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 GEORGIA MILITARY COLLEGE -TABLE OF CONTENTS- 
 
SECTION I 
 
FINANCIAL 
 
INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION 
 
EXHIBITS 
 
FINANCIAL STATE:MENTS 
 
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, EXPENDITURES, 
 
AND OTHER CHANGES 
 
6 
 
D NOTES TO THE FINANCIAL STATEMENTS 
 
7 
 
SUPPLEMENTARY INFORMATION 
 
SCHEDULE 
 
1 RECONCILIATION OF SALARIES AND TRAVEL 
 
18 
 
SECTION II 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 
 
 lussELL W. HINTON 
STATE AUDITOR 
(404) 656-2174 
 
DEPARTMENT OF AUDITS AND ACCOUNTS 
254 Washington Street, S W., Smte 214 Atlanta, Georgia 30334-8400 
November 15, 2001 
 
Honorable Roy E. Barnes, Governor Members ofthe General Assembly of Georgia Members of the Board of Trustees of Georgia Military College 
and Major General Peter J. Boylan, President 
INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION 
Ladies and Gentlemen: 
We have reviewed the accompanying financial statements (Exhibits A through D) of Georgia Military College as of and for the year ended June 30, 2001, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute ofCertified Public Accountants. All information included in these financial statements is the representation of the management of Georgia Military College. 
A review consists principally ofinquiries ofCollege 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 of America, 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 op1mon. 
Based on our review, with the exception ofthe matter described in the fourth paragraph, we are not aware ofany 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. 
The College could not provide adequate subsidiary fixed asset records or other evidence supporting the Plant Fund Investment in Plant of $9,274,764.19 as shown on the Combined Balance Sheet. Accordingly, we were unable to satisfy ourselves as to the accuracy ofthis amount as reflected on the financial statements as of June 30, 2001. 
 
01ARL-67X 
 
 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 financial schedule (Schedule 1) is presented for supplementary analysis purposes. Such information has been subjected to the inquiries and analytical procedures applied in the review of the financial statements and we are not aware of any material modifications which should be made thereto. 
Respectfully submitted, 
Q __ ... QQ, 
~::cl W. Hinton State Auditor 
RWH:as 01ARL-67X 
 
 FINANCIAL STATEMENTS - 1- 
 
 GEORGIA MILITARY COLLEGE COMBINED BALANCE SHEET 
ALL FUND GROUPS JUNE 30, 2001 
 
ASSETS 
Cash and Cash Equivalents Investments Accounts Receivable {Net of Allowance for Doubtful Accounts) Inventories Prepaid Items Investment in Plant 
 
CURRENT FUNDS UNRESTRICTED RESTRICTED 
 
$ 1,296,711.32 $ 233,527.76 
 
1,393,309.05 394,136.12 1,9n.46 
 
343,778.00 
 
Total Assets 
 
$ 3,086,133.95 $ 577,305.76 
 
LIABILITIES AND FUND BALANCES 
Liabilities Accounts Payable Salaries Payable Notes Payable Student Deposits Deferred Revenue Tuition and Fees Other Deposits Held in Custody for Others Compensated Absences Capital Lease Obligations 
Total Liabilities 
Fund Balances Endowment Net Investment in Plant Restricted Unrestricted 
Total Fund Balances 
 
$ 
 
593,684.32 
 
394,655.85 
 
42,860.72 
 
636,587.33 150,000.00 
 
175,425.02 
 
$ 1,993,213.24 
 
$ 5n,3o5.76 $ 1,092,920.71 
$ 1,092,920.71 $ 5n,3o5.76 
 
Total Liabilities and Fund Balances 
 
$ 3,086,133.95 $ 577,305.76 
 
See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. 
 
The notes to the financial statements are an integral part of this statement. -2 - 
 
 EXHIBIT"A" 
 
ENDOWMENT FUNDS 
 
PLANT FUNDS INVESTMENT IN PLANT 
 
AGENCY FUNDS 
 
TOTAL 
(Memorandum Only) 
 
$ 699,823.86 
 
$ 70,820.35 $ 
 
- - - - - $ 9,274,764.19 
 
1,601,059.43 699,823.86 
1,737,087.05 394,136.12 1,977.46 
9,274,764.19 
 
$ 699,823.86 $ 9,274,764.19 $ 70,820.35 $ 13,708,848.11 
 
$ 266,917.79 
 
$ 
 
593,684.32 
 
394,655.85 
 
266,917.79 
 
42,860.72 
 
$ 70,820.35 180,047.51 
 
636,587.33 150,000.00 70,820.35 175,425.02 180,047.51 
 
$ 446,965.30 $ 70,820.35 $ 2,510,998.89 
 
$ 699,823.86 $ 8,827,798.89 
$ 699,823.86 $ 8,827,798.89 
 
$ 
 
699,823.86 
 
8,827,798.89 
 
577,305.76 
 
1,092,920.71 
 
$ 11,197,849.22 
 
$ 699,823.86 $ 9,274,764.19 $ 70,820.35 $ 13,708,848.11 
 
-3- 
 
 GEORGIA MILITARY COLLEGE COMBINED STATEMENT OF CHANGES IN FUND BALANCES 
ALL FUND GROUPS YEAR ENDED JUNE 30, 2001 
 
REVENUES AND OTHER ADDITIONS 
Unrestricted Current Fund Revenues Federal Grants and Contracts State Grants and Contracts Private Gifts, Grants, and Contracts Investment Income 
Endowment Other Net lncrease/(Decrease) in Fair Value of Investments Expended for Plant Facilities Current Funds 
Total Revenues and Other Additions 
EXPENDITURES AND OTHER DEDUCTIONS 
Educational and General Expenditures Auxiliary Enterprises Expenditures Indirect Costs Recovered Adjustments 
Prior Years' Revenues/Accounts Receivable 
Total Expenditures and Other Deductions 
Net lncrease/(Decrease) for the Year 
FUND BALANCES JULY 1, 2000 
FUND BALANCES JUNE 30, 2001 
 
CURRENT FUNDS UNRESTRICTED RESTRICTED 
$ 16,691,097.54 $ 3,941,665.30 3,743,369.52 344,100.91 
33,837.68 38,367.31 
 
$ 16,691,097.54 $ 8,101,340.72 
 
$ 15,218,730.19 $ 8,188,949.35 1,333,474.87 5,510.58 
 
-15,205.65 
 
$ 16,536,999.41 $ 8,194,459.93 
 
$ 
 
154,098.13 $ -93,119.21 
 
938,822.58 
 
670,424.97 
 
$ 
 
1,092.920.71 $ ==5=7==7:!,:13.0..5_.,7..6. = 
 
See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. 
The notes to the financial statements are an integral part of this statement. -4- 
 
 EXHIBIT"B" 
 
ENDOWMENT FUNDS 
 
PLANT FUNDS INVESTMENT IN PLANT 
 
TOTAL (Memorandum 
Only) 
 
$ 
 
50,500.00 
 
$ 16,691,097.54 3,941,665.30 3,743,369.52 394,600.91 
 
-89,675.20 
 
33,837.68 38,367.31 -89,675.20 
 
$ 116,736.60 
 
116,736.60 
 
$ -39,175.20 $ 116?36.60 $ 241869,999.66 
 
$ 
 
0.00 $ 
 
0.00 $ 23,407,679.54 
 
1,333,474.87 
 
5,510.58 
 
-15,205.65 
 
$ 
 
0.00 $ 
 
0.00 $ 241731,459.34 
 
$ -39,175.20 $ 116,736.60 $ 
 
138,540.32 
 
7381999.06 
 
817111062.29 
 
111059,308.90 
 
$ 6991823.86 $ 818271798.89 $ 1111971849.22 
 
-5- 
 
 - - - - - - - - - - - - - - - - - - - - -- --- -- ---- --- ---- 
GEORGIA MILITARY COLLEGE STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES, 
AND OTHER CHANGES YEAR ENDED JUNE 30, 2001 
 
EXHIBIT"C" 
 
UNRESTRICTED RESTRICTED 
 
TOTAL (Memorandum 
Only) 
 
REVENUES 
 
Tuition and Fees Federal Grants and Contracts State Grants and Contracts Local Grants and Contracts Pnvate Gifts, Grants, and Contracts Endowment Income Sales and Services of Auxiliary Enterpnses Other Sources 
 
$ 12,599,629.99 
 
$ 12,599,629 99 
 
$ 3,938,464.20 
 
3,938,464.20 
 
2,652,021.00 
 
3,609,765.52 
 
6,261,786.52 
 
212,450.00 
 
212,450 00 
 
43,947.84 
 
612,396.70 
 
656,344.54 
 
28,322.93 
 
28,322 93 
 
824,452.81 
 
824,452.81 
 
358,595.90 
 
358,595.90 
 
Total Revenues 
 
$ 16,691,097.54 $ 8.188,949.35 $ 24,880,046.89 
 
EXPENDITURES 
 
Educational and General lnstrucilon Academic Support Student Services Institutional Support Operation and Maintenance of Plant Scholarships and Fellowships 
Auxiliary Enterprises Student Housing Food Services Stores and Shops Intercollegiate Athletics Other Service Units 
 
$ 7,806,814.39 $ 573,057.04 $ 8,379,871.43 
 
864,021.32 
 
864,021.32 
 
2,004,862.19 
 
2,004,862 19 
 
2,524,651.53 
 
2,524,651.53 
 
1,680,714.59 
 
1,680,714.59 
 
337,666.17 
 
7,615,892.31 
 
7,953,558.48 
 
6,661.24 192,808.52 225,172.47 709,578.14 199,254.50 
 
6,661.24 192,808.52 225,172.47 709,578.14 199,254.50 
 
Total Expenditures 
 
$ 16,552,205.06 $ 8,188,949.35 $ 24,741,154.41 
 
OTHER TRANSFERS AND ADDITIONS/lDEDUCTIONS) 
 
Excess of Restricted Receipts over 
 
Transfers to Revenues 
 
Prior Period Adjustments (Net) 
 
$ 
 
Total Other Transfers and Additions/(Deductions $ 
 
$ 15,205.65 
15,205.65 $ 
 
-93, 119.21 $ -93,119.21 $ 
 
-93, 119.21 15,205.65 
-77,913.56 
 
Net lncrease/(Decrease) in Fund Balances 
 
$ 
 
1541098.13 $ -931119.21 $-==_.,;;6;,;;,0i,;;;,9,;.;78;;.;,.9;;;:2... 
 
See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. 
The notes to the financial statements are an integral part of this statement. 
-6- 
 
 GEORGIA MILITARY COLLEGE NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30, 2001 
 
EXHIBIT "D" 
 
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
REPORTING ENTITY Georgia Military College was created as a public authority and is an instrumentality of the State of Georgia and a public corporation. The Board of Trustees is composed of the mayor of the City of Milledgeville and six additional members, one of which shall be elected from each of the six municipal voting districts ofthe City ofMilledgeville. The government, control and management of Georgia Military College shall be vested in the Board of Trustees. Georgia Military College shall receive any designated funds appropriated by the General Assembly through the State Board of Regents. In order to incur debt, the Board ofTrustees must first receive permission from the Georgia State Financing and Investment Commission, as required for all state authorities. Accordingly, Georgia Military College is considered a component unit ofthe State ofGeorgia reporting entity for financial reporting purposes because of the significance of its legal, operational, and financial relationships with the State of Georgia. These reporting entity relationships are defined in Section 2100 ofthe Governmental Accounting Standards Board Codification ofGovernmental Accounting and Financial Reporting Standards. 
FUND ACCOUNTING In order to ensure observance of limitations and restrictions placed on the use of the resources available to the College the accounts ofthe College are maintained in accordance with the principles offund accounting. This is the procedure by which resources for various purposes are classified for accounting and reporting purposes into funds that are in accordance with activities or objectives specified. Separate accounts are maintained for each fund; however, in the accompanying financial statements, funds that have similar characteristics have been combined into fund groups. Accordingly, all financial transactions have been recorded and reported by fund group. 
Within each fund group, the College's fund balance allocations and designations represent those portions ofthe fund balances that are reserved, restricted and/or designated for specific future use by legal covenants or college policies. 
Fund groups and funds presented in the accompanying financial statements are as follows: 
CURRENT FUNDS 
UNRESTRICTED - The fund used to account for those economic resources over which the College retains full control to use for purposes of performing the primary functions of the College, e.g., instruction, auxiliary enterprises, student activities, etc. 
RESTRICTED - The fund used to record externally restricted funds which may only be utilized in accordance with the purposes established by their source. Restricted current funds are recorded as revenues and expenditures when expended for current operating purposes. 
 
-7- 
 
 ----------- --------------------------- 
 
GEORGIA MILITARY COLLEGE NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30, 2001 
 
EXHIBIT "D" 
 
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
FUND ACCOUNTING 
ENDOWMENT FUNDS 
The fund used to account for gifts that are subject to the restrictions ofgift instruments requiring that the principal be invested in perpetuity and income only be utilized. 
PLANT FUNDS 
INVESTMENT IN PLANT - The fund which shows the total amounts representing the book value of all physical properties owned by the College. Net Investment in Plant is an equity account showing the total book value of physical properties belonging to the College less the amount of any indebtedness to others. 
AGENCY FUNDS 
The fund used to account for resources held by the College as custodian or fiscal agent for individual students, faculty, staff members, and organizations. 
BASIS OF ACCOUNTING The financial statements of Georgia Military College have been prepared on the accrual basis of accounting. No depreciation on capital assets has been provided which is allowable under generally accepted accounting principles applicable to public colleges and universities. The Statement of Current Funds Revenues, Expenditures and Other Changes is a statement of financial activities of current funds related to the current reporting period. It does not purport to present the results of operations or the net income or loss for the period as would a statement of income or a statement of revenues and expenses. 
Prior period adjustments and certain other items are reported as additions to and deductions from fund balances of current funds in the accompanying financial statements. This presentation is in accordance with accounting practices prescribed or permitted by statutes and regulations ofthe State ofGeorgia, but differs from accounting principles generally accepted in the United States ofAmerica in that immaterial adjustments should be reported as current period revenues and expenditures. The effect ofthis departure is deemed to be immaterial to the fair presentation ofthe financial statements. 
CASH AND CASH EQUIVALENTS Cash and Cash Equivalents consist of petty cash, demand deposits, certificates of deposit and temporary investments in authorized financial institutions. 
INVESTMENTS Investments are reported at fair value. Funds received by the College as endowments or for restricted purposes are invested according to conditions stipulated by the donor, grantor, or in 
-8- 
 
 GEORGIA MILITARY COLLEGE NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30, 2001 
 
EXHIBIT "D" 
 
NOTE I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
INVESTMENTS accordance with the Board of Trustees authorizing resolutions. Gains and losses on investment transactions are accounted for in the funds where such assets are recorded. 
ACCOUNTS RECEIVABLE Accounts receivable consist ofreimbursements due from Federal, State, local, and private grants and contracts, and other receivables disclosed from information available. The College has recorded its accounts receivable for Student Accounts in the Unrestricted - Current Funds net of allowance for doubtful accounts of $518,646.00. 
INVENTORIES Inventories of consumable supplies are recorded on the consumption method and are valued at cost on the Combined Balance Sheet using the first-in, first-out method. 
Inventories of goods for resale are valued at cost using the first-in, first-out method. 
NOTES PAYABLE Notes payable are written promises to pay a certain sum of money on a specified future date and may arise from sales, financing or other transactions. Georgia Military College signed a promissory note in a prior year on a long-term Note Payable to help finance various construction projects. 
MEMORANDUM ONLY - TOTAL COLUMNS The total columns on the financial statements are captioned "Memorandum Only" because they do not represent consolidated financial information and are presented only to facilitate financial analysis. The columns do not present information that reflects financial position or changes in financial position in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation ofthis data. 
NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS 
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds belonging to the State ofGeorgia 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 ofthe following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59: 
(1) Bonds, bills, certificates of indebtedness, notes, or other direct obligations of the United States or of the State of Georgia. 
 
-9- 
 
 GEORGIA MILITARY COLLEGE NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30, 2001 
 
EXHIBIT "D" 
 
NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS 
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES (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 ofdevelopment authorities created by the laws ofthe 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 Horne Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Horne Loan Mortgage Association, and the Federal National Mortgage Association. 
(6) Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation. 
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 the option of exempting demand deposits from the collateral requirements. 
CATEGORIZATION OF DEPOSITS For purposes of analysis of custodial credit risk, cash deposits consist of all bank balances which include demand deposits and/or interest bearing accounts. The bank balances as of June 30, 2001, are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk: 
Category 1 - Amounts covered by depository insurance or collateralized with securities (at fair value) held by the College or by its agent in the College's name. 
Category 2 - Amounts collateralized with securities (at fair value) held by the pledging financial institution's trust department or agent in the College'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 College's name, and amounts uncollateralized. 
 
- 10 - 
 
 GEORGIA MILITARY COLLEGE NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30. 2001 
 
EXHIBIT "D" 
 
NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS 
 
CATEGORIZATION OF DEPOSITS 
 
Cash Deposits Investment Portfolio 
Accounts 
Total Cash Deposits 
 
Carrymg Amount 
 
Bank Balances 
 
Risk Categones 
 
2 
 
3 
 
$ 1,596,534 43 $1,759,319 03 $ 330,056.74 $ 
 
0.00 $ 1,429,262.29 
 
156,939.12 156,939.12 
 
100,000 00 
 
56,9J9.12 
 
0 00 
 
S I 753 473.55 $ I 216 258.15 $ 430 056.74 $ 56 939 12 $ I 429 262.29 
 
CATEGORIZATION OF INVESTMENTS Investments are summarized and classified as to custodial credit risk within the three categories described below: 
 
Category 1 - Insured or registered, or securities held by the College or its agent in the College's name. 
 
Category 2 - Uninsured and unregistered, with securities held by the counterparty's trust department or agent in the College's name. 
 
Category 3 - Uninsured and unregistered, with securities held by the counterparty, or by its trust department or agent but not in the College's name. 
 
The carrying amounts of investment balances as of June 30, 2001, are categorized below: 
 
Type of Investment 
 
Corporate Bonds 
 
$ 
 
U.S. Government Securities 
 
Investments Not Subject to Categonzat1ons: 
Investment Portfolio Accounts Mutual Funds 
Total Investments 
 
Risk Categories 2 
0.00 $ 31,479.30 $ 51,953.00 
0,00 $ 8J,432.30 $ 
 
Carrying 
 
3 
 
Amount 
 
0.00 $ 31,479.30 51,953.00 
 
0,00 $ 83,432.30 
 
459,452.44 
$ 542,884.74 
 
- 11 - 
 
 --------------------- 
 
GEORGIA MILITARY COLLEGE NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30. 2001 
 
EXHIBIT "D" 
 
NOTE 3: INVESTMENT IN PLANT 
 
Land, buildings and equipment are stated at cost as ofthe date ofacquisition, insurance valuations, if applicable, or fair market value at date of the gift. Depreciation ofphysical plant and equipment is not recorded. 
 
The following is a summary of Investment in Plant fixed assets as ofJune 30, 2001: 
 
Land Buildings Equipment 
 
$ 318,842.39 3,704,307.24 5,251,614.56 
 
Total Investment in Plant 
 
$ 9,274,764, 19 
 
NOTE 4: OPERATING LEASES 
 
Georgia Military College has entered into certain agreements to lease buildings and land which are classified as operating leases (leases on assets not recorded on the balance sheet). These leases generally contain provisions that, at the expiration date ofthe original term ofthe lease, the College has the option of renewing the lease on a year-to-year basis. Future minimum lease payments for operating leases as of June 30, 2001, are listed below. Amounts are included only for multi-year leases and for cancellable leases for which an option to renew for the subsequent fiscal year has been exercised. 
 
Fiscal Year Ending June 30 
 
2002 2003 2004 2005 2006 Thereafter 
 
$ 219,461.14 193,140.04 17,140.97 700.00 900.00 8,850.00 
 
Total Future Minimum Lease Payments 
 
$ 440,192,15 
 
NOTE 5: CAPITAL LEASES 
 
Georgia Military College acquires certain equipment through multi-year capital leases with varying terms and options. 
 
As of June 30, 2001, future minimum lease payments under capital leases are as follows: 
 
- 12 - 
 
 GEORGIA MILITARY COLLEGE NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30. 200 l 
 
EXHIBIT"D" 
 
NOTE 5: CAPITAL LEASES 
 
Fiscal Year Ending June 30 
 
2002 2003 2004 2005 2006 
 
$ 85,628.93 63,672.15 32,147.98 4,890.00 4,074.98 
 
Total Future Minimum Lease Payments 
 
$ 190,414.04 
 
Less: Amounts Representing Interest 
 
10,366.53 
 
Present Value of Future Minimum Lease Payments 
 
$ Hm,Q42.51 
 
NOTE 6: DEFICIT FUND BALANCE 
 
The Auxiliary Enterprises Fund and the Student Activities Fund, both a part ofUnrestricted Current Funds, have deficit fund balances of $1,459,826.19 and $886,770.98, respectively, which are not readily apparent from the financial statements. 
 
NOTE 7: RISK MANAGEMENT 
 
The Department of Administrative Services (DOAS) has the responsibility for the State of Georgia ofmaking and carrying out decisions that will minimize the adverse effects ofaccidental 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 College, as part of the State of Georgia reporting entity, 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. 
 
NOTES: RETIREMENTPLANS 
 
TEACHERS RETIREMENT SYSTEM OF GEORGIA 
 
Plan Description Georgia Military College participates in the Teachers Retirement System ofGeorgia (TRS), a costsharing multiple-employer defined benefit pension plan established by the General Assembly of 
 
- 13 - 
 
 GEORGIA MILITARY COLLEGE NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30. 2001 
 
EXHIBIT"D" 
 
NOTES: RETIREMENTPLANS 
 
TEACHERS RETIREMENT SYSTEM OF GEORGIA 
 
Plan Description 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 Georgia Department of Audits and Accounts. 
 
Funding Policy Employees ofthe College who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The College 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 200 l, the employer contribution rate was 11.29% 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 
 
2001 2000 1999 
 
100% 100% 100% 
 
$ 522,165.64 $ 465,093.54 $ 460,218.78 
 
NOTE 9: LEAVE POLICIES 
 
Employees earn annual leave ranging from ten to twenty days each year depending upon the employees' length of continuous State service with maximum accumulation of twenty days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. 
 
Employees earn one and one-quarter days ofsick leave each month with a maximum accumulation of forty-five days. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination of employment, except as noted in the subsequent paragraph. 
 
Certain employees who retire with a minimum of three months of unused sick leave are entitled to additional service credit in the Teachers Retirement System of Georgia. 
 
NOTE 10: 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 
 
- 14 - 
 
 GEORGIA MILITARY COLLEGE NOTES TO THE FINANCIAL STATEMENTS 
JUNE 30, 2001 
 
EXHIBIT "D" 
 
NOTE 10: CONTINGENCIES 
 
disallowed under grant terms. The amount ofexpenditures which may be disallowed by the grantor cannot be determined at this time although the College expects such amounts, if any, to be immaterial to its overall financial position. 
 
Litigation, claims and assessments filed against Georgia Military College, 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, 2001. 
 
NOTE 11: TUITION AND FEE WAIVERS 
 
Tuition and fee waivers of $875,604.53 were issued by Georgia Military College during fiscal year 2001. This amount is not readily apparent from the financial statements. 
 
NOTE12: ENROLLMENT 
 
The equivalent full-time student enrollment for the junior college division of Georgia Military College was as follows: 
 
Regular Term Fall Quarter, 2000 
Winter Quarter L 2000 
Winter Quarter II, 2001 Spring Quarter, 2001 
 
3,031 1,991 3,198 3,065 
 
Average 
 
Summer School, 2000 
 
The enrollment by grade for the secondary school division ofGeorgia Military College for the 20002001 academic year was as follows: 
 
Sixth Grade 
 
51 
 
Seventh Grade 
 
45 
 
Eighth Grade 
 
61 
 
Ninth Grade 
 
69 
 
Tenth Grade 
 
58 
 
Eleventh Grade 
 
42 
 
Twelfth Grade 
 
43 
 
Total Enrollment 
 
~ 
 
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 SUPPLEMENTARY INFORMATION - 17 - 
 
 GEORGIA MILITARY COLLEGE RECONCILIATION OF SALARIES AND TRAVEL 
YEAR ENDED JUNE 30, 2001 
 
SCHEDULE "1" 
 
Totals per Annual Supplement 
Accruals June 30, 2001 June 30, 2000 
Other Unidentified Variance 
 
SALARIES 
 
TRAVEL 
 
$ 9,356,349.52 $ 
 
61,911.49 
 
394,655.85 -405,634.01 
 
-419.89 
 
$ 913441951.47 $=.....,.6m1ilil9=1,;,;1=49= 
 
See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information. 
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 SECTIONil AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS 
 
 GEORGIA MILITARY COLLEGE AUDITEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 
 
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS 
 
FINDING CONTROL NUMBER AND STATUS 
 
FS-590-98-08 FS-590-99-01 FS-590-00-01 FS-5 90-00-02 
 
Partially Resolved - See Corrective Action/Responses Further Action Not Warranted Previously Reported Corrective Action Implemented Partially Resolved - See Corrective Action/Responses 
 
CORRECTIVE ACTION/RESPONSES 
 
GENERAL LEDGER Inadequate Endowment Agreements/No Separate Accountability Finding Control Number: FS-590-98-08 
 
A resolution was presented to the Georgia Military College Board of Trustees at the April 9, 2001, meeting to impose restrictions on the investments of principal, use of income, or termination of the endowments where no formal agreements exist. The resolution would initiate a Georgia Military College Trustees Scholarship Fund using funds from the Edgar B. Jackson Scholarship Fund and the Charles Whitfield Scholarship Fund. 
 
The Board ofTrustees tabled the resolution until a determination is made that there are no descendants of either the Jackson family or the Whitfield family. 
 
In November 2001, a representative ofthe Edgar Bell Jackson family signed a statement releasing the Georgia Military College Trustees from any liability concerning the original scholarship agreement. As ofJune 30, 2001, the Trustee's endowment account for the scholarship contained $5,748.11. A resolution to add these funds to the General Scholarship Endowment will be presented at the January 2002 Georgia Military College Board of Trustees meeting. 
 
The Development Office of Georgia Military College will continue their research to locate any descendants of the John Bulow Campbell family. 
 
There was no documentation of an endowment agreement for the Al and Charlotte Gandy Scholarship. However there was documentation expressing the donor intent of the distribution of the earned income. An endowment agreement will be completed in this fiscal year. 
 
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GEORGIA MILITARY COLLEGE AUDITEE'S RESPONSE 
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001 
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CORRECTIVE ACTION/RESPONSES GENERAL FIXED ASSETS/PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Finding Control Number: FS-590-00-02 The invent~ry of fixed assets has been completed and the missing data has been included and invalid data corrected. The general ledger will be adjusted in fiscal year 2002 to reflect the adjusted equipment value. Once the general ledger is reconciled, procurement records will be reviewed monthly and the cost of new equipment will be added to the inventory records. All deletions from the inventory will be recorded. Inventories are conducted semi-annually to insure that subsidiary ledger inventories match inventory on hand. Discrepancies will be researched and reconciled. The College is continuing in its efforts to determine the value ofbuildings owned by the College. 
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 SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS 
 
 GEORGIA MILITARY COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS 
YEAR ENDED JUNE 30, 2001 
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS 
GENERAL FIXED ASSETS/PROPERTY MANAGEMENT Inadequacies in Operation of Property Management System Finding Control Number: FS-590-01-01 
The College was unable to provide complete subsidiary fixed assets records or other historical cost evidence supporting the balance for general fixed assets recorded on the financial statements. Proper internal controls necessitate the maintenance of subsidiary records for general fixed assets. 
This condition resulted from management's failure to adequately monitor and implement procedures to ensure that all general fixed assets are properly recorded and accounted for. 
The College should take appropriate action to provide for an adequate property management system for general fixed assets, which would include subsidiary records that reflect an inventory of land, buildings, and equipment owned by the College. Detailed records should be maintained for all deletions and additions to the Plant Fund. The College should also implement procedures to periodically reconcile physical inventory counts offixed assets to the subsidiary records and ensure that those records agree with the General Ledger.