Georgia Gwinnett College, Lawrenceville, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2006

STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
I
GEORGIA GWINNETT COLLEGE LAWRENCEVILLE, GEORGIA REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2006
Russell W. Hinton State Auditor

GEORGIA GWINNETT COLLEGE - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

BASIC FINANCIAL STATEMENTS

EXHIBITS

A STATEMENT OF NET ASSETS

2

B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS

3

C STATEMENT OF CASH FLOWS

5

D NOTES TO THE FINANCIAL STATEMENTS

6

SUPPLEMENTARY INFORMATION

SCHEDULES

1 BALANCE SHEET - (NON-GAAP BASIS) BUDGET FUND

20

2 BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT

(NON-GAAP BASIS) BUDGET FUND

21

3 RECONCILIATION OF SALARIES AND TRAVEL

23

SECTION II CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
September 29, 2006

Honorable Sonny Perdue, Governor Members of the General Assembly of Georgia Members of the Board of Regents of the University System of Georgia
and Honorable Daniel J. Kaufman, President Georgia Gwinnett College
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying basic financial statements (Exhibits A through D) of Georgia Gwinnett College, an organizational unit of the State of Georgia, as of and for the year ended June 30, 2006. These financial statements are the responsibility of the institution's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As discussed in Note 1, the financial statements of Georgia Gwinnett College are intended to present the financial position and changes in financial position and cash flows of only that portion of the business-type activities of the State of Georgia that is attributable to the transactions of Georgia Gwinnett College. They do not purport to, and do not, present fairly the financial position and changes in financial position and cash flows ofthe State of Georgia, in conformity with accounting principles generally accepted in the United States of America.

06ARL-62

In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of Georgia Gwinnett College as ofJune 30, 2006, 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 required part ofthe basic financial statements but is required supplementary information required by accounting principles generally accepted in the United States ofAmerica. We have applied certain limited procedures, which consisted principally ofinquiries ofmanagement regarding the methods ofmeasurement and presentation ofthis 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 Gwinnett College taken as a whole. The accompanying supplementary information (Schedules 1 through 3) 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,

RWH:as 06ARL-62

lA~
Ru sell W. Hinton, CPA, CGFM State Auditor

REQUIRED SUPPLEMENTARY INFORMATION

GEORGIA GWINNETT COLLEGE
Management's Discussion and Analysis
Introduction
As the 35th and newest unit of the University System of Georgia, Georgia Gwinnett College is opening its doors to its charter class on August 18, 2006. Designated the "Campus of Tomorrow" because of the unique mission emanating from the Board of Regents, Georgia Gwinnett College will use state-of-the-art instructional technology, advanced learning methodology, and on-line courses to matriculate students. Of special importance will be the foundation of "mobile classrooms" in the sense that students will be able to access class work and archived lessons using various portable technology. Georgia Gwinnett College will offer initial baccalaureate degrees in business administration, biology, and psychology, followed by degree offerings in nursing, education, radiologic technology, and technology management in subsequent years. This pressing academic schedule, brought about by demand from the community, requires a rapid ramp-up in course design, technology acquisition, and the hiring of faculty.
Overview ofthe Financial Statements and Financial Analysis
Georgia Gwinnett College is proud to present its financial statements for fiscal year 2006. The emphasis of discussions about these statements will be on current year data. This is the first year of operation of Georgia Gwinnett College, therefore comparative data from the prior year is not available. 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 College's financial statements provides an overview of its financial activities for the year.
Statement ofNet Assets
The Statement of Net Assets presents the assets, liabilities, and net assets of the College 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 Gwinnett College. 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 two major categories. The first category, invested in capital assets, net of debt, provides the institution's
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equity in property, plant and equipment owned by the institution. The final category is unrestricted net assets. Unrestricted net assets are available to the institution for any lawful purpose of the institution.

Statement of Net Assets, Condensed

June 30, 2006

Assets Current Assets Capital Assets, Net

$ 1,477,955.24 40.310,346.20

Total Assets

$ 41,788,301.44

Liabilities Current Liabilities Noncurrent Liabilities

$ 741,235.39 14,844,123.02

Total Liabilities

$ 15,585,358.41

Net Assets Invested in Capital Assets, Net of Debt Unrestricted

$ 24,892,453.63 1,310,489.40

Total Net Assets

$ 26,202,943.03

The total assets of the institution are $41,788,301.44. A review of the Statement of Net Assets will reveal that most of this balance consists of $40,310,346.20 in capital assets, net of accumulated depreciation. These assets largely consist of two buildings and a capital lease. The Signature Building, built in 2002 and presently valued at approximately $18.7 million, was transferred to Georgia Gwinnett College from Georgia Perimeter College. This building was financed by the Georgia State Financing and Investment Commission. The capital lease, valued at approximately $16.3 million, was also transferred from Georgia Perimeter College. This lease has a liability of $15,417,892.57 associated with it. The Academic Building, built in 2006 and financed by the Georgia State Financing and Investment Commission, is valued at approximately $4.6 million. Consumption of assets follows the institutional philosophy to use available resources to acquire and improve all areas of the institution to better serve the instruction, research and public service missions of the institution.

The total liabilities for the year are $15,585,358.41. The largest liability of the College is the capital lease of $15,417,892.57. The combination of the total assets of $41,788,301.44 and the total liabilities of $15,585,358.41 yields a balance of total net assets of $26,202,943.03. The total net assets consist primarily of investment in capital assets, net of debt, in the amount of $24,892,453.63.

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Statement ofRevenues, Expenses and Changes in Net Assets

Changes in total net assets as presented on the Statement of Net Assets are based on the activity presented in the Statement of Revenues, Expenses and Changes in Net Assets. The purpose of the statement is to present the revenues received by the institution, both operating and nonoperating, and the expenses paid by the institution, operating and nonoperating, and any other revenues, expenses, gains and losses received or spent by the institution. Generally speaking operating revenues are received for providing goods and services to the various customers and constituencies of the institution. Operating expenses are those expenses paid to acquire or produce the goods and services provided in return for the operating revenues, and to carry out the mission of the institution. Nonoperating revenues are revenues received for which goods and services are not provided. For example, state appropriations are nonoperating because they are provided by the Legislature to the institution without the Legislature directly receiving commensurate goods and services for those revenues.

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

June 30, 2006

Operating Revenues Operating Expenses

$ 224,742.73 6,347,948.35

Operating Loss

$ -6,123,205.62

Nonoperating Revenues and Expenses

7,208,866.76

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

$ 1,085,661.14

Other Revenues, Expenses, Gains or Losses

3,836,101.72

Special Item

21,281,180.17

Increase (Decrease) in Net Assets

$ 26,202,943.03

Net Assets at Beginning of Year

0.00

Net Assets at End of Year

$ 26)02!943.03

The Statement of Revenues, Expenses and Changes in Net Assets reflect a positive year with a small increase in the net assets at the end of the year, after accounting for the Special Item Transfer of assets from Georgia Perimeter College. Some highlights of the information presented on the Statement of Revenues, Expenses and Changes in Net Assets are as follows:

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Revenue By Source For The Year Ended June 30, 2006

Operating Revenue Tuition and Fees Sales and Services of Educational Departments Other
Total Operating Revenue
Nonoperating Revenue State Appropriations Gifts Investment Income Other
Total Nonoperating Revenue
Capital Grants and Gifts State
Total Revenues
Expenses (By Functional Classification) For The Year Ended June 30, 2006
Operating Expenses Instruction Academic Support Student Services Institutional Support Plant Operations and Maintenance Unallocated Depreciation
Total Operating Expenses
Nonoperating Expenses Interest Expense (Capital Assets)
Total Expenses

June 30, 2006

$

75,186.00

2,941.99 146,614.74

$ 224,742.73

$ 7,663,329.00 332,230.00 19,929.75 0.04
$ 8,015,488.79

$ 3,836,101.72 $ 12,076,333.24

June 30, 2006
$ 1,160,452.66 1,495,626.06 148,058.75 3,369,876.82 174,011.11 -77.05
$ 6,347,948.35
806,622.03
$ 7,154,570.38

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Expenditures for Instruction and Student Services are related to the hiring of administrative academic personnel charged with establishing the new academic programs at Georgia Gwinnett College. Expenditures for Academic Support are related to the continued support that Georgia Gwinnett College provides to Georgia Perimeter College, Medical College of Georgia, and the University of Georgia as partners in the former Gwinnett University Center. This support is given primarily in investment in state of the art technology for all classrooms on campus.

The compensation and employee benefits category equaled $2,037,789.74. The amount reflects an increase in staff due to the start-up of the College. Utilities equaled $236,392.02 during the past year. Included in this cost is an increase due to a new building that was occupied as of January 1, 2006.

Under nonoperating revenues (expenses) state appropnat10ns equaled $7,663,329.00. This appropriation was to fund the services that Georgia Gwinnett College provides to the partners of the former Gwinnett University Center and the start-up of Georgia Gwinnett College.

Statement of Cash Flows

The final statement presented by Georgia Gwinnett College 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 Year Ended June 30, 2006, Condensed

June 30, 2006

Cash Provided (Used) By: Operating Activities Noncapital Financing Activities Capital and Related Financing Activities Investing Activities

$ -5,013,655.37 7,995,559.00 -1,562,942.60 19,929.75

Net Change in Cash Cash, Beginning of Year

$ 1,438,890.78 0.00

Cash, End of Year

$ 1,438,890.78

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Capital Assets
The College had one significant capital asset addition for facilities in fiscal year 2006. The first phase of the new Academic Building was completed and placed into service in early January, 2006.
For additional information concerning Capital Assets, see Notes 1, 4 and 12 in the Notes to the Financial Statements.
Long-Term Liabilities
Georgia Gwinnett College had Long-Term Liabilities of $15,531,543.75 of which $687,420.73 is reflected as current liability at June 30, 2006.
For additional information concerning Long-Term Liabilities, see Notes 1, 5 and 7 in the Notes to the Financial Statements.
Component Units
In compliance with GASB Statement No. 39, Georgia Gwinnett College is not including the financial statements and notes for any component units for fiscal year 2006. The Georgia Gwinnett College Foundation was not established as of June 30, 2006.
Economic Outlook
As a new institution, Georgia Gwinnett College initially will be involved in a number of activities in the coming year that will have substantial impact on both its short and long-term financial outlook. Included in these activities will be the hiring of faculty and deans, initiation of the College's first classes, integration of technology-related functions for enrollment, admission, matriculation, and other routine components of administering an educational institution, and most importantly, application for accreditation through the Southern Association of Colleges and Schools (SACS). The accreditation process will consist of a thorough review of academic and financial aspects of the College. Receiving this accreditation is critical to the future of the College.
Also critical to the future of the institution is the construction of urgently needed facilities, some are an important part of the SACS accreditation process. During the next year the College will begin construction of the second phase of an academic building, funded by Georgia State Financing and Investment Commission. Additionally, the College will begin construction of a parking deck financed through private funding and paid for by a new student parking fee. Additionally, the Board of Regents recently approved a new library learning resource center that is vital both for SACS accreditation and as a critical resource for Georgia Gwinnett College's student body. The funds for the new Library Resource Center will come through appropriated funds from the General Assembly.
Of further importance will be increasing our state budget allotment in advance of the normal process of funding. Normally, the General Assembly appropriates funds based on two-year
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retroactive cycle related to FTE's of an institution. Since Georgia Gwinnett College is new, funds for both the hiring of faculty and operating expenses must be provided before the FTE production occurs. This funding will come from several sources including the budget of the Board of Regents, special initiative funds from the General Assembly, or a combination of public and private dollars. Without adequate funding from these sources, Georgia Gwinnett College will not be able to acquire the personal and administrative resources necessary to meet the anticipated demand for student enrollment from the community. The next year will be an exciting time for Georgia Gwinnett College as it begins its operations and the initiation of classes. While there are many pressing needs for the College, the Gwinnett community, the General Assembly, and the Board of Regents have consistently supported the institution through its transition. We look forward to this continued support in meeting the objectives of the newest publicly funded state institution in the Nation. Daniel J. Kaufman, President Georgia Gwinnett College
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BASIC FINANCIAL STATEMENTS - 1-

GEORGIA GWINNETT COLLEGE STATEMENT OF NET ASSETS JUNE 30, 2006
ASSETS
Current Assets Cash and Cash Equivalents Accounts Receivable (Note 3) Other
Total Current Assets
Noncurrent Assets Capital Assets, Net (Note 4)
Total Assets
LIABILITIES
Current Liabilities Accounts Payable Salaries Payable Other Liabilities Lease Purchase Obligations Compensated Absences
Total Current Liabilities
Noncurrent Liabilities Lease Purchase Obligations
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Unrestricted
Total Net Assets

EXHIBIT"A"

$

1,438,890.78

39,064.46

$

1,477,955.24

40,310,346.20
$ 41,788,301.44

$

2,935.84

13,222.07

37,656.75

573,769.55

113,651.18

$

741,235.39

14,844,123.02
$ 15,585,358.41

$ 24,892,453.63
1,310,489.40

$ 26,202,943.03

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

GEORGIA GWINNETT COLLEGE STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
YEAR ENDED JUNE 30, 2006

EXHIBIT"B"

OPERATING REVENUES
Student Fees Sales and Services of Educational Departments Other Operating Revenues
Total Operating Revenues
OPERATING EXPENSES
Salaries Staff
Employee Benefits Travel Utilities Supplies and Other Services Depreciation
Total Operating Expenses
Operating Income (Loss)
NONOPERATING REVENUES (EXPENSES)
State Appropriations Gifts Interest and Other Investment Income Interest Expense Other Nonoperaling Revenues
Net Nonoperaling Revenues
Income (Loss) Before Other Revenues, Expenses, Gains, or Losses
Capital Grants and Gifts State
Special Item (See Note 12)
Increase (Decrease) in Net Assets
Net Assets - Beginning of Year
Net Assets - End of Year

$

75,186.00

2,941.99

146 614.74

$ _ _--=22:a..4;.,.c,7'--4'-=2"'-.7..;;..3

$

1,691,061.93

346,727.81

20,538.74

236,392.02

3,072,078.98

981,148.87

$

6,347,948.35

$ -6, 123,205.62

$

7,663,329.00

332,230.00

19,929.75

-806,622.03

0.04

$

7,208,866.76

$

1,085,661.14

3,836,101.72 21,281,180.17 $ 26,202,943.03
0.00

$ 26,202,943.03

The notes to the financial statements are an integral part of this statement. -3 -

(This page left intentionally blank)

GEORGIA GWINNETT COLLEGE STATEMENT OF CASH FLOWS
YEAR ENDED JUNE 30, 2006
CASH FLOWS FROM OPERATING ACTIVITIES Fees Grants and Contracts Payments to Suppliers Payments to Employees Other Receipts (Payments)
Net Cash Provided (Used) by Operating Activities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations Gifts and Grants Received for Other than Capital Purposes
Net Cash Flows Provided (Used) by Noncapital Financing Activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchases of Capital Assets Principal Paid on Capital Debt and Leases Interest Paid on Capital Debt and Leases
Net Cash Provided (Used) by Capital and Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES Interest on Investments
Net Increase (Decrease) in Cash
Cash and Cash Equivalents - Beginning of Year
Cash and Cash Equivalents - End of Year
RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating Income (Loss) Adjustments to Reconcile Net Income (Loss) to Net Cash
Provided (Used) by Operating Activities Depreciation Change in Assets and Liabilities: Accounts Receivable, Net Accounts Payable Other Liabilities Compensated Absences
Net Cash Provided (Used) by Operating Activities
NONCASH ACTIVITY Gift of Capital Assets Reducing Proceeds of Capital Grants and Gifts
The notes to the financial statements are an integral part of this statement. -5-

EXHIBIT"C"

$

75,186.00

-27,008.50

-3,662,555.95

-1,574,434.44

175,157.52

$ -5,013,655.37

$ 7,663,329.00 332,230.00
$ _ __;_1..;;,9..;;;.9.;;;..5,'""5.;;;..59;;;..;..;;;..ooc..

$

-308, 138.60

-448,181.97

-806,622.03

$ -1,562,942.60

$ _ _ _1_9,._9_29_._75_ $ 1,438,890.78
0.00

$ 1,438,890.78

$ -6, 123,205.62
981,148.87
-39,064.46 16,157.91 37,656.75 113,651.18

$ -5,013,655.37

$ -3,836, 101.72

GEORGIA GWINNETT COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS Georgia Gwinnett College serves the state and national communities by providing its students with academic instruction that advances fundamental knowledge, and by disseminating knowledge to the people of Georgia and throughout the country.
REPORTING ENTITY Georgia Gwinnett College 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 Gwinnett College 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 Gwinnett College does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Georgia Gwinnett College is considered an organizational unit of the Board of Regents of the University System of Georgia reporting entity for financial reporting purposes because of the significance of its legal, operational, and financial relationships with the Board of Regents as defined in Section 2100 of the Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial Reporting Standards.
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. Georgia Gwinnett College did not have any established component units as of June 30, 2006.
FINANCIAL STATEMENT PRESENTATION In June 1999, the GASB issued Statement No. 34, Basic Financial Statements and Management Discussion and Analysis for State and Local Governments. This was followed in November 1999 by GASB Statement No. 35, Basic Financial Statements and Management's Discussion and Analysis for Public Colleges and Universities. The State of Georgia implemented GASB Statement No. 34 as of and for the year ended June 30, 2002. As an organizational unit of the State of Georgia, the College was also required to adopt GASB Statements No. 34 and No. 35 as amended by GASB Statements No. 37 and No. 38. The financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) as prescribed by the GASB and are presented as required by these standards to provide a comprehensive, entity-wide perspective of the College's assets, liabilities, net assets, revenues, expenses, changes in net assets, cash flows, and replaces the fund group perspective previously required.

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GEORGIA GWINNETT COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING For financial reporting purposes, the College is considered a special-purpose government engaged only in business-type activities. Accordingly, the College's financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting, except as noted in the preceding paragraph. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. All significant intra-College transactions have been eliminated.
The College has the option to apply all Financial Accounting Standards Board (FASB) pronouncements issued after November 30, 1989, unless FASB conflicts with GASB. The College has elected to not apply FASB pronouncements issued after the applicable date.
CASH AND CASH EQUIVALENTS Cash and Cash Equivalents consist of petty cash, demand deposits and time deposits in authorized financial institutions, and cash management pools that have the general characteristics of demand deposit accounts.
ACCOUNTS RECEIVABLE Accounts receivable consists of fees charged to students. Accounts receivable also includes amounts due from state and local governments, or private sources, in connection with reimbursement of allowable expenditures made pursuant to the College's grant and contracts. Accounts receivable are recorded net of estimated uncollectible amounts.
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 College's capitalization policy includes all items with a unit cost of $5,000.00 or more, and an estimated useful life of greater than one year. Renovations to buildings, infrastructure, and land improvements that exceed $100,000.00 and significantly increase the value or extend the useful life of the structure are capitalized. Routine repairs and maintenance are charged to operating expense in the year in which the expense was incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 40 to 60 years for buildings, 20 to 25 years for infrastructure and land improvements, 10 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.
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GEORGIA GWINNETT COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL ASSETS Effective July 1, 2001, the GSFIC retains construction in progress on their books throughout the construction period and transfers the entire project to Georgia Gwinnett College when complete. For the year ended June 30, 2006, GSFIC did not transfer any capital additions to Georgia Gwinnett College.
COMPENSATED ABSENCES Employee vacation pay is accrued at year-end for financial statement purposes. The liability and expense incurred are recorded at year-end as accrued vacation payable in the Statement of Net Assets, and as a component of compensation and benefit expense in the Statement of Revenues, Expenses and Changes in Net Assets. Georgia Gwinnett College had accrued liability for compensated absences in the amount of $0.00 as of July 1, 2005. For fiscal year 2006, $113,651.18 was earned in compensated absences and employees were paid $0.00, for a net increase of $113,651.18 which represents the June 30, 2006 accrued liability for compensated absences.
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 College's net assets are classified as follows:
Invested in capital assets, net of related debt: This represents the College's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt. The term "debt obligations" as used in this definition does not include debt of the GSFIC as discussed previously in Note 1 - Capital Assets section.
Unrestricted net assets: Unrestricted net assets represent resources derived from student fees, state appropriations, and sales and services. These resources are used for transactions relating to the educational and general operations of the College, 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 $2,000.00. 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 Treasury and Fiscal Services.
Unrestricted Net Assets includes the following items which are quasi-restricted by management.

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GEORGIA GWINNETT COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NET ASSETS

June 30, 2006

Reserve for Encumbrances Other Unrestricted

$ 1,372,140.58 -61,651.18

Total Unrestricted Net Assets

$ 1,310,489.40

When an expense is incurred that can be paid using either restricted or unrestricted resources, the College's policy is to first apply the expense towards unrestricted resources, and then towards restricted resources.

INCOME TAXES Georgia Gwinnett College, as a political subdivision of the State of Georgia, is excluded from Federal income taxes under Section 115(1) of the Internal Revenue Code, as amended.

CLASSIFICATION OF REVENUES The College has classified its revenues as either operating or nonoperating revenues in the Statement of Revenues, Expenses and Changes in Net Assets according to the following criteria:

Operating revenues: Operating revenues include activities that have the characteristics of exchange transactions, such as student fees.

Nonoperating revenues: Nonoperating revenues include activities that have the characteristics of non-exchange transactions, such as gifts and contributions, and other revenue sources that are defined as nonoperating revenues by GASB No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting, and GASB No. 34, such as state appropriations and investment income.

NOTE 2: DEPOSITS

DEPOSITS The custodial credit risk for deposits is the risk that in the event of a bank failure, the College's deposits may not be recovered. Funds belonging to the State of Georgia (and thus the College) 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.

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GEORGIA GWINNETT COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "D"

NOTE 2: DEPOSITS

DEPOSITS 2. Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or
municipalities of the State of Georgia.

3. Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose.

4. Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia.

5. Bonds, bills, certificates of indebtedness, notes or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest 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 Mortgage Association.

6. Guarantee or insurance of accounts provided by the Federal Deposit Insurance 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, 2006, the carrying value of deposits was $1,438,890.78 and the bank balance was $1,544,840.08. Of the College's deposits, $1,444,840.08 was uninsured. Of these uninsured deposits, $1,444,840.08 was collateralized with securities held by the financial institution, by its trust department or agency, but not in the College's name.

NOTE 3: ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following at June 30, 2006.

Georgia State Financing and Investment Commission Other

$

27,008.50

12,055.96

Total Accounts Receivable

$====3==9=06==4==.4==6

NOTE 4: CAPITAL ASSETS

Following are the changes in capital assets for the year ended June 30, 2006:

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GEORGIA GWINNETT COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "D"

NOTE 4: CAPITAL ASSETS

Beginning Balance Jul:r: 1, 2005

Special Item
Transfers

Additions

Reductions

Ending Balance June 30, 2006

Capital Assets, Not Being

Depreciated:

Construction

Work-In-Progress

$

0.00 $ 850,827.25 $ 3,847,663.72 $ 4,671,482.47 $

27,008.50

Capital Assets, Being Depreciated: Building and Building Improvements $ Equipment Capital Leases Library Collections

0.00 $ 19,727,623.33 $ 4,676,480.47

0.00

1,171,577.10

61,631.34

0.00 17,279,804.07

0.00

789,079.00

229,947.30 $

3 554.00

$ 24,404,103.80 1,233,208.44
17,279,804.07 1,015,472.30

Total Assets

Being Depreciated

$

0.00 $ 38,968,083.50 $ 4,968,059.11 $

3 554.00 $ 43,932,588.61

Less: Accumulated Depreciation: Building and Building Improvements $ Equipment Capital Leases Library Collections

0.00 $ 0.00 0.00 0.00

986,381.17 $ 516,866.08 991,557.79 176,851.00

389,028.55 246,992.66 262,565.66
82,562.00 $

$ 3 554.00

1,375,409.72 763,858.74
1,254,123.45 255,859.00

Total Accumulated

Depreciation

$

0.00 $ 2,671,656.04 $ 981,148.87 $

3 554.00 $ 3,649,250.91

Total Capital Assets,

Being Depreciated, Net

$

0.00 $ 36,296,427.46 $ 3,986,910.24 $

0.00 $ 40,283,337.70

Capital Assets, Net

$

0.00 $ 37.147.254.71 $ 7.834.573.96 $ 4,671,482.47 $ 40.310,346.20

NOTES: LONG-TERM LIABILITIES

Long-term liability activity for the year ended June 30, 2006 was as follows:

Beginning Balance Jul:r: 1, 2005

Special Item
Transfer

Additions

Reductions

Ending Balance June 30, 2006

Current Portion

Leases Lease Obligations

$

0.00 $15,866,074.54

$ 448,181.97 $15,417,892.57 $ 573,769.55

Other Liabilities

Compensated Absences

0.00

$ 113,651.18

113,651.18

113,651.18

Total Long-Term Obligations

$

0.00 $15,866.074 54 $ 113.651 18 $ 448 181 97 $15,531.543 .75 $ 687,420 73

NOTE6: SIGNIFICANT COMMITMENTS

Georgia Gwinnett College had significant unearned, outstanding, construction or renovation contracts executed in the amount of $4,479,574.00 as of June 30, 2006. This amount is not reflected in the accompanying basic financial statements.

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GEORGIA GWINNETT COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "D"

NOTE 7: LEASE OBLIGATIONS

Georgia Gwinnett College is obligated under a capital lease for the acquisition of real property.

CAPITAL LEASES Georgia Gwinnett College has one capital lease payable in monthly installments with the term expiring in 2023. Expenditures for fiscal year 2006 were $1,254,804.00, of which $806,622.03 represented interest expense. Principal paid on the capital lease was $448,181.97. The following is a summary of the carrying values of assets held under capital lease at June 30, 2006:

Buildings

$ 17,279,804.07

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.

Future commitments for capital leases (which here and on the Statement of Net Assets include other installment purchase agreements) having remaining terms in excess of one year as of June 30, 2006, were as follows:

Year Ending June 30

Capital Leases

2007 2008 2009 2010 2011 2012 - 2016 2017 - 2021 2022 - 2023

$ 1,354,804.00 1,374,804.00 1,374,804.00 1,374,804.00 1,374,804.00 6,920,676.00 7,054,000.00 2,154,309.06

Total Minimum Lease Payments Less: Interest

$ 22,983,005.06 7,565.112.49

Principal Outstanding

$ 15,417,892.57

Georgia Gwinnett College's fiscal year 2006 expense for rental of real property and equipment under capital leases was $1,254,804.00.

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GEORGIA GWINNETT COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "D"

NOTE 8: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Plan Description Georgia Gwinnett College participates in the Teachers Retirement System of Georgia (TRS), a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly. TRS provides retirement allowances and other benefits for plan participants. TRS provides service retirement, disability retirement, and survivor's benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the TRS offices or from the Georgia Department of Audits and Accounts.

Funding Policy Employees of Georgia Gwinnett College who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. Georgia Gwinnett College makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2006, the employer contribution rate was 9.24% for covered employees. Employer contributions for the current fiscal year are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2006

100%

$

64,331.13

REGENTS RETIREMENT PLAN

Plan Description The Regents Retirement Plan, a single-employer defined contribution plan, is an optional retirement plan that was created/established by the Georgia General Assembly in O.C.G.A. 4721-1 et.seq. and is administered by the Board of Regents of the University System of Georgia. O.C.G.A. 47-3-68(a) defines who may participate in the Regents Retirement Plan. An "eligible University system employee" is a faculty member or a principal administrator, as designated by the regulations of the Board of Regents. Under the Regents Retirement Plan, a plan participant may purchase annuity contracts from four approved vendors (AIG-VALIC, American Century, Fidelity, and TIAA-CREF) for the purpose of receiving retirement and death benefits. Benefits depend solely on amounts contributed to the plan plus investment earnings. Benefits are payable to participating employees or their beneficiaries in accordance with the terms of the annuity contracts.

Funding Policy Georgia Gwinnett College 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 2006,

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GEORGIA GWINNETT COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "D"

NOTE 8: RETIREMENT PLANS
REGENTS RETIREMENT PLAN
Funding Policy the employer contribution was 9.65% of the participating employee's eamable compensation. Employees contribute 5% of their eamable compensation. Amounts attributable to all plan contributions are fully vested and non-forfeitable at all times.
Georgia Gwinnett College and the covered employees made the required contributions of $12,500.36 (9.65%) and $6,476.83 (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 Gwinnett College participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employer defined contribution plan established by the General Assembly of Georgia for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia.
Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board of Trustees. If a member has less than $ 3,500.00 credited to his/her account, the Board of Trustees has the option of requiring a lump sum distribution to the member in lieu of making periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute.
Contributions 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 2006 amounted to $3,974.29, 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.
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GEORGIA GWINNETT COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "D"

NOTE 9: RISK MANAGEMENT
The University System of Georgia offers its employees and retirees access to two different selfinsured healthcare plan options - a PPO/PPO Consumer healthcare plan, and an indemnity healthcare plan. Georgia Gwinnett College and participating employees and retirees pay premiums to either of the self-insured healthcare plan options to access benefits coverage. The respective self-insured healthcare plan options are included in the financial statements of the Board of Regents of the University System of Georgia - University System Office. All units of the University System of Georgia share the risk of loss for claims associated with these plans. The reserves for these two plans are considered to be a self-sustaining risk fund. Both selfinsured healthcare plan options provide a maximum lifetime benefit of $2,000,000.00 per person. The Board of Regents has contracted with Blue Cross Blue Shield of Georgia, a wholly owned subsidiary of WellPoint, to serve as the claims administrator for the two self-insured healthcare plan products. In addition to the two different self-insured healthcare plan options offered to the employees of the University System of Georgia, two fully insured HMO healthcare plan options are also offered to System employees.
The Department of Administrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. Georgia Gwinnett College, as an organizational unit of the Board of Regents of the University System of Georgia, is part of the State of Georgia reporting entity, and as such, is covered by the State of Georgia risk management program administered by DOAS. Premiums for the risk management program are charged to the various state organizations by DOAS to provide claims servicing and claims payment.
A self-insured program of professional liability for its employees was established by the Board of Regents of the University System of Georgia under powers authorized by the Official Code of Georgia Annotated Section 45-9-1. The program insures the employees to the extent that they are not immune from liability against personal liability for damages arising out of the performance of their duties or in any way connected therewith. The program is administered by DOAS as a Self-Insurance Fund.
NOTE 10: CONTINGENCIES
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditures that are disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although Georgia Gwinnett College expects such amounts, if any, to be immaterial to its overall financial position.
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GEORGIA GWINNETT COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "D"

NOTE 10: CONTINGENCIES
Litigation, claims and assessments filed against Georgia Gwinnett College (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, 2006.
NOTE 11: POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
Pursuant to the general powers conferred by the Official Code of Georgia Annotated Section 203-31, the Board of Regents of the University System of Georgia has established group health and life insurance programs for regular employees of the University System of Georgia. It is the policy of the Board of Regents to permit employees of the University System of Georgia eligible for retirement or that become permanently and totally disabled to continue as members of the group health and life insurance programs. The policies of the Board of Regents of the University System of Georgia define and delineate who is eligible for these post-employment health and life insurance benefits. Organizational units of the Board of Regents of the University System of Georgia pay the employer portion for group insurance for affected individuals. With regard to life insurance, the employer covers the total cost for $25,000.00 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.
As of June 30, 2006, there were no employees who had retired or were disabled that were receiving these post-employment health and life insurance benefits.
NOTE 12: SPECIAL ITEM TRANSFERS
Due to the creation of Georgia Gwinnett College by the Board of Regents of the University System of Georgia, all assets purchased and associated capital lease liability related to the Gwinnett University Center were transferred to Georgia Gwinnett College as of July 1, 2005. These items were transferred from Georgia Perimeter College, who acted as custodian for the Gwinnett University Center. The net book value of the transfer was $21,281,180.17. These assets and associated liability are included in the Statement of Net Assets and are noted as Special Item Transfers on the Statement of Revenues, Expenses and Changes in Net Assets. See Note 4, Capital Assets and Note 5, Long-Term Liabilities, for additional information.

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GEORGIA GWINNETT COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "D"

NOTE 13: NATURAL CLASSIFICATIONS WITH FUNCTIONAL CLASSIFICATIONS

The College's operating expenses by functional classification for fiscal year 2006 are shown below:

Functional Classification

Natural Classification
Salaries Staff
Employee Benefits Travel Utilities Supplies and Other
Services Depreciation
Total Operating Expenses

Instruction

Academic Support

Student Services

Institutional Support

$ 564,090.62 $

138,935.26

7,254.22

$

99,333.37

3,741.34

314,944.45 746 174.84

669,207.87 112,396.75

$ I 160,452 66 $ I 495 626 06 $

124,095.30 $ 21,665.52
254.54

993,268.46 185,987.71
13,029.98 25,608.50

2,043.39

2,149,643.61 2,338.56

)48 058 75 $ 3 369 876 82

Natural Classification
Salaries Staff
Employee Benefits Travel Utilities Supplies and Other
Services Depreciation
Total Operating Expenses

Functional Classification

Plant

Operations and

Unallocated

Maintenance

Depreciation

Total Operating Expenses

$

9,607.55

139.32

107,708.81

-63,760.34 120,315.77 $

$ 174 01 I 11 $

$ 1,691,061.93 346,727.81 20,538.74 236,392.02

-77.05

3,072,078.98 981,148.87

-77 05 $ 6 347 948 35

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SUPPLEMENTARY INFORMATION - 19 -

GEORGIA GWINNETT COLLEGE BALANCE SHEET - (NON-GAAP BASIS)
BUDGET FUND
JUNE 30, 2006
ASSETS Cash and Cash Equivalents Accounts Receivable
Other
Total Assets
LIABILITIES AND FUND EQUITY Liabilities
Accrued Payroll Payroll Withholdings Accounts Payable Other Liabilities
Total Liabilities Fund Balances
Reserved Technology Fees
Unreserved Surplus Total Fund Balances
Total Liabilities and Fund Balances

SCHEDULE "1"

$

1,438,886.17

39,064.45

$ ==i1=,4=7=7'=95=0=.6==2

$

13,222.07

2,976.31

1,372,095.49

37,656.75

$

1,425,950.62

$

50,000.00

2,000.00

$

52,000.00

$ ==i1=,4=7=7'=95=0=.6==2

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.
- 20 -

GEORGIA GWINNETT COLLEGE BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GAAP BASIS)
BUDGET FUND YEAR ENDED JUNE 30, 2006

SCHEDULE "2"

REVENUES State Appropriations State General Funds Other Funds Total Revenues
EXPENDITURES Teaching Excess of Funds Available over Expenditures
FUND BALANCE JULY 1 Reserved
FUND BALANCE JUNE 30

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$ 7,663,329.00 $ 7,663,329.00 $

4,634,312.00

4,413,004.20

$ 12,297,641.00 $ 12,076,333.20 $

0.00 -221,307.80
-221,307.80

$ 12,297,641.00 $ 12,024,333.20 $

$

0.00 $

52,000.00 $

273,307.80 52,000.00

0.00

$

52,000.00

SUMMARY OF FUND BALANCE
Reserved Technology Fees
Unreserved Surplus

$

50,000.00

2,000.00

Total Fund Balance

$ ===5=2=,o=o=o=.o=o

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.
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GEORGIA GWINNETT COLLEGE RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30, 2006

SCHEDULE "3"

Totals per Annual Supplement
Accruals June 30, 2006
Compensated Absences June 30, 2006
Adjustments Salaries Paid by Georgia Perimeter College on Behalf of Georgia Gwinnett College

SALARIES

TRAVEL

$ 914,850.19 $

20,538.74

13,222.07

105,574.71

657,414.96

$ 1,691,061.93 $ ====20=,5=3=8=74=

- 23 -

SECTION II CURRENT YEAR FINDINGS AND QUESTIONED COSTS

GEORGIA GWINNETT COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No findings or matters related to management were reported. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No findings or matters related to management were reported.