Audit report, state of Georgia, Medical College of Georgia, Augusta, Georgia, year ended June 30, 1998

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AUDIT REPORT STATE OF GEORGIA MEDICAL COLLEGE OF GEORGIA AUGUSTA, GEORGIA YEAR ENDED JUNE 30, 1998

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

MEDICAL COLLEGE OF GEORGIA - TABLE OF CONTENTS -

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

EXlllBITS

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

24

COMBINING STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,

AND OTHER CHANGES

G

UNRESTRICTED

26

H

RESTRICTED

29

SCHEDULES

SCHEDULES OF REVENUES AND EXPENDITURES COMPARED TO BUDGET

1

RESIDENT INSTRUCTION

30

2

LOTTERY FOR EDUCATION

32

3

OTHER ORGANIZED ACTIVITIES

33

4 CHANGES IN INVESTMENT IN PLANT

36

5 SCHEDULE OF FUND BALANCES

CURRENT FUNDS AND PLANT FUNDS

38

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
November 19,1998

Governor of the State of Georgia Members of the General Assembly of Georgia Members of the Board ofRegents of the 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 financial statements (Exhibits A through D) of Medical College of Georgia as ofand for the year ended June 30, 1998. 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.
Except as discussed in the following paragraph, 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 financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
Governmental Accounting Standards Board Technical Bulletin 98-1, Disclosures About Year 2000 Issues, requires disclosure ofcertain matters regarding the year 2000 issue. Medical College ofGeorgia has included such disclosures in the Notes to the Financial Statements. Because ofthe unprecedented nature of the year 2000 issue, its effects and the success ofrelated remediation efforts will not be fully determinable until year 2000 and thereafter. Accordingly, insufficient audit evidence exists to support Medical College of Georgia's disclosures with respect to the year 2000 issue made in the Notes to the Financial Statements. Further, we do not provide assurance that Medical College of Georgia is or will be year 2000 ready, that Medical College ofGeorgia's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Medical College of Georgia does business will be year 2000 ready.
98ARL-62A

As described in Note 1 to the financial statements, Georgia Law and State budgetary policy require the College to prepare its financial statements on a basis which is not consistent with generally accepted accounting principles with respect to the recording of encumbrances as expenditures and liabilities. To conform with generally accepted accounting principles, encumbrances should be recorded as a reservation offund balance. The effects on the financial statements ofthis departure from generally accepted aCcounting principles were not reasonably determinable, but are believed to be material.
As disclosed in Note 1 to the financial statements, the College did not report the liability and related expenditure for compensated absences in the current funds as required by generally accepted accounting principles. Ifcompensated absences were reported, liabilities would be increased and fund balance would be decreased by $21,150,090.61 as ofJune 30, 1998, and the net change in fund balance for the year ended June 30, 1998, would be decreased by $32,220.98.
In our opinion, except for the effects of such adjustments, if any, as might have been determined to be necessary had we been able to examine sufficient evidence regarding year 2000 disclosures, and except for , the effects on the financial statements ofthe matters discussed in the fourth and fifth paragraphs, the financial : statements referred to above present fairly, in all material respects, the financial position ofMedical College '" of Georgia as ofJune 30, 1998, 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 offorming an opinion on the financial statements taken as a whole. The
accompanying supplementary information (Exhibits E through H and Schedules 1 through 5) 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 such adjustments, if any, as might have been determined to be necessary had we been able to examine sufficient evidence regarding year 2000 disclosures, and except for the effects ofthe matters discussed in the fourth and fifth paragraphs, such information is fairly presented in all material respects in relation to the financial statements taken as a whole.
Respectfully submitted,
r:L~
Claude L. Vickers State Auditor
CLV:ds 98ARL-62A

FINANCIAL STATEMENTS - 1-

MEDICAL COLLEGE OF GEORGIA COMBINED BALANCE SHEET ALL FUND GROUPS JUNE 30,1998

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. Government 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

$ 46,716,958.97 $ 11,446,035.67 $ 1,701,423.20

75,514,827.48 2,611,879,44

4,691,967.30

7,237,372.60

$ 124,843,665.89 $ 16,138,002.97$ 8,938,795.80

$ 32,741,565.65 1,775,152.31

$ 34,516,717.96

$ 7,675,209.87 1,263,585.93

$ 16,138,002.97 $ 90,326,947.93
$ 90,326,947.93 $ 16,138,002.97 $ 8,938,795.80

$ 124,843,665.89 $ 16,138,002.97 $ 8,938,795.80

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)

$ 9,096,856.55 $

511,564.93

$ 9,225,247.12 $ 78,698,086.44

$ 7,852,931.03

7,852,931.03

6,749,971.34

94,194,138.72

2,611,879.44

2,604,584.63

2,604,584.63

_ _ _ _ _ _ $ 522,742.600.23

522,742,600.23

$ 7,852,931.03 $ 18,451,412.52 $

511,564.93 $ 522,742,600.23 $ 9,225,247.12 $ 708,704,220.49

$ 15,832,085.08 $
$ 15,832,085.08 $
$ 3,031,342.79 4,821,588.24 $ 2,619,327.44 $
$ 7,852,931.03 $ 2,619,327.44 $

107,659.81

$ 8,164,162.70 $ 56,845,473.24

1,775,152.31

1,061,084.42

1,061,084.42

$

14,773.04

14,773.04

107,659.81 $
\.

14,773.04 $

$ 522,727,827.19 403,905.12

9,225,247.12 $ 59,696,483.01
$ 7,675,209.87 1,263,585.93 3,031,342.79 4,821,588.24
522,727,827.19 16,138,002.97 93,350,180.49

403,905.12 $ 522,727,827.19

$ 649,007,737.48

$ 7,852,931.03 $ 18,451,412.52 $

511,564.93 $ 522,742,600.23 $ 9,225,247.12 $ 708,704,220.49

-3-

MEDICAL COLLEGE OF GEORGIA COMBINED STATEMENT OF CHANGES IN FUND BALANCES
ALL FUND GROUPS YEAR ENDED JUNE 30, 1998

REVENUES AND OTHER ADDITIONS
Unrestricted Current Fund Revenues State Appropriations
Regular Lottery Proceeds Federal Grants and Contracts State Grants and Contracts Local Grants and Contracts Private Gifts, Grants, and Contracts Investment Income Endowment Other Rental Income Net IncreaselDecrease In Fair Value of Investments Interest on Loans Receivable Adjustments Prior Years' Expenditures/Accounts Payable Prior Years' Checks Voided Expended for Plant Facilities Current Funds Plant Funds
Unexpended Renewals and Replacements Georgia State Financing and Investment Commission 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)
Loans ASSigned to Federal Government Loan Cancellations and Write-Offs Administrative and Collection Costs Expended for Plant FacJllties
Capitalized Noncapltallzed DisposalslDeletions/Adjustments
Total Expenditures and Other Deductions
TRANSFERS BETWEEN FUNDS
Nonrnandatory Renewals and Replacements Capital Projects
Total Transfers Between Funds
Net Increase/(Decrease) for the Year
FUND BALANCES JULY 1. 1997 (Restated - See Note 1 )
FUND BALANCES JUNE 30, 1998
The notes to the financial statements are an integral part of this statement.
-4-

CURRENT FUNDS

UNRESTRICTED

RESTRICTED

LOAN FUNDS

S 378,165,520.17

S 19,007,966.93 S 80,228,220.83 837,749,05 39,902,763.57
233,359.64

94,813.00 19,201.00 75,972.14

352,077.12 4,485.37

179,179.62

S 378,522,082.66 S 140,210,060.02 S

58,798.97 427,964.73

S 193,462,864.41 S 2,984,978.61
190,659,473.05

57,871,358.58
76,626,963.10 4,454,350.85 S

284,637.00

369,791.38

5,296.79 122,858.43
8,121.21

S 387,477,107.45 S 138,952,672.53 S

420,913.43

S

-254,289.33

-122,944.19

S

-377 ,233.52

S

-9,332,258.31 S

1,257,387.49 S

7,051.30

99,659,206.24

14,880,615.48

8,931,744.50

S

90,326,947.93 S 16,138,002.97 S 8,938,795.80

EXHIBIT "B"

$ .$ $ 1,269.119.43 $ 6,583,811.60

$ 122,944.19
122,944.19 $ -359,601.76 $ 2,978,929.20

254.289.33

$

254,289.33

$

57.587.45 $ 43,906,591.76 $

346,317.67

478,821,235.43

0.00 0.00 0.00 36,805,877.36
612,201,860.12

$ 7,852,931.03 $

2,619,327.44 $

403,905.12 $ 522,727,827.19 $ 649,007,737.48

-5-

MEDICAL COLLEGE OF GEORGIA STATEMENT OF CURRENT FUNDS REVENUES. EXPENDITURES.
AND OTHER CHANGES YEAR ENDED JUNE 30.1998

EXHIBIT C

Net Increase/(Decrease) in Fund Balances The notes to the financial statements are an integral part of this statement.
-6-

$

-9,332,258.31 $

1,257,387,49 $ ==-.8..,0..7...4..,=87;.;0;,;;,8=2...

MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998

EXHIBIT"D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY Medical College ofGeorgia 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 financial 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 ofthe Board ofRegents 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 of the resources available to the College, the accounts ofthe College are maintained in accordance with the principles offund accounting. This is the procedure by which resources for various purposes are classified for accounting and reporting purposes into funds that are in accordance with activities or objectives specified. Separate accounts are maintained for each fund; however, in the accompanying financial statements, funds that have similar characteristics have been combined into fund groups. Accordingly, all financial transactions have been recorded and reported by fund group.
Within each fund group, the College's fund balance allocations and designations represent those portions of the fund balances that are reserved, restricted and/or designated for specific future use by legal covenants, State policies, or institutional policies.
Fund groups and funds presented in the accompanying financial statements are as follows:
CURRENT FUNDS
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.
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MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 3D. 1998

EXHIBIT"D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING 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-endoWIilent 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 ofall
physical properties owned by the College. Net Investment in Plant is an equity account showing the total
book value ofphysical properties belonging to the College less the amount of any indebtedness to others.

AGENCY FUNDS

The fund used to account for resources held by the College as custodian or fiscal agent for individual students, faculty, staffmembers, and organizations.

BASIS OF ACCOUNTING Except as otherwise disclosed in these notes, the financial statements are prepared on the modified accrual basis ofaccounting, which is materially the same as the accrual basis ofaccounting app~icable to colleges and universities prescribed in the American Institute ofCertified Public Accountants' audit guide reporting model. The modified accrual basis ofaccounting is defined as that method ofaccounting in which expenditures, other than accrued interest on general long-term debt, are recorded at the time liabilities are incurred and revenues are recorded when available and measurable to finance expenditures ofthe fiscal period.

Contractual obligations for goods and services which have not been received at the end ofthe 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

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MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1998

EXHIBIT"D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING for goods and services. The recognition ofencumbrances 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 detennined 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$21,150,090.61 and a related net current year expenditure of $32,220.98 .: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 behalfofthe 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 ofthe agreement at the net present value of the future minimum lease payments, not to exceed the fair value of the leased property. The effect of this departure is deemed to be immaterial to the fair presentation ofthe financial statements.
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 ofrevenues and expenses.

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MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998

EXHIBIT"D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

RESTATEMENT OF PRIOR YEAR FUND BALANCE In fiscal year 1998, Medical College ofGeorgia implemented GASB Statement 31, "Accounting and Financial Reporting for Certain Investments and for External Investment Pools". The statement requires certain investments to be reported at fair value rather than at cost. As a.result, the beginning fund balance of the Endowment and Similar Funds has been increased by $814,531.47 to implement this change in accounting principle.

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 19971998. The appropriated budget covers current funds and plant funds, except for Auxiliary Enterprises and Student Activities which are not subject to appropriation. The allocation of the appropriated budget is made to the College by the Administrative Central Office. In addition, the College receives Federal funds and other funds directly and includes these funds in the budget filed with the Administrative Central Office.

A comparison ofanticipated funds available and budgeted expenditures by budget unit object class indicates that the following object classes were overspent by the amounts identified below:

Resident Instruction Special Funding Initiative
Lottery for Education Equipment, Technology and Construction Trust Fund
Other Organized Activities Medical College of Georgia Hospital and Clinics Operating Expenses: Sponsored Operations

$ 6.742.60 $ 897.943.72
$ 3.415.182.85

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 reported at fair value. Funds received by the College as endowments or for restricted purposes are invested according to conditions stipUlated by the donor, grantor, or in accordance with the Board ofRegents authorizing resolutions. Gains and losses on investment transactions are accounted for in the funds where such assets are recorded.

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MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,1998

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

$ 131,115,962.30

Allowance for Uncollectible Accounts

56,225,742.45

Net Receivables

$ 74,890,219,85

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

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MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998

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 of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose.
(4) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia.
(5) Bonds, bills, certificates of indebtedness, notes, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest, or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
(6) Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation.
As authorized in the Official Code of Georgia Annotated Section 50-17-53, the State Depository Board has adopted policies which allow agencies of the State of Georgia (which includes organizational units of the Board 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, 1998, 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 fair value) held by the College or by its agent in the College's name.
Category 2 - Amounts collateralized with securities (at fair value) held by the pledging financial institution's trust department or agent in the College's name.
Category 3 - Amounts collateralized with securities (at fair value) held by the pledging fmancial institution, or by its trust department or agent but not in the College's name, and amounts uncollateralized.
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MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998

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

$ 57,037,168.90 $ 50,692,923.64 $ 516,949.65 $ 47,491,751.12 $ 2,684,222.87

Investment Portfolio Accounts

284,298.39

284,298.39

109,088.79

175,209.60

Total Cash Deposits

$ 57:32L467.29 $ 50 977 222.03 $ 626.038.44 $ 47 49],751.12 $ 2 859,432,47

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 ofJune 30, 1998, are categorized below:

Type ofInvestment

Risk Categories

1

2

3

Carrying Amount

Common Stock

$

Corporate Bonds

U. S, Government Securities

0,00 $ 3,938,808.17 $ 876,005,00
2.302,096.62

0.00 $ 3,938,808.17 876,005,00
2.302,096,62



0,00 $ 7,116,909,79 $

0.00 $ 7,116,909,79

Investments Not Subject to Categorizations:

Investment Portfolio Accounts Mutual Funds Real Estate
State Investment Pool

438,222,85 13,500,00
21,621,114.54

Total Investments

$ 29.189.747,18

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 ofthe pool.

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MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998

EXIllBIT "D"

NOTE 3: INVESTMENT IN PLANT

The following is a summary ofInvestment in Plant fixed assets as of June 30, 1998:

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

$ 8,998,281.93 278,138,280.66
5,488,096.16 174,755,950.80 10,618,442.25 44,743,548.43

Total Investment in Plant

$522.742.600.23

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 of a 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 financial reporting purposes.

As of June 30, 1998, future minimum lease payments under capital leases are as follows:

Fiscal Year Ending June 30

1999

$ 13,833.58

2000

939.46

Total Future Minimum Lease Payments

$,=~1=!d4'b677""",3:!.!.0~4

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 ofthe University System ofGeorgia share the risk ofloss for claims of the Health Benefits Plan. The Health Benefits Plan is considered a self-sustaining risk fund that provides health coverage for its members up to a maximum lifetime benefit of $1 ,000,000.00 per person and dental coverage up to an annual maximum of $1,000.00 per person. The Board of Regents has contracted with Blue Cross Blue Shield of Georgia to process claims in accordance with the Health Benefits Plan as established by the Board ofRegents.

- 14,.

MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1998

EXIllBIT "D"

NOTES: RISKMANAGEMENT
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 ofthe 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 ofor 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 ofthe 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 ofGeorgia subject only to the claims of the State's general creditors. Participants' rights under the plan are equal to those of a general creditor of the State of Georgia in an amount equal to the fair market value of the deferred account for each participant. Financial information relative to the plan will be presented in the State of Georgia Comprehensive Annual Financial Report for the fiscal year ended June 30, 1998.
- 15 -

MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1998

EXHIBIT"D"

NOTE 6: DEFERRED COMPENSATION PLAN

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 was converted effe~tive 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 dermed 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, disability retirement, and survivor's benefits for its members in accordance with State statute. The Teachers Retirement System ofGeorgia 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 the College who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The College makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. For fiscal year 1998, the employer contribution rate was 11.81% for covered employees. In addition, the College contributed 3.91% to the TRS on behalfofemployees electing to participate in the Regents Retirement Plan. Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

1998

100%

$23,526,761.98

1997

100%

$19,995,895.35

1996

100%

$19,958,613.71

REGENTS RETIREMENT PLAN

Plan Description

The Regents Retirement Plan, a single-employer defined contribution plan, is an optional retirement plan

established and administered by the Board of Regents of the University System of Georgia, under which it

may purchase annuity contracts for the purpose ofproviding retirement and death benefits for eligible faculty

and principal administrators. Benefits depend solely on amounts contributed to the plan plus investment

earnings. Benefits are payable to participating employees or their beneficiaries in accordance with the terms

of the annuity contracts.

.

- 16-

MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998

EXHIBIT"D"

NOTE 7: RETIREMENT PLANS
REGENTS RETIREMENT PLAN
Funding Policy Member contribution requirements are established by the Board of Trustees of the Teachers Retirement System. Employer contributions are established by statute and may be amended only by the General Assembly ofthe State of Georgia. The employer contributes 7.75% ofthe participating employee's earnable compensation. Employees contribute 5% of their earnable compensation. Amounts attributable to all plan contributions are fully vested and non-forfeitable at all times.
The College and the covered employees made the required contributions of $2,863,073.48 (7.75%) and ;$1,847,144.10 (5%), respectively.
GEORGIA DEFINED CONTRIBUTION PLAN
Plan Description Medical College of Georgia participates in the Georgia Defined Contribution Plan (GDCP) which is a singleemployer defmed contribution plan established by the General Assembly of Georgia for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia.
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 his/her account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute.
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 ofTrustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member.
Total contributions made by employees during fiscal year 1998 amounted to $311,968.09 which represents 7.50% of covered payroll. These contributions met the requirements ofthe plan.
NOTE 8: LEAVEPOUCrnS
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
- 17-

MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998

EXlllBIT liD"

NOTE 8: LEAVEPOUCffiS
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, except as noted in the subsequent paragraph.
Effective July 1, 1998, certain employees who retire with a minimum of three months of unused sick leave are entitled to additional service credit in the Teachers Retirement System of Georgia.
NOTE 9: CONTINGENCffiS
Amounts received or receivable from grantor agenciesare 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 of Regents ofthe University System ofGeorgia), ifany, 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, 1998.
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 ofGeorgia. It is the policy ofthe Board of Regents to permit employees ofthe University System ofGeorgia eligible for retirement or that become permanently and totally disabled to continue as members ofthe group health and life insurance programs. Employees who are eligible for retirement or disability under the criteria established by the Teachers Retirement System of Georgia and who have at least ten years ofservice with the University System ofGeorgia 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 ofJune 30, 1998, there were 1,673 employees who had retired or were disabled that were receiving these postemployment health and life insurance benefits. For the year ended June 30, 1998, Medical College of Georgia recognized as incurred $1,620,508.89 ofexpenditures, which was net of $363,434.20 of participant contributions.

- 18 -

MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1998

EXHIBIT"D"

NOTE 11: YEAR 2000 SYSTEMS READINESS

The year 2000 issue is the result ofprogramming "shortcuts" in many electronic data processing systems and other process control systems containing embedded chips that may adversely affect the Medical College of Georgia's (MCG) operations as early as calendar year 1999. However, the Medical College of Georgia has been preparing for year 2000 compliance for the past three years and will declare a state of "reasonable" compliance by December 31, 1998. The term reasonable is defined as all that the staff and faculty of this organization could prudently do to prepare itself for year 2000 occurrences, given the time in which to prepare. There are few exceptions to the status but all are projected to be compliant well before January 1, 2000. The following stages have been identified as necessary to implement year 2000 compliant systems.

Awareness Stage - Encompasses establishing a budget and project plan for dealing with the year 2000 Issue.

Assessment Stage - The actual process of identifying all systems and individual components of systems to check for compliance.

Remediation Stage - The time when changes are made to systems and equipment.

Validationffesting Stage - The process of ensuring that the changes made to systems and equipment will produce a year 2000 compliant system.

It will be necessary for the College to progress through all four of these stages for each computer and/or electronic system, not already year 2000 compliant, in order to assure that these systems will not be adversely affected.

The College has identified the following systems requiring year 2000 remediation:

Systems in rocess or Completed
HealthQuest (patient Information Management System)

Awareness*
L. ...L
XX

Assessment* Remediation

L. ...L L. ...L

X

X

X

Validation & Testing
L. ...L
X

General Ledger, Payroll & Budget Conversion

XX

X

X

X

X

Student Affairs Conversion

XX

X

X

X

X

- 19-

MEDICAL COLLEGE OF GEORGIA NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1998

EXIllBIT "D"

NOTE 11: YEAR 2000 SYSTEMS READINESS

Systems in rocess or Completed
Other year 2000 related systems identified as necessary for the continuance of MCG Operations

Awareness*
..L .....
XX

Assessment* Remediation

..L ..... ..L .....

X

X

Validation & Testing
..L .....

Other year 2000 related systems identified as necessary for the continuance of MCG Hospital & Clinics Operations

XX

X

X

* Awareness and Assessment Phases are continual throughout the entire process including the Recovery Phase (all after January 1, 2000). The Recovery Phase is the period for discovery of problems not previously identified and their subsequent correction.

Remaining contracted amounts of$I,916,398.00 are committed to this project as of June 30, 1998.

Because ofthe unprecedented nature ofthe year 2000 issue, its effects and the success ofrelated remediation efforts will not be fully determinable until year 2000 and thereafter. While management is confident that the College will be year 2000 ready, it cannot assume that its_remediation efforts will be successful in whole or in part, or that parties with whom the College does business will be year 2000 ready.

NOTE 12: ENROLLMENT

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

Regular Term Fall Quarter, 1997 Winter Quarter, 1998 Spring Quarter, 1998

3,374 3,202 3.136

Average

Summer School, 1997

- 20-

SUPPLEMENTARY INFORMAnON - 21 -

MEDICAL COLLEGE OF GEORGIA COMBINING BALANCE SHEET
CURRENT FUNDS - UNRESTRICTED JUNE 30,1998

ASSETS Cash and Cash Equivalents Accounts Receivable (Net of Allowance
for Uncollectibles) Inventories Due from Other Fund Groups
Total Assets
LIABILITIES AND FUND BALANCES Liabilities
Accounts Payable Deferred Revenue
Tuition and Fees Due to Other Fund Groups
Total Liabilities Fund Balances
Unrestricted
Total Liabilities and Fund Balances

RESIDENT

LOTTERY FOR

INSTRUCTION EDUCATION

$ 14,336,421,19

142,303,84 $
9,128,14 70,564,72

347,000.00

$ 14,558,417,89 $ 347,000,00

$ 12,910,783,30 $ 268,344,15

1,516,126.00

70,564,72

$ 14,426,909,30 $ 338,908,87

131,508.59

8,091.13

$ 14,558,417.89 $ 347,000,00

See notes to the financial statements.

- 22-

EXHIBIT"E"

OTHER ORGANIZED
FUNDS

AUXILIARY ENTERPRISES

STUDENT ACTIVITIES

TOTAL

$ 30,751,491.57 $ 1,535,548.37 $ 93,497.84 $ 46,716,958.97

74,961,922.08 2,018,042.38

63,601.56 584,708.92

75,514,827.48 2,611,879.44 70,564.72

$ 107,731,456.03 $ 2,183,858.85 $ 93,497.84 $ 124,914,230.61

$ 19,530,676.09 $ 31,762.11

$ 32,741,565.65

231,626.31 $ 27,400.00

1,775,152.31 70,564.72

$ 19,530,676.09 $ 263,388.42 $ 27,400.00 $ 34,587,282.68

88,200,779.94

1,920,470.43

66,097.84

90,326,947.93

$ 107,731,456.03 $ 2,183,858.85 $ 93,497.84 $ 124,914,230.61

- 23-

MEDICAL COLLEGE OF GEORGIA COMBINING STATEMENT OF CHANGES IN FUND BALANCES
CURRENT FUNDS - UNRESTRICTED YEAR ENDED JUNE 30, 1998

REVENUES AND OTHER ADDITIONS

Unrestricted Current Fund Revenues Adjustments
Prior Years' Expenditures/Accounts Payable Prior Years' Checks Voided

')0

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 Unrestricted Fund Balance (Surplus)

Total Expenditures and Other Deductions

TRANSFERS BETWEEN FUNDS

Nonmandatory Renewals and Replacements Capital Projects

Total Transfers Between Funds

Net Increase/(Decrease) for the Year

FUND BALANCES JULY 1, 1997

FUND BALANCES JUNE 30, 1998

RESIDENT INSTRUCTION

LOTTERY FOR EDUCATION

$ 114,193,781,78 $
121,222,51 874,05
$ 114,315,878.34 $

808,380,00 808,380,00

$ 114,307,142,68 $

1,599,834,66 100,000,00

137,885.74

4,583,35

$ 114,445,028.42 $ 1,704,418.01

$ -129,150.08 $ -896,038,01

260,658.67

904,129.14

$

131,508,59 $=======8=,0.9.1.=',;,;1.3...

See notes to the financial statements,

- 24-

~!:
Ji~>;'!""

OTHER ORGANIZED ACTIVITIES

AUXILIARY ENTERPRISES

STUDENT ACTIVITIES

TOTAL

$ 259,273,601.45 $
230,047.24 3,575.83
$ 259,507,224.52 $

3,718,750.95 $
807.37 35.49
3,719,593.81 $

171,005.99 $ 378,165,520.17
352,077.12 4,485.37
171,005.99 $ 378,522,082.66

$ 77,398,448.99 $
190,559,473.05

$ 2,984,978.61

157,438.08 $

193,462,864.41 2,984,978.61
190,659,473.05

227,322.29

369,791.38

$ 268,185,244.33 $ 2,984,978.61 $

157,438.08 $ 387,477,107.45

$
$ $ -8,678,019.81 $
96,878,799.75

-254,289.33 -122,944.19
-377 ,233.52
357,381.68 $ 1,563,088.75

$
$ 13,567.91 $ 52,529.93

-254,289.33 -122,944.19 -377,233.52
-9,332,258.31 99,659,206.24

$ 88,200,779.94 $ 1,920,470.43 $

66,097.84 $ 90,326,947.93

- 25-

MEDICAL COLLEGE OF GEORGIA COMBINING STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,
AND OTHER CHANGES UNRESTRICTED
YEAR ENDED JUNE 30, 1998

REVENUES
State Appropriations Tuition and Fees Federal Grants and Contracts State Grants and Contracts Private Gifts, Grants, and Contracts Sales and Services of Educational Activities Sales and Services of Auxiliary Enterprises Sales and Services of Hospital Other Sources
Total Revenues
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
Total Expenditures
OTHER TRANSFERS AND ADDITIONS/(DEDUCTIONSl
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)
Total Other Transfers and Additions/(Deductions}
Net Increase/(Decrease} in Fund Balances
See notes to the financial statements.

- 26-

RESIDENT INSTRUCTION

LOTTERY FOR EDUCATION

$ 94.652.775,00 $ 9.221.895,22 3,866.833,51 4,895,21 585,041,03 4,554,361,90

808,380,00

1,307,979.91 $ 114,193,781.78 $

808.380,00

$ 71,897,330.10 $ 2,432,179,02

1,066.806,51

10,016,801,19 1,475,395.94
13,741,791,95 13.575.214.34
1.168,430.14

291,775,39 241.252,76

100,000,00 $ 114,307,142,68 $ 1.699.834,66

$

122,096,56

-137,885.74 $

-4.583.35

$

-15,789,18 $

-4.583.35

===-... $

-129,150,08 $

8.9.6.';.;;,0=3.8.,.0.1;..,

EXHIBIT "G"

OTHER ORGANIZED ACTIVITIES

AUXILIARY ENTERPRISES

STUDENT ACTIVITIES

TOTAL

$ 59,036,055.00
$ 200,044,046.45
193,500.00

$ 3,718,750.95

$ 154,497,210.00

159,522.00

9,381,417.22

3,866,833.51

4,895.21

585,041.03

4,554,361.90

3,718,750.95

200,044,046.45

11,483.99

1,512,963.90

$ 259,273,601.45 $ 3,718,750.95 $ 171,005.99 $ 378,165,520.17

$ 28,586,095.49 48,812,353.50

$ 101,550,232.10

2,432,179.02

48,812,353.50

10,308,576.58

$ 157,438.08

1,632,834.02

13,983,044.71

13,575,214.34

1,168,430.14

$

642,806.43

25,153.23

325,230.75

1,991,788.20

642,806.43 25,153.23
325,230;75 1,991,788.20

190,559,473.05

190,659,473.05

$ 267,957,922.04 $ 2,984,978.61 $ 157,438.08 $ 387,107,316.07

$ -254,289.33

-122,944.19

$

233,623.07

842.86

$

-254,289.33

-122,944.19

356,562.49

-227,322.29

$

6,300.78 $ _--.;;,3;.,;,.7""6,,,,,39;;.;0;.,;,..6;;.;6,-

-369,791.38

$

-390,462.41

$ -8,678,019.81 $

357,381.68 $ 13,567.91 $ -9,332,258.31

,27 -

THIS PAGE LEFT BLAHK

MEDICAL COLLEGE OF GEORGIA COMBINING STATEMENT OF CURRENT FUNDS REVENUES. EXPENDITURES.
AND OTHER CHANGES RESTRICTED
YEAR ENDED JUNE 30, 1998

EXHIBIT-W

REVENUES
Federal Grants and Contracts State Grants and Contracts Local Grants and Contracts Private Gifts, Grants, and Contracts Endowment Income
Total Revenues
EXPENDITURES
Educational and General Instruction Research Academic Support Institutional Support Scholarships and Fellowships
Hospital Georgia War Veterans Nursing Home Georgia Correctional Health Care
Total Expenditures
OTHER TRANSFERS AND ADDITIONS/(DEDUCTIONSl
Excess of Restricted Receipts over Transfers to Revenues

RESIDENT INSTRUCTION

OTHER ORGANIZED ACTIVITIES

TOTAL

$ 15,053,126.46

$ 15,053,126.46

3,793,971.89 $ 76,626,963,10

80,420,934.99

634,337.27

634,337.27

38,281,503.46

38,281,503.46

108,419,50

108,419.50

$ 57,871,358.58 $ 76,626,963.10 $ 134,498,321.68

$ 37,760,077.19 17,168,829,76 509,648.35 1,270,395,28 1,162,408.00

$ 37,760,077.19 17,168,829,76 509,648.35 1,270,395.28 1,162,408.00

$ 7,420,422.00 69,206,541,10

7,420,422,00 69,206,541.10

$ 57,871,358.58 $ 76,626,963.10 $ 134,498,321.68

$ 1,257,387.49

$ 1,257,387.49

Net Increase/(Decrease) in Fund Balances

$ 1,257,387.49 $ -=========_0=,0=:0,=$ 1,257,387.49

See notes to the financial statements.

- 29-

MEDICAL COLLEGE OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
RESIDENT INSTRUCTION YEAR ENDED JUNE 30, 1998

REVENUES
State Appropriations Other Revenues Retained

CURRENT FUNDS UNRESTRICTED RESTRICTED

PLANT FUNDS RENEWALS AND
UNEXPENDED REPLACEMENTS

$ 94,652,n5,00

$ 3,036,000,00 $

0,00

19,541,006,78 $ 57,871,358,58

5,213,984,69

- - - - - - - $ 114,193,781,78 $ 57,871,358,58 $ 8,249,984,69 $

0,00

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

$ 82,276,203.36 $ 44,443,211,09

28,043,716.72
1,871,000.00 1,764,362.60
351,860,00

13,428,147,49 $ 8,727,001,27 $

198,302,38

$ 114,307,142,68 $ 57,871,358,58 $ 8,727,001,27 $ _ _-.;.;19~8.:.;;,3~02_,3.;..;8.;..;

Excess of Revenues over Expenditures

$

-113,360,90 $

0,00 $ -4n,016.58 $ ===-=19:=8=,3=:02=:,3:::;8=

(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,

-30-

SCHEDULE "1"

TOTAL

ADJUSTMENTS (1)

TOTAL (Budget Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$ 97,688,n5.00

$ 97,688,n5.00 $ 97,688,n5.00 $

0.00

82,626,350.05 $ -1,700,302.16

80,926,047.89

96,759,841.00

-15,833,793.11

$ 180,315,125.05 $ -1,700,302.16 $ 178,614,822.89 $ 194,448,616.00 $ -15,833,793.11

$ 82,276,203.36 44,443,211.09

$ 82,276,203.36 $ 82,843,439.00 $

44,443,211.09

45,418,547.00

28,043,716.72 $ 13,428,147.49 8,925,303.65
1,871,000.00 1,764,362.60
351,860.00

-2,021,548.73

26,022,167.99 13,428,147.49 8,925,303.65
1,871,000.00 1,764,362.60
351,860.00

30,194,n4.00 22,737,764.00
9,273,612.00 1,871,000.00 1,757,620.00
351,860.00

567,235.64 975,335.91
4,172,606.01 9,309,616.51
348,308.35 0.00
-6,742.60 0.00

$ 181,103,804.91 $ -2,021,548.73 $ 179,082,256.18 $ 194,448,616.00 $ 15,366,359.82

$ -788,679.86 $

321,246.57 $ -467,433.29

$ ==-46::::::::;7=,4=33;;;;;.2=9=

-'31 -

MEDICAL COLLEGE OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
LOTTERY FOR EDUCATION YEAR ENDED JUNE 30, 1998

SCHEDULE "2"

REVENUES State Appropriations

CURRENT FUNDS PLANT FUNDS

TOTAL

UNRESTRICTED UNEXPENDED (Budget Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$

808,380,00 $ 291,000,00 $ 1,099,380.00 $ 1,099,380.00 $

,,;;;O.;.;.OO~

EXPENDITURES

Equipment, Technology and Construction

Trust Fund

$

Special Funding Initiatives

1,288,943.72 $ 410,890.94

291,000.00 $ 1,579,943.72 $ 682,000.00 $

410,890.94

417,380.00

-897,943.72 6,489.06

$

1,699,834,66 $

291,000.00 $ 1,990,834.66 $ 1,099,380.00 $ _ _-8.;.9;.;1~,4;.,;;54";';';.;.66;..

Excess of Revenues over Expenditures

$

-891,454,66 $ ........_ ...0;;;.;.;;,;0.0.. $ -891,454.66

$ ==-.8.9.;;,;1..,4.;,;;54,,;.;.6..6....

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, 1998

SCHEDULE "3"

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

CURRENT FUNDS UNRESTRICTED RESTRICTED

TOTAL (Budget Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$ 33,608,599,00

$ 33,608,599,00 $ 33,608,599,00 $

196,949,017,14 $ 76,626,963.10 273,575,980,24 303,743,730,00

0,00 -30,167,749,76

$ 230,557,616.14 $ 76,626,963.10 $ 307,184,579,24 $ 337,352,329,00 $ -30,167,749,76

EXPENDITURES
Personal Services: Education, General and Depertmental Services Sponsored Operations
'-Operating Expanses: Education, General and Departmental Services Sponsored Operations

$ 150,926,534,46

$ 150,926,534,46 $ 167,944,892,00 $

$ 43,758,810,25

43,758,810,25

45,824,949,00

88,445,292.09

32,868,152.85

88,445,292,09 32,868,152,85

94,129,518,00 29,452,970,00

17,018,357,54 2,066,138.75
5,684,225,91 -3,415,182,85

$ 239,371,826,55 $ 76,626,963,10 $ 315,998,789,65 $ 337,352,329.00 $ 21,353,539,35

Excess of Revenues over Expandituras

$ -8,814,210.41 $

0.00.... $ -8,814,210,41

$ =...,.;-8.,.8..1..4./oi,2.1.0...4...1...

see notes to the financial statements,

-33-

MEDICAL COLLEGE OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
OTHER ORGANIZED ACTIVITIES YEAR ENDED JUNE 30, 1998

SCHEDULE "3"

JOINT BOARD OF FAMILY PRACTICE REVENUES
State Appropriations

CURRENT FUNDS UNRESTRICTED RESTRICTED

TOTAL (Budget Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$ 25,427,456,00 $

0,00 $ 25,427,456.00 $ 25,427.456.00 $

0,00

EXPENDITURES

',>
Personal Services:

Education, General and Departmental Servicas

$

301,517,09 $

0,00 $

301,517.09 $

330,367,00 $

28,849,91

Operating Expenses:

Education, General and Departmental Services

739,966.22

739,966,22

756,467,00

16,500.78

Capitation Contracts for Family Practice Residency

3,864,194,94

3,864,194,94

3,864,204,00

9,06

Residency Capitation Grants

2,119,364,53

2,119,364,53

2,119,378.00

13,47

Student Preceptorships

145,000,00

145,000,00

146,400.00

1,400,00

Mercer Medical School Grant

7,210,000.00

7,210,000,00

7,210,000.00

0,00

Morehouse School of Medicine Grant

6,494,890,00

6,494,890,00

6,494,890,00

0,00

S,R.E,B, Payments

4,502,900,00

4,502,900.00

4,505,750,00

2,850,00

$ 25,3n,832,78 $

0,00 $ 25,3n,832.78 $ 25,427,456,00 $

49,623.22

Excess of Revenues over Expenditures

$

49,623,22 $

0.00 $

49,623,22

$

49,623,22

See notes to the financial statements,

-34-

MEDICAL COLLEGE OF GEORGIA SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
OTHER ORGANIZED ACTIVITIES YEAR ENDED JUNE 30, 1998

SCHEDULE "3"

GEORGIA RADIATION THERAPY CENTER REVENUES
~erRevenuesRetained

CURRENT FUNDS UNRESTRICTED RESTRICTED

TOTAL (Budget Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$

3,288,529.31 $

0,00 $ 3,288,529.31 $ 3,704,908.00 $

-416,378.69

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

$

2,017,526.03 $

1,190,736.68

0.00 $

2,017,526.03 $ 1,190,736.68

2,033,088.00 $ 1,671 ,820.00

15,561.97 481,083.32

$

3,208,262,71 $

0.00 $ 3,208,262.71 $ 3,704,908.00 $

496,645.29

Excess of Revenues over Expenditures

$

80,266.60 $

0.00 $

80,266.60

$

80,266.60

See notes to the financial statements,

- 35-

MEDICAL COLLEGE OF GEORGIA CHANGES IN INVESTMENT IN PLANT
YEAR ENDED JUNE 30, 1998

Land BUildings Improvements other Than Buildings
'),
Equipment Ubrary Books and Collections Construction in Progress
SUMMARY OF INVESTMENT College Capital Leases

BALANCE JULY 1.1997

CURRENT FUNDS UNRESTRICTED RESTRICTED

PLANT UNEXPENDED

$

8,998,281,93

262,600,942,39 $ 6.856.811.75

$ 7.540.179.23

5.085,917.44

355.869,70

25,741,01

168.256.400,65

13,361,697.88 $ 1,547,051.61

295,243.30

9,711.175,38

909,742,25

24.230.434.45

89,000.00

$ 478,883.152,24 $ 21.573,121.58 $ 1.547.051.61 $ 7.861.163.54

$ 478,821,235,43 $ 61.916.81

21,573,121.58 $

1,547,051.61 $

7,861,163.54

$ 478,883.152.24 $ 21.573,121.58 $ 1.547.051.61 $ 7,861.163.54

See notes to the financial statements.

- 36-

SCHEDULE "4"

ADDITIONS
FUNDS RENEWALS AND REPLACEMENTS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

124,221.27 $

1,016,126.02

20,568.01

30,330.31

6,180,016.34 $

20,424,113.98

CAPITAL LEASES
65,897.14 $

PRIVATE GIFTS

DEDUCTIONS DISPOSALS! DELETIONS! ADJUSTMENTS

BALANCE JUNE 30, 1998

$

8,998,281.93

278,138,280.66

5,488,096.16

113,486.75 $ 15,094,173.18

174,755,950.80

2,475.38

10,618,442.25

44,743,548.43,

$

175,119.59 $ 27,620,256.34 $

65,897.14 $

113,486.75 $ 15,096,648.56 $ 522,742,600.23

$

175,119.59 $ 27,620,256.34

$

113,486.75 $ 14,983,607.65 $ 522,727,827.19

_ _ _ _ _ _ $ _ _6:;;:5;,1,;,8:,::9.:.,;7.:.;,.14.;...

113,040.91

14,773.04

$

175,119.59 $ 27,620,256.34 $

65,897.14 $

113,486.75 $ 15,096,648.56 $ 522,742,600.23

37 -

MEDICAL COLLEGE OF GEORGIA SCHEDULE OF FUND BALANCES CURRENT FUNDS AND PLANT FUNDS
JUNE 30,1998

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 Fund For Equipment/Revenue Stabilization Reserve for Georgia Radiation Therapy Center For Hospital Operations For Inventory Reserve For Renewals and Replacements Reserve For Revenue Stabilization Reserve for Medical College of Georgia Hospital and Clinics For Subsequent Years' Expenditures Surplus Regular Lottery for Education

RESIDENT INSTRUCTION

LOTTERY FOR EDUCATION

CURRENT FUNDS

UNRESTRICTED

OTHER ORGANIZED

AUXILIARY

ACTIVITIES

ENTERPRISES

$

1,602,07

$

13,775,91

$

575,227,90

74,890,219,85

2,176,181,90 $

584,708,92

10,341,336,09

1,335,761.51

117,732,68

$

131,508,59 $

6,489.06 8,091,13 $

217,814,20 88,200,779.94 $ 1,920,470.43

$

131,508.59 $

8,091,13 $

88,200,779,94 $ 1,920,470.43

See notes to the financial statements,

- 38-

SCHEDULE "5"

STUDENT ACTIVITIES

RESTRICTED

UNEXPENDED

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

TOTAL

$ 522.727,827.19 $ 522,727.827.19

$ 16,138.002.97

$ 16.138.002.97

$

2,604,584.63

$

2.604.584.63

1.602.07

$

403.905.12

575,227.90 74.890.219.85
2,774.666.73 403,905.12

$

66,097.84

10.341 .336.09 1.401.859.35

$ _ _6,;;.;6;;,:..0,;;.;9;.,;,7,;.;;.8;.,;,4_

14,742.81

$

2,619.327.44 $ _ _--:.40;;,;3:.:,,9:;,:0;,,;;5;.:,;.1:,;;2;.,;,

350,289.69 6.489.06
$ 93.350,180.49

$

66.097.84 $ 16.138,002.97 $

2.619,327.44 $

403,905.12 $ 522.727.827.19 $ 632.216.010.65

- 39-