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AUDIT REPORT STATE OF GEORGIA MACON COLLEGE MACON, GEORGIA YEAR ENDED JUNE 30, 1996 MACON COLLEGE - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION EXHIBITS FINANCIAL STATEMENTS A COMBINED BALANCE SHEET ALL FUND GROUPS 2 B COMBINED STATEMENT OF CHANGES IN FUND BALANCES ALL FUND GROUPS 4 C STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES, AND OTHER CHANGES 6 D NOTES TO THE FINANCIAL STATEMENTS 7 SUPPLEMENTARY INFORMATION E COMBINING BALANCE SHEET CURRENT FUNDS - UNRESTRICTED 22 F COMBINING STATEMENT OF CHANGES IN FUND BALANCES CURRENT FUNDS - UNRESTRICTED 23 G COMBINING STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES, AND OTHER CHANGES UNRESTRICTED 25 SCHEDULES SCHEDULES OF REVENUES AND EXPENDITURES COMPARED TO BUDGET 1 RESIDENT INSTRUCTION 26 2 LOTTERY FOR EDUCATION 28 3 SCHEDULE OF OPERATIONS LOAN FUNDS 29 4 SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS AGENCY FUNDS 30 5 CASH AND CASH EQUIVALENTS 32 6 INVESTMENTS 33 7 ACCOUNTS RECEIVABLE 35 8 CHANGES IN INVESTMENT IN PLANT 36 9 SCHEDULE OF FUND BALANCES CURRENT FUNDS AND PLANT FUNDS 38 MACON COLLEGE - TABLE OF CONTENTS - SECTION I FINANCIAL SUPPLEMENTARY INFORMATION SCHEDULES 10 SCHEDULE OF REVENUES CURRENT FUNDS 40 SCHEDULES OF EXPENDITURES BY OBJECT 11 CURRENT FUNDS 42 12 PLANT FUNDS 46 13 RECONCILIATION OF SALARIES AND WAGES, AND TRAVEL 47 SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS SECTION I FINANCIAL CLAUDE L. VICKERS STATE AUDITOR (404) 6562174 DEPARTMENT OF AUDITS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 September 30, 1996 Honorable Zell Miller, Governor Members ofthe General Assembly of Georgia Members ofthe Board ofRegents of the University System of Georgia and Honorable S. Aaron Hyatt, President Macon College INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION Ladies and Gentlemen: We have audited the accompanying financial statements (Exhibits A through D) ofMacon College as of and for the year ended June 30, 1996. These financial statements are the responsibility of the College's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As described in Note 1 to the financial statements, Georgia Law and State budgetary policy require the College to prepare its financial statements on a basis which is not consistent with generally accepted accounting principles with respect to the recording of encumbrances as expenditures and liabilities. To conform with generally accepted accounting principles, encumbrances should be recorded as a reservation offund balance. The effects on the financial statements of this departure from generally accepted accounting principles were not reasonably determinable, but are believed to be material. As disclosed in Note 1 to the financial statements, the College did not report the liability and related expenditure for compensated absences in the current funds as required by generally accepted accounting principles. Ifcompensated absences were reported, liabilities would be increased and fund balance would be 96ARL-62 decreased by $514,027.82 as ofJune 30, 1996, and the net change in fund balance for the year ended June 30, 1996, would be decreased by $90,099.56. In our opinion, except for the effects on the financial statements ofthe matters discussed in the third and fourth paragraphs, the financial statements referred to above present fairly, in all material respects, the financial position ofMacon College as of June 30, 1996, and the changes in fund balances and the current operating funds revenues, expenditures, and other changes for the year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplementary information (Exhibits E through G and Schedules 1 through 13) is presented for purposes ofadditional analysis and is not a required part of the financial statements ofMacon College. Such information has been subjected to the auditing procedures applied in the audit ofthe financial statements and, in our opinion, except for the effects of the matters discussed in the third and fourth paragraphs, such information is fairly presented in all material respects in relation to the financial statements taken as a whole. Respectfully submitted, ~~ Claude L. Vickers State Auditor CLV:dt 96ARL-62 FINANCIAL STATEMENTS - 1- MACON COLLEGE COMBINED BALANCE SHEET ALL FUND GROUPS JUNE 30, 1996 ASSETS Cash and Cash Equivalents Investments Accounts Receivable Inventories Prepaid Items Due from Other Fund Groups Investment in Plant Total Assets LIABILITIES AND FUND BALANCES Liabilities Accounts Payable Deferred Revenue Tuition and Fees Deposits Held in Custody for Others Due to Other Fund Groups Total Liabilities Fund Balances U. S. Government Grants Refundable Term Endowment Net Investment in Plant Restricted Unrestricted Total Fund Balances Total Liabilities and Fund Balances CURRENT FUNDS UNRESTRICTED RESTRICTED LOAN FUNDS $ 950,980.40 $ $ 18,226.77 152,375.38 418,709.99 213,478.83 2,144.00 534,204.96 1;016.60 7,261.92 $ 1,853,183.57 $ 436,936.76 $===8=,2.7...8...=52= $ 207,247.85 519,011.63 $ 398,110.30 $ 726,259.48 $ 398,110.30 $ $ $ 1,126,924.09 $ 1,126,924.09 $ 38,826.46 38,826.46 $ 8,278.52 8,278.52 $ 1,853,183.57 $ 436,936.76 $ ===8=,2..7..8....5...2= The notes to the financial statements are an integral part of this statement. -2- EXHIBIT "A" ENDOWMENT AND SIMILAR FUNDS UNEXPENDED PLANT FUNDS' RENEWALS AND REPLACEMENTS INVESTMENT IN PLANT AGENCY FUNDS TOTAL (Memorandum Only) $ 269,543.39 $ 289,961.78 $ 1,511,502.17 $ 771,121.79 789,348.56 $ 527,596.71 2,220.62 1,108,164.62 213,478.83 2,144.00 534,204.96 _ _ _ _ _ _ $ 25,102,809.12 25,102,809.12 $ 771,121.79 $ 527,596.71 $ 269,543.39 $ 25,102,809.12 $ 292,182.40 $ 29,261,652.26 $ 293,875.74 136,094.66 $ 429,970.40 $ 771,121.79 $ $ 771,121.79 $ 97,626.31 $ 97,626.31 $ $ 146,752.02 $ 647,875.61 145,430.38 519,011.63 145,430.38 534,204.96 $ 292,182.40 $ 1,846,522.58 $ 25,102,809.12 269,543.39 269,543.39 $ 25,102,809.12 $ 8,278.52 771,121.79 25,102,809.12 38,826.46 1,494,093.79 $ 27,415,129.68 $ 771,121.79 $ 527,596.71 $ 269,543.39 $ 25,102,809.12 $ 292,182.40 $ 29,261,652.26 -3- MACON COLLEGE COMBINED STATEMENT OF CHANGES IN FUND BALANCES ALL FUND GROUPS YEAR ENDED JUNE 30, 1996 REVENUES AND OTHER ADDITIONS Unrestricted Current Fund Revenues State Appropriations Regular Lottery Proceeds Federal Grants and Contracts State Grants and Contracts Private Gifts, Grants, and Contracts Investment Income Endowment Other Realized Gains on Investments Adjustments Prior Years' Expenditures/Accounts Payable Prior Years' Checks Voided Expended for Plant Facilities Current Funds Plant Funds Unexpended Renewals and Replacements Georgia State Financing and Investment Commission Total Revenues and Other Additions EXPENDITURES AND OTHER DEDUCTIONS Educational and General Expenditures Auxiliary Enterprises Expenditures Indirect Costs Recovered Remittances to the Board of Regents of the University System of Georgia Prior Year's Unrestricted Fund Balance (Surplus) Adjustments Prior Years' RevenuesiAccounts Receivable Expended for Plant Facilities Capitalized Noncapitalized DisposalslDeletionsiAdjustments Total Expenditures and Other Deductions TRANSFERS BETWEEN FUNDS Mandatory Investment Income for Principal Endowment Principal Nonmandatory Renewals and Replacements Total Transfers Between Funds Net Increase/(Decrease) for the Year FUND BALANCES JULY 1, 1995 FUND BALANCES JUNE 30, 1996 CURRENT FUNDS UNRESTRICTED RESTRICTED LOAN FUNDS $ 16,901,653,23 $ 0.00 $ 2,470,339.61 638,523.94 70,053,80 38,635,58 9,902.54 171,80 $ 16,911,727,57 $ 3,217,552,93 $ 0.00 $ 16,422,091.09 $ 3,155,568,48 $ 0.00 343,226.70 38,287,40 9,383,99 356,91 $ 16,775,058.69 $ 3,193,855.88 $ 0.00 $ -20,408,81 -750,000,00 $ -66,612,72 $ -66,612.72 $ -770,408,81 $ 70,056,16 $ -746,711.76 $ 1,056,867,93 785,538.22 0.00 8,278.52 $ 1,126,924.09 $ 38,826,46 $ 8,278.52 The notes to the financial statements are an integral part of this statement, -4- EXHIBIT"B" ENDOWMENT AND SIMILAR FUNDS UNEXPENDED PLANT FUNDS RENEWALS AND REPLACEMENTS INVESTMENT IN PLANT TOTAL (Memorandum Only) $ 306,510.00 400,000.00 3,451.32 22,852.55 $ $ 712.98 $ 712.98 $ 732,813.87 $ $ 16,901,653.23 306,510.00 400,000.00 2,470,339.61 638,523.94 73,505.12 4,748.25 38,635.58 27,600.80 712.98 9,902.54 171.80 $ 690,469.18 690,469.18 645,135.64 70,347.39 527,596.71 645,135.64 70,347.39 527,596.71 4,748.25 $ 1,933,548.92 $ 22,801 ,104.52 $ 0.00 $ 19,577,659.57 343,226.70 38,287.40 $ 3,695.43 13,079.42 8,143.84 8,500.75 645,135.64 $ 106,794.06 70,347.39 $ 201,146.43 715,483.03 106,794.06 201,146.43 $ 0.00 $ 763,768.97 $ 70,347.39 $ 201,146.43 $ 21,004,177.36 $ 20,408.81 750,000.00 $ $ 770,408.81 $ $ 771,121.79 $ -30,955.10 $ 0.00 128,581.41 $ 0.00 0.00 66,612.72 0.00 66,612.72 $ 0.00 1,013.58 $ 1,732,402.49 $ 1,796,927.16 268,529.81 23,370,406.63 25,618,202.52 $ 771,121.79 $ 97,626.31 $ 269,543.39 $ 25,102,809.12 $ 27,415,129.68 -5- MACON STATE COLLEGE STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES, AND OTHER CHANGES YEAR ENDED JUNE 30,1996 EXHIBIT"C" Net Increase/(Decrease) in Fund Balances $ 70,056,16 $ -746,711.76 $ -676,655.60 The notes to the financial statements are an integral part of this statement. -6- MACON COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996 EXIllBIT "0" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY Macon College is one ofthirty-four (34) 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 ofMacon College as a separate reporting entity. The Board ofRegents 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. Macon College does not have authority to retain unexpended State funds (surplus) for any given fiscal year. Accordingly, Macon 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 Codification of Governmental Accounting and Financial Reporting Standards. FUND ACCOUNTING In order to ensure observance oflimitations and restrictions placed on the use ofthe resources available to the College, the accounts ofthe College are maintained in accordance with the principles offund accounting. This is the procedure by which resources for various purposes are classified for accounting and reporting purposes into funds that are in accordance with activities or objectives specified. Separate accounts are maintained for each fund; however, in the accompanying financial statements, funds that have similar characteristics have been combined into fund groups. Accordingly, all financial transactions have been recorded and reported by fund group. Within each fund group, the College's fund balance allocations and designations represent those portions of the fund balances that are reserved, restricted and/or designated for specific future use by legal covenants, State policies, or institutional policies. Fund groups and funds presented in the accompanying financial statements are as follows: CURRENT FUNDS UNRESTRIClED - The fund used to account for those economic resources over which the College retains full control to use for purposes of performing the primary functions of the College, e.g., instruction, auxiliary enterprises, and student activities. RESTRICTED - The fund used to record externally restricted funds which may ol).ly be utilized in accordance with the purposes established by their source. Restricted current funds are recorded as revenues and expenditures when expended for current operating purposes. - 7- MACON COLLEGE NOTESTOTHEFmANC~STATE~NTS JUNE 30.1996 EXHIBIT "0" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTmG POLICIES FUND ACCOUNTING LOAN FUNDS The fund used to account for resources which have been made available for financial loans to students. ENDOWMENT AND SIMILAR FUNDS The fund used to account for gifts to the Endowment Challenge grant. Endowment funds are subject to the restrictions ofgift instruments requiring that the principal be invested in perpetuity and income only be utilized. This term endowment fund is similar to endowment funds except that upon the passage of a stated period of time or the occurrence of a particular event, all or part ofthe principal may be expended. PLANT FUNDS UNEXPENDED - The fund used to account for financial resources utilized to acquire or to construct physical properties for institutional purposes. RENEWALS AND REPLACEMENTS - The fund used to account for resources set aside for the renewal and replacement ofinstitutional properties. INVESTMENT m PLANT - The fund which shows the total amounts representing the book value of all , physical properties owned by the College. Net Investment in Plant is an equity account showing the total book value ofphysical properties belonging to the College less the amount of any indebtedness to others. AGENCY FUNDS The fund used to account for resources held by the College as custodian or fiscal agent for individual students, faculty, staff members, and organizations. BASIS OF ACCOUNTING Except as otherwise disclosed in these notes, the financial statements are prepared on the modified accrual basis ofaccounting, which is materially the same as the accrual basis of accounting applicable to colleges and . universities prescribed in the American Institute of Certified Public Accountants audit guide reporting model. The modified accrual basis ofaccounting is defined as that method of accounting in which expenditures, other than accrued interest on general long-term debt, are recorded at the time liabilities are incurred and revenues are recorded when available and measurable to finance expenditures of the fiscal period. - 8- MACON COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996 EXHIBIT"D" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING Contractua1obligations for goods and services which have not been received at the end of the fiscal year are recognized as expenditures and liabilities in the accompanying financial statements. This accounting practice causes expenditure-driven grant revenues to be accrued based, in part, on the unexecuted portion of contracts for goods and services. The recognition of encumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, but is not consistent with generally accepted accounting principles, which provide for the recording of encumbrances as a reservation offund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures determined in accordance with generally accepted accounting principles. Compensated absences represent obligations of the College relating to employees' rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulated annual leave in which payment is probable and can be reasonably estimated. The compensated absences liability of $514,027.82 and the related current year expenditure of $90,099.56 have not been reported in the current funds as required by generally accepted accounting principles. Prior period adjustments and certain other items are reported as additions to and deductions from fund balances of current funds in the accompanying financial statements. This presentation is in accordance with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, but differs from generally accepted accounting principles in that immaterial adjustments should be reported as current period revenues and expenditures. The effect of this departure is deemed to be immaterial to the fair presentation ofthe financial statements. To'the extent that Current Funds and Plant Funds are used to finance plant assets, the amounts so provided are accounted for as expenditures. The balances shown on the Combined Balance Sheet as Net Investment in Plant reflect the accumulated expenditures made for plant facilities through Current Funds and Plant Funds and also include expenditures made for plant facilities expended by the Georgia State Financing and Investment Commission on behalf of the College. Donated fixed assets are recorded at fair market value on the date donated. Disposals are deleted at recorded values. No depreciation has been provided on physical plant and equipment. The Statement of Current Funds Revenues, Expenditures, and Other Changes is a statement of financial activities of current funds related to the current reporting period. It does not purport to present the results of operations or the net income or loss for the period as would a statement of income or a statement of revenues and expenses. BUDGET The Board of Regents of the University System of Georgia - Administrative Central Office receives State appropriation allotments for units of the University System of Georgia. The appropriated budget is adopted at the departmental level and represents appropriations provided by the Amended Appropriations Act of 19951996. The appropriated budget covers current funds and plant funds, except for Auxiliary Enterprises and Student Activities which are not subject to appropriation. The budget allocation and disbursement of these - 9- MACON COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1996 EXHIBIT "D" NOTE 1: SUM:MARY OF SIGNIFICANT ACCOUNTING POLICIES BUDGET funds is made to the various organizational units by the Administrative Central Office. In addition, the organizational units receive Federal funds and other funds directly and include these funds in the budget filed with the Administrative Central Office. A comparison of anticipated funds available and budgeted expenditures by budget unit object class indicates that the following object classes were overspent by the amounts identified below: Personal Services: Sponsored Operations $ 2832047 Operating Expenses: Education, General and Departmental Services $ 683.798.24 These overexpenditures of budget constitute a violation of Board of Regents policy, but do not constitute statutory violations of budget authority. Statutory violations of budget authority are reported at the departmental level. CASH AND CASH EQUIVALENTS Cash and Cash Equivalents consist of petty cash, demand deposits, certificates of deposit and temporary investments in authorized financial institutions. INVESTMENTS Investments are recorded at cost or in the case of gifts at fair market value on the date of the gift. Funds received by the College as endowments or for restricted purposes are invested according to conditions stipulated by the donor, grantor, or in accordance with the Board ofRegents authorizing resolutions. Gains and losses on investment transactions are accounted for in the funds where such assets are recorded. ACCOUNTS RECEIVABLE Accounts receivable consist ofreimbursements due from Federal, State, local, and private grants and contracts, and other receivables disclosed from information available. No provision has been made for an allowance for doubtful accounts within the accompanying financial statements. INVENTORIES Inventories of consumable supplies are recorded on the consumption method and are valuedatcost on the Combined Balance Sheet using the first-in, first-out method. Inventories of goods for resale are valued at cost using the first-in, first-out method. - 10 - MACON COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1996 EXHIBIT "0" NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES MEMORANDUM ONLY - TOTAL COLUMNS The total columns on the financial statements are captioned "Memorandum Only" because they do not represent consolidated financial information and are presented only to facilitate financial analysis. The columns do not present information that reflects financial position or changes in financial position in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminati<:>ns have not been made in the aggregation of this data. NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds belonging to the State ofGeorgia cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral anyone or more ofthe following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59: (1) Bonds, bills, certificates ofindebtedness, notes, or other direct obligations of the United States or ofthe State of Georgia. (2) Bonds, bills, certificates ofindebtedness, notes, or other obligations of the counties or municipalities ofthe State of Georgia. (3) Bonds ofany public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose. (4) Industrial revenue bonds and bonds 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, or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. (6) Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation. As authorized in the Official Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted policies which allow agencies of the State of Georgia (which includes organizational units of the Board ofRegents of the University System of Georgia) the option of exempting demand deposits from the collateral requirements. - 11 - MACON COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1996 EXHIBIT "D" NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES The treasurer ofthe Board ofRegents is responsible for all details relative to furnishing the required depository protection for all units of the University System of Georgia. CATEGORIZATION OF DEPOSITS For purposes of analysis of custodial credit risk, cash deposits consist of all bank balances which include demand deposits and/or interest bearing accounts. The bank balances as of June 30, 1996, are categorized below in order to provide information about the extent to which such deposits are exposed to custodial credit risk: Category 1 - Amounts covered by depository insurance or collateralized with securities (at market value) held by the College or by its agent in the College's name. Category 2 - Amounts collateralized with securities (at market value) held by the pledging financial institution's trust department or agent in the College's name. Category 3 - Amounts collateralized with securities (at market value) held by the pledging financial institution, or by its trust department or agent but not in the College's name, and amounts uncollateralized. Cash Deposits IDvestment Portfolio Accounts Total Cash Deposits Canying Amount Bank Balances Risk Categories 2 3 $ 1,506,375.17 $ 2,106,962.46 $ 398,409.90 $ 94,760.93 94.707.98 94,707.98 0.00 $ 1,708,552.56 $ 160113610 $ 2,201 67044 $ 49311788 $ 000 $ 170855256 CATEGORIZATION OF INVESTMENTS Investments are summarized and classified as to custodial credit risk within the three categories described below: Category 1 - Insured or registered, or securities held by the College or its agent iti the College's name. Category 2 - Uninsured and unregistered, with securities held by the counterparty's trust department or agent in the College's name. Category 3 - Uninsured and unregistered, with securities held by the counterparty, or by its trust department or agent but not in the College's name. - 12 - MACON COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996 EXlllBIT "D" NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS CATEGORIZATION OF INVESTMENTS The carrying amounts ofinvestment balances as of June 30, 1996, are categorized below: Type ofInvestment Common Stock Corporate Bonds Preferred Stock U. S. Government Securities Risk Categories 2 $ 359,618.99 $ 175,120.88 10,000.00 149.847.76 0.00 $ $ 694 58763 $ 0,00 $ Carrying Market 3 Amount Value 0.00 $ 359,618.99 $ 368,185.40 175,120.88 167,670.03 . 10,000.00 9,750.00 149.847.76 147.116.85 0,00 $ 694 58763 $ 69272228 NOTE 3: INVESTMENT IN PLANT The following is a summary ofInvestment in Plant fixed assets as of June 30, 1996: Land Buildings Improvements Other Than Buildings EqUipment Library Books and Collections Total Investment in Plant $ 483,411.84 17,122,545.21 1,639,857.45 3,492,062.79 2,364,931.83 $ 25.102.809.12 NOTE 4: DEFICIT FUND BALANCE The Resident Instruction Fund, a part ofUnrestricted Current Funds, has a deficit fund balance of$II,588.37 which is-not readily apparent from the financial statements. NOTE 5: RISK MANAGEMENT Macon College is a participant in the Board of Regents of the University System of Georgia Health Benefits Plan, which is a self-insurance program of health and dental benefits for employees and retirees of the University System of Georgia. The College and participating employees and retirees pay premiums to the Health Benefits Plan for this health insurance coverage. The Health Benefits Plan is included in the audit report ofthe Board ofRegents ofthe University System of Georgia - Administrative Central Office. All units ofthe University System of Georgia share the risk ofloss for claims of the Health Benefits Plan. The Health Benefits Plan is considered a self-sustaining risk fund that provides health coverage for its members up to a maximum lifetime benefit of $1,000,000.00 per person and dental coverage up to an annual maximum of $1,000.00 per person. The Board of Regents has contracted with Blue Cross Blue Shield of Georgia to process claims in accordance with the Health Benefits Plan as established by the Board ofRegents. - 13 - MACON COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996 EXIllBIT "D" NOTE 5: RISK MANAGEMENT The Department ofAdministrative SeIVices (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 ~tate is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. The College, as 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 ofRegents of the University System ofGeorgia 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 ofthe performance oftheir duties or in any way connected therewith. The program is administered by DOAS as a Self-Insurance Fund. NOTE 6: DEFERRED COMPENSATION PLAN The State ofGeorgia offers its employees a deferred compensation plan in accordance with Internal Revenue Code Section 457. The plan, available to employees of the State of Georgia and county health departments, permits such employees to defer a portion oftheir salary until future years. Participation in the plan is optional. Participants choose the option or options in which they wish to participate. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the employee or other beneficiary) solely the property and rights of the State of Georgia subject only to the claims of the State's general creditors. Participants' rights under the plan are equal to those of a general creditor of the State of Georgia in an amount equal to the fair market value of the deferred account for each participant. Financial information relative to the plan will be presented in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 1996. NOTE 7: RETIREMENTPLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA Plan Description Macon College participates in the Teachers Retirement System of Georgia (TRS), a cost-sharing multipleemployer public employee retirement system (PERS) established by the General Assembly of Georgia for the - 14 - MACON COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1996 EXHIBIT "0" NOTE 7: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA Plan Description purpose of providing retirement allowances and other benefits for teachers of the State of Georgia. The College's payroll for the year ended June 30, 1996, for employees covered by TRS was $8,160,567.42. The College's total payroll for all employees was $10,028,115.77. . Benefits TRS provides service retirement, disability retirement, and survivor's benefits for its members. A member is eligible for service retirement after the member (1) has attained the age of 60 years and has at least ten years ofcreditable service, (2) has at least 30 years of creditable service, regardless of age, or (3) has attained the age of 55 years and has at least 25 years of creditable service. For those members with 30 years of service or those age 60 with at least ten years of service, retirement benefits are equal to 2% of the average of the member's two consecutive highest paid years ofservice multiplied by the number of years of creditable service up to 40 years. Any member who has between 25 and 30 years of creditable service and is at least 55 years ofage shall receive a benefit which is reduced by the lessor of 1/12 of 7% for each month the member is below age 60; or by 7% for each year or fraction thereofby which the member has less than 30 years of service. The normal retirement pension is payable monthly for life. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death. Retirement benefits also include death and disability benefits whereby the disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The benefit is based on member's creditable service (minimum of 1 years of service) and compensation up to the date of death or up to the time of disability. Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting ofemployer contributions occurs, but the member's contributions are refunded with interest. Contributions Required and Contributions Made Employees of the College who are covered by TRS are required to pay 5% of their gross earnings to TRS. The College makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees as advised by their independent actuary..For fiscal year 1996, the employer contribution rate was 11.81% for covered employees. In addition, the College contributed 4.87% to the TRS on behalf of employees electing to participate in the Regents Retirement Plan. The interest rate assumption (rate of return on investments) was 7.50%. Total contributions to the plan made during fiscal year 1996 amounted to $1,425,340.18, of which $1,017,309.62 was made by the College and $408,030.56 was made by employees. These contributions represented 12.47% (College) and 5% (employees) of covered payroll. - 15 - MACON COLLEGE NOTES TO THE FINANCIAL STATE:MENTS JUNE 30, 1996 EXHIBIT "D" NOTE 7: RETmEMENTPLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA Funding Status and Progress Pension Benefit Obligation The amount of the total pension benefit obligation is based on a standardized measurement established by Statement No.5 of the Governmental Accounting Standards Board (GASB) that is required to be used for reporting purposes. The standardized measurement is the actuarial present value ofcredited projected benefits. This pension valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date and is adjusted for the effects of projected salary increases and any step-rate benefits. A standardized measure of the pension benefit obligation was adopted by the GASB to enable readers ofthe PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among similar PERS. The total unfunded pension benefit obligation of TRS as ofJune 30, 1995, which was the latest information available, was as follows: Total pension benefit obligation $ 17,442,607,000.00 Net assets available for benefits, at cost 15,857,066,000.00 Unfunded pension benefit obligation $ 1.585,541.000.00 The measurement ofthe total pension benefit obligation is based on an actuarial valuation as ofJune 30, 1995. Net assets available for benefits were valued as of the same date. TRS does not make separate measurements of assets and pension benefit obligation for individual employers. Retirement System Contributions Total contributions from all employers to TRS for the year ended June 30, 1996, were $607,274,559.00. The College's contribution for the year ended June 30, 1996, of$I,017,309.62 was actuariaIIy determined and represented .1675% oftotal contributions made by all participating employers. Trend Information Historical trend information is presented in the TRS June 30, 1996, financial report. This information gives an indication of the progress made in accumulating sufficient assets to pay benefits when due. REGENTS RETIREMENT PLAN The State of Georgia provides optional pension benefits for eligible faculty and principal administrators through a defined contribution plan. In a defined contribution plan, benefits depend solely on amounts contributed to the plan plus investment earnings. - 16 - MACON COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1996 EXHIBIT liDII NOTE 7: RETffiEMENTPLANS REGENTSRETImEMENTPLAN State legislation requires that the employer contribute 4% and the employee contribute 5% of the participating employee's earnable compensation. Amounts attributable to all plan contributions are fully vested and nonfOlfeitable at all times. The College's payroll for employees covered by the Regents Retirement Plan for the year ended June 30, 1996, was $1,099,519.74. The College's total payroll for all employees was $10,028,115.77. The College and the covered employees made the required contributions of$44,055.59 (4%) and $55,069.91 (5%), respectively. GEORGIA DEFINED CONTRIBUTION PLAN Plan Description Macon College participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employer defmed 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. The College's payroll for the year ended June 30, 1996, for employees covered by GDCP was $208,168.13. The College's total payroll for all employees was $10,028,115.77. 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. Ifa member has less than $ 3,500.00 credited to hislher account, the Board of Trustees has the option of requiring a lump sum distribution to the member in lieu ofmaking periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to hislher account will be paid to the member's designated beneficiary. Contributions and Vesting Member contributions are seven and one-half percent (7.5%) of gross salary. There are no employer contributions. 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 1996 amounted to $15,612.85 which represents 7.5% of covered payroll. These contributions met the requirements of the plan. - 17 - MACON COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996 EXlllBIT "D" NOTE 8: LEAVB POLICIES Employees earn annual leave ranging from one and one-quarter days to one and three-quarter days each month depending upon the employees' length of continuous State service with maximum accumulation offorty-five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. See Note 1 - Basis of Accounting (Compensated Absences) Employees earn one day of sick leave each month with no maximum accumulation established. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination of employmenf. NOTE 9: CONTINGENCIES Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditures which are disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although the College expects such amounts, if any, to be immaterial to its overall financial position. Litigation, claims and assessments filed against Macon College (as an organizational unit of the Board of Regents ofthe University System of Georgia), ifany, are generally considered to be actions against the State ofGeorgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State ofGeorgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 1996. ' NOTE 10: POSTEMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS Pursuant to the general powers conferred by the Official Code of Georgia Annotated Section 20-3-31, the Board ofRegents ofthe University System ofGeorgia has established group health and life insurance programs for regular employees ofthe University System of Georgia. It is the policy ofthe Board ofRegents to permit employees ofthe University System ofGeorgia eligible for retirement or that become permanently and totally disabled to continue as members ofthe group health and life insurance programs. Employees who are eligible for retirement or disability under the criteria established by the Teachers Retirement System of Georgia and who have at least ten years of service with the University System of Georgia are eligible for these postemployment health and life insurance benefits. Organizational units of the Board of Regents of the University System of Georgia pay the employer portion for group insurance for affected individuals. As of June 30, 1996, there were 23 employees who had retired or were disabled that were receiving these postemployment health and life insurance benefits. .For the year ended June 30, 1996, Macon College recognized as incurred $38,035.20 ofexpenditures, which was net of$17,918.20 of participant contributions. - 18 - MACON COLLEGE NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 1996 EXHlBIT"D" NOTE 11: BONDING INFORMATION The President and all employees of Macon College are bonded under a Public Employees Blanket Bond written by the Employers Insurance ofWausau, their Bond No. 1450-02-110723, on which the premium was paid to October 1, 1996. Under this agreement, the public employee dishonesty coverage insures Macon College to a maximum ofSl,OOO,OOO.OO against loss sustained through fraudulent or dishonest acts by its employees. The faithful performance of duty coverage insures the College to a maximum ofSl,OOO,OOO.OO against loss sustained from failure ofits employees to perform faithfully their duties or to account properly for all monies and property received by virtue of their position or employment. All employees .of Macon College are also bonded under Commercial Crime Policies written by the United States Fire Insurance Company, their Policy Nos. 6260116752 and 626 012294 4, on which the premiums were paid to October 1, 1996. Under these additional public employee dishonesty coverages, the policies insure the College to a maximum ofS9,OOO,000.00 against loss sustained through fraudulent or dishonest acts by its employees and from failure ofits employees to perform faithfully. NOTE 12: ENROLLMENT The equivalent full-time student enrollment ofMacon College was as follows: Regular Term Fall Quarter, 1995 Winter Quarter, 1996 Spring Quarter, 1996 2,371 2,321 2.216 Average Summer School, 1995 - 19 - ' 0 \a,v,\<- fJ 20 SUPPLEMENTARY INFORMATION - 21 - MACON COLLEGE COMBINING BALANCE SHEET CURRENT FUNDS - UNRESTRICTED JUNE 30 1996 EXHIBIT-E- ~ cash and cash Equivalents Accounts Receivable Inventories Prepaid Items Due from Other Fund Groups RESIDENT INSTRUCTION LOTTERY FOR AUXILIARY EDUCATION ENTERPRISES STUDENT ACTIVITIES TOTAL $ 493.429.55 $ 121.478.01 17,455.11 2,144.00 69,781.41 $ 356,358.55 $ 30.897.37 196,023.n 534,204.96 31,410.89 $ 950.980.40 152,375.38 213.478.83 2.144.00 534,204.96 Total Assets $ 634,506.67 $ 69.781 .41 $ 1,117,484.60 $ 31.410.89 $ 1.853,183.57 LIABILITIES ANP FUNP BALANCES liabilities Accounts Payable Deferred Revenue Tuition and Fees Total liabilities Fund Balances Unrestricted $ 155,300.41 $ 490.794.63 $ 646.095.04 $ 38,483.00 $ 38,483.00 $ 13.464.44 $ 207.247.85 12,649.00 $ 15,568.00 519.011.63 26.113.44 $ 15,568.00 $ 726.259.48 -11,588.37 31,298.41 1,091.371.16 15,842.89 1.126,924.09 Total liabilities and Fund Balances $ 634.506.67 $ 69.781.41 $ 1:117.484.60 $ 31,410.89 $ 1,853.183.57 See notes to the financial statements. - 22 MACON COLLEGE COMBINING STATEMENT OF CHANGES IN FUND BALANCES CURRENT FUNDS - UNRESTRICTED YEAR ENDED JUNE 30, 1996 EXHIBITPO FUND BALANCES JUNE 30, 1996 $ -11,588,37 $ 31,298.41 $ 1,091,371,16 $ 15,842,89 $ 1,126,924,09 see notes to the financial statements, -23 tslcU' ~ lL PJ 2-~ MACON COLLEGE COMBINING STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES, AND OTHER CHANGES UNRESTRICTED YEAR ENDED JUNE 3D, 1996 EXHIBIT"G" REVENUES State Appropriations Tuition and Fees Federal Grants and Contracts Private Gifts, Grants, and Contracts Sales and Services of Educational Activities Sales and Services of Auxiliary Enterprises other Sources Total Revenues EXPENDITURES Educational and General Instruction Academic Support Student Services Institutional Support Operation and Maintenance of Plant Scholarships and Fellowships Auxiliary Enterprises Food Services Stores and Shops Intercollegiate Athletics other Service Units Total Expenditures OTHER TRANSFERS AND ADDITIONSI COEDUCTIONS) Transfers for Renewals and Replacements Prior Period Adjustments (Net) Remittances to the Board of Regents of the University System of Georgia Prior Year's Unrestricted Fund Balance (Surplus) Total other Transfers and Additionsl(Deductions) RESIDENT INSTRUCTION LOTTERY FOR EDUCATION AUXILIARY ENTERPRISES STUDENT ACTIVITIES TOTAL $ 11,895,058.00 $ 3,696,155,41 24,235.00 14,052,40 10,011.42 269,793,35 $ 15,909,305,58 $ 368,483,00 $ 368,483,00 $ $ 455,223,13 27,577,03 $ 12,263,541,00 125,341,64 3,821,497,05 24,235,00 14,052.40 10,011,42 455,223.13 15,722.85 313,093,23 482,800.16 $ 141,064.49 $ 16,901,653,23 $ 8,503,714,83 1,479,905,72 $ 1,053,487,66 2,442,711,18 1,918,037.09 550,366,00 172,735,00 162,398,01 949,06 $ $ 15,948,202,48 $ 336,082,07 $ $ 8,503,714.83 1,652,640.72 $ 137,806.54 1,191,274,20 2,605,109.19 1,918,986.15 550,366.00 142,667,39 107,737,29 92,535,45 286.57 142,667.39 107,737,29 92,535.45 286.57 343,226.70 $ 137,806.54 $ 16,765,317.79 $ 10,074.34 -9,383,99 $ 690,35 $ -66,612,72 -356,91 $ -66,969.63 $ -66,612,72 9,717,43 -9,383.99 $ -66,279,28 Net Increasel(Decrease) in Fund Balances $ -38,206.55 $ 32,400,93 $ 72,603,83 $ 3,257,95 $ 7_0.,0;;;;5~6._.16. See notes to the financial statements. - 25- MACON COLLEGE SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET RESIDENT INSTRUCTION YEAR ENDEP JUNE 30,1996 REVENUES State ApproprIations Other Revenues Retained CURRENT FUNDS UNRESTRICTED RESTRICTED PLANT FUNDS RENEWALS AND UNEXPENDED REPLACEMENTS $ 11,895,058,00 $ 4,014,247,58 $ 3,155,568,48 306,510,00 26,303,87 $ _ _---:o4,L:..748=,25:. $ 15,909,305,58 $ 3,155,568,48 $ 332,813,87 $ _ _---"4,"-748=,25~ exPENDITURES Personal ServIces: Education, General and Departmental Services Sponsored Operations Operating Expenses: Education, General and Departmental services Sponsored Operations Capital Outlay Special FUnding Initiative $ 11,981,583,24 $ 411,871,47 3,653,472.24 313,147,00 2,743,697,01 $ 351,929,70 $ 70,347,39 $ 15,948,202,48 $ 3,155,568,48 $ 351,929,70 $ 70,347,39 Excess of Revenues over Expenditures $ -38,896.90 $ 0.00 $ -19,115,83 $ -65~,5__99_,1.4.. (1) To eliminate tuition waivers not budgeted and to reclassify prior year fund balances budgeted as revenues. See notes to the financial statements, -26- SCHEDULE "1" TOTAL ADJUSTMENTS TOTAL (1) (Budget Basis) BUDGET VARIANCEFAVORABLE (UNFAVORABLE) $ 12,201,568.00 7,200,868.18 $ $ 12,201,568.00 $ 12,201 ,568.00 $ -484,766.86 6,716,101.32 7,071 ,409.00 0.00 -355,307.68 $ 19,402,436.18 $ . -484,766.86 $ 18,917,669.32 $ 19,272,9n.00 $ -355,307.68 $ 11,981 ,583.24 411,871.47 3,653,472.24 $ 2,743,697.01 422,277.09 313,147.00 $ 11,981 ,583.24 $ 12,521,721.00 $ A11,871.47 383,551.00 -550,366.00 3,103,106.24 2,743,697.01 422,2n.09 313,147.00 2,419,308.00 2,903,340.00 731,910.00 313,147.00 540,137.76 -28,320.47 -683,798.24 159,642.99 309,632.91 0.00 $ 19,526,048.05 $ -550,366.00 $ 18,975,682.05 $ 19,272,977.00 $ 297,294.95 $ -123,611.87 $ 65,599.14 $ -58,012.73 $ -58m2.73 - 27- MACON COLLEGE SCHEPULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET LOTTERY FOR EDUCATION YEAR ENDED JUNE 30,1996 SCHEDULE "Z' REVENUES State Appropriations CURRENT FUNDS PLANT FUNDS TOTAL UNRESTRICTED UNEXPENDED (Budget Basis) BUDGET VARIANCEFAVORABLE (UNFAVORABLE) $ 368,483,00 $ 400,000.00 $ 768,483.00 $ 768,483.00 $ 0,00 EXPENPITURES capital Outlay Equipment, Technology and Construction Trust Fund $ Special Funding Initiatives $ 317,599.07 18,483,00 200,000,00 $ 200,000,00 200,000.00 $ 200,000.00 $ 317,599,07 218,483,00 350,000.00 218,483.00 $ 336,082.07 $ 400,000,00 $ 736,082,07 $ 768,483.00 $ 0.00 32,400,93 0,00 32,400,93 Excess of Revenues over Expenditures $ 32,400,93 $ 0.00 $ 32,400.93 $ 32,400.93 See notes to the financial statements, - 28- MACON COLLEGE SCHEDULE OF OPERATIONS LOAN FUNDS YEAR ENDED JUNE 30,1996 SCHEDULE "3" FUND U. S. GOVERNMENT GRANTS REFUNDABLE Nursing Student Loan Fund Perkins Loan Fund FUND BALANCE ADDITIONSI DEDUCTIONSI FUND BALANCE JULY 1,1995 TRANSFERS TRANSFERS JUNE 30,1996 $ 3,036.60 $ 5,241.92 0.00 $ 0.00 $ 3,036.60 5,241.92 $ RECONCILIATION OF STUDENT NOTES RECEIVABLE Balance July 1, 1995 Deduct: Repayment of Loans 8.278.52 $ 0.00 $ 0.00 $ $ 7,261.92 0.00 ,i;;l8.,:,27;,,;;8;;,;;.5;:;,2 Balance June 30,1996 $ _......:.l7.,;;26;.;,1,;,;;;.9.2. See notes to the financial statements. - 29- MACON COLLEGE SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS AGENCY FUNDS YEAR ENDED JUNE 30.1996 SCHEDULE "4" MACON COLLEGE SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS AGENCY FUNDS YEAR ENDED JUNE 30.1996 SCHEDULE "4" FUND OTHER FUNDS Nursing Liability Insurance Nursing Pins Nursing Service Pandoras Box Phi Beta Lambda Phi Theta Kappa Postsecondary Program Pre-Med Club Public Service Activity Fee Recovery Fee Renaissance Festival Scholarships and Grants Regents' Scholarship Fund Other Scholarships (Ust on File) Scholastic Aptitude Test Six Flags TICkets Softball Caps Spanish Club Speech and Debate Team Student Government Association Vocational Inventory Fees BALANCE JULY 1, 1995 RECEIPTS BALANCE DISBURSEMENTS JUNE 30, 1996 $ 723.00 $ 5,928.75 $ 3,052.62 2,765.13 313.30 44.65 430.60 439.71 2,403.58 2,972.84 3,503.00 18,528.00 13.36 382.40 10,414.36 18,508.44 1,815.88 362.00 2,300.00 31,083.73 4,219.07 1,354.00 40.00 32.96 170.92 677.01 1,815.27 5,900.00 75,297.87 5,635.00 6,202.00 1,034.12 1,045.20 64.87 600.00 $ 105,804.69 $ 2,838,782.23 $ 5,122.50 $ 3,317.53 823.72 2,688.21 21,886.00 352.40 23,052.15 1,815.88 362.00 5,500.00 74,418.25 65.00 6,744.00 704.56 1,216.12 139.20 2,799,156.54 $ 1,529.25 2,500.22 313.30 44.65 46.59 2,688.21 145.00 43.36 5,870.65 2,700.00 31,963.35 9,789.07 812.00 40.00 362.52 602.68 2,415.27 145,430.38 $ 244,382.12 $ 9,190,662.41 $ 9,145,082.75 $ 289,961.78 See notes to the financial statements. - 31 - MACON COLLEGE CASH AND CASH EQUIVALENTS JUNE 30, 1996 SCHEDULE "5" NONINTEREST BEARING ACCOUNTS SunTrust Bank, Atlanta, Georgia INTEREST BEARING ACCOUNTS CB&T Bank of Middle Georgia, Warner Robins, Georgia Certificates of Deposit (5.44%) First Union National Bank, Atlanta, Georiga Certificates of Deposit (4.83%) NationsBank of Georgia, Atlanta, Georgia Certificates of Deposit (4.74%) SunTrust Bank, Atlanta, Georgia N.O.W. Account (1.51%) OTHER Cash on Hand Petty Cash $ 1,500,00 $ 61,421.56 75,000.00 155,000,00 1,213,453.61 1,504,875.17 5,127,00 $ 1,511,502.17 See notes to the financial statements, - 32- Investment Accounts Robinson Humphrey Company, Macon, Georgia Investment Portfolio Account Cash Common Stock Corporate Bonds Money Market Funds Preferred Stock U. S. Govemment Securities MACON COLLEGE INVESTMENTS JUNE 30, 1996 SCHEDULE "6" $ 35,190.25 359,618.99 175,120.88 59,570.68 10,000.00 149,847.76 $ 789,348,56 See notes to the financial statements. - 33- B \a-V\. ~ t1 SL( I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I MACON COLLEGE ACCOUNTS RECEIVABLE JUNE 30 1996 SCHEDULE "r CURRENT FUNDS UNRESTRICTED RESTRICTED Fedenil Grants and Contracts Research anc:Ilnstruc:tion $ 23.75 State Grants and Contracts Research and Instruction Student Aiel 15.305.32 391,103.92 loclII Grants and Contracts Research andlnstruc:tion 12,2n.OO 0Iher /4Qertcy Fund Overpayments Garnishments LIfe Insurance Georgia State F"manclng anc:Ilnvestment Commission RClIumed Checks $ 12.036.89 Student Accounts 114.527.n Student Notes $ 0Iher 25,810.n LOAN FUNDS PLANT FUNDS UNEXPENDED AGENCY FUNDS $ $ $ 527.596.71 809.14 1,411.48 7,261.92 TOTAL 23.75 15.305.32 391,103.92 12,2n.OO 809.14 1.411.48 527.596.71 12.036.89 114,527.n 7,261.92 25,810.n $ 152,375.38 $ 418,709.99 $ 7,261.92 $ 527.596.71 $ 2.220.62 $ 1,108,164.62 See notes to the financial statements. - 35 MACON COLLEGE CHANGES IN INVESTMENT IN PLANT YEAR ENDED JUNE 30, 1996 Land BuUdings Improvements Other Than Buildings Equipment Ubrary Books and Collections BALANCE JULY 1,1995 CURRENT FUNDS UNRESTRICTED RESTRICTED $ 483,411.84 16,001,900.99 1,610,853.52 3,045,692.13 $ 393,669.12 $ 160,416.38 2,228,548.15 136,383.68 $ 23,370,406.63 $ 530,052.80 $ 160,416.38 See notes to the financial statements. - 36- SCHEDULE "8" ADDITIONS PLANT FUNDS RENEWALS AND UNEXPENDED REPLACEMENTS GEORGIA STATE FINANCING AND INVESTMENT COMMISSION DEDUCTIONS DISPOSALSI DELETIONSI ADJUSTMENTS BALANCE JUNE 30, 1996 $ 483,411.84 $ 537,984.01 $ 70,347.39 $ 512,312.82 17,122,545.21 10,503.87 15,283.89 $ 3,216.17 1,639,857.45 96,647.76 -204,362.60 3,492,062.79 2,364,931.83 $ 645,135.64 $ 70,347.39 $ 527,596.71 $ -201,146.43 $ 25,102,809.12 - 37- MACON COLLEGE SCHEDULE OF FUND BALANCES CURRENT FUNDS AND PLANT FUNDS JUNE 30, 1996 $ -11,588.37 $ 31,298.41 $ 1,091,371.16 $======1:::d5':;;,84,;,;;2...8.:=.9 See notes to the financial statements. - 38- SCHEDULE "9" RESTRICTED PLANT FUNDS UNEXPENDED LOTTERY FOR RENEWALS AND REGULAR EDUCATION REPLACEMENTS INVESTMENT IN PLANT TOTAL $ 25.102,809.12 $ 25.102,809.12 $ _--.;;3.;;.,j8.=82=6..;..;.4~6 $ _---:3::,:8:.&.:,8:::2:.:,6.:,;:;4:.6 $ 97,626.31 $ 269,543.39 $ 97,626.31 31,298.41 2,340.41 209,136.11 269,543.39 908,411.34 4,560.38 _____ $ $ $ 38,826.46 $ 97,626.31 $ --=0;.:.;.0:;.;:.0 0.00 $ _ _-=2:.:,69::J..:.54:.:3~.3;;;.9 -28,822.56 0.00 $ 1,494,093.79 0.00 $ 269,543.39 $ 25,102,809.12 $ 26,635,729.37 - 39- MACON COLLEGE SCHEDULE OF REVENUES CURRENT FUNDS YEAR ENDED JUNE 30,1996 $ 15,909,305.58 $ 368.483.00 $ _ _48...--2,800,;;",;;,;,.1..S... lOOo See notes to the financial statements. -40 - SCHEDULE "10" STUDENT ACTMTIES TOTAL RESTRICTED RESIDENT INSTRUCTION TOTAL $ 11,581,911.00 313,147.00 368,483.00 $ 12,263,541.00 $ 11,581,911.00 313,147.00 368,483.00 $ 12,263,541.00 $ 3,052,2n.55 $ 125,341.64 769,224.50 $ 3,052,272.55 769,224.50 $ 648,458.48 1,791,689.67 24,235.00 648,458.48 1,791,689.67 24,235.00 63,603.50 575,119.00 63,603.50 575,119.00 14,052.40 10,011.42 455,223.13 76,697.83 76,697.83 14,052.40 10,011.42 455,223.13 15,722.85 1,090.73 -393.15 253,364.17 10,494.57 48,536.91 1,090.73 -393.15 253,364.17 10,494.57 48,536.91 $ 141,064.49 $ 4,638,112.23 $ 3,155,568.48 $ 7,793,680.71 $ 141,064.49 $ 16,901,653.23 $ 3,155,568.48 $ 20,057,221.71 - 41 - MACON COLLEGE SCHEDULE OF EXPENDITURES BY OBJECT CURRENT FUNDS YEAR ENDED JUNE 30,1996 See notes to the financial statements. -42- SCHEDULE -11- STUDENT ACTIVITIES TOTAL RESTRICTED RESIDENT INSTRUCTION TOTAL $ 9,435,648.44 $ 321,979.37 $ 9,757,627.81 $ 10.50 666,739.93 23,920.06 690,659.99 1,001,691.60 34,093.59 1,035,785.19 887,375.15 31,878.45 919,253.60 105,280.00 105,280.00 2,798.00 2,798.00 78,042.00 78,042.00 747.00 747.00 $ 10.50 $ 12,178,322.12 $ 411,871.47 $ 12,590,193.59 $ 143,938.25 $ 5,815.10 $ 149,753.35 41,970.82 41,970.82 $ 26,010.39 653,040.29 13,993.09 667,033.38 204,052.19 204,052.19 506,062.16 506,062.16 50.68 1,838.68 1,402.50 3,241.18 17,571.00 17,571.00 21,290.10 63,239.84 84,529.94 53,516.97 14,412.64 550,366.00 558,403.09 266,501.94 2,366,808.67 25,088.44 1,208.89 2,917,174.67 583,491.53 267,710.83 67,685.65 9,935.29 32,900.67 203,616.71 150,783.59 42,872.72 5,127.42 3,018.38 110,558.37 9,935.29 38,028.09 203,616.71 153,801.97 33,305.36 10,500.00 228,154.09 10,500.00 54,705.58 282,859.67 10,500.00 269,156.08 160,416.38 429,572.46 $ 137,796.04 $ 3,937,766.60 $ 2,743,697.01 $ 6,681,463.61 $ 11,000.00 949.06 50,583.00 4,880.00 $ 11,000.00 949.06 50,583.00 4,880.00 -43- MACON COLLEGE SCHEDULE OF EXPENDITURES BY OBJECT CURRENT FUNDS YEAR ENDED JUNE 30.1996 $ 15.948,202.48 $ 336.082.07 $_.....;34~3._226~.7_0 See notes to the financial statements. - 44- SCHEDULE -11- STUDENT ACTIVITIES TOTAL RESTRICTED RESIDENT INSTRUCTION TOTAL $ 12,465.29 237,721.72 $ 317,599.07 $ 12,465.29 237,721.72 $ 317,599.07 $ 248,604.35 16,926.05 25,181.20 17,743.40 $ 308,455.00 23,175.00 $ 331,630.00 $ 248,604.35 16,926.05 25,181.20 17,743.40 $ 308,455.00 23,175.00 $ 331,630.00 $ 137,806.54 $ 16,765,317.79 $ 3,155,568.48 $ 19,920,886.27 - 45 MACON COLLEGE SCHEDULE OF EXPENDITURES BY OBJECT PLANT FUNDS YEAR ENDED JUNE 30.1996 SCHEDULE "12" UNEXPENDED LOTTERY FOR REGULAR EDUCATION RENEWALS AND REPLACEMENTS TOTAL $ 70,347.39 70,347.39 $ 3,234.55 600.00 79,402.19 442,392.59 96,647.76 622,277.09 $ 21,883.61 1,673.71 $ 23,557.32 176,442.68 $ 200,000.00 $ 351,929.70 $ 400,000.00 $ 70,347.39 $ 822,277.09 See notes to the financial statements. - 46- MACON COLLEGE RECONCILIATION OF SALARIES AND WAGES, AND TRAVEL YEAR ENDED JUNE 30,1996 SCHEDULE "13" Totals per Annual Supplement Adjustments Shared Services on Jointly Staffed Personnel University of Georgia Jones, Unda Totals per Report SALARIES AND WAGES $ 10,042,353.77 $ TRAVEL 149,753.35 -14,238.00 $ 10,028,115.77 $ 149,753.35 DISTRIBUTION BY FUND CURRENT FUNDS Unrestricted Resident Instruction Regular Special Funding Initiative Auxiliary Enterprises Restricted Resident Instruction Plant Funds Unexpended $ 9,287,545.35 $ 248,604.35 148,103.09' 321,979.37 21,883.61 142,692.72 1,245.53 5,815.10 $ 10,028,115.77 $ 149,753.35 See notes to the financial statements. - 47- SECTION II FINDINGS AND IMPROPER OR QUESTIONED COSTS MACON COLLEGE SCHEDULE OF FINDINGS AND IMPROPER OR OUESTIONED COSTS YEAR ENDED JUNE 30, 1996 STATUS OF PRIOR YEAR FINDINGS AND IMPROPER OR OUESTIONED COSTS The status offindings disclosed in the review report for the year ended June 30, 1995, is summarized below: Audit Control Number Status of Finding 581-93-01 581-95-01 581-95-02 581-95-03 581-95-04 581-95-05 581-95-06 No Corrective Action Implemented Corrective Action Implemented Corrective Action Implemented See Audit Control Number 581.:.96-02 See Audit Control Number 581-96-01 Corrective Action Implemented See Audit Control Number 581-96-03 PRIOR YEAR/CURRENT YEAR CASH AND CASH EQUIVALENTS Inadequate Accounting Procedures Financial Statements Audit Control Number 581-96-01 The review report for the year ended June 30, 1995, reported that the College's accounting procedures were insufficient to provide for adequate internal control over the bank reconciliation process. For the year under review, the College's accounting procedures continued to be insufficient. The following deficiencies were noted: (1) Book errors disclosed through the bank reconciliation process were carried as reconciling items for extended periods of time. (2) The monthly bank statements for the payroll account and operating account were not reconciled to the general ledger resulting in unidentified variances of $3,302.41 and $3,341.75, respectively, between the reconciled bank balance and the book balance. These deficiencies were the result of management's disregard of proper internal control procedures over cash and bank reconciliations that are necessary to adequately safeguard and report the cash and cash equivalents ofthe College. The College should establish appropriate internal controls to ensure that bank statements are reconciled with the accounting records monthly and that needed adjustments are recorded on a timely basis. - 1- MACON COLLEGE SCHEDULE OF FINDINGS AND IMPROPER OR OUESTIONED COSTS YEAR ENDED JUNE 30. 1996 PRIOR YEAR/CURRENT YEAR GENERAL FIXED ASSETSIPROPERTY MANAGEMENT Inadequate Equipment Inventory Records Financial Statements Audit Control Number 581-96-02 The review report for the year ended June 30, 1995, noted that an equipment inventory sample of randomly selected items disclosed deficiencies in Macon College's equipment inventory records. For the year under review, an equipment inventory sample of 28 randomly selected items was utilized to test the accuracy and validity of the equipment inventory records. The results of our testing procedures disclosed the following exceptions: (1) One item selected to be traced to its location was found to have been listed twice on the inventory. (2) The College did perform a reconciliation ofthe subsidiary equipment records to the accounting control records. However, an entry was made to the accounting control records for $242,217.60 in order to balance to the subsidiary equipment records. This entry could not be documented except as an attempt to balance the subsidiary records to the accounting records. These deficiencies occurred because of management's failure to adequately monitor the subsidiary equipment records. The College should establish appropriate procedures to strengthen internal accounting controls and to ensure that assets are safeguarded against loss from unauthorized use or disposition. SPECIAL REPORTING REQUIREMENTS Report Not Reconciled to Accounting Records Federal Financial Assistance Audit Control Number 581-96-03 The review report for the year ended June 30, 1995, disclosed that expenditures reported on the Fiscal Operations and Application to Participate (FISAP) Report submitted by Macon College to the U. S. Department of Education on October 1, 1994 did not reconcile with the accounting records. For the year under review, the FISAP Report submitted October 1, 1995, was reviewed and this report again did not reconcile with the accounting records as indicated below: -2- MACON COLLEGE SCHEDULE OF FINDINGS AND ThfPROPER OR OUESTIONED COSTS YEAR ENDED JUNE 30.1996 PRIOR YEAR/CURRENT YEAR SPECIAL REPORTING REQUIREMENTS Report Not Reconciled to Accounting Records Federal Financial Assistance Audit Control Number 581-96-03 FISAP Report Item FISAP Report Accounting Records Difference PELL GRANT PROGRAM (CFDA 84.063) Expenditures $ 1,619,566.00 $ 1,619,702.55 $ -136.55 PERKINS LOAN PROGRAM (CFDA 84.038) Cash on Hand Defaulted Loan Principal Assigned to U. S. Government Federal Capital Contributions Cancelled Cost-Principal and Interest Other Costs $ 944.00 $ 17,505.00 $ 82,206.00 $ 1,171.00 $ 66.00 $ 885.81 $ 58.19 $ 17,508.95 $ -3.95 $ 82,026.00 $ 180.00 $ 1,052.82 $ 118.18 $ 68.34 $ -2.34 SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANT (CFDA 84.007) Administrative Cost Allowance Funds to Recipients $ 120.00 $ 0.00 $ 120.00 $ 86,941.00 $ 87,061.00 $ -120.00 FEDERAL WORK STUDY PROGRAM (CFDA 84.033) Expenditures $ 57,774.00 $ 61,660.00 $ -3,886.00 Federal Regulations require the College to ensure that information reported is accurate and reconciled to the accounting records. These differences between the accounting records and the FISAP Report were not reconciled. The College should ensure that all data reported on the FISAP is reconciled with its formal accounting records prior to submission to the U. S. Department of Education. -3- MACON COLLEGE SCHEDULE OF FINDINGS AND IMPROPER OR OUESTIONED COSTS YEAR ENDED JUNE 30. 1996 CURRENT YEAR CASH MANAGEMENT Excessive Cash Balance Federal Financial Assistance Pell Grant Program (CFDA 84.063) Audit Control Number 581-96-04 A review of cash ma.nitgement procedures for the Pell Grant Program disclosed that the College made a cash draw in excess ofimmediate need. Macon College used the ACHIEFT method to drawdown funds which are maintained in a EDPMS Cash Control account in Agency funds. Federal cash drawdowns should not exceed the immediate need. For institutions using the ACHIEFT method, immediate need is defined as need for a three-day period. The excessive cash balance at June 30, 1996 of$34,305.20 was the result of an oversight in requesting more funds than needed for federal expenditure reimbursement. Procedures should be implemented by the College to ensure that requests for cash draws do not exceed th~ immediate need. TYPES OF SERVICES Awards Not Based on Correct Enrollment Status Federal Financial Assistance Pell Grant Program (CFDA 84.063) Questioned Cost: $1,119.00 Audit Control Number 581-96-05 For the year under review, an examination of twenty-five student financial aid files of students receiving Pell Grants identified two instances where the student's award was not adjusted based on a change in enrollment status. These students originally registered for classes then either never attended a class or formally dropped classes before the third day of the quarter. In order to determine whether these were isolated instances or a weakness in the College's procedures, an additional four student financial aid files were selected based on the noted problem criteria. Of those four students it was noted that no adjustment of the students' award was made for two of the students when they reduced their hours from originally registered for classes. These questioned costs resulted from management's failure to adjust awards when a student reduced their hours before the third day of the quarter. Procedures should be implemented to ensure that student awards are based on their correct enrollment status. -4- MACON COLLEGE SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS YEAR ENDED JUNE 30,1996 CURRENT YEAR SPECIAL TESTS AND PROVISIONS Refund not Credited in a Timely Manner Federal Financial Assistance Pell GrantProgram (CFDA 84.063) Audit Control Number 581-96-06 For the year under review, an examination of the College's refund procedures disclosed that a refund of institutional costs paid from the Pell Grant Program was not credited within 30 days as required by Federal regulation (34CFR668.22). This noncompliance was the result of an oversight of the accounting office. The College should ensure that refunds of institutional costs paid from Federal student financial aid funds are credited to Federal accounts within required time frames. - 5-