BOARD OF REGENTS OF THE UNNERSITY SYSTEM OF GEORGIA ADMINISTRATIVE CENTRAL OFFICE (OVERSIGHT UNIT) - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION EXHIBITS FINANCIAL STATEMENTS A COMBINED BALANCE SHEET ALL FUND GROUPS 2 B COMBINED STATEMENT OF CHANGES IN FUND BALANCES ALL FUND GROUPS 4 C STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITIJRES, AND OTHER CHANGES 7 D NOTES TO THE FINANCIAL STATEMENTS 8 SUPPLEMENTARY INFORMATION E COMBININGBALANCESHEET CURRENT FUNDS -UNRESTRICTED 26 F COMBINING STATEMENT OF CHANGES IN FUND BALANCES CURRENT FUNDS -UNRESTRICTED 28 COMBINING STATEMENTS OF CURRENT FUNDS REVENUES, EXPENDITIJRES, AND OTHER CHANGES G UNRESTRICTED 30 H RESTRICTED 33 SCHEDULES SCHEDULESOFREVENUESANDEXPENDITURESCOMPAREDTOBUDGET 1 "A" RESIDENT INSTRUCTION 34 2 "B" REGENTS CENTRAL OFFICE AND OTHER ORGANIZED ACTIVITIES 36 3 "D" LOTIERY FOR EDUCATION 39 SCHEDULES OF APPROVED BUDGET 4 "A" RESIDENT INSTRUCTION 40 5 "B" REGENTS CENTRAL OFFICE AND OTHER ORGANIZED ACTIVITIES 42 6 "D" LOTIERY FOR EDUCATION 44 SCHEDULES OF BUDGET TRANSFERS TO OTHER UNITS 7 "A" RESIDENT INSTRU.CTION 46 8 "B" REGENTS CENTRAL OFFICE AND OTHER ORGANIZED ACTIVITIES 50 9 "D" LOTIERY FOR EDUCATION 52 10 CHANGES IN INVESTMENT IN PLANT 54 BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA ADMINISTRATIVE CENTRAL OFFICE (OVERSIGHT UNIT) - TABLE OF CONTENTS - SECTION I FINANCIAL SCHEDULES 11 SCHEDULE OF FUND BALANCES CURRENT FUNDS AND PLANT FUNDS 56 SCHEDULES OF ALLOTMENTS TO UNITS OF THE UNIVERSITY SYSTEM OF GEORGIA 12 "A" RESIDENT INSTRUCTION 58 13 "B" REGENTS CENTRAL OFFICE AND OTHER ORGANIZED ACTIVITIES 61 14 "D"LOTIERYFOREDUCATION 62 15 ANALYSIS OF PRIOR YEAR'S SURPLUS FUNDS COLLECTED FROM INSTITUTIONS AND REDISTRIBUTED TO INSTITUTIONS WITH DEFICITS 64 16 RECONCILIATION OF SALARIES AND TRAVEL 66 SECTIONll AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION I FINANCIAL RussELL \\'. Hlr-;TON STATE AUDITOR (404) 6562174 DEPARTMENT OF AuDITS AND AccouNTS 254 Washington Street. S.W.. Suite 214 Atlanta. Georgia 30334-R400 January 9, 2002 Honorable Roy E. Barnes, Governor Members ofthe General Assembly ofG.eorgia Members of the Board ofRegents of the University System of Georgia and Honorable Thomas C. Meredith, Chancellor INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION Ladies and Gentlemen: We have audited the accompanying financial statements (Exhibits A through D) of 'the Administrative Central Office (Oversight Unit) ofthe Board ofRegents ofthe University System of Georgia as of and for the year ended June 30, 2001. These financial statements are the responsibility of the Administrative Central Office's management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements referred to above include only the activities of the oversight unit of the Board of Regents of the University System of Georgia. Financial activities of other organizational units (the various State colleges and universities) are not included. 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 examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As described in Note 1 to the financial statements, Georgia Law and State budgetary policy require the Administrative Central Office to prepare its financial statements on a basis which is not consistent with accounting principles generally accepted in the United States ofAmerica with respect to the recording of encumbrances as expenditures and liabilities. To conform with accounting principles generallyaccepted in the United States ofAmerica, encumbrances should be recorded as a 01ARL-62X reservation of fund balance. The effects on the financial statements ofthis departure from accounting principles generally accepted in the United States of America were not reasonably determinable, but are believed to be material. As disclosed in Note 1 to the financial statements, the Administrative Central Office did not report the liability and related .expenditure for compensated absences in the current funds as required by accounting principles generally accepted in the United States ofAmerica. If compensated absences were reported, liabilities would be increased and fund balance would be decreased by $1,790,453.43 as of June 30, 2001, and the net change in fund balance for the year ended June 30, 200 l, would be decreased by $268,953.18. In our opinion, except for the effects on the financial statements of the matters discussed in the fourth and fifth paragraphs, the financial statements referred to above present fairly, in all material respects, the financial position ofAdministrative Central Office a5 ofJune 30, 2001, and the changes in fund balances and the current operating funds revenues, expenditures, and other changes for the year then ended in conformity with accounting principles generally accepted in the United States of America. Our audit was made for'the purpose of forming an opinion on the financial statements taken as a whole. The accompanying combining statements (Exhibits E through H) and the financial schedules (Schedules 1 through 16) are presented for purposes of additional analysis and are not a required part ofthe financial statements ofAdministrative Central Office. Such information has been subjected to the auditing procedures applied in the audit ofthe financial statements and, in our opinion, except for the effects of the matters discussed in the fourth and fifth paragraphs, such information is fairly presented in all material respects in relation to the financial statements taken as a whole. Respectfully submitted, RWH:gp 01ARL-62X State Auditor FINANCIAL STATEMENTS - 1- BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA ADMINISTRATIVE CENTRAL OFFICE (OVERSIGHT UNIT) COMBINED BALANCE SHEET ALL FUND GROUPS JUNE 30. 2001 ASSETS Cash and Cash Equivalents Investments Accounts Receivable Investment in Plant CURRENT FUNDS UNRESTRICTED RESTRICTED ENDOWMENT AND SIMILAR FUNDS $ 65,568,620.50 $ 5,053,588.51 $ 10,583,356.77 10,067,899.92 69,619.32 403.08 Total Assets $ 75,706,139.74 $ 5,053,991.59 $ 10,583,356.77 LIABILITIES AND FUND BALANCES Liabilities Accounts Payable Employee Health Benefits Claims . Deposits Held in Custody for Others Capital Lease Obligations $ 12,830,740.06 35,179,138.50 Total Liabilities $ 48,009,878.56 Fund Balances Endowment Quasi-Endowment - Restricted Net Investment in Plant Restricted Unrestricted $ 3,612,043.20 6,971,313.57 $ 5,053,991.59 $ 27,696,261.18 Total Fund Balances $ 27,696,261.18 $ 5,053,991.59 $ 10,583,356.77 Total Liabilities and Fund Balances $ 75,706,139.74 $ 5,053,991.59 $ 10,583,356.77 The notes to the financial statements are an integral part of this statement. - 2- EXHIBIT"A" PLANT FUNDS INVESTMENT UNEXPENDED IN PLANT AGENCY FUNDS TOTAL (Memorandum Only) $ 5,020,534.46 ------ $ $ 169,022,1~5.19 136,530,241.60 $ 222,756,341.84 10,067,899.92 70,022.40 169,022,145.19 $ 5,020,534.46 $ 169,022,145.19 $ 136,530,241.60 $ 401,916,409.35 $ 2,682.00 $ 12,833,422.06 35,179,138.50 136,527,559.60 136,527,559.60 $ 3,410,745.02 3,410,745.02 $ 3,410,745.02 $ 136,530,241.60 $ 187,950,865.18 $ 165,611,400.17 $ 5,020,534.46 $ 5,020,534.46 $ 165,611,400.17 $ 3,612,043.20 6,971,313.57 165,611,400.17 5,053,991.59 32,716,795.64 $ 213,965,544.17 $ 5,020,534.46 $ 169,022,145.19 $ 136,530,241.60 $ 401,916,409.35 - 3- BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF GEORGIA ADMINISTRATIVE CENTRAL OFFICE