Georgia Southern University, Statesboro, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2011

GEORGIA SOUTL-, RN UNIVERSITY
STATESBORO, GEORGTA
REPORT ON AUDIT OF THE FINANCLAL STATEMENTS FOR THE FISCAL YEAR ENDED
JUNE 30,2011

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ofl Georgia Department

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GEORGIA SOUTHERN UNIVERSITY - TABLE OF CONTENTS -

SECTION I

INDEPENDENTAUDITOR'S COMBINED REPORT ON BASIC FINANCIALSTATEMENTS AND SUPPLEMENTARY INFORMATION

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENTS DISCUSSIONAND ANALYSIS

BASIC FINANCIAL STATEMENTS

EXH IBlTS

A STATEMENT OF NET ASSETS

B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS

C STATEMENT OF CASH FLOWS

D NOTES TO THE FINANCIAL STATEMENTS

SUPPLEMENTARY INFORMATION

SCHEDULES

1 BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND

28

2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT

(NON-GAAP BASIS) BUDGET FUND

29

3 STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET

BY PROGRAM AND FUNDING SOURCE

(NON-GAAP BASIS) BUDGET FUND

30

4 STATEMENT OF CHANGES TO FUND BALANCE

BY PROGRAM PAND FUNDING SOURCE

(NON-GAAP BASIS) BUDGET FUND

32

5 RECONCILIATIONOF SALARIESAND TRAVEL

35

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

GEORGIA SOUTHERN UNIVERSITY - TABLE OF CONTENTS -
SECTION Ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
December 9 , 2 0 1 1

Honorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the Board of Regents of the University System of Georgia
and Honorable Brooks A. Keel, President Georgia Southern University
INDEPENDENTAUDITOR'S COMBINED REPORT ON BASIC FINANCIALSTATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying basic financial statements (Exhibits A through D) of Georgia Southern University, a unit of the University System of Georgia, which is an organizational unit of the State of Georgia, as of and for the year ended June 30,2011. These financial statements are the responsibility of the University's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of College/University's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As discussed in Note 1, the financial statements of Georgia Southern University are intended to present the financial position and changes in financial position and cash flows of only that portion of the business-typeactivities of the State of Georgia that is attributable to the transactions of Georgia Southern University. They do not purport to, and do not, present fairly the financial position and changes in financial position and cash flows of the State of Georgia, in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of Georgia Southern University as of June 30, 2011, and its changes in financial position and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Management's Discussion and Analysis is not a part of the basic financial statements but is required supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of this required supplementary information. However, we did not audit this information and express no opinion on it.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements of Georgia Southern University taken as a whole. The accompanying supplementary information (Schedules 1through 5) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
Respectfully submitted,
R U S ~ I IW. Hinton, CPA, CGFM State Auditor

REQUIRED SUPPLEMENTARY INFORMATION

GEORGIA SOUTHERN UNIVERSITY
Management's Discussion and Analysis

Introduction

Georgia Southern University is one of the 35 institutions of higher education of the University System of Georgia. It is the largest and most comprehensive center of higher education in the southern half of Georgia. During the 2010-2011 academic year, Georgia Southern continued to see record increases in student interest, applications, and enrollment. The University celebrated its largest enrollment with a fall 2010 student population of 19,691 students. Georgia Southern's freshman class once again achieved an average SAT score of over 1100 and the University's first year student retention rate has stabilized in a range from 7 9 - 81% since 2007. In addition, the University's graduate population continued to grow reaching a new all-time high enrollment as well.

Faculty

Students (Headcount)

Students (FTE)

Fiscal Year 2011 Fiscal Year 2010 Fiscal Year 2009
Overviewof the FinancialStatementsand FinancialAnalysis
Georgia Southern University is proud to present its financial statements for fiscal year 2011. The emphasis of discussions about these statements will be on current year data. There are three financial statements presented: the Statement of Net Assets; the Statement of Revenues, Expenses and Changes in Net Assets; and the Statement of Cash Flows. This discussion and analysis of the University's financial statements provides an overview of its financial activities for the year. Comparative data is provided for fiscal year 2 0 1 1and fiscal year 2010.
Statement of Net Assets
The Statement of Net Assets presents the assets, liabilities, and net assets of the University as of the end of the fiscal year. The Statement of Net Assets is a point of time financial statement. The purpose of the Statement of Net Assets is to present to the readers of the financial statements a fiscal snapshot of Georgia Southern University. The Statement of Net Assets presents end-of-year data concerning Assets (current and noncurrent), Liabilities (current and noncurrent), and Net Assets (assets minus liabilities). The difference between current and noncurrent assets will be discussed in the Notes to the Financial Statements.
From the data presented, readers of the Statement of Net Assets are able to determine the assets available to continue the operations of the institution. They are also able to determine how much the institution owes vendors.
Finally, the Statement of Net Assets provides a picture of the net assets (assets minus liabilities) and their availability for expenditure by the institution. Net assets are divided into three major categories. The first category, invested in capital assets, net of debt, provides the institution's equity in property, plant and equipment owned by the institution. The next asset category is restricted net assets, which is divided into two categories, nonexpendable and expendable. The corpus of nonexpendable restricted resources is only available for investment purposes. Expendable restricted net assets are available for expenditure by the institution but must be spent for purposes as determined by donors and/or external entities that have placed time or purpose restrictions on the use of the assets. The final category is unrestricted net assets. Unrestricted net assets are available t o the institution for any lawful purpose of the institution.

Statement of Net Assets, Condensed

June 30,2011

June 30,2010

Assets Current Assets Capital Assets, Net Other Assets

Total Assets

Liabilities Current Liabilities Noncurrent Liabilities

Total Liabilities

Net Assets
Invested in Capital Assets, Net of Debt Restricted - Nonexpendable Restricted - Expendable Unrestricted

$ 260,189,190 2,465,814 3,253,853
43,843,061

$ 255,444,309 2,465,814 3,465,787
35,686,887

Total Net Assets

The total assets of the institution increased by $32,326. A review of the Statement of Net Assets will reveal that the increase was primarily due to an increase of $78,087 in the category of Capital Assets, Net. The University restated its Net Capital Assets during the year by $2,357,819 for an error in accumulated depreciation noted during the fiscal year 2010 audit This increase is reflected in the net change.
The total liabilities for the year decreased by $12,656,795. The combination of the increase in total assets of $32,326 and the decrease in total liabilities of $12,656,795 yields an increase in total net assets of $12,689,121. The increase in total net assets is primarily in the category of Unrestricted Net Assets, in the amount of $8,156,174.
Statementof Revenues, Expensesand Changesin NetAssets
Changes in total net assets as presented on the Statement of Net Assets are based on the activity presented in the Statement of Revenues, Expenses and Changes in Net Assets. The purpose of the statement is to present the revenues received by the institution, both operating and nonoperating, and the expenses paid by the institution, operating and nonoperating, and any other revenues, expenses, gains and losses received or spent by the institution. Generally speaking operating revenues are received for providing goods and services to the various customers and constituencies of the institution. Operating expenses are those expenses paid to acquire or produce the goods and services provided in return for the operating revenues, and to carry out the mission of the institution. Nonoperating revenues are revenues received for which goods and services are not provided. For example state appropriations are nonoperating because they are provided by the Legislature to the institution without the Legislature directly receiving commensurate goods and services for those revenues.

Statement of Revenues, Expenses and Changes in Net Assets, Condensed

June 30,2011

June 30,2010

Operating Revenues Operating Expenses

Operating Loss

$ -97,846,491

$ -97,427,200

Nonoperating Revenues and Expenses

104,865,251

106,578,256

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

$

7,018,760

$ 9,151,056

Other Revenues, Expenses, Gains or Losses

3,312,542

4,032,953

Increase (Decrease) in Net Assets

$ 10,331,302

$ 13,184,009

Net Assets at Beginningof Year, as Originally Reported

$ 297,062,797

$ 283,878,788

Prior Year Adjustments

Net Assets at Beginningof Year, Restated $ 299,420,616

$ 283,878,788

Net Assets at End of Year

The Statement of Revenues. Expenses and Changes in Net Assets reflects a positive year with an increase in the net assets at the end of the year. Some highlights of the information presented on
the Statement of Revenues, Expenses and Changes in Net Assets are as follows:

Revenue by Source For the Years Ended June 3 0 , 2 0 1 1 and June 30,2010

June 30,2011

Operating Revenue

Tuition and Fees

$

Grants and Contracts

Sales and Services of Educational Departments

Auxiliary

Other

97,033,479 7,506,675 3,248,585
68,072,654 1.919.138

Total Operating Revenue

$ 177,780,531

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

$ 76,625,510
34,128,251 2,420,415 696,516 -42,475

Total Nonoperating Revenue

$ 113,828,217

Capital Grants and Gifts State Other

Total Capital Grants and Gifts

$

3,312,542

Total Revenues

$ 294,921,290

Expenses (By Functional Classification) For the Years Ended June 3 0 , 2 0 1 1 and June 30, 2010

June 30.2011

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

Total Operating Expenses

Nonoperating Expenses Interest Expense (Capital Assets)

Total Expenses

June 30,2010 June 30.2010

Operating revenues increased by $26,394,392 in fiscal year 2 0 1 1 primarily due to an increase in Tuition and Fee Revenues of $22,008,764. Although Tuition and Fee revenue included an 8% increase, Grants and Contracts revenues decreased $328,313.
The Auxiliary revenue increase of $4,275,685 was primarily generated from housing and food service operations.
Nonoperating revenues decreased by $1,650,925 for the year primarily due to a decrease of $14,229,698 in Federal Stimulus funding.
The compensation and employee benefits category increased by $15,903,661 and primarily affected Instruction and Auxiliary Service categories. Increases primarily resulted from increases in health care premiums and a change in accounting procedures which split summer term faculty compensation between two fiscal years rather than recording as prepaid expense. Additionally, Auxiliary Services implemented an initiative to convert a number of casual labor employees to regular staff positions.
Utilities increased by $1,209,240 during the past year. The increase was primarily associated with the increased utility rates that were experienced in the winter of fiscal year 2 0 1 1 and affected the Plant Operations and Maintenance category.
Statement of Cash Flows
The final statement presented by the Georgia Southern University is the Statement of Cash Flows. The Statement of Cash Flows presents detailed information about the cash activity of the institution during the year. The statement is divided into five parts. The first part deals with operating cash flows and shows the net cash used by the operating activities of the institution. The second section reflects cash flows from noncapital financing activities. This section reflects the cash received and spent for nonoperating, noninvesting, and noncapital financing purposes. The third section deals with cash flows from capital and related financing activities. This section deals with the cash used for the acquisition and construction of capital and related items. The fourth section reflects the cash flows from investing activities and shows the purchases, proceeds, and interest received from investing activities. The fifth section reconciles the net cash used to the operating income or loss reflected on the Statement of Revenues, Expenses and Changes in Net Assets.
Cash Flows for the Years Ended June 30,2011 and 2010, Condensed

June 3 0 , 2 0 1 1

June 30,2010

Cash Provided (Used) By: OperatingActivities Noncapital FinancingActivities Capital and Related FinancingActivities Investing Activities

$ -93,502,485 113,315,962 -27,512,792 675,223

$ -76,592,098 109,146,995 -20,477,512 523,178

Net Change in Cash Cash, Beginningof Year

Cash, End of Year

Capital Assets
In the spring of 2011, the University acquired a golf course facility which has been renamed University Park. Acquisition cost of the facility was $776,013. Renovations to make the facility usable for student services continue into fiscal year 2012. The facility was purchased to provide additional recreational and intramural athletic facilities for students.
Georgia Southern Universityalso completed major renovations to the Hendricks Hall Building in fiscal year 2011. Of the total construction costs of over $7 million, $4 million was funded by the Georgia State Financing and Investment Commission (GSFIC). Other renovations funded by the GSFIC included $2.4 million for buildings. Projected funding by GSFIC for fiscal year 2012 will be approximately half of the fiscal year 2 0 1 1 level.
For additional information concerning Capital Assets, see Notes 1,6, 8, and 1 0 in the Notes to the Financial Statements.
Long-Tern Liabilities
Georgia Southern University had Long-Term Liabilities of $181,290,787 of which $8,858,368 was reflected as current liability at June 30, 2011.
For additional information concerning Long-Term Liabilities, see Notes 1and 8 in the Notes to the Financial Statements.
Economic Outfmk
The University is not aware of any currently known facts, decisions, or conditions that are expected to have a significant effect on the financial position or results of operations during this fiscal year beyond those unknown variations having a global effect on virtually all types of business operations. The University's overall financial position is strong. Even with a relatively flat funded year, the University was able to generate a modest increase in Net Assets. The University anticipates the current fiscal year will be much like last and will maintain a close watch over resources t o maintain the University'sability to react to unknown internal and external issues.
Dr. Brooks A. Keel, President Georgia Southern University

BASIC FINANCIAL STATEMENTS

GEORGIA SOUTHERN UNIVERSITY STATEMENT OF NET ASSETS JUNE 30,2011
Current Assets Cash and Cash Equivalents Short-Term Investments Accounts Receivable, Net (Note 3) Receivables - Federal Financial Assistance Receivables -Other Due from Affiliated Organizations Inventories (Note 4) Prepaid Items
Total Current Assets
Noncurrent Assets Noncurrent Cash investments (Externally Restricted) Investments Notes Receivable Capital Assets. Net (Note 6)
Total Noncurrent Assets
Total Assets
LIABILITIES
Current Liabilities Accounts Payable Salaries Payable Contracts Payable Deposits Deferred Revenue (Note 7 ) Other Liabilities Deposits Held for Other Organizations Lease Purchase Obligations Compensated Absences Due to Affiliated Organizations Notes and Loans Payable
Total Current Liabilities
Noncurrent Liabilities Lease Purchase Obligations Compensated Absences Notes and Loans Payable
Total Noncurrent Liabilities
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Restricted for:
Nonexpendable Expendable Unrestricted
Total Net Assets
The notes to the financial statements are an integral part of this statement.
-2.

EXHIBIT 'A"

GEORGIA SOUTHERN UNIVERSITY STATEMENT OF REVENUES, EXPENSESAND CHANGES IN NET ASSETS
YEAR ENDED JUNE 30.2011
Student Tuition and Fees Less: Scholarship Allowances
Grants and Contracts Federal State Other
Sales and Services Rents and Royalties Auxiliaty Enterprises
Residence Halls Bookstore Food Servtces Parking/lransportation Health Services Intercolle@ateAthletics Other Operating Revenues
Total Operating Revenues
OPERATING FXPENSFS
Salaries Faculty Staff
Employee Benefits Other PersonalServices Travel Scholarshipsand Fellowships Utilities Suppliesand Other Sewlces Deoreciation
Total Operat~ngExpenses
Operating lncome (Loss)
State Appropriations Grants and Contracts
Federal State Gifts Investment lncome Interest Expense Other Nonoperating Revenues
Net Nonoperating Revenues
lncome (Loss)Before Other Revenues. Expenses, Gains, or Losses
Capital Grants and Gifts State Other
Total Other Revenuer, Expenses. Gains or Losses
Increase(Decrease)in Net Assets
Net Assets - Beginntngof Year. Restated
Net Assets - End of Year
The notes to the financial statements are an Integral part of this statement.

GEORGIA SOUTHERN UNIVERSITY STATEMENT OF CASH FLOWS YEAR ENDED JUNE 3 0 , 2 0 1 1
CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Grants and Contracts Sales and Services Payments to Suppliers Payments to Employees Payments for Scholarships and Fellowships Loans Issued to Students and Employees Collection of Loans to Students and Employees Auxiliary Enterprise Charges: Residence Halls Bookstore Food Services ParkingITransportation Health Services Intercollegiate Athletics Other Organizations Other Receipts (Payments)
Net Cash Provided (Used) by Operating Activities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations Agency Funds Transactions Gifts and Grants Receivedfor Other than Capital Purposes Other Nonoperating Receipts
Net Cash Flows Provided (Used) by Noncapital FinancingActivities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Grants and Gifts Received Proceedsfrom Sale of Capital Assets Purchases of Capital Assets Principal Paid on Capital Debt and Leases Interest Paid on C a ~ i t aDl ebt and Leases
Net Cash Provided (Used) by Capital and Related FinancingActivities
CASH FLOWS FROM INVESTING ACTlVlTlES Proceedsfrom Sales and Maturities of lnvestments Interest on Investments
Net Cash Provided (Used) by InvestingActivities
Net Increase (Decrease) In Cash
Cash and Cash Equlvalents - Beginnlng of Year
Cash and Cash Equlvalents -End of Year

EXHIBIT "C"

GEORGIA SOUTHERN UNIVERSITY STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30.2011
RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating Income (Loss) Adjustments to Reconcile Operat~ngIncome (Loss) to Net Cash
Provided (Used) by Operating Activities Depreciation Change in Assets and Liabilities: Accounts Receivable, Net Inventories Prepaid Items Notes Receivable, Net Accounts Payable Deferred Revenue Other Liabilities Compensated Absences
Net Cash Provided (Used) by Operating Activities
NONCASH ACTIVITY Fixed Assets Acquired by IncurringCapital Lease Obligations Change in Fair Value of Investments Recognizedas a Component of Interest Income Gift of Capital Assets Reducing Proceeds of Cap~taGl rants and Gifts
The notes to the financial statements are an integral part of this statement - 5

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

EXHIBlT "D"

Note 1.Summary of SignificantAccounting Policies
Nature of Operations Georgia Southern University serves the region, state, and national communities by providing its students with academic instruction that advances fundamental knowledge, and by disseminating knowledge to the people of Georgia and throughout the country.
Reporting Entity Georgia Southern University is one of thirty-five (35) State supported member institutions of higher education in Georgia which comprise the University System of Georgia, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations of Georgia Southern University as a separate reporting entity.
The Board of Regents has constitutional authority to govern, control and manage the University System of Georgia. This authority includes but is not limited to the power to designate management, the ability to significantly influence operations, the authority to control institutions' budgets, the power to determine allotments of State funds to member institutions and the authority to prescribe accounting systems and administrative policies for member institutions. Georgia Southern University does not have authority to retain unexpendedState 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 (GASB) Codification of Governmental Accounting; and Financial Re~ortinEStandards.
Legally separate, tax exempt organizations whose activities primarily support units of the University System of Georgia, which are organizational units of the State of Georgia, are considered potential component units of the State. See Note 1 7 for additional information.
Financial Statement Presentation The financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) as prescribed by the GASB and are presented as required by these standards to provide a comprehensive, entity-wide perspective of the University's assets, liabilities, net assets, revenues, expenses, changes in net assets and cash flows.
Generally Accepted Accounting Principles (GAAP) requires that the reporting of summer school revenues and expenses be between fiscal years rather than in one fiscal year. During fiscal year 2011, the University changed accounting procedures for recording summer academic term revenue and related expenses. Beginning in 2 0 1 1 and future years, summer tuition and fee revenue is prorated between the two fiscal years based on prorated number of days in the academic term related to the applicable fiscal year. Summer term faculty compensation is recorded in the fiscal year instruction occurred and salaries were paid. For fiscal year 2011, 62% of summer revenue is recognized in the current year, with the remainder deferred into fiscal year 2012.
Basis of Accounting For financial reporting purposes, the University is considered a special-purpose government engaged only in business-type activities. Accordingly, the University's financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting, except as noted in the preceding paragraph. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. All significant intraUniversity transactions have been eliminated.

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

EXHIBIT "D"

The University has the option to apply all Financial Accounting Standards Board (FASB) pronouncements issued after November 30, 1989, unless FASB conflicts with GASB. The University has elected to not apply FASB pronouncements issued after the applicable date.
Cash and Cash Equivalents Cash and Cash Equivalents consist of petty cash, demand deposits and time deposits in authorized financial institutions.
Short-Term Investments Short-Term lnvestments consist of investments of 9 0 days - 13 months. This would include certificates of deposits or other time restricted investments with original maturities of six months or more when purchased. Funds are not readily available and there is a penalty for early withdrawal.
Investments lnvestments include financial instruments with terms in excess of 1 3 months, certain other securities for the production of revenue, land, and other real estate held as investments by endowments. The University accounts for its investments at fair value. Changes in unrealized gain (loss) on the carrying value of investments are reported as a component of investment income in the Statement of Revenues, Expenses and Changes in Net Assets. The Board of Regents Diversified Fund is included under Investments.
Accounts Receivable Accounts receivable consists of tuition and fees charged to students and auxiliary enterprise services provided to students, faculty and staff, the majority of each residing in the State of Georgia. Accounts receivable also includes amounts due from the Federal government, state and local governments, or private sources, in connection with reimbursement of allowable expenditures made pursuant to the University's grants and contracts. Accounts receivable are recorded net of estimated uncollectible amounts.
Inventories Consumable supplies are carried at the lower of cost or market on the first-in, first-out ("FIFOu)basis. Resale lnventories for Food Services are valued at cost using the average-cost basis. Resale lnventories for Bookstore and other services are valued at cost using the first-in, first-out ("FIFO") basis.
Noncurrent Cash and Investments Cash and investments that are externally restricted and cannot be used to pay current liabilities are classified as noncurrent assets in the Statement of Net Assets.
Prepaid Items Payments made to vendors and local government organizations for services that will benefit periods beyond June 30,2011, are recorded as prepaid items.
Capital Assets
Capital assets are recorded at cost at the date of acquisition, or fair market value at the date of donation in the case of gifts. For equipment, the University's capitalization policy includes all items with a unit cost of $5,000 or more, and an estimated useful life of greater than one year. Renovations to buildings, infrastructure, and land improvements that exceed $100,000 and/or significantly increase the value or extend the useful life of the structure are capitalized. Routine repairs and maintenance are charged to operating expense in the year in which the expense was

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

EXHIBIT "D"

incurred. Depreciation, which also includes amortization of intangible assets such as water, timber, and mineral rights, easements, patents, trademarks, and copyrights, as well as software is computed using the straight-line method over the estimated useful lives of the assets, generally 4 0 to 6 0 years for buildings, 2 0 to 25 years for infrastructure and land improvements, 1 0 years for library books, and 3 to 20 years for equipment. Residual values will generally be 10% of historical costs for infrastructure, buildings and building improvements, and facilities and other improvements.
To obtain the total picture of plant additions in the University System, it is necessary to look at the activities of the Georgia State Financing and Investment Commission (GSFIC) - an organization that is external to the System. GSFIC issues bonds for and on behalf of the State of Georgia, pursuant to powers granted to it in the Constitution of the State of Georgia and the Act creating the GSFIC. The bonds so issued constitute direct and general obligations of the State of Georgia, to the payment of which the full faith, credit and taxing power of the State are pledged.
For projects managed by GSFIC, the GSFIC retains construction in progress on its books throughout the construction period and transfers the entire project to the University when complete. For projects managed by the University, the University retains construction in progress on its books and is reimbursed by GSFIC. For the year ended June 30, 2011, GSFIC transferred capital additions valued at $7,709,713 to Georgia Southern University.
Deposits Deposits represent prepayments held as deposits from students to reserve housing assignments in a University residence hall.
Deferred Revenues Deferred revenues include amounts received for tuition and fees and certain auxiliary activities prior to the end of the fiscal year but related to the subsequent accounting period. Deferred revenues also include amounts received from grant and contract sponsors that have not yet been earned.
Compensated Absences Employee vacation pay is accrued at year-end for financial statement purposes. The liability and expense incurred are recorded at year-end as compensated absences in the Statement of Net Assets, and as a component of compensation and benefit expense in the Statement of Revenues, Expenses and Changes in Net Assets. Georgia Southern University had accrued liability for compensated absences in the amount of $5,168,981 as of July 1,2010. For fiscal year 2011, $3,809,333 was earned in compensated absences and employees were paid $3,705,800, for a net increase of $103,533. The ending balance as of June 30, 2 0 1 1 in accrued liability for compensated absences was $5,272,514.
Noncurrent Liabilities Noncurrent liabilities include (1) liabilities that will not be paid within the next fiscal year; (2) capital lease obligations with contractual maturities greater than one year; and (3) other liabilities that, although payable within one year, are to be paid from funds that are classified as noncurrent assets.
Net Assets
The University's net assets are classified as follows:
Invested in wpiital ass&, net of related debt: This represents the University's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a

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

component of invested in capital assets, net of related debt. The term "debt obligations" as used in this definition does not include debt of the GSFlC as discussed previously in Note 1- Capital Assets section.

Restricted net assets - nonexpendable: Nonexpendable restricted net assets consist of endowment and similar type funds in which donors or other outside sources have stipulated, as a condition of the gift instrument, that the principal is to be maintained inviolate and in perpetuity, and invested for the purpose of producing present and future income, which may either be expended or added to principal. The University may accumulate as much of the annual net income of an institutional fund as is prudent under the standard established by Code Section 44-15-7 of Annotated Code of Georgia.

Restricted net assets - expendable: Restricted expendable net assets include resources in which the University is legally or contractually obligated to spend resources in accordance with restrictions imposed by external third parties.

Expendable Restricted Net Assets include the following:

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

347,364 2,853,450
53,039

Total Restricted Expendable

Unreskktednetassets: Unrestricted net assets represent resources derived from student tuition and fees, state appropriations, and sales and services of educational departments and auxiliary enterprises. These resources are used for transactions relating to the educational and general operations of the University, and may be used at the discretion of the governing board to meet current expenses for those purposes, except for unexpended state appropriations (surplus) of $61,126.77. Unexpended state appropriations must be refunded to the Board of Regents of the University System of Georgia, University System Office for remittance to the Office of the State Treasurer. These resources also include auxiliary enterprises, which are substantially self-supporting activities that provide services for students, faculty and staff.
Unrestricted Net Assets includes the following items which are quasi-restricted by management.
R & R Reserve Reserve for Encumbrances Reserve for Inventory Other Unrestricted
Total Unrestricted Net Assets
When an expense is incurred that can be paid using either restricted or unrestricted resources, the University's policy is to first apply the expense towards unrestricted resources, and then towards restricted resources.
Income Taxes Georgia Southern University, as a political subdivision of the State of Georgia, is excluded from Federal income taxes under Section 115(1) of the Internal Revenue Code, as amended.

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

EXHIBrr "D"

Classification of Revenues and Expenses The Statement of Revenues, Expenses and Changes in Net Assets classify fiscal year activity as operating and nonoperating according to the following criteria:

Operating Revenues: Operating revenue includes activities that have the characteristics of exchange transactions, such as (1) student tuition and fees, net of scholarship allowances, (2) certain Federal, state and local grants and contracts, and (3) sales and services.

Nonoperating Revenues: Nonoperating revenue includes activities that have the characteristics of nonexchange transactions, such as gifts and contributions, and other revenue sources that are defined as nonoperating revenue by GASB No. 9, Reporting a s h Flows of Proprietary and Nonexpendable Trust Funds and GovernmentalEntities That Use Proprietary Fund Accounting, and GASB No. 34, such as state appropriations and investment income.

Operating Expenses: Operating expense includes activities that have the characteristics of exchange transactions.

Nonoperating Expenses: Nonoperating expense includes activities that have the characteristics of nonexchangetransactions, such as capital financing costs and costs related to investment activity.

Restatement of Prior Year Net Assets
Prior year net assets are restated to increase beginning net assets by $2,357,819. Restatement
was required to remove invalid accumulated depreciation balance as noted in 2010 audit engagement due to system error in asset management module.

Scholarship Allowances Student tuition and fee revenues, and certain other revenues from students, are reported at gross with a contra revenue account of scholarship allowances in the Statement of Revenues, Expenses and Changes in Net Assets. Scholarship allowances are the difference between the stated charge for goods and services provided by the University, and the amount that is paid by students and/or third parties making payments on the students' behalf. Certain governmental grants, such as Pell grants, and other Federal, state or nongovernonnmental programs are recorded as either operating or nonoperating revenues in the University's financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the University has recorded contra revenue for scholarship allowances. Auxiliary Intercollegiate Athletics revenue of $8,512,027 is reported net of discounts and allowances of $1,594,587.

Note 2. Deposits and Investments

Deposits The custodial credit risk for deposits is the risk that in the event of a bank failure, the University's deposits may not be recovered. Funds belonging to the State of Georgia (and thus the University) cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral any one or more of the following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:

1. Bonds, bills, notes, certificates of indebtedness, or other direct obligations of the United States or of the State of Georgia.

2.

Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or

municipalities of the State of Georgia.

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

EXHIBll "D"

3.

Bonds of any public authority created by the laws of the State of Georgia, providing that the

statute that created the authority authorized the use of the bonds for this purpose.

4.

Industrial revenue bonds and bonds of development authorities created by the laws of the

State of Georgia.

5.

Bonds, bills, certificates of indebtedness, notes or other obligations of a subsidiary

corporation of the United States government, which are fully guaranteed by the United States

government both as to principal and interest and debt obligations issued by the Federal Land

Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank

for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association and

the Federal National MortgageAssociation.

6. Guarantee or insurance of accounts provided by the Federal Deposit lnsurance Corporation.

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

At June 30, 2011, the carrying value of deposits was $34,718,835 and the bank balance was $37,367,819. Of the University's deposits, $36,617,819 was uninsured. Of these uninsured deposits, $36,617,819 was collateralized with securities held by the financial institution, by its trust department or agency, but not in the University's name.
Investments Georgia Southern University maintains an investment policy which fosters sound and prudent judgment in the management of assets to ensure safety of capital consistent with the fiduciary responsibility each institution has to the citizens of Georgia and which conforms to Board of Regents investment policy. All investments are consistent with donor intent, Board of Regents policy, and applicable Federal and state laws.

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

Other lnvestments Life lnsurance Value Cash Surrender Value

lnvestment Pools Board of Regents Diversified Fund

Total Investments

$

2,408,904

The Board of Regents Investment Pool is not registered with the Securities and Exchange Commission as an investment company. The fair value of investments is determined daily. The pool does not issue shares. Each participant is allocated a pro rata share of each investment at fair value along with a pro rata share of the interest that it earns. Participation in the Board of Regents lnvestment Pool is voluntary. The Board of Regents lnvestment Pool is not rated. Additional information on the Board of Regents lnvestment Pool is disclosed in the audited Financial Statements of the Board of Regents of the University System of Georgia - System Office (oversight unit). This audit can be obtained from the Georgia Department of Audits - Education Audit Division or on their web site at http:L/www.audits.~a.~ov.

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

EXHIBIT "D"

lnterest Rate Risk lnterest rate risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of an investment. The University does not have a formal policy for managing interest rate risk.

The Effective Duration of the Diversified Fund is 4.31 years. Of the University's total investment of $2,399,017 in the Diversified Fund, $769,728 is invested in debt securities.

Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event of a failure of the counterparty to a transaction, the University will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The University does not have a formal policy for managing custodial credit risk for investments.

Note 3. Accounts Receivable

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

Student Tuition and Fees

$

Auxiliary Enterprises and Other Operating Activities

Federal Financial Assistance

Georgia State Financing and Investment Commission

Due from Affiliated Organizations

Other

214,659 6,467,477 15,632,221
318,632 1,607,039 3,926,211

Less Allowance for Doubtful Accounts

Net Accounts Receivable

Note 4. Invenivrk

lnventories consisted of the following at June 30, 2011:

Bookstore Food Services Other

Total Inventories

$

2,273,439

Note 5. Notes/Loans Receivable

The Federal Perkins Loan Program (the Program) comprises substantially all of the loans receivable at June 30, 2011. The Program provides for cancellation of a loan at rates of 10% to 30% per year up to a maximum of 100% if the participant complies with certain provisions. The Federal government reimburses the University for amounts cancelled under these provisions. As the University determines that loans are uncollectible and not eligible for reimbursement by the Federal government, the loans are written off and assigned to the U. S. Department of Education.

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

EXHIBIT "D"

Note 6. Capi&lAssets Following are the changes in capital assets for the year ended June 30,2011:

Beginning Balance July 1.2010 (Restated)

Additions

Reductions

Ending Balance June 30.2011

Capital Assets. Not Being Depreciated: Land Capitalized Collections Construction Work-In-Progress

Total Capital Assets. Not Being Depreciated $

19,238.171 $

9,742,092$

8,910,252 $

20.070.011

Capital Assets. Being Depreciated: Infrastructure Building and Building Improvements Facilitiesand Other Improvements Equipment Capital Leases Library Collections

$

17,425,337 $

320.346.209

6,203,958

23,004,483

192,363,547

39,863,791

333.274 9,577,477
789,796 3.218.163 $
127,019 1,953,941

$
1,682,796 53,119 26,033

17,758,611 329,923,686
6,993,754 24,539,850 192,437,447 41.791.699

Total Assets Being Depreciated

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

$

11,954,294 $

92,819,936

950.052

17,599,325

23,765,512

32,869,182

389,100 7,042,577
222,595 2,122,883 $ 7,788,041 1,481.782

$
1,635,134 36.517 26,033

12,343.394 99.862.513
1.172.647 18.087.074 31,517,036 34,324,931

Total Accumulated Depreciation

Total Capital Assets, Being Depreciated, Net

$

419,249,024 $

-3,047.308$

64.264 $

416,137.452

Capital Assets, Net

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

EXHIBrr "D"

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

Prepaid Tuition and Fees Other Deferred Revenue

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

Beginning Balance July 1.2010

Additions

Reductions

Ending Balance June 30,2011

Current Portion

Leases Lease Obligations

$ 178,651,766 $

127,019 $ 4,699,039 $ 174,079,746 $ 5,013,399

Other Liabilities Compensated Absences $ Notes and Loans Payable

5,168,981 $ 2,033,301

3,809,333 $

3,705,800 $ 94,774

5,272,514 $ 1.938.527

3.744.911 100.058

Total

Total Long-Term Obligations $ 185,854,048 $ 3,936,352 $ 8,499,613 $ 181,290,787 $ 8,858,368

Notes And Loans Payable

Included in total Long-Term liabilities is a $3,000,000 note payable that was originally payable to

Georgia Education Authority (University), (GEA(U)). In July 2007, GEA(U) met and resolved to no

longer conduct business as a state authority and dispose of all its assets and liabilities. As a result of

that decision, a Note Receivablethat was payable from Georgia Southern University was transferred

by Resolution from GEA(U) to the University System Office (USO) of the University System of Georgia.

Georgia Southern University continues to render payments according to the original amortization

schedule to the USO. The note carries an interest rate of 5.50% and is due semi-annually through the

year 2025. The outstanding balance at June 30, 2 0 1 1 is $1,938,527. Annual maturities are as

follows:

Total Principal

Interest

Total Payments

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

EXHIBrT "D"

Note 9. Significant Commitments

The University had significant unearned, outstanding, construction or renovation contracts executed in the amount of $9,646,116 as of June 30, 2 0 1 1 for renovations to the Williams Center and Brannen Hall and construction of the new Physical Plant complex and the Biological Science building. This amount is not reflected in the accompanyingbasic financial statements.
Note 10. Lease Ob/igations
Georgia Southern University is obligated under various operating leases for the use of real property (land, buildings, and office facilities) and equipment, and also is obligated under capital leases and installment purchase agreements for the acquisition of real property.
CAPITAL LEASES Capital leases are generally payable in installments ranging from monthly to annually and have terms expiring in various years between 2012 and 2039. Expenditures for fiscal year 2 0 1 1 were $13,551,459 of which $8,852,420 represented interest. Total principal paid on capital leases was $4,699,039 for the fiscal year ended June 30, 2011. Interest rates range from 3.77 percent to 28.36 percent. The following is a summary of the carrying values of assets held under capital lease at June 30,2011:

Land Infrastructure Equipment Buildings

Total Assets Held Under Capital Lease

$

160,920.411

Certain capital leases provide for renewal and/or purchase options. Generally purchase options at bargain prices of one dollar are exercisable at the expiration of the lease terms.
Georgia Southern University had a capital lease with related entities in the current fiscal year. In October 2002, Georgia Southern University entered into a capital lease of $42,668,051 at 4.89 percent with the Georgia Southern University Housing Foundation, Inc., an affiliated organization whereby the University leases Buildings (Southern Courtyard and Southern Pines) for a twenty-eight year period that began September 2003 and expires October 2031. The outstanding liability at June 30, 2011, for this capital leases was $35,259,206.
Georgia Southern University had a capital lease with related entities in the current fiscal year. In July 2005, Georgia Southern University entered into a capital lease of $2,230,350 at 4.94 percent with the Georgia Southern University Housing Foundation, Inc., an affiliated organization whereby the University leases a Facility (Clements Baseball Stadium) for a twenty-four year period that began August 2005 and expires July 2029. The outstanding liability at June 30, 2011, for this capital lease was $1,897,616.
Georgia Southern University had a capital lease with related entities in the current fiscal year. In July 2005, Georgia Southern Universityentered into a capital lease of $694,056 at 4.94 percent with the Georgia Southern University Housing Foundation, Inc., an affiliated organization whereby the University leases a facility (Athletic Training Center) for a twenty-four year period that began August 2005 and expires July 2029. The outstanding liability at June 30, 2011, for this capital lease was $590,387.

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

EXHIBIT "D"

Georgia Southern University had a capital lease with related entities in the current fiscal year. In July 2005, Georgia Southern University entered into a capital lease of $1,677,441 at 4.94 percent with the Georgia Southern University Housing Foundation, Inc., an affiliated organization whereby the University leases a facility (Soccer Stadium) for a twenty-four year period that began August 2005 and expires July 2029. The outstanding liability at June 30, 2 0 1 1 for this capital lease was $1,426,225.
Georgia Southern University had a capital lease with related entities in the current fiscal year. In July 2005, Georgia Southern University entered into a capital lease of $30,179,998 at 4.94 percent with the Georgia Southern University Housing Foundation, Inc., an affiliated organization whereby the University leases Buildings (Eagle Village) for a twenty-five year period that began August 2005 and expires July 2030. The outstanding liability at June 30, 2011, for this capital lease was $25,777,563.
Georgia Southern University had a capital lease with related entities in the current fiscal year. In August 2006, Georgia Southern University entered into a capital lease of $40,264,057 at 4.73 percent with the Georgia Southern University Housing Foundation, Inc., an affiliated organization whereby the University leases Buildings (Recreational Activities Complex-RAC) for a twenty-five year period that began August 2006 and expires July 2031. The outstanding liability at June 30, 2011, for this capital lease was $37,366,381.
Georgia Southern University had a capital lease with related entities in the current fiscal year. In July 2008, Georgia Southern University entered into a capital lease of $13,360,301 at 5.256 percent with the Georgia Southern University Housing Foundation, Inc., an affiliated organization whereby the University leases Buildings and Land (University Villas) for a thirty year period that began August 2008 and expires June 2038. The outstanding liability at June 30, 2011, for this capital lease was $13,713,387.
Georgia Southern University had a capital lease with related entities in the current fiscal year. In July 2009, Georgia Southern University entered into a capital lease of $56,096,073 at 5.256 percent with the Georgia Southern University Housing Foundation, Inc., an affiliated organization whereby the University leases Buildings and Land (Centennial Place) for a thirty year period that began August 2009 and expires June 2039. The outstanding liability at June 30, 2011, for this capital lease was $56,130,179.
Georgia Southern University had a capital lease with SunTrust Bank in the current fiscal year. In August 2008, Georgia Southern University entered into a capital equipment lease of $3,409,806 at 3.77 percent with SunTrust Bank, to purchase its voice over internet protocol (VOIP) campus fiber and telephone system for a 5 year period that began August 2008 and expires July 2013. The outstanding liability at June 30, 2011, for this capital lease was $1,538,313.
Georgia Southern University also has various capital leases for equipment with an outstanding balance at June 30, 2011, in the amount of $380,489.
OPERATING LEASES Georgia Southern University's noncancellable operating leases having remaining terms of more than one year expire in fiscal year 2012. Certain operating leases provide for renewal options for periods from one to five years at their fair rental value at the time of renewal. All agreements are cancellable if the State of Georgia does not provide adequate funding, but that is considered a remote possibility. In the normal course of business, operating leases are generally renewed or replaced by other leases. Operating leases are generally payable on a monthly basis. Examples of property under operating leases are office space, copiers and other small business equipment.

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

EXHIBll "D"

In 2010, Georgia Southern University entered into a real property operating lease with an unrelated party for Atlanta office space for monthly rental payments. The agreement contains a renewal option on a year-to-year basis. Under this agreement, the University paid $8,679 in the current year. This rental agreement was terminated as of September 30, 2010.
In 2010, Georgia Southern University entered into a real property operating lease with an unrelated party for office space at Georgia Avenue Building #810 for monthly rental payments of $1,000. The agreement contains a renewal option on a year-to-year basis. Under this agreement, the University paid $12,000 in the current year.
In 2010, Georgia Southern University entered into a real property operating lease with an unrelated party for office space in Building #7 at the Skidaway Institute of Oceanography for monthly rental payments of $875. The agreement contains a renewal option on a year-to-year basis. Under this agreement, the University paid $10,500 in the current year.
In 2010, Georgia Southern University entered into a real property operating lease with an unrelated party for office space at College Plaza Unit #4 for monthly rental payments of $9,232. The agreement contains a renewal option on a year-to-year basis. Under this agreement, the University paid $110,784 in the current year.
In 2010, Georgia Southern University entered into a real property operating lease with an unrelated party for storage space at the Costume Shop for monthly rental payments of $3,500. The agreement contains a renewal option on a year-to-year basis. Under this agreement, the University paid $42,000 in the current year.
In 2010, Georgia Southern University entered into a real property operating lease with an unrelated party for office space in the Market District Center located for monthly rental payments of $1,323. The agreement contains a renewal option on a year-to-year basis. Under this agreement, the University paid $15,876 in the current year.
In 2011, Georgia Southern University entered into a real property operating lease with an unrelated party for office space for the City Campus, located at 5 8 East Main Street, Suite D, for monthly rental payments of $3,000. The agreement contains a renewal option on a year-to-year basis. Under this agreement, the University paid $15,000 in the current year.
FUTURE COMMITMENTS Future commitments for capital leases (which here and on the Statement of Net Assets include other installment purchase agreements) and for noncancellable operating leases having remaining terms in excess of one year as of June 30,2011, were as follows:

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

EXHIBIT "D"

Real Property and Equipment

Capital

Operating

Leases

Leases

Year Ending June 30: 2012 2013 2014 2015 2016 - 2020 2021 - 2025 2026 - 2030 2031 - 2035 2036 - 2039

Total Minimum Lease Payments

Less: Interest
Principal Outstanding
Georgia Southern University's fiscal year 2 0 1 1 expense for rental of real property and equipment under operating leases was $214,839.
Note 11-Significant ContingentLiabilities
In the spring of 2011, the Georgia Southern University Foundation purchased the Campus Club apartment complex located on Lanier Drive in Statesboro, GA. The complex will be operated by the Foundation during fiscal year 2012. In fiscal year 2013, the University will enter into a capital management lease to operate the facility as a student housing complex.
Note 12. Retirement Plans
Georgia Southern University participates in various retirement plans administered by the State of Georgia under two major retirement systems: Employees' Retirement System of Georgia (ERS System) and Teachers Retirement System of Georgia. These two systems issue separate publicly available financial reports that include the applicable financial statements and required supplementary information. The reports may be obtained from the respective system offices. The significant retirement plans that Georgia Southern University participates in are described below. More detailed information can be found in the plan agreements and related legislation. Each plan, including benefit and contribution provisions, was established and can be amended by State law.
Employees' Retirement System of Georgia
The ERS System is comprised of individual retirement systems and plans covering substantially all employees of the State of Georgia except for teachers and other employees covered by the Teachers Retirement System of Georgia. One of the ERS System plans, the Employees' Retirement System of Georgia (ERS), is a cost-sharing multiple-employer defined benefit pension plan that was established

GEORGIA SOUTHERN UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011
by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees and has the powers and privileges of a corporation. ERS acts pursuant to statutory direction and guidelines, which may be amended prospectively for new hires but for existing members and beneficiaries may be amended in some aspects only subject to potential application of certain constitutional restraints against impairment of contract.
On November 20, 1997, the Board created the Supplemental Retirement Benefit Plan (SRBP-ERS) of ERS. SRBP-ERS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of ERS. The purpose of the SRBP-ERS is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC Section 415. Beginning January 1,1998, all members and retired former members in ERS are eligible to participate in the SRBP-ERS whenever their benefits under ERS exceed the limitation on benefits imposed by IRC Section 415.
The benefit structure of ERS is established by the Board of Trustees under statutory guidelines. Unless the employee elects otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July 1,1982, is an "old plan" member subject to the plan provisions in effect prior to July 1, 1982. Members hired on or after July 1.1982 but prior to January 1,2009 are "new plan" members subject to the modified plan provisions. Effective January 1,2009, newly hired State employees, as well as rehired State employees who did not maintain eligibility for the "old" or "new" plan, are members of the Georgia State Employees' Pension and Savings Plan (GSEPS). ERS members hired prior to January 1,2009 also have the option to change their membership to the GSEPS plan.
Under the old plan, new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 1 0 years of creditable service and attainment of age 6 0 or 3 0 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 25 years of creditable service for members under age 60.
Retirement benefits paid to members are based upon a formula adopted by the Board of Trustees for such purpose. The formula considers the monthly average of the member's highest 2 4 consecutive calendar months of salary, the number of years of creditable service, and the member's age at retirement. Post-retirement cost-of-living adjustments may be made to members' benefits provided the members were hired prior to July 1,2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS.
Member contribution rates are set by law. Member contributions under the old plan are 4%of annual compensation up to $4,200 plus 6% of annual compensation in excess of $4,200. Under the old plan. Georgia Southern University pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these Georgia Southern University contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. Georgia Southern University is required to contribute at a specified percentage of active member payroll established by the Board of Trustees determined annually in accordance with actuarial valuation and minimum funding standards as provided by law. These Georgia Southern University contributions are not at any time refundable to the member or his/her beneficiary.

GEORGIA SOUTHERN UNIVERSUY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011

EXHIBlT "D"

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

Old Plan* New Plan GSEPS

10.41% 10.41%
6.54%

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

Members become vested after 1 0 years of service. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contributions; the member forfeits all rights to retirement benefits.

Teachers Retirement System of Georgia

The Teachers Retirement System of Georgia (TRS) is a cost-sharing multiple-employer defined benefit plan created in 1943 by an act of the Georgia General Assembly to provide retirement benefits for qualifying employees in educational service. A Board of Trustees comprised of active and retired members and ex-officio State employees is ultimately responsible for the administration of TRS.

On October 25, 1996, the Board created the Supplemental Retirement Benefit Plan of the Georgia Teachers Retirement System (SRBP-TRS). SRBP-TRS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of TRS. The purpose of SRBP-TRS is to provide retirement benefits to employees covered by TRS whose benefits are otherwise limited by IRC Section 415. Beginning July 1, 1997, all members and retired former members in TRS are eligible to participate in the SRBP-TRS whenever their benefits under TRS exceed the IRC Section 415 imposed limitation on benefits.

TRS provides service retirement, disability retirement, and survivor's benefits. The benefit structure of TRS is defined and may be amended by State statute. A member is eligible for normal service retirement after 3 0 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 2 5 years of creditable service.

Normal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 4 0 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 60 or by 7% for each year or fraction thereof by which the member has less than 3 0 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits
are payable monthly for life. A member may elect to receive a partial lumpsum distribution in addition to a reduced monthly retirement benefit. Death, disability and spousal benefits are also available.

TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 10 years of service. If a member terminates with less than 1 0 years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest. Member contributions are limited by State law to not less than 5% or more than 6% of a member's earnable compensation. Member contributions as adopted by the Board of Trustees for the fiscal year ended June 30, 2010 were 5.25% of annual salary. The member contribution rate increased to 5.53% effective July 1,2010. The employer contribution rate increased to 10.28% effective July 1,2010.

GEORGIA SOUTHERN UNIVERSTTY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011

EXHIBIT "D"

The following table summarizes the Georgia Southern University contributions by defined benefit plan for the years ending June 30,2011, June 30,2010, and June 30,2009:

Fiscal Year

E RS

Required

Percentage

Contribution Contributed

TRS

Required

Percentage

Contribution Contributed

Regents Retirement Plan
Plan Description The Regents Retirement Plan, a single-employer defined contribution plan, is an optional retirement plan that was created/established by the Georgia General Assembly in O.C.G.A. 47-21-1 et.seq. and administered by the Board of Regents of the University System of Georgia. O.C.G.A. 47-3-68(a) defines who may participate in the Regents Retirement Plan. An "eligible university system employee" is a faculty member or a principal administrator, as designated by the regulations of the Board of Regents. Under the Regents Retirement Plan, a plan participant may purchase annuity contracts from four approved vendors (AIG-VALIC, American Century, Fidelity, and TIAA-CREF) for the purpose of receiving retirement and death benefits. Benefits depend solely on amounts contributed to the plan plus investment earnings. Benefits are payable to participating employees or their beneficiaries in accordance with the terms of the annuity contracts.
Funding Policy Georgia Southern University makes monthly employer contributions for the Regents Retirement Plan at rates adopted by the Teachers Retirement System of Georgia Board of Trustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2011, the employer contribution was 9.24% for the participating employee's earnable compensation. Employees contribute 5%of their earnable compensation. Amounts attributable to all plan contributions are fully vested and nonforfeitable at all times.
Georgia Southern University and the covered employees made the required contributions of $4,692,487 (9.24%) and $2,539,258 (5%),respectively.
AIG-VALIC, American Century, Fidelity, and TIAA-CREF have separately issued financial reports which may be obtained through their respective corporate offices.
Georgia Defined Contribution Plan
Plan Description Georgia Southern University participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employer defined contribution plan established by the General Assembly of Georgia for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia.

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

EXHIBlT "D"

Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board of Trustees. If a member has less than $3,500 credited to his/her account, the Board of Trustees has the option of requiring a lump sum distribution to the member in lieu of making periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute.
Contributions Member contributions are seven and one-half percent (7.5%)of gross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member.
Total contributions made by employees during fiscal year 2011 amounted to $406,885 which represents 7.5%of covered payroll. These contributions met the requirements of the plan.
The Georgia Defined Contribution Plan issues a financial report each fiscal year, which may be obtained from the ERS offices.
Note 13. Risk Management
The University System of Georgia offers its employees and retirees access to three different selfinsured healthcare plan options. A PPO/PPO Consumer healthcare plan was offered for the entire reporting period, and effective 01/01/2011, a HSA/High Deductible PPO and a HMO are also offered on a self-insured basis. The HSA/High Deductible PPO and HMO were previously insured through Blue Cross Blue Shield of Georgia. Georgia Southern University and participating employees and retirees pay premiums to either of the self-insured healthcare plan options to access benefits coverage. The respective self-insured healthcare plan options are included in the financial statements of the Board of Regents of the University System of Georgia - University System Office. All units of the University System of Georgia share the risk of loss for claims associated with these plans. The reserves for these plans are considered to be a self-sustaining risk fund. The Board of Regents has contracted with Blue Cross Blue Shield of Georgia, a wholly owned subsidiary of Wellpoint, to serve as the claims administrator for the self-insured healthcare plan products. In addition to the self-insured healthcare plan options offered to the employees of the University System of Georgia, a fully insured HMO healthcare plan option is also offered to System employees through Kaiser.
The Department of Administrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk ofloss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. Georgia Southern University, as an organizational unit of the Board of Regents of the University System of Georgia, is part of the State of Georgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment.

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

EXHIBIT "D"

A self-insured program of professional liability for its employees was established by the Board of Regents of the University System of Georgia under powers authorized by the Official Code of Georgia Annotated Section 45-9-1. The program insures the employees to the extent that they are not immune from liability against personal liability for damages arising out of the performance of their duties or in any way connected therewith. The program is administered by DOAS as a Self-Insurance Fund.
Note 14. Contingencies
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditures disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although Georgia Southern 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 of the University System of Georgia), if any, are generally considered to be actions against the State of Georgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 2011.
Note 15. Post-Employment Benefits Other 77tan Pension Benefits
Pursuant to the general powers conferred by the Official Code of Georgia Annotated Section 20-3-31, the Board of Regents of the University System of Georgia has established group health and life insurance programs for regular employees of the University System of Georgia. It is the policy of the Board of Regents to permit employees of the University System of Georgia eligible for retirement or that become permanently and totally disabled to continue as members of the group health and life insurance programs. The policies of the Board of Regents of the University System of Georgia define and delineate who is eligible for these 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. With regard to life insurance, the employer covers the total cost for $25,000 of basic life insurance. If an individual elects to have supplemental, and/or, dependent life insurance coverage, such costs are borne entirely by the employee.
The Board of Regents Retiree Health Benefit Plan is a single employer defined benefit plan. Financial statements and required supplementary information for the Plan are included in the publicly available Consolidated Annual Financial Report of the UniversitySystem of Georgia. The College pays the employer portion of health insurance for its eligible retirees based on rates that are established annually by the Board of Regents for the upcoming plan year. For the 2010 and 2 0 1 1 plan years, the employer rate was between 70-75% of the total health insurance cost for eligible retirees and the retiree rate was between 25-30%.
As of June 30, 2011, there were 724 employees who had retired or were disabled that were receiving these post-employment health and life insurance benefits. For the year ended June 30, 2011, Georgia Southern University recognized as incurred $3,449,578 of expenditures, which was net of $1,527,608 of participant contributions.

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

EXHIBIT "D"

Note 16. Natural Classifications with Functianal Clasifiwtions The University's operating expenses by functional classification for fiscal year 2011are shown below:

Functional Classification

Natural Classification

Instruction

Research

Public Service

Academic Support

Student Services

Salaries Faculty Staff
Employee Benefits Other Personal Services Travel Scholarsh~psand Fellowships Utilities Supplies and Other Services Depreciation

Total Operating Expenses Natural Classification

$ 94,652,404 $

2,603,883 $ 2,094,493$ 19,695,162$ 22,999,932
P

Institutional Support

Functional Classification

Plant Operations Scholarsh~ps

and

and

Maintenance

Fellowships

Auxiliary Enterprises

Total Operating Expenses

Salaries Faculty Staff
Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation

Total Operating Expenses

$ 25,355,795 $

33,302,996$ 13,961381 $ 60,960,976$ 275,627,022

Note 17.AMliated Ofyanizations
In accordance with GASB Statement No. 39, Determining Whether Cerian Organizations are Component Unik, the Georgia Southern University Foundation, Inc., Georgia Southern University Housing Foundation. Inc., Georgia Southern University Athletics Foundation, Inc., and Georgia Southern University Research and Service Foundation, Inc. are legally separate, tax exempt organizations whose activities primarily support Georgia Southern University. The State Accounting Office has determined Component Units of the State of Georgia, as required by GASB Statement No. 39, should be assessed in relation to their significance to the State of Georgia. Therefore, the financial statements of these affiliated organizations are not included in these financial statements.

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

EXHIBIT "D"

Copies of the financial statements for these affiliated organizations may be obtained from Georgia Southern University.
Georgia Southern University Housing Foundation, Inc., has been determined significant to the State of Georgia for the year ended June 30, 2011, and as such, is reported as a discretely presented component unit in the Comprehensive Annual Financial Report of the State of Georgia (CAFR). The significant discretely presented component unit issues separate audited financial statements that can be obtained from the Board of Regents of the University System of Georgia.

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SUPPLEMENTARY INFORMATION

GEORGIA SOUTHERN UNIVERSITY BALANCE SHEET (NON-GAAP BASIS)
BUDGET FUND JUNE 30.2011
ASSETS
Cash and Cash Equivalents Investments Accounts Receivable
Federal Financial Assistance Other Prepaid Expenditures Inventories
Total Assets
LIABILITIES AND FUND EQUITY
Liabilities Accrued Payroll Encumbrances Payable Accounts Payable Deferred Revenue
Total Liabilities
Fund Balances Reserved Department Sales and Services Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Inventories Tuition Carry-Over Unreserved Surplus
Total Fund Balances
Total Liabilities and Fund Balances

SCHEDULE "1"

Actual amounts were prepared on a prescribed basis of accounting that demonstrates
compliance with budgetary statutes and regulations of the State of Georgia, which is a
comprehensive basis of accounting other than generally accepted accounting principles.
-28-

GEORGIA SOUTHERN UNIVERSITY SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NONGAAP BASIS)
BUDGET FUND YEAR ENDEDJUNE 30.2011

SCHEDULE '2"

REVENUE
State Appropriation State General Funds
Other Funds
Total Revenues
ADJUSTMENTS AND PRERAJ TRANSFERS
CARRY-OVER FROM PRIOR YEARS
Transfers from Reserved Fund Balance
Total Funds Available
Teaching
Excess of Funds Ava~lableover Expend~tures
FUND BALANCE JULY I
Reserved Unreserved
ADJUSTMFNTS
Pr~oYr ear Payables/Expendltures Prlor Year Receivables/Revenues UnreservedFund Balance (Surplus)Returned
to Board of Regents - Unlversiv System Office Year EndedJune 30,2010
Early Return of Surplus in FiscalYear 2011 Prior Year Reserved Fund Balance Included in FundsAvailable
FUND BALANCE JUNE 2Q

BUDGET

ACTUAL

VARIANCE FAVORABLE (UNFAVORABLE)

SUMMARY OF FUND BALANCE
Reserved Department Sales and Services Ind~recCt ost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable lnventorles Tultlon Carw-Over
Total ReSeNed
Unreserved Surplus
Total Fund Balance

Actual amounts were prepared on a prescribed basis of account~ngthat demonstrates compliance wlth budgetary statutes and regulations of the State of Georgia. which is a comprehensive basis of accounting other than generally accepted accounting principles.

GEORGIA SOUTHERN UNIVERSITY STATEMENT OF FUNDS AVAILABLE AND EXPENDITURESCOMPAREDTO BUDGEl BY PROGRAMAND FUNDING SOURCE
(NON-GAAPBASIS) BUDGET FUND YEAR ENDED JUNE 30,2011

Teachlng State Appropr~atlon State General Funds Federal Funds Amer~canRecovery and Re~nvestmenAt ct Federal Stabilization Funds Other Funds
Total Teaching

Original Appropriation

Amended Appropr~at~on

F~nal Budget

Current Year Revenues

Actual amounts were preparedon a prescribed basis of accountingthat demonstrates cornpllancewith budgetary statutes and regulationsof the State of Georg~aw, hich is a comprehens~vebass of accounting other than generally acceptedaccounting principles.

SCHEDULE "3"

Funds Available Compared to Budget

Prlor Year

Adjustments and

Total

Carry-Over

Program Transfers

Funds Available

Variance Positive (Negative)

Expenditures Compared to Budget

Variance

Actual

Positive (Negative)

Excess (Deficiency) of Funds Available
Over/(Under) Expend~tures

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

Teaching State Appropriation State General Funds Federal Funds American Recoveryand Reinvestment Act Federal Stabilization Funds Other Funds
Total Teachlng
Prior Year R ~ s ~ N ~ s Not Avallable for Expenditure lnventorles Uncollectlble Accounts Receivable

Beginning Fund Ealance/(Deficit)
July I

Fund Balance Carried Over from
Prior Period as Funds Available

Return of FiscalYear 2010
Surplus

nor ~ e r l o d
Adjustments

Budget Un~Ttotals

Actual amounts were prepared on a prescribed basis of accountlng that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accountlng principles.

SCHEDULE "4"

Other Adjustments

Early Return Fiscal Year 2011
Surplus

Excess (Deficiency) of Funds Ava~lable
Over/(Under) Expenditures

End~ngFund Balance/(Deficit)
June 30

Analysis of Ending Fund Balance

Resewed

Surplus/(Deficit)

Total

Summary af EndingFund Balance Reserved
Department Sales and Services Indirect Cost Recoveries Technolog+Fees Restricted/Sponsored Funds UncollectlbleAccounts Receivable Inventories Tu~tionCarry-Over Unreserved Surplus
Total Ending Fund Balance - June 30

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GEORGIA SOUTHERN UNIVERSITY RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDEDJUNE 30,2011

Totals per Annual Supplement

Accruals June 3 0 , 2 0 1 1 June 30.2010

Compensated Absences June 30.2011 June 30.2010

Prepaids June 30.2010

Adjustments

Shared Services on Jointly Staffed Personnel

Albany State University

Bryant.

Rhonda

East Georgia College

Edgens,

Jefferson

Georgia College and State University

Woodard,

Howard

Kennesaw State University

Roberts,

Ga IY

North Georgia College and State University

Dick.

Geoffrey

Skidaway Institute of Oceanography

Alexander. Clark

Universityof West Georgia

Anderson, Jonathon

Unidentified Variance

SALARIES

SCHEDULE "5" TRAVEL

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

GEORGIA SOUTHERN UNIVERSITY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRlOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 3 0 , 2 0 1 1

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-539-10-01

Previously Reported Corrective Action Implemented

PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS

No matters were reported.

SECTION Ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS

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