Review report, state of Georgia, Middle Georgia College, Cochran, Georgia, year ended June 30, 1999

REVIEW REPORT STATE OF GEORGIA MIDDLE GEORGIA COLLEGE COCHRAN, GEORGIA YEAR ENDED JUNE 30, 1999
'''---------------------~
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

MIDDLE GEORGIA COLLEGE - TABLE OF CONTENTS -

Page

SECTION I

FINANCIAL

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

EXHIBITS

FINANCIAL STATEMENTS

A COMBINED BALANCE SHEET ALL FUND GROUPS
B COMBINED STATEMENT OF CHANGES IN FUND BALANCES ALL FUND GROUPS
C STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES, AND OTHER CHANGES
D NOTES TO THE FINANCIAL STATEMENTS

2

4

~

7 8

SUPPLEMENTARY INFORMATION

E COMBINING BALANCE SHEET

CURRENT FUNDS - UNRESTRICTED

22

F COMBINING STATEMENT OF CHANGES IN FUND BALANCES

CURRENT FUNDS - UNRESTRICTED

23

G COMBINING STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES,

AND OTHER CHANGES

UNRESTRICTED

24

SCHEDULES

1 SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

25

SCHEDULES OF REVENUES AND EXPENDITURES COMPARED TO BUDGET

2

RESIDENT INSTRUCTION

26

3

LOTTERY FOR EDUCATION

29

4 CHANGES IN INVESTMENT IN PLANT

30

5 SCHEDULE OF FUND BALANCES

CURRENT FUNDS AND PLANT FUNDS

32

6 RECONCILIATION OF SALARIES AND TRAVEL

34

MIDDLE GEORGIA COLLEGE - TABLE OF CONTENTS -
SECTIONll AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARYSCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

RUSSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w', Suite 214 Atlanta, Georgia 30334-8400
September 8, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly of Georgia Members ofthe Board ofRegents ofthe University System of Georgia
and Honorable Steve Maradian, President Middle Georgia College
INDEPENDENT ACCOUNTANT'S COMBINED REPORT ON REVIEW OF
FINANCIAL STATEMENTS AND SupPLEMENTARY INFORMATION
Ladies and Gentlemen:
We have reviewed the accompanying financial statements (Exhibits A through D) ofMiddle Georgia College as of and for the year ended June 3D, 1999, in accordance with Statements on Standards for Accounting and Review Services issued by the American fustitute of Certified Public Accountants. All information included in these financial statements is the representation ofthe management ofMiddle Georgia College.
A review consists principally ofinquiries of College personnel and analytical procedures applied to fmancial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, with the exception of the matters described in the fourth and fifth paragraphs, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles.
As disclosed in Note 1 to the financial statements, generally accepted accounting principles require encumbrances to be recorded as a reservation of fund balance. However, in accordance with Georgia Law and State budgetary policy, management recorded encumbrances as expenditures and liabilities. The effects of this departure from generally accepted accounting principles on the financial statements were not reasonably determinable.

"
99ARL-67

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. If compensated absences were reported, liabilities would be increased and fund balance would be decreased by $549,697.64 as of June 30, 1999, and the net change in fund balance for the year ended June 30, 1999, would be decreased by $32,607.81.
Our review was made for the purpose of expressing limited assurance that there are no material modifications
that should be made to the financial statements in order for them to be in confonnity with generally accepted accounting principles. The year 2000 supplementary information on Schedule"1" is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. The accompanying combining statements (Exhibits E through G) and the financial schedules (Schedules 2 through 6) are presented for supplementary analysis purposes. Such information has been subjected to the inquiries and analytical procedures applied in the review ofthe financial statements, and except for the effects of the matters discussed in the fourth and fifth paragraphs, we are not aware of any material modifications which should be made thereto.
Respectfully submitted,
~vJ.4t Russell W. Hinton State Auditor
RWH:jb 99ARL-67

FINANCIAL STATEMENTS - 1-

MIDDLE GEORGIA COLLEGE COMBINED BALANCE SHEET
ALL FUND GROUPS JUNE 30.1999

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable Inventories Prepaid Items Due from Other Fund Groups Investment in Plant
Total Assets
LIABILITIES AND FUND BALANCES
Liabilities Accounts Payable Student Deposits Deferred Revenue Tuition and Fees Deposits Held in Custody for Others Due to Other Fund Groups Capital Lease Obligations
Total Liabilities
Fund Balances U. S. Government Grants Refundable Institutional Loans - Restricted Endowment Term Endowment Quasi-Endowment - Restricted Net Investment in Plant Restricted Unrestricted
Total Fund Balances
Total Liabilities and Fund Balances

CURRENT FUNDS

UNRESTRICTED

RESTRICTED

LOAN FUNDS

$

99,558.55

$

17,435.61

$

78,545.55

348.451.11

202,347.37

168,463.30

305.031.17

124.576.60

517.808.71

7.235.87

$

1,395,426.14 $

280,892.92 $ =====19=3...1.=34.;,;.=78=

$

479,606.33

54,571.39

410.356.21

$

277.140.97

$

944.533.93 $

277,140.97

$

188.869.93

4.264.85

$

$

450.892.21

$

450.892.21 $

3.751.95 3.751.95 $

193.134.78

$

1.395,426.14 $

280.892.92 $ =====19=3:=.1=34.;,;.7=8=

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
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)

$

133,026.14 $

1,266,764.55

38,649.23

766,680.23 $

287,149.39

$

7,922.96

$

31,145,405.19

$

1,438,439.92 $

766,680.23 $

295,072.35 $

31,145,405.19 $

21,966.83 $ 75,801.45

1,325,816.75 1,345,310.10
727,184.74 305,031.17 124,576.60 639,495.26 31,145,405.19

97,768.28 $ =====3=5,=61=2=:,8=19:=.8=:1=

$

404,263.23 $

362,354.29

$

766,617.52 $

34,450.17

$ 34,450.17 $

$ 195,044.20 195,044.20 $

$

353,334.67

1,006,005.78

79,099.47

$

$

1,438,439.92 $

62.71 $ 62.71 $

$ 260,622.18 260,622.18 $

30,950,360.99 30,950,360.99

$ 97,768.28 97,768.28 $

918,319.73 54,571.39
410,356.21 97,768.28
639,495.26 195,044.20
2,315,555.07

$

188,869.93

4,264.85

353,334.67

1,006,005.78

79,099.47

30,950,360.99

3,751.95

711,Sn.10

$

33,297,264.74

$

1,438,439.92 $

766,680.23 $

295,072.35 $

31,145,405.19 $.

97,768.28 $ =====35=,=61=2=:,8=19:=.8=:1=

-3-

MIDDLE GEORGIA COLLEGE COMBINED STATEMENT OF CHANGES IN FUND BALANCES
ALL FUND GROUPS YEAR ENDED JUNE 30,1999

EXHIBIT "B"

ENDOWMENT AND SIMILAR
FUNDS

UNEXPENDED

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

TOTAL (Memorandum
Only)

$

$

3,976.00

7,379.94

$

11,355.94 $

886,000.00 87,198.65 $ 62.71
973,261.36 $

14,521.38 4.35 $
14,525.73 $

$
744,118.72 189,766.77 82,491.80 3,970,490.68 4,986,867.97 $

14,885,108.67
886,000.00 1,642,529.24
893,129.73 44,610.95
8,875.68 102,608.64
7,379.94 2,497.59
17,773.48 2,118.00
744,118.72
189,766.77 82,491.80 3,970,490.68
249.00
23,479,748.89

$

15,351,948.50

1,800,557.90

9,612.03

$

1,853.50

6,039.05

323.51 403.95 582.46

189,766.77 $ 824,153.27

82,491.80 50,919.91
$

-51,357.66

272,258.57 875,073.18 -51,357.66

$

1,015,773.54 $

133,411.71 $

-51,357.66 $

18,265,441.49

$

35,167.18

$

$

35,167.18 $

$

46,523.12 $

1,391,916.80

$

1,438,439.92 $

$ 40,721.39 40,721.39 $ -1,790.79 $
1,853.50
62.71 $

166,639.72
166,639.72 47,753.74 $ 212,868.44

$
$ 5,038,225.63 $ 25,912,135.36 .

0.00 0.00 0.00 0.00 5,214,307.40 28,082,957.34

260,622.18 $

30,950,360.99 $

33,297,264.74

-5-

MIDDLE GEORGIA COLLEGE STATEMENT OF CURRENT FUNDS REVENUES. EXPENDITURES.
AND OTHER CHANGES YEAR ENDED JUNE 30,1999

EXHIBIT"C"

Net Increase/(Decrease) in Fund Balances

$

105,239.38 $

-24,292.47 $==."".;8;;::0~,9;;:;46~.~91!:::

See Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
The notes to the financial statements are an integral part of this statement. -7-

MIDDLE GEORGIA COLLEGE
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1999

EXHIBIT "D"

NOTE 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY Middle Georgia College is one of thirty-four (34) State supported member institutions of higher education in Georgia which comprise the University System ofGeorgia, an organizational unit of the State of Georgia. The accompanying financial statements reflect the operations of Middle Georgia College as a separate reporting entity.
The Board ofRegents has constitutional authority to govern, control and manage the University System of Georgia. This authority includes but is not limited to the power to designate management, the ability to significantly influence operations, the authority to control institutions' budgets, the power to determine allotments of State funds to member institutions and the authority to prescribe accounting systems and administrative policies for member institutions. Middle Georgia College does hot have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, Middle Georgia College is considered an organizational unit of the Board ofRegents ofthe University System of Georgia reporting entity for financial reporting purposes because of the significance of its legal, operational, and financial relationships with the Board of Regents as defined in Section 2100 of the Governmental Accounting Standards Board Codification of Governmental Accounting and Financial Reporting Standards.
FUND ACCOUNTING In order to ensure observance oflimitations and restrictions placed on the use 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, 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.
-8-

MIDDLE GEORGIA COLLEGE
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1999

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 fmancialloans to students.
ENDOWMENT AND SIMILAR FUNDS
The fund used to account for endowment funds, term 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. Term endowment funds are similar to endowment funds except that upon the passage of a stated period of time or the occurrence of a particular event, all or part ofthe principal may be expended. While quasi-endowment funds have been established by the College for the same purposes as endowment funds, any portion of quasi-endowment funds may be expended. Restricted quasi-endowment funds may be expended only for the purposes established by the source of such funds.
PLANT FUNDS
UNEXPENDED - The fund used to account for financial resources utilized to acquire or to construct physical properties for institutional purposes.
RENEWALS AND REPLACEMENTS - The fund used to account for resources set aside for the renewal and replacement of institutional properties.
INVESTMENT IN PLANT - The fund which shows the total amounts representing the book value of all physical properties owned by the College. Net Investment in Plant is an equity account showing the total book value ofphysical properties belonging to the College less the amount of any indebtedness to others.
AGENCY FUNDS
The fund used to account for resources held by the College as custodian or fiscal agent for individual students, faculty, staff members, and organizations.
BASIS OF ACCOUNTING Except as otherwise disclosed in these notes, the financial statements are prepared on the modified accrual basis of accounting, which is materially the same as the accrual basis of accounting applicable to colleges and universities prescribed in the American Institute ofCertified Public Accountants' audit guide rep,orting 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 of the fiscal period.

-9-

MIDDLE GEORGIA COLLEGE NOTES TO THE FmANCIAL STATEMENTS
JUNE 30. 1999

EXHffiIT"D"

NOTE 1: SUMMARy OF SIGNIFICANT ACCOUNTmG POLICIES
BASIS OF ACCOUNTING Contractual obligations for goods and services which have not been received at the end of the fiscal year are recognized as expenditures and liabilities in the accompanying financial statements. This accounting practice causes expenditure-driven grant revenues to be accrued based, in part, on the unexecuted portion of contracts for goods and services. The recognition of encumbrances as expenditures and liabilities is in conformity with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, but is not consistent with generally accepted accounting principles, which provide for the recording of encumbrances as a reservation of fund balance. Further, revenue recognition for expenditure-driven grants should be based upon expenditures determined in accordance with generally accepted accounting principles.
Compensated absences represent obligations of the College relating to employees' rights to receive compensation for future absences based upon services already rendered. This obligation relates only to vesting accumulated annual leave in which payment is probable and can be reasonably estimated. The compensated absences liability of $549,697.94 and a related net current year expenditure of $32,607.81 have not been reported in the current funds as required by generally accepted accounting principles.
Prior period adjustments and certain other items are reported as additions to and deductions from fund balances of current funds in the accompanying financial statements. This presentation is in accordance with accounting practices prescribed or permitted by statutes and regulations of the State of Georgia, but differs from generally accepted accounting principles in that immaterial adjustments should be reported as current period revenues and expenditures. The effect of this departure is deemed to be immaterial to the fair presentation ofthe financial statements.
To the extent that Current Funds ~d 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 ofMiddle Georgia College to record some assets acquired through capital.1eases 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. It is also the policy of the College to record some assets acquired through capita1leases as additions to Investment in Plant as payments are made. The liability for such leases at fiscal year-end is not recorded on the Combined Balance Sheet. These presentations differ from generally accepted accounting princIples in that the assets and the related liability resulting from capital leases should be recorded in Investment in Plant at the inception of the agreement at the net present value ofthe 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 of the financial statements.
- 10-

MIDDLE GEORGIA COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30.1999

EXHIBIT "D"

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING The Statement of Current Funds Revenues, Expenditures, and Other Changes is a statement of financial activities of current funds related to the current reporting period. It does not purport to present the results of operations or the net income or loss for the period as would a statement of income or a statement of revenues and expenses.

BUDGET The Board of Regents of the University System of Georgia - Administrative Central Office receives State appropriation allotments for units ofthe University System of Georgia. The appropriated budget is adopted at the Board level and represents appropriations provided by the Amended Appropriations Act of 1998-1999. 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 of anticipated funds available and budgeted expenditures by budget unit object class indicates that the following object classes were overspent by the amounts identified below:

Resident Instruction Operating Expenses Education, General and Departmental Services Year 2000 Project

$ 92.348.33 $ 14.799.47

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 Board object class level.

CASH AND CASHEQUIVALENTS 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 stipulateq 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.

- 11 -

MIDDLE GEORGIA COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1999

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. No provision has been made for an allowance for doubtful accounts within the accompanying fmancial statements.
INVENTORIES Inventories of consumable supplies are recorded on the consumption method and are valued at cost on the Combined Balance Sheet using the weighted average method.
Inventories of goods for resale are valued at cost using the first-in, first-out method.
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 financial analysis. The columns do not present information that reflects financial position or changes in financial position in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund 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.
(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 ofthe bonds for this purpose.
(4) Industrial revenue bonds and bonds of development authofi.ties created by the laws of the State of Georgia.
- 12-

MIDDLE GEORGIA COLLEGE
NOTES TO THE FINANCIAL STATEMENIS
JUNE 30.1999

EXHIBIT "D"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

STATE OF GEORGIA COLLATERALIZATION STATUTES AND POLICIES (5) Bonds, bills, certificates of indebtedness, notes, or other obligations ofa 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 Intennediate Credit Bank, the Central Bank for Cooperatives, the Fann 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, 1999, are categorized below in order to provide infonnation about the extent to which such deposits are exposed to custodial credit risk:

Category I - 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 financial institution, or by its trust department or agent but not in the College's name, and amounts uncollateralized.

Carrying Amount

Bank Balances

Risk Categories 2

Cash Deposits

$ -309,760.79 $ 439,375.62 $ 217,435.61 $ 221,940.01

Investment Portfolio Accounts

63.026.00

63.026.00

$

Total Cash Deposits

$ -246.734.79 $ 502.401.62 $ 217.435.61 $ 221.940.01 $

3
63.026.00 63,026.00

- 13-

MIDDLE GEORGIA COLLEGE
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1999 .

EXHIBIT"D"

NOTE 2: CUSTODIAL CREDIT RISKS OF CASH DEPOSITS AND INVESTMENTS

CATEGORIZATION OF INVESTMENTS Investments are summarized and classified as to custodial credit risk within the three categories described below:

Category 1 - Insured or registered, or securities held by the College or its agent in the College's name.

Category 2 - Uninsured and unregistered, with securities held by the counterparty's trust department or agent in the College's name.

Category 3 - Uninsured and unregistered, with securities held by the counterparty, or by its trust department or agent but not in the College's name.

The carrying amounts of investment balances as of June 30, 1999, are categorized below:

Tn'!e of Investment ,

Risk Categories

1

2

3

Carrying Amount

Common Stock U. S. Government Securities
Investments Not Subject to Categorizations:

$ 1,195,718.10 $ 86.566.00
$ 1.282.284.10 $

0.00 $ 0.00 $

0.00 $ 1,195,718.10 86,566.00
0.00 $ 1,282,284.10

Board ofRegents Short-Term Fund Balanced Income Fund
Total Investments

1,530,466.50 98,911.04
$ 2,911.661.64

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

NOTE 3: INVESTMENT IN PLANT

The following is a summary of Investment in Plant fixed assets as of June 30, 1999:

- 14-

MIDDLE GEORGIA COLLEGE
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1999

EXHIBIT "D"

NOTE 3: INVESTMENT IN PLANT

Land Buildings Improvements Other Than Buildings Equipment Library Books and Collections

$ 18,400.00 21,483,643.65
2,465,425.66 5,129,840.17 2,048,095.71

Total Investment in Plant

$31.145.405.19

NOTE 4: CAPITAL LEASES

Middle Georgia College acquires 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, 1999, future minimum lease payments under capital leases are as follows:

Fiscal Year Ending June 30

2000 2001 2002 2003

$ 48,761.05 48,761.05 48,761.05 48,761.05

Total Future Minimum Lease Payments

$ 195,044.20

NOTE 5: RISK MANAGEMENT

Middle Georgia College isa participant in the Board ofRegents of the University System of Georgia Health Benefits Plan, which is a self-insurance program ofhealth 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 financial statements ofthe Board of Regents ofthe University System of Georgia - Administrative Central Office. All units of the University System of Georgia share the risk of ioss 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 $1,000,000.00 per person and dental coverage up to an annual maximum of$l,OOO.OOperperson. 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.

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MIDDLE GEORGIA COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30.1999

EXHIBIT "D"

NOTE 5: RlSK MANAGEMENT

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 cOmInercial 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.

NOTE 6: RETmEMENTPLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Plan Description Middle Georgia College participates in the Teachers Retirement System of Georgia (TRS), a cost-sharing multiple-employer defined benefit pension plan established by the General Assembly of Georgia for the purpose of providing retirement allowances and other benefits for teachers of the State of Georgia. TRS provides service retirement, disability retirement, and survivor's benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department ofAudits 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 1999, the employer contribution rate was 11.95% for covered employees. In addition, the College contributed 3.46% to the TRS on behalf of employees electing to participate in the Regents Retirement Plan. Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

- 16-

MIDDLE GEORGIA COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1999

EXHIBIT"D"

NOTE6: RETffiEMENTPLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Funding Policy

Fiscal Year

Percentage Contributed

Required Contribution

1999 1998 1997

100% 100% 100%

$ 800,647.08 $ 761,761.40 $ 745,978.34

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.

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 8.34%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 $71,834.80 (8.34%) and $41,067.67 (5%), respectively.

GEORGIA DEFINED CONTRIBUTION PLAN

Plan Description Middle Georgia College participates in the Georgia Defined Contribution Plan (GDCP) which is a singleemployer defined contribution plan established by the General Assembly of Georgia for the purpose of providing retirement coverage for State employees who are temporary, seasonal, and,part-time and are not members of a public retirement or pension system. GDCP is administered by the Board of Trustees of the Employees' Retirement System of Georgia.

- 17 -

MIDDLE GEORGIA COLLEGE
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30.1999

EXHIBIT "D"

NOTE 6: RETIREMENT PLANS
GEORGIA DEFINED CONTRIBUTION PLAN
Benefits A member may retire and elect to receive periodic payments after attainment of age 65. The payment will be based upon mortality tables and interest assumptions to be adopted by the Board of Trustees. Ifa member has less than $ 3,500.00 credited to hislher account, the Board of Trustees has the option of requiring a lump sum distribution to the member in lieu ofmaking periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to hislher account will be paid to the member's designated beneficiary. 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 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 1999 amounted to $24,967.12 which represents 7.5% of covered payroll. These contributions met the requirements ofthe plan.
NOTE7: LEAVEPOUCffiS
Employees earn annual leave ranging from one and one-quarter days to one and three-quarter days each month depending upon the employees' length of continuous State service with maximum accumulation of forty-five days. Employees are paid for unused accumulated annual leave upon retirement or termination of employment. See Note 1 - Basis of Accounting (Compensated Absences)
Employees earn one day of sick leave each month with no maximum accumulation established. Unused accumulated sick leave does not vest with the employee and is forfeited upon retirement or termination of employment, except as noted in the subsequent paragraph.
Certain employees who retire with a minimum ofthree months ofunused sick leave are entitled to additional service credit in the Teachers Retirement System of Georgia.
NOTE 8: CQNTffiGENCffiS
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. This could result in refunds to the grantor agency for any expenditures which are disallowed under grant tenns. 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.

- 18 -

MIDDLE GEORGIA COLLEGE NOTES TO THE FINANCIAL STATEMENTS
JUNE 30. 1999 .

EXHIBIT "D"

NOTE 8: CONTINGENCIES

Litigation, claims and assessments filed against Middle Georgia College (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 Comprehensive Annual Financial Report for the fiscal year ended June 30, 1999.

NOTE 9: POSTEMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS

Pursuant to the general powers conferred by the Official Code of Georgia Annotated Section 20-3-31, the Board of Regents of the University System of Georgia has established group health and life insurance programs for regular employees ofthe University System of Georgia. It is the policy ofthe Board ofRegents to permit employees ofthe University System of Georgia eligible for retirement or that become pennanently 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 of Georgia are eligible for these postemployment health and life insurance benefits. Organizational units of the Board of Regents of the University System of Georgia pay the employer portion for group insurance for affected individuals.

As of June 30, 1999, there were 93 employees who had retired or were disabled that were receiving these postemployment health and life insurance benefits. For the year ended June 30, 1999, Middle Georgia College recognized as incurred $164,767.39 of expenditures, which was net of $50,274.47 of participant contributions.

NOTE 10: ENROLLMENT

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

Regular Tenn Fall Semester, 1998 Spring Semester, 1999

1,432 1.346

Average

Summer School, 1998

- 19-

SUPPLEMENTARY INFORMATION - 21 -

MIDDLE GEORGIA COLLEGE COMBINING BALANCE SHEET CURRENT FUNDS - UNRESTRICTED
JUNE 30.1999

EXHIBITE

ASSETS
Cash and Cash Equivalents Accounts Receivable Inventories Prepaid Items Due from Other Fund Groups

RESIDENT INSTRUCTION

LOTIERYFOR EDUCATION

AUXILIARY ENTERPRISES .

STUDENT ACTIVITIES

TOTAL

$

5,600.00

159,598.85

78,535.62

33,609.73

563,895.48 $

$ 6,239.64

$ 185,186.24 226,495.55 90,741.87

93,958.55 $ 3,666.02
225.00 54,676.21

99,558.55 348,451.11 305,031.17 124,576.60 624,811.33

Total Assets

$

841,239.68 $

6,239.64 $

502,423.66 $

152,525.78 $ 1,502,428.76

LIABILITIES AND FUND BALANCES
Liabilities A=unts Payable Student Deposits Deferred Revenue Tuition and Fees Due to Other Fund Groups
Total Liabilities
Fund Balances Unrestricted

$

472,436.55 $

272,704.05

$

745,140.60 $

96,099.08

6,239.64 $ 6,239.64 $

273.71 $ 54,571.39
119,378.66 107,002.62
281,226.38 $

656.43 $

479,606.33 54,571.39

18,273.50

410,356.21 107,002.62

18,929.93 $ 1,051,536.55

0.00

221,197.28

133,595.85

450,892.21

Total Liabilities and Fund Balances

$

841,239.68 $

6,239.64 $

502,423.66 $

152,525.78 $ 1,502,428.76

See a=mpanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.

-22-

MIDDLE GEORGIA COLLEGE COMBINING STATEMENT OF CHANGES IN FUND BALANCES
CURRENT FUNDS - UNRESTRICTED YEAR ENDED JUNE 30,1999

EXHIBIT"P

REVENUES AND OTHER ADDITIONS
Unrestricted Current Fund Revenues Adjustments
Prior Years' Expenditures/Accounts Payable Prior Years' Checks Voided
Total Revenues and Other Additions
EXPENDITURES AND OTHER DEDUCTIONS
Educational and General Expenditures Auxiliary Enterprises Expenditures Remittances to the Board of Regents of the
University System of Georgia Prior Year's Unrestricted Fund Balance (Surplus)
Adjustments Prior Years' Revenues/Accounts Receivable
Total Expenditures and Other Deductions
TRANSFERS BETWEEN FUNDS
Nonmandatory Renewals and Replacements
Net Increase/(Decrease) for the Year
FUND BALANCES JULY 1, 1998

RESIDENT INSTRUCTION

LOTIERYFOR EDUCATION

AUXILIARY ENTERPRISES

STUDENT ACTIVITIES

TOTAL

$ 12,509,229,15 $ 12,753,86
$ 12,521,983,01 $

175,000,00 $

2,046,083,39 $ 5,110,97

175,000,00 $ 2,051,194,36 $

154,796,13 $ 14,885,108,67

-158.41 2,118,00

17,706.42 2,118,00

156,755,72 $ 14,904,933,09

$ 12,508,879,37 $

175,000.00 $

$ 1,800,557,90

144,107.66 $ 12,827,987,03 1,800,557,90

4,185,42 221,74

0,13

4,185,55

-94.40

196,17

323,51

$ 12,513,286,53 $

175,000,13 $ 1,800,463,50 $

144,303,83 $ 14,633,053,99

$

8,696.48 $

87,402,60

$ -0,13 $ 0,13

-166,639,72 84,091,14 $ 137,106,14

$ 12,451.89 $ 121,143,96

-166,639,72 105,239.38 345,652,83

FUND BALANCES JUNE 30, 1999

$

96,099,08 $

0,00 $

221,197,28 $

133,595,85 $

450,892.21

See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information,

-23-

MIDDLE GEORGIA COLLEGE COMBINING STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES
AND OTHER CHANGES UNRESTRICTED
YEAR ENDED JUNE 30 1999

EXHIBIT"G"

REVENUES
State Appropriations Tuition and Fees Federal Grants and Contracts Sales and Services of Educational Activities Sales and Services of Auxiliary Enterprises Other Sources
Total Revenues
EXPENDITURES
Educational and General Instruction Academic Support Student Services Institutional Support Operation and Maintenance of Plant Scholarships and Fellowships
Auxiliary Enterprises Student Housing Faculty and Staff Housing Food Services Stores and Shops Intercollegiate Athletics Other Service Units
Total Expenditures
OTHER TRANSFERS AND ADDITIONS/IDEDUCTIONS)
Transfers for Renewals and Replacements Prior Period Adjustments (Net)
Remittances to the Board of Regents
of the University System of Georgia Prior Year's Unrestricted Fund Balance (Surplus)
Total Other Transfers and Addilions/(Deductions)

RESIDENT INSTRUCTION

LOTIERYFOR EDUCATION

AUXILIARY ENTERPRISES

STUDENT ACTIVITIES

TOTAL

$ 9,952,792,00 $ 2,251,343.68 10,107.93 10,606.09
284,379,45
$ 12,509,229.15 $

175,000,00 $
$ 2,025,152.09 20,931,30
175,000.00 $ 2,046,tl83.39 $

$ 146,895.65
7,900.48

10,127,792,00 2,398,239.33 10,107,93 10,606.09 2,025,152.09 313,211.23

154,796.13 $ 14,885,108.67

$ 5,727,213.82 948,484.92 $
1,078,077.03 2,938,982.22 1,710,984.63
105,136.75
$ 12,508,879.37 $

117,001.00 $
57,999.00
$ 1,026,468.93 17,909,81 95,332.06
175,632.79 379,379.38 105,834.93
175,000.00 $ 1,800,557.90 $

$ 144,107.66

5,727,213.82 1,065,485.92 1,222,184,69 2,996,981.22 1,710,984.63
105,136.75

1,026,468.93 17,909.81 95,332.06
175,632,79 379,379.38 105,834.93

144,107.66 $ 14,628,544.93

$

12,532.12

$ -166,639.72 5,205.37 $

$ 1,763.42

-166,639.72 19,500.91

~,185,42 $

$

8,346.70 $

-0.13 -0.13 $ -161,434.35 $

~,185.55
1,763.42 $ -151 ,324,36

Net Increasel(DeCrease) in Fund Balances

$

8,696,48 $

-0.13 $

84,091,14 $

12,451.89 $

105,239.38

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

-24-

MIDDLE GEORGIA COLLEGE

SCHEDULE "1"

SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

YEAR 2000 DISCLOSURES

YEAR ENDED JUNE 30. 1999

The year 2000 issue is the result of shortcomings in many electronic data processing systems and other electronic equipment that may adversely affect the College's operations beyond calendar year 1999. Middle Georgia College has completed an inventory of computer systems and other electronic equipment that may be effected by the 2000 issue and that are necessary to conducting institutional operations. The following stages have been identified as necessary to implement year 2000 compliant systems.
:'-wareness Stage - Encompasses establishing a budget and project plan for dealing with the year 2000 Issue.
Assessment Stage - The actual process ofidentifying all systems and individual components ofsystems to check for compliance.
Remediation Stage - The time when changes are made to systems and equipment.
Validation/Testing Stage - The process ofensuring 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.
Middle Georgia College has identified the following financial systems requiring year 2000 remediation that are supported by the Board ofRegents, University System ofGeorgia and have been remediated by the Board.
The College and University Fund Accounting System has been remediated, validated and tested.
The Regents Budget Reporting System is reportedly year 2000 compliant. The awareness, assessment and validation/testing phases were completed in 1997.
The Regents Payrol1/Personnel System has been remediated, validated and tested.
The Regents Pioperty mventory System is reportedly year 2000 compliant. The awareness, assessment, validation/testing phases were completed in 1997.
The Banner Student fuformation System is supported by SCT Banner, me. Their year 2000 version has been released and distributed to the College.
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.

See accompanying notes and mdependent Accountant's Combined Report on Review ofFinancial Statements and Supplementary mformation:
- 25-

MIDDLE GEORGIA COLLEGE SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
RESIDENT INSTRUCTION YEAR ENDED JUNE 30.1999

REVENUES
State Appropriations Other Revenues Retained

CURRENT FUNDS

UNRESTRICTED

RESTRICTED

PLANT FUNDS

RENEWALS AND

UNEXPENDED

REPLACEMENTS

$

9,952,792.00

$

2,556,437.15 $

:::2,,,,,52:;:3:.:.;.9;.:6..:;1.,,,,,47.:-

886,000.00 87,198.65 $

.:..14:.:.;,5::::2..:;1.=38=-

$

12,509,229.15 $

2,523,961.47 $

973,198.65 $

.:..14;,.:.;,5;,;:2..:;1.=38;;.,.

EXPENDITURES

Personal Services:

Education, General and Departmental Services

$

Sponsored Operations

Operating Expenses:

Education, General and Departmental Services

Sponsored Operations

Capital Outlay

Special Funding Initiative

Year 2000 Project

9,436,831.22 $
2.425,316.58
568,148.10 78,583.47

19,297.21
2,504,664.26 $

1,013,920.04 $

133.411.71

$

12,508,879.37 $

2,523,961.47 $

1,013,920.04 $ _ _--:.13;;,;3;:,..4;.;,1";.;1..:.,.71,;,,,.

Excess of Revenues over Expenditures

$

349.78 $

(1) To eliminate tuition waivers not budgeted and to reclassify current year transfers and prior year fund balances budgeted as revenues.

0.00 $

-40,721.39 $===-=1,;,;18=,8=9=0.=33=

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
-26-

SCHEDULE "2"

TOTAL

ADJUSTMENTS (1)

TOTAL (Budget Basis)

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$

10,838.792.00

5,182,118.65 $

$ 56.342.47

10,838,792.00 $ 5,238,461.12

10,838.792.00 $ 5.418.759.00

0.00 -180,297.88

$

16,020,910.65 $

56.342.47 $

16.077.253.12 $ 16,257.551.00 $

-_18;.;;0"".2;.;..97_.8_8_

$

9,436,831.22

19,297.21

$

9,436.831.22 $

9.528,218.00 $

19.297.21

21,680.00

2,425,316.58 $ 2,504,664.26 1,147,331.75
568,148.10 78.583.47

-103.269.25

2,322,047.33 2,504.664.26 1,147,331.75
568.148.10 78.583.47

2,229,699.00 2.609,595.00 1,234,725.00
569.850.00 63.784.00

91.386.78 2.382.79
-92,348.33 104,930.74
87,393.25 1,701.90
-14,799.47

$

16,180,172.59 $

-103.269.25 $

16,076,903.34 $ 16,257,551.00 $ _ _....:..18;;.;0;.:.;.6;..;.47.;...;..;;.;66;...

$

-159.261.94 $

159.611.72 $====.....3.4;,,;;;;9..;,;78;.,

$======34;,;,;9....7;.;8=

-27 -

MIDDLE GEORGIA COLLEGE SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO BUDGET
LOTTERY FOR EDUCATION YEAR ENDED JUNE 30,1999

SCHEDULE "3"

REVENUES State Appropriations

CURRENT FUNDS UNRESTRICTED

BUDGET

VARIANCEFAVORABLE (UNFAVORABLE)

$

175,000,00 $

175,000,00 $

0._00_

EXPENDITURES
Equipment, Technology and Construction Trust Fund
Special Funding Initiatives

$

115,999.00 $

116,000.00 $

59,001.00

59,000.00

$

175,000.00 $

175,000.00 $

1.00 -1.00
0._00_

Excess of Revenues over Expenditures

$=====0:=.0,,==0

$=====0.=00,=

See accompanying notes and Independent Accountanfs Combined Report on Review of Financial Statements and Supplementary Information.
- 29-

MIDDLE GEORGIA COLLEGE CHANGES IN INVESTMENT IN PLANT
YEAR ENDED JUNE 30,1999

Land Buildings Improvements Other Than BUildings Equipment Library Books and Collections
SUMMARY OF INVESTMENT College Capital Leases

BALANCE
JULY 1,1998

CURRENT FUNDS

UNRESTRICTED

RESTRICTED

$

18,400.00

17,521,113.28

2,333,116.82

4,079,305,98 $

685,540.35 $

8,808.00

1,998,325,34

49,770.37

$ 25,950,261.42 $

735,310.72 $======8,8:=08:.;.0;.;0...

$ 25,912,135.36 $ 38,126.06

735,310.72 $

8,808.00

$ 25,950,261.42 $

735,310.72 $======8=,8.0.8.:=,0=:0,=

See accompanying notes and Independent Accountant's Combined Rep.ort on Review of Financial Statements and Supplementary Information,
- 30-

SCHEDULE "4"

ADDITIONS

PLANT FUNDS

RENEWALS AND

UNEXPENDED

REPLACEMENTS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

800.00 $

121,072.44

67,894.33

9,513.24 $

3,970,490.68

72,978.56

$

CAPITAL LEASES

DEDUCTIONS DISPOSALS! DELETIONS! ADJUSTMENTS

BALANCE JUNE 30, 1999

$

18,400.00

$

18,273.55

21,483,643.65

-11,236.40

2,465,425.66

243,805.25

28,492.30

5,129,840.17

2,048,095.71

$

189,766.77 $

82,491.80 $

3,970,490.68 $

243,805.25 $

35,529.45 $ ===3=1,=14=5~,4=0=5.=19=

$

189,766.77 $

82,491.80 $

3,970,490.68

$

_ _ _ _ _ _ $_--=24..:.:3:.!.:,8~0.;:;;5.=25:;...

-51,357.66 $ 86,887.11

30,950,360.99 195,044.20

$

189,766.77 $

82,491.80 $

3,970,490.68 $

243,805.25 $

35,529.45 $ ===31=,=14:::::5:.:,4=05=.=19=

- 31 -

MIDDLE GEORGIA COLLEGE SCHEDULE OF FUND BALANCES CURRENT FUNDS AND PLANT FUNDS
JUNE 30, 1999

RESIDENT INSTRUCTION

CURRENT FUNDS

UNRESTRICTED

LOTIERYFOR

AUXILIARY

EDUCATION

ENTERPRISES

STUDENT ACTIVITIES

NET INVESTMENT IN PLANT

Investment in Plant Facilities

RESTRICTED

Designated for Subsequent Years' Expenditures

UNRESTRICTED

Designated

For Bus Replacement Reserve

For Intercollegiate Athletics

$

-139,740,14

For Inventory Reserve

$

78,535.62

226,495,55

For Renewals and Replacements Reserve

For Subsequent Years' Expenditures

134,441.87 $

133,595.85

For Uncollectible Accounts
~
Surplus

5,371,12

Regular

12,192,34

Lottery for Education

$'

0.00

$

96,099.08 $

0,00 $

221,197.28 $

133,595.85

$

96,099.08 $

0.00 $

221,197.28 $ =====1=33=,=59;;;;5;;;.8;;;;5~

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

SCHEDULE "5"

RESTRICTED

UNEXPENDED REGULAR

PLANT FUNDS RENEWALS AND REPLACEMENTS

INVESTMENT IN PLANT

TOTAL

$

3"".;.;75;:.;1~.9;.;:5'_

$

30.950.360.99 $ _--"30""';;.;95;.;;0.:.:.3,,,,60""';;.;99;...

$

-=3.:.:,7..::.5.:,.:1.::.:95::...

$

$

$

3,751.95 $

$

121,986.32

138,635.86

$

121.986.32

-139.740.14

305.031.17

138.635.86

268.037.72

5,371.12

62.71 62.71 $ _ _.....;;;.26;.;;0"'.6;.:2::;2.""18::...

12,255.05 0.00
$ _ _-.:..71;..:1..:.:,5;.:.77;..:.",,10::...

62.71 $

260.622.18 $

30.950.360.99 $ =::;3,;"l1.=66;;;;;5;;:;.6.9.0.;;,;.;;,04,;,.

-33-

MIDDLE GEORGIA COLLEGE RECONCILIATION OF SALARIES AND TRAVEL
YEAR ENDED JUNE 30. 1999

SCHEDULE "6"

Totals per Annual Supplement
Prepaid Expense June 30, 1999

SALARIES $ 8,164,876.92 $

TRAVEL 144,189.19

-18,000.00

$ 8,146,876.92 $=====14...4.=,1=8=9.=19=

See accompanying notes and Independent Accountant's Combined Report on Review of Financial Statements and Supplementary Information.
- 34-

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

MIDDLE GEORGIA COLLEGE AUDITEE'S RESPONSE
SUMMARy SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 1999

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-584-97-01 FS-584-98-01 FS-584-98-02

Further Action Not Warranted Unresolved - See Correction ActionlResponses Unresolved - See Corrective ActionlResponses

CORRECTIVE ACTIONIRESPONSES

REVENUESIRECENABLES/RECEIPTS Student Accounts Receivable Not Supported by Financial Aid Finding Control Number: FS-584-98-01

These receivables are due to changes in students' financial aid after registration or due to the students' withdrawal from classes. Part ofthe identified finding consists of accounts that are several years old. The likelihood of collection becomes more and more remote each year. An integrated system for financial aid, registration and student fees has been implemented and will assist in improving this problem. Collection efforts have been increased to assist in the collection of these amounts. A review ofthe collection services provider is being made in order to improve efficiency of collections.

FUND EQUITIES Deficit to be Funded from Subsequent Years' Operations Finding Control Number: FS-584-98-02

Fund raising and budget oversight measures, along with an adjustment to the athletic fees have been combined to address this problem. Fund raising efforts have been expanded, and a pledge of $150,000.00 to cover this deficit was received. To date we have received $50,000.00 ofthis pledge. Budget oversight and fund raising efforts have paid off because the most current fiscal year saw surpluses in the intercollegiate athletics budget. The current year's budget includes a built-in surplus earmarked to reduce the deficit.

SECTION ill CURRENT YEAR FINDINGS AND QUESTIONED COSTS

MIDDLE GEORGIA COLLEGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 1999
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
REVENUES/RECEIVABLES/RECEIPTS Student Accounts Receivable Not Supported by Financial Aid Finding Control Number: FS-584-99-01
On June 30, 1999, the College had $62,947.99 in student accounts receivable which were over one year old and were not supported by approved financial aid. There is no provision in the policies of the Board of Regents for deferments of student accounts without the student having approved financial aid at the time of registration. This condition occurred because management disregarded the policies of the Board of Regents.
Collection of student accounts receivable should be made on at least a quarterly basis, and no student should be granted deferment without having approved financial aid. It is recommended that legal means be used to collect all student accounts receivable, if necessary.
FUND EQUITIES Deficit to be Funded from Subsequent Years' Operations Finding Control Number: FS-584-99-02
At June 30, 1999, the College's Intercollegiate Athletics had a deficit balance of$139,740.14. This deficit is a result ofthe College's lack of sufficient funds to meet obligations on a current basis. The Board ofRegents' Policy Manual Section 702.02 states that auxiliary enterprises "will be placed on a self-supporting basis, and the State will not make an appropriation to finance its operations."
The College should take appropriate action to fund this deficit.