Georgia Southern University, Statesboro, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2001

GEORGIA SOUTHERN UNNERSITY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

EXHIBITS


FINANCIAL STATEMENTS

A COMBINED BALANCE SHEET

ALL FUND GROUPS

2

B COMBINED STATEMENT OF CHANGES IN FUND BALANCES

ALLFUND GROUPS

4

C STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,

AND OTHER CHANGES

7

D NOTES TO THE FINANCIAL STATEMENTS

8

SUPPLEMENTARY INFORMATION

E COMBINING BALANCE SHEET

CURRENT FUNDS - UNRESTRICTED

22

F COMBINING STATEMENT OF CHANGES IN FUND BALANCES

CURRENT FUNDS - UNRESTRICTED

24

G COMBINING STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,

AND OTHER CHANGES

UNRESTRICTED

26

SCHEDULES

SCHEDULES OF REVENUES AND EXPENDITURES COMPARED TO BUDGET

1

RESIDENT INSTRUCTION

28

2

LOTTERY FOR EDUCATION

31

3 CHANGES IN INVESTMENT IN PLANT

32

4 SCHEDULE OF FUND BALANCES

CURRENT FUNDS AND PLANT FUNDS

34

5 RECONCILIATION OF SALARIES AND TRAVEL

36

GEORGIA SOUTHERN UNNERSITY - TABLE OF CONTENTS -
SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS
Y SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTIONID CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL


RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
December 11, 2001

Honorable Roy E. Barnes, Governor Members of the General Assembly of Georgia Members of the Board of Regents of the University System of Georgia
and Honorable Bruce F. Grube, President Georgia Southern University
INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying financial statements (Exhibits A through D) ofGeorgia Southern University as of and for the year ended June 30, 2001. These financial statements are the responsibility of the University's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in Note 1 to the financial statements, Georgia Law and State budgetary policy require the University to prepare its financial statements on a basis which is not consistent with accounting principles generally accepted in the United States of America with respect to the recording of encumbrances as expenditures and liabilities. To conform with accounting principles generally accepted in the United States ofAmerica, encumbrances should be recorded as a reservation offund balance. The effects on the financial statements of this departure from accounting principles generally accepted in the United States of America were not reasonably determinable, but are believed to be material.

01ARL-62

As disclosed in Note 1 to the financial statements, the University did not report the liability and related expenditure for compensated absences in the current funds as required by accounting

principles generally accepted in the United States of America. If compensated absences were reported, liabilities would be increased and fund balance would be decreased by $3,559,369.79 as of June 30, 2001, and the net change in fund balance for the year ended June 30, 2001, would be decreased by $189,493.13.
In our opinion, except for the effects on the financial statements ofthe matters discussed in the third and fourth paragraphs, the financial statements referred to above present fairly, in all material respects, the financial position ofGeorgia Southern University as ofJune 30, 2001, and the changes in fund balances and the current operating funds revenues, expenditures, and other changes for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying combining statements (Exhibits E through G) and the financial schedules (Schedules 1 through 5) are presented for purposes ofadditional analysis and are not a required part ofthe financial statements ofGeorgia Southern University. Such information has been subjected to the auditing procedures applied in the audit ofthe financial statements and, in our opinion, except for the effects of the matters discussed in the third and fourth paragraphs, such information is fairly presented in all material respects in relation to the financial statements taken as a whole.
Respectfully submitted,

RWH:as 01ARL-62

k).
Rus ell W. Hinton State Auditor




FINANCIAL STATEMENTS

- 1-

GEORGIA SOUTHERN UNIVERSITY COMBINED BALANCE SHEET ALL FUND GROUPS JUNE 30, 2001

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable Inventories Prepaid Items Due from Other Fund Groups Investment in Plant
Total Assets
LIABILITIES AND FUND BALANCES
Liabilities Accounts Payable Salaries Payable Deferred Revenue Tuition and Fees Other Deposits Held in Custody for Others Due to Other Fund Groups Capital Lease Obligations
Total Liabilities
Fund Balances U. S. Government Grants Refundable Institutional Loans - Restricted Endowment Net Investment in Plant Restricted Unrestricted
Total Fund Balances
Total Liabilities and Fund Balances

CURRENT FUNDS UNRESTRICTED RESTRICTED

LOAN FUNDS

$

13,203,840.60 $ 152,756.75 $ 129,331.30

6,945.85

1,515,615.21

788,014.52

2,929,679.21

1,891,444.20

2,079,255.37

80,581.81

$

18,777,683.04 $ 940,771.27 $ 3,059,010.51

$

3,954,987.00

434,983.10

5,259,910.64 46,498.28

$ 80,581.81

$

9,696,379.02 $ _~=-8'0-,=58.1:..81..

$ 3,002,425.69
56,584.82

$
$--==..9.,.0:8..1.=,3=04=.0=2-

$

9,081,304.02 $

860,189.46 860,189.46 $ 3,059,010.51

$

18,777,683.04 $ 940,771.27 $ 3,059,010.51

The notes to the financial statements are an integral part of this statement. -2-

EXHIBIT "A"

ENDOWMENT FUNDS

UNEXPENDED

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

AGENCY FUNDS

TOTAL (Memorandum
Only,-)_ _

$ 2,384,217.46 $

2,160,587.89 $

1,728,200.77

$

636,780.78

_ _ _ _ _ _ $ 257,191,825.08

1,894,865.89 $

21,653,800.66 6,945.85
5,870,089.72 1,891,444.20 2,079,255.37
80,581.81 257,191,825.08

$ 2,384,217.46 $ 2,797,368.67 $

1,728,200.77 $ 257,191,825.08 $ 1,894,865.89 $ 288?73,942.69

$ 2,797,358.67 $

539,716.89

$ 1,191,180.18 $

8,483,242.74 434,983.10

- - - - - - $-_...:..:2=1-,:5.1.5"."7"1,-~

703,685.71

5,259,910.64 46,498.28
703,685.71 80,581.81 21,515.71

$ 2,797,358.67 $

539,716.89 $

21,515.71 $ 1,894,865.89 $ 15,030,417.99

$ 2,384,217.46
-----$
$ 2,384,217.46 $

$ 257,170,309.37

10.00 $ _-""-'-1=,:1.8J8..,4.8:.3..:8:8=~

10.00 $

1,188,483.88 $ 257,170,309.37

$ 3,002,425.69 56,584.82
2,384,217.46 257,170,309.37
860,189.46 10,269,797.90
$ 273,743,524.70

$ 2,384,217.46 $ 2,797,368.67 $

1,728,200.77 $ 257,191,825.08 $ 1,894,865.89 $ 288,773,942.69

-3-

GEORGIA SOUTHERN UNIVERSITY COMBINED STATEMENT OF CHANGES IN FUND BALANCES
A!..L FUND GROUPS YEAR ENDED JUNE 30, :Z001

REVENUES AND OTHER ADDITIONS
Unrestricted Current Fund Revenues State Appropriations
Regular Federal Grants and Contracts State Grants and Contracts Local Grants and Contracts Private Gifts, Grants, and Contracts Investment Income
Endowment Other Net Increase/Decrease in Fair Value of Investments Interest on Loans Receivable Adjustments Prior Years' Expenditures/Accounts Payable Prior Years' Checks Voided Expended for Plant Facilities Current Funds Plant Funds
Unexpended Renewals and Replacements Georgia State Financing and Investment Commission Other Additions Proceeds from Sale of Plant Assets Recovery of Prior Years' Cancelled Loans
Total Revenues and Other Additions
EXPENDITURES AND OTHER ~EDUCTIONS
Educational and General Expenditures Auxiliary Enterprises Expenditures Indirect Costs Recovered Remittances to the Board of Regents of the
University System of Georgia Prior Year's Unrestricted Fund Balance (Surplus)
Adjustments Prior Years' Revenues/Accounts Receivable
Loan Cancellations and Write-Offs Administrative and Collection Costs Expended for Plant Facilities
Capitalized Noncapitalized Disposals/Deletions/Adjustments
Total Expenditures and Other Deductions
TRANSFERS BETWEEN FUNDS
Nonmandatory Renewals and Replacements Capital Projects
Total Transfers Between Funds
Net Increase/(Decrease) for the Year
FUNQ.Ml..ANCES JJ.1bY 1. 2000



CURRENT FUNDS

LOAN

UNRESTRICTED

RESTRICTED

FUNDS

$ 130,745,998.99

$ 44,918,727.24 $ 14,806,204.13 781,678.29 458,318.90
39,585.37
-6,105.55
100,206.47 14,478.21

216.12 -85.84 2,088.26 51,494.46

$ 130,860,683.67 $ 60,998,408.38 $

73,956.00 127,669.00

$ 110,705,457.91 $ 60,542,325.53 17,152,135.08 348,627.35

146,537.08 -394.68

$

57,408.11

27,967.87

$ 128,003,735.39 $ 60,890,952.88 $_-.85:,3= 75~ .9~ 8

$ -1,540,853.80 -513,367.77

$ _--==-2=,0.5.:4.:,2.:2::1..:5c7...

$

802,726.71 $

8,278,577.31

107,455.50 $

42,293.02

752,733.96

3,016,717.49

FUND BALANCES JUNE 30. 2001

$

The notes to the financial statements are an integral part of this statement.
-4-

860,189.46 $ 3,059,010.51

EXHIBIT "B"

ENDOWMENT FUNDS

UNEXPENDED

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

TOTAL (Memorandum
OnIY~l_ _

$ 2,568,000.00

$

-48,351.72

79,994.47 1,593,293.36
10.00

$

20,701.51

$

-48,351.72 $ 4,261,999.34 $

$ 130,745,998.99

2,568,000.00

44,918,943.36

14,806,204.13

781,678.29

$

10,502.00

548,729.53

39,585.37 1,595,381.62
-54,457.27 51,494.46

100,216.47 14,478.21

6,180,342.98

6,180,342.98

0.00

4,612,368.05

1,314,827.64

8,014,388.14

4,612,368.05 1,314,827.64 8,014,388.14

~O.~OO:!... $

20,701.51 73,956.00
20,132,428.81 $ 216,332,837.48

$

0.00

$ 171,247,783.44 17,152,135.08 348,627.35

$

3,673.44

150,210.52

-394.68 57,408.11 27,967.87

4,612,368.05 $

1,314,827.64

163,019.71

174,874.93

- - - - - - $-~=~4.,:0.9.2:,3.1:0:.1.3..

5,927,195.69 337,894.64
4,092,310.13

$

---:0:;;.0:.,:0:... $ 4,779,061 .20 $

1,489,702.57 $ 4,092,310.13 $ 199,341,138.15

$

$

-48,351.72 $

2,432,569.18

$ 513,367.77

1,540,853.80

$

0.00

0.00

513,367.77 $ _ _.1.:,5..4.0.:,8::5~3~~.:8!0...

-3,694.09 $

51,151.23 $

$ - - - - = : !0..0.0. 16,040,118.68 $ 16,991,699.33

3,704.09

1,137,332.65

241,130,190.69

256,751,825.37

$ 2,384,217.46 $

10.00 $

1,188,483.88 $ 257,170,309.37 $ 273?43,524.70

-5-

.GEORGIA SOUTHERN UNIVERSITY STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,
AND OTHER CHANGES YEAR ENDED JUNE 30, 2001

EXHIBIT "COl

UNRESTRICTED

RESTRICTED

TOTAL (Memorandum
Only,,-)_ _

REVENUES

State Appropriations Tuition and Fees Federal Grants and Contracts State Grants and Contracts Local Grants and Contracts Private Gifts, Grants, and Contracts Endowment Income Sales and Services of Educational Activities Sales and Services of Auxiliary Enterprises Other Sources

$

72,462,544.00

$ 72,462,544.00

34,496,007.33

34,496,007.33

331,487.10 $ 44,578,567.83

44,910,054.93

35,422.80

14,681,854.60

14,717,277.40

4,801.34

838,897.81

843,699.15

3,875.61

394,117.56

397,993.17

48,887.73

48,887.73

1,758,702.61

1,758,702.61

20,766,837.94

20,766,837.94

886,320.26

886,320.26

Total Revenues

$ 130,745,998.99 $ 60,542,325.53 $ 191,288,324.52

EXPENDITURES

Educational and General Instruction Research Public Service 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

$

57,010,792.22 $

798,177.30 $ 57,808,969.52

726,212.65

866,433.44

1,592,646.09

832,317.05

1,358,422.09

2,190,739.14

11,790,629.26

19,521.37

11,810,150.63

10,856,103.44

12,735.56

10,868,839.00

14,184,361.41

429,303.46

14,613,664.87

12,831,671.68

12,831,671.68

2,473,370.20

57,057,732.31

59,531,102.51

4,377,652.40 3,233,739.02 1,380,656.32 5,499,896.27 2,660,191.07

4,377,652.40 3,233,739.02 1,380,656.32 5,499,896.27 2,660,191.07

Total Expenditures

$ 127,857,592.99 $ 60,542,325.53 $ 188,399,918.52

OTHER TRANSFERS AND ADDITIONS/(DEDUCTIONSl

Excess of Restricted Receipts over Transfers to Revenues
Transfers for Renewals and Replacements Transfers for Capital Projects Prior Period Adjustments (Net) Remittances to the Board of Regents
of the University System of Georgia Prior Year's Unrestricted Fund Balance (Surplus)

$

s

-1,540,853.80

-513,367.77

115,079.36

107,455.50 $

107,455.50 -1,540,853.80
-513,367.77 115,079.36

-146,537.08

-146,537.08

Total Other Transfers and Additions/(Deductions) $

-2,085,679.29 $

107,455.50 $ -1,978,223.79

Net Increase/(Decrease) in Fund Balances

$

802,726.71 s

107,455.50 $ -==.....,9;;1.:0.:,;1o,8,:2.;.;2:~1.:...


The notes to the financial statements are an integral part of this statement. -7-

GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REPORTING ENTITY
Georgia Southern University is one ofthirty-four (34) State supported member institutions ofhigher education in Georgia which comprise the University System ofGeorgia, an organizational unit ofthe State ofGeorgia. The accompanying financial statements reflect the operations ofGeorgia Southern University as a separate reporting entity.

The Board of Regents has constitutional authority to govern, control and manage the University System ofGeorgia. 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 Southern University does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Georgia Southern 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 Codification of Governmental 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 University, the accounts of the University are maintained in accordance with the

principles of fund 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 University'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, State policies, or institutional 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 University retains full control to use for purposes of performing the primary functions of the University, e.g., instruction, research, public service, etc.

- 8-


GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FUND ACCOUNTING
CURRENT FUNDS
RESTRICTED - The fund used to record externally restricted funds which mayonlybe 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.
LOAN FUNDS
The fund used to account for resources which have been made available for financial loans to students.
ENDOWMENT FUNDS
The fund used to account for gifts that are subject to the restrictions by the donor requiring that the principal be invested in perpetuity and income only be utilized.
PLANT FUNDS
UNEXPENDED - The fund used to account for financial resources utilized to acquire or to construct physical properties for institutional purposes.
RENEWALS AND REPLACEMENTS - The fund used to account for resources set aside for the renewal and replacement of institutional properties.
INVESTMENT IN PLANT - The fund which shows the total amounts representing the book value of all physical properties owned by the University. Net Investment in Plant is an equity account showing the total book value ofphysical properties belonging to the University less the amount of any indebtedness to others.
AGENCY FUNDS
The fund used to account for resources held by the University as custodian or fiscal agent for individual students, faculty, staff members, and organizations.
BASIS OF ACCOUNTING Except as otherwise disclosed in these notes, the financial statements are prepared on the modified accrual basis of accounting, which is materially the same as the accrual basis of accounting applicable to colleges and universities prescribed in the American Institute of Certified Public Accountants' audit guide reporting model. The modified accrual basis of accounting is defined as
-9-

GEORGIA SOUTHERN UNNERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
that method of accounting in which expenditures, other than accrued interest on general long-term debt, are recorded at the time liabilities are incurred and revenues are recorded when available and measurable to finance expenditures of the fiscal period.
Contractual obligations for goods and services which have not been received at the end ofthe fiscal year are recognized as expenditures and liabilities in the accompanying financial statements. This accounting practice causes expenditure-driven grant revenues to be accrued based, in part, on the unexecuted portion of contracts for goods and services. The recognition of encumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, but is not consistent with accounting principles generally accepted in the United States ofAmerica, which provide for the recording ofencumbrances as a reservation offund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures determined in accordance with accounting principles generally accepted in the United States of America.
Compensated absences represent obligations ofthe University relating to employees' rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulated annual leave in which payment is probable and can be reasonably estimated. The compensated absences liability of$3,559,369.79 and a related net current year expenditure of $189,493.13 have not been reported in the current funds as required by accounting principles generally accepted in the United States of America.
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.
To the extent that Current Funds and Plant Funds are used to finance plant assets, the amounts so provided are accounted for as expenditures. The balances shown on the Combined Balance Sheet as Net Investment in Plant reflect the accumulated expenditures made for plant facilities through Current Funds and Plant Funds and also include expenditures made for plant facilities expended by the Georgia State Financing and Investment Commission on behalfofthe University. Donated fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded values. No depreciation has been provided on physical plant and equipment.

- 10-

GEORGIA SOUTHERN UNNERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING
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 ofrevenues and expenses.

BUDGET
The Board ofRegents ofthe University System ofGeorgia - Administrative Central Office receives State appropriation allotments for units of the University System of Georgia. The appropriated budget is adopted at the Board level and represents appropriations provided by the Amended Appropriations Act of2000-200l. The appropriated budget covers current funds and plant funds, except for Auxiliary Enterprises and Student Activities which are not subject to appropriation. The allocation ofthe appropriated budget is made to the University by the Administrative Central Office. In addition, the University receives Federal funds and other funds directly and includes these funds in the budget filed with the Administrative Central Office.

A comparison of anticipated funds available and budgeted expenditures by budget unit object class indicates that the following object class was overspent by the amount identified below:

Resident Instruction Capital Outlay

$ 89Z.090.33

This overexpenditure of budget constitutes a violation of Board of Regents policy, but does not constitute a statutory violation of budget authority. Statutory violations of budget authority are reported at the Board object class level.

CASH AND CASH EQUIVALENTS
Cash and Cash Equivalents consist of petty 'cash, demand deposits, certificates of deposit and temporary investments in authorized financial institutions, and cash management pools that have the general characteristics of demand deposit accounts.

INVESTMENTS
Investments are reported at fair value. Funds received by the University as endowments or for restricted purposes are invested according to conditions stipulated by the donor, grantor, or in accordance with the Board of Regents authorizing resolutions. Gains and losses on investment transactions are accounted for in the funds where such assets are recorded.

ACCOUNTS RECEIVABLE
Accounts receivable consist ofallotments due from the Board ofRegents ofthe University System of Georgia - Administrative Central Office, reimbursements due from Federal, State, local, and private grants and contracts, and other receivables disclosed from information available. No provision has been made for an allowance for doubtful accounts within the accompanying financial statements.

- 11 -

GEORGIA SOUTHERN UNNERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 200 I

EXHIBIT "D"

NOTE I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVENTORIES Inventories of consumable supplies are recorded on the consumption method and are valued at cost on the Combined Balance Sheet using the weighted average method.
Inventories of goods for resale are valued at cost using the first-in, first-out method.
PREPAID ITEMS Prepaid items are payments made to vendors in advance ofthe receipt ofgoods and services that will benefit periods subsequent to the balance sheet date.
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 anyone or more ofthe following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:
(I) Bonds, bills, certificates of indebtedness, notes, or other direct obligations ofthe 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 ofthe 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.

- 12-

GEORGIA SOUTHERN UNIVERSITY 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 (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.

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 (which includes organizational units of the Board of Regents of the University System of Georgia) the option of exempting demand deposits from the collateral requirements.

The treasurer ofthe Board ofRegents is responsible for all details relative to furnishing the required depository protection for all units of the University System of Georgia.

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 University or by its agent in the University's name.

Category 2 - Amounts collateralized with securities (at fair value) held by the pledging financial institution's trust department or agent in the University'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 University's name, and amounts uncollateralized.

Cash Deposits

Carrying Amount

Bank Balances

Risk Categories

1

2

3

$) 9,199. lll..LQS $ 22,622.030,32 $ 400.900,00 $-.J ,2QQ.000.00 $.2l.022,030.32

- 13-

GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHffilT "D"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

CATEGORIZATION OF INVESTMENTS
The carrying amounts of investment balances as ofJune 30, 2001, are as follows:
me of Investment

Board ofRegents Short-Term Investment Fund Total Return Fund
Life Insurance Policy (Cash Surrender Value)

$ 15,199.95
2,285,336.28 6,945.85

Total Investments

$ Za307.482.0

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 ofthe pool.

NOTE 3: INVESTMENT IN PLANT

The following is a summary of Investment in Plant fixed assets as of June 30, 2001:

Land Buildings Improvements Other Than Buildings Equipment

Library Books and Collections

$ 1,862,841.20 176,516,103.76 9,486,024.13 43,143,042.06 26,183,813.93

Total Investment in Plant

$257.191.825.08

NOTE 4: CAPITAL LEASES

Georgia Southern University acquires certain equipment through multi-year capital leases with varying terms and options. These agreements contain fiscal funding clauses in accordance with Official Code of Georgia Annotated Section 50-5-64 which prohibits the creation of a debt to the State of Georgia for the payment of any sums under such agreements beyond the fiscal year of execution if appropriated funds are not available. If renewal of such agreements is reasonably assured, however, capital leases requiring appropriation by the General Assembly of Georgia are considered noncancellable for financial reporting purposes.

As of June 30, 2001, future minimum lease payments under capital leases are as follows:

- 14-

GEORGIA SOUTHERN UNNERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHffiIT "D"

NOTE 4: CAPITAL LEASES

Fiscal Year Ending June 30

2002 2003

$ 16,079.90 6,765.24

Total Future Minimum Lease Payments

$ 22,845.14

Less: Amounts Representing Interest

1,329.43

Present Value ofFuture Minimum Lease Payments

$ 2.UJ5.71

NOTE 5: RISK MANAGEMENT

Georgia Southern University is a participant in the Board of Regents of the University System of Georgia Health Benefits Plan, which is a self-insurance program of health and dental benefits for employees and retirees of the University System of Georgia. The University and participating employees and retirees pay premiums to the Health Benefits Plan for this health insurance coverage. The Health Benefits Plan is included in the financial statements of the Board of Regents of the University System ofGeorgia - Administrative Central Office. All units ofthe University System of Georgia share the risk of loss for claims of the Health Benefits Plan. The Health Benefits Plan is considered a self-sustaining risk fund that provides health coverage for its members up to a maximum lifetime benefit of $2,000,000.00 per person and dental coverage up to an annual maximum of$l ,000.00 per person. Blue Cross Blue Shield ofGeorgia processes medical and dental claims in accordance with the Health Benefits Plan as established by the Board of Regents. As of January 1, 2001, Express Scripts, Incorporated was contracted with to process pharmacy drug claims in accordance with the Pharmacy Benefit Program portion ofthe Health Benefits Plan.

The Department ofAdministrative Services (DOAS) has the responsibility for the State ofGeorgia 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 University, as an organizational unit ofthe 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.

- 15 -

GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT "D"

NOTE 5: RISK MANAGEMENT



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 SelfInsurance Fund.

NOTE 6: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Plan Description
Georgia Southern 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 ofGeorgia 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 University who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The University makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2001, the employer contribution rate was 11.29% for covered employees. In addition, the University contributed 2.33% to the TRS on behalf of employees electing to participate in the Regents Retirement Plan. 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

REGENTS RETIREMENT PLAN

100% 100% 100%

$ 5,068,260.20 $ 5,345,231.90 $ 5,717,519.28

Plan Description
The Regents Retirement Plan, a single-employer defined contribution plan, is an optional retirement plan established and administered by the Board of Regents of the University System of Georgia, under which it may purchase annuity contracts for the purpose of providing retirement and death

- 16-

GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHffiIT "D"

NOTE 6: RETIREMENT PLANS
REGENTS RETIREMENT PLAN
Plan Description benefits for eligible faculty and principal administrators. 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 Member contribution requirements are established by the Board of Trustees of the Teachers Retirement System. Employer contributions are established by statute and may be amended onlyby the General Assembly ofthe State ofGeorgia. The employer contributes 8.81 % ofthe participating employee's earnable compensation. Employees contribute 5% of their earnable compensation. Amounts attributable to all plan contributions are fully vested and non-forfeitable at all times.
The University and the covered employees made the required contributions of $2,362,799.03 (8.81%) and $1,341,312.84 (5%), respectively.
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description Georgia Southern University participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employer defined contributionplan established by the General Assembly ofGeorgia for the purpose ofproviding retirement coverage for State employees who are temporary, seasonal, and parttime 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 ofage 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board ofTrustees. Ifa member has less than $ 3,500.00 credited to his/her account, the Board ofTrustees has the option of requiring a lump sum distribution to the member in lieu ofmaking 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-halfpercent (7.5%) ofgross 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 ofthe member's account is refundable upon request by the member.

- 17 -

GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT "D"

NOTE 6: RETrnEMENTPLANS
GEORGIA DEFINED CONTRIBUTION PLAN
Contributions and Vesting Total contributions made by employees during fiscal year 2001 amounted to $186,374.79 which represents 7.5% of covered payroll. These contributions met the requirements of the plan.
NOTE 7: LEAVEPOUCffiS
Employees earn annual leave ranging from one and one-quarter days to one and three-quarter days each month depending upon the employees' length of continuous State service with maximum accumulation of forty-five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. See Note 1 - Basis of Accounting (Compensated Absences)
Employees earn one day of sick leave each month with no maximum accumulation established. 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 8: CONTINGENCffiS
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 ofexpenditures which may be disallowed by the grantor cannot be determined at this time although the University expects such amounts, if any, to be immaterial to its overall financial position.
Litigation, claims and assessments filed against Georgia Southern University (an organizational unit of the Board of Regents ofthe University System of Georgia), ifany, 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 9: POSTEMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
Pursuant to the general powers conferred by the Official Code of Georgia Annotated Section 20-331, the Board of Regents of the University System of Georgia has established group health and life insurance programs for regular employees ofthe University System ofGeorgia. It is the policy ofthe Board ofRegents to permit employees ofthe University System ofGeorgia eligible forretirement or
- 18 -

GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2001

EXHIBIT "D"

NOTE 9: POSTEMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS

that become permanently and totally disabled to continue as members ofthe group health and life insurance programs. Employees who are eligible for retirement or disability under the criteria established by the Teachers Retirement System ofGeorgia and who have at least ten years ofservice with the University System of Georgia are eligible for these postemployment health and life insurance benefits. Organizational units of the Board of Regents of the University System of Georgia pay the employer portion for group insurance for affected individuals.

As ofJune 30, 2001, there were 454 employees who had retired or were disabled that were receiving these postemployment health and life insurance benefits. For the year ended June 30, 2001, Georgia Southern University recognized as incurred $1,019,727.00 of expenditures, which was net of $310,250.00 of participant contributions.

NOTE 10: ENROLLMENT

The equivalent full-time student enrollment of Georgia Southern University was as follows:

Regular Term Fall Semester, 2000 Spring Semester, 2001

12,985 12,029

Average

12.507

Summer School, 2000

- 19-

SUPPLEMENTARY INFORMATION


- 21 -

GEORGIA SOUTHERN UNIVERSITY COMBINING BALANCE SHEET
CURRENT FUNDS - UNRESTRICTED JUNE 30, 2001

ASSETS
. Cash and Cash Equivalents Investments Accounts Receivable Inventories Prepaid Items Due from Other Fund Groups
Total Assets

RESIDENT INSTRUCTION

LOTIERYFOR EDUCATION

$ 5,001,882.52 $
415,540.38 278,000.32 1,988,857.37
80,581.81

319,135.01

$ 7?64,862.40 $_....:;3.:1.9:,.1~,3;5;.;0,1,;,.

LIABILITIES AND FUND BALANCES
Liabilities Accounts Payable Salaries Payable Deferred Revenue Tuition and Fees Other
Total Liabilities
Fund Balances Unrestricted
Total Liabilities and Fund Balances

$ 3,232,017.86 $
337,034.61
3,755,382.98 46,498.28
$ 7,370,933.73 $

313,851.39 313,851.39

393,928.67

5,283.62

$ 7,764,862.40 $ 319,135.0_1_

See notes to the financial statements.

-22 -

EXHIBIT "E"

AUXILIARY ENTERPRISES

STUDENT ACTIVITIES

TOTAL

$ 7,070,835.55 $ 811,987.52 $ 13,203,840.60

6,945.85

6,945.85

1,097,585.12

2,489.71

1,515,615.21

1,613,443.88

1,891,444.20

90,223.00

175.00

2,079,255.37

80,581.81

$ 9,879,033.40 $ 814,652.23 $ 18,777,683.04

$ 312,543.80 $ 96,573.95 $ 3,954,987.00

72,509.98

25,438.51

434,983.10

1,315,037.32

189,490.34

5,259,910.64 46,498.28

$ 1,700,091.10 $ 311,502.80 $ 9,696,379.02

8,178,942.30 503,149.43

9,081,304.02

$ 9,879,033.40 $ 814,652.23 $ 18,777,683.04



-23 -

GEORGIA SOUTHERN UNIVERSITY COMBINING STATEMENT OF CHANGES IN FUND BALANCES
CURRENT FUNDS - UNRESTRICTED YEAR ENDED JUNE 30. 2001

REVENUES AND OTHER ADDITIONS
Unrestricted Current Fund Revenues Adjustments
Prior Years' Expenditures/Accounts Payable Prior Years' Checks Voided
Total Revenues and Other Additions
EXPENDITURES AND OTHER DEDUCTIONS
Educational and General Expenditures Auxiliary Enterprises Expenditures Remittances to the Board of Regents of the
University System of Georgia Prior Year's Unrestricted Fund Balance (Surplus)
Adjustments Prior Years' Revenues/Accounts Receivable
Total Expenditures and Other Deductions
TRANSFERS BETWEEN FUNDS
Nonmandatory Renewals and Replacements Capital Projects In Lieu of State Appropriations
Total Transfers Between Funds
Net Increase/(Decrease) for the Year
FUND BALANCES JULY 1, 2000
FUND BALANCES JUNE 30, 2001

RESIDENT INSTRUCTION

LOTIERYFOR EDUCATION

$ 106,050,008.16 $

668,292.00

43,230.15 14,478.21

5,283.62

$106,107,716.52 $ _ _.6::7:.:3...,:5:;c7:5:,,.:6.;=2=-

$ 107,689,811.92 $

668,292.00

146,414.00 -190.00


123.08

$ 107,836,035.92 $ _ _=66=8.,.4:1.=5.:0:8...

1,691,927.00

$ _---:1.,6=9=1~,9:2:7..0.0.

$

-36,392.40 $

430,321.07

5,160.54 123.08

$

39-.3,928.67 $ _ _....5..,.2.8..3.62_

See notes to the financial statements.

-24-

EXHIBIT "F"

AUXILIARY ENTERPRISES

STUDENT ACTIVITIES

TOTAL

$ 21,135,120.37 $ 2,892,578.46 $ 130,745,998.99

48,261.76

3,430.94

100,206.47 14,478.21

$ 21,183,382.13 $ 2,896,009.40 $ 130,860,683.67

$ 2,347,353.99 $ 110,705,457.91

$ 17,152,135.08

17,152,135.08

-204.68

146,537.08 -394.68

$

17,151,930.40 $

2,347,353.99 $ 128,003,735.39

$

-1,540,853.80

$

-1,540,853.80

-513,367.77

-513,367.77

-1,014,809.00 $ _.--.:~.-..6.7:.7.,.1.:1.8~:.:0.0...

0.00

$

-3,069,030.57 $

-677,118.00 $ _~=:..-.2:,0.L5:4:,2=2":1'.5:7'~

$

962,421.16 $

-128,462.59 $

802,726.71

7,216,521.14

631,612.02

8,278,577 .31

$

8,178,942.30 $

503,149.43 $ _....,;;;9,081 ,304.02

- 25-

GEORGIA SOUTHERN UNIVERSITY COMBINING STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,
AND OTHER CHANGES UNRESTRICTED
YEAR ENDED JUNE 30, 2001

REVENUES
State Appropriations Tuition and Fees Federal Grants and Contracts State Grants and Contracts Local Grants and Contracts Private Gifts, Grants, and Contracts Sales and Services of Educational Activities Sales and Services of Auxiliary Enterprises Other Sources
Total Revenues
EXPENDITURES
Educational and General Instruction Research Public Service 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
Total Expenditures
OTHER TRANSFERS AND ADDITIONS/(DEDUCTIONS)
Transfers for Renewals and Replacements Transfers for Capital Projects Transfers in Lieu of State Appropriations Prior Period Adjustments (Net) Remittances to the Board of Regents
of the University System of Georgia Prior Year's Unrestricted Fund Balance (Surplus)
Total Other Transfers and Additionsl(Deductions)

Net Increase/(Decrease) in Fund Balances
See notes to the financial statements.

- 26-

RESIDENT INSTRUCTION

LOTIERYFOR EDUCATION

$ 71,794,252.00 $
31,993,623.41 331,487.10 35,422.80 4,801.34 3,875.61
1,758,702.61

668,292.00

127,843.29

$ 106,050,008.16 $_--6:6:8,:29=2=.0~0

$ 56,342,500.22 $
726,212.65 832,317.05
- 11,790,629.26
8,508,749.45 14,184,361.41 12,831,671.68 2,473,370.20

668,292.00

$ 107,689,811.92 $_--6:6:8,:29=2=.00~

$

1,691,927.00

57,898.36 $

5,283.62

-146,414.00

-123.08

$

1,603,411.36 $ _ _--=5..,1..6:.0:.:5:.4:=~

$ _ _..;-3:;;;;:6,392.40 $ _ _...5.;,;1:o.6.:0.:.;5:,4:;:,~

EXHIBIT "G"

AUXILIARY ENTERPRISES

STUDENT ACTIVITIES

TOTAL

$ $ 2,502,383.92

$ 20,766,837.94
368,282.43

390,194.54

72,462,544.00 34,496,007.33
331,487.10 35,422.80 4,801.34 3,875.61
1,758,702.61 20,766,837.94
886,320.26

$ 21,135,120.37 $ 2,892,578.46 $ 130,745,998.99

$ 57,010,792.22

726,212.65

832,317.05

11,790,629.26

$ 2,347,353.99

10,856,103.44



14,184,361.41

12,831,671.68

2,473,370.20

$ 4,377,652.40 3,233,739.02 1,380,656.32 5,499,896.27 2,660,191.07

4,377,652.40 3,233,739.02 1,380,656.32 5,499,896.27 2,660,191.07

$ 17,152,135.08 $ 2,347,353.99 $ 127,857,592.99

$ -1,540,853.80
-513,367.77
-1,014,809.00 $
48,466.44

$
-677,118.00 . 3,430.94

-1,540,853.80 -513,367.77 0.00 115,079.36

-146,537.08
$ -3,020,564.13 $ -673,687.06 $ -2,085,679.29

$

962,421.16 $ _ _-.;.;1.28.,462.59 $ _ _~8:0-2:,.7:2;6~..7:1..

- 27-

GEORGIA SOUTHERN UNIVERSITY SCH~DULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGla
RESIDENT INSTRUCTIQN
yEAR ENDED JUNE 30, 2001

REVENUES
State Appropriations Other Revenues Retained

CURRENT FUNDS

UNRESTRICTED

RESTRICTED

PLANT FUNDS RENEWALS AND
UNEXPENDED REPLACEMENTS

$ 71,794,252.00

$ 2,568,000.00 $

34,255,756.16 $ 60,542,325.53

1,693,989.34

$ 106,050,008.16 $ 60,542,325.53 $ 4,261,989.34 $,

0.00
0=.:0:0...

EXP.ENDITURES
Personal Services: Education, General and Departmental Services Sponsored Operations
Operating Expenses: Education, General and Departmental Services Sponsored Operations
Capital Outlay Special Funding Initiative

$ 83,125,375.74 $ 1,626,743.27

23,108,583.18 1,455,853.00

58,915,582.26 $ 4,775,387.76 $

1,489,702.57

$ 107,689,811.92 $ 60,542,325.53 $ 4,775,387.76 $ _ _..1.,.4:8.9.:,7..0=2~.=5:7...

Excess of Revenues over Expenditures

$

-1,639,803.76 $

0.00 $

-1,489,702.57

(1) To eliminate tuition waivers not budgeted and to reclassify current year transfers and prior year fund balances budgeted as revenues.

See notes to the financial statements.

- 28

SCHEDULE "1"

TOTAL

ADJUSTMENTS _ _-.l.2.(1)....._ _

TOTAL (Budget Basis)

BUDGET

VARIANCE FAVORABLE (UNFAVORABLEL

$ 74,362,252.00

$ 74,362,252.00 $ 74,362,252.00 $

0.00

96,492,071.03 $ _--1,' 06~ 4,2~37~.5~ 4

97,556,308.57

115,832,680.00

-18,276,371.43

$ 170,854,323.03 $

1,064,237.54 $ 171,918.560.57 $ 190,194,932.00 $ -18,276,371.43

$ 83,125.375.74 1,626,743.27
23,108,583.18 $ 58,915.582.26
6,265,090.33 1,455,853.00

$ -2,630,759.80

83,125,375.74 $ 1,626,743.27
20.477,823.38 58.915.582.26
6,265.090.33 1,455,853.00

83,236,087.00 $ 3,041,754.00
22,134,992.00 74,958,246.00
5.368,000.00 1,455,853.00

110,711.26 1.415,010.73
1,657,168.62 16,042,663.74
-897,090.33 0.00

$ 174.497,227.78 $

-2,630,759.80 $ 171,866,467.98 $ 190,194,932.00 $_--=1-8=,=32:8:,:4.6::4..:0=2 -

$ -3,642,904.75 $

3,694,997.34 $

52,092.59

$ _ _.....;5;;:;2,092.59

- 29-

GEORGIA SOUTHERN UNIVERSITY

SCHEDULE "2"

SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET

LOTTERY FOR EDUCATION

YEAR ENDED JUNE 3D, 2001

REVENUES State Appropriations

CURRENT FUNDS UNRESTRICTED

BUDGET

VARIANCE FAVORABLE (UNFAVORABLE)

$

668,292.00 $ 668,292.00 $

-0= .0~ 0

EXPENDITURES
Equipment, Technology and Construction Trust Fund
Special Funding Initiatives

$

503,292.00 $ 503,292.00 $

165,000.00

165,000.00

$

668,292.00 $ 668,292.00 $

0.00 0.00
-.0:.:0.0:~

Excess of Revenues over Expenditures

0.00

0.00



See notes to the financial statements.

- 31

GEORGIA SOUTHERN UNIVERSITY CHANGES IN INVESTMENT IN PLANT
YEAR ENDED JUNE 30. 2001

Land Buildings Improvements Other Than Buildings Equipment Library Books and Collections
SUMMARY OF INVESTMENT University Capital Leases

BALANCE JULY 1, 2000

CURRENT FUNDS UNRESTRICTED RESTRICTED

$

1.862,841.20

164,481,192.02

8,698,570.89
41.199,126.85 $

4,773,821.35 $ 175,077.18

24,952,369.48

1,231 ,444.45

$ 241,194,100.44 $ _~6,005,265.80 $ 175,077.18

$ 241,130,190.69 $
63,909.75

6,005,265.80 $ 175,077.18

$ 241,194,100.44 $ 6,005,265.80 $ 175,077.18

See notes to the financial statements.

- 32-

SCHEDULE "3"

ADDITIONS
PLANT FUNDS RENEWALS AND
UNEXPENDED REPLACEMENTS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

PRIVATE GIFTS

DEDUCTIONS DISPOSALS! DELETIONS! ADJUSTMENTS

BALANCE JUNE 30, 2001

$ 1,862,841.20

$ 3,571,111.88 $

1,049,411.72 $

7,414,388.14

176,516,103.76

689,712.99

97,740.25

9,486,024.13

351,543.18

167,675.67

600,000.00 $ 10,502.00 $ 4,134,704.17

43,143,042.06

26,183,813.93

$ 4,612,368.05 $

1,314,827.64 $ -=-...l;;l8,,;;;.01~4,388.14 $ 10,502.00 $

$ 4,612,368.05 $

1,314,827.64 $

8,014,388.14 $ 10,502.00 $

4,092,310.13 $ 257,170,309.37

42,394.04

21,515.71

$ 4,612,368.05 $ .............1.,314,827.64 $

8,014,388.14 $ 10,502.00 $ 4,134?04.17 $ 257,191,825.08

- 33-

GEORGIA SOUTHERN UNIVERSITY SCHEDULE OF FUND BALANCES
CURRENT FUNDS AND PLANT FUNDS JUNE 30, 2001

NET INVESTMENT IN PLANT Investment in Plant Facilities
RESTRICTED Designated for Subsequent Years' Expenditures
UNRESTRICTED Designated For Intercollegiate Athletics For Inventory Reserve For Renewals and Replacements Reserve For Subsequent Years' Expenditures For Uncollectible Accounts Surplus Regular Lottery for Education

RESIDENT INSTRUCTION

CURRENT FUNDS

UNRESTRICTED

LOTTERY FOR

AUXILIARY

EDUCATION

ENTERPRISES

$ 283,000.00

$

180,472.00

1,613,443.88

35,085.07

6,368.901.27 16,125.15

75.843.60
- - - - - $-_.==~
$ 393,928.67 $

8.178,942.30

5,283.62 $ =".,;;;;,...........=::0...

See notes to the financial statements.

- 34-

SCHEDULE "4"

STUDENT ACTIVITIES

RESTRICTED

UNEXPENDED REGULAR

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

TOTAL

$ 257,170,309.37 $ 257,170,309.37

860,189.46

860,189.46

$

502,462.43

687.00

$ 1,188,483.88

$

180,472.00

1,896,443.88

1,188,483.88

6,871,363.70

51,897.22

$-~50= 3,1= 49.4~3

$

503,149.43 $

$

10.00

$

....:1.:::;0.~00~ $ 1,188,483.88

75,853.60 5,283.62
$ 10,269,797.90


860,189.46 $=....._...:1~0.~00:;:.. $

1,188,483.88 $

257,170,309.37 $

268,300,296.73


- 35-

GEORGIA SOUTHERN UNIVERSITY RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2001

SCHEDULE "5"

Totals per Annual Supplement

Prepaid Items June 30, 2001 June 30, 2000

Accruals June 30, 2001 June 30, 2000

Adjustments

Shared Services on Jointly Staffed Personnel

Armstrong Atlantic State University

Foyle,

Anthony

Augusta State University

Blanton,

Bonnie

Coastal Georgia Community College

Barber,

Henry

Doster,

Janet

Howe,

Stacey

Student Assistants

Toler,

Cynthia

Macon State College

Murphey,

Connie

Medical College of Georgia.

Guidry,

Bret

Middle Georgia College

Collins,

Nicholas

Savannah State University

Davies,

David

SALARIES

TRAVEL

$ 76,116,576.13 $ 1,553,283.24

-1,611,472.09 1,642,396.85

434,983.10 -271,710.53

-2,375.00 2,000.00 29,155.00 9,874.00 12,154.00 9,178.00 14,000.00
-800.00 7,990.00 1,500.00
300.00
$ 76,393,749.46 $ 1,553,283.24

See notes to the financial statements.

- 36-

SECTION II AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

GEORGIA SOUTHERN UNNERSITY 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

539-96-01 FS-539-98-02 FS-539-00-01

Partially Resolved - See Corrective Action/Responses Further Action Not Warranted Partially Resolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

REVENUES/RECEIVABLES/RECEIPTS Student Accounts Receivable Not Supported by Financial Aid Finding Control Number: 539-96-01

Georgia Southern University is following the Board of Regents Policy, Section 704, on collecting fees at student registration and ensuring that allowable exceptions to the Board of Regents' Policy have supporting documentation. Student fee deferments are only granted to students whose fees are guaranteed by an agreement with an outside agency and whose student fees will be paid from approved financial aid.

Procedures to collect outstanding accounts receivable balances have been implemented. Georgia Southern University will continue its collection efforts on the outstanding student
accounts receivable balances. In addition, to assist in the collection of the accounts,
Georgia Southern University has placed a financial record hold on the academic records of students who have outstanding accounts receivable balances.

GENERAL FIXED ASSETS Inadequacies in Operation of Property Management System Finding Control Number: FS-539-00-01

Executive management of the institution has taken the necessary actions to implement Equipment Inventory Policies and Procedures to adequately strengthen internal accounting controls and ensure that assets are safeguarded against loss from unauthorized use or disposition. The campus community has been adequately informed of the necessity to implement these policies and procedures into daily operating procedures. We will implement these policies and procedures to the fullest extent possible. However, we have learned since the implementation ofthe University System ofGeorgia Peoplesoft Financial Asset Management System that the model is lacking in functionality and reporting capability to fully allow effective implementation of procedures to achieve the above stated goals of ensuring adequate internal controls over equipment inventory at this time. We have reported known issues to the University System ofGeorgia implementation office and are awaiting resolution. It is certainly our hopes that all issues will be resolved in

- 1-

GEORGIA SOUTHERN UNIVERSITY 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 ACTIONIRESPONSES GENERAL FIXED ASSETS Inadequacies in Operation of Property Management System Finding Control Number: FS-539-00-01 adequate time to fully implement the institution's Equipment Inventory Policy and Procedures by the close offiscal year 2002. While we believe the outstanding issues will be eventually resolved, we are reluctant to provide full assurance on finding resolution until we have been provided with a fully functional equipment management system. At this point we will implement to the fullest extent available to the institution the operational procedures necessary to support adequate and effective internal controls and continue to seek local solutions to inadequacies in the model system.


-2-


SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS

GEORGIA SOUTHERN UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL FIXED ASSETS Inadequacies in Operation of Property Management System Finding Control Number: FS-5J9-01-01
The accounting procedures ofthe University were insufficient to provide adequate control over the Property Management System. An equipment inventory sample of250 randomly selected items was utilized to test the accuracy and completeness of the University's general fixed assets records. The following deficiencies were noted:
(1) Three items with a total cost of$14,683.00 could not be located. (2) One item with a cost of$7,416.00 was returned to the vendor, but the item had not been
removed from the equipment records. The University did not provide documentation to support the item had been returned. (3) Twelve items with a total cost of$ll 0, 171.30 were surplused, but had not been removed from the equipment records. The University did not provide documentation to support the items had in fact been surplused.
We also noted that the University had 957 items with a total cost of$2,380,993.92 noted as missing on their equipment records. The University made an adjustment in the subsequent period to remove 447 of these items with a total cost of$1,050,805.82. These discrepancies occurred because the University's internal control procedures regarding additions/deletions/transfers and physical equipment inventory counts were not operating properly. The University should establish appropriate procedures to strengthen internal accounting controls and to ensure that assets are safeguarded against loss from unauthorized use or disposition.