UNIVERSITY OF GEORGIA
ATHENS, GEORGIA
REPORT ON AUDIT OF THE FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30,2010

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 B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS C STATEMENT OF CASH FLOWS D NOTES TO THE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION SCHEDULES 1 BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND
2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT
(NON-GAAP BASIS) BUDGET FUND 3 STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING
SOURCE COMPARED TO BUDGET (NON-GAAP BASIS) BUDGET FUND
4 RECONCILIATION OF SALARIES AND TRAVEL
SECTION II CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

Page

SECTION I FINANCIAL

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

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
November 22,2010

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 a unit of the University System of Georgia, which is an organizational unit of the State of Georgia, as of and for the year ended June 30, 2010. 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 of America. 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 the 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.
As discussed in Note 1,the financial statements of the University of Georgia are intended to present the financial position and changes in financial position and cash flows of only that portion of the business-type activities of the State of Georgia that is attributable to the transactions of the University of Georgia. They do not purport to, and do not, present fairly the financial position and changes in financial position and cash flows of the State of Georgia, in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of the University of Georgia as of June 30, 2010, 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 of the basic financial statements but is required supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of this 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 the University of Georgia taken as a whole. The accompanying supplementary information (Schedules 1through 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 of the 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,

.

~ u s & e Wl l . Hinton, CPA, CGFM State Auditor

REQUIRED SUPPLEMENTARY INFORMATION

UNIVERSITY OF GEORGIA
Management's Discussion and Analysis

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:

Students

Students

Faculty

(Headcount)

(FTE)

Fiscal Year 2010 Fiscal Year 2009 Fiscal Year 2008

1,835 1,848 1,822

34,885 34,180 33,831

33,175 32,261 31,818

Overview of the Financial Statementsand FinancialAnalysis
The University of Georgia is proud to present its financial statements for fiscal year 2010. 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 2010 and fiscal year 2009.

Statement of Net 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.
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 30,2010

June 30,2009

Assets Current Assets Capital Assets, Net Other Assets
Total Assets

Liabilities Current Liabilities Noncurrent Liabilities

Total Liabilities

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

$ 1,139,354,681 58,106,618 74,447,034 294,754
151,038,628

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

The total assets of the institution increased by $183,814,349. A review of the Statement of Net Assets will reveal that the increase was primarily due to an increase of $101,050,825 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 title &pita/ Assets. The balance of the increase is mainly in cash categories.
The total liabilities for the year increased by $49,122,360. This increase was primarily due to an increase in lease purchase obligations which are due under lease agreements between the University of Georgia and the UGA Real Estate Foundation, Inc., a related entity. The combination of the increase in total assets of $183,814,349 and the increase in total liabilities of $49,122,360 yields an increase in total net assets of $134,691,989. The increase in total net assets is primarily in the categories of Unrestricted Net Assets and lnvested in Capital Assets, Net of Debt, in the amounts of $66,180,675 and $57,408,158, respectively.

Statement of Revenues, Expenses and Changesin 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 30,2010

June 30,2009

Operating Revenues Operating Expenses

Operating Loss

$ 470,403,134

$ 498,879,096

NonoperatingRevenuesand Expenses

527,068,268

496,993,687

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

$ 56,665,134

$ -1,885,409

Other Revenues, Expenses, Gains or Losses

78,026,855

64,912,962

Increase (Decrease)in Net Assets

$ 134,691,989

$ 63,027,553

Net Assets at Beginningof Year, as Originally Reported

$ 1,288,549,726

$ 1,220,028,700

Prior Year Adjustments

Net Assets at Beginningof Year, Restated

$ 1,288,549,726

$ 1,225,522,173

Net Assets at End of Year

The Statement of Revenues, Expenses and Changes in Net Assets reflects a positive year with a $134,691,989 increase in the 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 30,2010, and June 30,2009

June 30,2010

June 30,2009

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

Total OperatingRevenue

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

Total Nonoperating Revenue

Capital Grants and Gifts State Other

Total Capital Grants and Gifts

Total Revenues

Expenses (By Functional Classification) For the Years Ended June 30,2010, and June 30,2009

June 30,2010

June 30,2009

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

Total Operating Expenses

$ 1,106,667,243

$ 1,126,444,295

Nonoperating Expenses Interest Expense (CapitalAssets)
Total Expenses

17,253,812

12,078,104

Operating revenues increased by $8,698,910 in fiscal year 2010, which included $31,161,411 net increase in tuition and fees, $27,059,664 decrease in grants and contracts operating revenues, and $6,734,746 increase 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 $2,284,903 in Residence Hall revenues, $1,653,938 in Food Services revenues, and $1,476,303 in Health Services revenues.
The decrease in grants and contracts operating revenues was due to a large number of restricted accounts being reclassified from operatingto nonoperating under the other grant contract category.
Nonoperating revenues increased by $35,250,289 for the year primarily due to the previously mentioned reclassification of other grants and contracts revenue from operating to nonoperating. State appropriations decreased by $72,774,078 due to state budget reductions that occurred throughout the year as overall state revenues declined. In fiscal year 2010, the University received $57,269,298 in Federal Stimulus Stabilization funds through the State of Georgia to help offset these reductions in state appropriations.
State funded capital gifts and grants increased from fiscal year 2009 to fiscal year 2010 by $11,290,328 as a result of increased funding for capital improvements and additions through the Georgia State Financing and Investment Commission (GSFIC).
Total operating expenses decreased by $19,777,052 as a result of reduced spending and salary reductions through mandated furloughs. This decrease was net of a $3,700,489 increase in employee benefits expenditures due to increase health insurance premiums and a $3,115,274 increase in depreciation expense from capital additions. Utilities also increased by $1,835,907 during the past year, primarily from increased energy costs from rising natural gas and electricity costs.

Siatement 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 30,2010, and 2009, Condensed

June 30,2010

June 30,2009

Cash Provided (Used) By: Operating Activities Noncapital FinancingActivities Capital and Related FinancingActivities InvestingActivities

$ 408,322,032 536,265,555 -69,130,211 4,492,425

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

Net Change in Cash Cash, Beginningof Year

Cash, End of Year

Capital AsseiS
The University had several significant capital asset additions in fiscal year 2010. The College of Pharmacy South addition was completed in July 2009, adding 93,288 square feet of state-of-the-art classrooms and teaching labs as well as high-tech research labs. The $35.5 million addition, funded primarily by the Georgia State Financing and Investment Commission (GSFIC), includes biodiesel generators and chemical fume hood control system that is integrated with the building's heating and air conditioning system to minimize energy consumption. The building is the first on campus to be registered for the Leadership in Energy and Environmental Design (LEED) certification, the national benchmark for design, construction, and operations of high-performance green buildings.
The Interim Medical Partnership building renovations were completed during the summer of 2009. The $16.9 million conversion of a historic building to a modern facility will provide small-group classrooms, lecture halls, a medical library, gross anatomy lab and faculty office space where medical students will be educated.
Two parking decks were also completed during fiscal year 2010. The $9.5 million Performing Arts Parking Deck was completed to add parking spaces near the Performing and Visual Arts Center. The $8.0 million Intramural Field Parking Deck was completed to provide SO0 parking spaces at the Intramural fields.

The Griffin Student Learning Center opened in the summer of 2009 to provide 33,000 square feet of classrooms, meeting rooms and a computer lab for students at the Griffin Campus. The center was funded in large part through a $10.0 million Special Purpose Local Option Sales Tax approved by Spalding County voters in 2005.
During fiscal year 2010, the University had a number of significant capital projects under construction. These projects include the Special Collections Library, the Stegeman Coliseum renovation, the Reed Plaza conversion, and an addition to the Georgia Museum of Art.
For additional information concerning Capital Assets, see Notes 1,6, 8, 9 and 1 0 in the Notes to the Financial Statements.
Long- Term Liabilities
The University of Georgia had Long-Term Liabilities of $288,051,020 of which $31,567,003 was reflected as current liability at June 30, 2010.
For additional information concerning Long-Term Liabilities, see Notes 1and 8 in the Notes to the Financial Statements.
Economic Outlook
The national and state economy was officially declared in a recession during 2009, which led to significant decreases in state revenue collections. In response to declining state revenue collections in 2008, and 2009 and 2010, all state agencies experienced significant budget reductions. The University of Georgia experienced a 12% cut to the level of state appropriated support for its fiscal year 2010 resident instruction budget. (Please note that this figure becomes a 7% cut after $19.3 million in the education stabilization funds from the American Recovery and Reinvestment Act (Stimulus Funds) that were allocated to the University by the state to help offset these cuts are considered.) Additionally, the University's "B" Units saw their fiscal year 2010 budgets reduced by 9.5%. Duringthe course of fiscal year 2010, the resident instruction budget was reduced by another 19.9% (the net reduction is 8.7% when the additional $38 million in Stimulus Funds that were allocated to the University to help offset these cuts are considered) and the "B" Units were reduced by an additional 9.5%. Also in response to declining state revenue collections, the Governor and Board of Regents mandated six furlough days of unpaid leave for faculty and staff to generate salary savings in addition to reducing expenditures.
The University and the Board of Regents took the following actions to manage the fiscal year 2010 budget reductions so that core missions would be minimally impacted:
a) the University reduced its school/college/unit budgets by an average of 8%, b) the Board of Regents increased undergraduate tuition for incoming students by 25% from
$2,428 per semester to $3,035 for in-state students and from $10,584 to $12,140 for outof-state students, c) the Board of Regents instituted a Special Institutional mandatory fee of $100 per semester; this fee was subsequently increasedto $200 per semester effective Spring 2010, d) the Board of Regents reduced the employer health insurance contribution levels, and e) the University increased the implementation of energy conservation measures to reduce utility costs.

The University also 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. University schools, colleges and other units have restructured budgets, not filled position vacancies (including faculty lines), and managed operations with less financial support. These actions provided the University with flexibility to address increasing energy and health care costs and manage budget reductions without layoffs.
As fiscal year 2 0 1 1 began, the state started to experience slight increases in revenue collections, but due to the shortfall in fiscal year 2010, the Governor and Board of Regents reduced the fiscal
year 2 0 1 1 budget by 4%.The University has and continues to prepare for the possibility of additional
reductions in fiscal year 2 0 1 1 and will continue to do so for future years until the state's economy begins to recover and eventually stabilizes. In anticipation of additional cuts, all academic and administrative units have developed fiscal year 2 0 1 1 budget plans to meet additional reduction levels of 4%, 6%, and 8%.Through this proactive planning, the University is, in advance, positioning itself to address additional cuts and the programmatic implications thereof. The University will also 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. As fiscal year 2 0 1 1 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

BASIC FINANCIAL STATEMENTS

UNlVERSllY OF GEORGIA STATEMENT OF NET ASSETS
JUNE 30,2010
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
Accounts Receivable - Other
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 L~abilities
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Restricted for:
Nonexpendable Expendable Capital Projects Unrestricted
Total Net Assets
The notes t o the financial statements are an integral part of this statement.
- 2 -

EXHIBIT "A"

UNIVERSITY OF GEORGIA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
YEAR ENDED JUNE 30,2010
Student Tuition and Fees Less: Scholarship Allowances
Federal Appropriatlons Grants and Contracts
Federal Federal Stimulus State Other Sales and Services of Educational Departments Rents and Royalties Auxiliary Enterprises Residence Halls Bookstore Food Services Parking/Transportation Health Services lntercolleg~ateAthletics Other Organizations Other Operating Revenues
Total Operating Revenues
OPERATING WPFNSES
Salaries Faculw Staff
Employee Benefits Other PersonalS e ~ l c e s Travel Scholarsh~psand Fellowships Utilities Supplies and Other Services Depreciation
Total Operating Expenses
Operating lncome (Loss)
NONOPERATING REVENUES IEXPENSEa
State Appropriat~ons
FederalStimulus - Stablllzatlon Funds
Grants and Contracts State Other
Gifts lnterest and Other Investment lncome lnterest Expense (Capital Assets) Other Nonoperat~ngRevenues
Net Nonoperating Revenues
lncome (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 - Beginningof Year
Net Assets - End of Year
The notes to the financial statements are an integral part of this statement.
- 3

UNIVERSITY OF GEORGIA STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30,2010
CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Federal Appropriations Grants and Contracts Sales and Services of Educational Departments Paymentsto Suppliers Payments to Employees Paymentsfor Scholarships and Fellowships Loans Issued to Students and Employees Collection of Loans to Students and Employees Auxiliary Enterprise Charges: Residence Halls Booktore Food Services ParkingITransportation Health Services Intercollegiate Athletics Other Organizations Other Recelpts (Payments)
Net Cash Provided (Used) by Operating Activities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations 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 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 FinancingActivities
CASH FLOWS FROM INVESTING ACTIVITIES lnterest on Investments
Net Increase (Decrease) in Cash
Cash and Cash Equivalents - Beginning of Year
Cash and Cash Equivalents - End of Year

EXHIBIT "C"

UNIVERSITY OF GEORGIA STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30,2010
RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating lncome (Loss) Adjustments to Reconcile Operating lncome 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 lncome Gift of Capital Assets Reducing Proceeds of Capital Grants and Gifts

EXHIBIT "C"

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

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBIT "DM

Note 1. Summary of Signifiwnt 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 knowledgeto 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 UniversitySystem of Georgia reporting entity for financial reporting purposes because 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 Re~ortinRStandards.
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 1 6 for additional information.
Financial Statement Presentation 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, entity-wide perspective of the University's assets, liabilities, net assets, revenues, expenses, changes in net assets and cash flows.
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.
New Accounting Pronouncements In fiscal year 2010, the University of Georgia adopted the Governmental Accounting and Standards
. Board (GASB) Statement No 51,Accounting and Reporting for IntangibleAssets. The provisions of this
Statement generally required retroactive reporting for intangible assets acquired after June 30, 1980, with the exception of those intangible assets that have indefinite useful lives and those that are considered internally generated.
In addition, the University of Georgia adopted GASB Statement No. 53, Accounting and Financial Reporting for Derivative Instruments. The provisions of this Statement impacts disclosure regarding derivative instruments entered into by the state and local governments. Derivative disclosures, if any, will be identified in Note 2.

UNIVERSITY OF GEORGIA NOTES TO M E FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBrT "D"

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 intraUniversity 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 lnvestment Pool and the University's lnvestment Advisory Account which is invested in short-term, highly liquid U. S. Agencies.
Short-Term lnvestments Short-Term lnvestments consist of investments of 90 days - 13 months. This would include certificates of deposits or other time restricted investments with original maturities of six months or more when purchased. Funds are not readily available and there is a penalty for early withdrawal.
lnvestments lnvestments include financial instruments with terms in excess of 13 months, certain other securities for the production of revenue, land, and other real estate held as investments by endowments. The University accounts for its investments at fair value. 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.
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 lnvestments 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.

UNIVERSITY OF GEORGIA NOTES TO M E FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBIT "Dl'

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, which also includes amortization of intangible assets such as water, timber, and mineral rights, easements, patents, trademarks, and copyrights, as well as software is computed using the straight-line method over the estimated useful lives of the assets, generally 4 0 to 6 0 years for buildings, 2 0 to 25 years for infrastructure and land improvements, 1 0 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 Financingand 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, 2010, GSFIC transferred capital additions valued at $34,679,456 to the University of Georgia.
Deposits Deposits represent good faith deposits from students t o 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 receivedfrom grant and contract sponsors that have not yet been earned.
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 Statement of Revenues, Expenses and Changes in Net Assets. The University of Georgia had accrued liability for compensated absences in the amount of $41,009,986 as of July 1,2009. For fiscal year 2010, $28,365,171 was earned in compensated absences and employees were paid $27,170,263, for a net increase of $1,194,908. The ending balance as of June 30, 2010, in accrued liability for compensated absences was $42,204,894.
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.

UNIVERSIW OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBll "D"

Net Assets The University's net assets are classified as follows:

Invested in capital assets, net of related 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 GSFlC as discussed previously in Note 1- Capital Assets section.

R e s t r i d net assets - nonexpndable: 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.
Restrided 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.

Expendable Restricted Net Assets include the following:

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

53,489,409 10,460,125 10,497,500

Total Restricted Expendable

$

74,447,034

Restricted net asseb - expendable - Opital 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 $227,085.58. 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 selfsupporting activities that provide services for students, faculty and staff.

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBrr "D"

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

R & R Reserve Reserve for Encumbrances Reserve for Inventory Other Unrestricted

Total Unrestricted Net Assets

$

151,038,628

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.
Classification of Revenuesand Expenses The Statement of Revenues, Expenses and Changes in Net Assets classify fiscal year activity as operating and nonoperating according to the following criteria:
OperatingRevenues Operating revenue includes activities that have the characteristics of exchange transactions, such as (1) student tuition and fees, net of scholarship allowances, (2) certain Federal, state and local grants and contracts, and (3)sales and services.
Nonoperating Revenues Nonoperating revenue includes activities that have the characteristics of nonexchange transactions, such as gifts and contributions, and other revenue sources that are defined as nonoperating revenue by GASB No. 9, Reporting Cash Flows of Proprietaty and Nonexpendable Trust Funds and GovernmentalEntities mat Use Proprietary Fund Accounting, and GASB No. 34, such as state appropriations and investment income.
OperatingExpenses: Operating expense includes activities that have the characteristics of exchange transactions.
Nonoperating hpenses Nonoperating expense includes activities that have the characteristics of nonexchangetransactions, such as capital financing costs and costs related t o investment activity.
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 $18,440,420 and $19,377,585, respectively, are reported net of discounts and allowances of $481,970 and $1,156,429, respectively.

UNIVERSrrY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2010

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 Corporation.

The Treasurer of the Board of Regents is responsible for all details relative to furnishing the required depository protection for all units of the UniversitySystem of Georgia.

At June 30, 2010, the carrying value of deposits was $103,658,708 and the bank balance was $107,895,164. Of the University's deposits, $105,876,089 were uninsured. Of these uninsured deposits, $105,725,755 were collateralized with securities held by the financial institution, by its trust department or agency, but not in the University'sname and $150,334 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.

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "D"

The University's investments as of June 30, 2010, are presented below. All investments are presented by investment type and debt securities are presented by maturity.

Investment T v ~ e

Fair Value

Less Than 1Year

Investment Maturity

1 - 5 Years

6 - 10 years

More than 10 Years

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

Other Investments Bond/Equity Mutual Funds Equity Mutual Funds
Equity Securities - Domestic
Miscellaneous Holdings Real Estate Held for
lnvestment Purposes Real Estate lnvestment Fund

lnvestment Pools Board of Regents Legal Fund Diversified Fund Office of Treasuly and Fiscal Services Georgia Fund 1

7,807,720 1,322.558
106,773,951

Total Investments

$ 220,679.954

The Board of Regents lnvestment 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 lnvestment Pool is voluntary. The Board of Regents lnvestment Pool is not rated. Additional information on the Board of Regents lnvestment 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 htt~://www.audits.state.~a.us/internet/searchR~ts.html.
The Georgia Fund 1lnvestment 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 lnvestment Company Act of 1940. This investment is valued at the pool's share price, $1per share. The Georgia Fund 1lnvestment Pool is an AAAm rated investment pool by Standard and Poor's. The Weighted Average Maturity of the Fund is 4 1days.

UNIVERSrPl OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "D"

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 2.95 years. Of the University's total investment of $7,807,720 in the Legal Fund, $7,807,720 is invested in debt securities.
The Effective Duration of the Diversified Fund is 3.15 years. Of the University's total investment of $1,322,558 in the Diversified Fund, $510,524 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, 2010, $97,268,954 of the University's applicable investments were uninsured and held by the investment's counterparty in the University's name and $1,722,050 were uninsured and held by the investment's counterparty's trust department or agent, but not in the University's name.
Credit Oualitv 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 on 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:

Credit Oualitv Risk

Fair Value

AA

A

BBB

Unrated

Related Debt Investments U. S. Agencies Corporate Debt
Repurchase Agreements - Underlying
U. S., Agency Securities

5,295,097

5,295,097

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 Long-Term 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%.

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT " D

As of June 30, 2010, 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

18.7% 7.6%

Foreign Currencv Risk Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of an investment or a deposit. The University does not have a formal policy for managing exposure to foreign currency risk.

Note 3. Accounis Receivable Accounts receivable consisted of the following at June 30,2010:

Student Tuition and Fees Auxiliary Enterprises and Other OperatingActivities Federal Financial Assistance Georgia State Financingand Investment Commission Other

$ 8,120,036 1,127,225
15,230,509 8,352,543
47,676,158

Less Allowance for Doubtful Accounts
Net Accounts Receivable
Note 4. Inventories
Inventories consisted of the following at June 30,2010:
Food Services Physical Plant Other
Total
Note 5. Notes/L oans Receivable
The Federal Perkins Loan Program (the Program) comprises substantially all of the loans receivable at June 30, 2010. The Program provides for cancellation of a loan at rates of 10% to 30% per year up to a maximum of 100% if the participant complies with certain provisions. The Federal government reimburses the University for amounts cancelled under these provisions. A s 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, 2010, the allowance for uncollectible loans was approximately $759,876.

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "DM

Note 6. Capita/ Assets Following are the changes in capital assets for the year ended June 30,2010:

Beginning Balance
July 1,2009

Additions

Reductions

Ending Balance
June 30,2010

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

$

28,978,766 $

566,480

17,455.054

384.230

64,771,408

45,204,312 $

37,363.294

17,839,284 72,612,426

Total Capital Assets, Not Being Depreciated $

111,205,228 $

46,155,022 $

37,363,294 $

119,996,956

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

$

44,896,229 $

1,299,902,334

151,645,704

337,415,449

1,053,903

237.016.124

6,210.075 119,580.920 $
6,194,978 22.834.427
9.655.052

5 584,272
16.369.256 19,513
184,258

51,106,304 1,418,898,982
157.840.682 343,880,620
1,034,390 246.486.918

Total Assets Being Depreciated

$ 2,071,929,743$

164,475,452$

17,157.299 $ 2,219,247,896

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

$

18.250.013 $

396,898,454

42,254,259

262,762,223

581,503

179,201,050

1,408.778 31,697,5575
3,959,496 22,420,219
214,322 11,185,500

$
472,477
15,150,568 19,513
184,258

19,658,791 428,123,534
46,213,755 270.031.874
776,312 190,202,292

Total Accumulated Depreciation

$

899,947,502 $

Total Capital Assets, Being Depreciated, Net 5 1,171,982.241$

70,885,872 $ 93,589,580$

15,826,816 $

955,006,558

1,330,483$ 1,264,241,338

Capital Assets, Net

Buildings include $256,843,785 of property held under capital leases with the University of Georgia Real Estate Foundation. Accumulated depreciation for these properties is $22,423,392 and $4,834,175 in depreciation expense was recognized for these properties in fiscal year 2010.

UNIVERSIW OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "D"

Note 7. Deferred Revenue Deferred revenue consisted of the following at June 30, 2010:
Prepaid Tuition and Fees Research Other Deferred Revenue
Totals

Note 8. Long- Term Liabilities Long-Term liability activity for the year ended June 30, 2010, was as follows:

Beginning Balance July 1,2009

Additrons

Reductions

Ending Balance June 30,2010

Current Portion

Leases Lease Obligations

$ 201,240,946$ 48,383,835$ 4,741,168$ 244,883,613$ 3,638,776

Other Liabilities Compensated Absences $ Other

41,009,986 $ 958,692

28,365,171 $ 132,155

27,170,263 $ 128,334

42,204,894$ 962,513

27,794,507 133,720

Total

Total Long-Term Obligations $ 243,209,624 $ 76,881,161$ 32,039,765$ 288,051,020$ 31,567,003

Note 9. Signifiannt Commitments
The University had significant unearned, outstanding, construction or renovation contracts executed in the amount of $9,335,949 as of June 30, 2010. 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 fifteen real properties and holds various equipment items under capital leases. The real property leases expire in various years between 2028 and 2040. The equipment capital leases expire between 2 0 1 1 and 2014. Reductions in principal on capital leases were $4,741,168 with $17,253,812 in interest expense for a total of $21,994,980 in fiscal year 2010. Interest rates range from 4.88 percent to 9.00 percent. The carrying values of assets held under capital lease at June 30, 2010, were as follows:

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "D"

Buildings
Equipment

Total Assets Held Under Capital Lease

$ 234,678,471

All of the University of Georgia's current real property capital leases are with the University of Georgia Real Estate Foundation (UGAREF), a related entity. 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, 2 0 0 1 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 lease 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. During fiscal year 2010, the University entered into seven new leases with UGAREF whereby the University leases the Intramural Parking Deck and Performing Arts Center Parking Deck for 30-year periods that expire June 30, 2039, four houses in the new Greek Park for 30-year periods expiring July 31, 2039, and the Medical Partnership Building for a 19-year period that expires June 30, 2028. The outstanding liability at June 30, 2010, on these capital leases is $244,406,251.

The University also has various capital leases for equipment with an outstanding balance of $477,362 a t June 30,2010.

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.

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

UNIVERSIlY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "D"

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 30,2010, were as follows:

Real Property and Equipment

Capital

Operating

Leases

Leases

Year EndingJune 30: 2011 2012 2013 2014 2015
2016 - 2020
2021- 2025
2026 - 2030
2031- 2035 2036 - 2040
Total Minimum Lease Payments

$ 525,415,175 $ 6,189,119

Less: Interest Less: Executory Costs (if paid)

259,662,776 20,868,786

Principal Outstanding

The University of Georgia's fiscal year 2010 expense for rental of real property and equipment under operating leases was $7,052,311. No expenditures were made for equipment under noncancellable operating leases.
Note 11. Retirement P/ans
Teachers RetirementSystem of Georgia
Plan Description The University of Georgia participates in the Teachers Retirement System of Georgia (TRS), a costsharing 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.

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "D"

Funding Policy Employees of the University of Georgia who are covered by TRS are required by State statute to contribute 5.25% 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 2010, the employer contribution rate was 9.74% 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

Employees' Retirement System of Georgia
Plan Description The University of Georgia participates in the Employees' Retirement System of Georgia (ERS), a costsharing multiple-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 benefit structure of ERS is defined by State statute and was significantly modified on July 1, 1982. Unless elected 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. Employees 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 both the old plan and new plan, members become vested after 10 years of creditable service. A member may retire and receive normal retirement benefits after completion of 1 0 years of creditable service and attainment of age 60. Additionally, there are certain provisions allowing for retirement after 25 years of service regardless of age.
Retirement benefits paid to members are based upon a formula which considers the monthly average of the member's highest twenty-four 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 are also made to member's benefits. 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.
In addition, 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.

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "D"

The ERS issues a financial report each fiscal year, which may be obtained 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, 2010, for employees covered by ERS was $1,244,944. The University's total payroll for all employees was $601,677,447.

For the year ended June 30, 2010, under the old plan, member contributions consist of 4% of annual compensation up to $4,200 plus 6%of annual compensation in excess of $4,200. Of these member contributions, the employee pays the first 1.25% and the University pays the remainder on behalf of the employee.

Under the new plan, member contributions consist solely of 1.25% of annual compensation paid by employee. The University also is required to contribute at a specified percentage of active member payroll determined annually by actuarial valuation for both old and new plans. For the year ended June 30, 2010, the ERS employer contribution rate for the University amounted to 10.41% of covered payroll and included the amounts contributed on behalf of the employees under the old plan referred to above. Employer contributions are also made on amounts paid for accumulated leave to retiring employees.

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

Fiscal Year

Percentage Contributed

Required Contribution

Actuarial and Trend Information Actuarial and historical trend information is presented in the ERS June 30, 2010, financial report, which may be obtained through ERS.
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. 47-21-1 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 TIM-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.

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "D"

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 2010, the employer contribution was 9.24% for the participating employee's earnable compensation. Employees contribute 5% of their earnable compensation. Amounts attributable to all plan contributions are fully vested and nonfotfeitable at all times.
The University of Georgia and the covered employees made the required contributions of $15,229,437 (9.24%) and $8,035,125 (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.
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 2010 amounted to $1,768,363 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.

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBIT "D"

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 selfinsured 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 self-insured 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, a fully insured HSA/High Deductible PPO healthcare plan and two fully insured HMO healthcare plan options are also offered to System employees.
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 $962,513. 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 2010 was as follows:

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBIT "D"

Beginning Balance July 1,2009

Additions

Reductions

Ending Balance June 30,2010

Current Portion

Pollution Remediation

Obligations

$

958,692 $

132,155 $

128,334 $

962,513 $

133,720

Note 13. Contingencies
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditures 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.
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 30,2010.
Note 14. Post-Employment Benefih Other ThanPension Senefib
Pursuant to the general powers conferred by the Official Code of Georgia Annotated Section 20-3-31, the Board of Regents of the University System of Georgia has established group health and life insurance programs for regular employees 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 UniversitySystem 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 the 2009 and 2010 plan years, the employer rate was between 70-75% of the total health insurance cost for eligible retirees and the retiree rate was between 25-30%.
As of June 30, 2010, there were 4,081 employees who had retired or were disabled that were receiving these post-employment health and life insurance benefits. For the year ended June 30, 2010, the University of Georgia recognized as incurred $20,676,559 of expenditures, which was net of $9,305,146 of participant contributions.

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2010

EXHIBlT "D"

Note 15. Natura/ C/assifiatitionwith Functional C/assifiations The University's operating expenses by functional classification for fiscal year 2010 are shown below:
Functional Classification

Natural Classification

Instruction

Research

Public Service

Academic Support

Student Services

Salaries Faculty Staff
Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation

Total Operating Expenses

$ 234,172,343 $ 285,339,594 $ 153,581,758 $ 79,865,548 $ 37,282.525

Natural Classification

Institutional Support

Functional Classification

Plant Operations Scholarships

and

and

Auxiliary

Maintenance

Fellowships

Enterprises

Total Operating Expenses

Salaries Faculty Staff
Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation

Total Operating Expenses

$ 68,792,675 $ 101,853,327 $ 19,557,879 $ 126,221,594 $ 1,106,667,243

Note 16. Afi/iated Organizations
In accordance with GASB Statement No. 39, Determining Whether Certain Organizaons are Component Units, 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.

UNIVERSIW OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "D"

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, 2010, 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.

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SUPPLEMENTARY INFORMATION

UNIVERSITY OF GEORGIA BALANCE SHEET (NON-GAAP BASIS)
BUDGET FUND YEAR ENDEDJUNE 30.2010
ASSETS Cash and Cash Equivalents Accounts Receivable
Federal Financial Assistance Other Prepaid Expenditures Inventories
Total Assets
LIABILITIESAND FUND EOUITY Liabilities
Accrued Payroll Accounts Payable Deferred Revenue Other Liabilities
Total Liabilities Fund Balances
Reserved Capital Outlay Department Sales and Services Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds UncollectibleAccounts Receivable Inventories Tuition Carry-Over
U nreserved Surplus Total Fund Balances
Total Liabilities and Fund Balances
Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetarystatutes and regulations of the State of Georgia, which is a comprehensivebasis of accounting other than generally accepted accounting principles.

SCHEDULE "1"

UNIVERSITY OF GEORGIA SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GMPBASIS)
BUDGET FUND YEAR ENDEDJUNE 30,2010

State Appropriation State General Funds
Federal Funds Other Funds
Total Revenues
CARRYOVER FROM PRIOR YEAR
Transfer from Reserved Fund Balance
Total Funds Awallable
EXPENDITURES
Agricultural ExperimentStation Athens T~ftonVeterinary Laboratories CooperativeExtension Servlce FOreSUyCooperative ExtensionService Foresby Research Marlne lnstltute Marme Resources ExtensionCenter ResearchConsorbum Speclal FundingInitiative reacn~ng Veterinary Medlclne Experiment Statlon Veterinary Medlclne Teaching Hospital
Total Expenditures
Excess of Funds Available over Expenditures
FUND BALANCE JULY 1
Reserved Unreserved
ADJUSTMENTS
Pnor Year Payables/Expendltures Prior Year Rece~vaales/Revenues Increase (Decrease) In lnventorles Unreserved Fund Balance (Surplus) Returned
to Board of Regents unlversg System mice Year Ended June 3 0 , 2 0 0 9
Early Remlnanceof Surplus In Current FlscalYear Prior Year Reserved Fund Balance Included an Fund$ Available
FUND BALANCEJUNE 3 0
SUMMARY OF FUND BALANCE
Reserved Capital Outlay DepartmentSales and Services lndlrect Cost Recoveries Tecnnology Fees Restr~cted/SponsoredFunds Uncollect~bleAccounts Receivable Inventories Tulbon Carryover
~ o t aRl eserved
Unreserved surplus
Total Fund Balance

BUDGf3

ACTUAL

- VARIANCE
FAVORABLE (UNFAVORABLE)

Actual amounts were prepared on a prescribedbasis of accountingthat demonstrates compliance witn budgetatystatutes and regulations of the State of Georgia,which is a comprehensivebasis of accounting other than generallyaccepted accounting principles

A#lcurural apartment Stsuon State Appropr~allon State General Funds Other Funds
Total Agr~culturaEl xpar4rnentSLabon
AthsnsTltton Vetsrlnary Laborstoria Other Funds
Cooparatlvs Extension S e w # ~ = State Appropnatlon StateGenerill Fund$ Other Funds
Total Cooperawe t m n s l o n Servlce
Forestry Cooperative Extension Sawica State Appropr~aton State General Funds Other Funds
Total F o r e Z t ~CooperauveEaienslon Servlce
Forsetry Ressarch State Appraprtat~on State General Funds Other Funds
Total Forestry Research
Marine Inrtnum State Appmpnauon State General Funds Other Funds
Total Marlne Instiiute
Marlno Rmaourceo URenn~onCenter state Approprlauon State General Funds Other Funds
Total Marine Rerources ~ n s l o Cnenter
Research Consortium State Appraprlat~on State General Funds
Spsclal Fundinglnibst~ve State ApPrOPr8atlOn State General Funds
Teaching state Approprlauon state General ~ u n a s Federal Funds Amerncan Recovery and Relnvertment Acl of 2009 FederalStabll!ratlon Funds Other FederalSurnuius Other Funds

UNIVERSIMOF GEORGIA STATEMENTOF PROGRAMRWENUES AND EXPENDITURES BY FUNDING SOURCE COMPARED TO BUDGET
(NONGMP BASIS) BUDGEl FUND YEAR ENDEDJUNE 30,2010

Or~g~nal Approprlstlan

F~nal Budget

Current Year Revenues

FundsAvanlableComparedlo Budget

Prnor Year carryover

Total FUndCAVallable

Variance Porotlve (Negative)

Actual amounts were prepared on a presalbad baas of accounungthat demonstrates

cornpllence w t h budgetarystaMes and rspulatlons of me State of G-a

wwhh 8s n

cornprehenslvebaslsof acmuntmg other than generallyacceptad acoountlng prlnctples

Vetonnary Moduslm Eaponrnent SUtlon State Approprlauon State General Funds
Vetarlnery MadoclnsTeachlng Hoepita1 state ~pproprfauon State General Funds Other Funds

UNIVERSITY OF GEORGIA STATEMENTOFPROGRAM REVENUESANDMPENDITURESBY FUNDINGSOURCECOMPAREDTOBUDGEl
(NONGMP BASIS) BUDGET FUND YEAR ENDEDlUNE 30.2010

Orlgnal Approprlatlon

Final Budget

Current Year Revenuer.

FundsAvallabla Compared to Budget

~ r l eyrear Carryover

Total Funds Avallaale

variance Posnlve (Negative)

Grand Totala - 1\11Progrnrno

Actual amountswere prepared on a presortbed bass of accounting that demonstrates mrnpllancs with budgetary statutes and repulaoonrof theSIate of Georaa. whlch IS a mmprenanslve bass of acmuntlngotherthangcncrallyacaspted accQurmnp~rlnaoler

ExpendRurer Comparedto Budget

Varlanse

~ollt~ve

Anual

(Negauve)

Actual Funds Available
over/(under) Erpendtturer

Pnor Perod Adjustments

Other Adjustments

Early Remmance of Surplus

Program Fund
Balancer

Transfers

Program Fund Balances

Renerve

Surplus

Total Fund Balance

Uneipsndable Reserves Inventones Uncollectlble Accounts Receivable

1487.00000 699.728 88

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Totals per Annual Supplement
Prepaid Salaries
June 30,2010 June 30.2009
Accruals
June 30,2010 June 30.2009
Compensated Absences
June 30,2010 June 30,2009
Unident~fiedVariance

UNlVERSllYOF GEORGIA RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30,2010

SCHEDULE "4"

SALARIES
$ 600,681,503$

TRAVEL
11,359,925

SECTION II CURRENT YEAR FINDINGS AND QUESTIONED COSTS

UNIVERSITY OF GEORGIA SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30,2010
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. FEDERAL AWARD FINDINGS AND OUESTIONED COSTS No matters were reported.