Gordon College, Barnesville, Georgia, independent accountant's report on applying agreed-upon procedures for fiscal year ended June 30, 2010

GORDON COLLEGE
BARNESVILLE, GEORGIA
INDEPENDENT ACCOUNTANT'S
REPORT ON APPLYING AGREED-
UPON PROCEDURES FOR EISCAL YEAR ENDED
JUNE 30,2010
Georgia Department of Audits and Hccounts
4i Russell W. Hinton State Auditor I

GORDON COLLEGE - TABLE OF CONTENTS -
INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES EXHIBITS
A SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT B STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING
SOURCE COMPARED TO BUDGET

RUSSELLW. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMEONFTAUDITASND ACCOUNTS
270 Washington Street, S.W., Suite 1- 156
Atlanta, Georgia 30334-8400
November 18,2010

Members of the State Board of Regents of the University System of Georgia Honorable Shelley Nickel, Interim President Gordon College
Independent Accountant's R e ~ o rotn ADDlvinR Agreed-U~onProcedures
Ladies and Gentlemen:
We have performed the procedures enumerated below, which were agreed to by the College and the University System Office (Oversight Unit) of the Board of Regents of the University System of Georgia, solely to assist you in assessing the accuracy of the financial information reported to the University System Office in the College's 2010 Annual Financial Report for inclusion in the University System of
Georgia's Annual Financial Report, the State of Georgia's ComprehensiveAnnual Financial Report (CAFR)
and Single Audit Repo/t; and to assist you in assessing the accuracy of the budget basis information provided in the Summary Budget Comparison and Surplus Analysis Report and Statement of Program Revenues and Expenditures by Funding Source Compared to Budget which are attached as Exhibits A and B, respectively. Gordon College's management is responsible for the financial information reported to the University System Office in the College's Annual Financial Report. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.
The procedures and the associated findings are as follows:
1. Review selected balance sheet items reported on the Annual Financial Report (cash, accounts receivable, accounts payable, deferred revenues, net assets). Confirm that these items have adequate supporting documentation and are properly reconciled to the College's general ledger.
We noted exceptions as a result of our procedures performed on the balance sheet
items. Prepaid Items were understated by $18,512and Accounts Payable was overstated by $5,522due to fiscal year 2011 activity being included on the general
ledger.
Additionally, we noted an overstatement of Accounts Receivable- Other and Deferred Revenue of $4,366.

2. Obtain the College's GAAP basis Statement of Net Assets and Statement of Revenues, Expenses and Changes in Net Assets (SRECNA) submitted for inclusion in the State's CAFR and Single Audit. Utilizing test scripts, confirm that financial information presented in these statements properly supports activity reported in the College's accounting records.
Immaterial amounts of fiscal year 2 0 1 1 activity were incorrectly included in the College's Annual Financial Report for fiscal year 2010. Expenses were overstated by $24,034.
3. Obtain the College's Statement of Cash Flows submitted for inclusion in the State's CAFR and Single Audit. Utilizing cash flow worksheets, confirm information reported on Statement of Cash Flows.
We did not note any exceptionsas a result of our procedures.
4. Obtain the College's Notes to the Financial Statements submitted for inclusion in the State's CAFR and Single Audit. Utilizing notes worksheets and other supporting documentation confirm that note disclosures related to Cash, Investments, Accounts Receivable, Capital Assets, LongTerm Debt, Lease Obligationsand Retirement Plans have been properly reported.
We did not note any exceptions as a result of our procedures.
5. Review the College's year end GAAP basis journal entries. Obtain documentation for GAAP journal entries and confirm that the entries were posted to the College's Annual Financial Report.
The GAAP entry related to local grant revenue was not posted correctly. Accounts
- Receivable Other and Deferred Revenue were overstated by $4,366 on the
Statements of Net Assets.
6. Confirm that State Appropriation revenues, receivables and remittances of prior year surplus balances have been properly recorded in the College's financial records. Prior year surplus balances should be netted against State Appropriation revenues in the GAAP basis financial statements; however, prior year surplus balances should be reflected as fund balance adjustments on the Budget basis financial statements.
We did not note any exceptions as a result of our procedures.
7. Obtain listing of write-off requests for accounts receivable less than $3,000.00 for fiscal year 2010. Confirm that these write-off requests have been approved by the State Accounting Officer and have been posted to the College's financial statements.
We did not note any exceptions as a result of our procedures.
8. Verify that the listing of salaries, travel, and professional services reported to the Department of Audits is in accordance with O.C.G.A. 50-6-27 and reconciles to amounts recorded in the College's financial statements.
We did not note any exceptions as a result of our procedures.

9. Review year end Budgetary Statements including the Summary Budget Comparison and Surplus Analysis Report (Exhibit A) and Statement of Program Revenues and Expenditures by Funding Source Compared to Budget (Exhibit B). Confirm that budget information presented in these statements supports activity reported in the College's accounting records and determine if any budget overexpenditures exist.
A portion of fiscal year 2011 activity was incorrectly included in fiscal year 2010 Budgetary Statements. Cash was understated by $18,411.12,Prepaid Items were overstated by $174,Accounts Payable was overstated $5,522.00,and Expenditures were overstated by $23,759.12.This exception caused Unreserved - Surplus to be understated by $11,427.12.The College resubmitted the budgetary statements to
Board of Regents.
10. Obtain documentation for Budget basis reserves reported by College on the Summary Budget Comparison and Surplus Analysis Report (Exhibit A). Confirm that the reserves are properly documented, valid and appropriate.
A portion of fiscal year 2011 activity was incorrectly included in fiscal year 2010
Budgetary Statements. The reserve for Tuition Carry-Over was understated by
$12,332.The College resubmitted the budgetary statements to Board of Regents.
11.Review the H.O.P.E. Scholarship Program reconciliation between the College and the Georgia Student Finance Commission. Confirm that information reported to the Georgia Student Finance Commission has been reconciled with H.O.P.E. Scholarship activity reported on the College's financial records.
We did not note any exceptions as a result of our procedures.
12. Review the Schedule of Expenditures of Federal Awards information submitted by the College for inclusion in the Statewide Single Audit. Confirm that the information is properly presented and supported by the College's accounting records.
We did not note any exceptions as a result of our procedures.
13. Review capital asset records to ensure that (1) subsidiary ledgers are appropriately reconciled to the ledgers, (2) capitalization thresholds are being properly followed, and (3) a complete annual physical equipment inventory is being conducted and that issues noted during the physical inventory are being properly addressed by management.
We did not note any exceptions as a result of our procedures.
14. Review bank reconciliations during the year under review to ensure that management is preparing them timely and that reconciling items are being addressed by management timely and in an appropriate manner.
We did not note any exceptions as a result of our procedures.
15. Review documentation to ensure that all subsidiary modules including BANNER are reconciled to the general ledger at least quarterly in accordance with the Business Procedures Manual Section 10.6.2. and ensure that reconciling items are adequately explained and resolved in a timely manner.
We did not note any exceptions as a result of our procedures.

These agreed-upon procedures do not constitute an audit of the financial statements or any part thereof, the objective of which is to express an opinion on the financial statements or a part thereof. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
This report is intended solely for the information and use of the specified users listed above and is not intended to be and should not be used by anyone other than these specified parties.
Res~ectfullsvubmitted.
~ u d s e lWl . Hinton, CPA, CGFM State Auditor

EXHIBITS

GORDON COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT
YEAR ENDED JUNE 30.2010

REVENUES
State Appropr~at~on State General Funds
Federal Funds Other Funds
Total Revenues
CARRY-OVER FROM PRIOR YEAR
Transfer from Reserved Fund Balance
Total Funds Ava~lable
EXPENDITURES
Teaching
Excess of Funds Ava~lableover Expenditures
FUND BALANCE JULY 1
Reserved Unreserved
ADJUSTMENTS
Pr~oYr ear Payables/Expend~tures Pr~oYr ear Rece~vables/Revenues Unreserved Fund Balance (Surplus) Returned
to Board of Regents - Unlverslty System Offlce
Year Ended June 30,2009 Early Rern~ttanceof Surplus In Current F~scaYl ear Non-Mandatory Transfers Pr~oYr ear Reserved Fund Balance Included In Funds Ava~lable
FUND BALANCE JUNE 3Q
SUMMARY OF FUND BALANCE
Reserved Department Sales and Services Technology Fees Uncollect~bleAccounts Receivable Tu~tionCarry-Over
Total Reserved

BUDGET

ACTUAL

VARIANCE -
FAVORABLE (UNFAVORABLE)

Total Fund Balance

Special Funding Initlativa state npproprlauon State General Funds

GORDON COLLEGE STATEMENTOF PROGRAM REVENUESAND EXPENDITURES BY FUNDING SOURCE COMPARED TO B U f f i E l
YEAR ENDEDJUNE3O. 2010

OrQnal Approprlabon

Final Budget

Current Year Revenues

Funds Available Compared to nudger

Prior Year carrpover

Total ~ u n d~svallable

Varnance Posltlve (Negat~ve)

Taachlng State Appropriat~on State General Funds Federal Funds Amerloan Recoveryand ReinvestmentAct of 2009 Federal Stabtltrauon Funds Other Funds
Total Teach~ng

Grand Totals -All Programs

Expendturescnmpared to Budget

Var~ance

Positive

Actual

(Negative)

Actual FundsAw~labls
Over/(lJnder) Expenditures

Pmr Penod bd~ustments

Mher Adjustments

Early Rcrn~ttance ofSurplus

program Fund
Balances

Transfers

Program Fund Balances

Resewe

Surplus

Total Fund Balance

Unexpendsble Reserves Uncollecuble Accounts Rece~vable