STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS I GEORGIA COLLEGE AND STATE UNIVERSITY MILLEDGEVILLE, GEORGIA REPORT ON REVIEW OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2004 Russell W. Hinton State Auditor GEORGIA COLLEGE AND STATE UNIVERSITY - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION REQUIRED SUPPLEMENTARY INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS BASIC FINANCIAL STATEMENTS EXHIBITS A STATEMENT OF NET ASSETS 3 B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS 4 C STATEMENT OF CASH FLOWS 6 D NOTES TO THE FINANCIAL STATEMENTS 8 SUPPLEMENTARY INFORMATION SCHEDULES SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET - (NON-GAAP BASIS) RESIDENT INSTRUCTION 33 2 RECONCILIATION OF SALARIES AND TRAVEL 34 3 RECONCILIATION OF PER DIEM AND FEES 35 SECTION II CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION I FINANCIAL Russell W. Hinton STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 December 6, 2004 Honorable Sonny Perdue, Governor Members of the General Assembly of Georgia Members of the Board of Regents of the University System of Georgia and Honorable Dorothy Leland, President Georgia College and State University INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION Ladies and Gentlemen: We have reviewed the accompanying basic financial statements of Georgia College and State University, an organizational unit of the State of Georgia, and its' aggregate discretely presented component units, as of and for the year ended June 30, 2004, as listed in the table of contents, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. We did not review the financial statements of the University's discretely presented component units. Those financial statements were audited by other auditors whose report thereon has been furnished to us and the results ofour review expressed herein, insofar as it relates to the amounts included for Georgia College and State University Foundation and Georgia College and State University Alumni Association are based solely upon the report of the other auditors. All information included in these financial statements is the representation of the management of Georgia College and State University. A review consists principally of inquiries of Georgia College and State University personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with auditing standards generally accepted in the United States ofAmerica, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review and the report of other auditors discussed above, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America. 04ARL-66 As discussed in Note 1, the University adopted the provisions of the Governmental Accounting Standards Board, Statement Number 39, Determining Whether Certain Organizations are Component Units during the year ended June 30, 2004. Management's Discussion and Analysis is not a required part ofthe basic financial statements but is supplementary information required by accounting principles generally accepted in the United States of America. We and other auditors have applied certain limited procedures, which consisted principally of inquiries ofmanagement regarding the methods ofmeasurement and presentation of this supplementary information, and we are not aware of any material modifications that should be made thereto. Our review was made for the purpose of expressing limited assurance that there are no material modifications that should be made to the financial statements in order for them to be in conformity with accounting principles generally accepted in the United States ofAmerica. The accompanying supplementary information (Schedules 1 through 3) is presented for additional analysis purposes. Such information has been subjected to the inquiries and analytical procedures applied in the review ofthe financial statements, and we are not aware of any material modifications that should be made to such data. Respectfully submitted, RWH:as 04ARL-66 State Auditor REQUIRED SUPPLEMENTARY INFORMATION GEORGIA COLLEGE AND STATE UNIVERSITY Management's Discussion and Analysis Introduction Georgia College and State University is one of the 34 institutions of the University System of Georgia. The University, located in Milledgeville, Georgia, was founded in 1889 as Georgia Normal and Industrial College. It later became Georgia State College for Women (GSCW). In 1967 it became Georgia College and was re-established as a co-educational institution. In 1995 the Board of Regents gave Georgia College university status, a new mission, and new name, "Georgia College and State University". As the state's designated public liberal arts university, Georgia College and State University is committed to combining the educational experiences typical of esteemed private liberal arts colleges with the affordability of public higher education. Georgia College and State University is a residential learning community that emphasizes undergraduate education and offers selected graduate programs. The faculty is dedicated to challenging students and fostering excellence in the classroom and beyond. Georgia College and State University seeks to endow its graduates with a passion for achievement, a lifelong curiosity and exuberance for living. Georgia College and State University offers degree programs in the Arts and Sciences, Business, Education and Health Sciences as well as Pre-Professional and Graduate Studies. There are over 5,000 students enrolled on the Milledgeville campus. Faculty Students FY2004 FY2003 FY2002 292 7,096 296 6,696 282 6,352 Overview ofthe Financial Statements and Financial Analysis Georgia College and State University is proud to present its financial statements for fiscal year 2004. 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 2003 and fiscal year 2004. Statement ofNet Assets The Statement of Net Assets presents the assets, liabilities, and net assets of the University as of the end of the fiscal year. The Statement of Net Assets is a point of time financial statement. The purpose of the Statement of Net Assets is to present to the readers of the financial statements a - 1- fiscal snapshot of Georgia College and State University. 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 two categories, nonexpendable and expendable. 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 (thousands of dollars) June 30, 2004 June 30, 2003 Assets Current Assets Capital Assets, Net Other Assets $ 10,677 $ 10,417 35,386 40,801 8 191 7 417 Total Assets $_ _.:;.54.:.:z;,2=5'-'-4 $_ _ _5~8,_63_5 Liabilities Current Liabilities Noncurrent Liabilities $ 4,885 $ 5,352 799 785 Total Liabilities $_ _ _5~6~8'-'-4 $_ _ _6=13~7 Net Assets Invested in Capital Assets, Net of Debt $ 35,380 $ 40,768 Restricted - Nonexpendable 2,743 2,406 Restricted - Expendable 6,246 4,801 Unrestricted 4 201 4 523 Total Net Assets $_===48~57=0 $=====52====49==8 - 11 - The total assets of the institution decreased by approximately $4,381,000. A review of the Statement of Net Assets will reveal that the investment in plant, net of accumulated depreciation decreased by approximately $5,415,000 and current assets increased in the amount of approximately $260,000. Consumption of assets follows the institutional philosophy to use available resources to acquire and improve all areas of the institution to better serve the instruction, research and public service missions of the institution. The total liabilities for the year decreased by approximately $453,000. The primary cause for the decrease was a reduction in deferred revenue of approximately $576,500. Because student tuition and fees for fall semester were not recognized prior to June 30, 2004, both accounts receivable and deferred revenue were lower. The combination of the decrease in total assets of approximately $4,381,000 and the decrease in total liabilities of approximately $453,000 yields a decrease in total net assets of approximately $3,928,000. The decrease in total net assets is primarily in the category of invested in capital assets, net of debt in the amount of approximately $5,388,000. Net assets restricted for expendable represents the additional increase in total net assets. Statement ofRevenues, Expenses and Changes in Net Assets Changes in total net assets as presented on the Statement of Net Assets are based on the activity presented in the Statement of Revenues, Expenses and Changes in Net Assets. The purpose of the statement is to present the revenues received by the institution, both operating and nonoperating, and the expenses paid by the institution, operating and nonoperating, and any other revenues, expenses, gains and losses received or spent by the institution. Generally speaking operating revenues are received for providing goods and services to the various customers and constituencies of the institution. Operating expenses are those expenses paid to acquire or produce the goods and services provided in return for the operating revenues, and to carry out the mission of the institution. Nonoperating revenues are revenues received for which goods and services are not provided. For example state appropriations are nonoperating because they are provided by the Legislature to the institution without the Legislature directly receiving commensurate goods and services for those revenues. - 111 - Statement of Revenues, Expenses and Changes in Net Assets, Condensed (thousands of dollars) June 30, 2004 June 30, 2003 Operating Revenues Operating Expenses $ 32,351 $ 30,379 64,606 61,330 Operating Loss $ -32,255 $ -30,951 Nonoperating Revenues and Expenses 31,586 29,740 Other Revenues, Expenses, Gains or Losses 80 1170 Increase (Decrease) in Net Assets $ -589 $ -41 Net Assets at Beginning of Year, as Originally Reported $ 52,498 $ 44,941 Prior Period Adjustment -3 339 7 598 Net Assets at Beginning of Year Restated $ 49159 $ 52,539 Net Assets at End of Year $ 48 570 $ 52,498 The Statement of Revenues, Expenses and Changes in Net Assets reflects a decrease 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: - IV - Revenue By Source (thousands of dollars) For The Years Ended June 30, 2004 and June 30, 2003 Operating Revenue Tuition and Fees Grants and Contracts Sales and Services of Educational Departments Auxiliary Other Total Operating Revenue Nonoperating Revenue State Appropriations Gifts Investment Income Grants and Contracts Other Total Nonoperating Revenue Capital Grants and Gifts Other Total Revenues June 30, 2004 June 30, 2003 $ 15,359 $ 13,264 3,448 3,203 1,109 12,091 344 864 11,779 1269 $ 32,351 $ 30,379 $ 26,317 $ 28,260 1,343 427 251 3,347 2,231 153 -1 002 $ 31,587 $ 29 740 $ 80 $ 1 170 $ 642018 $ 612289 - V- Expenses (By Functional Classification) (thousands of dollars) For The Years Ended June 30, 2004 and June 30, 2003 June 30. 2004 June 30. 2003 Operating Expenses Instruction Research Public Service Academic Support Student Services Institutional Support Plant Operations and Maintenance Scholarships and Fellowships Auxiliary Enterprises Unallocated Depreciation $ 26,569 $ 26,639 188 41 127 249 3,502 4,127 3,381 3,100 6,877 7,315 9,949 8,210 1,158 1,441 10,336 10,208 2,519 Total Operating Expenses $ 64,606 $ 61,330 Nonoperating Expenses Interest Expense (Capital Assets) 1 Total Expenses $ 64,607 $ 61,330 The compensation and employee benefits category increased by approximately $316,000. Utilities increased by approximately $542,000 during the past year. The increase was primarily associated with the increased natural gas costs that were experienced in the winter of fiscal year 2004. Under nonoperating revenues (expenses) state appropriations decreased by approximately $1,943,000. The reduction of state appropriations system-wide, due to a sluggish economy, has created a challenge for all institutions of the University System of Georgia and, thus, for Georgia College and State University. We are hopeful that the economy is now on an upward trend. Statement ofCash Flows The final statement presented by the Georgia College and State University 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. - Vl - Cash Flows for the Years Ended June 30, 2004 and June 30, 2003, Condensed (thousands of dollars) June 30, 2004 June 30, 2003 Cash Provided (Used) By: Operating Activities $ -29,290 $ -28,397 Noncapital Financing Activities 31,153 30,380 Capital and Related Financing Activities -906 -3,130 Investing Activities 1 742 -1 094 Net Change in Cash Cash, Beginning of Year $ 2,699 $ -2,241 4 975 7 216 Cash, End of Year Capital Assets $===7==6==7==4 $===4="9==7==5 The University completed the first phase of the library project expanding this facility to include an additional 95,000 square feet. The additional library space is scheduled to open fall 2004 and phase two, renovation of the existing library, will continue in fiscal 2005. Additional GSFIC projects include a Central Chiller Plant and Restoration of the Old Governor's Mansion. Both of these are scheduled for completion early in fiscal year 2005. Total GSFIC funding for the Library is $10,326,302 for Phase I Library Addition and $2,691,698 for Phase II Library Renovation. Other projects currently funded by GSFIC include approximately $4,350,000 for a Central Chiller Plant and approximately $9,000,000 for Restoration of the Old Governor's Mansion. Both of these are scheduled for completion early in fiscal year 2005 and will be included in Capital Assets in the year the assets are turned over to Georgia College and State University by GSFIC. For additional information concerning Capital Assets, see Notes 1, 6, 8, and 9 in the Notes to the Financial Statements. Long-Term Debt Georgia College and State University had a total Long-Term Debt of $1,863,902.06 of which $1,064,979.61 was reflected as current liability at June 30, 2004. For additional information concerning Long-Term Debt see Notes 1 and 8 in the Notes to the Financial Statements. Component Units In compliance with GASB Statement No. 39, Georgia College and State University has included the financial statements and notes for all required component units for fiscal year 2004. As of June 30, 2004, the Georgia College and State University Foundation had endowed investments -vu - of $8.1 million, buildings valued at $51 million and long-term debt of $65 million in the form of two bond issues. Also, at June 30, 2004, the Georgia College and State University Alumni Association had endowed investments of $4.6 million. Details are available in Note 1, Summary of Significant Accounting Policies and Note 16, Component Units. Economic Outlook The University is not aware of any currently known facts, decisions, or conditions that are expected to have a significant effect on the financial position or results of operations during this fiscal year beyond those unknown variations having a global effect on virtually all types of business operations. The University's overall financial position is strong. Even with a relatively flat funded year, the University was able to generate a modest increase in Net Assets. The University anticipates the current fiscal year will be much like last and will maintain a close watch over resources to maintain the University's ability to react to unknown internal and external issues. Dorothy Leland, President Georgia College and State University -vm- BASIC FINANCIAL STATEMENTS - 1- GEORGIA COLLEGE AND STATE UNIVERSITY STATEMENT OF NET ASSETS JUNE 30 2004 EXHIBIT"A" ASSETS Current Assets Cash and Cash Equivalents Short-Term Investments Accounts Receivable, Net Federal Financial Assistance Other Pledges Receivable Prepaid Items Inventories Other Assets Total Current Assets Noncurrent Assets Cash and Cash Equivalents Investments Notes Receivable Capital Assets, Net Other Noncurrent Assets Total Noncurrent Assets Total Assets LIABILITIES Current Liabilities Contracts Payable Salaries Payable Accounts Payable Deferred Revenue Funds Held for Others Capital Leases Compensated Absences Other Liabilities Total Current Liabilities Noncurrent Liabilities Capital Leases Compensated Absences Long-Term 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 PRIMARY GOVERNMENT COMPONENT UNITS GEORGIA COLLEGE GEORGIA COLLEGE AND AND STATE UNIVERSITY STATE UNIVERSITY FOUNDATION ALUMNI ASSOCIATION $ 7,674,037.46 $ 80,483.40 199,127.18 1,277,484.09 171,388.08 1,274,200.24 $ 10,676,720.45 $ $ $ 5,045,853.06 3,145,316.63 35,385,878.78 $ 43 577 048.47 $ $ 54,253,768.92 $ 734,497.00 $ 433,446.00 338,293.00 1,506,236.00 $ 279,374.00 22,444,044.00 $ 50,995,083.00 3,307,002.00 77,025,503.00 $ 78,531,739.00 $ 91,350.00 8,111.00 8 686.00 108147.00 4,633,598.00 104,029.00 16 687.00 4 754 314.00 4,862,461.00 $ 29,486.58 150,884.86 208,763.64 $ 2,607,538.72 267,114.56 2,587.80 1,062,391.81 556 017.75 $ 4,884,785.72 $ $ 3,661.16 795,261.29 $ $ 798,922.45 $ $ 5,683,708.17 $ $ 35,379,629.82 $ 2,743,388.41 6,191,362.74 54,920.13 4,200,759.65 $ 48,570,060.75 $ 1,957,126.00 1 957126.00 65,339,383.00 65,339,383.00 67,296,509.00 1,693,209.00 $ 7,996,546.00 948,697.00 596 778.00 11,235,230.00 $ 104,029.00 4,622,752.00 117,636.00 18 044.00 4,862,461.00 See Independent Accountant's Combined Report on Review of Basic Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement. -3- GEORGIA COLLEGE AND STATE UNIVERSITY STATEMENT OF REVENUES. EXPENSES AND CHANGES IN NET ASSETS YEAR ENDED JUNE 30. 2004 EXHIBIT"B" OPERATING REVENUES Student Tuition and Fees Less: Scholarship Allowances Gifts and Contributions Endowment Income (Per Spending Plan) Grants and Contracts Federal State Rents and Royalties Sales and Services of Educational Departments Auxiliary Enterprises Residence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Other Operating Revenues Total Operating Revenues OPERATING EXPENSES Salaries Faculty Staff Employee Benefits Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Housing Expenses Payments to or on the Behalf of Georgia College and State University Total Operating Expenses Operating Income (Loss) NONOPERATING REVENUES /EXPENSES) State Appropriations Grants and Contracts Federal State Local Nongovernmental Gifts Interest and Other Investment Income Interest Expense (Capital Assets) Other Nonoperating Revenues Net Nonoperating Revenues Income (Loss) Before Other Revenues, Expenses, Gains, or Losses PRIMARY GOVERNMENT COMPONENT UNITS GEORGIA COLLEGE GEORGIA COLLEGE AND AND STATE UNIVERSITY STATE UNIVERSITY FOUNDATION ALUMNI ASSOCIATION $ 18,160,075.90 -2,801,353.89 $ 3,441,926.28 6,294.15 34,047.56 1,109,326.05 3,456,490.34 2,813,753.23 3,067,770.78 424,099.84 591,901.80 1,615,269.38 121,985.85 309,780.05 $ 32,351,367.32 $ 720,143.00 $ 822,592.00 6,535,180.00 8 077 915.00 $ 22,357.00 448,152.00 134 309.00 604 818.00 $ 17,329,839.02 14,696,590.03 8,757,363.07 400,339.46 1,816,469.34 2,680,167.19 15,974,751.79 $ 2,950,546.28 $ 64,606,066.18 $ $ -32,254,698.86 $ 401,373.00 $ 1,117,859.00 3,294,964.00 952,029.00 5,766,225.00 $ 2,311 690.00 $ $ 26,316,747.76 573,521.69 106,291.99 286,474.33 2,381,504.54 1,343,273.25 427,194.34 -1,671.01 $ 152,722.14 $ 31,586,059.03 $ $ -668,639.83 $ -2, 121,466.00 502,012.00 -1 619 454.00 692,236.00 $ 140,380.00 10,078.00 188,233.00 338,691.00 266,127.00 266 127.00 -4- GEORGIA COLLEGE AND STATE UNIVERSITY STATEMENT OF REVENUES. EXPENSES AND CHANGES IN NET ASSETS YEAR ENDED JUNE 30. 2004 EXHIBIT"B" NONOPERATING REVENUES (EXPENSES) Capital Grants and Gifts Nongovernmental Additions to Permanent Endowments Total Other Revenues Increase (Decrease) in Net Assets Net Assets Net Assets - Beginning of Year, as Originally Reported Prior Period Adjustment to Correct Improper Recording of Capital Assets (See Note 1) Net Assets - Beginning of Year. Restated PRIMARY GOVERNMENT COMPONENT UNITS GEORGIA COLLEGE GEORGIA COLLEGE AND AND STATE UNIVERSITY STATE UNIVERSITY FOUNDATION ALUMNI ASSOCIATION $ 80.000.00 $ $ 80,000.00 $ $ -588,639.83 $ $ 52,498,344.50 $ -3,339,643.92 $ 49,158,700.58 $ 618 513.00 $ 618,513.00 $ 1 310 749.00 $ 9,924,481.00 $ 9 924 481.00 $ 256,755.00 256,755.00 522,882.00 4,339,579.00 4 339 579.00 Net Assets - End of Year $ 48,570,060.75 $ 11,235,230.00 $ 4,862 461.00 See Independent Accountant"s Combined Report on Review of Basic Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement. -5- GEORGIA COLLEGE AND STATE UNIVERSITY STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30. 2004 CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Grants and Contracts Sales and Services of Educational Departments Payments to Suppliers Payments to Employees Payments for Scholarships and Fellowships Loans Issued to Students and Employees Collection of Loans to Students and Employees Auxiliary Enterprise Charges: Residence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Other Receipts (Payments) Net Cash Provided (Used) by Operating Activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations Agency Funds Transactions Gifts and Grants Received for Other than Capital Purposes Other Nonoperating Receipts Net Cash Flows Provided (Used) by Noncapital Financing Activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from Sale of Capital Assets Purchases of Capital Assets Principal Paid on Capital Debt and Lease Interest Paid on Capital Debt and Lease Net Cash Provided (Used) by Capital and Related Financing Activities CASH FLOWS FROM INVESTING ACTIVITIES Interest on Investments Purchase/Sales of Investments 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" $ 15,322,631.31 3,299,422.21 1,108,254.14 -27,956,188.82 -31,975,467.91 -1,816,469.34 -754,097.53 634,374.34 3,384,033.01 2,986,392.70 2,992,310.78 448,231.83 620,814.20 1,740,378.47 147,165.85 527,969.95 $ -29,290,244.81 $ 26,316,747.76 -164,886.51 4,832,229.87 169 340.75 $ 31,153,431.87 $ 47,364.30 -925,631.04 -25,991.79 -1 671.01 $ _ _-~9~05~,9~2~9_.5_4 $ 320,574.24 1,420,983.09 $ _ ____;_1L.:..74---'--1'-'-5=5'-'--7.;.;:;.3.:;.3 $ _-=2,i-;;;_6..:;.;98:;..,8~1'--'4.;.;:;.8..:;..5 $ _ ____;_4,'--"-9-'--'75'--",2=2=2=.6--'-1 $ ==7,=6=74=,0=3=7=.4=6 -6- GEORGIA COLLEGE AND STATE UNIVERSITY STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30. 2004 EXHIBIT"C" RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating Income (Loss) Adjustments to Reconcile Net Income (Loss) to Net Cash Provided (Used) by Operating Activities Depreciation Change in Assets and Liabilities: Accounts Receivable, Net Inventories Prepaid Items Notes Receivable Accounts Payable Salaries Payable Deferred Revenue Other Liabilities Compensated Absences $ -32,254,698.86 2,950,546.28 577,480.04 -9,105.69 -133,943.23 -119,723.19 -116,275.83 46,537.06 -576,529.72 341,044.25 4424.08 Net Cash Provided (Used) by Operating Activities $ -29,290,244.81 NONCASH ACTIVITY NONCAPITAL FINANCING, CAPITAL AND RELATED FINANCING TRANSACTIONS AND INVESTING ACTIVITIES Gift of Capital Assets Reducing Proceeds of Capital Grants and Gifts Change in Fair Market Value of Investments Recognized as a Component of Interest Income $ ===-8=0=,o=o=o=.o=o $ ===10=6,,.,,6=2=0=.1=0 See Independent Accountant's Combined Report on Review of Basic Financial Statements and Supplementary Information. The notes to the financial statements are an integral part of this statement. -7- GEORGIA COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "D" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS Georgia College and State University 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 Georgia College and State University is one of thirty-four (34) 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 Georgia College and State University 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. Georgia College and State University does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Georgia College and State University 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. The Board of Regents of the University System of Georgia (and thus Georgia College and State University) is required to implement the Governmental Accounting Standards Board (GASB) Statement No. 39 Determining Whether Certain Organizations are Component Units - an amendment of Statement No. 14, for fiscal year 2004. This statement requires the inclusion of the financial statements for Foundations and affiliated organizations that qualify as component units of the institution. These statements (Statement of Net Assets and Statement of Revenues, Expenses and Changes in Net Assets) are reported discretely in the University's financial statements. For fiscal year 2004, Georgia College and State University is reporting the activity for the Georgia College and State University Foundation and the Georgia College and State University Alumni Association. See Note 16, for additional component unit disclosures. FINANCIAL STATEMENT PRESENTATION In June 1999, the GASB issued Statement No. 34, Basic Financial Statements and Management Discussion and Analysis for State and Local Governments. This was followed in November 1999 by GASB Statement No. 35, Basic Financial Statements and Management's Discussion and Analysis for Public Colleges and Universities. The State of Georgia implemented GASB -8- GEORGIA COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "D" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FINANCIAL STATEMENT PRESENTATION Statement No. 34 as of and for the year ended June 30, 2002. As an organizational unit of the State of Georgia, the University also adopted GASB Statements No. 34 and No. 35 as amended by GASB Statements No. 37 and No. 38. The financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) as prescribed by the GASB and are presented as required by these standards to provide a comprehensive, entity-wide perspective of the University's assets, liabilities, net assets, revenues, expenses, changes in net assets, cash flows, and replaces the fund group perspective previously required. 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 predominate activity takes place. BASIS OF ACCOUNTING For financial reporting purposes, the University is considered a special-purpose government engaged only in business-type activities. Accordingly, the University's financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting, except as noted in the preceding paragraph. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. All significant intra-University transactions have been eliminated. The University has the option to apply all Financial Accounting Standards Board (FASB) pronouncements issued after November 30, 1989, unless FASB conflicts with GASB. The University has elected to not apply FASB pronouncements issued after the applicable date. CASH AND CASH EQUIVALENTS Cash and Cash Equivalents consist of petty cash, demand deposits and time deposits in authorized financial institutions, and cash management pools that have the general characteristics of demand deposit accounts. SHORT-TERM INVESTMENTS Short-Term Investments consist of investments of 90 days - 13 months. This would include certificates of deposits or other time restricted investments with original maturities of six months or more when purchased. Funds are not readily available and there is a penalty for early withdrawal. INVESTMENTS The University accounts for its investments at fair value in accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools. Changes in unrealized gain (loss) on the carrying value of investments are -9- GEORGIA COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "D" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INVESTMENTS reported as a component of investment income in the statements of revenues, expenses and changes in net assets. The Board of Regents Total Return Fund is included under Investments. ACCOUNTS RECEIVABLE Accounts receivable consists of tuition and fee charges 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 include 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 Resale Inventories are valued at cost using the average-cost basis. NONCURRENT CASH AND INVESTMENTS Cash and investments that are externally restricted and cannot be used to pay current liabilities are classified as noncurrent assets in the Statement of Net Assets. CAPITAL ASSETS Capital assets are recorded at cost at the date of acquisition, or fair market value at the date of donation in the case of gifts. For equipment, the University's capitalization policy includes all items with a unit cost of $5,000.00 or more, and an estimated useful life of greater than one year. Renovations to buildings and land improvements that exceed $100,000.00 and significantly increase the value or extend the useful life of the structure are capitalized. Routine repairs and maintenance are charged to operating expense in the year in which the expense was incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 40 to 60 years for buildings, 20 to 25 years for land improvements, 10 years for library books, and 3 to 20 years for equipment. Residual values will generally be 10% of historical costs for buildings and building improvements and facilities and other improvements. To obtain the total picture of plant additions in the University System, it is necessary to look at the activities of the Georgia State Financing and Investment Commission (GSFIC) - an organization that is external to the System. GSFIC issues bonds for and on behalf of the State of Georgia, pursuant to powers granted to it in the Constitution of the State of Georgia and the Act creating the GSFIC. The bonds so issued constitute direct and general obligations of the State of Georgia, to the payment of which the full faith, credit and taxing power of the State are pledged. - 10 - GEORGIA COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "D" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CAPITAL ASSETS Effective July 1, 2001, the GSFIC retains construction in progress on their books throughout the construction period and transfers the entire project to Georgia College and State University when complete. For the year ended June 30, 2004, GSFIC did not transfer any capital additions to Georgia College and State University. 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 accrued vacation payable in the Statement of Net Assets, and as a component of compensation and benefit expense in the Statements of Revenues, Expenses and Changes in Net Assets. Georgia College and State University had accrued liability for compensated absences in the amount of $1,853,229.02 as of July 1, 2003. For fiscal year 2004, $1,280,315.91 was earned in compensated absences and employees were paid $1,275,891.83, for a net increase of $4,424.08. The ending balance as of June 30, 2004 in accrued liability for compensated absences was $1,857,653.10. Compensated absences include a current liability of $1,062,391.81. NONCURRENT LIABILITIES Noncurrent liabilities include (1) liabilities that will not be paid within the next fiscal year; (2) capital lease obligations with contractual maturities greater than one year; and (3) other liabilities that, although payable within one year, are to be paid from funds that are classified as noncurrent assets. NET ASSETS The University's net assets are classified as follows: Invested in capital assets, net ofrelated debt: This represents the University's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt. The term "debt obligations" as used in this definition does not include debt of the GSFIC as discussed previously in Note 1 - Capital Assets section. - 11 - GEORGIA COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "D" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NET ASSETS Restricted net assets - nonexpendable: Nonexpendable restricted net assets consist of endowment and similar type funds in which donors or other outside sources have stipulated, as a condition of the gift instrument, that the principal is to be maintained inviolate and in perpetuity, and invested for the purpose of producing present and future income, which may either be expended or added to principal. The University may accumulate as much of the annual net income of an institutional fund as is prudent under the standard established by Code Section 4415-7 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. The University's Expendable Restricted Net Assets include the following: June 30, 2004 Restricted - E&G Federal Loans Institutional Loans $ 1,999,231.70 3,385,085.41 807,045.63 Total Restricted Expendable $6,191,362.74 Restricted net assets - expendable - Capital Projects: This represents resources for which the University is legally or contractually obligated to spend resources for capital projects in accordance with restrictions imposed by external third parties. Unrestricted net assets: Unrestricted net assets represent resources derived from student tuition and fees, state appropriations, and sales and services of educational departments and auxiliary enterprises. These resources are used for transactions relating to the educational and general operations of the University, and may be used at the discretion of the governing board to meet current expenses for those purposes, except for unexpended state appropriations (surplus) of $174,844.50. Unexpended state appropriations must be refunded to the Board of Regents of the University System of Georgia - Administrative Central Office for remittance to the Office of Treasury and Fiscal Services. These resources also include auxiliary enterprises, which are substantially self-supporting activities that provide services for students, faculty and staff. The University's Unrestricted Net Assets includes the following items which are quasi-restricted by management. - 12 - GEORGIA COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "D" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NET ASSETS June 30, 2004 R&RReserve Reserve for Encumbrances Reserve for Inventory Other Unrestricted $ 415,604.68 3,795,313.57 1,274,200.24 -1,284,358.84 Total Unrestricted Net Assets $ 4.200.759.65 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 Georgia College and State University, as a political subdivision of the State of Georgia, is excluded from Federal income taxes under Section 115(1) of the Internal Revenue Code, as amended. CLASSIFICATION OF REVENUES The University has classified its revenues as either operating or nonoperating revenues in the Statement of Revenues, Expenses and Changes in Net Assets according to the following criteria: Operating revenues: Operating revenues include activities that have the characteristics of exchange transactions, such as (1) student tuition and fees, net of scholarship allowances, (2) sales and services of auxiliary enterprises, (3) most Federal, state and local grants and contracts and Federal appropriations, and (4) interest on institutional student loans. Nonoperating revenues: Nonoperating revenues include activities that have the characteristics of nonexchange transactions, such as gifts and contributions, and other revenue sources that are defined as nonoperating revenues by GASB No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting, and GASB No. 34, such as state appropriations and investment income. SCHOLARSHIP ALLOWANCES Student tuition and fee revenues, and certain other revenues from students, are reported at gross with a contra revenue account of scholarship allowances in the Statement of Revenues, Expenses and Changes in Net Assets. Scholarship allowances are the difference between the stated charge for goods and services provided by the University, and the amount that is paid by students and/or third parties making payments on the students' behalf. Certain governmental grants, such as Pell grants, and other Federal, state or nongovernmental programs, are recorded as either operating or - 13 - GEORGIA COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "D" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SCHOLARSHIP ALLOWANCES 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. RESTATEMENT OF PRIOR YEAR NET ASSETS - BEGINNING OF YEAR In the prior fiscal year, the University failed to properly record construction work in progress in accordance with the University's asset capitalization policies. As a result of the adjustments made to capital assets, net assets at July 1, 2003 were reduced by $3,339,643.92. NOTE 2: CASH AND CASH EQUIVALENTS; OTHER DEPOSITS; AND INVESTMENTS STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds belonging to the State of Georgia (and thus Georgia College and State 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, bill, certificates of indebtedness, notes, or other direct obligations of the United States or of the State of Georgia. 2. Bonds, bills, certificates of indebtedness, notes, or other obligations of the counties or municipalities of the State of Georgia. 3. Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose. 4. Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia. 5. Bonds, bills, certificates of indebtedness, notes, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest, or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, The Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. 6. Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation. - 14 - GEORGIA COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "D" NOTE 2: CASH AND CASH EQUIVALENTS; OTHER DEPOSITS; AND INVESTMENTS STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES As authorized in the Official Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted policies which allow agencies of the State of Georgia (and thus Georgia College and State University), the option of exempting demand deposits from the collateral requirements. 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. CATEGORIZATION OF DEPOSITS Cash deposits are categorized by risk as follows: Category 1 - Amounts covered by depository insurance or collateralized with securities (at fair value) held by the entity or by its agent in the entity's name. Category 2 - Amounts collateralized with securities (at fair value) held by the pledging financial institution's trust department or agent in the entity's name. Category 3 - Amounts collateralized with securities (at fair value) held by the pledging financial institution, or by its trust department or agent but not in the entity's name, and amounts uncollateralized. Georgia College and State University At June 30, 2004, the University's cash deposits were as follows: Carrying Amount Bank Balances Risk Categories 2 3 Cash Deposits Investment Portfolio Accounts $ 7,775,367.46 $ 8,078,177.56 $ 387,529.93 $ 80,483.40 80,483.40 0.00 $ 7,690,647.63 80,483.40 Total Cash Deposits $ 7 855,850.86 $ 8,158 660 26 $ 38:Z 522 23 $ 000 $ :Z :Z:Zl 131 03 - 15 - GEORGIA COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "D" NOTE 2: CASH AND CASH EQUIVALENTS; OTHER DEPOSITS; AND INVESTMENTS CATEGORIZATION OF DEPOSITS Component Units At June 30, 2004, Georgia College and State University Foundation's cash deposits were as follows: Carrying Amount Bank Balances Risk Categories 2 3 Cash Deposits Investment Portfolio Accounts $ 734,497.00 $ 864,754.40 $ 100,000.00 $ 619,679.00 619 679.00 0.00 $ 764,754.40 619 679.00 Total Cash Deposits $ 1,354,176.00 $ 1 484,433.40 $ 100,000.00 $ 0.00 $ 1,384,433.40 At June 30, 2004, Georgia College and State University Alumni Association's cash deposits were as follows: Carrying Amount Bank Balances Risk Categories 2 3 Cash Deposits Investment Portfolio Accounts $ 91,350.00 $ 256,993.00 $ 100,000.00 $ 258,551.00 258,551.00 0.00 $ 156,993.00 258,551.00 Total Cash Deposits $ 349 901.00 $ 515,544.00 $ 100,000.00 $ 0.00 $ 415 544.00 CATEGORIZATION OF INVESTMENTS Investments are categorized as to credit risk within the three categories described below: Category 1 - Insured or registered, or securities held by the entity or its agent in the entity's name. Category 2 - Uninsured and unregistered, with securities held by the counter party's trust department or agent in the entity's name. Category 3 - Uninsured and unregistered, with securities held by the counter party, or by its trust department or agent, but not in the entity's name. - 16 - GEORGIA COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "D" NOTE 2: CASH AND CASH EQUIVALENTS; OTHER DEPOSITS; AND INVESTMENTS CATEGORIZATION OF INVESTMENTS Georgia College and State University At June 30, 2004, the University's investments consisted of the following: Txne of Investments Risk Categories 2 3 Carrying Amount Common Stock Corporate Bonds U. S. Government Securities $ 2,103,933.48 $ 631,330.30 403,712.00 0.00 $ 0.00 $ 2,103,933.48 631,330.30 403,712.00 Totals $ 3,138 275.78 $ 0 00 $ ==="0,,,,,0""'0 $ 3,138,975.78 Investments Not Subject to Categorizations: Board of Regents Total Return Fund 1,776.877.28 Total Investments $ 4 215,853 06 Funds invested in an investment pool managed by another governmental entity are not required to be categorized since the University did not own any specific, identifiable investment securities of the pool. Component Units At June 30, 2004, Georgia College and State University Foundation's investments consisted of the following: Type of Investments Carrying Amount Uncategorized as to Credit Risk: Common Stock Corporate Bonds U.S. Government Obligation $ 5,090,652.00 2,403,640.00 14,609,447.00 Total Investments $22,103,739.00 At June 30, 2004, Georgia College and State University Alumni Association's investments consisted of the following: Type of Investments Carrying Amount Uncategorized as to Credit Risk: Common Stock Corporate Bonds $ 2,939,049.00 1,435,998.00 Total Investments $ 4,375,047.00 - 17 - GEORGIA COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "D" NOTE 3: ACCOUNTS RECEIVABLE The University's accounts receivable consisted of the following at June 30, 2004. Student Tuition and Fees Auxiliary Enterprises and Other Operating Activities Federal, State and Private Funds Other $ 263,254.51 197,666.13 902,482.36 178,886.60 Less Allowance for Doubtful Accounts $ 1,542,289.60 65,678.33 Net Accounts Receivable $ 1,476,611.27 NOTE 4: INVENTORIES The University's inventories consisted of the following at June 30, 2004. Bookstore $ 1,274,200.24 NOTE 5: NOTES RECEIVABLE Notes receivable consisted of the following at June 30, 2004: Perkins Loans Nursing Loans Institutional Loans $3,106,496.81 2,233.85 36,585.97 Total Notes Receivable $3,145,316.63 The Federal Perkins Loan Program (the Program) comprise substantially all of the loans receivable at June 30, 2004. 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. NOTE 6: CAPITAL ASSETS Following are the changes in capital assets for the year ended June 30, 2004: - 18 - GEORGIA COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "D" NOTE 6: CAPITAL ASSETS Beginning Balance (Restated) July 1. 2003 Additions Reductions Ending Balance June 30, 2004 Capital Assets, Not Being Depreciated: Land $ Construction Work-In-Progress 634,079.21 688,145.21 $ 634,079.21 $ 688,145.21 0.00 Total Capital Assets Not Being Depreciated $ 1,322,224.42 $ 688,145.21 $ 634,079.21 Capital Assets, Being Depreciated: Building and Building Improvements Facilities and Other Improvements Equipment Capital Leases Library Collections Capitalized Collections $ 51,232,750.00 $ 867,019.00 6,845,692.93 120,472.65 5,943,995.91 174,800.00 688,I45.21 583,537.44 $ 355,893.29 $ 51,920,895.21 867,019.00 142,340.30 7,286,890.07 40,614.55 79,858.10 52,740.00 6,247,149.20 174,800.00 Total Assets Being Depreciated $ 65,184,730.49 $ 1,627,575.94 $ 235,694.85 $ 66,576,611.58 Less: Accumulated Depreciation: Buildings and Building Improvements $ 19,217,036.64 $ Facilities and Other Improvements 521,482.73 Equipment 4,602,440.09 Capital Leases 68,436.64 Library Collections 4,604,782.80 Capitalized Collections 31 798.77 1,975,064.27 39,015.85 620,075.61 $ 17,566.57 294,454.00 4,369.98 $ 21,192,100.91 560,498.58 96,935.92 5,125,579.78 22,036.02 63,967.19 52,740.00 4,846,496.80 36,168.75 Total Accumulated Depreciation $ 29,045,977.67 $ 2,950,546.28 $ 171,711.94 $ 31,824,812.01 Total Capital Assets, Being Depreciated, Net $ 36,138,752.82 $ -1,322,970.34 $ 63,982.91 $ 34,751,799.57 Capital Assets, Net $ 37 460 977.24 $ -1,322,970.34 $ 752,128.12 $ 35,385,878.78 NOTE 7: DEFERRED REVENUE Deferred revenue consisted of the following at June 30, 2004. Prepaid Tuition and Fees Other Deferred Revenue $ 2,548,134.38 59,404.34 Totals $2,607,538.72 NOTE 8: LONG-TERM LIABILITIES Long-Term liability activity for the year ended June 30, 2004 was as follows: - 19 - GEORGIA COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "D" NOTE 8: LONG-TERM LIABILITIES Beginning Balance July 1, 2003 Additions Reductions Ending Balance June 30, 2004 Current Portion Leases Lease Obligations $ 32,240.75 $ 25,991.79 $ 6,248.96 $ 2,587.80 Other Liabilities Compensated Absences 1,853.229.02 $ 1,280,315.91 1,275,891.83 1,857.653.10 1,062,391.81 Total Long-Term Obligations $ 1,885,462.77 $ 1,280,315.91 $ 1,301,883.62 $ 1,863,902.06 $ 1 064 979.61 NOTE 9: SIGNIFICANT COMMITMENTS Georgia College and State University had significant unearned, outstanding, construction or renovation contracts executed in the amount of $1,967,733.76 as of June 30, 2004. This amount is not reflected in the accompanying basic financial statements. NOTE 10: LEASE OBLIGATIONS Georgia College and State University is obligated under various operating leases for the use of equipment and also is obligated under capital leases and installment purchase agreements for the acquisition of equipment. CAPITAL LEASES Capital leases are generally payable in installments ranging from monthly to annually and have terms expiring in various years between 2005 and 2008. Expenses for fiscal year 2004 were $27,662.80 of which $1,671.01 represented interest. Total principal paid on capital leases was $25,991.79 for the fiscal year ended June 30, 2004. Interest rates range from 6.20 percent to 8.30 percent. The following is a summary of the carrying values of assets held under capital lease at June 30, 2004: Equipment $ 79,858.10 Certain capital leases provide for renewal and/or purchase options. Generally purchase options at bargain prices of one dollar are exercisable at the expiration of the lease terms. OPERATING LEASES Georgia College and State University's noncancellable operating leases having remaining terms of more than one year expire in various fiscal years from 2005 through 2011. Certain operating leases provide for renewal options for periods from one to three years at their fair rental value at the time of renewal. All agreements are cancellable if the State of Georgia does not provide adequate funding, but that is considered a remote possibility. In the normal course of business, - 20 - GEORGIA COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "D" NOTE 10: LEASE OBLIGATIONS OPERATING LEASES operating leases are generally renewed or replaced by other leases. Operating leases are generally payable on a monthly basis. Examples of property under operating leases are copiers and other small business equipment. Noncancellable operating lease expenditures in 2004 were $41,602.00 for equipment. 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, 2004, were as follows: Year Ending June 30: 2005 2006 2007 2008 2009 2010 through 2011 Total Minimum Lease Payments Less: Interest Principal Outstanding Capital Leases Operating Leases $ 3,153.24 $ 423,903.37 1,776.00 31,666.00 1,776.00 26,446.00 592.00 27,238.00 28,054.00 58,862.00 $ 7,297.24 $ 596,169.37 1,048.28 $ 6,248.96 NOTE 11: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA Plan Description Georgia College and State University participates in the Teachers Retirement System of Georgia (TRS), a cost-sharing multiple-employer defined benefit pension plan established by the General Assembly of Georgia for the purpose of providing retirement allowances and other benefits for teachers of the State of Georgia. TRS provides service retirement, disability retirement, and survivor's benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the TRS offices or the Georgia Department of Audits and Accounts. - 21 - GEORGIA COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "D" NOTE 11: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA Funding Policy Employees of Georgia College and State University who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. Georgia College and State University makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2004, the employer contribution rate was 9.24% for covered employees. Employer contributions for the current fiscal year and the preceding two fiscal years are as follows: Fiscal Year Percentage Contributed Required Contribution 2004 2003 2002 100% 100% 100% $ 1,682,743.30 $ 1,768,795.95 $ 1,700,606.26 REGENTS RETIREMENT PLAN Plan Description The Regents Retirement Plan, a single-employer defined contribution plan, is an optional retirement plan that was created/established by the Georgia General Assembly in O.C.G.A. 4721-1 et. seq. and is administered by the Board of Regents of the University System of Georgia. O.C.G.A. 47-3-68(a) defines who may participate in the Regents Retirement Plan. An "eligible university system employee" is a faculty member or a principal administrator, as designated by the regulations of the Board of Regents. Under the Regents Retirement Plan, a plan participant may purchase annuity contracts from four approved vendors (AIG-VALIC, American Century, Fidelity, and TIAA-CREF) for the purpose of receiving retirement and death benefits. Benefits depend solely on amounts contributed to the plan plus investment earnings. Benefits are payable to participating employees or their beneficiaries in accordance with the terms of the annuity contracts. Funding Policy Georgia College and State University 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. The employer contributes I0.03% of the participating employee's earnable compensation. Employees contribute 5% of their eamable compensation. Amounts attributable to all plan contributions are fully vested and nonforfeitable at all times. - 22 - GEORGIA COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "D" NOTE 11: RETIREMENT PLANS REGENTS RETIREMENT PLAN Funding Policy Georgia College and State University and the covered employees made the required contributions of $1,105,084.42 (10.03%) and $550,801.39 (5%), respectively. AIG-VALIC, American Century, Fidelity, and TIAA-CREF have separately issued financial reports which may be obtained through their respective corporate offices. GEORGIA DEFINED CONTRIBUTION PLAN Plan Description Georgia College and State University participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employer defined contribution plan established by the General Assembly of Georgia for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia. Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board of Trustees. If a member has less than $ 3,500.00 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 and Vesting 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 2004 amounted to $48,824.05 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. - 23 - GEORGIA COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "D" NOTE 12: RISK MANAGEMENT The University System of Georgia offers its employees and retirees access to two different selfinsured healthcare plan options - a PPO/PPO Consumer healthcare plan, and an indemnity healthcare plan. Georgia College and State University and participating employees and retirees pay premiums to either of the self-insured healthcare plan options to access benefits coverage. The respective self-insured healthcare plan options are included in the financial statements of the Board of Regents of the University System of Georgia - University System Office. All units of the University System of Georgia share the risk of loss for claims associated with these plans. The reserves for these two plans are considered to be a self-sustaining risk fund. Both selfinsured healthcare plan options provide a maximum lifetime benefit of $2,000,000.00 per person. The Board of Regents has contracted with Blue Cross Blue Shield of Georgia, a wholly owned subsidiary of WellPoint, to serve as the claims administrator for the two self-insured healthcare plan products. In addition to the two different self-insured healthcare plan options offered to the employees of the University System of Georgia, two fully insured HMO healthcare plan options are also offered to System employees. 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. Georgia College and State University, as an organizational unit of the Board of Regents of the University System of Georgia, is part of the State of Georgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment. A self-insured program of professional liability for its employees was established by the Board of Regents of the University System of Georgia under powers authorized by the Official Code of Georgia Annotated Section 45-9-1. The program insures the employees to the extent that they are not immune from liability against personal liability for damages arising out of the performance of their duties or in any way connected therewith. The program is administered by DOAS as a Self-Insurance Fund. - 24 - GEORGIA COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "D" 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 which are disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although Georgia College and State University expects such amounts, if any, to be immaterial to its overall financial position. Litigation, claims and assessments filed against Georgia College and State University (an organizational unit of the Board of Regents of the University System of Georgia), if any, are generally considered to be actions against the State of Georgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 2004. NOTE 14: POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS Pursuant to the general powers conferred by the Official Code of Georgia Annotated Section 203-31, the Board of Regents of the University System of Georgia has established group health and life insurance programs for regular employees of the University System of Georgia. It is the policy of the Board of Regents to permit employees of the University System of Georgia eligible for retirement or that become permanently and totally disabled to continue as members of the group health and life insurance programs. The policies of the Board of Regents of the University System of Georgia define and delineate who is eligible for these post-employment health and life insurance benefits. Organizational units of the Board of Regents of the University System of Georgia are on a pay as you go basis to finance the employer portion for group insurance for affected individuals. With regard to life insurance, the employer covers the total cost for $25,000.00 for basic life insurance. If an individual elects to have supplemental, and/or, dependent life insurance coverage, such costs are borne entirely by the employee. As of June 30, 2004, there were 236 employees who had retired or were disabled that were receiving these post-employment health and life insurance benefits. For the year ended June 30, 2004, Georgia College and State University recognized as incurred $751,145.20 of expenses, which was net of $287,014.31 of participant contributions. - 25 - GEORGIA COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "D" NOTE 15: NATURAL CLASSIFICATIONS WITH FUNCTIONAL CLASSIFICATIONS The University's operating expenses by functional classification are shown below: Statement of Operating Expenses - Natural vs Functional Classifications For the Fiscal Year Ended June 30, 2004 Functional Classification Natural Classification Instruction Research Public Service Academic Sui;mort Student Services Institutional Sum1ort Salaries Faculty Staff Employee Benefits Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation $ 16,422,516.38 $ 20,267.00 2,751,626.65 66,639.10 $ 4,520,377.48 14,229.03 238,400.18 14,710.57 4,500.00 167,454.14 403.02 2,387,831.99 76 461.98 70,840.84 455.80 78,469.33 20,293.01 51.37 $ 813,694.12 1,559,750.67 598,896.66 33,967.98 $ 1,998,216.47 494,902.80 39,358.09 $ 3,665,905.10 1,716,937.98 35,163.07 1,620.00 36,768.09 68,499.45 220,824.23 79,756.95 25,058.22 1 942.33 314,801.53 144,549.32 778,430.40 1,355.03 1,112,697.34 46 271.33 Total Operating Expenses $ 26 569 168 80 $ 187 545 36 $ 127 434.26 $ 3 502 428.37 $ 3 380 762.24 $ 6 877 556 00 Natural Classification Salaries Faculty Staff Employee Benefits Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation Total Operating Expenses Plant Operations and Maintenance Functional Classification Scholarships and Fellowshi11s Auxiliary Entemrises Unallocated De11reciation Total Operating Ex11enses $ 3,163,988.61 1,025,822.05 9,151.80 $ 73,361.52 1,411,994.10 365,904.06 29,536.40 $ 17,329,839.02 14,696,590.03 8,757,363.07 400,339.46 $ 1,157,644.61 1,815,102.10 433,500.50 510,563.44 1,816,469.34 2,680,167.19 3,898,412.62 36,081.76 7,386,678.85 124 751.40 $ 2,518,677.33 15,974,751.79 2,950,546.28 $ 9 948 558.94 $ 1 157 644.61 $ 10 336 290.27 $ 2 518 677.33 $ 64 606 066.18 NOTE 16: COMPONENT UNITS General Disclosure for Component Units Georgia College and State University Foundation (Foundation) and Georgia College and State University Alumni Association (Association) are legally separate, tax-exempt component units of Georgia College and State University (University). The Foundation and Association act primarily as fund-raising organizations to supplement the resources that are available to the University in support of its programs. The boards of the Foundation and Association are selfperpetuating and consist of graduates and friends of the University. Although the University does not control the timing or amount of receipts from the Foundation or Association, the majority of resources or income thereon that the Foundation and Association hold and invest are restricted to the activities of the University by the donors. Because these restricted resources - 26 - GEORGIA COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "D" NOTE 16: COMPONENT UNITS General Disclosure for Component Units held by the Foundation and Association can only be used by, or for the benefit of, the University, the Foundation and the Association are considered component units of the University and are discretely presented in the University's financial statements. The Foundation information includes three single member limited liability companies (LLC's) whose sole member is the Foundation. The limited liability companies (LLC I, II and III) were formed primarily to construct and finance various buildings and improvements located on the property of Georgia College and State University. LLC III was not officially operational until July 14, 2004. The Foundation and Association are private nonprofit organizations that report under FASB standards, including FASB Statement No. 117, Financial Reporting for Not-for-Profit Organizations. As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features. The FASB reports were reclassified to the GASB presentation for external financial reporting purposes in these financial statements. The Association's and the Foundation's fiscal year is July 1 through June 30. During the year ended June 30, 2004, the Foundation and the Association distributed $952,029.00 and $188,233.00 respectively to and on behalf of the University for both restricted and unrestricted purposes. Complete financial statements for both the Foundation and Alumni Association can be obtained from the Georgia College and State University Advancement Office at Campus Box 96, Milledgeville, Georgia 31061. Investments for Component Units Georgia College and State University Foundation holds endowment investments in the amount of $8.1 million and the Alumni Association holds endowment investments of $4.6 million. The corpus of the endowments is nonexpendable, but the earnings on the investments may be expended as restricted by the donors. Georgia College and State University Foundation and Alumni Association, in conjunction with the donors, have established a spending plan whereby 4.75% of the fair market value at year end may be used for academic scholarships and .25% may be used for administrative expenses. Long-Term Liabilities for Component Units Student Housing Revenue Bonds On March 1, 2002, the Georgia College and State University Foundation Property I, LLC entered into a loan agreement with the Development Authority of the City of Milledgeville and Baldwin County (the Authority) whereby the Authority would issue certain bonds totaling $55,875,000 and loan the entire proceeds to the Georgia College and State University Foundation Property I, LLC. As part of the loan agreement, Property I, LLC agreed to use the bond proceeds to acquire, - 27 - GEORGIA COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "D" NOTE 16: COMPONENT UNITS Long-Term Liabilities for Component Units construct, renovate and equip student housing located on the campus of Georgia College and State University (the University), to establish a debt service reserve, to establish certain amounts for capitalized interest and to pay the cost of issuance of the bonds. The principal and interest are payable solely from and secured by a lien upon certain leasehold deeds to secure debt and certain pledged revenue and assignment of rents and leases. Lease Revenue Bonds (for Student Center Facility and Parking Lot) On December 1, 2003, the Georgia College and State University Foundation Property II, LLC entered into a loan agreement with the Development Authority of the City of Milledgeville and Baldwin County (the Authority) whereby the Authority would issue certain bonds totaling $7,840,000 and loan the entire proceeds to the Georgia College and State University Foundation Property II, LLC. As part of the loan agreement, Property I, LLC agreed to use the bond proceeds to construct and equip a student center and a parking lot located on the campus of the University, to establish a debt service reserve, to establish certain amounts for capitalized interest and to pay the cost of issuance of the bonds. The principal and interest are to be payable solely from and secured by a lien upon certain interests in real property and certain assignments of rental income originating from rental agreements between Property II, LLC and the University System of Georgia (the Board of Regents). The rental agreements are for an initial term of one year and will commence following the issuance of a certificate of occupancy. Changes in long-term liabilities for component units for the fiscal year ended June 30, 2004 are shown below: Student Housing Revenue Bonds Lease Revenue Bonds Total Long-Term Obligations Beginning Balance July I. 2003 $ 55,875,000.00 0.00 $ 55,875 000.00 Additions $ 0.00 7,840,000.00 $ 7,840,000.00 Reductions $ 0.00 0.00 $ 0.00 Ending Balance June 30. 2004 $ 55,875,000.00 7,840,000.00 $ 63 715,000.00 Amounts due within One Year $ 0.00 0.00 $ 0.00 The above liabilities do not include $1,624,383.00 in amortized issuance premiums. Annual debt service requirements to maturity for Student Housing (Real Estate Foundation) Revenue Bonds payable are as follows: - 28 - GEORGIA COLLEGE AND STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2004 EXHIBIT "D" NOTE 16: COMPONENT UNITS Long-Term Liabilities for Component Units Year Ending June 30: 2005 2006 2007 2008 2009 2010 through 2014 2015 through 2019 2020 through 2024 2025 through 2029 2030 through 2034 Bonds Payable Principal Interest Total $ 0.00 480,000.00 560,000.00 685,000.00 815,000.00 6,195,000.00 8,495,000.00 10,875,000.00 13,905,000.00 13,865,000.00 $ 2,318,437.00 1,947,225.00 1,929,025.00 1,907,238.00 1,880,987.00 8,836,362.00 7,535,413.00 5,848,938.00 3,690,837.00 1,000,388.00 $ 2,318,437.00 2,427,225.00 2,489,025.00 2,592,238.00 2,695,987.00 15,031,362.00 16,030,413.00 16,723,938.00 17,595,837.00 14,865,388.00 $ 55!875!000.00 $36!894!850.00 $92!769!850.00 Annual debt service requirements to maturity for Lease Revenue (Georgia College and State University Foundation Property II, LLC) bonds payable are as follows: Year Ending June 30: 2005 2006 2007 2008 2009 2010 through 2014 2015 through 2019 2020 through 2024 2025 through 2029 Bonds Payable Principal Interest Total $ 0.00 $ 300,421.00 $ 300,421.00 265,000.00 297,439.00 562,439.00 275,000.00 291,019.00 566,019.00 275,000.00 284,144.00 559,144.00 280,000.00 276,506.00 556,506.00 1,555,000.00 1,220,613.00 2,775,613.00 1,860,000.00 905,275.00 2,765,275.00 1,785,000.00 491,634.00 2,276,634.00 1,545,000.00 47,700.00 1,592,700.00 $ 7!840!000.00 $ 4!114)51.00 $11!954!751.00 - 29 - SUPPLEMENTARY INFORMATION - 31 - GEORGIA COLLEGE AND STATE UNIVERSITY SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET - (NON-GAAP BASIS} RESIDENT INSTRUCTION YEAR ENDED JUNE 30. 2004 SCHEDULE "1" REVENUES State Appropriations Other Revenues Retained BUDGET ACTUAL (1) VARIANCEFAVORABLE (UNFAVORABLE) $ 26.356.837.00 $ 26,356,837.00 $ 36,713,006.00 37,344,840.38 0.00 631 834.38 $ 63,069,843.00 $ 63,701,677.38 $ - - - -63~ 1,83-4.3-8 EXPENDITURES Personal Services: Education, General and Departmental Services Sponsored Operations Operating Expenses: Education, General and Departmental Services Sponsored Operations Capital Outlay Special Funding Initiative $ 35,603,689.00 $ 35,570,914.43 $ 500,487.00 547,674.02 8,016,147.00 16,194,783.00 1,124,064.00 1,630,673.00 7,781,517.56 16,271,987.10 114,989.05 1,628,657.84 32,774.57 -47,187.02 234,629.44 -77,204.10 1,009,074.95 2,015.16 $ 63,069,843.00 $ 61,915,740.00 $ - - -1,1-54-,10-3.0-0 Excess of Revenues over Expenditures $ 1,785,937.38 $ =====1,=78=5=,9=3=7.=38= (1) Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles. See accompanying notes and Independent Accountant's Combined Report on Review of Basic Financial Statements and Supplementary Information. - 33 - GEORGIA COLLEGE AND STATE UNIVERSITY RECONCILIATION OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 2004 SCHEDULE 211 11 Totals per Annual Supplement Accruals June 30, 2004 June 30, 2003 Compensated Absences June 30, 2004 June 30, 2003 Adjustments Shared Services on Jointly Staffed Personnel Fort Valley State University Yasin, Jehad Unidentified Variance SALARIES $ 31,967,190.30 $ TRAVEL 400,339.46 150,884.86 -104,347.80 1,725,641.52 -1,721,531.83 8,400.00 192.00 $ 32,026,429.05 $ ==4,;.;;0;,;;,0;,3.;;;;39;;,;,.4.;,;6;;,,, See accompanying notes and Independent Accountant's Combined Report on Review of Basic Financial Statements and Supplementary Information. - 34- GEORGIA COLLEGE AND STATE UNIVERSITY RECONCILIATION OF PER DIEM AND FEES YEAR ENDED JUNE 30. 2004 SCHEDULE "3" Totals per Annual Supplement Unidentified Variance FEE AMOUNT EXPENSE AMOUNT TOTAL $ 720,555.21 $ 53,844.99 $ 774,400.20 -2,054.01 -2,054.01 $ 718,501.20 $ 53,844.99 $ 772,346.19 See accompanying notes and Independent Accountant"s Combined Report on Review of Basic Financial Statements and Supplementary Information. - 35 - SECTION II CURRENT YEAR FINDINGS AND QUESTIONED COSTS GEORGIA COLLEGE AND STATE UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2004 FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.