MIDDLE GEORGIA I COLLEGE I COCHRAN, GEORGIA INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED- UPON PROCEDURES FOR FISCAL YEAR ENDED JUNE30,2011 Georgia Department of, MIDDLE GEORGIA COLLEGE - TABLE OF CONTENTS - INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES EXH IBlTS A SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT 1 B STATEMENT OF FUNDS AVAILABLE AND EXPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE 2 C STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE RIJSSELLW. HINTON STATE AUDITOR (404) 866-2174 DEPARTMENOTF AUDITSAND ACCOUNTS 270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 January 11,2012 Members of the State Board of Regents of the University System of Georgia and Honorable W. Michael Stoy, President Middle Georgia College Independent Accountant's Report on ApplvinR &reed-Upon Procedures 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 UniversitySystem of Georgia, solely to assist you in assessing the accuracy of the financial information reported to the University System Office in the College's 2011Annual Financial Report for inclusion in the University System of Georgia's Annual Financial Report, the State of Georgia's ComprehensiveAnnual Financial Report (CAFR) and Single Audit Report and to assist you in assessing the accuracy of the budget basis information provided in the Summary Budget Comparison and Sutplus Ana/j.sisReport, Statement of Fund.Avai/ab/e and Expenditures Compared to Budget By Program and Funding Source, and the Shternent of Changes To Fund Balance By Program and Funding Source which are attached as Exhibits A, B and C, 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 regarding the 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. The subsidiary detailed listing provided to support the Accounts Payable balance of $543,286.00 reported on the Statement of Net Assets (SNA) had an unidentified variance of $561.51. 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 noted that Net Assets - Beginning of the Year as reflected on the Statement of Revenues, Expenses and Changes in Net Assets (SRECNA) did not agree with the prior year Net Assets - End of Year balance as corrected by the prior year auditors. Auditor made the necessary adjustmentsto correctly present this balance. 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 did not note any exceptions as a result of our procedures. 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. Duringreview of Note 2, Deposits and Investments, we found that the entity failed to select the correct Custodial Credit Risk category for Deposits. In addition, the incorrect percentage of investments was presented in the Concentration of Credit Risk Disclosure for Investments. 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 noted that State Appropriations as reflected on the Statement of Revenues, Expenses and Changes in Net Assets (SRECNA) was overstated by $960.00. Auditor made the necessary adjustments to the SRECNA and Statement of Cash Flows to correctly present State Appropriations. 7. Obtain listing of write-off requests for accounts receivable less than $3,000.00 for fiscal year 2011. Confirm that these write-off requests have been approved by the State Accounting Officer and have been posted to the College's financial statements. We did not note any exceptions as a result of our procedures. 8. Verify that the listing of salaries and travel 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's financial 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), Statement of Funds Available and Expenditures mrnpared to Budget By Program and Funding Source (Exhibit B) and the Sbtement of Changes To Fund Balance By Program and Funding Source (Exhibit C). 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 Compariisan and Surplus Analysis 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 Expendituresof 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. The College's Schedule of Expendituresof Federal Awards (SEFA) informationdid not agree with the Federal expenditure activity reflected on the College's accounting records. Expenditures reflected for the Federal WorkStudy Program were $103,995.90, instead of $104,123.35 as reflected on the accounting records. An adjustment was made to the SEFA to accurately reflect this program's expenditures. 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. During review of the College's capital asset records, we noted two small-value equipment items totaling $7,960.68 which were capitalized by the entity in error. 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 to 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 exceptions as a resultof 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 s s dWl . Hinton, CPA, CGFM State Auditor EXH l BITS MIDDLE GEORGIA COLLEGE SUMMARY BUDGET COMPARISON AND SURPLUS ANALYSIS REPORT YEAR ENDED JUNE 3 0 , 2 0 1 1 REVENUES State Appropriation State General Funds Other Funds Total Revenues ADJUSTMENTS AND PROGRAM TRANSFERS CARRY-OVER FROM PRIOR YEARS Transfers from Reserved Fund Balance Total Funds Available EXPENDITURES Special Funding Initiative Teach~ng Total Expenditures Excess of Funds Available over Expenditures FUND BACANCE JULY 1 Reserved Unreserved ADJUSTMENTS Prior Year Payables/Expenditures Prior Year Receivables/Revenues Unreserved Fund Balance (Surplus) Returned to Board of Regents - University System Office Year Ended June 30. 2010 Early Return of Surplus in Current Fiscal Year Prlor Year Resewed Fund Balance Included in Funds Available FUND BALANCEJUNE 3 0 SUMMARY OF FUND BALANCE Resewed Department Sales and Services Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollectible Accounts Receivable Tuition Carry-Over Total Reserved Unreserved Surplus Total Fund Balance BUDGET ACTUAL - VARIANCE FAVORABLE (UNFAVORABLE) MIDDLE GEORGIA COLLEGE STATEMENT OF FUNDS AVAILABLE AND MPENDITURES COMPARED TO BUDGET BY PROGRAM AND FUNDING SOURCE YEAR ENDED JUNE 30.2011 Special Funding Initiative State Appropriation State General Funds Teaching State Appropnation State General Funds Federal Funds Amerlcan Recovery and Re~nvestmenAt ct Federal Stab~lizationFunds Other Funds Total Teaching Total Operating Activity Original Appropriat~on Amended Appropriation Final Budget Current Year Revenues Funds Available Compared to Budget Prior Year Adjustments and Total Carry-Over Program Transfers Funds Available Variance Positive (Negative) ExpendrturesCompared to Budget Variance Actual Pos~tive(Negat~ve) Excess (Deficiency) of Funds Available Over/(Under) Expenditures MIDDLE GEORGIA COLLEGE STATEMENT OF CHANGES TO FUND BALANCE BY PROGRAM AND FUNDING SOURCE YEAR ENDED JUNE 30.2011 Special Funding Initiative State Appropriat~on State General Funds Teaching State Appropriatlon State General Funds Federal Funds American Recoveryand Reinvestment Act Federal Stabilization Funds Other Funds Total Teach~ng Total Operating Activity Prior Year R e s e ~ e S Not Available for Expenditure Uncollectible Accounts Receivable Beginning Fund Balance/(Deficit) July 1 Fund Balance Carried Over from Prior Period as Funds Available Return of Fiscal Year 2010 Surplus Pnor Period Adjustments Budget Unit Totals Other Adjustments Early Return F~scaYl ear 2011 Surplus Excess (Def~c~ency) of Funds Available Over/(Under) Expenditures Ending Fund Balance/(Deficit) June 3 0 Analysis of End~ngFund Balance Resewed Surplus/(Deficit) Total Summary of Ending Fund Balance Resewed Department Sales and Sewices Indirect Cost Recoveries Technology Fees Restricted/Sponsored Funds Uncollect~bleAccounts Receivable Tultlon Carry-Over Unrese~ed surplus Total End~ngFund Balance -June 3 0