Middle Georgia College, Cochran, Georgia, independent accountant's report on applying agreed-upon procedures for fiscal year ended June 30, 2010

MIDDLE GEORGIA COLLEGE
COCHRAN, GEORGIA
INDEPENDENT ACCOUNTANT'S
REPORT ON APPLYING AGREED-
UPON PROCEDURES FOR FISCAL YEAR ENDED
JUNE 30,2010
Georgia Department of I Audits and Ace~lynts1

MIDDLE GEORGIA COLLEGE - TABLE OF CONTENTS -
INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES EXHIBITS
A SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT
B STATEMENT OF PROGRAM REVENUES AND EXPENDITURES BY FUNDING SOURCE COMPARED TO BUDGET

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

DEPARTMEONFTAUDITASND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
December 10,2010

Members of the State Board of Regents of the University System of Georgia Honorable W. Michael Stoy, President Middle Georgia College
lndeuendent Accountant's R e ~ o rotn A D D I VA~gr~ee~d-U~onProcedures
Ladies and Gentlemen:
We have performed the procedures enumerated below, which were agreed to by the College and the University System Office (Oversight Unit) of the Board of Regents of the University System of Georgia, solely to assist you in assessing the accuracy of the financial information reported to the University System Office in the College's 2010 Annual Financial Report for inclusion in the University System of
(a Georgia's Annual Financial Report,the State of Georgia's ComprehensiveAnnual Financial Report FR)
and Single Audit Report; and to assist you in assessing the accuracy of the budget basis information provided in the Summary Budget Comparison and Surplus Anawsis Report and Statement of Program Revenues and Expenditures by Funding Source Compared to Budget which are attached as Exhibits A and B, respectively. Middle Georgia College's management is responsible for the financial information reported to the University System Office in the College's Annual Financial Report. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the parties specified in this report. Consequently, we make no representation regardingthe sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.
The procedures and the associated findings are as follows:
1. Review selected balance sheet items reported on the Annual Financial Report (cash, accounts receivable, accounts payable, deferred revenues, net assets). Confirm that these items have adequate supporting documentation and are properly reconciled to the College's general ledger.
A misclassification of $3,558 was noted between Cash and Investments related to the Board of Regents Balanced Income Fund and the Board of Regents Short-Term Fund.
2. Obtain the College's GAAP basis Statement of Net Assets and Statement of Revenues, Expenses and Changes in Net Assets (SRECNA) submitted for inclusion in the State's CAFR and Single Audit. Utilizing test scripts, confirm that financial information presented in these statements properly supports activity reported in the College's accounting records.
We did not note any exceptions as a result of our procedures.

3. Obtain the College's Statement of Cash Flows submitted for inclusion in the State's CAFR and Single Audit. Utilizing cash flow worksheets, confirm information reported on Statement of Cash Flows.
We noted a misclassification of $2,068 between Cash Flows from Operating Activities and Cash Flows from Non-Capital Financing Activities, which was corrected by the auditor.
4. Obtain the College's Notes to the Financial Statements submitted for inclusion in the State's CAFR and Single Audit. Utilizing notes worksheets and other supporting documentation confirm that note disclosures related to Cash, Investments, Accounts Receivable, Capital Assets, LongTerm Debt, Lease Obligations and Retirement Plans have been properly reported.
The Capital Lease note disclosure verbiage did not include the new dormitory lease,
resulting in an understatement of the liability of $22,146,830at that location in the
College's Annual Financial Report. This omission was corrected by the auditor.
5. Review the College's year end GAAP basis journal entries. Obtain documentation for GAAP journal entries and confirm that the entries were posted to the College's Annual Financial Report.
We did not note any exceptions as a result of our procedures.
6. Confirm that State Appropriation revenues, receivables and remittances of prior year surplus balances have been properly recorded in the College's financial records. Prior year surplus balances should be netted against State Appropriation revenues in the GAAP basis financial statements; however, prior year surplus balances should be reflected as fund balance adjustments on the Budget basis financial statements.
We did not note any exceptions as a result of our procedures.
7. Obtain listing of write-off requests for accounts receivable less than $3,000.00 for fiscal year 2010. Confirm that these write-off requests have been approved by the State Accounting Officer and have been posted to the College's financial statements.
The College wrote off accounts receivable of $558.20 without adequately
documented due diligence. The College should determine whether the accounts receivable and reservefor uncollectibles should be reestablished.
8. Verify that the listing of salaries, travel, and professional services reported to the Department of Audits is in accordance with O.C.G.A. 50-6-27 and reconciles to amounts recorded in the College'sfinancial statements.
We did not note any exceptions as a result of our procedures.
9. Review year end Budgetary Statements including the Summary Budget Comparison and Surplus Analysis Report (Exhibit A) and Statement of Program Revenues and Expenditures by Funding Source Compared to Budget(Exhibit B). Confirm that budget information presented in these statements supports activity reported in the College's accounting records and determine if any budget overexpenditures exist.
We did not note any exceptions as a result of our procedures.

10.Obtain documentation for Budget basis reserves reported by College on the Summary Budget Comparison and Surplus Anaksis Report (Exhibit A). Confirm that the reserves are properly documented, valid and appropriate.
We did not note any exceptions as a result of our procedures.
11.Review the H.O.P.E. Scholarship Program reconciliation between the College and the Georgia Student Finance Commission. Confirm that information reported to the Georgia Student Finance Commission has been reconciled with H.O.P.E. Scholarship activity reported on the College's financial records.
We did not note any exceptions as a result of our procedures.
12. Review the Schedule of Expenditures of Federal Awards information submitted by the College for inclusion in the Statewide Single Audit. Confirm that the information is properly presented and supported by the College's accounting records.
We did not note any exceptions as a result of our procedures.
13. Review capital asset records to ensure that (1)subsidiary ledgers are appropriately reconciled to the ledgers, (2) capitalization thresholds are being properly followed, and (3)a complete annual physical equipment inventory is being conducted and that issues noted during the physical inventory are being properly addressed by management.
Several assets below the capitalization threshold had been capitalized by the entity. One asset was misclassified between asset categories. Finally, there were unreconciled variances between the AFR and subsidiary records of $5,098.
14. Review bank reconciliations during the year under review to ensure that management is preparing them timely and that reconciling items are being addressed by management timely and in an appropriate manner.
We did not note any exceptions as a result of our procedures.
15. Review documentation to ensure that all subsidiary modules including BANNER are reconciled t o the general ledger at least quarterly in accordance with the Business Procedures Manual Section 10.6.2. and ensure that reconciling items are adequately explained and resolved in a timely manner.
We did not note any exceptionsas a result of our procedures.
These agreed-upon procedures do not constitute an audit of the financial statements or any part thereof, the objective of which is to express an opinion on the financial statements or a part thereof. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
This report is intended solely for the information and use of the specified users listed above and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
~ u d s e lWl . Hinton, CPA, CGFM State Auditor

EXHIBITS

MIDDLE GEORGIA COLLEGE SUMMARY BUDGET COMPARISONAN0 SURPLUSANALYSIS REPORT
YEAR ENDED JUNE 30.2010

REVENUES
State Appropriation State General Funds
Federal Funds Other Funds
Total Revenues
CARRY-OVER FROM PRIOR YEAR
Transfer from Reserved Fund Balance
Total Funds Ava~lable
EXPENDITURES
Excess of Funds Available over Exoend~tures
FUND BALANCE JULY 1
Reserved Unreserved
ADJUSTMENTS
Prlor Year Payables/Expend~tures Prior Year Rece~vables/Revenues Unreserved Fund Balance (Surplus) Returned
to Board of Regents - University System Offlce Year Ended June 30.2009
Early Rem~ttanceof Surplus in Current Flscal Year Prior Year Reserved Fund Balance Included in Funds Ava~lable FUND BALANCEJUNE 3 0
SUMMARY OF FUND BALANCE
Reserved Department Sales and Servlces Indirect Cost Recover~es Technology Fees Restricted/Sponsored Funds Uncollect~bleAccounts Receivable Tuition Carry-Over
Total Reserved
Unreserved Surplus
Total Fund Balance

BUDGET

ACTUAL

VARIANCE FAVORABLE (UNFAVORABLE)

MIDDLE GEORGIA COLLEGE STATEMENT OF PROGRAM REVENUES AND EXPENDITURESBY FUNDING SOURCE COMPARED TO BUDGET
YEAR ENDED JUNE 30.2010

Speclal Fundlng Inltiatlve State Appropriation State General Funds

Orlginal Approprlatlon

Ftnal Budget

Current Year Revenues

Funds Avatlable Compared to Budget

Prlor Year CarvOver

Total Funas Ava~Ianie

Variance ~osltlve (Negative)

reacnlng State Appropr~abon State General Funds Federal Funds Amerlcan Recovery and Reinvestment Act of 2009 Federal Stabilization Funds Other Federal Stimulus Other Funds

Grand Totals -Ail Programs

Expenditures Compared to Budget

Vanance

Postbve

Actual

(Negative)

Actual Funds Available
Over/(under) mena~tures

Prior Perlad Adjustments

otner Aqustments

Early Remlnance of Surplus

Program Fund
Balances

Transfers

Program Fund Balances

Reserve

Surplus

Total Fund Balance

Unexpendable Reserves Unmllectlble Accounts Receovable

93.414.20 5 1.023.296.77