REPORT ON AUDIT OF THE FINANCIAL
STATEMENTS FOR THE FISCAL YEAR ENDED
JUNE 30,2011
Georgia Deparhnent ofAudits andAccounts 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

EXH IBlTS

A STATEMENT OF NET ASSETS

B STATEMENT OF REVENUES. EXPENSESAND 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

30

2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT

(NON-GAAP BASIS) BUDGET FUND

31

3 STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET

BY PROGRAM AND FUNDING SOURCE

(NON-GAAP BASIS) BUDGET FUND

32

4 STATEMENT OF CHANGES TO FUND BALANCE

BY PROGRAM AND FUNDING SOURCE

(NON-GAAP BASIS) BUDGET FUND

36

5 RECONCILIATION OF SALARIES AND TRAVEL

41

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

SECTION I FI NANClAL

Russell W. Hinton
STATE AUDITOR
(404) 666-2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
November 28,2011

Honorable Nathan Deal, 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 UniversitySystem of Georgia, which is an organizational unit of the State of Georgia, as of and for the year ended June 30, 2011. 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, 2011, 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 5) 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.
Respectfullv submitted.
RUS&II W. Hinton, CPA, CGFM State Auditor

REQUIRED SUPPLEMENTARY INFORMATION

THE 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 nations 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 2011 Fiscal Year 2010 Fiscal Year 2009
Overview of the Financial Statements and Financial Analysis
The University of Georgia is proud to present its financial statements for fiscal year 2011. 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 2011and fiscal year 2010.
Statementof 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 30,2011

June 30.2010

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

$ 1,206,069,542 65,353,422 75,257,587 6,370,561
134,456,020

$ 1,139.354.681 58,106,618 74,447,034 294,754
151,038,628

Total Net Assets

The total assets of the institution increased by $97,010,950. A review of the Statement of Net Assets will reveal that the increase was primarily due to an increase of $104,681,726 in the category of Capital Assets.
The total liabilities for the year increased by $32,745,533 due to an increase in capital lease obligations. The combination of the increase in total assets of $97,010,950 and the increase in total liabilities of $32,745,533 yields an increase in total net assets of $64,265,417. The increase in total net assets is primarily in the category of lnvested in Capital Assets, Net of Debt, in the amount of $66,714,861.
Stahment of Revenues, Expenses and Changesin Net Asseb
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 3 0 , 2 0 1 1

June 30,2010

Operating Revenues Operating Expenses

Operating Loss

$ -470,666,657

$ 470,403,134

Nonoperating Revenues and Expenses

458,347,267

527,068,268

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

$ -12,319,390

$ 56,665,134

Other Revenues, Expenses, Gains or Losses

76,584,807

78,026.855

Increase(Decrease) in Net Assets

$ 64,265,417

$ 134,691,989

Net Assets at Beginningof Year

Net Assets at End of Year

The Statement of Revenues, Expenses and Changes in Net Assets reflects a positive year with a $64,265,417 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 3 0 , 2 0 1 1 and June 3 0 , 2 0 1 0

June 3 0 , 2 0 1 1

June 30,2010

Operating Revenue

Tuition and Fees

$

Federal Appropriations

Grants and Contracts

Sales and Services of Educational Departments

Auxiliary

Other

285,376,810 10,398,993
198,061,917 43,741,633
151,288,641 2,585,133

Total Operating Revenue

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

Total Nonoperating Revenue

Capital Grants and Gifts Federal State Other

Total Capital Grants and Gifts

Total Revenues

Expenses (By Functional Classification) For the Years Ended June 30,2011 and June 30,2010

June 3 0 , 2 0 1 1

June 30,2010

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

Total Operating Expenses
Nonoperating Expenses Interest Expense (Capital Assets)

$ 1,162,119,784

$ 1,106,667,243

Total Expenses

Operating revenues increased by $55,189,018 in fiscal year 2 0 1 1 which included $30,981,162 net increase in tuition and fees, $16,554,466 increase in grants and contracts operating revenues, and $6,463,853 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 include a $3,252,458 in Residence Hall revenues and $1,732,069 in Food Services revenues.
The increase in grants and contracts operating revenues was due to an overall increase in awards and the change from the previous year decrease.
Nonoperating revenues decreased by $66,909,481 for the year primarily due to a decrease of $57,269,298 in Federal Stimulus funds, which were not available this year. Gifts and Other nonoperatinggrants and contracts decreased by $9,679,452 and $15,964,082, respectively.
State funded capital grants and gifts decreased from fiscal year 2010 to fiscal year 2 0 1 1 by $37,005,774 as a result of decreased funding for capital improvements and additions through the Georgia State Financing and Investment Commission (GSFIC).
Total operating expenses increased by $55,452,541, which included $13,166,105 in employee compensation and benefits, $8,644,600 in utilities, and $26,406,665 in supplies and other services.
The $13,166,105 increase in employee compensation and benefits category were primarily in the instructional, research, academic support, and auxiliary functions. Utilities increased by $8,644,600 during the past year, which was primarily associated with additional square footage and increases in electricity and natural gas costs.

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 3 0 , 2 0 1 1 and 2010, Condensed

June 3 0 , 2 0 1 1

June 30,2010

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

$ -373,271,285 459,653,083 -86,683,392 -3,903,27 1

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

Net Change in Cash Cash, Beginningof Year

Cash, End of Year

$ 276,670,769

$ 280,875,634

Capital Assets

The University had several significant capital asset additions in fiscal year 2011. A new East Campus Village Resident Hall opened in the fall of 2010. The $48.7 million modern residence hall supports academics and personal growth for 555 students. By January 2011, the $19.0 million Georgia Museum of Art addition was completed, which provides 16,000 square feet of new galleries, an outdoor sculpture garden, an expanded lobby, and additional storage space. The former Navy Supply School property was transferred to the University to become the Health Sciences Campus. The $27.9 million property includes many different buildings and housing units that will be used primarily for health related education and research programs and the Georgia Health Sciences University/University of Georgia Medical Partnership. The Stegeman Coliseum renovation was completed for the 2010-2011 basketball and gymnastic seasons. The $12.8 million renovation included a major expansion of the concourse and lobby space, modernization and addition of restrooms, and upgrades to concession areas. The Reed Plaza $10.8 million renovation was completed in September 2010 before the first home football game. In addition to providing an additional 30,000 square feet of athletic patron space with greatly expanded restrooms and concession areas, Reed Plaza also will be used on nongame days for student activities and outdoor lectures.

The Georgia State Financing and Investment Commission (GSFIC) provided funding for $16.8 million for buildings and renovations and $2.0 million for equipment. Projected funding by GSFIC for fiscal year 2012 will be approximately the same. GSFIC also transferred ownership of $3.4 million in additional improvements to the College of Pharmacy. These improvements are a continuation of the $35.5 million transferred for the College of Pharmacy in fiscal year 2010.

For additional information concerning Capital Assets, see Notes 1,6, 8, and 1 0 in the Notes to the Financial Statements.
Long- Term Liabilities
The University of Georgia had Long-Term Liabilities of $327,297,272 of which $33,275,785 was reflected as current liability at June 30, 2011.
For additional information concerning Long-Term Liabilities, see Notes 1and 8 in the Notes to the Financial Statements.
Economic OutJook
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, 2009 and 2010, all state agencies experienced significant budget reductions. During the development of the University of Georgia's fiscal year 2 0 1 1 budget, state appropriated support was reduced by 12% for the University's resident instruction budget and by 12.2% for the University's State of Georgia B budget line items ("B" units).
The University and the Board of Regents took the following actions to manage the fiscal year 2 0 1 1 budget reductions so that core missions would be minimally impacted:
a) The University reduced its school/college/unit budgets by an average of 2%,
b) the Board of Regents increased undergraduate tuition for incoming and second year students by $500 per semester - from $3,035 per semester to $3,535 (16.5% increase) for in-state students and from $12,140 to $12,640 (4.1% increase) for out-of-state students,
c) the Board of Regents increased the Special Institutional mandatory fee from $100 per semester to $200 per semester, and
d) the University further 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 with minimal 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% and eliminated the Federal Stimulus Funds that were a part of the University's budget when fiscal year 2 0 1 1 began. When coupled with the additional reductions that were approved during the 2 0 1 1 legislative session, state appropriated support for the University's resident instruction budget was reduced by another 7.4% during the course of fiscal year 2 0 1 1 and by an additional 3.5% for the University's "B" Units. Thus, state appropriated support for the University of Georgia was 17.9% less during fiscal year 2 0 1 1 than it was when fiscal year 2010 began.

The University has and continues to prepare for the possibility of additional reductions in fiscal year 2012 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 2012 budget plans to meet additional reduction levels of 2%, 4%, and 6%. 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 2012 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.
Dr. Michael F. Adams, President The Universityof Georgia

BASIC FINANCIAL STATEMENTS

UNIVERSITY OF GEORGIA STATEMENT OF NET ASSETS
JUNE 30,2011
ASSETS
Current Assets Cash and Cash Equivalents Accounts Receivable. Net (Note3) Receivables - Federal Financial Assistance
Receivables - Other
Due from Affiliated Organizations Inventories(Note 4) Prepaid Items
Total Current Assets
Noncurrent Assets Noncurrent Cash Due from Affiliated Organizations 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 Com~enSatedAbsences
Total Current Liabilities
Noncurrent Liabilities Lease Purchase Obligations Compensated Absences Other Noncurrent 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.
- 2 -

EXHIBIT "A"

UNIVERSITY OF GEORGIA STATEMENT OF REVENUES,EXPENSESAND CHANGESIN NET ASSETS
YEAR ENDEDJUNE 30.2011
DPERATING RFVENUES
Student Tuition and Fees Less: Scholarship Allowances
Federal Appropriations Grants and Contracts
Federal Federal Stimulus State Other Sales and Services Rents and Royalties Auxilialy Enterprises Residence Halls Bookstore Food S e ~ l c e s ParkingITransportation Health Sewices Intercolle@ateAthletics Other Organizations Mher Operating Revenues
Total Operating Revenues
DPERATING EXPENSE
Salaries Faculty Staff
Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciabon
Total Operating Expenses
OperattngIncome (Loss)
NONOPERATING REVENUFS 1FXPENC.FS)
State Appropriations Grants and Contracts
Federal State Other GlftS Investment lncome Interest Ewpense Other Nonoperat~ngRevenues
Net Nonoperating Revenues
Income (Loss) Before Other Revenues. Expenses. Gains, or Losses
Capital Grants and Gifts Federal State Other
Total Other Revenues. Expenses, Gains or Losses
Increase (Decrease)in Net Assets
Net Assets - Beginning of Year
Net Assets - End of Year
The notes to the financial statements are an integral part of thls statement

UNIVERSITY OF GEORGIA STATEMENT OF CASH FLOWS YEAR ENDEDJUNE 30,2011
CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Federal Appropriations Grants and Contracts Sales and Services Paymentsto Suppliers Paymentsto Employees Payments for Scholarships and Fellowships Loans issued t o Students and Employees Collection of Loans to Students and Employees Auxiliary Enterprise Charges: Residence Halls Bookstore Food Services Parkingflransportation Health Sewices Intercollegiate Athletics Other Organizations Other Receipts (Payments)
Net Cash Provided(Used) by OperatingActivities
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 FinancingActivities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Grants and Gifts Received Purchases of Capital Assets Principal Paid on Capital Debt and Leases lnterest Paid on C a ~ i t aDl ebt and Leases
Net Cash Provided(Used) by Capital and Related FinancingActivities
CASH FLOWS FROM INVESTING ACTIVITIES Interest on lnvestments Purchaseof lnvestments
Net Cash Provided (Used) by Investing Activities
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 30.2011
RECONCILIATIONOF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating Income (Loss) Adjustments to ReconcileOperating Income (Loss) to Net Cash
Provided(Used) by OperatingActivities 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 Provlded(Used) by OperatingActivities
NONCASH ACTIVITY Fixed Assets Acquired by Incurring Capital Lease Obligations Change in Fair Value of Investments Recognizedas a Component of Interest Income Gift Reducing Proceeds of Gifts and Grants Receivedfor Other Than Capital Purposes Gift of Capital Assets ReducingProceeds of Capital Grants and Gifts

EXHIBIT "C"

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

(This page left intentionally blank)

UNIVERSrrY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011

EXHIBIT "DM

Note 1: Summary of SignificantAccauntinp 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 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.
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 intraUniversitytransactions 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.

UNIVERSrrY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011

EXHIBIT "D"

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 lnvestment Advisory Account which is invested in short-term, highly liquid U. S. Agencies.
Short-Term lnvestments Short-Term lnvestments consist of investments of 9 0 days - 1 3 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.
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, 20 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.

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011

EXHIBIT "0"

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) - a n 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 Universitywhen 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, 2011, GSFIC transferred capital additions valued at $3.4 million 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.
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 $42,204,894 as of July 1,2010. For fiscal year 2011, $28,004,362 was earned in compensated absences and employees were paid $26,688,093 for a net increase of $1,316,269. The ending balance as of June 30, 2 0 1 1 in accrued liability for compensated absences was $43,521,163.
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 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 GSFIC as discussed previously in Note 1- Capital Assets section.
Restricted net asse& - 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

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011

EXHIBlT "D"

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.

Expendable Restricted Net Assets include the following:

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

54,671,217 10,079,049 10.507.321

Total Restricted Expendable
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.

Unrestrictednetassets..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 $1,146,632-08. 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 the State Treasurer. 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 & R Reserve Reservefor Encumbrances Reserve for Inventory Other Unrestricted

Total Unrestricted Net Assets

$

134,456,020

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.

UNIVERSrrY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011

EXHIBll "D"

Classification of Revenues and Expenses The Statement of Revenues, Expenses and Changes in Net Assets classify fiscal year activity as operating and nonoperating according to the following criteria:
Operating Revenues: Operating revenue includes activities that have the characteristics of exchange transactions, such as (I stu) dent 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 Proprietay and Nonexpendable TrustFunds and Governmental Entities That Use Proprietary Fund Accounting, and GASB No. 34, such as state appropriations and investment income.
Operating Expenses: Operating expense includes activities that have the characteristics of exchange transactions.
Nonoperating Expenses: Nonoperating expense includes activities that have the characteristics of nonexchange transactions, such as capital financing costs and costs related to 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 $18,693,750 and $19,414,907, respectively, are reported net of discounts and allowances of $506,562 and $1,184,277, respectively.
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.

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011

EXHIBrr "D"

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 MortgageAssociation.

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 University System of Georgia.

At June 30, 2011, the carrying value of deposits was $102,782,644 and the bank balance was $115,214,693. Of the University's deposits, $114,260,391 were uninsured. Of these uninsured deposits, $114,200,244 were collateralized with securities held by the financial institution, by its trust department or agency, but not in the University's name and $60,147 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 NOTEST O THE FINANCIAL STATEMENTS
JUNE 30, 2011

EXHIBIT "D"

The University's investments as of June 30, 2 0 1 1 are presented below. All investments are presented by investment type and debt securities are presented by maturity.

Investment Tvoe

Fa~r Value

Less Than 1Year

lnvestment Maturity

1- 5 Years

6 - 1 0 years

More than 1 0 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 Equity Securities - International
Miscellaneous Holdings Real Estate Held for
lnvestment Purposes Real Estate lnvestrnent Fund

lnvestment Pools Board of Regents Legal Fund Diversifled Fund Office of the State Treasurer
Georgia Fund 1

Total Investments

$

232,702,322

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 - 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.aa.aov.
The Georgia Fund 1lnvestment Pool, managed by the Office of the State Treasurer, 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

UNIVERSrPlOF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011

EXHIBIT "D"

is valued at the pool's share price, $1per share. The Georgia Fund 1Investment Pool is an AAAm rated investment pool by Standard and Poor's. The Weighted Average Maturity of the Fund is 5 9 days.

lnterest Rate Risk lnterest 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 3.8 years. Of the University's total investment of $8,701,379 in the Legal Fund, $6,648,793 is invested in debt securities.

The Effective Duration of the Diversified Fund is 4.31 years. Of the University's total investment of $1,560,075 in the Diversified Fund, $500,552 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, 2011, $109,774,971 of the University's applicable investments were uninsured and held by the investment's counterparty in the University's name and $2,011,205 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 Quality Risk

Fair Value

AAA

AA

A

BBB

Unrated

Related Debt Investments

U. S. Agencies

$ 55,210,726 $ 55,210.726

Corporate Debt

5,076,941

6.644 $ 1050.234 $ 2,052,955 $ 1,886,125 $

Repurchase Agreements - Underlying

U. S. Agency Securities

4,959,873

4,959,873

80,983

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%.

UNIVERSlTY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011

EXHIBIT "D"

As of June 30, 2011, applicable investments in a single issuer where those investments exceed 5% of total investments were as follows:

Federal National Mortgage Association Federal Home Loan MortgageAssociation

16.0% 7.7%

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: Accounts Reaeivable

Accounts receivable consisted of the following at June 30, 2011:

Student Tuition and Fees Auxiliary Enterprisesand Other OperatingActivities Federal Financial Assistance Georgia State Financingand Investment Commission Due from Affiliated Organizations Other

$ 6,750,870 1,181,820
17,790,406 3,281,072
26,765,344 15,994,497

Less Allowance for Doubtful Accounts

$ 71,764,009 693,128

Net Accounts Receivable
Note 4: Inventories
lnventories consisted of the following at June 30, 2011:
Food Services Physical Plant Other

Total Inventories

$ 5,327,182

Note 5: Notes/Loans Receivable

The Federal Perkins Loan Program (the Program) comprises substantially all of the loans receivable at June 30, 2011. 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. 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, 2011, the allowance for uncollectible loans was approximately $944,636.

UNIVERSIW OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011

Note 6: Capital Assets

Following are the changes in capital assets for the year ended June 30, 2011:

Beginning Balance
July 1,2010

Additions

Reductions

Ending Balance
June 30,2011

Cap~taAl ssets, Not Being Depreciated: Land Cap~talizedCollections Construction Work-In-Progress

$

29,545,246 $

13,237,667

$

42,782,913

17,839,284

408.975

18,248,259

72,612,426

33,136,758$

30.005.991

75.743.193

Total Capital Assets. Not Being Depreciated $

119,996,956 $

46,783,400$

30,005,991$

l36,774,365

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

$

51106,304 $

1,418,898.982

157,840,682

343,880,620

1034,390

246,486,918

l,190.040 108,948,954 15,675,803 24,886,831 $
12,796,821

$
14,270,861 86,380 65,933

52,296,344 l,527.847,936
173,516,485 354,496,590
948,010 259,217,806

Total Assets Being Depreciated

$ 2,219,247,896$

163,498,449$

14,423,174$ 2,368,323,171

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

$

19,658,791$

428,123,534

46,213,755

1,689,239 34,091748
4,400,376

Total Accumulated Deprec~ation

$

955,006,558 $

75.027.513 $

13,856,555$ 1,016,177,516

Total Capital Assets, Being Depreciated. Net $ 1,264,241,338$

88,470,936$

566,619 $ 2352,145,655

Cap~taAl ssets. Net

Buildings include $297,025,752 of property held under capital leases with the University of Georgia Real Estate Foundation. Accumulated depreciation for these properties is $26,786,709 and $5,675,796 in depreciation expense was recognized for these properties in fiscal year 2011.

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011

EXHIBIT "D"

Note 7: Deferred Revenue Deferred revenue consisted of the following at June 30, 2011:

Prepaid Tuition and Fees Research Other Deferred Revenue

Total Deferred Revenue
Note 8: Long- Term Liabilities Long-Term liability activity for the year ended June 30, 2 0 1 1 was as follows:

Beginning Balance July 1,2010

Additions

Reductions

Ending Balance June 30, 2011

Current Porbon

Leases Lease Obligations

$ 244,883,613 $ 49,948,870$ 11,982,005$ 282,850,478$ 4,38l,604

Other Liabilities

Other L~abil~ties

962,513

96,838

133,720

925.631

119.154

Total

Total LongTerm Obligations $ 288,051,020$ 78,050,070$ 38,803,818$ 327,297,272$ 33.275.785

Note 9: Signifimnt Commitments
The University had significant unearned, outstanding, construction or renovation contracts executed in the amount of $9,840,523 as of June 30, 2011. 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 fiscal years 2028, 2032, three in 2034, 2036, 2037, 2038, two in 2039, and five in 2040. The equipment capital leases expire between 2012 and 2014. Reductions in principal on capital leases were $11,982,005 with $19,065,332 in interest expense for a total of $31,047,337 in fiscal year 2011. Interest rates range from 4.88 percent to 9.00 percent. The carrying values of assets held under capital lease at June 30, 2 0 1 1 were as follows:

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011
Buildings Equipment
Total Assets Held Under Capital Lease
All of the University of Georgia'scurrent 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 leased the East Village Parking Deck for a 30-year period that began on November 1,2002 and originally expired July 31, 2032. In August of 2010, the Universityof Georgia purchased this leased property. 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 University of Georgia entered into a capital lease with the UGAREF whereby the University leases East Campus Housing Phase II (Building 1516) for a 30-year period that began July 25, 2010 and expires June 30, 2040. The outstanding liability at June 30, 2 0 1 1 on these capital leases is $282,556,973.
The University also has various capital leases for equipment with an outstanding balance of $293,505 at June 30,2011.
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.
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, 2011, were as follows:

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011

EXHIBlT "D"

Year EndingJune 30:
2012 2013 2014 2015 2016
2017 - 2021 2022 - 2026
2027 - 2031 2032 - 2036
2037 - 2040
Total Minimum Lease Payments $

Real Property and Equipment

Capital

Operating

Leases

Leases

594,521,948 $ 6,474,892

Less: Interest Less: Executory Costs (if paid)

284,721,907 26,949.563

Principal Outstanding

The University of Georgia's fiscal year 2011 expense for rental of real property and equipment under operating leases was $7,798,716. No expenditures were made for equipment under noncancellable operating leases.

Note 11: Retirement Plans
The University of Georgia participates in various retirement plans administered by the State of Georgia under two major retirement systems: Employees' Retirement System of Georgia (ERS System) and Teachers Retirement System of Georgia. These two systems issue separate publicly available financial reports that include the applicable financial statements and required supplementary information. The reports may be obtained from the respective system offices. The significant retirement plans that the University of Georgia participates in are described below. More detailed information can be found in the plan agreements and related legislation. Each plan, including benefit and contribution provisions, was established and can be amended by State law.
Employees' Retirement System of Georgia
The ERS System is comprised of individual retirement systems and plans covering substantially all employees of the State of Georgia except for teachers and other employees covered by the Teachers Retirement System of Georgia. One of the ERS System plans, the Employees' Retirement System of Georgia (ERS), is a cost-sharing multiple-employer defined benefit pension plan that was established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees and has the powers and privileges of a corporation. ERS acts pursuant to statutory direction and guidelines, which may be amended prospectively for new hires but for existing members and beneficiaries may be amended in some aspects only subject to potential application of certain constitutional restraints against impairment of contract.

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011

EXHIBIT "Dm

On November 20,1997, the Board created the Supplemental Retirement Benefit Plan (SRBP-ERS) of ERS. SRBP-ERS 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 the SRBP-ERS is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC Section 415. Beginning January 1, 1998, all members and retired former members in ERS are eligible to participate in the SRBP-ERS whenever their benefits under ERS exceed the limitation on benefits imposed by IRC Section 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 1 0 years of creditable service and attainment of age 6 0 or 3 0 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.

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.

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 of Georgia pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these University of Georgia contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. The University of Georgia 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 of Georgia contributions are not at any time refundable to the member or his/her beneficiary.

Employer contributions required for fiscal year 2 0 1 1 were based on the June 30, 2008 actuarial valuation for the old and new plans and were set by the Board of Trustees on September 18, 2008 for GSEPS as follows:

Old Plan* New Plan GSEPS

10.41% 10.41%
6.54%

* 5.66% exclusive of contributions paid by the employer on behalf of old plan members

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011

EXHIBrr "D"

Members become vested after 1 0 years of service. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contributions; the member forfeits all rights to retirement benefits.
Teachers Retirement System of Georgia
The Teachers Retirement System of Georgia (TRS) is a cost-sharing multiple-employer defined benefit plan created in 1943 by an act of the Georgia General Assembly to provide retirement benefits for qualifying employees in educational service. A Board of Trustees comprised of active and retired members and ex-officio State employees is ultimately responsible for the administration of TRS.
On October 25, 1996, the Board created the Supplemental Retirement Benefit Plan of the Georgia Teachers Retirement System (SRBP-TRS). SRBP-TRS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of TRS. The purpose of SRBP-TRS is to provide retirement benefits to employees covered by TRS whose benefits are otherwise limited by IRC Section 415. Beginning July 1,1997, all members and retired former members in TRS are eligible to participate in the SRBP-TRS whenever their benefits under TRS exceed the IRC Section 415 imposed limitation on benefits.
TRS provides service retirement, disability retirement, and survivor's benefits. The benefit structure of TRS is defined and may be amended by State statute. A member is eligible for normal service retirement after 3 0 years of creditable service, regardless of age, or after 1 0 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service.
Normal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 4 0 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 60 or by 7% for each year or fraction thereof by which the member has less than 3 0 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lumpsum distribution in addition to a reduced monthly retirement benefit. Death, disability and spousal benefits are also available.
TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 10 years of service. If a member terminates with less than 1 0 years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest. Member contributions are limited by State law to not less than 5% or more than 6% of a member's earnable compensation. Member contributions as adopted by the Board of Trustees for the fiscal year ended June 30, 2 0 1 1 were 5.53% of annual salary. Employer contributions required for fiscal year 2 0 1 1 were 10.28% of annual salary as required by the June 30, 2009 actuarial valuation.

UNIVERSIlY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011

EXHIBIT " D

The following table summarizes the University of Georgia contributions by defined benefit plan for the years ending June 30,2011, June 30, 2010, and June 30,2009 (dollars in thousands):

Fiscal Year

E RS

Required

Percentage

Contribution

Contributed

TRS

Required

Percentage

Contribution Contributed

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 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 employeenis 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 2011, 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 nonforfeitable at all times.
The University of Georgia and the covered employees made the required contributions of $15,144,092 (9.24%) and $8,184,428 (5%), respectively.
AIG-VALIC, American Century, Fidelity, and TIM-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.

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011

EXHIBIT "D"

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 2 0 1 1 amounted to $1,863,811 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 three different selfinsured healthcare plan options. A PPO/PPO Consumer healthcare plan was offered for the entire reporting period, and effective 01/01/2011, a HSA/High Deductible PPO and a HMO are also offered on a self-insured basis. The HSA/High Deductible PPO and HMO were previously insured through Blue Cross Blue Shield of Georgia. 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 plans are considered to be a self-sustaining risk fund. 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 self-insured healthcare plan products. In addition to the self-insured healthcare plan options offered to the employees of the University System of Georgia, a fully insured HMO healthcare plan option is also offered to System employees through Kaiser.
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.

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011

EXHIBIT "D"

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 $925,631. 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 2 0 1 1was as follows:

Beginning Balance July 1.2010

Additrons

Reductions

Ending Balance June 3 0 , 2 0 1 1

Current Portion

Pollution Rernediation

Obli@tions

$

962,513 $

96,838 $

133,720 $

925,631 $

119,154

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 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 Reportfor the fiscal year ended June 30, 2011.
Note 14: Post-Employment Benefits Other man Pension Benefits
Pursuant to the general powers conferred by the Official Code of Georgia Annotated Section 20-3-31, the Board of Regents of the University System of Georgia has established group health and life insurance programs for regular employees 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.

UNIVERSIW OF GEORGIA NOTESTO THE FINANCIAL STATEMENTS
JUNE 30, 2011

EXHIBIT "DM

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 2010 and 2 0 1 1 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, 2011, there were 4,226 employees who had retired or were disabled that were receiving these post-employment health and life insurance benefits. For the year ended June 30, 2011, The University of Georgia recognized as incurred $22,524,592 of expenditures, which was net of $9,661,823 of participant contributions.

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011

Note 15: Natural ClassificationswiM Func&onal Classifications The University'soperating expenses by functional classification for fiscal year 2011are shown below:
Functional Classification

Natural Class~f~cation

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 Depreciat~on
Total Operating Expenses

$ 243,889,329 $

299.812.689 $ 150,888,539 $

87,445,933 $ 38,846,068

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

$ 67.874.152 $

119,112.203 $ 21,339,010 $ 132,911,861 $ 1,162,119.784

Note 16: Affiliated Organizations
In accordance with GASB Statement No. 39, Determining Whether Cen3jn Organizations are Cimpunent 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.

UNIVERSITY OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011

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, 2011, 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
JUNE 30,2011
ASSETS
Cash and Cash Equivalents Accounts Receivable
Federal Financial Assistance Other Prepaid Expenditures lnventories
Total Assets
LIABILITIES AND FUND EOUITY
Liabilities Accrued Payroll Encumbrances Payable Deferred Revenue Other Liabilities
Total Liabilities
Fund Balances Reserved Department Sales and Services Indirect Cost Recoveries Technology Fees Capital Outlay Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over Inventories Unreserved Surplus
Total Fund Balances
Total L~ab~litieansd Fund Balances

SCHEDULE "1"

Actual amounts were prepared on a prescribed basis of accountingthat 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 BUDGETCOMPARISONAND SURPLUS ANALYSIS REPORT (NON-GAAPBASIS)
BUDGET FUND YEAR ENDED JUNE X).2 0 1 1

REVENUES
State Appropnation State General Funds
Other Funds
Total Revenues
ADJUSTMENTSAND PROGRAM TRANSFERS
CARRY-OVER FROM PRIOR YEAR
Prior Year Reserves Available for Expenditure
Total Funds Available
EXPENDITURES
Agricultural ExperimentStation Athens and Tlfton Veterinary Laboratories Cooperatlve Extension Service Forestry Cooperawe Extension Forestry Research Manne Institute Manne Resources EktensionCenter Research Consortium Special Funding lnltiabve Teaching Veterinary Medicine Experiment Station Veterinary Medicine Teaching Hospital
Total Expenditures
Excess of Funds Avallable over Expenditures
FUND BALANCE JULY 1
Reservea Unreserved
ADJUSTMENTS
Prior Year Payables/Expend~tures Prior Year Receivables/Revenues UnreservedFund Balance (Surplus) Returned
to Board of Regents - UniversitySystem Offlce Year Ended lune 30,2010
Early Return of Surplus in Current Fiscal Year Prior Year Reserved Fund Balance Included In FundsAvallable
FUND BALANCE JUNF 30
SUMMARY OF FUND BALANCE
Reserved Department Sales and Servlces Indirect Cost Recoveries Technology Fees Capital Outlay Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over Inventories
Total Reserved
Unreserved Surplus
Total Fund Balance
Actual amounts were prepared on a prescribed basls of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgla, which is a cornprehenslvebasis of accounting other than generally accepted accountingprinciples.

BUDGET

ACTUAL

SCHEDULE '2"
VARIANCE FAVORABLE (UNFAVORABLE)

UNIVERSITY OF GEORGIA STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE
(NONGAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30.2011

Agricultural Experiment StaUon State Appropriation State General Funds Other Funds
Total Agricultural Experiment Stat~on
Athens and Tifton Veterinary Laboratories Other Funds
Cooperatlve EatensionService State Appropriation State General Funds Other Funds
Total Cooperative ExtensionS e ~ l c e
Forestry Cooperatlve Extension State Approprlatlon State General Funds Other Funds
~ o t aFlorestry cooperative Enension
forest^^ Research
State Appropriation State General Funds
Other Funds
Total Forestry Research
Marine Institute State Approprlat~on State General Funds Other Funds
Total Marine Institute
Marine Resources Udansion Center State Appropriation State General Funds Other Funds
Total Marine Resources Eitens~onCenter
Research Consortium State Appropriation State General Funds
Speclal Funding lnklatlves State Appropriation State General Funds
Teaching State Appropriation State General Funds Other Funds
Total Teaching

Orlginal Appropriation

Amended Appropriation

Final Budget

Current Year Revenues

Actual amounts were prepared on a prescribed basts of accounting that demonstrates compliance with budgetary statutes and regulationsof the State of Georgia, which is a comprehensivebasis of accountingother than generally accepted accountingprinciples.

UNIVERSITY OF GEORGIA STATEMENT OF FUNDSAVAILABLE AND MPENDITURESCOMPAREDTO BUDGET BY PROGRAMAND FUNDINGSOURCE
(NONGAAP BASIS) BUDGET FUND YEAR ENDED JUNE 30.2011

Veterinary Medlcine Experiment Station
State Approprlation State General Funds
Veterinary Medicine Teaching Hospital State Approprlatron State General Funds Other Funds
Total Vetennary Medlclne Teaching Hospital
Total Operating Activity

Orig~nal Appropriation

Amended Approprtation

Final Budget

Current Year Revenues

Actual amounts were prepared on a prescr~bedbasls of accountlngthat demonstrates cornpllance wlth budgetary statutes and regulations of the State of Georgia, which is a cornprehenslve bass of accountingother than generally accepted accountlng principles.

SCHEDULE '3"

Funds Available Compared to Budget

~ r l oyrear

Adjustments and

Total

carryover

Program Transfers

Funds Available

Variance Posltive (Negative)

Expenditures Compared to Budget

Actual

Variance Positive (Negative)

Excess (Deficiency) of Funds Available
Over/(Under) Expenditures

UNIVERSITY OF GEORGIA STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AN0 FUNDING SOURCE
(NONGAAP BASIS) BUDGET FUND YEAR ENDEDJUNE 30.2011

Agricultural ExperimentStation State Appropriation State General Funds Other Funds
Total Agr~culturaEl xperiment Station
Athens and T M n Veterinary LaboratDrias Other Funds
Cooperatlve ExtensionSewice State Appropriation State General Funds Other Funds
Total Cooperative Extens~onServlce
Forestry CooperaUve Extension State Appropr~at~on State General Funds Other Funds
Total ForestryCooperatlve Extension
Forestry Research State Appropriation State General Funds Other Funds
Total Forestry Research
Marine institute State Appropriation State General Funds Other Funds
Total Marine Institute
Marlne Resources Unension Centel State Approprlation State General Funds Other Funds
Total Marine ResourcesExtension Center
Research ConsorUurn State Appropriation State General Funds
Special Funding lnitlatives State Approprlation State General Funds
Teaching State Appropriation State General Funds Other Funds
Total Teaching
Vetednsry Medlclne ExperimentStation State Appropnabon State General Funds

Beginning Fund Balance/(Deficit)
July 1

Fund Balance Carred Over from
Prior Period as FundsAvailable

Return of Fiscal Year 2010
Surplus

Prior Perlod Adjusttnents

Actual amounts were preparedon a prescribed basisof accountingthat demonstrates compliancewith budgetary statutes and regulationsof the State of Georgia, which IS a comprehensive basisof accountingother than generally accepted accounting princ~ples.

SCHEDULE "4"

Other Adjustments

Earlv Return Fiscal Year 2 0 1 1
Surplus

Excess (Deficiency) of Funds Available
Over/(Under) Expenditures

- Endine Fund
Balance/(Deficit) June 3 0

Reserved

Analysis of Endlng Fund Balance Surplus/(Defic~t)

Total

UNIVERSITY OF GEORGIA STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE
(NON-GAAP BASIS) BUDGET FUND YEAR ENDEDJUNE 30.2011

Veterinary Medlclne Teachlng Hospital State Appropriation State General Funds Other Funds
Total Veter~naryMedicine Teaching Hospltal
Total Operating ~ c t ~ v ~ t y
Pr~oYr ear Reserves Not Available for Expenditure lnventor~es Uncollectible Accounts Receivable

Beginning Fund Balance/(Deficit)
July 1

Fund Balance Carried Over from
Prlor Perlod as Funds Available

Return of F~scaYl ear 2010
Surplus

Pr~oPr er~od Adjustments

Budget Unit Totals

Actual amounts were prepared on a prescr~bedbass of accountlng that demonstrates compl~ancew ~ t hbudgetary statutes and regulations of the State of Georgia, which is a cornprehens~vebasis of accounting other than generally accepted accountlng principles.

SCHEDULE "4"

Other Adjustments

Early Return Fiscal Year 2011
Surplus

Excess (Defic~ency) of Funds Available
Over/(Under) Expendftures

Ending Fund Balance/(Dehcit)
June 30

Reserved

Analysis of Ending Fund Balance Surplus/(Oeficit)

Total

Summary of EndingFund Balance Reserved
Department sales and services Indirect Cost Recoveries Technology Fees Capital Outlay Restrlcted/SponSored Funds Uncollectible Accounts Receivable Tuition Carry-Over lnventor~es Unreserved Surplus
Total EndingFund Balance- June 30

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Totals per Annual Supplement
Prepa~dSalaries
June 30,2011 June 30,2010
Accruals
June 30,2011 June 30.2010
Compensated Absences
June 30,2011 June 30,2010
Other ReconcilingActivity
Unidentified Variance

UNIVERSITY OF GEORGIA RECONCILIATIONOF SALARIES AND TRAVEL
YEAR ENDED JUNE 30.2011

SCHEDULE "5"

SALARIES

TRAVEL

$

608,984,947$ 12,797,180

SECTION I1 CURRENT YEAR FINDINGS AND QUESTIONED COSTS

UNIVERSITY OF GEORGIA SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30,2011
FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS No matters were reported. FEDERAL AWARD FINDINGS AND OUESTIONED COSTS No matters were reported.