Macon State College, Macon, Georgia, report on review of the financial statements for the fiscal year ended June 30, 2002

~A "'e,uo ', K\
('(\ ';l_
?.00, .. ~_.,-:2.

, '
, '

' I

:,. .:STATE :DEPARTMENT OF

AOUF1DGITESOARNGDIA'ACCOUNT-S

,,

"'" ~I
l

I

! ,. \

r

I

'\
.-

I,
' ''

)

, I

) \ .)

I ' r - \

-

1'

I

' "

-MACON STATE COLLEGE MACON, GEORGIA,

I

'

REPORT ON REVIEW

'

OF THE FINANCIAL STATEMENTS:

l

'

FOR THE FISCAL YEAR ~NDED Jf!NE 30, 2002

\

' .

, r

Russell W. Hinton

;

State Auditor ,,

,-.
' I

MACON STATE COLLEGE - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

3

BASIC FINANCIAL STATEMENTS

EXHIBITS

A STATEMENT OF NET ASSETS

11

B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS

12

C STATEMENT OF CASH FLOWS

13

D NOTES TO THE FINANCIAL STATEMENTS

14

SUPPLEMENTARY INFORMATION

SCHEDULES

SCHEDULES OF REVENUES AND EXPENDITURES COMPARED TO

BUDGCT - (NON-GAAP BASIS)

I

RESIDENT INSTRUCTION

31

2

LOTTERY FOR EDUCATION

32

3 RECONCILIATION OF SALARIES AND TRAVEL

33

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

SECTION I FINANCIAL

R1,~lLL \\', H1~1or,,, ST.ATE AUC.TO~
(4:'.M) 6~ 2170:

0EPART!\1ENT OF AUDITS AND ACCOUNTS
:!"4 \\J,hmg-1on \1rcc1 (, \\' 'iuitc :! 14 Atl,mtJ Gcorg1J. 301-l4-8-Hl0
November I, 2002

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 David Bell, President Macon State College
INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen
We have reviewed the accompanying baste financial statements (Exh1b1ts A through D) of Macon State College, an organizational unit of the State of Georgia, as of and for the year ended June 30, 2002, in accordance with Statements on Standards for Accounting and Review Services issued by the Amencan Institute of Certified Pubhc Accountants All informat10n included in these financial statements 1s the representation of the management of Macon State College
A review consists pnnc1pally of inqumes of Macon State College personnel and analytical procedures apphed to financial data It ts substantially less in scope than an audit in accordance with auditing standards generally accepted in the United States of Amenca, the oh1ect1ve ofwh1ch ts the expression of an opin10n regarding the financial statements taken as a whole Accordingly, we do not express such an opinion
Based on our review, with the exception of the matter discussed in the fourth paragraph, we are not aware of any matenal mod1ficat1ons that should be made to the accompanying financial statements in order for them to be in conformtty with accounting pnnctples generally accepted in the United States of Amenca
As descnbed in Note I to the financial statements, the Macon State College did not recognize June 30, 2001, encumbrances as expenses in the June 30, 2002, baste financial statements To conform to generally accepted accounting pnnc1ples, encumbrances should be recognized as expenses and ltab1ht1es in the penod that goods and servtces are received The effects on the basic financial statements of this departure from generally accepted accounting pnnc1ples were not rea~onably determinable
02ARL-67

As descnbed m Note L Macon State College adopted the prov1s1ons of Governmental Accountmg Standards Board (GASB) Statement No 35, Basic Financial Staremems - and Managcmem's D1scusswn and Analvszs -for Public Colleges and Umversmes, as amended by GASB Statement No 37, Basic Financial Sraremenrs - and Managemenl's D1scusswn and Analvs1s -for Stale and Local Governmellls, and GASB Statement No 38, Certain Financial Statements Note Disclosures. as of July I, 2001, to implement a new financial reportmg model
Management's D1scuss1on and Analysis 1s not a required part of the basic financial statements but 1s supplementary mformatlon reqmred by the GASB We have apphed certam hm1ted procedures, wluch consisted pnnc1pally ofmqumes ofmanagement regardmg the methods ofmeasurement and presentation ofth1s supplementary mforma!Jon, and we arc not aware ofanymatenal mod1ficat1ons that should be made thereto.
Our review was made for the purpose of expressmg hmncd assurance that there are no matenal mod1fica!Jons that should be made to the financial statements m order for them to be m conformity with accountmg pnnc1ples generally accepted m the Umted States ofAmenca The accompanymg supplementary mforma!Jon (Schedules I through 3) 1s presented for add1110nal analysis purposes Such mformat1on has been subJected to the mqumes and analytical procedures apphed m the rcVIew of the financial statements, and we are not aware of any matenal mod1ficat1ons that should be made to such data
- w:4-~ Respectfully submitted, ...

RWHgp 02ARL-67

State Auditor

REQUIRED SUPPLEMENTARY INFORMATION - I-

MACON STATE COLLEGE
Management's Discussion and Analysis
Introduction
Macon State College 1s one of the 34 mstltuhons of the Umvers1ty System ofGeorgia Macon State College was opened m 1968 as part of the Umvers1ty System of Georgia Smee its mcept10n, the College has grown and expanded m many areas. lrullally offermg two-year transfer programs, career programs, and one-year certificates, the College received approval from the Board of Regents m October 1996 to begin offenng baccalaureate programs m lnformat10n Technology, Health Services Adrmmstrat1on, and Health lnformallon Management With the add1t1on ofbaccalaureate programs m Busmess and Informahon Technology m 1998, Commurucauons and lnformallon Technology m 1999, and m Pubhe Services-Human Services m 2001, the College has further expanded its le_vels of prograrnmmg and service to the region
The College's mam campus, located m Macon, Georgia, 1s complemented by a permanent campus now under construcllon m Warner Robins, Georgia Enrollment at the College has mcreased 40% smce the m1ss1on change m 1996 Enrollment for Fall 2002 contmued to mcrease with a total enrollment of4,989 students The contmued emphasis on its focused m1ss1on and its professionally onented baccalaureate degrees has positioned the College to contmue as a maJor economic dnver m the Central Georgia region
Oveniiew ofthe Financial Statements and Financial Analysis
Macon State College 1s proud to present its financ1aJ statements for fiscal year 2002 The emphasis of d1scuss1ons about these statements will be on current year data There arc three financial statements presented the Statement of Net Assets, the Statement of Revenues. Expenses and Changes m Net Assets, and, the Statement of Cash Flows This d1scuss1on and analysis of the Umvers1ty's financial statements provides an overview ofits financial ac11v1t1es for the year Macon State College has elected to not restate pnor penods for purposes ofprov1dmg the comparallve data for this Management's D1scuss10n and AnaJys1s However, m future years, when pnor penod mformat1on 1s available, a comparallve analysis Will be presented
Statement ofNet Assets
The Statement ofNet Assets presents the assets, hab1h1Ies. and net assets of the Umvers1ty as ofthe end of the fiscal year The Statement of Net Assets 1s a pomt of ume financial statement The purpose ofthe Statement ofNet Assets 1s to present to the readers ofthe financial statements a fiscal snapshot ofMacon State College The Statement ofNet Assets presents end-of-year data conccrnmg Assets (current and non-current}, Liab1hlles (current and non-current), and Net Assets (assets mmus hab1hlies) The difference between current and non-current assets will be discussed m the footnotes to the financial statements
-3-

From the data presented, readers of the Statement of Net Assets are able to determine the assets available to continue the operat10ns of the institution They are also able to determine how much the institution owes vendors, investors and lending inslltullons

Finally, the Statement of Net Assets provides a picture ofthe net assets (assets minus hab1hlles) and their availab1hty for expenditure by the institution Net assets are d1v1dcd into three maJor categones The first category, invested in capital assets, net ofdebt, provides the institution's equity in property, plant and equipment owned by the institution The next asset category 1s restncted net assets, expendable Expendable restncted net assets are available for expenditure by the ins11nmon but must be spent for purposes as determined by donors and/or external entities that have placed time or purpose restnctlons on the use of the assets The final category 1s unrestncted net assets Unrestncted assets are available to the inslltullon for any lawful purpose of the insutullon

Statement of Net Assets, Condensed (thousands of dollars)

Assets Current Assets Capital Assets, Net Other Assets

$ 6,679 20,897 1,162

Total Assets

$ 28.738

Liabilities Current L1ab1ht1es Non-Current Liab1ht1es

$ 4,168 268

Total Liabilities

$ 4436

Net Assets Invested in Capital Assets, Net of Debt Restncted - Expendable Unrestncted

$ 20,897 1.257 2,148

Total Net Assets Statement ofRevenues, Expenses and Changes in Net Assets

$ 24.302

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 1s to present the revenues received by the 1nst1tut1on, both operating and nonoperaung, and the expenses pa.id 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 prov1dmg goods and services to the vanous customers and constituencies of the inslltullon Operating expenses are those expenses paid to acquire or produce the goods and services

-4-

provided m return for the operating revenues, and to carry out the m1ss1on of the institution Nonoperatmg revenues are revenues received for which goods and services arc not provided For example state appropnauons are nonoperatmg because they are provided by the Legislature to the mst1tut1on without the Legislature directly rece1vmg commensurate goods and services for those revenues

Statement of Revenues, Expenses and Changes m Net Assets, Condensed (thousands of dollars)

Operatmg Revenues Operating Expenses

S 12,193 -28.495

Operating Loss

$ -16,302

Nonoperatmg Revenues and Expenses

16,199

Decrease in Net Assets

$ -103

Net Assets at Begmnmg of Year, as Onginally Reported

$ 43,662

Cumulative Effect of Changes m Accountmg Pnnc1ple

-I 9,257

Net Assets at Beginmng of Year Restated

S 24,405

Net Assets at End of Year

$J4.302

The Statement of Revenues, Expens,:s and Changes m Net Assets reflects a negative year with a decrease m the net assets at the end of the year Some h1ghhghts ofthe mformat1on presented on the Statement of Revenues, Expenses and Changes m Net Assets arc as follows

-5-

Revenue By Source (thousands of dollars) For The Year Ended June 30, 2002

Operatmg Revenue TuitJon and Fees Grants and Contracts Sales and Services of EducatJonal Departments Aux1hary Other
Total Operatmg Revenue
Nonoperatmg Revenue State AppropnatJons Gifts and Contracts Other
Total Nonoperatmg Revenue
Total Revenues
Expenses (thousands of dollars) For The Year Ended June 30, 2002

s 4,653
4,596 367
2,239 338
$ 12,193
$ 14,971 1,374 -146
$ 16,199
$ ,.J2~

Operatmg Expenses Instruction Pubhc SerY1ce Academic Support Student Services lnsUtutJonal Support Plant Operat10ns and Mamtenance Scholarships and Fellowships Aux1hary Enterpnses Deprec1ahon

$ 12,499 340
2,239 2,063 3,158 2,503 2,674 2,020
999

Total Operatmg Expenses

$ 28 495

Statement of Cash Flows

The final statement presented by the Macon State College 1s the Statement of Cash Flows The Statement of Cash Flows presents detaJled mformatJon about the cash act1v1ty of the mstltutJon dunng the year The statement 1s d1v1ded mto five parts The first part deals with operatmg cash flows and shows the net cash used by the operatmg acllv1tJes ofthe msutuuon The second section reflects cash flows from non-capital financmg activities ThIS sectJon reflects the cash received and

-6-

spent for nonoperatmg, non-mvestmg, and non-capital financmg purposes The th1rd scctmn reflects the cash flows from mvestmg act1v1t1es and shows the purchases, proceeds. and mterest received from mvcstmg act1v1t1es. The fourth section deals with cash flows from capital and related financmg activities This section deals with the cash used for the acqms1Uon and construction of capital and related items The fifth sectmn reconciles the net cash used to the operatmg mcome or loss reflected on the Statement of Revenues, Expenses and Changes m Net Assets

Cash Flows for the Year Ended June 30, 2002, Condensed (thousands of dollars)

Cash Provided (Used) By Operating Act1v1Ues Non-Capital Fmancmg Act1v1t1es Investmg Act1V1t1es Capital and Related Fmancmg Act1v1t1es

$ -16,523 16,692 66 -199

Net Change m Cash Cash, Begmmng ofYear
Cash, End of Year

$ 36 2,556
$ 2,592

Capital Assets

The Nursmg, Health Science and Outreach Complex - This proJect, which 1s currently under construction, 1s Phase I ofa two phase proJect The bmldmg has a total budget of$16 1 m1Ihon and will consist of approximately 75,000 square feet The proJect 1s bemg funded through the Georgia State Fmancmg and Investment Comm1ss1on (GSFIC) Expected occupancy of the completed fac1hty 1s January 2004

Warner Robms Campus - ThJS proJect consists of the renovation of an ex1stmg 24,000 square foot bmldmg This proJect 1s the first ofa permanent campus for Macon State College m Warner Robms and was made possible by a donation ofland and an ex1stmg bmldmg by the City of Warner Robms and a $5 m1lhon commitment from the Board of Regents Expected occupancy of the completed fac1ht1es 1s August 2003

For additional mformatlon concemmg Capital Assets, see Notes I and 6 m the notes to the financial statements

David Bell, President Macon State College

-7-

BASIC FINANCIAL STATEMENTS
-9 -

MACON STATE COLLEGE STATEMENT OF NET ASSETS
JUNE 30, 2002

EXHIBIT "A"

ASSETS
Current Assets Cash and Cash Equivalents Short-term Investments Accounts Receivable, Net Federal Financial Assistance Other Prepaid Items lnventones
Total Current Assets
Noncurrent Assets Cash and Cash Equivalents Investments Notes Receivable, Net Capital Assets, Net (See Note 6/
Total Noncurrent Assets
Total Assets
LIABILITIES
Current Llab1hties Salanes Payable Payroll Wrthhold1ngs Accounts Payable Deferred Revenue Funds Held for Others Compensated Absences Other L1ab1ht1es
Total Current L1ablhbes
Noncurrent Llab1ht1es Compensated Absences
Total Llabllrt1es
NET ASSETS
Invested m Caprtal Assets, Net of Related Debt Restncted Unrestncted

$ 2,592,267 04 830,595 48
81,009 89 2,799,125 58
925 00 375,392 62
$ 6 679,315 61

$

200,000 00

925,625 96

35,873 06

20,897,040 93

$ 22,058,539 95
s 28,737,855.56

s

43,733 74

94,452 26

158,262 10

3,143,118 82

226 486 64

473,725 57

28 140 36

$ 4 167 919 49

$

267,673 22

$ 4,435 592 71

$ 20,897,040 93 1,257,202 89 2,148,019 03

Total Net Assets
See Independent Accountant's Combined Report on Review of Basic Financial Statements and Supplementary Information
The notes to the financial statements are an integral part of this statement - 11 -

$ 24,302,262 85

MACON STATE COLLEGE
STATEMENT OF REVENUES EXPENSES AND CHANGES IN NET ASSETS
YEAR ENDED JUNE 30 2002

EXHIBIT "B"

OPERATING RE\/ENUES
Student Tu1t1on and Fees Less Scholarship Allowances
Grants and Contracts Federal Nongovernmental
Sales and Services of Educebonal Departments Aux,hary Enterpnses
Bookstore Food Services OtherOrganizabons Other Operebng Revenues
Total Operabng Revenues
OPERATING EXPENSES
Salanes Faculty Staff
Employee Benefits Other Personal ServlC8s Travel Scholarships and Fellowships Ut1lrties Supplies and Other Services Depreciation
Total Operabng Expenses
Operebng Income (Loss)
NONOPEBAJING RE\IENUES !EXPENSES)
State Appropnabons Grants and Contracts
Federal State Nongovernmental Interest and Other Investment Income Other Nonoperabng Revenues
Net Nonoperabng Revenues
lncreasal(Decrease) m Net Assets
Net Assets Net Assets~ Begmnmg of Year, as Ong1nally Reported Cumulative Effect of Changes m Accounting Pnnople
Net Assets - Begrnmng of Year Restated
Net Assets - End of Year
See Independent Accountant's Combined Report on ReV18W of Basic Flnanaal Statements and Supplementary Information
The notes to the frnanoal statements are an integral part of this statement
- 12 -

$ 6,225 618 28 -1,57277122
4,407 705 86 188,869 79 367,090 51
2,204,740 08 23,929 13 9,780 74
338.424 72
$ 12193 387 89

$ 8 395,328 38 5 951,11184 3 689,474 81 52 870 00 163,628 62 2,855 941 34 742 645 52 5,645 763 25 998,529 82
$ 28,495 293 58
$ -16 301 905 69

$ 14,97124953

658,273 67 627,981 18 87,381 35
-9,648 95 -136 269 94

$ 16 198 966 84

$

-102 938 85

$ 43,661,757 09 -19 256 555 39
$ 24 405 201 70

S 24.302 262 85

MACON STATE COLLEGE STATEMENT OF CASH FLOWS YEAR ENDED JUNE 30 2002
CASH FLOWS FROM OPERATING ACTMTIES Tu1t1on and Fees Grants and Contracts Seles and Services of EduC811onal Departments Payments to Suppliers Payments to Employees Payments for Scholarships and Fellowships Loans Issued to Students and Employees Collectlon of Loans to Students and Employees AuXlliary Enterpnse Charges Bookstore Food Services Other Orgam.zabons Other Receipts (Payments)
Net Cash PrtMCled (Used) by Operatmg ActMbes
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVmES State Appropnabons Agency Funds Tranaachons Gdls and Grants Rec:e1'18d for Other than Caprtal Purposes Other Nonoperal1ng Reca1pts
Nat Cash Flows Pl'OVlded (Used) by Noncaprtal Financrng Actlvlbes
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTMTIES Purchases of Caprtal Assets
CASH FLOWS FROM INVESTING ACTMTIES Interest on Investments Purchase of Investments
Ne! Cash Provided (Used) by Investing AChVlbeS
Net lncrease/(Decrease) in Cash
Cash and Cash Equivalents - June 30 2001 Less Short-Term Investments
Cash and Cash Equ1VBlents - Begrnning of Year
Cash and Cash Equrvalents - End of Year
RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTMTIES
Operating Income (Loss) AdJustments to Reconcile Net Income (Loss) to Ne1 Cash
Provided (Used) by Operating Act1vrties Depreaabon Change m Assets and LJab1lrbes Accounts Recetvables Net lnventones Prepaid ttems Notes Receivables Ne1 Accounts Payable Selenes Payable Deferred ReYSnue Other LJab1li!Les Compensated Absences
Net Cash Provided (Used) by Operating Ad1vrt1es
See Independent Accountants Combin d Report on R8Vl8W of Basic F1nanC1SI Statements and Supplementary tnforrnat1on
The no1es to the financial statements are an integral part of this statement
- 13 -

EXHIBIT 'C"

s

4 856 092 04

4 362 275 33

367 090 51

-11 37504697

-14 259 583 72

-2 855 941 34

-79 830 64

73 993 57

2 204,740 08 23 929 13 9 780 74
149 851 60
s -16 522 649 67

s 14 971 2-19 53
347 22912 1 373 636 20
5 00
s 16692.119 85

s

-199 213 23

s

10232159

-36 254 06

s

66 067 53

s

36 324 48

s

3 519 196 94

-963 254 38

s

2 555 942 56

s

2 592 267 04

s -16 301 905 69
998 529 82
-1,954 295 89 30 266 92 2 402 50 -5 837 07
-1,113,334 19 22 228 61
1 73-1 691 47 -24 04
64 627 89
s -16 522 649 67

MACON STATE COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT "D"

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS Macon State College serves the state, and national commumlies by prov1dmg its students with academic mstruclion that advances fundamental knowledge, and by d1ssemmatmg knowledge to the people of Georgia and throughout the country
REPORTING ENTITY Macon State College 1s one of thirty-four (34) State supported member mst1tut1ons of higher educalion m Georgia which compnse the Umvers1ty System ofGeorgia, an orgaruzalional U111t ofthe State of Georgia The accompanymg financial statements reflect the operalions of Macon State College as a separate reportmg enlity
The Board of Regents has const1tut1onal authonty to govern, control and manage the Umversily System ofGeorgia Th.is authonty mcludes but 1s not hm1ted to the power to designate management, the ab1hty to s1gmficantly mfluence operations, the authonty to control mslitut1ons' budgets, the power to determme allotments of State funds to member mst1tut10ns and the authonty to prescnbe accountmg systems and adm1mstralive pohc1es for member mst1tulions Macon State College docs not have authonty to retam unexpended State appropnat10ns (surplus) for any given fiscal year Accordmgly, Macon State College 1s considered an organ1zat1onal unit of the Board of Regents of the Umvers1ty System of Georgia reportmg entity for financial reporting purposes because of the s1gn1ficance of its legal, operat10nal, and financial rela11onsh1ps with the Board ofRegents as defined m Secl!on 2100 of the Governmental Accountmg Standards Board (GASB) Cod1ficauon of Governmental Accounting and Fmanctal Reportmg Standards
FINANCIAL STATEMENT PRESENTATION In June 1999. the GASB issued Statement No 34, Basic Fmanczal Statements and Management Discusswn and Anal\'sisfor State and Local Governments This was followed m November 1999 by GASB Statement No 35, Basic Fmanczal Statements and Management's Discusswn and Analrsi~ for Puh/zc Colleges and Universities The State of Georgia 1s required to implement GASB Statement No 34 as of and for the year ended June 30. 2002 As an organ1zauonal unit of the State of Georgia, the College 1s also requued to adopt GASB Statements No 34 and No 35 as amended by GASB Statements No 37 and No 38 The financial statement presentat10n reqmred by GASB Statements No 34 and No 35 as amended by GASB Statements No 37 and No 38 provides a comprehensive, ent1ty-w1de perspective of the College's assets. hah1ht:tes. net assets. revenues. expenses, changes m net assets, cash flows, and replaces the fund group perspecllvc previously reqmred
The College has elected to not restate its 2001 financial statements to conform with the new financial statement presental!on. therefore comparalive financial mformauon will not be presented for fiscal year 2002 S1gmficant accountmg changes made m order to comply with the new requirements mclude (I) adoplion ofdeprec1a11on on capital assets, and (2) recognlllon ofcompensated absences Generally Accepted Accountmg Pnnc1ples (GAAP) requires that the reportmg of summer school
- 14 -

MACON STATE COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT"D"

NOTE 1 SUMMARY OF SIGNTFICM'T ACCOUNTING POLICIES
FINANCIAL STATEMENT PRESENTATION revenues and expenses be between fiscal years rather than m one fiscal year Due to the lad. of matenahty, Jnst1tut1ons ofthe Umvers1ty System ofGeorgia will contmue to report summer revenues and expenses m the year m which the predommate activity takes place
At June 30, 2001, encumbrances (contractual obligations for goods and services not received at fiscal year end) were recorded as expenditures by the College mstead of reservations of fund balance as reqmred by generally acceptejl accountmg pnnc1ples For fiscal year 2002, the College changed its method of recordmg encumbrances such that encumbrances at June 30, 2002 were recorded as a reservallon of fund balance Th.ts change 1s m accordance with generally accepted accountmg pnnc1ples
No adJustments however. have been made on the financial statements to restate the fund balance at July 1, 2001 for the June 30, 2001 encumbrances recorded as expenditures m fiscal year 2001 The net effect of the above accountmg treatment resulted m an understa1ement of expenditures on the accompanymg financial statements for pnor year encumbrances which should have been reflected as expenditures m the penod when goods and services were received
BASIS OF ACCOUNTING For financial reportmg purposes, the College 1s considered a special-purpose government engaged only m busmess-type act1v1t1es Accordmgly, the College's financial statements have been presented usmg the economic resources measurement focus and the accrual basis of accountmg, except as noted m the precedmg paragraphs Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obhgat1on has been incurred All s1gmficant mtra-college transactmns have been ehmmated
The College has the optmn to apply all Fmancial Accountmg 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 apphcablc date
RESTATEMENT OF NET ASSETS - BEGINNING OF YEAR As a result of the adoption ofGASB Statement No 34, the College was also required to make certam changes m accountmg pnnc1ples, specifically (I) adoption of depreciation on capital assets, and (2) recordmg of compensated absences GASB Statement No 34 requires certam summer semester revenues be recogmzed between fiscal years rather than the fiscal year m which the semester was predominantly conducted The Umvers1ty System of Georgia has chosen to contmue to record summer revenue m the year m which the semester was predommantly conducted Net assets at July I, 2001 were reduced by $19,256,555 39 for the cumulative effect of these changes

- 15 -

MACON STATE COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS/SHORT-TERM INVESTMENTS Cash and Cash Eqmvalents consist of petty cash, demand deposits and time deposits m authonzed financial mst1tut10ns, and cash management pools that have the general charactenst1cs of demand deposit accounts
INVESTMENTS The College accounts for its mvestments at fair value m accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Jnve~tment Pools Changes m unrealized gain (loss) on the carrymg value ofmvestments are reported as a component of mvestment mcome m the statements of revenues, expenses, and changes m net assets
ACCOUNTS RECEIVABLE Accounts receivable consists oftmllon and fee charges to students and aux1hary enterpnse services provided to students, faculty and staff, the maJonty of each res1dmg m the State of Georgia Accounts receivable also mclude amounts due from the Federal government, state and local governments, or pnvate sources, m connection with reimbursement of allowable expenchtures made pursuant to the College's grant and contracts Accounts receivable are recorded net of estimated uncollecuble amounts
INVENTORIES Resale lnventones are earned at the lower of cost or market on the first-m, first-out ("FIFO") basis
NON-CURRENT CASH AND INVESTMENTS Cash and mvestments that are e:xternally restncted and cannot be used to pay current hab1ht1es are classified as non-current assets m the statements of net assets
CAPITAL ASSETS Capital assets are recorded at cost at the date of acqms11Jon, or fair market value at the date of donallon m the case of gifts For equipment, the College's cap1tahzat1on pohcy mcludes all items with a umt cost of $5,000 00 or more, and an estimated useful hfe of greater than one year Renovations to bmldmgs, mfrastructure, and land improvements that exceed $ I 00,000 00 and s1gruficantly mcrease the value or extend the useful hfe of the structure are cap1tahzed Routme repairs and mamtenance are charged to operatmg expense m the year m which the expense was mcurred Depreciation 1s computed usmg the straight-hne method over the estimated useful hves of the assets, generally 40 to 60 years for bmldmgs, 20 to 25 years for mfrastructure and land improvements, 10 years for hbrary books, and 3 to 7 years for eqmpment
To obtam the total picture of plant additions m the Umvers1ty System, 1t 1s necessary to look at the act1v1t1es of the Georgia State Fmancmg and Investment Comm1ss1on (GSFIC)- an organization that 1s external to the System GSFIC issues bonds for and on behalfof the State of Georgia, pursuant to powers granted to 1t m the Constitution of the State of Georgia and the Act creatmg the GSFIC The
- 16 -

MACON STATE COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL ASSETS bonds so issued constitute direct and general obligations of the State of Georgia, to the payment of which the full faith, credlt and taxmg power of the State are pledged
DEFERRED REVENUES Deferred revenues mclude amounts received for tu1t10n and fees and certam aux1hary actJVJt:Jes pnor to the end of the fiscal year but related to the subsequent accountmg penod Deferred revenues also mclude amounts received from grant and contract sponsors that have not yet been earned
COMPENSATED ABSENCES Employee vacation pay 1s accrued at year-end for financial statement purposes The hab1hty and expense mcurred are recorded at year-end as accrued vaca!Jon payable m the Statement of Net Assets, and as a component of compensa!Jon and benefit expense m the Statements of Revenues, Expenses, and Changes m Net Assets Macon State College had accrued hab1hty for compensated absences m the amount of$676,770 90 as of July I, 2001. For Fiscal Year 2002, $538,353 46 was earned m compensated absences and employees were paid $473,725 57, for a net mcrease of S64.627 89
NON-CURRENT LIABILITIES Non-current hab1ht1es mclude (I) hab1h1Jes that will not be paid w1thm the next fiscal year, (2) capital lease obhgauons with contractual matunttes greater than one year; and (3) other hab1ht1es that, although payable w1tlun one year, are to be paid from funds that are classified as non-current assets
NET ASSETS The College's net assets are classified as follows
Invested 111 capllal assets, net of related debt Tlus represents the College's total mvcstment m capital assets, net of outstandmg debt obligations related to those capital assets To the extent debt has been mcurred but not yet expended for capital assets, such amounts are not mcluded as a component of mvested m capital assets, net of related debt (The term "debt obhgauons" as used m this defimuon does not mclude debt of the GSFIC as discussed above)
Restncted net assets Restncted expendable net assets mclude resources m which the College 1s legally or contractually obhgated to spend resources m accordance with restnct1ons imposed by external third parties

- 17 -

MACON STATE COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBJT"D"

NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NET ASSETS Unresmcted net assets Unrestncted net assets represent resources denved from student tmtJon and fees, state appropnauons, and sales and services of educational departments and aux1hary enterpnses These resources are used for transactions relatmg to the educational and general operations of the College, and may be used at the d1scre1Ion of the governmg board to meet current expenses for those purposes, except for unexpended state appropnal!ons (surplus) of $7,840 40 Unexpended state appropnallons must be refunded to the Board ofRegents ofthe Uruvers1ty System of Georgia - Admm1strat1ve Central Office for remittance to the Office of Treasury and Fiscal Services These resources also mclude aux1hary enterpnses, wluch are substantially self-supportmg act1V11Ies that provide services for students, faculty and staff
When an expense 1s mcurred that can be paid usmg either restncted or unrestncted resources, the College's pohcy 1s to first apply the expense towards unrestncted resources, and then towards restncted resources
INCOME TAXES Macon State College, as a pohl!cal subd1v1smn of the State of Georgia, 1s excluded from Federal mcome taxes under Sectmn I 15(1) of the Internal Revenue Code, as amended
CLASSIFICATION OF REVENUES The College has classified its revenues as either operatmg or non-operatmg revenues m the Statement of Revenues, Expenses, and Changes m Net Assets accordmg to the followmg cntena
Operating revenues Opcratmg revenues mclude act1v11Ies that have the charactenst1cs ofexchange transachons, such as (I) student tmtmn and fees. net ofscholarslup allowances. (2) sales and services of aux1hary enterpnses, (3) most Federal, state and local grants and contracts and Federal appropnahons, and (4) mterest on mslltutlonal student loans
Non-operating revenues Non-operatmg revenues mclude ac11v111es that have the charactenst1cs of non-exchange transachons, such as gifts and contnbut1ons, and other revenue sources that are defined as non-operatmg revenues by GASB No 9, Reporting Cash Flows of Proprietary and None:cpendahle Trust Funds and Governmental En/Illes That Use Propnetary Fund Accounting, and GASB No. 34, such as state appropnatlons and mvcstrnent mcome
SCHOLARSHIP ALLOWANCES Student tmtlon and fee revenues, and certain other revenues from students, are reported at gross with a contra revenue account of scholarslup allowances m the Statement of Revenues, Expenses, and Changes m Net Assets Scholarship allowances are the difference between the stated charge for goods and services provided by the College, and the amount that 1s paid by students and/or third parties makmg payments on the students' behalf Certam governmental grants. such as Pell grants,

- 18 -

MACON STATE COLLEGE NOTES TO THE FINANCIAL STATEMEJ\'TS
JUNE 30, 2002

EXHIBIT "D"

NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SCHOLARSHIP ALLOWANCES and other Federal, state or nongovernmental programs, are recorded as either operatmg or nonoperatmg revenues m the College's financial statements To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the College has recorded contra revenue for scholarship allowances
NOTE 2 CASH AND CASH EQUIVALENTS, OTHER DEPOSITS, AND INVESTMENTS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES Funds belongmg to the State of Georgia (and thus Macon State College) cannot be placed m a depository paymg mterest longer than ten days without the depository prov1dmg a surety bond to the State In heu of a surety bond, the depository may pledge as collateral any one or more of the followmg secunlles as enumerated m the Official Code of Georgia Annotated Sect10n 50-17-59
Bonds, bill. certificates ofmdebtedness, notes, or other direct obhgallons ofthe Uruted States or of the State of Georgia
2 Bonds, bills, certificates of mdebtedness, notes, or other obhgallons of the counties or muruc1paht1es of the State of Georgia
3 Bonds of any pubhc authonty created by the laws of the State of Georgia, prov1dmg that the statute that created the authonty authonzed the use of the bonds for this purpose
4 Industnal revenue bonds and bonds of development authonues created by the laws of the State of Georgia
5 Bonds, bills, certificates of mdebtedness, notes, or other obhgallons of a subs1d1ary corporation ofthe Uruted States government, which are fully guaranteed by the Umted States government both as to pnnc1pal and mterest, or debt obhgauons 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 Associat1on, and the Federal National Mortgage Association
6 Guarantee or msurance ofaccounts provided by the Federal Deposit Insurance Corporation
As authonzed m the Official Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted pohc1es which allow agencies of the State of Georgia (and thus Macon State College). the option of exemptmg demand deposits from the collateral reqmrements
The Treasurer of the Board ofRegents 1s responsible for all details relative to furmshmg the reqmred depository protect10n for all uruts of the Uruverslly System of Georgia
- I9 -

MACON STATE COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE 2 CASH AND CASH EQUIVALENTS, OTHER DEPOSITS, AND INVESTMENTS

CATEGORIZATION OF DEPOSITS The College's cash deposits are categonzed by nsk as follows

Category I - Amounts covered by depository insurance or collaterahzed with secunues (at fair value) held by the College or by its agent m the College's name

Category 2 - Amounts collaterahzed with secunt1es (at fair value) held by the pledgmg financial mstltullon's trust department or agent m the College's name.

Category 3 - Amounts collaterahzed with secuntles (at fair value) held by the pledging financial institution, or by its trust department or agent but not m the College's name, and amounts uncollateral1zed

Cash Deposits as of June 30, 2002 are as follows

Cash Dcposots
Jnvcstment Portfolio Accounts
Total Cash DepoS1ts

Canymg Anx,unt

Ban~
Balances

Risk Catcgones

$ 2,789,643 04 $ 3,576,603 68 $ 300,000 00 S

0 00 S 3,276,603 68

3) 08704 ,108704

,) 087 04

s..,2 820 730 os s-3 607 620 22 s 311082 04 s___o_o_o s--3 22c, 603 6&

CATEGORIZATION OF INVESThlENTS The College's mvestments are categonzed as to credit nsl.. w1thm the three categones descnbed below

Category I - Insured or registered, or secunt1es held by the College or its agent m the College's name

Category 2 - Unmsured and unregistered, With secuntles held by the counter party's trust department or agent m the College's name

Category 3 - Umnsured and unregistered, with secunues held by the counter party, or by its trust department or agent, but not m the College's name

At June 30, 2002, the College's investments consisted of the followmg

- 20 -

MACON STATE COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 2002

EXHIBIT"D"

NOTE 2 CASH AND CASH EQUIVALEl\'TS, OTHER DEPOSITS, AND INVESTMENTS

CATEGORIZATION OF INVESTMENTS

Type of Investments
Common Stock Corporate Bonds U S Government Sccunties
and Corporate Obligations
Totals

R15k Catcgones
2

s 574, \32 26 s
58,009 92

000 S

WIT)lng

l

Amount

0 00 S 574, \32 26 58,009 92

293,483 77
s 2,~ ~25 2" s

293,481.77
ooo s._ ___,<.>.oo... s 925.625 95

Investments Not SubJcct to Catcgonzauons Board of Regents
Short-Tenn Fund

799 508 4,

Total Investments

s 1725 13440

Funds mvested man mvestment pool managed by another governmental entity are not reqmred to be categonzed smce the College did not own any specific, 1dent1fiable mvestment secunlies ofthe pool

NOTE 3 ACCOUNTS RECEIVABLE

Accounts receivable consisted of the followmg at June 30, 2002

Student Tmt10n and Fees Aux1hary Enterpnses and Other Operatmg Acliv1t1es Federal, State, and Pnvate Funds Other

S 1,657,418 90 92,840 66
919,523 94 219.387 38

S 2,889,170 88

Less Allowance for Doubtful Accounts

9 035 41

Net Accounts Receivable

S 2.880.)35.47

NOTE 4 Il\'VENTORIES

Inventones consisted of the followmg at June 30, 2002 Bookstore

$ 375.3,22 62

- 21 -

MACON STATE COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE 5 NOTES/LOANS RECEIVABLE

Notes/Loans receivable at June 30, 2002, pnmanly consist ofstudent loans made through the Federal Perkins Loan Program (the Program) The Program provides for cancellahon of a loan at rates of I 0% to 30% per year up to a maximum of I00% 1fthe part1c1pant comphes wl\h certain prov1smns The Federal government reimburses the College for amounts cancelled under these proVJsmns As the College detenmnes that loans are uncollechble and not ehg1ble for reimbursement by the Federal government. the loans arc wntten off and assigned to the U S Department of Educatmn

NOTE 6 CAPITAL ASSETS

The balance at July I, 2001 was adjusted for accounting changes reqmred in implementing GASB Statements 34 and 35 as disclosed in Note I Following are the changes in capital assets for the year ended June 30, 2002

Adjusted Balance
July I. 2001

Addn1ons

Reducuons

Balance June 30 21Xl2

Capital Assets, Not Bemg Depreciated

Land and Land Improvements

S 483.411 84 S_ _ _0~ 00 s

oOQ s 483.411 84

Capital Assets, Bemg Depreciated Bu1ldmg and Bu1ldmg Improvements Fac1ht1cs and Other Improvements
Equipment Library Collections

$ 26,558,485 42 1.848, 180 00 1,894,830 26 S
2 953.895 72

$
102.202 40 97.010 81

S 33 255 19140 S - ~199= .213 23 $

277,153 00 S 26,281,332 42 341,981 00 1,506. I99 00 106,884 15 1.890.148 51
3,050 906 55
72601815 S 32.728 S86 48

Less Accumulated Deprec1auon Bmldmgs and Bu1ldmg Improvements S Fac1!1t1cs and Other Improvements Eqmpment Library Colkct1ons

7,360.765 79 $ 813,274 67
1,203.094 73
2 529 035 59

632.158 23 s
60.835 81 184.057 78
12147800

S I l 906 170 78 $_-"L99e8"."5"2"9 82 s

144,792 35 s
342,053 70 I 02,897 I 6

7,848.131 67
532.056 78
1.284.255 35
2 650 s l1 s9

589 743 21 $ 12,114 957 39

Total Capital Assets, Bemg Depreciated,

Net

$ 2I 349 220 62 $ --~ 799-11659 $

Capaa\ Assets, Net

S 2I 832 6~2A6 s-"-'1-2"2~16~2 s

136 2i4 94 S 20 4J162909
1~c1.2z~ 2:! s 2g S22 11:!Q 2l

NOTE 7 DEFERRED REVENUE

Deferred revenue consisted of the followmg at June 30, 2002

Prepaid Tmuon and Fees Fedcral Gifts and Grants
Totals

S 2,991,810 38 15130844
s 3,143,118,82

- 22 -

MACON STATE COLLEGE NOTES TO THE FINANCIAL STATEMEl\'TS
JUNE 30. 2002

EXHIBIT "D"

NOTE 8 LONG-TERM LIABILITIES

Long-term hab1hty acllv1ty for the year ended June 30, 2002, was as follows

Other L1ab1hues Compensated Absences

Balance July I, 2001

Addn1ons

Reductions

Balance June 30, 2002

Current
Poo1on

S 676 770 90 S "38 353 46 S 4i3 72~ ~ S 741 39B;12 S 473 T'"-"!1.Z

NOTE 9 RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Plan Description Macon State College participates in the Teachers Retirement System of Georgia (TRS). a costshanng multiple-employer defined benefit pension plan established by the General Assembly of Georgia for the purpose of providing retirement allowances and other benefits for teachers of the State of Georgia TRS provides service retirement, d1sab1hty retuement, 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 Georgia Department of Audits and Accounts

Funding Policy Employees of Macon State College who are covered by TRS are reqmred by State statute to contnbute 5% of their gross earmngs to TRS Macon State College makes monthly employer contnbut10ns 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 2002, the employer contnbu11on rate was 9 24% for covered employees Employer contnbutlons for the current fiscal year and the preceding two fiscal years are as follows

Fiscal Year

Percentage Contnbuted

Reqmre<l Contn buuon

2002 2001 2000

100% 100% 100%

S 877,827 88 S 1,073,549 80 S 1,076,461 99

REGENTS RETIREMENT PLAN

Plan Description The Regents Retirement Plan, a single-employer defined contnbullon plan, 1s an optional retirement plan established and adm1mstered by the Board of Regents of the Umvers1ty System of Georgia, under which II may purchase annuity contracts for the purpose of providing retirement and death

- 23 -

MACON STATE COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE 9 RETIREMENT PLANS
REGENTS RETIREMENT PLAN
Plan Description benefits for ehgible faculty and pnnc1pal adm1D1strators Benefits depend solely on amounts contnbuted to the plan plus 1Dvestment carn1Dgs Benefits are payable to part1c1pat1Dg employees or their benefic1anes ID accordance With the terms of the armmty contracts
Funding Policy Member contnbutlon reqmrements are estabhshed by the Board of Trustees of the Teachers Rel!rcment System Employer contnbut10ns are estabhshed by statute and may be amended only by the General Assembly ofthe State of Georgia The employer contnbutcs 9 62% ofthe part1c1pat1Dg employee's carnable compensat10n Employees contnbute 5% of their earnable compensation Amounts attnbutable to all plan contnbul!ons are fully vested and non-forfe1table at all times
Macon State College and the covered employees made the reqmred contnbul!ons of $330, I09 25 (9 62%) and $171,575.21 (5%), respectively
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description Macon State College participates ID the Georgia Defined Contnbutlon Plan (GDCP) which 1s a s1Dgle-employer defined contnbutlon plan estabhshed by the General Assembly of Georgia for the purpose ofprov1d1Dg rel!rement coverage for State employees who are temporary, seasonal, and partl!mc and are not members of a pubhc retirement or pension system GDCP 1s adm1mstered by the Board of Trustees of the Employees' Retirement System of Georgia
Benefits A member may retire and elect to receive penod1c payments after attainment of age 65 The payment will be based upon mortahty tables and 1Dterest assumptions to be adopted by the Board ofTrustees If a member has less than$ 3,500 00 credited to his/her account, the Board ofTrustees has the opl!on ofrequmng a lump sum d1stnbut1on to the member ID heu ofmak1Dg pcnod1c payments Upon the death of a member, a lump sum d1stnbut1on equal1Dg the amount credited to his/her account will be prud to the member's designated beneficiary Benefit prov1s1ons are estabhshed by State statute
Contributions and Vesting Member contnbutlons are seven and one-halfpercent (7 5%) of gross salary There are no employer contnbullons Contnbul!on rates are estabhshed by State statute Eam1Dgs are credited to each member's account ID a marmer estabhshed by the Board of Trustees Upon term1Dal!on of employment, the amount of the member's account 1s refundable upon request by the member
Total contnbullons made by employees dunng fiscal year 2002 amounted to S35,027 27 which represents 7 5% of covered payroll These contnbul!ons met the requirements of the plan
- 24 -

MACON STATE COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE 10 RISK MANAGEMENT
Macon State College 1s a part1c1pant in the Board of Regents of the Umvers1ty System of Georgia Health Benefits Plan, which 1s a self-insurance program of health and dental benefits for employees and retirees ofthe Umvers1ty System ofGeorgia Macon State College and part1c1pating employees and rellrees pay premmms to the Health Benefits Plan for this health insurance coverage The Health Benefits Plan 1s included in the financial statements of the Board of Regents of the Umvers1ty System of Georgia - Administrative Central Office All umts of the Uruvers1ty System of Georgia share the nsk ofloss for chums of the Health Benefits Plan The Health Benefits Plan 1s considered a self-sustaining nsk fund that provides health coverage for Its members up to a maximum hfet1me benefit ofS2,000.000.00 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 estabhshed by the Board of Regents
The Department of Adm1rustrat1ve Services (DOAS) has the respons1b1hty for the State of Georgia of making and canying out dec1s1ons that will m1mm1ze the adverse effects of accidental losses that involve State government assets The State believes 11 1s more economical to manage its nsks internally and set aside assets for claim settlement Accordingly, DOAS processes claims for nsk of loss to which the State 1s exposed, including general liability, property and casualty, workers' compensallon, unemployment compensation, and law enforcement officers' indemmfical!on L1m1ted amounts of commerc1al insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other nsks Macon State College. as an orgaruzal!onal umt of the Board ofRegents ofthe Uruvers1ty System ofGeorgia, 1s part ofthe State of Georgia reporting enllty, and as such. 1s covered by the State of Georgia nsk management program adm1mstered by DOAS Premmms for the nsk management program are charged to the vanous state orgamzat10ns 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 Umvers1ty System of Georgia under powers authonzed by the Official Code of Georgia Annotated Secllon 45-9-1 The program insures the employees to the extent that they are not immune from liab1hty against personal liability for damages an sing out of the performance of their duties or in any way connected therewith The program 1s adm1mstered by DOAS as a SelfInsurance Fund
NOTE 11 CONTINGENCIES
Amounts received or receivable from grantor agencies are subJect to audit and adJustmcnt 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 llme although Macon State College expects such amounts, 1fany, to be 1mmatenal to its overall financial pos11Ion

- 25 -

MACON STATE COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE 11 CONTINGENCIES
L1t1gat10n, chums and assessments tiled agamst Macon State College (an organ1zat10nal umt of the Board ofRegents of the Umvers1ty System ofGeorgia). 1f any, are generally considered to be actions agamst the State of Georgia Accordmgly, s1gruficant ht1gat1on, claims and assessments pendmg agamst the State of Georgia are disclosed m the State of Georgia Comprehensive Annual Fmanc1al Report for the fiscal year ended June 30, 2002
NOTE 12 POST-EMPLOYMENT BENEFITS OTHER THAN PENSIOI\ BENEFITS
Pursuant to the general powers conferred by the Official Code ofGeorgia Annotated Section 20-331, the Board of Regents of the Umvers1ty System of Georgia has established group health and hfe
msurance programs for regular employees ofthe Umvers1ty System ofGeorgia It 1s the pohcy ofthe
Board of Regents to permit employees ofthe Umvers1ty System of Georgia ehg1ble for retirement or that become permanently and totally disabled to contmue as members of the group health and hfe msurance programs Employees who are ehgible for retirement or d1sab1hty under the cntena established by the Teachers Retirement System ofGeorgia and who have at least ten years ofservice with the Umvers1ty System of Georgia are ehg1ble for these post-employment health and hfc msurance benefits Organ1zat10nal umts of the Board of Regents of the Umverslly System of Georgia pay the employer porllon for group msurance for affected md1v1duals
As of June 30, 2002, there were 57 employees who had retired or were disabled that were rece1vmg these post-employment health and hfe msurance benefits For the year ended June 30, 2002. Macon State College recogmzed as mcurred $195,120 07 of expenditures, which was net ofS86,914 62 of part1c1pant contnbullons

- 26 -

MACON STATE COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2002

EXHIBIT "D"

NOTE 13 NATURAL CLASSIFICATIONS WITH FUNCTIONAL CLASSIFICATIONS

The College's operating expenses by functional class1ficat1on are shown below

Statement of Opcranng E.xpenscs - Natural \S f-unct1onal Cb.ss1ficauons I-or the Fiscal Year Ended June JO, 2002

[!ffiCllQ!Jal ~ la~~O~iHIQl1

Natural Class1fic:at1on
~lanes foacult-. ~..tr
l:mploycc Benefits Other Personal Semces Travel <icholarsh1JX and
Fellowshrps lJtJlnies ~upphcs and Other
SeMc~
Dcpm:ia11on
Total Operating Expcnso

ln,unn;11Q!l

Pubhc ~'1!::!::

Acadermc SW2Rl2Il

s<m;ru,dcecnst

lnstmmonal Suuocn1

s 8.326,678 38 s 934,"68 13 2.119,672 66 103,68K 89
102.289 12 911,655 25

15,928 00 151,913 9Q 40,()64 82
l,lll 40

s 16.50000
1,275.240 HI 321,447 92
8,852 52

s 35 472 00 1.300175 26 324,413 7)
1915679

s

75-0 00

1,540 8 H, 02

654,719 gc:.

52 ~70 00

23.->2 77

5,651 41

b 876 37 63,451 84

3 l.037 00 28,439 4,1

143 789 53 40 366 65

125,430 14

546,71908

324,160 29

701,759 63

S 12 496 6-1i2 41 s 34() 20] 76 s 22:\2,01!8..l,4 s 202 85;1 <ii] s )J<ii8J744"

N?tural c1a....51ficatmn
Sa.lanes faculty S!BtT
Employee Benefits Other Pmonal Services 1 ravel Scholarships and
Fellowsh1ps. Ut1htJes Supphcs and Other
Services Deprec1at1on
Total Operating Expenses

Plan!
Operauons and
Mamtenancc

Eu:ma:i!,!I:!,~J C~s1fica1mo

Scholarships
and Fcllo1.1r}b1DS

Auxiliary
tntemmcc;

Unallocated
Pmrecu1t1on

TOUII Operating t;xpensg

5 620,217 76 174,057 04

s 128,079 87 55,09H 79

4,143 63 498,QQ9 52

s 2,674,238 44

3,268 62 3 447 !'4

1,206,080 17 S---2 "iQl ;11~ I~

s ~ (17!,,;:JRM

1,829,958 69
s s ZQl2,~\1 s

s 8,395,328 38 5,951,111 84 3,689,474 81 51,870 00 163,628 62

2855,94134 742,645 52

5,645 761 25

<X>K ''29 82

()QR 52() 82

,s 22~ "22 B~ s :12l ~Q1 ~

- 27 -

SUPPLEMENTARY INFORMATION - 29 -

MACON STATE COLLEGE SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO
BUDGET - (NON-GAAP BASIS) RESIDENT INSTRUCTION
YEAR ENDED JUNE 30. 2002

SCHEDULE "1"

REVENUES
State Appropnations other Revenues Retained

BUDGET

ACTUAL (1)

VARIANCE FAVORABLE (UNFAVORABLE)

$ 14,725,954 00 $ 14,725,954 50 $

15,890,757 00

12,581,584 67

0 50 -3.309 172 33

$ 3061671100 $ 27.307,53917 $ _ _-;:;3,.::.309=,1,;_;7....:1....:8;,;:.3

EXPENDITURES
Personal Services Educabon General and Departmental Services Sponsored Operations
Operabng Expenses Education General and Departmental Services Sponsored Operabons
Caprtal Outlay Special Funding lmbabve

s $ 16,517.704 00 $ 16,428 323 32

1379,56500

1, 195,207 34

3,791.431 00 7,397,150 00 1,389.036 00
14182500

3,800,000 04 4 785,834 93 1 140,692 84
14182500

89.380 68 184,357 66
-8,569 04 2,61131507
248 343 16 000

$ 30 616 711 00 $ 27.491 883 47 $ _ _.::,3c.1,:=, .24"'.8;:;2::..c7....:5=3

Excess of Revenues over Expenditures

$

-184.344 30 $ ~ ~ - -.1.84.,...,344..,._,30.,

(1) Actual amounts were prepared on a prescnbed basis of accounbng that demonstrates compliance wrth budgetary statutes and regulations of the State of Georgia. which ,s a comprehensive bas,s of accounbng other than generally accepted accounting pnnciples

See accompanying notes and Independent Accountant's Combined Report on Rev,ew of Basic Financial Statements and Supplementary Information
- 31 -

MACON STATE COLLEGE SCHEDULE OF REVENUES'AND EXPENDITURES COMPARED TO
B0DGET - /NON!GAAP BASIS} LOTTERY FOR EDUCATION YEAR ENDED JUNE 30, 2002

SCHEDULE "2"

REVENUES State Appropnabons

BUDGET

ACTUAL (1)

VARIANCEFAVORABLE (UNFAVORABLE)

$

248,346 DO S_ _ _ __::_D.;:.D::.D

EXPENDITURES
Equipment, Technology and Construction Trust Fund
Special Funding lnrt1at1ves

$ 149,314 OD $

149,314 OD $

ODD

99,032 OD

99 032 DO

D DO

$ 248,346 DO $

248,346 OD $ _ _ _ _--=.D.;:.DD::.

Excess of Revenues over Expendrtures

$

0 OD S~==~=O,;;,DD;.

(1) Actual amounts were prepared on a prescnbed basis of accounting that demonstrates comphance wrth budgetary statutes and regulations of the State of Georgia, which 1s a comprehensive basis of accounting other than generally accepted accounting pnnciples

See accompanying notes and Independent Accountant's Combined Report on Review of Basic Financial Statements and Supplementary Information
- 32 -

MACON STATE COLLEGE RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30 2002

SCHEDULE "3"

Totals per Annual Supplement
Accruals June 30 2001 June 30, 2002 July 1, 2001 Accrual AdJUStments
Compensated Absences June 30, 2001 June 30, 2002
AdJustments Shared Services on Jointly Staffed Personnel Macon State College Hamngton, M L

SALARIES $ 14 274 043 65 $

TRAVEL 163,628 62

-21,505 13 43,733 74
4,240 76

-628,677 10 688,712 30

-14 108 00 $ 14,346,440 22 $ ~-1.:.:6;;:3...::16::.28:;.6_2;..

See accompanying notes and Independent Accountant's Combined Report on Review of Basic Financial Statements and Supplementary Information
- 33 -

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

MACON STATE COLLEGE AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIOJ\1ED COSTS YEAR ENDED JUNE 30, 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

F1NDING CONTROL NUMBER AND STATVS

FS-581-99-01

Further Action Nol Warranted