Audit report, state of Georgia, Medical College of Georgia, Augusta, Georgia, year ended June 30, 1997

t'V\
A~oo
.RI
M'1f.
rqqt-17.

AUDIT REPORT STATE OF GEORGIA MEDICAL COLLEGE OF GEORGIA AUGUSTA, GEORGIA YEAR ENDED JUNE 30, 1997

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET ATLANTA, GEORGIA 30334-8400

MEDICAL COLLEGE OF GEORGIA - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXIllBITS

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

COMBINING STATEMENTS OF CURRENT FUNDS REVENUES, EXPENDITURES,

AND OTHER CHANGES

G

UNRESTRICTED

24

H

RESTRICTED

25

SCHEDULES

SCHEDULES OF REVENUES AND EXPENDITURES COMPARED TO BUDGET

1

RESIDENT INSTRUCTION

26

2

LOTTERY FOR EDUCATION

29

3

OTHER ORGANIZED ACTIVITIES

30

4 CHANGES IN INVESTMENT IN PLANT

34

5 SCHEDULE OF FUND BALANCES

CURRENT FUNDS AND PLANT FUNDS

36

6 RECONCILIATION OF PER DIEM AND FEES

38

MEDICAL COLLEGE OF GEORGIA - TABLE OF CONTENTS -
SECTIONll AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

CLAUDE L. VICKERS
STAlE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
October 2, 1997

Honorable Zell Miller, Governor Members of the General Assembly of Georgia Members ofthe Board of Regents ofthe University System of Georgia
and Honorable Francis J. Tedesco, President Medical College of Georgia
INDEPENDENT AUDITOR'S COMBINED REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have audited the accompanying fmancial statements (Exhibits A through D) of Medical College of Georgia as of and for the year ended June 30, 1997. 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fmancial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall fmancial 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 of fund balance. The effects on the financial statements ofthis departure from generally accepted accounting principles were not reasonably determinable, but are believed to be material.

97ARL-62

As disclosed in Note 1 to the fmancial statements, the College did not report the liability and related expynditure for compensated absences in the current funds as required by generally accepted accounting principles. If compensated absences were reported, liabilities would be increased and fund balance would be decreased by $21,117,869.63 as of June 30, 1997, and the net change in fund balance for the year ended Jun~ 30, 1997, would be decreased by $631,286.72.
In our opinion, except for the effects on the financial statements of the matters discussed in the third and fourth paragraphs, the fmancial statements referred to above present fairly, in all material respects, the financial position of Medical College of Georgia as of June 30, 1997, 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 H and Schedules 1 through 6) is presented for purposes of additional analysis and is not a required part of the financial statements of Medical College of Georgia. 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 fmancial statements taken as a whole.
Respectfully submitted,
tr~
Claude L. Vickers State Auditor
CLV:gp 97ARL-62

FINANCIAL STATEMENTS - 1-

MEDICAL COLLEGE OF GEORGIA COMBINED BALANCE SHEET ALL FUND GROUPS JUNE 30,1997

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable (Net of Allowance
for Uncollectibles) Inventories Prepaid Items Investment in Plant
Total Assets
LIABILITIES AND FUND BALANCES
Liabilities Accounts Payable Deferred Revenue Tuition and Fees Deposits Held in Custody for Others Capital Lease Obligations
Total Liabilities
Fund Balances U. S. Govemment Grants Refundable Institutional Loans - Restricted Endowment Quasi-Endowment - Restricted Net Investment in Plant Restricted Unrestricted
Total Fund Balances
Total Liabilities and Fund Balances

CURRENT FUNDS UNRESTRICTED RESTRICTED

LOAN FUNDS

$ 45,711,296.13 $ 11,840,019,81 $ 1,398,238.26

85,327,908.02 2,568,856.71

3,040,595.67

7,533,506.24

$ 133,608,060.86 $ 14,880,615,48 $ 8,931,744.50

$ 32,672,394.06 1,276,460.56

$ 33,948,854,62

$ 7,696,010.15 1,235,734.35

$ 14,880,615.48 $ 99,659,206.24
$ 99,659.206.24 $ 14.880,615.48 $ 8,931,744.50

$ 133,608,060.86 $ 14,880,615.48 $ 8,931,744.50

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)

$ 8,488,977.62 $ $ 5,769,280.13

426,156.87

$ 8,001,934.19 $ 75,866,622.88 5,769,280.13

218,097.00
2,958,842.66 _ _ _ _ _ _ $ 478,883,152.24

96,120,106.93 2,568,856.71 2,958,842.66 478,883,152.24

$ 5,769,280.13 $ 11,665,917.28 $

426,156.87 $ 478,883,152.24 $ 8,001,934.19 $ 662,166,861.55

$ 8,686,988.08 $
$ 8,686,988.08 $
$ 1,315,221.86 4,454,058.27 $ 2,978,929.20 $
$ 5,769,280.13 $ 2,978,929.20 $

79,839.20
$ 79,839.20 $

$ 7,004,930.76 $ 48,444,152.10

61,916.81

997,003.43

1,276,460.56 997,003.43 61,916.81

61,916.81 $ 8,001 ,934.19 $ 50,779,532.90

$ 478,821,235.43 346,317.67 346,317.67 $ 478,821,235.43

$ 7,696,010.15 1,235,734.35 1,315,221.86 4,454,058.27
478,821,235.43 14,880,615.48
102,984,453.11
$ 611,387,328.65

$ 5,769,280.13 $ 11,665,917.28 $

426,156.87 $ 478,883,152.24 $ . 8,001,934.19 $ 662,166,861.55

-3-

MEDICAL COLLEGE OF GEORGIA COMBINED STATEMENT OF CHANGES IN FUND BALANCES
ALL FUND GROUPS YEAR ENDED JUNE 30, 1997

REVENUES AND OTHER ADDITIONS
Unrestricted Current Fund Revenues State Appropriations
Regular Federal Grants and Contracts state Grants and Contracts Local Grants and Contracts Private Gifts, Grants, and Contracts
Investment Income
Endowment Other Rental Income Realized Gains on Investments Interest on Loans Receivable Adjustments Prior Years' Expenditures/Accounts Payable Prior Years' Checks Voided Expended for Plant Facilities Cunent Funds Plant Funds
Unexpended Renewals and Replacements Georgia State Financing and Investment Commission Other Additions Recovery of Prior Years' Cancelled Loans
Total Revenues and Other Additions
EXPENDITURES AND OTHER DEDUCTIONS
Educational and General Expenditures Auxiliary Enterprises Expenditures Hospital Expenditures Indirect Costs Recovered Refunded to Grantors Remittances to the Board of Regents of the
University System of Georgia Prior Year's Unrestricted Fund Balance (Surplus)
Adjustments Prior Years' Revenues/Accounts Receivable
Loans Assigned to Federal Government Loan Cancellations and Write-offs Collection Costs Expended for Plant Facilities
Capitalized Noncapitalized DisposalslDeletionsiAdjuslments
Total Expenditures and Other Deductions
TRANSFERS BETWEEN FUNDS
Nonmandatory Renewals and Replacements Capital Projects
Total Transfers Between Funds
Net Increasel(Decrease) for the Year
FUND BALANCES JULY 1, 1996

FUND BALANCES JUNE 30, 1997 The notes to the financial statements are an integral part of this statement.

-4 -

CURRENT FUNDS UNRESTRICTED RESTRICTED

LOAN FUNDS

'$ 373,600,030,42

$ 16,700,434.28 $ 12,238,547.72 766,858,97 34,799,847.33
217,447.59

28,023.00 9,511,60
45,671.14

470,852,20 18,218.71

176,632.56

$ 374,089,101.33 $ 64,723,135.89 $

31,955.75 291,794.05

$ 184,179,668.58 $ 54,857,432.90

3,051,361.20

188,842,456.88

7,580,043.00

3,781,253.28

$

358,334.00

125,924.30 45.45

19,230.53 119,549.34
5,800.51

$ 374,199,456.41 $ 66,218.729.18 $ 502,914.38

$

-243,362.89

-4,122,742.48

$ -4,366,105.37

$ -4,476,460.45 $ -1,495,593.29 $ -211,120.33

104,135,666.69 16,376,208,n

9,142,864.23

$ 99,659,206.24 $ 14,880,615.48 $ 8,931,744.50

EXHIBIT"B"

.
ENDOWMENT AND SIMILAR
FUNDS

UNEXPENDED

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

TOTAL (Memorandum
Only)

$ 1,578,853.00

$ 452,405.71

4,309,567.18 280,305.60

20,086.54 $

$ 452,405.71 $ 6,188,812.32 $

$ 373,600,030.42

1,578,853.00

16,728,457.28

12,238,547.72

766,858.97

$

112,417.23

34,921,n6.16

217,447.59 4,355,238.32
280,305.60 452,405.71 176,632.56

2,086.13

493,024.87 18,218.71

33,429,163.33 33,429,163.33

6,130,975.88 247,802.58
24,664,087.02

6,130,975.88 247,802.58
24,664,087.02

31,955.75

2,086.13 $ 64,584.446.04 $ 510,331,781.47

$

9,156.38

6,130.975.88 $ 12,388,788.25
$ 18,528,920.51 $

$ 239,037,101.48 3,051,361.20
194,422,499.88 3,781,253.28 358,334.00

247,802.58 22,374.92 $
270,1n.50 $

135,080.68

45.45 19,230.53 119,549.34 5,800.51

5,017.956.08

6,378,778.46 12,411,163.17
5,017,956.08

5,017,956.08 $ 464,738,154.06

$ $ 4,122,742.48 $ 4,122,742.48 $ $ 452,405.71 $ -8,217,365.71 $ 5,316,874.42 11,196,294.91

243,362.89

$

0.00

0.00

243,362.89

$

0.00

-24,728.48 $ 59,566,489.96 $ 45,593,627.41

371,046.15 419,254,745.47 565,793?01.24

$ 5?69,280.13 $ 2,978.929.20 $

346,317.67 $ 478.821.235.43 $ 611.387.328.65

-5-

MEDICAL COLLEGE OF GEORGIA STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,
AND OTHER CHANGES YEAR ENDED JUNE 30, 1997

EXHIBIT"C"

Net Increase/(Decrease) in Fund Balances

$ -4,476,460.45 $ -1,495,593.29 $ -5,972,053.74

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

-6-

MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT"D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY Medical College of Georgia is one ofthirty-four (34) State supported member institutions ofhigher education in Georgia which comprise the University System of Georgia, an organizational unit of the State of Georgia. The accompanying fmancial statements reflect the operations of Medical College of Georgia as a separate reporting entity.
The Board of Regents has constitutional authority to govern, control and manage the University System of Georgia. This authority includes but is not limited to the power to designate management, the ability to significantly influence operations, the authority to control institutions' budgets, the power to determine allotments of State funds to member institutions and the authority to prescribe accounting systems and administrative policies for member institutions. Medical College of Georgia does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Medical College ofGeorgia 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 of limitations and restrictions placed on the use ofthe resources available to the College, the accounts ofthe College are maintained in accordance with the principles of fund 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 fmancial statements, funds that have similar characteristics have been combined into fund groups. Accordingly, all fmancial 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
UNRESTRICTED - 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, research, public service, hospital support, etc.
RESTRICTED - The fund used to record externally restricted funds which may only 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-

MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1997

EXfllBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTlNG 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 endowment funds and quasi-endowment funds. Endowment funds are subject to the restrictions of gift instruments requiring that the principal be invested in perpetuity and income only be utilized. While quasi-endowment funds have been established by the College for the same purposes as endowment funds, any portion of quasi-endowment funds may be expended. Restricted quasiendowment funds may be expended only for the purposes established by the source of such funds.
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 of institutional properties.
INVESTMENT IN 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 of physical 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 of accounting, 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 ofaccounting in which expenditures, oilier 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 fmance expenditures of the fiscal period.

- 8-

MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT"D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING Contractual obligations 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 of fund 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 $21,117,869.63 and the related current year expenditure of $631 ,286.72 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 of the 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.
It is the policy of Medical College of Georgia to record assets acquired through capital leases as additions to Investment in Plant when received at the total acquisition cost including interest. The liability for such leases at fiscal year-end is recorded in Investment in Plant including interest. This presentation differs from generally accepted accounting principles in that the assets and the related liability resulting from capital leases should be recorded in Investment in Plant at the inception of the agreement at the net present value of the future minimum lease payments, not to exceed the fair value of th~ leased property. The effect of this departure is deemed to be immaterial to the fair presentation of the financial statements.

- 9-

MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT"D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING 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 ofthe University System of Georgia. The appropriated budget is adopted

at the departmental level and represents appropriations provided by the Amended Appropriations Act of 1996-

1997. 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

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:

Other Organized Activities Medical College of Georgia Hospital and Clinics Operating Expenses: Sponsored Operations Joint Board of Family Practice Operating Expenses: Education, General and Departmental Services

$ 33,224.54 $ 40.365.77

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, and cash management pools that have the general characteristics of demand deposit accounts.

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 of Regents authorizing resolutions. Gains and losses on investment transactions are accounted for in the funds where such assets are recorded.

- 10-

MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ACCOUNTS RECEIVABLE Accounts receivable consist of allotments due from the Board of Regents of the University System of Georgia - Administrative Central Office, reimbursements due from Federal, State, local, and private grants and contracts, and other receivables disclosed from information available. The College has recorded accounts receivable for patient services net of allowance for uncollectibles as follows:

Gross Receivables

$142,676,553.38

Allowance for Uncollectible Accounts

-58,966,810.88

Net Receivables

$ 83.709.742.50

INVENTORIES Inventories of consumable supplies are recorded on the consumption method and are valued at cost on the Combined Balance Sheet using the weighted average or the first-in, fIrst-out methods.

Departments within the College use several costing methods for determining valuations of inventories for resale. Inventories of goods for resale are valued at cost using the fIrst-in, first-out or weighted average methods.

PREPAID ITEMS Prepaid items are payments made to vendors in advance ofthe receipt of goods and services that will b~nefIt periods subsequent to the balance sheet date.

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 fmancial position or changes in fInancial position in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations 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 of Georgia 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 of the following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:

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

- 11 -

MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT"D"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS
STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES (2) Bonds, bills, certificates of indebtedness, notes, or other obligations of the counties or municipalities of the 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 ofdevelopment 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 of Regents of the University System of Georgia) the option of exempting demand deposits from the collateral requirements.
The treasurer of the Board of Regents is responsible for all details relative to furnishing the required depository protection for all units of the University System of Georgia.
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, 1997, 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.
- 12-

MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT"D"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

CATEGORIZATION OF DEPOSITS

Carrying Amount

Bank Balances

Risk Categories

2

3

Cash Deposits

$ 50,216,237.37 $ 54,918,645.62 $ 595,455.48 $ 51,633,894.17 $ 2,689,295.97

Investment Portfolio Accounts

178,243.92

178,243.92

101.559.68

76.684.24

Total Cash Deposits

$ 50,394 481 29 $ 55 096 889.54 $ 697015.16 $ 51,633 894.17 $ 2765,98021

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 in 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.

The carrying amounts of investment balances as of June 30, 1997, are categorized below:

Type of Investment

Risk Categories 2

Common Stock

$

Corporate Bonds

U. S. Government Securities

0.00 $ 2,277,514.69 $ 847,377.00
2.149,923.44

$,==~0.~ 00 $ 527481513 $

Investments Not Subject to Categorization:

Investment Portfolio Accounts Mutual Funds Real Estate
State Investment Pool

Total Investments

Carrying

Market

3

Amount

Value

0.00 $ 2,277,514.69 $ 2,938,156.65

847,377.00

832,962.50

2.149.923.44 2.226.554.62

000 $ 5,274,815.13 $ 5,997,673.77

302,721.08 13,500.00
25,610.532.51

394,393.91 19,000.00
25,610.532.51

$ 31,201 56872 $ 32 021 600.19

Funds invested in an investment pool managed by another governmental entity are not required to be categorized since the College did not own any specific, identifiable investment securities of the pool.

- 13 -

MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT"D"

NOTE 3: INVESTMENT IN PLANT

The following is a summary of Investment in Plant fixed assets as of June 30, 1997:

Land Buildings Improvements Other Than Buildings Equipment Library Books and Collections Construction in Progress

$ 8,998,281.93 262,600,942.39 5,085,917.44 168,256,400.65 9,711,175.38 24,230,434,45

Total Investment in Plant

$478,883,152.24

NOTE 4: CAPITAL LEASES

Medical College of Georgia acquires certain equipment through multi-year capital leases with varying terms and options. These agreements contain fiscal funding clauses in accordance with Official Code of Georgia Annotated Section 50-5-64 which prohibits the creation ofa debt to the State of Georgia for the payment of any sums under such agreements beyond the fiscal year of execution if appropriated funds are not available. Ifrenewal of such agreements is reasonably assured, however, capital leases requiring appropriation by the General Assembly of Georgia are considered noncancellable for fmancial reporting purposes.

As of June 30, 1997, future minimum lease payments under capital leases are as follows:

Fiscal Year Ending June 30

1998 1999 2000

$ 40,069.62 19,305.01 2,542.18

Total Future Minimum Lease Payments

$=~6=y1.",,=91~6~.8~1

NOTE 5: RISK MANAGEMENT

Medical College of Georgia 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 of the Board of Regents of the University System of Georgia - Administrative Central Office. All units of the 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

- 14-

MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT "D"

NOTE 5: RISK MANAGEMENT
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.
The Department ofAdministrative Services (DOAS) has the responsibility for the State of Georgia ofmaking
and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. 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 of Regents of the University System of Georgia under powers authorized by the Official Code of Georgia Annotated Section 45-9-1. The program insures the employees to the extent that they are not immune from liability against personal liability for damages arising out of the performance of their duties or in any way connected therewith. The program is administered by DOAS as a Self-Insurance Fund.
The College has obtained commercial insurance for risk of loss associated with Professional Liability (Malpractice) in excess of the DOAS "Georgia Tort Claims Act" $1,000,000.00 cap and the "Georgia Broad Form" $1,000,000.00 cap. The shared excess aggregate limit for faculty is $10,000,000.00 and for housestaff is $3,000,000.00. The shared excess each loss limit for faculty is $10,000,000.00 and for housestaff is $3,000,000.00.
The College's commercial insurance for Professional Liability excludes coverage for sexual misconduct, default judgements, violation of law and knowing transmission of or exposure to certain infectious diseases.
NOTE 6: DEFERRED COMPENSATION PLAN
The State of Georgia 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 of their 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 ofthe 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
- 15 -

MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT"D"

NOTE 6: DEFERRED COMPENSATION PLAN
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, 1997.
A change in the Internal Revenue Code Section 457, effective August 20, 1996, requires that by January 1, 1999, all existing eligible deferred compensation plans must be held in trust for the exclusive benefit of participants and their beneficiaries. The State of Georgia's plan will be converted effective July 1, 1998.
NOTE 7: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA
Plan Description Medical College of Georgia participates in the Teachers Retirement System of Georgia (TRS), a cost-sharing multiple-employer public employee retirement system (PERS) 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, 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 of creditable service, or (2) 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, normal retirement benefits are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number of years of creditable service up to 40 years. Early retirement benefits are reduced by the lesser of 1/12 of 7% for each month the member is below age 60, or by 7% for each year or fraction thereof by which the member has less than 30 years of service. The normal retirement pension is payable monthly for life; however, 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 10 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 of employer contributions occurs, but the member's contributions are refunded with interest.
Funding Policy 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 1997, the employer contribution rate was 11.81% for
- 16-

MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXIDBIT"D"

NOTE 7: RETIREMENTPLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA
Funding Policy covered employees. In addition, the College contributed 4.24% 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%. The College's payroll for the year ended June 30, 1997, for employees covered by TRS was $156,431,703.46. The College's total payroll for all employees was $220,538,271.22.
Total contributions to the plan made during fiscal year 1997 amounted to $27,817,480.52, of which $19,995,895.35 was made by the College and $7,821,585.17 was made by employees. These contributions represented 12.78% (College) and 5% (employees) of covered payroll.
Total contributions from all employers to TRS for the year ended June 30, 1997, were $652,928,555.00. The College's contribution for the year ended June 30, 1997, of$19,995,895.35 was actuarially determined and represented 3.0625% of total contributions made by all participating employers:
Actuarial and Trend Information Actuarial and historical trend information is presented in the TRS June 30, 1997, financial report which can be obtained through TRS.
REGENTS RETIREMENT PLAN
Plan Description 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.
Funding Policy State legislation requires that prior to January 1, 1997, the employer contribute 4% of the participating employee's earnable compensation, and on and after January 1, 1997, an amount equal to the normal cost contribution determined by the TRS Board ofTrustees. Since January 1, 1997, the employer contribution rate was 7.42%. Employees contribute 5% of their earnable compensation. Amounts attributable to all plan contributions are fully vested and non-forfeitable at all times. The College's payroll for employees covered by the Regents Retirement Plan for the year ended June 30, 1997, was $35,684,704.62. The College's total payroll for all employees was $220,538,271.22.
The College and the covered employees made the required contributions of $2,043,177.78 (5.73%) and $1,784,237.14 (5%), respectively.

- 17 -

MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT "D"

NOTE7: RETIREMENTPLANS
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description Medical College ofGeorgia participates in the Georgia Defined Contribution Plan (GDCP) which is a singleemployer defined contribution plan established by the General Assembly of Georgia for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia.
Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board of Trustees. Ifa member has less than $ 3,500.00 credited to his/her account, the Board of Trustees has the option of requiring a lump sum distribution to the member in lieu of making periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to hislher account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute.
The Employees' Retirement System of Georgia issues a financial report each fiscal year which may be obtained through ERS.
Contributions and Vesting Member contributions are seven and one-half percent (7.5%) of gross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member. The College's payroll for the year ended June 30, 1997, for employees covered by GDCP was $1,745,200.59. The College's total payroll for all employees was $220,538,271.22.
Total contributions made by employees during fiscal year 1997 amounted to $130,890.94 which represents 7.50% of covered payroll. These contributions met the requirements of the plan.
NOTE 8: LEAVE 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 of forty-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 employment.
- 18 -

MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1997

EXHIBIT"D"

NOTE 9: CONTINGENCffiS

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 ofexpenditures 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 Medical College of Georgia (an organizational unit of the Board ofRegents of the University System of Georgia), if any, are generally considered to be actions against the State of Georgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 1997.

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 of Regents of the University System of Georgia has established group health and life insurance programs for regular employees ofthe University System of Georgia. It is the policy ofthe Board of Regents to permit employees of the University System of Georgia eligible for retirement or that become permanently and totally disabled to continue as members 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, 1997, there were 2,016 employees who had retired or were disabled that were receiving these postemployment health and life insurance benefits. For the year ended June 30, 1997, Medical College of Georgia recognized as incurred $1,495,311.72 of expenditures, which was net of $327,679.98 of participant contributions.

NOTE 11: ENROLLMENT

The equivalent full-time student enrollment of Medical College of Georgia was as follows:

Regular Term Fall Quarter, 1996 Winter Quarter, 1997 Spring Quarter, 1997

3,449 3,274 3,246

Average

Summer School, 1996

- 19-

THIS PAGE LEFT BLAHK

SUPPLEMENTARY INFORMATION - 21 -

MEDICAL COLLEGE OF GEORGIA COMBINING BALANCE SHEET
CURRENT FUNDS - UNRESTRICTED JUNE 30,1997

EXHIBIT"E"

ASSETS
Cash and Cash Equivalents Accounts Receivable (Net of Allowance
for Uncollectibles) Inventories

RESIDENT LOTTERY FOR INSTRUCTION EDUCATION

OTHER ORGANIZED ACTMTIES

AUXILIARY STUDENT ENTERPRISES ACTMTIES

TOTAL

$ 9,272,475.44 $ 432,801.97 $ 34,7n,061.40 $ 1,154,487.39 $ 74,469.93 $ 45,711,296.13

169,035.00 10,838.61

1,343,900.00

83,783,349.48 1,929,672.30

31,623.54 628,345.80

85,327,908.02 2,568,856.71

Total Assets

$ 9,452,349.05 $ 1,n6,701.97 $ 120.490,083.18 $ 1,814.456.73 $ 74.469.93 $ 133,608,060.86

LIABILITIES AND FUND BALANCES
Uabilities Accounts Payable Deferred Revenue Tuition and Fees
Total Liabilities
Fund Balances Unrestricted

$ 8,129,048.38 $ 1,062,642.00
$ 9,191,690.38 $

872,572.83 $ 23,611,283.43 $ 872,572.83 $ 23,611,283.43 $

59,489.42

$ 32,672,394.06

191,878.56 $ 21,940.00

1,276,460.56

251,367.98 $ 21,940.00 $ 33,948,854.62

260,658.67

904,129.14

96,878,799.75

1,563,088.75 52,529.93

99,659,206.24

Total Liabilities and Fund Balances

$ 9.452,349.05 $ 1?76?01.97 $ 120.490.083.18 $ 1,814.456.73 $ 74,469.93 $ 133,608,060.86

See notes to the financial statements.

- 22-

MEDICAL COLLEGE OF GEORGIA COMBINING STATEMENT OF CHANGES IN FUND BALANCES
CURRENT FUNDS - UNRESTRICTED YEAR ENDED JUNE 30,1997

EXHIBIT"P'

REVENUES AND OTHER ADDITIONS
Unrestrided Current Fund Revenues Adjustments
Prior Years' Expenditures/Accounts Payable
Prior Years' Checks Voided
Total Revenues and Other Additions
EXPENDITURES AND OTHER DEDUCTIONS
Educational and General Expenditures Auxiliary Enterprises Expenditures Hospital Expenditures Remittances to the Board of Regents of
the University System of Georgia Prior Year's Unrestrided Fund Balance (SurplUS)
Adjustments PriorYears'Revenues/Acoounts Receivable
Total Expenditures and Other Deductions
TRANSFERS BETWEEN FUNDS
Nonmandatory Renewals and Replacements Capital Projeds
Total Transfers Between Funds
Net Increasel(Decrease) for the Year
FUND BALANCES JULY 1,1996

RESIDENT LOTTERY FOR INSTRUCTION EDUCATION

OTHER ORGANIZED ACTIVITIES

AUXILIARY

STUDENT

ENTERPRISES ACTIVITIES

TOTAL

$ 106,510,127.44 $ 2,983,465.00 $ 260,377,391,65 $ 3,558,829.01 $ 170,217,32 $ 373,600,030.42

128,312,22 6,620.83

341,057.20 10,382.91

1,482.78 1,214.97

470,852.20 18,218.71

$ 106,645,060.49 $ 2,983,465.00 $ 260,728,831.76 $ 3,561,526.76 $ 170,217,32 $ 374,089,101.33

$ 104,733,649.45 $

1,979,335,86 $ 77,305,907.26 $
100,000,00 186,742,456.88

$ 160,776,01 $ 184,179,668.58

3,051,361.20

3,051,361.20

186,842,456.88

97,883.77

3,856.04

24,184.49

125,924,30

45.45

45.45

$ 104,831,533.22 $ 2,083,191.90 $ 264,072,594.08 $ 3,051,361.20 $ 160.776.01 $ 374,199,456.41

$ -1,775,000.00 $ -1,775,000.00

$ -243,362.89

$ -2,300,000,00

-47.742.48

$ -2,300,000.00 $ -29U05.37

$ -243,362.89 -4,122.742.48
$ -4,366,105.37

$

38,527.27 $ 900,273.10 $ -5,643,762.32 $ 219,060.19 $ 9,441.31 $ -4,476,460.45

222,131.40

3,856.04 102,522,562.07 1,344,028.56 43,088.62 104,135,666.69

FUND BALANCES JUNE 30, 1997

$

260,658.67 $ 904,129.14 $ 96,878,799.75 $ 1,563,088.75 $ 52,529.93 $ 99.659,206.24

See notes to the financial statements.

-23 -

MEDICAL COLLEGE OF GEORGIA COMBINING STATEMENT OF CURRENT FUNDS REVENUES EXPENDITURES,
AND OTHER CHANGES UNRESTRICTED
YEAR ENDED JUNE 30, 1997

EXHIBIT "Goo

RESIDENT INSTRUCTION

LOTIERYFOR EDUCATION

OTHER ORGANIZED ACTIVITIES

AUXILIARY

STUDENT

ENTERPRISES ACTIVITIES

TOTAL

REVENUES

State Appropriations Tuition and Fees Federal Grants and Contracts State Grants and Contracts Private Gifts, Gral!ts, and Contracts Sales and Servicesof Educational
Activities Sales and Services of Auxiliary
Enterprises Sales and Services of Hospital other Sources

$ 89,565,202.00 $ 2,983,465.00 $ 57,142,577.00 8,418,373.95 3,288,543.15 8,540.90 484,169.23

$ 149,691,244.00

$ 158,046.25

8,576,420.20

3,288,543.15

8,540,90

484,169.23

4,213,599.05

4,213,599.05

531,699.16

$ 203,041,314.65
193,500.00

3,558,829.01

12,171.07

3,558,829.01 203,041,314.65
737,370.23

Total Revenues

$ 106,510,127.44 $ 2,983,465.00 $ 260,377,391.65 $ 3,558,829.01 $ 170,217.32 $ 373,600,030,42

EXPENDITURES

Educational and General Instruction Research Public Service Academic Support Student Services Institutional Support Operation and Maintenance of Plant Scholarships and Fellowships
Auxiliary Enterprises Student Housing Food Services Stores and Shops Other Service Units
Hospital Medical College of Georgia Hospital

$ 67,680,015.31 $ 1,610,991.81 $ 26,996,119.36

792,810.22

50,309,787.90

8,912,114.17

368,344.05

1,386,363.35

11,776,167.16

13,068,148.94

1,118,030,30

$ $ 160,776.01

96,287,126.48 792,810.22
50,309,787.90 9,280,458.22 1,547,139.36
11,776,167.16 13,068,148.94
1,118,030.30

$ 738,474.73 31,064.49
328,794.94 1,953,027.04

738,474.73 31,064,49
328,794.94 1,953,027.04

100,000.00 186.142,456.88

186,842,456,88

Total Expenditures

$ 104.133,649.45 $ 2,079,335.86 $ 264,048,364.14 $ 3,051,361.20 $ 160,776.01 $ 374,073,486.66

OTHER TRANSFERS AND ADDITIONS/ <DEDUCTIONS)

Transfers for Renewals and Replacements
Transfers for Capital Projects Prior Period Adjustments (Net) Remittances to the Board of Regents
of the University System of Georgia Prior Year's Unrestricted Fund Balance (SurplUS)

$ -1,775,000,00 134,933.05
-97,883.77 $

$ -243,362.89

$ -2,300,000.00

-47,742.48

351,394.66

2,697.75

-3,856.04

-24,184.49

$

-243,362.89

-4,122,742.48

489,025.46

-125,924.30

Total Other Transfers and Additions/(Deductions)

$ -1,737,950.72 $

-3,856.04 $ -1 ,972.189.83 $ -288,407.62

$ -4,003,004.21

Net Increase/(Oecrease) in Fund Balances

$

38,527.27 $ 900,273.10 $ -5,643,762.32 $ 219,060.19 $ 9,441.31 $ -4,476,460.45

See notes to the financial statements.

-24 -

Net Decrease in Fund Balances

$ -1,495,593.29 $======O.=OO~ $ -1,495,593.29

See notes to the financial statements.

- 25-

MEDICAL COLLEGE OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
RESIDENT INSTRUCTION YEAR ENDED JUNE 30,1997

REVENUES
State Appropriations Other Revenues Retained

CURRENT FUNDS UNRESTRICTED RESTRICTED

PLANT FUNDS RENEWALS AND
UNEXPENDED REPLACEMENTS

$ 89,565,202,00

$ 1,578,853.00 $

0.00

16,944,925.44 $ 54,857,432.90

4,589,872.78

$ 106,510,127.44 $ 54,857,432.90 $ 6,168,725.78 $

...:O;;.;:.O~O

EXPENDITURES
Personal Services: Education, General and Departmental Services Sponsored Operations
Operating Expenses: Education, General and Departmental Services Sponsored Operations
Capital Outlay Special Funding Initiative Student Education Enrichment Program

$ 80,047,873.63 $ 40,587,731,92

22,678,625.08
1,647,436.74 359,714.00

14,269,700.98 $ 18,519,764.13 $

270,177.50

$ 104,733,649.45 $ 54,857,432.90 $ 18,519,764.13 $ _ _...:2:.;,.70~,..;...;17...;.7;;.;:.5~0

Excess of Revenues over Expenditures

$ 1.776,477.99 $

.;;;0,;,;;.0..,0 $ -12,351,038.35 $ _ _..;-2;,;.;70;0',;,,;1.7.7.,;,;;.5=0

(1) To eliminate tuition waivers and MCG Research Institute contract overhead not budgeted, and to reclassify prior year fund balances and current year transfers budgeted as revenues.

See notes to the financial statements.

- 26-

SCHEDULE "1"

TOTAL

ADJUSTMENTS

TOTAL

(1 )

(Budget Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$ 91,144,055.00

$ 91,144,055.00 $ 91,144,055.00 $

0.00

76,392,231.12 $ -1 ,495,337.24

74,896,893.88

93,302,519.00

-18,405,625.12

$ 167,536,286.12 $ -1,495,337.24 $ 166,040,948.88 $ 184,446,574.00 $ -18,405,625.12

$ 80,047,873.63 40,587,731.92

$ 80,047,873.63 $ 80,747,552.00 $

40,587,731.92

43,111,517.00

22,678,625.08 $ 14,269,700.98 18,789,941.63
1,647,436.74 359?14.00

-38,257.22 -12,303,295.87

22,640,367.86 14,269,700.98 6,486,645.76
1,647,436.74 359,714.00

26,897,9n.00 25,044,794.00 6,587,146.00
1,697,874.00 359,714.00

699,678.37 2,523,785.08
4,257,609.14 10,775,093.02
100,500.24 50,437.26
0.00

$ 178,381,023.98 $ -12,341,553.09 $ 166,039,470.89 $ 184,446,574.00 $ 18,407,103.11

$ -10,844,737.86 $ 10,846,215.85 $

1,477.99

$

1,4n.99

- 27-

THIS PAGE LEFT BLANK

MEDICAL COLLEGE OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
LOTTERY FOR EDUCATION YEAR ENDED JUNE 30,1997

SCHEDULE "2"

REVENUES State Appropriations

CURRENT FUNDS UNRESTRICTED

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$

2.983.465.00 $ 2.983.465,00 $

. . ; .0. . ; . 0. ;,.,0

EXPENDITURES
Equipment. Technology and Construction Trust Fund
Georgia Research Alliance Special Funding Initiatives

$

791.354,21 $ 1.690.900.00 $

1.196.510,66 1.200.000.00

91.470.99

92.565,00

899.545.79 3,489.34 1.094.01

$

2.079,335,86 $ 2,983.465,00 $ _ _....;.9_04....:..1_2_9_.14_

Excess of Revenues over Expenditures

$ ===9:=04=,=12=9=,1::::=4

$ ===9:=04=.=12=9=,1::::=4

See notes to the financial statements.

- 29-

MEDICAL COLLEGE OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
OTHER ORGANIZED ACTIVITIES
YEAR ENDED JUNE 30, 1997

MEDICAL COLLEGE OF GEORGIA HOSPITAL AND CLINICS
REVENUES
State Appropriations Other Revenues Retained

CURRENT FUNDS UNRESTRICTED RESTRICTED

TOTAL

$ 32,956,551,00

$ 32,956,551,00

200,375,721,65 $ 7,580,043,00 207,955,764,65

$ 233,332,272,65 $ 7,580,043.00 $ 240,912,315.65

EXPENDITURES
Personal Services: Education, General and Departmental Services Sponsored Operations
Operating Expenses: Education, General and Departmental Services Sponsored Operations

$ 149,448,138,73

$ 149,448,138.73

$ 5,250,466.46

5,250,466.46

87,604,106.05

2,329,576.54

87,604,106,05 2,329,576.54

$ 237,052,244.78 $ 7,580,043.00 $ 244,632,287,78

Excess of Revenues over Expenditures

$ -3,719,972.13 $====O=,O=.O $ -3,719,972.13

(1) To reclassify current year transfers budgeted as expenditures.

See notes to the financial statements.

- 30-

SCHEDULE "3"

ADJUSTMENTS

,

(1)

TOTAL (Budget Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$

0.00 $ 32,956,551.00 $ 32,956,551.00 $

0.00

207,955,764.65 228,075,922.00

-20,120,157.35

$

0._00_ $ 240,912,315.65 $ 261,032,473.00 $ -20,120,157.35

$ 149,448,138.73 $ 162,150,703.00 $ 12,702,564.27

5,250,466.46

5,299,628.00

49,161.54

$ 2,300,000.00

89,904,106.05 2,329,576.54

91,285,790.00 2,296,352.00

1,381,683.95 -33,224.54

$ 2,300,000.00 $ 246,932,287.78 $ 261,032,473.00 $ 14,100,185.22

$ -2,300,000.00 $ -6,019,972.13

$ -6,019,972.13

- 31 -

MEDICAL COLLEGE OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
OTHER ORGANIZED ACTIVITIES YEAR ENDED JUNE 30, 1997

SCHEDULE "3"

JOINT BOARD OF FAMILY PRACTICE REVENUES
State Appropriations

CURRENT FUNDS

TOTAL

UNRESTRICTED RESTRICTED (Budget Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$ 24,186,026.00 $ _ _--=0;:;;;.0.;:..0 $ 24,186,026.00 $ 24,186.026.00 $

--=O~.O;.;:..O

EXPENDITURES
Personal Services: Education, General and Departmental Services $
Operating Expenses: Education, General and Departmental Services
Capitation Contracts for Family Practice Residency Residency Capitation Grants Student Preceptorships Mercer Medical School Grant Morehouse School of Medicine Grant S.R.E.B. Payments

252,635.22 $
633,579.n 3,864,194.89 2,119,367.64
145,500.00 7,000,000.00 5,868,890.00 4,300,650.00

$ 24,184,817.52 $

0.00 $ 252,635.22 $ 293,290.00 $

633,579.n 3,864,194.89 2,119,367.64
145,500.00 7,000,000.00 5,868,890.00 4,300,650.00

593,214.00 3,864,204.00 2,119,378.00
146,400.00 7,000,000.00 5,868,890.00 4,300,650.00

40,654.78
-40,365.n 9.11 10.36
900.00 0.00 0.00 0.00

0.00 $ 24,184,817.52 $ 24,186,026.00 $

1,208.48

Excess of Revenues over Expenditures

$

1,208.48 $

0.00 $

1,208.48

$

1,208.48

See notes to the financial statements.

- 32-

MEDICAL COLLEGE OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
OTHER ORGANIZED ACTIVITIES YEAR ENDED JUNE 30. 1997

SCHEDULE "3"

GEORGIA RADIATION THERAPY CENTER REVENUES
Other Revenues Retained

CURRENT FUNDS

TOTAL

UNRESTRICTED RESTRICTED (Budget Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$ 2.859,093.00 $

....;;;O.;.;;.O~O $ 2.859.093.00 $ 3.044,746.00 $ _ _-....;,1.;;.;85;.:..6;;..;;5...;;.3;.;;,.0~0

EXPENDITURES

Personal services:

Education. General and Departmental Services $ 2.081.612.34 $

Operating Expenses:

Education. General and Departmental Services

729.689.50

$ 2,811.301.84 $

Excess of Revenues over Expenditures

$

47,791.16 $

0.00 $ 2.081.612.34 $ 2.086.983.00 $

729.689.50

957.763.00

5.370.66 228.073.50

-=0:.:;:.0:.::.,0 $ 2,811.301.84 $ 3.044,746.00 $ _ _-=2=.;33:.:,.444.:.:.:.;,.;.16:::.

0.00 $ _ ....4..7.,.79.1..1...6.

$

4,.7...7.9.1..1..6..

See notes to the financial statements. -33 -

MEDICAL COLLEGE OF GEORGIA CHANGES IN INVESTMENT IN PLANT
YEAR ENDED JUNE 30.1997

Land Buildings Improvements Other Than BUildings Equipment Library Books and Collections Construction in Progress

BALANCE JULY 1,1996

CURRENT FUNDS UNRESTRICTED RESTRICTED

PLANT UNEXPENDED

$ 8,998,281.93

234,576,427.56 $ 18,751,034.92

$ 5,636,390.13

4,601,985.68

474,347.84

159,663,828.11

10,928,133.24 $ 2,820,353.95

20,237.91

8,782,029.91

929,611.22

30.00

2,965,644.46

$ 419,588,197.65 $ 30,608,779.38 $ 2,820,383.95 $ 6,130,975.88

SUMMARY OF INVESTMENT
College Capital Leases

$ 419,254,745.47 $ 30,608,779.38 $ 2,820,383.95 $ 6,130,975.88
333,452.18

$ 419,588,197.65 $ 30,608,779.38 $ 2,820,383.95 $ 6,130,975.88

See notes to the financial statements.

- 34-

SCHEDULE "4"

ADDITIONS
FUNDS RENEWALS AND REPLACEMENTS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

CAPITAL LEASES

PRIVATE GIFTS

DEDUCTIONS DISPOSALS! DELETIONS! ADJUSTMENTS

BALANCE JUNE 30, 1997

$ 8,998,281.93

$

229,088.76 $

3,399,297.03

$

-8,703.99 262,600,942.39

9,583.92

5,085,917.44

9,129.90

$

19,232.78 $ 112,417.23

5,316,932.47 168,256,400.65

495.75

9,711,175.38

21,264,789.99

24,230.434.45

$

247,802.58 $ 24,664,087.02 $

19,232.78 $ 112,417.23 $ 5,308,724.23 $ 478,883,152.24

$

247,802.58 $ 24,664,087.02

$ 112,417.23 $ 5,017,956.08 $ 478,821,235.43

------$

19,232.78

290,768.15

61,916.81

$

247,802.58 $ 24,664,087.02 $

19,232.78 $ 112.417.23 $ 5,308,724.23 $ 478,883,152.24

- 35-

MEDICAL COLLEGE OF GEORGIA SCHEDULE OF FUND BALANCES CURRENT FUNDS AND PLANT FUNDS
JUNE 30, 1997

RESIDENT INSTRUCTION

LOTIERYFOR EDUCATION

CURRENT FUNDS

UNRESTRICTED

OTHER ORGANIZED AUXILIARY

ACTIVITIES

ENTERPRISES

NET INVESTMENT IN PLANT

Investment in Plant Facilities

RESTRICTED

Designated for Subsequent Years' Expenditures

UNRESTRICTED

Designated

For Capital Projects (GSFIC)

For Equipment, Technology and Construction Trust

$ 899,545.79

For EquipmenVRevenue Stabilization Reserve for Georgia Radiation Therapy Center

$

494,719.96

For Hospital Operations

83,709,742.50

For Inventory Reserve

$

9,397.93

2,080,226.34 $ 628,345.80

For Property Sales Reserve

113,375.00

For Renewals and Replacements Reserve

For Revenue Stabilization Reserve for Medical College of Georgia Hospital and Clinics
For Subsequent Years' Expenditures

10,366,788.66

934,742.95

Surplus Regular Lottery for Education

137,885.74

4,583.35

227,322.29

$ 260,658.67 $ 904,129.14 $

96,878.799.75 $ 1,563,088.75

$ 260,658.67 $ 904,129.14 $

96,878,799.75 $ 1,563,088.75

See notes to the financial statements.

- 36-

SCHEDULE "5"

,STUDENT ACTIVITIES

RESTRICTED

UNEXPENDED

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

TOTAL

$ 478,821,235.43 $ 478,821,235.43

$ 14,880,615.48

$ 14,880,615.48

$ 2,958,842.66

$ 2,958,842.66 899,545.79

$

346,317.67

494,719.96 83,709,742.50
2,717,970.07 113,375.00 346,317.67

$

52,529.93

10,366,788.66 987,272.88

$ _--=5=2Cl.::,5:=29=.:..=;93=..

20,086.54 $ 2,978,929.20 $ _ _...::34:..:,6::.1,=.31.:.,:7..:,:.6:.:.,.7

385,294.57 4,583.35
$ 102,984.453.11

$

52,529.93 $ 14,880,615.48 $ 2,978,929.20 $

346,317.67 $ 478,821,235.43 $ 596,686,304.02

- 37-

MEDICAL COLLEGE OF GEORGIA RECONCILIATION OF PER DIEM AND FEES
YEAR ENDED JUNE 30, 1997

SCHEDULE "6"

Totals per Annual Supplement
Unidentified Variance
Totals per Report
DISTRIBUTION BY FUND
CURRENT FUNDS Unrestricted Resident Instruction Regular Lottery Special Funding Initiative Student Education Enrichment Other Organized Activities Hospitals and Clinics Joint Board of Family Practice Georgia Radiation Therapy Center Auxiliary Enterprises Student Activities Restricted Resident Instruction Other Organized Activities
PLANT FUNDS Unexpended RegUlar

FEE AMOUNT

EXPENSE AMOUNT

TOTAL

$ 4,331,204.31 $ 319,120.49 $ 4,650,324.80

476.00

476.00

$ 4,331,680.31 $ 319,120,49 $ 4,650,800.80

$ 651,544.52 3,500.00
14,012.80 14,626,38
2,421,225.07 113,953,94 84,665.68 22,561,14 103.54
910,752.93 33,629,37
380,225.43
$ 4,650,800.80

See notes to the financial statements.

- 38-

SECTIONll AUDlTEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

MEDICAL COLLEGE OF GEORGIA AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997

PRIqR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

512-96-01 512-96-03

Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented

PRIOR YEAR FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

512-96-02 512-96-04

Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented