for purposes as determined by donors and/or external entities that have placed time or purpose restrictions on the use of the assets. The final category is unrestricted net assets. Unrestricted net assets are available to the institution for any lawful purpose of the institution.

Statement of Net Assets, Condensed

June 30, 2009

June 30, 2008

Assets Current Assets Capital Assets, Net Other Assets

$ 290,998,689 1,283,187,469 64,424,373

$ 284,248,689 1,160,318,033 63,023,779

Total Assets

$1,638,610,531

$ 1,507,590,501

Liabilities Current Liabilities Noncurrent Liabilities

$ 136,093,374 213,967,431

$ 120,406,694 167,155,107

Total Liabilities

$ 350,060,805

$ 287,561,801

Net Assets Invested in Capital Assets, Net of Debt Restricted - Nonexpendable Restricted - Expendable Restricted - Capital Projects Unrestricted

$ 1,081,946,523 52,823,876 67,033,436 1,887,938 84,857,953

$ 1,009,701,095 50,137,516 67,356,275 756,840 92,076,974

Total Net Assets

$ 1!288!5492726

$ 1~2201028)00

The total assets of the institution increased by $131,020,030. A review of the Statement of Net Assets will reveal that the increase was primarily due to an increase of $122,869,436 in the category of Capital Assets, Net. These capital asset increases are more fully described in the Management's Discussion and Analysis under the section titled Capital Assets.

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The total liabilities for the year increased by $62,499,004. This increase was primarily due to an increase in lease purchase obligations which are due under lease agreements between the University System of Georgia and the UGA Real Estate Foundation, Inc., a related party. The combination of the increase in total assets of$131,020,030 and the increase in total liabilities of $62,499,004 yields an increase in total net assets of $68,521,026. As previously noted, the increase in total net assets is primarily in the category of Invested in Capital Assets, Net of Debt, in the amount of $72,245,428.

Statement ofRevenues, Expenses and Changes in Net Assets

Changes in total net assets as presented on the Statement of Net Assets are based on the activity presented in the Statement of Revenues, Expenses and Changes in Net Assets. The purpose of the statement is to present the revenues received by the institution, both operating and nonoperating, and the expenses paid by the institution, operating and nonoperating, and any other revenues, expenses, gains and losses received or spent by the institution. Generally speaking operating revenues are received for providing goods and services to the various customers and constituencies of the institution. Operating expenses are those expenses paid to acquire or produce the goods and services provided in return for the operating revenues, and to carry out the mission of the institution. Nonoperating revenues are revenues received for which goods and services are not provided. For example state appropriations are nonoperating because they are provided by the Legislature to the institution without the Legislature directly receiving commensurate goods and services for those revenues.

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

June 30, 2009

June 30, 2008

Operating Revenues Operating Expenses

$ 627,565,199 1,126,444,295

$ 600,026,555 1,110,921,074

Operating Loss

$ -498,879,096

$ -510,894,519

Nonoperating Revenues and Expenses

496,993,687

525,466,438

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

$ -1,885,409

$ 14,571,919

Other Revenues, Expenses, Gains or Losses

64,912,962

79,109,515

Increase (Decrease) in Net Assets

$ 63,027,553

$ 93,681,434

Net Assets at Beginning of Year, as Originally

Reported

$ 1,220,028,700

$ 1,126,347,266

Prior Year Adjustments

5,493,473

Net Assets at Beginning of Year, Restated

$ 1,225,522,173

$ 1,126,347,266

Net Assets at End of Year

$ 1,288,549,726

$ 1,220.028,700

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The Statement of Revenues, Expenses and Changes in Net Assets reflects a positive year with a $68,521,026 increase in net assets at the end of the year. Some highlights of the information presented on the Statement of Revenues, Expenses and Changes in Net Assets are as follows:

Revenue By Source For The Years Ended June 30, 2009 and June 30, 2008

June 30, 2009

June 30, 2008

Operating Revenue Tuition and Fees Federal Appropriations Grants and Contracts Sales and Services of Educational Departments Auxiliary Other

$ 223,234,237 14,485,340
208,567,115
40,134,426 138,090,042
3,054,039

$ 203,244,615 15,395,942
201,514,041
47,404,503 129,804,359
2,663,095

Total Operating Revenue

$ 627,565,199

$ 600,026.555

Nonoperating Revenue State Appropriations Federal Stimulus - Stabilization Funds Grants and Contracts Gifts Investment Income Other

$ 445,084,744 3,578,412 17,412,933
33,235,762 973,396
8,786,544

$ 471,177,285
17,346,248 34,870,520
6,571,468 7,798,838

Total Nonoperating Revenue

$ 509,071,791

$ 537,764,359

Capital Grants and Gifts State Other

$ 49,652,710 15,260,252

$ 43,671,987 35,437,528

Total Capital Grants and Gifts

$ 64,912,962

$ 79,109,515

Total Revenues

$ 1,201,549.952

$ 1,216,900.429

- IV -

Expenses (By Functional Classification) For The Years Ended June 30, 2009 and June 30, 2008

June 30, 2009

June 30, 2008

Operating Expenses Instruction Research Public Service Academic Support Student Services Institutional Support Plant Operations and Maintenance Scholarships and Fellowships Auxiliary Enterprises

$ 242,228, 185 286,710,641 160,780,535 82,387,915 35,775,604 63,302,133 110,322,667 16,598,860 128,337,755

$ 230,999,493 286,889,193 153,546,888 104,828,251 32,395,645 67,946,589 98,936,420 14,398,059 120,980,536

Total Operating Expenses

$ 1,126,444,295

$ 1,110,921,074

Nonoperating Expenses Interest Expense (Capital Assets)

12,078,104

12,297,921

Total Expenses

$ 1~138!522!399

$ 1)231218!995

Operating revenues increased by $27,538,644 in fiscal year 2009, which included $19,989,622 net increase in tuition and fees and growth of $8,285,683 in auxiliary revenues. The auxiliary revenue increases are the result of modest fee increases and additional participation in services provided by Auxiliary units; specific increases included a $1,501,616 increase in Residence Hall revenues, $2,627,340 in Food Service revenues, and $2,933,152 in Parking/Transportation revenues.

While state grants and contracts revenues decreased significantly, the University experienced an overall increase in grants and contracts revenue due to an 18% increase in private/other grants and contracts and a 3.2% increase in Federal grants and contracts.

Nonoperating revenues decreased by $28,692,568 for the year primarily due to a decrease of $26,092,541 or 6% decrease in State Appropriations revenue resulting primarily from state budget reductions that occurred during the year totaling 11 %. In fiscal year 2009, the University received $3,578,412 in Federal stimulus stabilization funds through the State of Georgia to help offset Base Budget reductions in state appropriations that totaled $58,251,280.

State funded Capital Gifts and Grants increased from fiscal year 2008 to fiscal year 2009 by $5,980,723 as a result of increased funding for capital improvements and additions through the Georgia State Financing and Investment Commission (GSFIC).

Total operating expenses increased by $15,523,221 or 1.4% between fiscal years. This increase was due to increases in faculty salaries, employee benefit cost escalations, and utility cost increases. The increase in energy costs were primarily associated with rising natural gas and electricity costs. The University experienced decreases in supplies/other services expenses and travel costs which reflect the impact of state budget cuts to University operations.

-V-

Statement of Cash Flows

The final statement presented by the University of Georgia is the Statement of Cash Flows. The Statement of Cash Flows presents detailed information about the cash activity of the institution during the year. The statement is divided into five parts. The first part deals with operating cash flows and shows the net cash used by the operating activities of the institution. The second section reflects cash flows from noncapital financing activities. This section reflects the cash received and spent for nonoperating, noninvesting, and noncapital financing purposes. The third section deals with cash flows from capital and related financing activities. This section deals with the cash used for the acquisition and construction of capital and related items. The fourth section reflects the cash flows from investing activities and shows the purchases, proceeds, and interest received from investing activities. The fifth section reconciles the net cash used to the operating income or loss reflected on the Statement of Revenues, Expenses and Changes in Net Assets.

Cash Flows for the Years Ended June 30, 2009 and June 30, 2008, Condensed

June 30, 2009

June 30, 2008

Cash Provided (Used) By: Operating Activities Noncapital Financing Activities Capital and Related Financing Activities Investing Activities

$ -431,057,567 517,091,317 -85,320,435 3,439,525

$ -445,367,663 524,904,812 -76,191,024 24,878,440

Net Change in Cash Cash, Beginning of Year

$ 4,152,840 213,417,057

$ 28,224,565 185,192,492

Cash, End of Year

$ 217,569.897

$ 213,417,057

Capital Assets

The University had several significant capital asset additions for facilities in fiscal year 2009. The Tate Center Expansion, built over a $13 million parking deck, was completed in spring 2009, adding 100,000 square feet of space for student programs and events. The $47 million addition includes large meeting halls and event rooms as well as a food court with a variety of dining options. The University Health Center addition opened on March 30th and includes space for new clinics and additional space for existing student services. The $13 million project added 27,500 square feet of new construction and renovated 7,000 square feet of the existing building.

The new $42 million Visual Arts Building, home to the Lamar Dodd School of Art, officially opened September 2008 with 172,000 square feet for undergraduate and graduate students in studio, art history, and art education programs. The building also provides gallery space, resource and design centers, and wood and metal shops.

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Renovations funded through the Georgia State Financing and Investment Commission (GSFIC) totaled $26 million in fiscal year 2009 and included $17.6 million for various buildings and $5 .3 million for equipment. In fiscal year 2009, GSFIC also transferred to the University for completion, the remaining phase of the Animal Health Research Center upgrades.
During fiscal year 2009, the University had a number of significant capital projects under construction. These projects included a $44 million addition to the College of Pharmacy, a new Student Leaming Center at Griffin that will enable the continuing expansion of undergraduate degree programs delivered at that campus, a new dining facility at the Rock Eagle 4-H Center, and an addition to the Georgia Museum of Art.
For additional information concerning Capital Assets, see Notes 1, 6, 8, and 10 in the Notes to the Financial Statements.
Long-Term Liabilities
The University of Georgia had Long-Term Liabilities of $243,209,624 of which $29,242,193 was reflected as current liability at June 30, 2009.
For additional information concerning Long-Term Liabilities, see Notes 1 and 8 in the Notes to the Financial Statements.
Economic Outlook
The national and state economy was officially declared in a recession during fiscal year 2009, which led to significant decreases in state revenue collections. The decline in state revenues led to an overall 11 % budget reduction to the University of Georgia. This economic situation accentuated the University's commitment to continue using its financial resources wisely and underscored the University's energy and water conservation efforts for cost containment and environmental management. To fiscally prepare for the economic climate and budget reductions, the University directed each of its academic and administrative units to set aside 2% of their operating budget as fiscal year 2009 began. These unit reductions increased to 6% as the fiscal year progressed with the central University budget providing the balance. The University continued to curtail the hiring process by requiring all state funded faculty and staff positions to be approved by a senior vice president before advertising the position, a process put in place in March 2008. These actions provided the University with flexibility to address increasing energy and health care costs and manage budget reductions without layoffs or furloughs.
As fiscal year 2010 began, the state continued to experience declining revenue collections, additional budget reduction requirements, and rising energy and health care costs. In order to address these economic challenges, the Governor and Board of Regents directed institutions to furlough all employees for six days during the fiscal year and to reduce expenditures by 5%. The University will control hiring for new and replacement positions through the approval process that was put in place in March 2008 and will continue requiring senior vice president approval for all vehicle purchases. Academic and administrative units were once again directed to set aside 2% of their fiscal year operating budgets to plan for fiscal year 2010 budget cuts with the
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central University budget balancing the remainder of the 5% reduction. As fiscal year 2010 progresses, the University will take appropriate action to implement any additional expenditure reduction and cost control measures that are necessary to meet state mandated budget reductions, while maintaining the University's ability to provide core mission functions to sustain instruction, research, and public service activities. Michael F. Adams, President University of Georgia
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BASIC FINANCIAL STATEMENTS - 1-

UNIVERSITY OF GEORGIA STATEMENT OF NET ASSETS
JUNE 30, 2009
ASSETS
Current Assets Cash and Cash Equivalents Accounts Receivable, Net (Note 3) Federal Financial Assistance Other Inventories (Note 4) Prepaid Items
Total Current Assets
Noncurrent Assets Noncurrent Cash Other Assets Investments Notes Receivable, Net Capital Assets, Net (Note 6)
Total Noncurrent Assets
Total Assets
LIABILITIES
Current Liabilities Accounts Payable Salaries Payable Contracts Payable Deposits Deferred Revenue (Note 7) Other Liabilities Deposits Held for Other Organizations Lease Purchase Obligations Compensated Absences
Total Current Liabilities
Noncurrent Liabilities Lease Purchase Obligations Compensated Absences Other Liabilities
Total Noncurrent Liabilities
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Restricted for:
Nonexpendable Expendable Capital Projects Unrestricted
Total Net Assets
The notes to the financial statements are an integral part of this statement.
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EXHIBIT"A"

$ 210,933,906
17,772,300 50,627,795
6,114,520 5!5501168
$ 29019981689

$

6,635,991

1,273,102

45,963,189 10,552,091

1128311871469

$ 1!347,6111842

$ 1163816101531

$

21,143,080

4,219,533

6,849,952

1,170,597

57,830,065

2,189,919

13,576,368

2,588,937

2615241923

$ 13610931374

$ 198,652,009 14,485,063 8301359
$ 21319671431
$ 3501060,805

$ 1,081,946,523
52,823,876 67,033,436
1,887,938 8418571953

$ 1,2881549,726

UNIVERSITY OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
YEAR ENDED JUNE 30, 2009
OPERATING REVENUES
Student Tuition and Fees Less: Scholarship Allowances
Federal Appropriations Grants and Contracts
Federal State Other Sales and Services of Educational Departments Rents and Royalties Auxiliary Enterprises Residence Halls Bookstore Food Services ParkingfTransportation Health Services Intercollegiate Athletics Other Organizations Other Operating Revenues
Total Operating Revenues
OPERATING EXPENSES
Salaries Faculty Staff
Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation
Total Operating Expenses
Operating Income (Loss)
NONOPERATING REVENUES (EXPENSES)
State Appropriations Federal Stimulus - Stabilization Funds Grants and Contracts
State Other Gifts Interest and Other Investment Income Interest Expense Other Nonoperating Revenues
Net Nonoperating Revenues
Income (Loss) Before Other Revenues, Expenses, Gains, or Losses
Capital Grants and Gifts State Other
Total Other Revenues, Expenses, Gains or Losses
Increase (Decrease) in Net Assets
Net Assets - Beginning of Year (Restated)
Net Assets - End of Year
The notes to the financial statements are an integral part of this statement.
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EXHIBIT "B"

$ 306,224,618 -82,990,381 14,485,340
99,608,712 30,673,047 78,285,356 40,134,426
367,993
39,127,050 4,062,310
36,308,162 17,512,847 17,901,282 19,422,342
3,756,049 2,686,046
$ 627,565,199

$ 190,799,170 414,806,142 167,640,979 785,633 12,194,261 23,676,598 37,709,231 211,061,683 67,770,598
$ 1,126,444,295
$ -498,879,096

$ 445,084,744 3,578,412

798,854 16,614,079 33,235,762
973,396 -12,078,104
8,786,544

$ 496,993,687

$

-1,885,409

$

49,652,710

15,260,252

$

64,912,962

$

63,027,553

1,225,522, 173

$ 1,288l549, 726

UNIVERSITY OF GEORGIA STATEMENT OF CASH FLOWS
YEAR ENDED JUNE 30, 2009
CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Federal Appropriations Grants and Contracts Sales and Services of Educational Departments Payments to Suppliers Payments to Employees Payments for Scholarships and Fellowships Loans Issued to Students and Employees Collection of Loans to Students and Employees Auxiliary Enterprise Charges: Residence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Other Receipts (Payments)
Net Cash Provided (Used) by Operating Activities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations Federal Stimulus - Stabilization Funds Agency Funds Transactions Gifts and Grants Received for Other than Capital Purposes Other Nonoperating Receipts
Net Cash Flows Provided (Used) by Noncapital Financing Activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Grants and Gifts Received Proceeds from Sale of Capital Assets Purchases of Capital Assets Principal Paid on Capital Debt and Leases Interest Paid on Capital Debt and Leases
Net Cash Provided (Used) by Capital and Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES Interest on Investments
Net Increase (Decrease) in Cash
Cash and Cash Equivalents - Beginning of Year
Cash and Cash Equivalents - End of Year

EXHIBIT "C"

$ 225,441,839 16,666,535
205,281,528 40,277,830
-426,278,031 -609,250,832
-23,676,598 -944,197 1,789,939
39,618,318 4,212,804
36,160,819 17,565,550 17,881,367 19,433,568
3,877,815 884 179
$ -431,057,567

$ 445,084,744 3,578,412 8,993,965 50,648,695 8,785,501
$ 517,091,317

$

32,284,705

1,043

-103,195,851

-2,332,228

-12,078, 104

$ -85,320,435

$

3,439,525

$

4,152,840

213,417,057

$ 217,569,897

-4 -

UNIVERSITY OF GEORGIA STATEMENT OF CASH FLOWS
YEAR ENDED JUNE 30, 2009
RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating Income (Loss) Adjustments to Reconcile Operating Income to Net Cash
Provided (Used) by Operating Activities Depreciation Change in Assets and Liabilities: Accounts Receivable, Net Inventories Prepaid Items Notes Receivable, Net Accounts Payable Deferred Revenue Other Liabilities Compensated Absences
Net Cash Provided (Used) by Operating Activities
NONCASH ACTIVITY Fixed Assets Acquired by Incurring Capital Lease Obligations Change in Fair Value of Investments Recognized as a Component of Interest Income Gift of Capital Assets Reducing Proceeds of Capital Grants and Gifts

EXHIBIT "C"
$ -498,879,096
67,770,598 -8,018, 194
-854,791 -136,688 845,742 562,898 9,242,354
50,435 -1,640,825
$ -431,057,567
$ ===::::::::::=52=,9=5=6='==2,=36= $ ==2,...,=46=6=,1=2=9 $ -32,628,257

The notes to the financial statements are an integral part of this statement. -5-

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS The University of Georgia serves the state and national communities by providing its students with academic instruction that advances fundamental knowledge, and by disseminating knowledge to the people of Georgia and throughout the country.
REPORTING ENTITY The University of Georgia is one of thirty-five (35) 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 financial 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 (GASB) Codification of Governmental Accounting and Financial Reporting Standards.
Legally separate, tax exempt organizations whose activities primarily support units of the University System of Georgia, which are organizational units of the State of Georgia, are considered potential component units of the State. See Note 16 for additional information.
FINANCIAL STATEMENT PRESENTATION In June 1999, the GASB issued Statement No. 34, Basic Financial Statements and Management Discussion and Analysis for 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 Universities. The State of Georgia implemented GASB Statement No. 34 as of and for the year ended June 30, 2002. As an organizational unit of the State of Georgia, the University was also required to adopt GASB Statements No. 34 and No. 35 as amended by GASB Statements No. 37 and No. 38. The financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) as prescribed by the GASB and are presented as required by these standards to provide a comprehensive, entitywide perspective of the University's assets, liabilities, net assets, revenues, expenses, changes in net assets, cash flows, and replaces the fund group perspective previously required.

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UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D 11

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FINANCIAL STATEMENT PRESENTATION Generally Accepted Accounting Principles (GAAP) requires that the reporting of summer school revenues and expenses be between fiscal years rather than in one fiscal year. Due to the lack of materiality, Institutions of the University System of Georgia will continue to report summer revenues and expenses in the year in which the predominant activity takes place.
BASIS OF ACCOUNTING For financial reporting purposes, the University is considered a special-purpose government engaged only in business-type activities. Accordingly, the University's financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting, except as noted in the preceding paragraph. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. All significant intra-University transactions have been eliminated.
The University has the option to apply all Financial Accounting Standards Board (FASB) pronouncements issued after November 30, 1989, unless FASB conflicts with GASB. The University has elected to not apply FASB pronouncements issued after the applicable date.
CASH AND CASH EQUIVALENTS Cash and Cash Equivalents consist of petty cash, demand deposits and time deposits in authorized financial institutions, and cash management pools that have the general characteristics of demand deposit accounts. This includes the State Investment Pool and the University's Investment Advisory Account which is invested in short-term highly liquid U.S. Agencies.
INVESTMENTS The University accounts for its investments at fair value in accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools. Changes in unrealized gain (loss) on the carrying value of investments are reported as a component of investment income in the Statement of Revenues, Expenses and Changes in Net Assets. The Board of Regents Legal Fund and the Board of Regents Diversified Fund are included under Investments.
ACCOUNTS RECEIVABLE Accounts receivable consists of tuition and fees charged to students and auxiliary enterprise services provided to students, faculty and staff, the majority of each residing in the State of Georgia. Accounts receivable also includes amounts due from the Federal government, state and local governments, or private sources, in connection with reimbursement of allowable expenditures made pursuant to the University's grants and contracts. Accounts receivable are recorded net of estimated uncollectible amounts.

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UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVENTORIES Consumable supplies are carried at the lower of cost or market on the first-in, first-out ("FIFO") basis. Resale Inventories are valued at cost using the average cost basis.
NONCURRENT CASH AND INVESTMENTS Cash and investments that are externally restricted and cannot be used to pay current liabilities are classified as noncurrent assets in the Statement of Net Assets.
CAPITAL ASSETS Capital assets are recorded at cost at the date of acquisition, or fair market value at the date of donation in the case of gifts. For equipment, the University's capitalization policy includes all items with a unit cost of $5,000 or more, and an estimated useful life of greater than one year. Renovations to buildings, infrastructure, and land improvements that exceed $100,000 and/or significantly increase the value or extend the useful life of the structure are capitalized. Routine repairs and maintenance are charged to operating expense in the year in which the expense was incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 40 to 60 years for buildings, 20 to 25 years for infrastructure and land improvements, 10 years for library books, and 3 to 20 years for equipment. Residual values will generally be 10% of historical costs for infrastructure, buildings and building improvements, and facilities and other improvements.
To obtain the total picture of plant additions in the University System, it is necessary to look at the activities of the Georgia State Financing and Investment Commission (GSFIC) - an organization that is external to the System. GSFIC issues bonds for and on behalf of the State of Georgia, pursuant to powers granted to it in the Constitution of the State of Georgia and the Act creating the GSFIC. The bonds so issued constitute direct and general obligations of the State of Georgia, to the payment of which the full faith, credit and taxing power of the State are pledged.
For projects managed by GSFIC, the GSFIC retains construction in progress on its books throughout the construction period and transfers the entire project to the University when complete. For projects managed by the University, the University retains construction in progress on its books and is reimbursed by GSFIC. For the year ended June 30, 2009, GSFIC transferred capital additions valued at $26,375,508 to the University of Georgia.
DEPOSITS Deposits represent good faith deposits from students to reserve housing assignments in a University residence hall.
DEFERRED REVENUES Deferred revenues include amounts received for tuition and fees and certain auxiliary activities prior to the end of the fiscal year but related to the subsequent accounting period. Deferred revenues also include amounts received from grant and contract sponsors that have not yet been earned.
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UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
COMPENSATED ABSENCES Employee vacation pay is accrued at year-end for financial statement purposes. The liability and expense incurred are recorded at year-end as compensated absences in the Statement of Net Assets, and as a component of compensation and benefit expense in the Statements of Revenues, Expenses and Changes in Net Assets. The University of Georgia had accrued liability for compensated absences in the amount of $42,650,811 as of July 1, 2009. For fiscal year 2009, $28,154,084 was earned in compensated absences and employees were paid $29,794,909, for a net decrease of $1,640,825. The ending balance as of June 30, 2009 in accrued liability for compensated absences was $41,009,986.
NONCURRENT LIABILITIES Noncurrent liabilities include (1) liabilities that will not be paid within the next fiscal year; (2) capital lease obligations with contractual maturities greater than one year; and (3) other liabilities that, although payable within one year, are to be paid from funds that are classified as noncurrent assets.
NET ASSETS The University's net assets are classified as follows:
Invested in capital assets, net ofrelated debt: This represents the University's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt. The term "debt obligations" as used in this definition does not include debt of the GSFIC as discussed previously in Note 1 - Capital Assets section.
Restricted net assets - nonexpendable: Nonexpendable restricted net assets consist of endowment and similar type funds in which donors or other outside sources have stipulated, as a condition of the gift instrument, that the principal is to be maintained inviolate and in perpetuity, and invested for the purpose of producing present and future income, which may either be expended or added to principal. The University may accumulate as much of the annual net income of an institutional fund as is prudent under the standard established by Code Section 44-15-7 of Annotated Code of Georgia.
Restricted net assets - expendable: Restricted expendable net assets include resources in which the University is legally or contractually obligated to spend resources in accordance with restrictions imposed by external third parties.

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UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NET ASSETS Expendable Restricted Net Assets include the following:

Restricted - E&G and Other Organized Activities Federal Loans Institutional Loans

$ 45,981,266 10,570,622 10,481,548

Total Restricted Expendable

$ 67,033.436

Restricted net assets - expendable - Capital Projects: This represents resources for which the .University is legally or contractually obligated to spend resources for capital projects in accordance with restrictions imposed by external third parties.

Unrestricted net assets: Unrestricted net assets represent resources derived from student tuition and fees, state appropriations, and sales and services of educational departments and auxiliary enterprises. These resources are used for transactions relating to the educational and general operations of the University, and may be used at the discretion of the governing board to meet current expenses for those purposes, except for unexpended state appropriations (surplus) of $255,504.73. Unexpended state appropriations must be refunded to the Board of Regents of the University System of Georgia, University System Office for remittance to the Office of Treasury and Fiscal Services. These resources also include auxiliary enterprises, which are substantially self-supporting activities that provide services for students, faculty and staff.

Unrestricted Net Assets includes the following items which are quasi-restricted by management.

R& RReserve Reserve for Encumbrances Reserve for Inventory Other Unrestricted

$ 13,693,282 57,639,862 1,487,000 12,037,809

Total Unrestricted Net Assets

When an expense is incurred that can be paid using either restricted or unrestricted resources, the University's policy is to first apply the expense towards unrestricted resources, and then towards restricted resources.

INCOME TAXES The University of Georgia, as a political subdivision of the State of Georgia, is excluded from Federal income taxes under Section 115(1) of the Internal Revenue Code, as amended.

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UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CLASSIFICATION OF REVENUES The University has classified its revenues as either operating or nonoperating revenues in the Statement of Revenues, Expenses and Changes in Net Assets according to the following criteria:
Operating revenues: Operating revenues include activities that have the characteristics of exchange transactions, such as (1) student tuition and fees, net of scholarship allowances, (2) sales and services of auxiliary enterprises, net of scholarship allowances, (3) most Federal, state and local grants and contracts and Federal appropriations, and (4) interest on institutional student loans.
Nonoperating revenues: Nonoperating revenues include activities that have the characteristics of nonexchange transactions, such as gifts and contributions, and other revenue sources that are defined as nonoperating revenues by GASB No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting, and GASB No. 34, such as state appropriations and investment income.
SCHOLARSHIP ALLOWANCES Student tuition and fee revenues, and certain other revenues from students, are reported at gross with a contra revenue account of scholarship allowances in the Statement of Revenues, Expenses and Changes in Net Assets. Scholarship allowances are the difference between the stated charge for goods and services provided by the University, and the amount that is paid by students and/or third parties making payments on the students' behalf. Certain governmental grants, such as Pell grants, and other Federal, state or nongovernmental programs are recorded as either operating or nonoperating revenues in the University's financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the University has recorded contra revenue for scholarship allowances.
Auxiliary Parking/Transportation and Health Services revenues of$17,512,847 and $17,901,282, respectively, are reported net of discounts and allowances of $474,836 and $1,117,216, respectively.
RESTATEMENT OF PRIOR YEAR NET ASSETS As a result of the adoption of GASB Statement No. 52, Land and Other Real Estate Held as Investments by Endowments, the University had real property held by endowments appraised to meet the reporting requirement of endowment held land and other real estate investments at fair value. This change in value results in an increase in net assets at July 1, 2008 of $5,493,473.

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UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 2: DEPOSITS AND INVESTMENTS
DEPOSITS
The custodial credit risk for deposits is the risk that in the event of a bank failure, the University's deposits may not be recovered. Funds belonging to the State of Georgia (and thus the University) 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 any one or more of the following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:
1. Bonds, bills, notes, certificates of indebtedness, or other direct obligations of the United States or of the State of Georgia.
2. Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia.
3. Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose.
4. Industrial revenue bonds and bonds 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 and 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 Corporati on.
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.
At June 30, 2009, the carrying value of deposits was $23,867,210 and the bank balance was $29,432,983. Of the University's deposits, $28,646,220 were uninsured. Of these uninsured deposits, $28,329,468 were collateralized with securities held by the pledging financial institution, by its trust department or agency, and $316,752 were uncollateralized.
INVESTMENTS
The University of Georgia maintains an investment policy which fosters sound and prudent judgment in the management of assets to ensure safety of capital consistent with the fiduciary responsibility each institution has to the citizens of Georgia and which conforms to Board of Regents investment policy. All investments are consistent with donor intent, Board of Regents policy, and applicable Federal and state laws.
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UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 2: DEPOSITS AND INVESTMENTS

INVESTMENTS The University's investments as of June 30, 2009 are presented below. All investments are presented by investment type and debt securities are presented by maturity.

Investment Type

Fair Value

Debt Securities U.S. Treasuries U. S. Agencies Explicitly Guaranteed Implicitly Guaranteed Repurchase Agreements

$ 12,268,907
319,433 62,274,102
465,000

$ 75,327,442

Other Investments Bond/Equity Mutual Funds Equity Mutual Funds Equity Securities - Domestic Real Estate Held for Investment Purposes

40,447 18,212,146
664,322
5,733,942

Investment Pools Board of Regents Legal Fund Diversified Fund Office of Treasury and Fiscal Services Georgia Fund 1

7,743,396 1,189,927

Total Investments

$ 233 935 455

Less Than 1 Year

$

66,906

756 283,832 465,000

$ 816 494

Investment Maturi!Y

1-5 Years

6 - 10 Years

$ 8,582,745 9,555,492

$ 3,527,277
2,599 2,266,916

$ 18 138 237

More than 10 Years

$

91,979

316,078 50,167,862

$ 50 575.919

The Board of Regents Investment Pool is not registered with the Securities and Exchange

Commission as an investment company. The fair value of investments is determined daily.

The pool does not issue shares. Each participant is allocated a pro rata share of each

investment at fair value along with a pro rata share of the interest that it earns. Participation in

the Board of Regents Investment Pool is voluntary. The Board of Regents Investment Pool is

not rated. Additional information on the Board of Regents Investment Pool is disclosed in the

audited Financial Statements of the Board of Regents of the University System of Georgia -

University System Office (oversight unit). This audit can be obtained from the Georgia

Department of Audits

Education Audit Division or on their web site at

http://www.audits.state.ga.us/intemet/searchRpts.html.

The Georgia Fund 1 Investment Pool, managed by the Office of Treasury and Fiscal Services, is not registered with the Securities and Exchange Commission as an investment company, but does operate in a manner consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940. This investment is valued at the pool's share price, $1 per share. The Georgia Fund 1 Investment Pool is an AAAm rated investment pool by Standard and Poor's. The Weighted Average Maturity of the Fund is 41 days.

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UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 2: DEPOSITS AND INVESTMENTS

INVESTMENTS Interest Rate Risk Interest rate risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of an investment. The University's policy for managing interest rate risk is divided between Short-Term and Long-Term investments. Short-Term investments will have a maximum maturity of three years and Long-Term investments will have a maximum maturity of ten years.

The Effective Duration of the Legal Fund is 3.31 years. Of the University's total investment of $7,743,396 in the Legal Fund, $7,743,396 is invested in debt securities.

The Effective Duration of the Diversified Fund is 6.26 years. Of the University's total investment of $1,189,927 in the Diversified Fund, $472,401 is invested in debt securities.

Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event of a failure of the counterparty to a transaction, the University will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The University does not have a formal policy for managing custodial credit risk for investments.

At June 30, 2009, $92,633,868 of the University's applicable investments were uninsured and held by the investment's counterparty in the University's name and $1,599,493 were uninsured and held by the investment's counterparty's trust department or agent, but not in the University's name.

Credit Quality Risk Credit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The University's policy for managing credit quality risk focuses in investment of loan and endowment funds which are funded by private sources. For loan and endowment funds, investments should have an average rating of "AAA". All other investments follow Board of Regents investments guidelines.

The investments subject to credit quality risk are reflected below:

Fair Value

Unrated

Related Debt Investments U. S. Agencies Repurchase Agreements - Underlying U. S. Agencies

$ 62,274,102 $ 62,274,102

465,000

465,000

Total Investments Subject to Credit Quality Risk $ 62!7392102 $ 62!739!102

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UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 2: DEPOSITS AND INVESTMENTS

INVESTMENTS Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The University's policy for managing concentration of credit risk is divided between Short-Term and Long-Term investments. For Short-Term investments, certificates of deposit and repurchase agreements should comprise 25-50%, investment in the Office of Treasury and Fiscal Services, Georgia Fund I should not exceed 50%, and investment in U. S. Treasury obligations or U. S. government agency securities can be 100%. For LongTerm investment of loan and endowment funds, equities comprise 50-75%, fixed income can range between 25-50%, and cash and cash equivalents will range between 10-25%.

As of June 30, 2009, applicable investments in a single issuer where those investments exceed 5% of total investments were as follows:

Federal National Mortgage Association Federal Home Loan Mortgage Corporation

20.7% 6.0%

NOTE 3: ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following at June 30, 2009:

Student Tuition and Fees Auxiliary Enterprises and Other Operating Activities Federal Financial Assistance Georgia State Financing and Investment Commission Other

$ 3,913,732 1,129,499
17,772,300 3,869,045 42,402,837

Less Allowance for Doubtful Accounts

$ 69,087,413 687,318

Net Accounts Receivable

$ 681400.095

NOTE 4: INVENTORIES

Inventories consisted of the following at June 30, 2009:

Food Services Physical Plant Other

$ 1,694,263 2,471,026 1,949,231

Total

$ 6,114,520

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UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 5: NOTES/LOANS RECEIVABLE

The Federal Perkins Loan Program (the Program) comprises substantially all of the loans receivable at June 30, 2009. The Program provides for cancellation of a loan at rates of 10% to 30% per year up to a maximum of I00% if the participant complies with certain provisions. The Federal government reimburses the University for amounts cancelled under these provisions. As the University determines that loans are uncollectible and not eligible for reimbursement by the Federal government, the loans are written off and assigned to the U.S. Department of Education. The University has provided an allowance for uncollectible loans, which, in management's opinion, is sufficient to absorb loans that will ultimately be written off. At June 30, 2009 the allowance for uncollectible loans was approximately $669,287.

NOTE 6: CAPITAL ASSETS

Following are the changes in capital assets for the year ended June 30, 2009:

Beginning Balance Jul)'. 1, 2008

Additions

Reductions

Ending Balance June 30, 2009

Capital Assets, Not Being Depreciated: Land Capitalized Collections Construction Work-In-Progress

$ 26,478,298 $ 2,500,468

12,708,615

4,746,439

86,687,960

43,529,637

$ 28,978,766 17,455,054 64,771,408

Total Capital Assets Not Being Depreciated

$ 125,874,873 $ 50,776,544 $ 65,446,189 $ 111,205 228

Capital Assets, Being Depreciated: Infrastructure Building and Building Improvements Facilities and Other Improvements Equipment Capital Leases Library Collections

$ 44,068,943 $

827,286

1,133,187,893

167,021,804 $

150,399,447

1,246,257

326,014,318

24,599,443

839,383

222,241

225,227,875

11,977,738

307,363
13,198,312 7,721
189 489

$ 44,896,229 1,299,902,334 151,645,704 337,415,449 1,053,903 237,016 124

Total Assets Being Depreciated

$ 1,879,737,859 $ 205,894,769 $ 13,702,885 $2,071,929,743

Less: Accumulated Depreciation: Infrastructure Building and Building Improvements Facilities and Other Improvements Equipment Capital Leases Library Collections

$ 16,888,167 $ 368,225,760 38,557,641 252,859,840 386,797 168,376,494

1,361,846 28,884,628 $
3,696,618 22,611,034
202,427 11,014,045

$ 18,250,013

211,934

396,898,454

42,254,259

12,708,651

262,762,223

7,721

581,503

189 489

179,201,050

Total Accumulated Depreciation

$ 845,294,699 $ 67,770,598 $ 13,117,795 $ 899,947,502

Total Capital Assets, Being Depreciated,

Net

$ li0)4,443,160 $ 138,124,171 $

585 090 $1,171,982,241

Capital Assets, Net

$1,160 318 033 $ 188 200,115

$ 1 283 18:Z 462

Buildings include $209,931,419 of property held under capital leases with the University of Georgia Real Estate Foundation. Accumulated depreciation for those properties is $17,589,217 and $3,613,052 in depreciation expense was recognized for these properties in fiscal year 2009.

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UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 7: DEFERRED REVENUE

Deferred revenue consisted of the following at June 30, 2009:

Prepaid Tuition and Fees Research Other Deferred Revenue

$ 23,449,524 16,376,132 18,004,409

Totals

$ 57,830.065

NOTE 8: LONG-TERM LIABILITIES

Long-Term liability activity for the year ended June 30, 2009 was as follows:

Beginning Balance July 1, 2008

Additions

Reductions

Ending Balance June 30, 2009

Current Portion

Leases Lease Obligations

$ 150 616,938 $ 52,956,236 $ 2,332,228 $ 201,240,946 $ 2,588,937

Other Liabilities Compensated Absences Other

$ 42,650,811 $ 28,154,084 $ 29,794,909 $ 41,009,986 $ 26,524,923

0

958,692

958,692

128,333

Total

$ 42,650,81 I $ 29,112,776 $ 29,794,909 $ 41,968,678 $ 26,653 256

Total Long-Term Obligations $ 123 261142 $ 82 Q62 Ql2 $ 32,127,137 $ 243,2.0.2.,_6_2A $ 29,2421193

NOTE 9: SIGNIFICANT COMMITMENTS

The University had significant unearned, outstanding, construction or renovation contracts executed in the amount of $14,860,396 as of June 30, 2009. This amount is not reflected in the accompanying basic financial statements.

NOTE 10: LEASE OBLIGATIONS

The University of Georgia is obligated under various operating leases for the use of real property (land, buildings, and office facilities) and equipment, and also is obligated under capital leases and installment purchase agreements for the acquisition of real property.

CAPITAL LEASES The University of Georgia occupies eight real properties and holds various equipment items under capital leases. The real property leases expire in various years between 2031 and 2038. The equipment capital leases expire between 2010 and 2014. Reductions in principal on capital leases were $2,332,228 with $12,078,104 in interest expense for a total of $14,410,332 in fiscal year 2009. Interest rates range from 6.83 percent to 9.00 percent. The carrying values of assets held under capital lease at June 30, 2009 were as follows:

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UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 10: LEASE OBLIGATIONS

CAPITAL LEASES Buildings Equipment

$ 192,342,202 472,400

Total Assets Held Under Capital Lease

$ 192,814,602

All eight of the University of Georgia's current real property capital leases are with the University of Georgia Real Estate Foundation (UGAREF), a related entity which is a component unit of the University of Georgia Research Foundation. In August of 2001, the University of Georgia entered into a capital lease with the UGAREF, whereby the University leases the Carlton Street Parking Deck for a 30 year period that began September 30, 2001 and expires August 31, 2031. In November of 2002, the University of Georgia entered into the second capital lease with the UGAREF whereby the University leases the East Village Parking Deck for a 30 year period that began on November 1, 2002 and expires July 31, 2032. In September of 2003, the University of Georgia entered into the third capital lease with the UGAREF, whereby, the University leases the Complex Carbohydrate Research Center for a 30 year period that began on September 25, 2003 and expires September 30, 2033. The University of Georgia entered into the fourth and fifth capital leases with the UGAREF, whereby the University leases the East Campus Village dormitory complex and the East Village Commons dining hall for a 30 year period that began July 1, 2004, and expires June 30, 2034. The University of Georgia entered into a sixth capital lease with UGAREF whereby the University leases the Coverdell Center for a 30 year period that began December 9, 2005 and expires November 30, 2035. During fiscal year 2009, the University entered into the seventh and eighth capital leases with UGAREF whereby the University leases the Tate Student Center Parking Deck and Tate Student Center Expansion for 29 year periods that expire June 30, 2037 and June 30, 2038, respectively. The outstanding liability at June 30, 2009 on these capital leases is $200,565,836.

The University also has various capital leases for equipment with an outstanding balance of $675,110 at June 30, 2009.

OPERATING LEASES The University of Georgia is Lessee under a number of one year operating leases, which generally provide for four (4) renewal option periods. All agreements are cancelable if the State of Georgia does not provide adequate funding, but that is considered a remote possibility. In the normal course of business, operating leases are generally renewed or replaced by other leases. Operating leases are generally payable on a monthly basis.

Properties are leased for a variety of functions, from farm acreage to office space to parking lots.

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UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 10: LEASE OBLIGATIONS

FUTURE COMMITMENTS Future commitments for capital leases (which here and on the Statement of Net Assets include other installment purchase agreements) and for noncancellable operating leases having remaining terms in excess of one year as of June 30, 2009, were as follows:

Year Ending June 30: 2010 2011 2012 2013 2014 2015 - 2019 2020 - 2024 2025 - 2029 2030 - 2034 2035 - 2038

Real Property and Equipment Capital Leases Operating Leases

$ 15,840,521 15,965,472 15,949,781 15,846,618 18,210,921 91,024,750 91,088,807 91,163,675 85,048,522 20,963,934

$ 6,288,693

Total Minimum Lease Payments

$ 461,103,001

$ 6,288.693

Less: Interest Less: Executory Costs (If Paid)

242,398,722 17,463,333

Principal Outstanding

$ 201,240.946

Noncancellable operating lease expenditures in 2009 were $8,973,584 for real property. No expenditures were made for equipment under noncancellable operating leases.

NOTE 11: RETIREMENT PLANS

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 defined benefit pension plan established by the Georgia General Assembly. TRS provides retirement allowances and other benefits for plan participants. 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 TRS offices or from the Georgia Department of Audits and Accounts.

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UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 11: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Funding Policy Employees of the University of Georgia who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The University of Georgia 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 fiscal year 2009, the employer contribution rate was 9.28% for covered employees. Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2009 2008 2007

100% 100% 100%

$ 33,264,426 $ 32,103,416 $ 30,182,072

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA

Plan Description University of Georgia participates in the Employees' Retirement System of Georgia (ERS), a single-employer defined benefit pension plan established by the General Assembly of Georgia for the purpose of providing retirement allowances for employees of the State of Georgia.

The ERS Board of Trustees created the Supplemental Retirement Benefit Plan (SRBP) effective January 1, 1998. The SRBP was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of ERS. The purpose of SRBP is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC 415.

The benefit structure of ERS is established by the Board of Trustees under statutory guidelines. Unless the employee elects otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July 1, 1982, is an "old plan" member subject to the plan provisions in effect prior to July 1, 1982. Members hired on or after July 1, 1982 but prior to January 1, 2009 are "new plan" members subject to the modified plan provisions. Effective January 1, 2009, newly hired State employees, as well as rehired State employees who did not maintain eligibility for the "old" or "new" plan, are members of the Georgia State Employees' Pension and Savings Plan (GSEPS). ERS members hired prior to January 1, 2009 also have the option to change their membership to the GSEPS plan.

Under the old plan, new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 10 years of creditable service and attainment of age 60 or 30 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 25 years of creditable service for members under age 60.

- 20 -

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 11: RETIREMENT PLANS

EMPLOYEES' RETIREMENT SYSTEM OF GEORGIA

Plan Description Retirement benefits paid to members are based upon a formula adopted by the Board of Trustees for such purpose. The formula considers the monthly average of the member's highest 24 consecutive calendar months of salary, the number of years of creditable service, and the member's age at retirement. Post-retirement cost-of-living adjustments may be made to members' benefits provided the members were hired prior to July 1, 2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS.

Funding Policy As established by State statute, all full-time employees of the State of Georgia and its political subdivisions, who are not members of other state retirement systems, are eligible to participate in the ERS. Both employer and employee contributions are established by State statute. The University's payroll for the year ended June 30, 2009, for employees covered by ERS was $1,372,862. The University's total payroll for all employees was $605,605,312.

Member contribution rates are set by law. Member contributions under the old plan are 4% of annual compensation up to $4,200 plus 6% of annual compensation in excess of $4,200. Under the old plan, the University pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these University contributions are included in the members' accounts for refund purposes and are used in the computation of the members' eamable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The University is required to contribute at a specified percentage of active member payroll established by the Board of Trustees determined annually in accordance with actuarial valuation and minimum funding standards as provided by law. These University contributions are not at any time refundable to the member or his/her beneficiary.

Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2009 2008 2007

100% 100% 100%

$ 142,826

$ 122,876

$

98,268

Actuarial and Trend Information Actuarial and historical trend information is presented in the ERS June 30, 2009 financial report, which may be obtained through ERS.

- 21 -

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 11: RETIREMENT PLANS
REGENTS RETIREMENT PLAN
Plan Description The Regents Retirement Plan, a single-employer defined contribution plan, is an optional retirement plan that was created/established by the Georgia General Assembly in O.C.G.A. 4721-1 et.seq. and is administered by the Board of Regents of the University System of Georgia. O.C.G.A. 47-3-68(a) defines who may participate in the Regents Retirement Plan. An "eligible university system employee" is a faculty member or a principal administrator, as designated by the regulations of the Board of Regents. Under the Regents Retirement Plan, a plan participant may purchase annuity contracts from four approved vendors (AIG-VALIC, American Century, Fidelity, and TIAA-CREF) for the purpose of receiving retirement and death benefits. 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 The University of Georgia makes monthly employer contributions for the Regents Retirement Plan at rates adopted by the Teachers Retirement System of Georgia Board of Trustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2009, the employer contribution was 8.15% for the first six months and 9.24% for the last six months of the participating employee's eamable compensation. Employees contribute 5% of their eamable compensation. Amounts attributable to all plan contributions are fully vested and nonforfeitable at all times.
The University of Georgia and the covered employees made the required contributions of $13,393,001 (8.15% or 9.24%) and $7,710,147 (5%), respectively.
AIG-VALIC, American Century, Fidelity, and TIAA-CREF have separately issued financial reports which may be obtained through their respective corporate offices.
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description The University of Georgia participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employer defined contribution plan established by the General Assembly of Georgia for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia.

- 22 -

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 11: RETIREMENT PLANS
GEORGIA DEFINED CONTRIBUTION PLAN
Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board of Trustees. If a member has less than $3,500 credited to his/her account, the Board of Trustees has the option of requiring a lump sum distribution to the member in lieu of making periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute.
Contributions Member contributions are seven and one-half percent (7.5%) of gross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member.
Total contributions made by employees during fiscal year 2009 amounted to $1,741,202 which represents 7.5% of covered payroll. These contributions met the requirements of the plan.
The Georgia Defined Contribution Plan issues a financial report each fiscal year, which may be obtained from the ERS offices.
NOTE 12: RISK MANAGEMENT
The University System of Georgia offers its employees and retirees access to two different selfinsured healthcare plan options - a PPO/PPO Consumer healthcare plan, and an indemnity healthcare plan. The University of Georgia and participating employees and retirees pay premiums to either of the self-insured healthcare plan options to access benefits coverage. The respective self-insured healthcare plan options are included in the financial statements of the Board of Regents of the University System of Georgia - University System Office. All units of the University System of Georgia share the risk of loss for claims associated with these plans. The reserves for these two plans are considered to be a self-sustaining risk fund. Both selfinsured healthcare plan options provide a maximum lifetime benefit of $2,000,000 per person. The Board of Regents has contracted with Blue Cross Blue Shield of Georgia, a wholly owned subsidiary of WellPoint, to serve as the claims administrator for the two self-insured healthcare plan products. In addition to the two different self-insured healthcare plan options offered to the employees of the University System of Georgia, two fully insured HMO healthcare plan options are also offered to System employees.

- 23 -

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 12: RISK MANAGEMENT

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

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.

The University of Georgia is responsible for pollution remediation at the Milledge Avenue landfill site. The University of Georgia has recorded a liability and expense related to this pollution remediation in the amount of $958,692. The liability is reflected on the Statement of Net Assets in Accounts Payable and on the Statement of Revenues, Expenses and Changes in Net Assets in Supplies and Other Services. The liability was determined using a 5-year budget estimate provided by environmental engineers and consultants. The University of Georgia does not anticipate any significant changes to the expected remediation outlay. There are no expected recoveries that have reduced the liability. Pollution remediation liability activity in fiscal year 2009 was as follows:

Beginning
Balance
July 1. 2008

Additions

Reductions

Ending Balance June 30, 2009

Current Portion

Pollution Remediation Obligations

$====0 $

NOTE 13: CONTINGENCIES

958.692 $====0 $

958 692 $

128 334

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 that 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 of Georgia expects such amounts, if any, to be immaterial to its overall financial position.

- 24 -

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 13: CONTINGENCIES
Litigation, claims and assessments filed against the University of Georgia (an organizational unit of the Board of Regents 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, 2009.
NOTE 14: POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
Pursuant to the general powers conferred by the Official Code of Georgia Annotated Section 203-31, the Board of Regents of the University System of Georgia has established group health and life insurance programs for regular employees of the University System of Georgia. It is the policy of the 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 of the group health and life insurance programs. The policies of the Board of Regents of the University System of Georgia define and delineate who is eligible for these post-employment 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. With regard to life insurance, the employer covers the total cost for $25,000 of basic life insurance. If an individual elects to have supplemental, and/or, dependent life insurance coverage, such costs are borne entirely by the employee.
The Board of Regents Retiree Health Benefit Plan is a single employer defined benefit plan. Financial statements and required supplementary information for the Plan are included in the publicly available Consolidated Annual Financial Report of the University System of Georgia. The University pays the employer portion of health insurance for its eligible retirees based on rates that are established annually by the Board of Regents for the upcoming plan year. For 2007 and 2008 plan years, the employer rate was approximately 75% of the total health insurance cost for eligible retirees and the retiree rate was approximately 25%.
As of June 30, 2009, there were 3,937 employees who had retired or were disabled that were receiving these post-employment health and life insurance benefits. For the year ended June 30, 2009, the University of Georgia recognized as incurred $21,045,866 of expenditures, which was net of $9,427,144 of participant contributions.

- 25 -

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT "D"

NOTE 15: NATURAL CLASSIFICATIONS WITH FUNCTIONAL CLASSIFICATIONS

The University's operating expenses by functional classification for fiscal year 2009 are shown below:

Natural Classification
Salaries Faculty Staff
Employee Benefits Other Personal Services Travel Scholarships and
Fellowships Utilities Supplies and Other
Services Depreciation
Total Operating Expenses

Instruction

Functional Classification

Research

Public Service

Academic Sum2ort

Student Services

$ 94,506,692 $ 81,583,718 $ 13,989,996 $

685,05 I $

32,188

65,518,541

89,346,590

75,383,063

41,221,795

16,214,328

38,372,664

38,826,319

29,159,724

12,758,296

4,738,341

67,161

26,144

12,560

28,980

29,988

2,222,447

5,641,866

3,037,114

433,328

180,846

3,017,977 1,557,260

1,292,192 1,124,897

167,971 1,288,375

13,570 648,864

1,711,737 235,439

24,027,953 12.937.490

33,468,783 4 272 949

11,324,980 15 273 051

11,727,011 905.726

$ 286 710.Ml $ 160.780 535 $ 82387915

Natural Classification
Salaries Faculty Staff
Employee Benefits Other Personal Services Travel Scholarships and
Fellowships Utilities Supplies and Other
Services Depreciation
Total Operating Expenses

Institutional Support

Functional Classification

Plant

Operations and Scholarships

Auxiliary

Maintenance and Fellowshi12s Entemrises

Total Operating Ex12enses

$

1,225

34,301,602 $ 38,166,169

16,546,714

13,964,942

612,300

532,558

49,962

$

300 $ 190,799, I 70

54,654,054

414,806,142

13,273,979

167,640,979

8,500

785,633

96,140

12,194,261

5,000 453,693

$ 16,598,860 25,380,489

869,291 7,020,214

23,676,598 37,709,231

9,940,517 908 524

29,265,008 3 496 097

39,806,691 12 608 586

211,061,683 67,770,598

LJ.10..322 667 $ 16 598.860 $ 128 337 755 $ I 126 444 295

NOTE 16: COMPONENT UNITS

In accordance with GASB Statement No. 39, Determining Whether Certain Organizations are Component Units, an amendment of GASB Statement No. 14, The Reporting Entity, which became effective for the year ended June 30, 2004, the University of Georgia Research Foundation, the University of Georgia Athletic Association, Inc., the University of Georgia Foundation, and the Arch Foundation for the University of Georgia have been determined to be legally separate, tax exempt organizations whose activities primarily support the University of Georgia, a unit of the University System of Georgia (an organizational unit of the State of Georgia). The State Accounting Office has determined Component Units of the State of Georgia, as required by GASB No. 39, should be assessed in relation to their significance to the State of Georgia. Accordingly, the University of Georgia has not included financial activity for these affiliated organizations in these financial statements.

- 26 -

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2009

EXHIBIT 11D"

NOTE 16: COMPONENT UNITS
The University of Georgia Research Foundation, Inc., the University of Georgia Athletic Association, Inc., and the University of Georgia Foundation have been determined significant to the State of Georgia for the year ended June 30, 2009, and as such, are reported as discretely presented component units in the Comprehensive Annual Financial Report of the State of Georgia (CAFR). The significant discretely presented component units issue separate audited financial statements that can be obtained from the Board of Regents of the University System of Georgia.

- 27 -

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SUPPLEMENTARY INFORMATION - 29 -

UNIVERSITY OF GEORGIA BALANCE SHEET (NON-GMP BASIS)
BUDGET FUND JUNE 30, 2009
ASSETS
Cash and Cash Equivalents Accounts Receivable
Federal Financial Assistance Other Prepaid Expenditures Inventories
Tota I Assets
LIABILITIES AND FUND EQUITY
Liabilities Salaries Payable Accounts Payable Encumbrances Payable Deferred Revenue Other Liabilities
Total Liabilities
Fund Balances Reserved Capital Outlay Departmental Sales and Services Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over Inventories Unreserved Surplus
Total Fund Balances
Total Liabilities and Fund Balances

SCHEDULE "1"

$ 124,163,978.02 16,885,295.26 40,980,953.68 3,953,154.67 3,788,974.96
$ 189,772,356.59

$

3,042,586.17

1,258,890.82

54,706,533.63

57,260,936.01

900,595.11

$ 117I 169I 541.74

$

1,960,053.46

7,033,196.87

11,155,266.10

2,058,448.77

47,868,604.34

621,537.66

163,202.92

1,487,000.00

255,504.73

$ 72,602,814.85

$ 189,772,356.59

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles.
- 30 -

UNIVERSITY OF GEORGIA SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GAAP BASIS)
BUDGET FUND YEAR ENDED JUNE 30, 2009

SCHEDULE "2"

REVENUES
State Appropriation State General Funds
Federal Funds Other Funds
Total Revenues
CARRY-OVER FROM PRIOR YEAR
Transfer from Reserved Fund Balance
Total Funds Available
EXPENDITURES
Agricultural Experiment Station Athens Tifton Veterinary Laboratories Cooperative Extension Service Forestry Cooperative Extension Service Forestry Research Marine Institute Marine Resources Extension Center Office of Minority Business Research Consortium Special Funding Initiatives Teaching Veterinary Medicine Experiment Station Veterinary Medicine Teaching Hospital
Total Expenditures
Excess of Funds Available over Expenditures
FUND BALANCE JULY 1
Reserved Unreserved
ADJUSTMENTS
Prior Year Payables/Expenditures Prior Year Receivables/Revenues Unreserved Fund Balance (Surplus) Returned
to Board of Regents University System Office Year Ended June 30, 2008
Prior Year Reserved Fund Balance Included in Funds Available
FUND BALANCE JUNE 30

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$ 447,069,864,00 $ 445,319,227.00 $

1, 750,637.00

310,866,570.00

292,939,782.51

-17,926,787.49

425 526 920.00

339 683 824.23

-85 843 095.77

$ 1,183,463,354.00 $ 1,077,942,833.74 $ -105,520,520.26

0.00

75,867,168.60

$ 1,183 463 354.00 $ 1 153,810,002.34 $

75 867,168.60 29 653 351.66

$

88,786, 136.00 $

80,668,693.36 $

6,070,426.00

5,962,247.94

69,386,471.00

65,355,365.29

1,048,437.00

924,389.13

8,527,495.00

8,671,551.40

1,429,300.00

1,423,203.35

3,629,027.00

3,693,400.13

452,554.00

443,314.00

3,664,993.00

3,664,993.00

1,500,903.00

1,500,903.00

984,122,287.00

898,637,999.29

3,128,143.00

3,064,274.00

11,717182.00

9 810 920.37

$ 1 183,463 354.00 $ 1,083 821 254.26 $

$

0.00 $

69,988,748.08 $

8,117,442.64 108,178.06
4,031,105.71 124,047.87 -144,056.40 6,096.65 -64,373.13 9,240.00 0.00 0.00
85,484,287.71 63,869.00
1,906,261.63
99,642,099.74
69,988,748.08

77,930,668.30 234,482.78

567,026.66 -16,459.59

-234,482. 78 .75 867 168.60

$

72,6021814.85

SUMMARY OF FUND BALANCE
Reserved Capital Outlay Departmental Sales and Services Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over Inventories
Total Reserved
Unreserved Surplus

$

1,960,053.46

7,033,196.87

11,155,266.10

2,058,448.77

47,868,604.34

621,537.66

163,202.92

1 487 000.00

$

72,347,310.12

255,504.73

Total Fund Balance
Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles.
-31 -

$

72,602 814.85

UNIVERSITY OF GEORGIA STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING SOURCE COMPARED TO BUDGET
(NON-GAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2009

Agricultural Experiment Station State Appropriation State General Funds Federal Funds Other Funds
Total Agricultural Experiment Station
Athens Tifton Veterinary Laboratories State Appropriation State General Funds Federal Funds Other Funds
Total Athens Tifton Veterinary Laboratories
Cooperative Extension Service State Appropriation State General Funds Federal Funds Other Funds
Total Cooperative Extension Service

Original Aeeroeriation

Final Budget

Current Year Revenues

Funds Available Comeared to Budget

Prior Year Car[Y-Over

Total Funds Available

Variance Positive {Negative)

45,245,958.00 22,000,000.00 15 552 919.00
82,798,877.00

41,002,005.00 25,300,000.00 22484131.00
88,786,136.00

40,164,835.00 29,571,396.71 15 510 779.67
85,247,011.38

0.00 8,515,846.71
853,430.16
9,369,276.87

40,164,835.00 38,087,243.42 16 364 209.83
94,616,288.25

-837,170.00 12,787,243.42 -6119921.17
5,830,152.25

32,323.00 4,944,522.00
0.00
4 976 845.00

32,323.00 5,944,522.00
93 581.00
6 070 426.00

31,663.00 4,075,957.31
57 138.53
4 164 758.84

0.00 2,288,728.17
37 950.47
2 326 678.64

31,663.00 6,364,685.48
95 089.00
6 491 437.48

-660.00 420,163.48
1508.00
421 011.48

37,835,396.00 13,000,000.00 12 083 929.00
62,919,325.00

34,564,750.00 19,700,000.00 15 121 721.00
69,386,471 00

33,859,014.00 20,161,084.78 11 976 334.95
65,996,433.73

0.00 2,468,117.46
131 960.47
2,600,077.93

33,859,014.00 22,629,202.24 12 108 295.42
68,596,511.66

705,736.00 2,929,202.24 .3 013 425.58
-789,959.34

Forestry Cooperative Extension Service State Appropriation State General Funds Federal Funds Other Funds
Total Forestry Cooperative Extension Service

715,890.00 200,000.00 124 417.00
1,040,307.00

634,007.00 375,988.00 38 442.00
1,048,437.00

621,062.00 276,803.19
21 886.38
919,751.57

0.00 59,952.68 22,492.80
82,445.48

621,062.00 336,755.87 44 379.18
1,002,197.05

-12,945.00 -39,232.13
5 937.18
-46,239.95

Forestry Research State Appropriation State General Funds Federal Funds Other Funds
Total Forestry Research

3,410,980.00 2,000,000.00
950 426.00
6,361,406.00

3,078,167.00 4,300,000.00 1 149 328.00
8,527,495.00

3,015,318.00 4,645,225.85 1 182 810.58
8,843,354.43

0.00 788,506.45 500 190.28
1,288,696.73

3,015,318.00 5,433,732.30 1683000.86
10,132,051.16

-62,849.00 1,133,732.30
533 672.86
1:504.ss0.16

Marine Institute State Appropriation State General Funds Federal Funds Other Funds
Total Marine Institute

994,601.00 700,000.00 -264 719.00
1,429,882.00

901,830.00 367,648.00 159 822.00
1,429,300.00

883,417.00 470,859.92
78 267.72
1,432,544.64

0,00 14,940.39 15 448.38
30,388.77

883,417.00 485,800.31
93716.10
1,462,933.41

-18,413.00 118,152.31 -66 105.90
33,633.41

Marine Resources Extension Center State Appropriation State General Funds Federal Funds Other Funds
Total Marine Resources Extension Center

1,628,349.00 600,000.00 745 529.00
2,973,878.00

1,460.454.00 1,300,000.00
868 573.00
3,629,027.00

1,430,635.00 1,505,909.09
757 936.45
3,694,480,54

0.00 182,312.61
65.82
182,378.43

1,430,635.00 1,688,221.70
758 002.27
3,876,858.97

-29,819.00 388,221.70 -110 570.73
247,831.97

Office of Minority Business State Appropriation State General Funds

500 165.00 $

452 554.00 $

443 314.00 $

0.00 $

443 314.00 $

.9 240.00

Research Consortium State Appropriation State General Funds

1,293,553.00 $

3,664,993.00 $

3,664,993.00 $

0.00 $

3,664,993.00 $

0,00

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles.
32-

SCHEDULE "3"

Expenditures Compared to Budget

Variance

Positive

Actual

(Negative)

Actual Funds Available
Over/(Under) Expenditures

Prior Period Adjustments

Other Adjustments

Program Fund
Balances

Program Fund Balances

Transfers

Reserve

Surplus

Total Fund Balance

40,164,835.00 27,757,858.99 12 745,999.37
80,668,693.36

837,170.00 -2,457,858.99 9 738 131.63
8,117,442.64

0.00 10,329,384.43
3 618 210.46
13,947,594.89

25,624.53 -387,859.01
31 233.87
-331,000.61

0.00 0.00 3 252.46
3,252.46

25,624.53 9,941,525.42 3 652 696.79

0.00 $ 0.00 .....,__Q,QQ_

0.00 9,941,525.42 3 ~2 696.79

13,619,846.74 $ ~ $ 13,594,222.21

25,624.53 0.00 0.00
25,624.53

25,624.53 9,941,525.42 3 652,696.79
13,619,846.74

31,663.00 5,862,951.77
67 633.17
5 962 247,94

660.00 81,570.23 25 947.83
108 178.06

0.00 501,733.71
27 455.83
529 189.54

330.00 0.00
-330.00
0.00

0.00 0.00 330.00
330.00

330.00 501,733.71 27,455.83

0.00 $ 0.00 .....,__Q,QQ_

5291519.54 $ ~ $

0.00 501,733.71
27 455.83
529 169.54

330.00 0.00
o.oo
330.00

330.00 501,733.71
27 455.83
529 519.54

33,859,014.00 19,873,508.37 11,622,842.92
65,355,365.29

705,736.00 -173,508.37 3498 878.08
4,031,105.71

0.00 2,755,693.87
485 452.50
3,241,146.37

29,154.80 -26,553.20
2 697.40
5,299.00

0.00 0.00 -850.00
-850.00

29,154.80 2,729,140.67
487 299.90

0.00 $ 000 .....,__Q,QQ_

3,245,595.37 $ ~ $

0.00 2,729,140.67
487 299.90
3,216,440.57

29,154.80 0.00 0.00
29,154.80

29,154.80 2,729,140.67
487 299.90
3,245,595.37

621,062.00

12,945.00

0.00

0.00

0 00

0.00

0.00 $

0.00

0.00

o.oo

290,551.51

85,436.49

46,204.36

0.00

o.oo

46,204.36

0.00

46,204.36

o.oo

46,204.36

12 775.62

25 666.38

31 603.56

0.00

0.00

31 603.56 .....,__Q,QQ_

31 603.56

0.00

31 603.56

924 389.13

124,047.87

77,807.92

o.oo

0.00

77,807.92 $ ~ $

77,807.92

0.00

77,807.92

3,015,318.00 4,618,852.67 1 037 380.73
8,671,551.40

62,849.00 -318,852.67 111 947.27
-144,056.40

0.00 814,879.63 645 620.13
1,460,499.76

9,566.13 0.00 0.00
9,566.13

0.00 0.00
0.00 $

9,566.13

0.00

814,879.63

0.00

645 620.13

1,470,065.89 $ ==2J2!L $

0.00 814,879.63 645 620.13
1,460,499.76

9,566.13 0.00 0.00
9,566.13

9,566.13 814,879.63 645 620.13
1,470,065.89

883,417.00 467,215.12
72 571.23
1,423,203.35

18,413.00 -99,567.12 87 250.77
6,096.65

0.00 18,585.19 21 144.87
39,730.06

348,00
o.oo
0.00
348.00

0.00

348.00

0.00 $

0.00

348.00

348,00

0.00

18,585.19

0.00

18,585.19

0.00

18,585.19

0.00

21 144,87 __MQ_

21144.87

0.00

21144.87

0.00

40,078.06 $ ~ $

39,730.06

348.00

40,078.06

1,430,635.00 1,504,762.86
758 002.27
3,693,400.13

29,819.00 -204,762.86 110 570.73
-64,373.13

0.00 163,458.84
0.00
183,458.84

1,634.85 0.00 0.00
1,634.85

0.00

1,634.85

0 00 $

0.00

1,634.85

1,634.85

000

183,458.84

0.00

183,458.84

0.00

183,458.84

0.00

0.00 __MQ_

0.00

0.00

0.00

0.00

185,093.69 $ ~ $

183,458.84

1,634.85

185,093.69

443 314.00 $

9 240.00 $

0.00 $

0.00 $

0.00 $ =---0.,..00.... $ ~ $

0.00 $

o.oo $ _ _ _...;;.o;.;;..o;;,,.o

3,664,993.00 $

0.00 $

0.00 $

9,189.16 $

0.00 $

9,189.16 $ ~ $

0.00 $ 9,189, 16 $--==9=,1=8=9.:,16;,,,

- 33-

UNIVERSITY OF GEORGIA STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING SOURCE COMPARED TO BUDGET
(NON-GAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30, 2009

Special Funding Initiatives State Appropriation State General Funds

Original Ai;u:iroi;iriation

Final Budget

Current Year Revenues

Funds Available Comeared to Budget

Prior Year Car!Y-Over

Total Funds Available

Variance Positive (Negative)

1 758 240.00 $

1 500 903.00 $

1 500 903.00 $

0.00 $

1500903.00 $

0.00

Teaching State Appropriation State General Funds Federal Funds American Recovery and Reinvestment Act Education Stimulization Other Stimulus Funds Other Federal Funds Other Funds
Total Teaching

397,804,761.00 $ 356,163,121.00 $ 356,163,121.00 $

0.00 $

356,163,121.00 $

0.00

0.00 0.00 250,000,000.00 337 833 506.00
985 638,267.00

3,578,412.00 0.00
250,000,000.00 374,380 754.00
984 122 287.00

3,578,412.00 12,842.76
228,641,290.90 300 716 614.01
889 112,280.67

0.00 0.00 32,984,228.89 25 426,819.50
58 411 048.39

3,578,412.00 12,842.76
261,625,519.79 326 143 433.51
947 523 329.08

000 12,842.76 11,625,519.79 -48 237 320.49
-36 598 957.94

Veterinary Medicine Experiment Station State Appropriation State General Funds

3 504 264.00 $

3 128 143.00 $

3 064 274.00 $

0.00 $

3 064 274.00 $

-63 869.00

Veterinary Medicine Teaching Hospital State Appropriation State General Funds Other Funds
Total Veterinary Medicine Teaching Hospital

568,339.00 9 621 951.00
10,1901290.00

486,614.00 11 230 568.00
11,717,182.00

476,678.00 9 382 055.94
9,858,733.94

0.00 1,576 177.36
1,576,177.36

476,678.00 10 958 233.30
11,434,911.30

-9,93600 -272 334.70
-282,270.70

Grand Totals - All Programs

1,165,385,299.00 $ 1,183,463,354.00 $ 1,077,942,833.74 $ 75,867,168.60 $ 1,153,810,002.34 $ -29,653,351.66

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles.

-34-

SCHEDULE "3"

Expenditures Compared to Budget

Variance

Positive

Actual

(Negative)

Actual Funds Available
Overl(Under) Expenditures

Prior Period Adjustments

Other Adjustments

Program Fund
Balances

Program Fund Balances

Transfers

Reserve

Surplus

Total Fund Balance

1500903.00 $

0.00 $

0.00 $

0.00 $

0.00 $

0.00 $ ~ $

0.00 $

0.00 $

0.00

356,163,121.00 $

0.00 $

0.00 $ 176,219.65 $

000 $

176,219.65 $

0.00 $

0.00 $ 176,219.65 $

176,219.65

3,578,412.00 12,842.76
228,406,855.48 310 476 768.05
898,637,999.29

0.00 12,842.76 21,593,144.52 63 903 985.95
85 484 287.71

0.00 0.00 33,218,664,31 15 666 665.46
48 885 329.77

0.00 0.00 414,412.21 243 724.17
834 356.03

0.00 0.00 0.00 -23 719.36
-23 719 36

0.00 0.00 33,633,076.52 15 886 670.27

0.00 0.00 0.00 __Q,QQ_

0.00 0.00 33,633,076,52 15 886 670.27

49 695 966.44 $ ~ $ 49 519 746.79

0.00 0.00 0.00 0.00
176,219.65

0.00 0.00 33,633,076.52 15 886,670.27
49 695 966.44

3 064 274.00 $

63 869.00 $

0.00 $ 3 437.61 $

0.00 $

3 437.61 $ ~ $

0.00 $ 3 437 .61 $ -=--3.,.4.3.7...6.,.1.,.

476,678.00 9 334,242.37
9,810,920.37

9,936.00 1896325.63
1,906,261.63

0.00 1,623,990.93
1,623,990.93

0.00 17 736.90
17,736.90

000 -24 051.06
-24,051.06

0.00

0.00 $

1 617 676.77 __Q,QQ_

1,617,676.77 $ ~ $

0.00 1617676.77
1,617,676.77

0.00

0.00

0.00

1617676.77

0.00

1,617,676.77

1,083,821,254.26 $ 99,642,099.74 $ 69,988,748.08 $ 550,567.07 $ -45,037.96 $ 70.494,277.19 $ ~ $ 70,238,772.46 $ 255,504 73 $ 70,494,277.19

Unexpendable Reserves Inventories Uncollectible Accounts Receivable

1,487,000.00 621,537.66
72 602 814,85

. 35.

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UNIVERSITY OF GEORGIA RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2009

SCHEDULE "4"

Totals per Annual Supplement
Prepaid Salaries June 30, 2009 June 30, 2008
Accruals June 30, 2009 June 30, 2008
Compensated Absences June 30, 2009 June 30, 2008

SALARIES $ 608,969,172 $

TRAVEL 12,194,261

-1,906,383 1,984,702

4,207,033 -6,112,476

38,095,667 -39,632,403

$ 605,605,312 $ ==:::::1::2::,:1::9:=4=,2=6=1=

- 37 -

SECTION II CURRENT YEAR FINDINGS AND QUESTIONED COSTS

UNIVERSITY OF GEORGIA SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2009
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.