Georgia Health Sciences University, Augusta, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2011

GEORGIA HEALTH SCIENCES UNIVERSITY
AUGUSTA, GEORGIA
REPORT ON AUDIT OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED
JUNE 30,2011
Georgia Department of Audits and Accounts
Russell W.Hinton
I State A tar

GEORGIA HEALTH SCIENCES UNIVERSITY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

BASIC FINANCIAL STATEMENTS

EXHIBITS

A STATEMENTOFNETASSETS

B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS

C STATEMENT OF CASH FLOWS

D NOTES TO THE FINANCIAL STATEMENTS

SUPPLEMENTARY INFORMATION

SCHEDULES

1 BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND

30

2 SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT

(NON-GAAP BASIS) BUDGET FUND

31

3 STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET

BY PROGRAM AND FUNDING SOURCE

(NON-GAAP BASIS) BUDGET FUND

3 2

4 STATEMENT OF CHANGES TO FUND BALANCE

BY PROGRAM AND FUNDING SOURCE

(NON-GAAP BASIS) BUDGET FUND

34

5 RECONCILIATION OF SALARIES AND TRAVEL

37

SECTION I1 CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
November 1 6 , 2 0 1 1

Honorable Nathan Deal, Governor Members of the General Assembly of Georgia Members of the Board of Regents of the University System of Georgia
and Honorable Ricardo Azziz, President Georgia Health Sciences University
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Ladies and Gentlemen:
We 'have audited the accompanying basic financial statements (Exhibits A through D) of Georgia Health Sciences University, a unit of the UniversitySystem of Georgia, which is an organizational unit of the State of Georgia, as of and for the year ended June 30,2011. These financial statements are the responsibility of the Georgia Health Sciences University's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of University's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As discussed in Note 1,the financial statements of Georgia Health Sciences University are intended to present the financial position and changes in financial position and cash flows of only that portion of the business-type activities of the State of Georgia that is attributable to the transactions of Georgia Health Sciences University. They do not purport to, and do not, present fairly the financial position and changes in financial position and cash flows of the State of Georgia, in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of Georgia Health Sciences University as of June 30, 2011, and its changes in financial position and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Management's Discussion and Analysis is not a part of the basic financial statements but is required supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of this required supplementary information. However, we did not audit this information and express no opinion on it.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements of Georgia Health Sciences University taken as a whole. The accompanying supplementary information (Schedules 1through 5) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
Respectfully submitted,
~us$elWl . Hinton, CPA, CGFM State Auditor

REQUIRED SUPPLEMENTARY INFORMATION

GEORGIA HEALTH SCIENCES UNIVERSITY
Management's Discussion and Analysis

On February 1, 2011, the Medical College of Georgia changed its name thereby becoming the Georgia Health Sciences University (GHSU). GHSU, the oldest school of medicine in Georgia, was incorporated in 1828 as the Medical Academy of Georgia and is one of the 35 institutions of higher education of the University System of Georgia. The University, located in Augusta, Georgia, has become known for its world-class instructional, clinical, and research programs. The University offers more than 4 0 academic programs in allied health sciences, dentistry, graduate studies, medicine, and nursing at the baccalaureate, masters, doctoral, and professional levels. Additionally, GHSU offers residency training in medical and dental specialty areas. This wide range of educational opportunities attracts a highly qualified faculty and student body. A brief historical comparison of full time faculty and student levels is shown by the comparison numbers that follow.

Faculty

Students (Headcount)

Students (FTE)

Fiscal Year 2011 Fiscal Year 2010 Fiscal Year 2009
Overview of the Financial Statements and Financial Analysis
Georgia Health Sciences University is proud to present its financial statements for fiscal year 2011. The emphasis of discussions about these statements will be on current year data. There are three financial statements presented: the Statement of Net Assets; the Statement of Revenues, Expenses and Changes in Net Assets; and the Statement of Cash Flows. This discussion and analysis of the University's financial statements provides an overview of its financial activities for the year. Comparative data is providedfor fiscal year 2 0 1 1and fiscal year 2010.
Statement of Net h e &
The Statement of Net Assets presents the assets, liabilities, and net assets of the University as of the end of the fiscal year. The Statement of Net Assets is a point of time financial statement. The purpose of the Statement of Net Assets is to present to the readers of the financial statements a fiscal snapshot of Georgia Health Sciences University. The Statement of Net Assets presents end-ofyear data concerning Assets (current and noncurrent), Liabilities (current and noncurrent), and Net Assets (assets minus liabilities). The difference between current and noncurrent assets will be discussed in the Notes to the Financial Statements.
From the data presented, readers of the Statement of Net Assets are able to determine the assets available to continue the operations of the institution. They are also able to determine how much the institution owes vendors.
Finally, the Statement of Net Assets provides a picture of the net assets (assets minus liabilities) and their availability for expenditure by the institution. Net assets are divided into three major categories. The first category, invested in capital assets, net of debt, provides the institution's equity in property, plant and equipment owned by the institution. The next asset category is restricted net assets, which

is divided into three categories, nonexpendable, expendable, and capital projects. The corpus of nonexpendable restricted resources is only available for investment purposes. Expendable restricted net assets are available for expenditure by the institution, but must be spent for purposes as determined by donors and/or external entities that have placed time or purpose restrictions on the use of the assets. The final category is unrestricted net assets. Unrestricted net assets are available to the institution for any lawful purpose of the institution.

Statement of Net Assets, Condensed

June 30,2011

June 30,2010

Assets Current Assets Capital Assets, Net Other Assets

Total Assets

Liabilities Current Liabilities Noncurrent Liabilities

Total Liabilities

Net Assets Invested in Capital Assets, Net of Debt Restricted - Nonexpendable Restricted - Expendable Restricted - Capital Projects Unrestricted

$ 271,894,456 1,717,115
70,054,827 5,000,000 -9,125,319

$ 274,705,038 1,495,902
67,528,242 5,000,000
-11,582,372

Total Net Assets

The total assets of the institution increased by $16,185,564. A review of the Statement of Net Assets will reveal that the increase was primarily due to an increase of $18,142,711 in the category of Other Assets, primarily in the investments categories.
The total liabilities increased by $13,791,295. The combination of the increase in total assets of $16,185,564 and the increase in total liabilities of $13,791,295 yields an increase in total net assets of $2,394,269. The increase in total net assets is primarily in the category of Restricted Expendable in the amount of $2,526,585.
Statement of Revenues, Expensesand Changesin NetAssets
Changes in total net assets as presented on the Statement of Net Assets are based on the activity presented in the Statement of Revenues, Expenses and Changes in Net Assets. The purpose of the statement is to present the revenues received by the institution, both operating and nonoperating, and the expenses paid by the institution, operating and nonoperating, and any other revenues, expenses, gains and losses received or spent by the institution. Generally speaking operating revenues are received for providing goods and services to the various customers and constituencies of the institution. Operating expenses are those expenses paid to acquire or produce the goods and

services provided in return for the operating revenues, and to carry out the mission of the institution. Nonoperating revenues are revenues received for which goods and services are not provided. For example state appropriations are nonoperating because they are provided by the Legislature to the institution without the Legislature directly receiving commensurate goods and services for those revenues.

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

June 30,2011

June 30,2010

Operating Revenues Operating Expenses

Operating Loss

$ -155,050,386

$ -169,196,735

Nonoperating Revenues and Expenses

151,474,185

173,101,558

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

$ -3,576,201

$ 3,904,823

Other Revenues, Expenses, Gains or Losses

5,970,470

8,625,270

Increase (Decrease) in Net Assets

$ 2,394,269

$ 12,530,093

Net Assets at Beginning of Year

Net Assets at End of Year

The Statement of Revenues, Expenses and Changes in Net Assets reflect a positive year with an increase in net assets at the end of the year. Some highlights of the information presented on the Statement of Revenues, Expenses and Changes in Net Assets are as follows:

Revenue by Source Forthe Years EndedJune 3 0 , 2 0 1 1 and June 30.2010

June 3 0 . 2 0 1 1

Operating Revenue Tuition and Fees Grants and Contracts Sales and Services of Educational Departments Auxiliary Other

$ 38,532,794 399,821,598 8,406,636 7,535,101 606,632

Total Operating Revenue

Nonoperating Revenue State Appropriations Federal Stimulus -Stabilization Funds Grants and Contracts Gifts Investment Income Other

Total Nonoperating Revenue

Capital Grants and Gifts State Other

Total Capital Grants and Gifts

Total Revenues

Expenses (By Functional Classification) Forthe Years Ended June 3 0 , 2 0 1 1 and June 3 0 , 2 0 1 0
June 3 0 . 2 0 1 1
Operating Expenses Instruction Research Public Service Academic Support Student Services Institutional Support Plant Operations and Maintenance Scholarships and Fellowships Auxiliary Enterprises Patient Care
Total Operating Expenses
Nonoperating Expenses Interest Expense (Capital Assets)

Total Expenses

June 3 0 , 2 0 1 0 June 30.2010

Operating revenues increased by $23,156,101 in fiscal year 2011. Revenues increased in all but one category including a 9.91% increase in tuition and fees.
Nonoperating revenues and expenses decreased by $21,627,373 for the year primarily due to a decrease of $24,138,025 in Federal stimulus - stabilization funds.
The compensation and employee benefits category increased by $17,845,358 and primarily affected the Public Service and Academic Support categories. As a result of the decrease in State allocation funding, Instruction category expenses went down while clinical activities under the Public Service category went up. The remainder of the increase relates to faculty salary supplements paid by increased support from our affiliate Medical College of Georgia Physicians Practice Group Foundation. The increase in the Academic Support category is the result of a shift from using state allocations to using recovery funds for sponsored programs administrative costs.
Statement of Cash Flows

The final statement presented by the Georgia Health Sciences University is the Statement of Cash Flows. The Statement of Cash Flows presents detailed information about the cash activity of the institution during the year. The statement is divided into five parts. The first part deals with operating cash flows and shows the net cash used by the operating activities of the institution. The second section reflects cash flows from noncapital financing activities. This section reflects the cash received and spent for nonoperating, noninvesting, and noncapital financing purposes. The third section deals with cash flows from capital and related financing activities. This section deals with the cash used for the acquisition and construction of capital and related items. The fourth section reflects the cash flows from investing activities and shows the purchases, proceeds, and interest received from investing activities. The fifth section reconciles the net cash used to the operating income or loss reflected on the Statement of Revenues, Expenses and Changes in Net Assets.
Cash Flows for the Years Ended June 3 0 , 2 0 1 1 and 2010, Condensed

June 30,2011

June 30,2010

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

$ -129,671,552 145,390,092 -13,479,087 -10,810,883

$ -131,059,171 165,951,322 -18,338,577 -2,746,296

Net Change in Cash Cash, Beginning of Year

$ -8,571,430 24,362,020

$ 13,807,278 10,554,742

Cash, End of Year

$ 15,790,590

$ 24,362,020

Capital Assets
Georgia Health Sciences University had capital asset additions for buildings and building improvements. Numerous projects were completed during the fiscal year totaling $20,862,723.
Other on-going projects funded by Georgia State Financing and Investment Commission (GSFIC) included $5,771,318. Projected funding by GSFIC for fiscal year 2012 will be approximately the same.
For additional information concerning Capital Assets, see Notes 1,6, 8, and 10 in the Notes to the Financial Statements.

Long- Term Liabilities
Georgia Health Sciences University had Long-Term Liabilities of $58,448,198 of which $17,704,156 was reflected as current liability at June 30, 2011.
For additional information concerning Long-Term Liabilities, see Notes 1and 8 in the Notes to the Financial Statements.
Economic Out/ook
Along with all other institutions of the University System of Georgia, the University continues to respond to current and possible additional budget reductions mandated by the Governor's Office of Planning and Budget (OPB) in response to shortfalls in the State's revenue collections. Currently, plans for a 2% reduction in State Appropriations for fiscal year 2012 and fiscal year 2013 have been submitted to the University System Office for inclusion in the consolidated system's submission of plans to the OPB. While these reductions will not be without pain, the University is confident that its core missions will continue to be met.
Dr. Ricardo Azziz, President Georgia Health Sciences University

BASIC FINANCIAL STATEMENTS

GEORGIA HEALTH SCIENCES UNIVERSITY STATEMENT OF NET ASSETS JUNE 3 0 . 2 0 1 1
ASSETS
Current Assets Cash and Cash Equivalents Accounts Receivable, Net (Note 3)
Receivables - Federal Financial Assistance
Margin Allocation Funds Receivables - Other Inventories (Note 4) Prepaid Items
Total Current Assets
Noncurrent Assets Investments (Externally Restricted) Investments Notes Receivable. Net Capital Assets, Net (Note 6)
Total Noncurrent Assets
Total Assets
LIABILITIES
Current Liabilities Accounts Payable Salaries Payable Contracts Payable Deferred Revenue (Note 7) Deposits Held for Other Organizations Lease PurchaseObligations Compensated Absences
Total Current Liabilities
Noncurrent Liabilities Lease Purchase Obligations Compensated Absences
Total Noncurrent Liabilities
Total Liabilities
NET ASSETS
Invested in Capital Assets. Net of Related Debt Restricted for:
Nonexpendable Expendable Capital Projects Unrestricted (Deficit)
Total Net Assets
The notes to the financial statements are an integral part of this statement. -2-

EXHIBIT "A"

GEORGIA HEALTH SCIENCES UNIVERSITY STATEMENT OF REVENUES, EXPENSESAND CHANGES IN NET ASSETS
YEAR ENDEDJUNE 30.2011
OPERATING REVENUES
Student Tultlon and Fees Less: Scholarsh~pAllowances
Grants and Contracts Federal Federal Stimulus State Other
Sales and Services Rents and Royalt~es Auxlllary Enterprises
Residence Halls Bookstore Food Sewlces Parklng/Transportat~on Health Servlces Other Organtzatlons Other Operatlng Revenues
Total Operatlng Revenues
OPERATING EXPENSES
Salar~es Faculty Staff
Employee Benefits Other Personal Services Travel Scholarships and Fellowsh~ps Utilities Supplies and Other Services Depreciation
Total Operat~ngExpenses
Operating Income (Loss)
NONOPERATING REVENUES (EXPENSES)
State Appropriations Grants and Contracts
Federal Other Gifts Investment Income Interest Expense Other Nonoperat~ngRevenues
Net Nonoperating Revenues
Income (Loss) Before Other Revenues. Expenses, Gains, or Losses
Capltal Grants and Glfts Federal State Other
Total Other Revenues, Expenses. Gains or Losses
Increase (Decrease)in Net Assets
Net Assets -Beginningof Year
Net Assets - End of Year
The notes to the financial statements are an integral part of thls statement
- 3 -

EXHIBIT "B"

GEORGIA HEALTH SCIENCES UNIVERSITY STATEMENT OF CASH FLOWS YEAR ENDEDJUNE 30,2011
CASH FLOWS FROM OPERATING ACTIVITIES Tuit~onand Fees Grants and Contracts Sales and Services Paymentsto Suppliers Paymentsto Employees Paymentsfor Scholarships and Fellowships Loans Issued to Students and Employees Collection of Loansto Students and Employees Auxiliary Enterprise Charges: Residence Halls Bookstore Food Services Parkinflransportation Health Services Other Organizations Other Receipts (Payments)
Net Cash Prov~ded(Used) by OperatingActivities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations Agency Funds Transactions Gifts and Grants Received for Other than Capital Purposes Other Nonoperating Receipts
Net Cash Flows Provided(Used) by Noncapital FinancingActivities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Grants and Gifts Received Proceeds from Sale of Capital Assets
Purchasesaf Capital Assets
Principal Paid on Capital Debt and Leases Interest Paid on Capital Debt and Leases
Net Cash Prov~ded(Used) by Capital and Related FinancingActivities
CASH FLOWS FROM INVESTING ACTIVITIES Proceedsfrom Sales and Maturities of Investments Interest on Investments Purchaseof Investments
Net Cash Provided (Used) by Investing Activities
Net Increase (Decrease) in Cash
Cash and Cash Equivalents - Beginning of Year
Cash and Cash Equivalents - End of Year

EXHIBIT "C"

GEORGIA HEALTH SCIENCES UNIVERSITY STATEMENT OF CASH FLOWS YEAR ENDEDJUNE 30.2011
RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating Income (Loss) Adjustments to ReconcileOperatingIncome (Loss)to Net Cash
Provided (Used) by OperatingActivities Depreciation Change in Assets and Liabilities: Accounts Receivable. Net Inventories Prepaid Items Notes Receivable. Net Accounts Payable Deferred Revenue Compensated Absences
Net Cash Provided (Used) by OperatingActivities
NONCASH ACTIVITY Fixed Assets Acquired by Incurring Capital Lease Obligations Change in Fair Value of Investments Recognizedas a Componentof Interest Income Gift of Capital Assets ReduclngProceedsof Capital Grants and Gifts

EXHIBIT "C"

The notes to the financial statements are an integral part of this statement. -5-

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GEORGIA HEALTH SCIENCES UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011

EXHIBIT "D"

Note 1: Summary of Significant Accounting Policies
Nature of Operations Georgia Health Sciences University serves the local, state, and national communities by providing educational programs for health professionals, biomedical scientists, and educators at the undergraduate, graduate, and postgraduate levels and for lifelong learning through excellence in teaching and the total development of students in response to the health needs of the State of Georgia. The University strives to be a leading center of excellence in research through the generation and application of biomedical knowledge and technology to human health and disease, and to play an expanding role in the transfer of technology to the health care delivery system.
Reporting Entity Georgia Health Sciences University is one of thirty-five (35) State supported member institutions of higher education in Georgia which comprise the University System of Georgia, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations of Georgia Health Sciences University as a separate reporting entity.
The Board of Regents has constitutional authority to govern, control and manage the University System of Georgia. This authority includes but is not limited to the power to designate management, the ability to significantly influence operations, the authority to control institutions' budgets, the power to determine allotments of State funds to member institutions and the authority to prescribe accounting systems and administrative policies for member institutions. Georgia Health Sciences University does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Georgia Health Sciences University is considered an organizational unit of the Board of Regents of the University System of Georgia reporting entity for financial reporting purposes because of the significance of its legal, operational, and financial relationships with the Board of Regents as defined in Section 2100 of the Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial Reporting Standards.
Legally separate, tax exempt organizations whose activities primarily support units of the University System of Georgia, which are organizational units of the State of Georgia, are considered potential component units of the State. See Note 16for additional information.
Financial Statement Presentation The financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) as prescribed by the GASB and are presented as required by these standards to provide a comprehensive, entity-wide perspective of the University's assets, liabilities, net assets, revenues, expenses, changes in net assets and cash flows.
Generally Accepted Accounting Principles (GAAP) requires that the reporting of summer school revenues and expenses be between fiscal years rather than in one fiscal year. Due to the lack of materiality, Institutions of the University System of Georgia will continue to report summer revenues and expenses in the year in which the predominant activity takes place.
Basis of Accounting For financial reporting purposes, the University is considered a special-purpose government engaged only in business-type activities. Accordingly, the University's financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting, except as noted in the preceding paragraph. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. All significant intraUniversitytransactions have been eliminated.

GEORGIA HEALTH SCIENCES UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011

EXHIBIT "DM

The University has the option to apply all Financial Accounting Standards Board (FASB) pronouncements issued after November 30, 1989, unless FASB conflicts with GASB. The University has elected to not apply FASB pronouncements issued after the applicable date.
Cash and Cash Equivalents Cash and Cash Equivalents consist of petty cash, demand deposits and time deposits in authorized financial institutions, and cash management pools that have the general characteristics of demand deposit accounts. This includes the State lnvestment Pool.
Investments Investments include financial instruments with terms in excess of 13 months, certain other securities for the production of revenue, land, and other real estate held as investments by endowments. The University accounts for its investments at fair value. Changes in unrealized gain (loss) on the carrying value of investments are reported as a component of investment income in the Statement of Revenues, Expenses and Changes in Net Assets. The Board of Regents Diversified Fund is included under Investments.
Accounts Receivable Accounts receivable consists of tuition and fees charged to students and auxiliary enterprise services provided to students, faculty and staff, the majority of each residing in the State of Georgia. Accounts receivable also includes amounts due from the Federal government, state and local governments, or private sources, in connection with reimbursement of allowable expenditures made pursuant to the University's grants and contracts. Accounts receivable are recorded net of estimated uncollectible amounts.
Inventories Consumable supplies are recorded on the consumption method and are valued at cost using the first-in, first-out ("FIFO") basis. Resale Inventories are valued at cost first-in, first-out method.
Noncurrent lnvestments lnvestments that are externally restricted and cannot be used to pay current liabilities are classified as noncurrent assets in the Statement of Net Assets.
Capital Assets
Capital assets are recorded at cost at the date of acquisition, or fair market value at the date of donation in the case of gifts. For equipment, the University's capitalization policy includes all items with a unit cost of $5,000 or more, and an estimated useful life of greater than one year. Renovations to buildings, infrastructure, and land improvements that exceed $100,000 and/or significantly increase the value or extend the useful life of the structure are capitalized. Routine repairs and maintenance are charged to operating expense in the year in which the expense was incurred. Depreciation, which also includes amortization of intangible assets such as water, timber, and mineral rights, easements, patents, trademarks, and copyrights, as well as software is computed using the straight-line method over the estimated useful lives of the assets, generally 4 0 to 6 0 years for buildings, 2 0 to 25 years for infrastructure and land improvements, 1 0 years for library books, and 3 to 20 years for equipment. Residual values will generally be 10% of historical costs for infrastructure, buildings and building improvements, and facilities and other improvements.
To obtain the total picture of plant additions in the University System, it is necessary to look at the activities of the Georgia State Financingand lnvestment Commission (GSFIC) - a n organization that is external to the System. GSFIC issues bonds for and on behalf of the State of Georgia, pursuant to

GEORGIA HEALTH SCIENCES UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011

EXHIBIT "D"

powers granted to it in the Constitution of the State of Georgia and the Act creating the GSFIC. The bonds so issued constitute direct and general obligations of the State of Georgia, to the payment of which the full faith, credit and taxing power of the State are pledged.
For projects managed by GSFIC, the GSFIC retains construction in progress on its books throughout the construction period and transfers the entire project to the Universitywhen complete. For projects managed by the University, the University retains construction in progress on its books and is reimbursed by GSFIC. For the year ended June 30, 2011, GSFIC did not transfer any capital additions to Georgia Health Sciences University.
Deferred Revenues Deferred revenues include amounts received for tuition and fees and certain auxiliary activities prior to the end of the fiscal year but related to the subsequent accounting period. Deferred revenues also include amounts received from grant and contract sponsors that have not yet been earned.
Compensated Absences Employee vacation pay is accrued at year-end for financial statement purposes. The liability and expense incurred are recorded at year-end as compensated absences in the Statement of Net Assets, and as a component of compensation and benefit expense in the Statement of Revenues, Expenses and Changes in Net Assets. Georgia Health Sciences University had accrued liability for compensated absences in the amount of $32,278,042 as of July 1,2010. For fiscal year 2011, $21,982,256 was earned in compensated absences and employees were paid $21,958,150, for a net increase of $24,106. The ending balance as of June 30, 2 0 1 1 in accrued liability for compensated absences was $32,302,148.
Noncurrent Liabilities Noncurrent liabilities include (1) liabilities that will not be paid within the next fiscal year; (2) capital lease obligations with contractual maturities greater than one year; and (3) other liabilities that, although payable within one year, are to be paid from funds that are classified as noncurrent assets.
Net Assets The University's net assets are classified as follows:
Invested in capital assets, net of related debt: This represents the University's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt. The term "debt obligations" as used in this definition does not include debt of the GSFIC as discussed previously in Note 1- Capital Assets section.
Restricted net assets - nonexpendable: Nonexpendable restricted net assets consist of endowment and similar type funds in which donors or other outside sources have stipulated, as a condition of the gift instrument, that the principal is to be maintained inviolate and in perpetuity, and invested for the purpose of producing present and future income, which may either be expended or added to principal. The University may accumulate as much of the annual net income of an institutional fund as is prudent under the standard established by Code Section 44-15-7 of Annotated Code of Georgia.
R e s t r i d net assei3 - expendable: Restricted expendable net assets include resources in which the University is legally or contractually obligated to spend resources in accordance with restrictions imposed by external third parties.

GEORGIA HEALTH SCIENCES UNIVERSrrY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011

EXHIBlT "D"

Expendable Restricted Net Assets include the following:

Restricted - E&G and Other Organized Activities $
Federal Loans Institutional Loans Quasi-Endowments

57,588,121 5,496,980 1,103,628 5,866,098

Total Restricted Expendable

$

70,054,827

Restricted net assets - expendable - Opital Projects: This represents resources for which the
University is legally or contractually obligated to spend resources for capital projects in accordance
with restrictions imposed by external third parties.

Georgia Health Sciences University has $5,000,000 in Restricted Net Assets - Capital Projects. These funds are on deposit with GSFIC and will be used for the construction of the School of Dentistry.

Unrestrictednet assets: Unrestricted net assets represent resources derived from student tuition and fees, state appropriations, and sales and services of educational departments and auxiliary enterprises. These resources are used for transactions relating to the educational and general operations of the University, and may be used at the discretion of the governing board to meet current expenses for those purposes, except for unexpended state appropriations (surplus) of $35,044.50. Unexpended state appropriations must be refunded to the Board of Regents of the University System of Georgia, University System Office for remittance to the Office of the State Treasurer. These resources also include auxiliary enterprises, which are substantially self-supporting activities that provide services for students, faculty and staff.

Unrestricted Net Assets includes the following items which are quasi-restricted by management.

R & R Reserve Reserve for Encumbrances Reserve for Inventory Other Unrestricted

Total Unrestricted Net Assets
When an expense is incurred that can be paid using either restricted or unrestricted resources, the University's policy is to first apply the expense towards unrestricted resources, and then towards restricted resources.
Income Taxes Georgia Health Sciences University, as a political subdivision of the State of Georgia, is excluded from Federal income taxes under Section 115(1)of the Internal Revenue Code, as amended.
Classification of Revenues and Expenses
The Statement of Revenues, Expenses and Changes in Net Assets classify fiscal year activity as operating and nonoperating according to the following criteria:
Operating Revenues: Operating revenue includes activities that have the characteristics of exchange transactions, such as (1) student tuition and fees, net of scholarship allowances, (2) certain Federal, state and local grants and contracts, and (3)sales and services.

GEORGIA HEALTH SCIENCES UNIVERSITY NOTESTO THE FINANCIAL STATEMENTS
JUNE 30, 2011

EXHIBIT "D"

Nonoperating Revenues: Nonoperating revenue includes activities that have the characteristics of nonexchange transactions, such as gifts and contributions, and other revenue sources that are defined as nonoperating revenue by GASB No. 9, Reporting Cash Flows of Proprjetaty and Nunexpendable Trust Funds and GovernmentalEntities That Use Proprietaty Fund Accounting, and GASB No. 34, such as state appropriations and investment income.

Operating Expenses: Operating expense includes activities that have the characteristics of exchange transactions.

Nonoperating Expenses: Nonoperating expense includes activities that have the characteristics of nonexchange transactions, such as capital financing costs and costs related to investment activity.

Scholarship Allowances Student tuition and fee revenues, and certain other revenues from students, are reported at gross with a contra revenue account of scholarship allowances in the Statement of Revenues, Expenses and Changes in Net Assets. Scholarship allowances are the difference between the stated charge for goods and services provided by the University, and the amount that is paid by students and/or third parties making payments on the students' behalf. Certain governmental grants, such as Pell grants, and other Federal, state or nongovernmental programs are recorded as either operating or nonoperating revenues in the University's financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the University has recorded contra revenue for scholarship allowances.

Note 2: Deposits and Investments

Deposits The custodial credit risk for deposits is the risk that in the event of a bank failure, the University's deposits may not be recovered. Funds belonging to the State of Georgia (and thus the University) cannot be placed in a depository paying interest longer than ten days without the depository providing a surety bond to the State. In lieu of a surety bond, the depository may pledge as collateral any one or more of the following securities as enumerated in the Official Code of Georgia Annotated Section 50-17-59:

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

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

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

4.

Industrial revenue bonds and bonds of development authorities created by the laws of the

State of Georgia.

5. Bonds, bills, certificates of indebtedness, notes or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association and the Federal National MortgageAssociation.

6. Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation.

GEORGIA HEALTH SCIENCES UNIVERSIlY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011

EXHIBIT "D"

The Treasurer of the Board of Regents is responsible for all details relative to furnishing the required depository protection for all units of the University System of Georgia.
At June 30, 2011, the carrying value of deposits was $11,314,352 and the bank balance was $24,315,148. Of the University's deposits, $24,065,148 were uninsured. Of these uninsured deposits, $5,742,662 were collateralized with securities held by the financial institution's trust department or agent in the University's name and $18,322,486 were collateralized with securities held by the financial institution, by its trust department or agency, but not in the University's name.
Investments
Georgia Health Sciences University maintains an investment policy which fosters sound and prudent judgment in the management of assets to ensure safety of capital consistent with the fiduciary responsibility each institution has to the citizens of Georgia and which conforms to Board of Regents investment policy. All investments are consistent with donor intent, Board of Regents policy, and applicable Federal and state laws.
The University's investments as of June 30, 2011 are presented below. All investments are presented by investment type and debt securities are presented by maturity.

lnvestment T m

Fair Value

Less Than 1Year

Investment Maturity

1- 5 Years

6 - 1 0 years

More than 1 0 Years

Debt Securities U. S. Treasuries U. S. Agencies Explicitly Guaranteed Implicitly Guaranteed Corporate Debt Mutual Bond Fund

Other lnvestments Equity Mutual Funds Equity Secur~ties- Domestic
Equity Secur~ties- International
Real Estate lnvestment Fund
lnvestment Pools Board of Regents Diversified Fund Office of the State Treasurer Georgia Fund 1
Total lnvestments

GEORGIA HEALTH SCIENCES UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011

EXHIBIT "D"

The University does not have a formal policy addressing variable-rate securities. The University relies upon the judgment of its lnvestment Managers and the policies of the investment vehicles related to Georgia Health Sciences University's investment assets.
The Board of Regents lnvestment Pool is not registered with the Securities and Exchange Commission as an investment company. The fair value of investments is determined daily. The pool does not issue shares. Each participant is allocated a pro rata share of each investment at fair value along with a pro rata share of the interest that it earns. Participation in the Board of Regents lnvestment Pool is voluntary. The Board of Regents lnvestment Pool is not rated. Additional information on the Board of Regents lnvestment Pool is disclosed in the audited Financial Statements of the Board of Regents of the University System of Georgia - System Office (oversight unit). This audit can be obtained from the Georgia Department of Audits - Education Audit Division or on their web site at htt~://www.audits.ea.eov.
The Georgia Fund 1lnvestment Pool, managed by the Office of the State Treasurer, is not registered with the Securities and Exchange Commission as an investment company, but does operate in a manner consistent with the SEC's Rule 2a7 of the lnvestment Company Act of 1940. This investment is valued at the pool's share price, $1.00 per share. The Georgia Fund 1lnvestment Pool is an AAAm rated investment pool by Standard and Poor's. The Weighted Average Maturity of the Fund is 5 9 days.
Interest Rate Risk lnterest rate risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of an investment. The University's lnvestment Policy and Guidelines manages interest rate risk by recognizing that short-term loss of principal may be necessary in order to achieve longterm safety and growth of principal; and that in order to maximize income from debt instruments with maturities longer than sixty days, market values may be exposed to short-term price volatility.
The Effective Duration of the Diversified Fund is 4.31 years. Of the University's total investment of $7,583,214 in the Diversified Fund, $2,433,085 is invested in debt securities.
Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event of a failure of the counterparty to a transaction, the University will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The University does not have a formal policy for managing custodial credit risk for investments. lnvestment Managers are held accountable for custodial safety. The University's lnvestment Policy and Guidelines require that managers be registered in good standing as investment advisors; and will be experienced with proven track records.
At June 30, 2011, $80,960,829 of the University's applicable investments were uninsured and held by the investment's counterparty's trust department or agent in the University's name.
Credit Ouality Risk Credit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The University's policy for managing credit quality risk is contained in its lnvestment
Policy. All investment vehicles are designed to comply with Georgia Code 50-17-63.

GEORGIA HEALTH SCIENCES UNIVERSrrY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011

EXHIBIT "D"

The investments subject to credit quality risk are reflected below:

Credit Quality Risk

Fair Value

AA

A

Unrated

Related Debt Investments U.S. Agencies Corporate Debt Mutual Bond Fund

$ 60,286,033 4,974,692 $ 757,037

1,028,977 $

$ 60,286,033

1,953,054

1,992,661

757,037

Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The University's Investment Policy and Guidelines for managing concentration of credit risk requires that stocks and debt issues be diversified. The University also relies upon the concentration of credit risk policy of the individual investment vehicles related to Georgia Health Sciences University's investment assets. More than 5 percent of the University's investments are in the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. These investments are 38.8% and 13.3% respectively of the University's total investments.

Note 3: Accounts Receivable

Accounts receivable consisted of the following at June 30, 2011:

Student Tuition and Fees Auxiliary Enterprises and Other OperatingActivities Federal Financial Assistance Georgia State Financingand Investment Commission Margin Allocation Funds Other

$ 3,934,582 372,084
8,259,439 11,252,772
7,927,215 30,094,179

Less Allowance for DoubtFulAccounts

Net Accounts Receivable

$ 61,692.572

Note 4: Inventories

lnventories consisted of the following at June 30, 2011:

Bookstore Other

Total Inventories

$

404,2 77

GEORGIA HEALTH SCIENCES UNIVERSrrY NOTES TO THE FINANCIAL nATEMENTS
JUNE 30,2011

EXHIBlT "D"

Note 5: NotesfLoans Receivable

The Federal Perkins Loan Program (the Program) comprises substantially all of the loans receivable at June 30, 2011. The Program provides for cancellation of a loan at rates of 10%to 30% per year up to a maximum of 100% if the participant complies with certain provisions. The Federal government reimburses the University for amounts cancelled under these provisions. As the University determines that loans are uncollectible and not eligible for reimbursement by the Federal government, the loans are written off and assigned to the U. S. Department of Education. The University has provided an allowance for uncollectible loans, which, in management's opinion, is sufficient to absorb loans that will ultimately be written off. At June 30, 2011, the allowance for uncollectible loans was approximately $210,557.

Note 6: Capital Assets

Followingare the changes in capital assets for the year ended June 30, 2011:

Beginning Balance
July 1,2010

Additions

Reductions

Ending Balance
June 30,2011

Capital Assets. Not Being Depreciated: Land Construction Work-In-Progress

$

17,040,039 $

213.957 $

37,153 $

21273,030

5,624,838 19,694,846

17,216.843 7,203.022

Total Capital Assets, Not Being Depreciated $

38,313,069$ 5,838,795$ 19,731,999$

24,419,865

Capital Assets. Being Depreciated: Buildingand Building Improvements Facilities and Other Improvements Equipment Capital Leases Library Collections

$ 346,241,387$ 20.862.723

$

2.339.679

81259,134

7.842.932 $ 2,496,670

30,071,463

159,566

27,539

20,505,166

1,358,884

2,796,244

367.104.110 2,339.679
86.605.396 30.203.490 19,067,806

Total Assets Being Depreciated

$ 480.416.829 $ 30.224.105 $ 5,320,453$ 505.320.481

Less: Accumulated Depreciation: Buildingand Building Improvements Facilities and Other Improvements Equipment Capital Leases Library Collections

$ 136,965,354$ 9,550,930

$ 146,516,284

1852.703

60,901

l,913,604

58,704.669

7,553,870$ 2,179,713

64,078,826

5,687.303

1,335,200

20,800

7,001,703

13,873,936 1,111,731 2,796,244

12.189.423

Total Accumulated Depreciation

$ 217,083,965$ 19,612,632$ 4,996,757$ 231,699,840

Total Capital Assets, Being Depreciated, Net $ 263,332,864$ 10,6ll,473$

323,696 $ 273,620,641

Capital Assets. Net

GEORGIA HEALTH SCIENCES UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011

EXHIBIT "D"

Note 7: Deferred Revenue Current deferred revenue consisted of the following at June 30, 2011:

Prepaid Tuition and Fees Research Other Deferred Revenue

Total Deferred Revenue

$

42,267,479

There was no noncurrent deferred revenue at June 30, 2011.

Note 8: Long-Term Liabilities

Long-Term liability activity for the year ended June 30, 2 0 1 1 was as follows:

Beginning Balance July 1,2010

Additions

Reductions

Ending Balance June 30,2011

Current Portion

Leases Lease Obligations

$ 26.940.895 $

159.566 $

954,411 $ 26,146,050$

551,553

Other Liabilities Compensated Absences

32,278,042 21,982,256 21,958,150 32,302,148 17.152.603

Total Long-Term ObligaOons $ 59,218,937$ 22,141,822$ 22,912,561$ 58,448,198$ 17,704,156
Note 9: Significant Commitments
The University had significant unearned, outstanding, construction or renovation contracts executed in the amount of $4,094,307 as of June 30, 2011. This amount is not reflected in the accompanying basic financial statements.
Note 10: Lease Obligations
Georgia Health Sciences University is obligated under various operating leases for the use of equipment, and is also obligated under capital leases and installment purchase agreements for the acquisition of equipment and the use of several floors of the Cancer Research Center building.
CAPITAL LEASES Capital leases are generally payable in monthly installments and have terms expiring in various years between 2012 and 2036. Expendituresfor fiscal year 2 0 1 1 were $2,786,271 of which $1,831,860 represented interest. Total principal paid on capital leases was $954,411 for the fiscal year ended June 30, 2011. Interest rates range from 1.64 percent to 12.99 percent. The following is a summary of the carrying values of assets held under capital lease at June 30,2011:

Buildings Equipment
Total Assets Held Under Capital Lease

GEORGIA HEALTH SCIENCES UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011

EXHIBlT "D"

Certain capital leases provide for renewal and/or purchase options. Generally purchase options at bargain prices of one dollar are exercisable at the expiration of the lease terms.
Georgia Health Sciences University had one capital lease with an affiliated organization in the current fiscal year. In November 2004, Georgia Health Sciences University entered into a capital lease of $27,659,678 at 6.85 percent with the MCG-PPG Cancer Research Center, LLC, whereby the University leases the third, fourth, and fifth floors of the Cancer Research Center for a thirty year period that began January 2006 and expires December 2035. At the end of the lease, title to the building is transferred to the University. The outstanding liability at June 30, 2 0 1 1 on this capital lease is $25,833,823.
Georgia Health Sciences University also has various capital leases for equipment with an outstanding balance at June 30, 2 0 1 1 in the amount of $312,227.
OPERATING LEASES Georgia Health Sciences University's noncancellable operating leases have remaining terms of more than one year and expire in various fiscal years from 2012 and 2013. All agreements are cancellable if the State of Georgia does not provide adequate funding, but that is considered a remote possibility. In the normal course of business, operating leases are generally renewed or replaced by other leases. Operating leases are generally payable on a monthly basis. Examples of property under operating leases are copiers and other small business equipment.
FUTURE COMMITMENTS Future commitments for capital leases (which here and on the Statement of Net Assets include other installment purchase agreements) and for noncancellable operating leases having remaining terms in excess of one year as of June 30,2011, were as follows:

Real Prooemand Eaui~ment

Capital

Operating

Leases

Leases

Year EndingJune 30: 2012 2013 2014 2015 2016
2017 - 2021
2022 - 2026 2027 - 2031 2032 - 2036

Total Minimum Lease Payments

$

53,676,088 $

6,243

Less: Interest

27,530,038

Principal Outstanding

$

26,146,050

Georgia Health Sciences University's fiscal year 2 0 1 1 expense for rental of real property and equipment under operating leases was $8,927.

GEORGIA HEALTH SCIENCES UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011

EXHIBIT "D"

Note 11: Retirement Plans
Georgia Health Sciences University participates in various retirement plans administered by the State of Georgia under two major retirement systems: Employees' Retirement System of Georgia (ERS System) and Teachers Retirement System of Georgia. These two systems issue separate publicly available financial reports that include the applicable financial statements and required supplementary information. The reports may be obtained from the respective system offices. The significant retirement plans that Georgia Health Sciences University participates in are described below. More detailed information can be found in the plan agreements and related legislation. Each plan, including benefit and contribution provisions, was established and can be amended by State law.
Employees' Retirement System of Georgia
The ERS System is comprised of individual retirement systems and plans covering substantially all employees of the State of Georgia except for teachers and other employees covered by the Teachers Retirement System of Georgia. One of the ERS System plans, the Employees' Retirement System of Georgia (ERS), is a cost-sharing multiple-employer defined benefit pension plan that was established by the Georgia General Assembly during the 1949 Legislative Session for the purpose of providing retirement allowances for employees of the State of Georgia and its political subdivisions. ERS is directed by a Board of Trustees and has the powers and privileges of a corporation. ERS acts pursuant to statutory direction and guidelines, which may be amended prospectively for new hires but for existing members and beneficiaries may be amended in some aspects only subject to potential application of certain constitutional restraints against impairment of contract.
On November 20,1997, the Board created the Supplemental Retirement Benefit Plan (SRBP-ERS) of ERS. SRBP-ERS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of ERS. The purpose of the SRBP-ERS is to provide retirement benefits to employees covered by ERS whose benefits are otherwise limited by IRC Section 415. Beginning January 1,1998, all members and retired former members in ERS are eligible to participate in the SRBP-ERS whenever their benefits under ERS exceed the limitation on benefits imposed by IRC Section 415.
The benefit structure of ERS is established by the Board of Trustees under statutory guidelines. Unless the employee elects otherwise, an employee who currently maintains membership with ERS based upon State employment that started prior to July 1,1982, is an "old plan" member subject to the plan provisions in effect prior to July 1,1982. Members hired on or after July 1,1982 but prior to January 1,2009 are "new plan" members subject to the modified plan provisions. Effective January 1,2009, newly hired State employees, as well as rehired State employees who did not maintain eligibility for the "old" or "new" plan, are members of the Georgia State Employees' Pension and Savings Plan (GSEPS). ERS members hired prior to January 1,2009 also have the option to change their membership to the GSEPS plan. Under the old plan, new plan, and GSEPS, a member may retire and receive normal retirement benefits after completion of 1 0 years of creditable service and attainment of age 6 0 or 3 0 years of creditable service regardless of age. Additionally, there are some provisions allowing for early retirement after 25 years of creditable service for members under age 60.
Retirement benefits paid to members are based upon a formula adopted by the Board of Trustees for such purpose. The formula considers the monthly average of the member's highest 2 4 consecutive calendar months of salary, the number of years of creditable service, and the member's

GEORGIA HEALTH SCIENCES UNIVERSm NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011

EXHIBIT "D"

age at retirement. Post-retirement cost-of-living adjustments may be made to members' benefits provided the members were hired prior to July 1,2009. The normal retirement pension is payable monthly for life; however, options are available for distribution of the member's monthly pension, at reduced rates, to a designated beneficiary upon the member's death. Death and disability benefits are also available through ERS.

Member contribution rates are set by law. Member contributions under the old plan are 4% of annual compensation up to $4,200 plus 6% of annual compensation in excess of $4,200. Under the old plan, Georgia Health Sciences University pays member contributions in excess of 1.25% of annual compensation. Under the old plan, these Georgia Health Sciences University contributions are included in the members' accounts for refund purposes and are used in the computation of the members' earnable compensation for the purpose of computing retirement benefits. Member contributions under the new plan and GSEPS are 1.25% of annual compensation. Georgia Health Sciences University is required to contribute at a specified percentage of active member payroll established by the Board of Trustees determined annually in accordance with actuarial valuation and minimum funding standards as provided by law. These Georgia Health Sciences University contributions are not at any time refundable to the member or his/her beneficiary.

Employer contributions required for fiscal year 2 0 1 1 were based on the June 30, 2008 actuarial valuation for the old and new plans and were set by the Board of Trustees on September 18, 2008 for GSEPS as follows:

Old Plan* New Plan GSEPS

10.41% 10.41% 6.54%

* 5.66% exclusive of contributions paid by the employer on behalf of old plan members

Members become vested after 10 years of service. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contributions; the member forfeits all rights to retirement benefits.

Teachers Retirement System of Georgia

The Teachers Retirement System of Georgia (TRS) is a cost-sharing multipleemployer defined benefit plan created in 1943 by an act of the Georgia General Assembly to provide retirement benefits for qualifying employees in educational service. A Board of Trustees comprised of active and retired members and ex-officio State employees is ultimately responsible for the administration of TRS.

On October 25, 1996, the Board created the Supplemental Retirement Benefit Plan of the Georgia Teachers Retirement System (SRBP-TRS). SRBP-TRS was established as a qualified governmental excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of TRS. The purpose of SRBP-TRS is to provide retirement benefits to employees covered by TRS whose benefits are otherwise limited by IRC Section 415. Beginning July 1,1997, all members and retired former members in TRS are eligible to participate in the SRBP-TRS whenever their benefits under TRS exceed the IRC Section 415 imposed limitation on benefits.

GEORGIA HEALTH SCIENCES UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011

EXHIBIT "D"

TRS provides service retirement, disability retirement, and survivor's benefits. The benefit structure of TRS is defined and may be amended by State statute. A member is eligible for normal service retirement after 3 0 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service.

Normal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 4 0 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 6 0 or by 7% for each year or fraction thereof by which the member has less than 3 0 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lumpsum distribution in addition to a reduced monthly retirement benefit Death, disability and spousal benefits are also available.

TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 10 years of service. If a member terminates with less than 1 0 years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest. Member contributions are limited by State law to not less than 5% or more than 6% of a member's earnable compensation. Member contributions as adopted by the Board of Trustees for the fiscal year ended June 30, 2 0 1 1 were 5.53% of annual salary. Employer contributions required for fiscal year 2 0 1 1 were 10.28% of annual salary as required by the June 30, 2009 actuarial valuation.

The following table summarizes the Georgia Health Sciences University contributions by defined benefit plan for the years ending June 30, 2011, June 30, 2010, and June 30, 2009 (dollars in thousands):

Fiscal Year

ERS

Required

Percentage

Contribution

Contributed

TRS

Required

Percentage

Contribution

Contributed

Regents Retirement Plan
Plan Description The Regents Retirement Plan, a single-employer defined contribution plan, is an optional retirement plan that was created/established by the Georgia General Assembly in O.C.G.A. 47-21-1 et.seq. and administered by the Board of Regents of the University System of Georgia. O.C.G.A. 47-3-68(a) defines who may participate in the Regents Retirement Plan. An "eligible university system employee" is a faculty member or a principal administrator, as designated by the regulations of the Board of Regents. Under the Regents Retirement Plan, a plan participant may purchase annuity contracts from three approved vendors (AIG-VALIC, Fidelity, and TIM-CREF) for the purpose of receiving retirement and death benefits. Benefits depend solely on amounts contributed to the plan plus investment earnings. Benefits are payable to participating employees or their beneficiaries in accordance with the terms of the annuity contracts.

GEORGIA HEALTH SCIENCES UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011

EXHIBIT "Dl1

Funding Policy Georgia Health Sciences University makes monthly employer contributions for the Regents Retirement Plan at rates adopted by the Teachers Retirement System of Georgia Board of Trustees in accordance with State statute and as advised by their independent actuary. For fiscal year 2011, the employer contribution was 9.24% for the participating employee's earnable compensation. Employees contribute 5% of their earnable compensation. Amounts attributable to all plan contributions are fully vested and nonforfeitable at all times.
Georgia Health Sciences University and the covered employees made the required contributions of $9,792,605 (9.24%) and $5,299,030 (5%), respectively.
AIG-VALIC, American Century, Fidelity, and TIAA-CREF have separately issued financial reports which may be obtained through their respective corporate offices.
Georgia Defined Contribution Plan
Plan Description Georgia Health Sciences University participates in the Georgia Defined Contribution Plan (GDCP) which is a single-employer defined contribution plan established by the General Assembly of Georgia for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia.
Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board of Trustees. If a member has less than $3,500 credited to his/her account, the Board of Trustees has the option of requiring a lump sum distribution to the member in lieu of making periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute.
Contributions Member contributions are seven and one-half percent (7.5%) of gross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner established by the Board of Trustees. Upon termination of employment, the amount of the member's account is refundable upon request by the member.
Total contributions made by employees during fiscal year 2 0 1 1 amounted to $404,840 which represents 7.5% of covered payroll. These contributions met the requirements of the plan.
The Georgia Defined Contribution Plan issues a financial report each fiscal year, which may be obtained from the ERS offices.
Early Retirement Pension Plan
Plan Description Georgia Health Sciences University Early Retirement Pension Plan (ERP) is a single-employer defined benefit pension plan administered by Bryan, Pendleton, Swats and McAllister. The plan was devised by GHSU as a means of manpower reduction and was approved by the Board of Regents of the UniversitySystem of Georgia (BOR) effective January 1,2000.

GEORGIA HEALTH SCIENCES UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011

EXHIBIT "D"

The manpower reduction plan was designed to allow vested employees aged 55 or employees of any age with 25 years of creditable service to retire without penalties as applied by the Teachers Retirement System of Georgia (TRS) for early retirement. The plan would allow for all participants to retire as if they were vested and aged 6 0 or had attained 3 0 years of creditable service. No other benefits will be paid by this plan.
The ERP does not issue a standalone report, however, a financial statement is maintained by the Georgia Health Sciences University, Controller's Division, and is available for review during normal business hours.
Funding Policy The plan is to be funded by the purchase of an annuity utilizing salary savings of departed employees. The initial funding period of the annuity was 1 5 years; however, effective January 1, 2004, the remaining amortization period was extended 4 years. The fund sources that provided for an employee's salary, as of December 31, 1999, would be responsible for funding the annuity to provide the retiree benefits. There is no additional funding cost to the employee/retiree, BOR, or state of Georgia for this plan.
Since this plan was not pre-funded, GHSU is taking an aggressive approach to collect and deposit as much into the annuity fund in the earlier years as is possible, thereby realizing a greater return on investment. Effective January 1,2009, the period to amortize the unfunded accrued liability was extended 4 years to 14 years. The funding policy is reasonable and in compliance with the minimum funding requirements set forth in Code Section 47-20-10 of the Public Retirement Systems Standards Law. With this change, the plan should be fully funded by June 30, 2023. Further, since the actuarial value of assets had diverged significantly from the market value of assets, the actuarial value of assets at January 1,2009, was reestablished and set equal to the market value of assets.
Annual Pension Cost and Net Pension Obligation The ERP's annual pension cost and net pension obligation for the current year were as follows:

Total

GHSU

Other Units

Annual Required Contribution Interest on Net Pension Obligation Adjustments on Annual Required Contribution

$ 12,973,559 $ -616,752
1,012,000

6,875,986 $ -326,879 536,360

6,097,573 -289,873 475,640

Annual Pension Cost

$ 13,368,807 $ 7,085,467$ 6,283,340

Contributions Made

Increase (Decrease) in Net Pension Obligation

$ 142,957 $ -112,403 $ 255,360

Net Pension Obligation Beginningof Year

-8,223,354 -7,513,263 -710,091

Net Pension Obligation End of Year

GEORGIA HEALTH SCIENCES UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011

EXHIBIT "D"

Three-Year Trend Information

FiscalYear 2009

Total

GHSU

Other Units

Annual Pension Cost (APC) Percentage of APC Contributed Net Pension Obligation End of Year

FiscalYear 2010

Total

GHSU

Other Units

Annual Pension Cost (APC) Percentage of APC Contributed Net Pension Obligation End of Year

Fiscal Year 2 0 1 1

Total

GHSU

Other Units

Annual Pension Cost (APC) Percentage of APC Contributed Net Pension Obligation End of Year

Funded Status and Funding Progress As of January 1,2011, the most recent actuarial valuation date, the plan was 32.4% funded. The actuarial accrued liability for benefits was $147,266,514, and the actuarial value of assets was $47,778,455, resulting in an unfunded actuarial accrued liability (UAAL) of $99,488,059.

Schedule of Funding Progress

The schedule of funding progress which follows, presents multiyear trend information about whether the actuarial value of plan assets are increasing or decreasing over time relative to the actuarial accrued liability for benefits:

UAAL as a

Actuarial

Actuarial

Percentage

Actuarial

Value of

Accrued

Unfunded AAL Funded

Annual

of Covered

Valuation

Assets

Liability

('JAW

Ratio

Covered Payroll

Payroll

Date

(a)

(b)

(b-a)

(a/b)

(c)

((b-a)/c)

GEORGIA HEALTH SCIENCES UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011

EXHIBlT "D"

Actuarial Methodsand Assumptions The annual required contribution for the current year was determined as part of the January 1,2010 actuarial valuation using the Entry Age Actuarial cost method. The remaining amortization period is 1 2 years utilizing the entry age, level dollar and closed method. The actuarial value of assets recognizes a portion of the difference between the market value of assets and the expected actuarial value of assets, based on the assumed interest rate of return. The amount recognized each year is 20% of the difference between market value and expected actuarial value. The actuarial assumptions included (a) 7.5% rate of return on investment, (b) annual inflation of 3.5%, and (c) annual cost of living increase of 3.0%.
Note 12: Risk Management
The University System of Georgia offers its employees and retirees access to three different selfinsured healthcare plan options. A PPO/PPO Consumer healthcare plan was offered for the entire reporting period, and effective 01/01/2011, a HSA/High Deductible PPO and a HMO are also offered on a self-insured basis. The HSA/High Deductible PPO and HMO were previously insured through Blue Cross Blue Shield of Georgia. Georgia Health Sciences University and participating employees and retirees pay premiums to either of the self-insured healthcare plan options to access benefits coverage. The respective self-insured healthcare plan options are included in the financial statements of the Board of Regents of the UniversitySystem of Georgia - University System Office. All units of the University System of Georgia share the risk of loss for claims associated with these plans. The reserves for these plans are considered to be a self-sustaining risk fund. The Board of Regents has contracted with Blue Cross Blue Shield of Georgia, a wholly owned subsidiary of Wellpoint, to serve as the claims administrator for the self-insured healthcare plan products. In addition to the self-insured healthcare plan options offered to the employees of the University System of Georgia, a fully insured HMO healthcare plan option is also offered to System employees through Kaiser.
The Department of Administrative Services (DOAS) has the responsibility for the State of Georgia of making and carrying out decisions that will minimize the adverse effects of accidental losses that involve State government assets. The State believes it is more economical to manage its risks internally and set aside assets for claim settlement. Accordingly, DOAS processes claims for risk of loss to which the State is exposed, including general liability, property and casualty, workers' compensation, unemployment compensation, and law enforcement officers' indemnification. Limited amounts of commercial insurance are purchased applicable to property, employee and automobile liability, fidelity and certain other risks. Georgia Health Sciences University, 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.

GEORGIA HEALTH SCIENCES UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011

Georgia Health Sciences University has no liability for pollution remediation at June 30, 2011. The University does not anticipate any significant remediation outlay in 2012. Pollution remediation liability activity in fiscal year 2 0 1 1 was as follows:

Beginning Balance July 1,2010

Additions

Reductions

Ending Balance June 30. 2011

Current Portion

Pollution Remediation

Obligations

$

763 $

19.562 $

20,325 $

0 $

0

Note 13: Contingencies

Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditures disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although Georgia Health Sciences University expects such amounts, if any, to be immaterial to its overall financial position.

Litigation, claims and assessments filed against Georgia Health Sciences University (an organizational unit of the Board of Regents of the University System of Georgia), if any, are generally considered to be actions against the State of Georgia. Accordingly, significant litigation, claims and assessments pending against the State of Georgia are disclosed in the State of Georgia ComprehensiveAnnual Financial Report for the fiscal year ended June 30, 2011.

Note 14: Post-Employment BenefitsOther 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 of the University System of Georgia. It is the policy of the Board of Regents to permit employees of the University System of Georgia eligible for retirement or that become permanently and totally disabled to continue as members of the group health and life insurance programs. The policies of the Board of Regents of the University System of Georgia define and delineate who is eligible for these post-employment health and life insurance benefits. Organizational units of the Board of Regents of the University System of Georgia pay the employer portion for group insurance for affected individuals. With regard to life insurance, the employer covers the total cost for $25,000 of basic life insurance. If an individual elects to have supplemental, and/or, dependent life insurance coverage, such costs are borne entirely by the employee.

The Board of Regents Retiree Health Benefit Plan is a single employer defined benefit plan. Financial statements and required supplementary information for the Plan are included in the publicly available Consolidated Annual Financial Report of the University System of Georgia. The University pays the employer portion of health insurance for its eligible retirees based on rates that are established annually by the Board of Regents for the upcoming plan year. For the 2010 and 2 0 1 1 plan years, the employer rate was between 70-75% of the total health insurance cost for eligible retirees and the retiree rate was between 25-30%.

As of June 30, 2011, there were 1,411 employees who had retired or were disabled that were receiving these post-employment health and life insurance benefits. For the year ended June 30, 2011, Georgia Health Sciences recognized as incurred $7,560,944 of expenditures, which was net of $3,422,788 of participant contributions.

GEORGIA HEALTH SCIENCES UNIVERSIW NOTES TO THE FINANCIAL STATEMENTS
JUNE 30,2011

EXHIBlT "D"

Note 15: Natural Classifications with Functional Classifications The University'soperating expenses by functional classification for fiscal year 2011are shown below:
Functional Classification

Natural Classification

Instruction

Research

Publ~c Service

Academic Support

Student Services

Institutional Support

Salaries Faculty Staff
Employee Benefits Other Personal Services Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation

Total Operating Expenses

$ 147,216.645 $

47,328,685$ 122,456,636$ 22,875,755 $ 2,882,960$ 37,494,180

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

Plant Operations and
Maintenance

Functional Classification

Scholarships

and

Auxiliary

Fellowships Enterprises

Patient Care

Total Operating Expenses

Note 16: Affiliated Organizations
In accordance with GASB Statement No. 39, Determinng Whether Cenbin Organizations are C i n e n t Units, an amendment of GASB Statement No. 14, The Rewing Entity which became effective for the year ended June 30, 2004, MCG Health, Inc., MCG Health System, Inc., Medical College of Georgia Foundation, Inc., Medical College of Georgia Physicians Practice Group Foundation, Georgia Health Sciences University Research Institute, Inc., and Medical College of Georgia Dental Foundation are legally separate tax exempt organizations whose activities primarily support Georgia Health Sciences University, a unit of the University System of Georgia (an

GEORGIA HEALTH SCIENCES UNIVERSrrY NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2011

EXHIBIT "D"

organizational unit of the State of Georgia). The State Accounting Office determined Component Units of the State of Georgia, as required by GASB Statement No. 39 should not be assessed in relation to their significance to Georgia Health Sciences University, but instead based on their significance to the State of Georgia. Accordingly, Georgia Health Sciences University has not included financial activity for these affiliated organizations in these financial statements.
MCG Health, Inc., Medical College of Georgia Foundation, Inc., Medical College of Georgia Physician's Practice Group Foundation, and MCG Health System, Inc. have been determined as being significant to the State of Georgia for the year ended June 30, 2011, and as such, are reported as a discretely presented component units in the Comprehensive Annual Financial Report of the State of Georgia (CAFR). Significant discretely presented component units issue separate audited financial statements that can be obtained from each institution.

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SUPPLEMENTARY INFORMATION

GEORGIA HEALTH SCIENCES UNIVERSITY BALANCE SHEET (NON-GAAP BASIS) BUDGET FUND JUNE 30.2011
ASSETS
Cash and Cash Equivalents Investments Accounts Receivable
Federal Financial Assistance Other Margin Allocation Prepaid Expenditures Inventories
Total Assets
LIABILITIESAND FUND EOUITY
Liabilities Accrued Payroll Encumbrances Payable Accounts Payable Deferred Revenue
Total Liabilities
Fund Balances Resewed Department Sales and Services Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Inventories Early Retirement Program Unreserved Surplus
Total Fund Balances
Total Liabilities and Fund Balances

SCHEDULE "1"

Actual amounts were preparedon a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles.

GEORGIA HEALTH SCIENCES UNlVERSlM SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT (NON-GAAP BASIS)
BUDGET FUND YEAR ENDED JUNE 30.2011

State Appropriatlon State General Funds
Other Funds
Total Revenues
ADJUSTMENTS AND PROGRAM TRANSFERS

BUDGET

Transfersfrom Reserved Fund Balance
Total Funds Available
EXPENDITURES
Georgia Radiation Therapy Center Research Consortium Speclal Funding Initiative Teaching
Total Expenditures
Excess of Funds Available over Expenditures
FUND BALANCE JULY 1
Reserved Unreserved
ADJUSTMENTS
Prior Year Payables/Expenditures Prior Year Receivables/Revenues Unreserved Fund Balance (Surplus) Returned
to Board of Regents - UniversitySystem Office
Year Ended June 30.2010 Early Return of Surplus In the Current FiscalYear Prior Year Reserved Fund Balance included In Funds Available
FUND BALANCE JUNE 3Q

SUMMARY OF FUND BALANCE
Reserved Department Sales and Services Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds UncollectibleAccounts Receivable Inventories Early Retirement Program
Total Reserved
Unreserved Surplus

Total Fund Balance
Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetarystatutes and regulations of the State of Georg~aw, hich is a comprenensivebaas of accounting other than generallyaccepted accounting principles.

ACTUAL

SCHEDULE "2'
VARIANCE FAVORABLE (UNFAVORABLE)

GEORGIA HEALTH SCIENCES UNIVERSITY STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE
(NON-GAAP BASIS) BUDGET FUND YEAR ENDEDJUNE 30.2011

Georgia Radiation Therapy Center Other Funds
Research Consortium State Appropriation State General Funds
Speclal Funding lnltlatlve State Appropriation State General Funds
Teaching State Appropriation State General Funds Federal Funds American Recovery and ReinvestmentAct Federal Stablllzation Funds Other Funds
Total Teaching
Total Operating Activ~ty

Original Appropriation

Amended Appropriation

Final Budget

Current Year Revenues

Actual amounts were prepared on a prescribed basis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles.

SCHEDULE "3"

Funds Available Compared to Budget

Prior Year

Adjustments and

Total

Carry-Over

Program Transfers

Funds Available

Variance Positlve (Negative)

Expend~turesCompared to Budget

Actual

Variance Positive (Negative)

Excess (Deficiency) of Funds Available
Over./(.Underl Expenditures

GEORGIA HEALTH SCIENCES UNIVERSITY STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE
(NON-GAAP BASIS) BUDGET FUND YEAR ENDEDJUNE 30.2011

Georgla Radiation Therapy Center Other Funds
Research Consortium State Appropriation State General Funds
Special Funding Initiative State Appropriatlon State General Funds
Teaching State Appropriatlon State General Funds Federal Funds American Recoveryand Reinvestment Act Federal Stabillzatlon Funds Other Funds
Total Teaching
Total OperatingActivity
Prior Year R e S e ~ e s Not Available for Expenditure Inventories Uncollectible Accounts Receivable Early Retirement Program
Budget Unit Totals

Beginning Fund Balance/(Deficit)
July 1

Fund Balance Carrled Over from
Prior Period as Funds Available

Return af Fiscal Year 2010
Surplus

Prior Period Adjustments

Actual amounts were prepared on a prescr~bedbasis of accounting that demonstrates compliance with budgetary statutes and regulations of the State of Georgia, which is a comprehensive basis of accounting other than generally accepted accounting principles.

SCHEDULE "4"

Other Adjustments

Early Return Fiscal Year 2011
Surplus

Excess (Deficiency) of Funds Available
Over/(Under) Ex~enditures

Endlng Fund Balance/(Def~c~t)
June 3 0

Analys~sof EndlngFund Balance

Reserved

Surplus/(Deficit)

Total

Summary of Ending Fund Balance Reserved
Department Sales and Services Indlrect Cost Recoveries Technology Fees Restr~cted/SponsoredFunds Uncollectible Accounts Rece~vable Inventories Early Retirement Program Unreserved Surolus
Total Endlng Fund Balance -June 30

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GEORGIA HEALTH SCIENCES UNIVERSITY RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 3 0 , 2 0 1 1

SCHEDULE "5"

Totals per Annual Supplement

Accruals June 30,2011 June 30,2010

Compensated Absences June 30,2011 June 30.2010

Adjustment

Shared Services on Jointly Staffed Personnel

Augusta State University

Barton.

Barbara A.

Blocker,

Juanita D.

Richardson,

Deborah

Smith.

Robert Ells

Weiss,

Stephan Dale

Georgia Institute of Technology

Berthold,

Kristin

University of Georgia

Risher,

Mary Louise

Adjustments Azziz, Huang,

Ricardo Jie

SALARIES

TRAVEL

SECTION II CURRENT YEAR FINDINGS AND QUESTIONED COSTS

GEORGIA HEALTH SCIENCES UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30,2011
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.