Management report, North Georgia College and State University, Dahlonega, Georgia, an organizational unit of the state of Georgia fiscal year ended June 30, 2005

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
MANAGEMENT REPORT NORTH GEORGIA COLLEGE AND STATE UNIVERSITY
DAHLONEGA, GEORGIA
AN ORGANIZATIONAL UNIT OF THE STATE OF GEORGIA YEAR ENDED JUNE 30, 2005
Russell W. Hinton State Auditor

NORTH GEORGIA COLLEGE AND STATE UNIVERSITY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

LETTER OF TRANSMITTAL

SELECTED FINANCIAL INFORMATION

EXHIBITS

A STATEMENT OF NET ASSETS - (GAAP BASIS)

3

B STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS -

(GAAP BASIS)

5

C STATEMENT OF CASH FLOWS - (GAAP BASIS)

6

D SELECTED FINANCIAL NOTES

9

SUPPLEMENTARY INFORMATION

SCHEDULES

1 BALANCE SHEET-(STATUTORY BASIS)

"A" RESIDENT INSTRUCTION

21

2 ANALYSIS OF CHANGES IN FUND BALANCE - (STATUTORY BASIS)

"A" RESIDENT INSTRUCTION

22

3 SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO

BUDGET-(STATUTORY BASIS)

"A" RESIDENT INSTRUCTION

23

4 RECONCILIATION OF SALARIES AND TRAVEL

25

SECTION II 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
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
August 31, 2005

Honorable Sonny Perdue, Governor Members of the General Assembly of Georgia Members of the State Board of Regents of the University System of Georgia
and Honorable David Potter, President North Georgia College and State University
Ladies and Gentlemen:
As part ofour audit ofthe statutory basis financial statements ofthe State ofGeorgia presented in the State ofGeorgia Report ofthe State Auditor, the basic financial statements of the State of Georgia presented in the State ofGeorgia Comprehensive Annual Financial Report, and the issuance of a State ofGeorgia Single Audit Report pursuant to the Single Audit Act Amendments, as ofand for the year ended June 30, 2005, we have performed certain audit procedures at North Georgia College and State University. Accordingly, the financial statements and compliance activities ofNorth Georgia College and State University were examined to the extent considered necessary in order to express an opinion as to the fair presentation ofthe financial statements contained in the foregoing documents and to issue reports on compliance and internal control as required by the Single Audit Act Amendments of 1996.
This Management Report contains information pertinent to the financial and compliance activities of North Georgia College and State University as ofand for the year ended June 30, 2005. Information contained in this report is a by-product ofour engagement that is the representation ofmanagement, and accordingly, we do not express an opinion or any other form of assurance on it. The particular information provided is enumerated in the Table of Contents.

This report is intended solely for the information and use of the management of North Georgia College and State University, members ofthe Board ofRegents ofthe University System ofGeorgia and the appropriate accrediting regulatory agency and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
-ti~~ .~3;;...
State Auditor
RWH:as

SELECTED FINANCIAL INFORMATION - 1-

NORTH GEORGIA COLLEGE AND STATE UNIVERSITY STATEMENT OF NET ASSETS- (GAAP BASIS} JUNE 30. 2005
ASSETS
Current Assets Cash and Cash Equivalents Short-Term Investments Accounts Receivable, Net Federal Financial Assistance Other Prepaid Items Inventories
Total Current Assets
Noncurrent Assets Noncurrent Cash Investments Notes Receivable, Net Capital Assets, Net
Total Noncurrent Assets
Total Assets
LIABILITIES
Current Liabilities Accounts Payable Salaries Payable Contracts Payable Deposits Deferred Revenue Other Liabilities Funds Held for Others Compensated Absences
Total Current Liabilities
Noncurrent Liabilities Compensated Absences
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Restricted for:
Nonexpendable Expendable Unrestricted
Total Net Assets

EXHIBIT "A"
$ 7,193,200.52 49,078.65 63,641.29
1,675,309.03 819,878.63
1,177,813.52 $ 10,978,921.64
$ 967,903.94 1,539,747.45 1,071,386.90
52,433,994.54 $ 56,013,032.83 $ 66,991,954.47
$ 297,552.18 147,942.52 46,870.52 580,452.53
2,315,352.90 3,699.39
110,195.08 636,654.11 $ 4,138,719.23
600,110.20 $ 4,738,829.43
$ 52,433,994.54 620,692.26
3,395,200.06 5,803,238.18
$ 62,253,125.04

-3-

NORTH GEORGIA COLLEGE AND STATE UNIVERSITY STATEMENT OF REVENUES. EXPENSES AND CHANGES IN NET ASSETS - (GAAP BASIS)
YEAR ENDED JUNE 30. 2005

EXHIBIT"B"

OPERATING REVENUES
Student Tuition and Fees Less: Scholarship Allowances
Grants and Contracts Federal
Sales and Services of Educational Departments Auxiliary Enterprises
Residence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Other Operating Revenues
Total Operating Revenues
OPERATING EXPENSES
Salaries Faculty Staff
Employee Benefits Travel Scholarships and Fellowships Utilities Supplies and Other Services Depreciation
Total Operating Expenses
Operating Income (Loss)
NONOPERATING REVENUES (EXPENSES)
State Appropriations Grants and Contracts
Federal State Local Gifts Interest and Other Investment Income Other Nonoperating Revenues
Net Nonoperating Revenues
Income (Loss) Before Other Revenues, Expenses, Gains, or Losses
Capital Grants and Gifts State Other
Total Other Revenues, Expenses, Gains, or Losses
Increase (Decrease) in Net Assets
Net Assets - Beginning of Year
Net Assets - End of Year

$ 12,294,712.55 -1, 169,743.21
1,981,509.25 536,538.91
2,581,818.63 2,995,610.52 2,475,820.25
332,158.30 538,811.20 1,203,734.01 169,462.48 498 381.46
$ 24,438,814.35

$ 12,125,418.78 10,891,018.31 5,872,033.31 404,981.18 1,522,054.10 1,984,485.66 12,052,729.67 2,152,676.51
$ 47,005,397.52
$ -22,566,583.17

$ 19,887,999.51

540,683.11 43,889.88
939,024.47 890,216.80 176,013.77
32,597.88

$ 22,510,425.42

$

-56 157.75

$ 6,183,953.95 8 207.00
$ 6,192,160.95 $ 6,136,003.20 $ 56,117,121.84

$ 621253, 125.04

- 5-

NORTH GEORGIA COLLEGE AND STATE UNIVERSITY STATEMENT OF CASH FLOWS-(GAAP BASIS) YEAR ENDED JUNE 30. 2005
CASH FLOWS FROM OPERATING ACTIVITIES Tuition and Fees Grants and Contracts Sales and Services of Educational Departments Payments to Suppliers Payments to Employees Payments for Scholarships and Fellowships Loans Issued to Students and Employees Collection of Loans to Students and Employees Auxiliary Enterprise Charges: Residence Halls Bookstore Food Services Parking/Transportation Health Services Intercollegiate Athletics Other Organizations Other Receipts (Payments)
Net Cash Provided (Used) by Operating Activities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations Agency Funds Transactions Gifts and Grants Received for Other than Capital Purposes
Net Cash Flows Provided (Used) by Noncapital Financing Activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital Grants and Gifts Received Proceeds from Sale of Capital Assets Purchases of Capital Assets
Net Cash Provided (Used) by Capital and Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from Sales and Maturities of Investments Interest on Investments Purchase of 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"

$ 12,276,643.53 1,636,216.93 479,904.12
-20,353,727.67 -22,956, 108.01
-2,691,797.31 -43,728.70 52,309.77
2,644,704.51 2,860,436.87 2,482,010.67
352,652.92 531,230.73 1,226,755.37 181,115.84 584,216.28
$ -20,737,164.15

$ 19,887,999.51 -772,025.41 2,441,275.34
$ 21,557,249.44

$

8,207.00

525,793.53

-2,759,995.26

$ -2,225,994.73

$

73,868.51

176,013.77

-5 116.91

$

244,765.37

$ -1,161,144.07

9,322,248.53

$ 8 161 104.46

-6 -

NORTH GEORGIA COLLEGE AND STATE UNIVERSITY STATEMENT OF CASH FLOWS - (GAAP BASIS} YEAR ENDED JUNE 30. 2005
RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:
Operating Income (Loss) Adjustments to Reconcile Net Income (Loss) to Net Cash
Provided (Used) by Operating Activities Depreciation Change in Assets and Liabilities: Accounts Receivable, Net Inventories Other Assets Accounts Payable Deferred Revenue Other Liabilities Compensated Absences
Net Cash Provided (Used) by Operating Activities
NONCASH ACTIVITY Gift of Capital Assets Reducing Proceeds of Capital Grants and Gifts

EXHIBIT"C"
$ -22,566,583.17
2,152,676.51 -382,459.90
-2,649.02 -116,983.87 -101,257.58 196,541.00
28,260.28 55,291.60
$ -20,737,164.15
$ -6,183,953.95

-7-

NORTH GEORGIA COLLEGE AND STATE UNIVERSITY EXHIBIT "D" SELECTED FINANCIAL NOTES JUNE 30, 2005
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY North Georgia College and State University is one of thirty-four (34) 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 ofNorth Georgia College and State 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. North Georgia College and State University does not have authority to retain unexpended State appropriations (surplus) for any given fiscal year. Accordingly, North Georgia College and State 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.
NET ASSETS The University's net assets are classified as follows:
Invested in capital assets, net ofrelated 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.
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 4415-7 of Annotated Code of Georgia.
Restricted net assets - 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.
Unrestricted net 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
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NORTH GEORGIA COLLEGE AND STATE UNIVERSITY EXHIBIT "D" SELECTED FINANCIAL NOTES JUNE 30, 2005
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NET ASSETS 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 $7,245.32. 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 Treasury and Fiscal Services. These resources also include auxiliary enterprises, which are substantially self-supporting activities that provide services for students, faculty and staff.
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 Mortgage Association.
6. Guarantee or insurance of accounts provided by the Federal Deposit Insurance Corporation.
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.
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NORTH GEORGIA COLLEGE AND STATE UNIVERSITY EXHIBIT "D" SELECTED FINANCIAL NOTES JUNE 30, 2005

NOTE 2: DEPOSITS AND INVESTMENTS

DEPOSITS At June 30, 2005, $2,555,051.50 of the University's deposits were uninsured. Of these uninsured deposits, $2,555,051.50 were collateralized with securities held by the financial institution's trust department or agent in the University's name.

INVESTMENTS North Georgia College and State 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 with Board of Regents investment policy. All investments are consistent with donor intent, Board of Regents policy, and applicable Federal and state laws. Under Georgia Code Sections 50-17-59 and 50-17-63, investment of state funds is restricted to direct U. S. government obligations and obligations of selected U. S. government agencies. Private endowment funds and other non-state fund sources are not subject to this restriction.

The North Georgia College and State University's investments at June 30, 2005 are presented below. All investments are presented by investment type.

Investment Type

Fair Value

Debt Securities U.S. Savings Bonds General Obligation Bonds

$ 3,204.30 970,057.60

$ 973,261.90

Other Investments Common Stock Other - GHEAC

557,485.55 9,000.00

Investment Pools Office of Treasury and Fiscal Services Georgia Fund 1

6,661,592.03

Total Investments

$ 8,201,339.48

The Georgia Fund 1 Investment Pool, managed by the Office of Treasury and Fiscal Services, 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 Investment Company Act of 1940. This investment is valued at the pool's share price, $1.00 per share.

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NORTH GEORGIA COLLEGE AND STATE UNIVERSITY EXHIBIT "D" SELECTED FINANCIAL NOTES JUNE 30, 2005

NOTE 2: DEPOSITS AND INVESTMENTS

INVESTMENTS The State Depository Board, which has oversight over the Office of Treasury and Fiscal Services, may permit any department, board, bureau or other agency to invest funds collected directly by such organization in short-term time deposit agreements, provided that the interest income of those funds is remitted to the Director of the Office of Treasury and Fiscal Services as revenues of the State of Georgia. As a matter of general practice, however, demand funds of any department, board, bureau or other agency in excess of current operating expenses, are required to be deposited with the Director of the Office of Treasury and Fiscal Services for the purpose of pooled investment (OCGA 50-17-63).

NOTE 3: ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following at June 30, 2005.

Student Tuition and Fees Auxiliary Enterprises and Other Operating Activities Federal, State and Private Funds Other

$ 246,597.61 152,718.09 63,641.29
1,301,203.53

Less Allowance for Doubtful Accounts

$ 1,764,160.52 25,210.20

Net Accounts Receivable

$ 1!738!950.32

NOTE 4: CAPITAL ASSETS

Following are the changes in the University's capital assets for the year ended June 30, 2005:

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NORTH GEORGIA COLLEGE AND STATE UNIVERSITY EXHIBIT "D" SELECTED FINANCIAL NOTES JUNE 30, 2005

NOTE4: CAPITAL ASSETS

Beginning Balance July 1, 2004

Additions

Reductions

Ending Balance June 30, 2005

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

$ 1,179,845.43 $ 1,808,912.18 $

1,000,856.17

429,162.12

0.00 $ 2,988,757.61 1,430,018.29

Total Capital Assets Not Being Depreciated

$ 2,180,701.60 $ 2,238,074.30 $

0.00 $ 4,418,775.90

Capital Assets, Being Depreciated: Infrastructure Building and Building Improvements Facilities and Other Improvements Equipment Library Collections

$ 2,574,194.00

$ 90,395.00 $ 2,483,799.00

58,404,957.52 $ 6,215,774.57 1,195,732.00 63,425,000.09

3,058,430.00

119,075.00 2,939,355.00

4,266,723.85

141,406.87

65,409.99 4,342,720.73

3,596,890.88

348,693.47

5,244.00 3,940,340.35

Total Assets Being Depreciated

$71,901,196.25 $ 6,705,874.91 $ 1,475,855.99 $77,131,215.17

Less: Accumulated Depreciation:

Infrastructure

$ 2,103,334.06 $ 79,925.29

Buildings and Building Improvements 18,403,975.60 1,396,299.57 $

Facilities and Other Improvements

1,684,493.35

88,225.03

Equipment

3,013,598.31

422,604.62

Library Collections

2,609,870.00

165,622.00

648,165.00 43,645.00 154,897.30 5,244.00

$ 2,183,259.35 19,152,110.17 1,729,073.38 3,281,305.63 2,770,248.00

Total Accumulated Depreciation

$27,815,271.32 $ 2,152,676.51 $ 851,951.30 $29,115,996.53

Total Capital Assets, Being Depreciated,

Net

$ 44,085,924.93 $ 4,553,198.40 $ 623,904.69 $48,015,218.64

Capital Assets, Net

$ 46 266.626.53 $ 6.79] 272 70 $ 623 904 69 $ 52 433 994 54

NOTE 5: DEFERRED REVENUE

Deferred revenue consisted of the following at June 30, 2005.

Prepaid Tuition and Fees Other Deferred Revenue

$ 1,955,539.18 359,813.72

Totals

$ 2,315,352.90

NOTE 6: LONG-TERM LIABILITIES

The University's Long-Term liability activity for the year ended June 30, 2005 was as follows:

Other Liabilities Compensated Absences

Beginning Balance July 1, 2004

Additions

Reductions

Ending Balance June 30, 2005

Current Portion

$ 1 181,472 71 $ 807 OJ I 33 $ 75171973 $ 1236764 31 $ 636 654,11

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NORTH GEORGIA COLLEGE AND STATE UNIVERSITY EXHIBIT "D" SELECTED FINANCIAL NOTES JUNE 30, 2005

NOTE 7: NET ASSETS

Changes in Net Asset activity for the year ended June 30, 2005 are as follows:

Invested in Capital Assets Net of Related Debt
Restricted Net Assets Unrestricted Net Assets
Total Net Assets

Balance July I, 2004

Additions

Reductions

Balance June 30, 2005

$ 46,266,626.53 $ 6,791,272.70 $ 623,904.69 $ 52,433,994.54

4,058,184.07 3,505,106.71 3,547,398.46

4,015,892.32

5,792,311.24 43,444,133.06 43,433,206.12

5,803,238.18

$ 56 111,121.84 $ 53140 51241 $47,604,502.21 $ 62 253 125 04

NOTE 8: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA

Plan Description North Georgia College and State University 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 TRS offices or the Georgia Department of Audits and Accounts.

Funding Policy Employees of North Georgia College and State University who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. North Georgia College and State University 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 2005, the employer contribution rate was 9.24% for covered employees. Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2005 2004 2003

100% 100% 100%

$ 1,244,900.65 $ 1,896,346.17 $ 1,231,911.49

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NORTH GEORGIA COLLEGE AND STATE UNIVERSITY EXHIBIT "D" SELECTED FINANCIAL NOTES JUNE 30, 2005
NOTE 8: RETIREMENT PLANS
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. 4721-1 et. seq. and is 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 four approved vendors (AIG-VALIC, American Century, Fidelity, and TIAA-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.
Funding Policy North Georgia College and State 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. The employer contributes 10.03% of the participating employee's earnable compensation. Employees contribute 5% of their eamable compensation. Amounts attributable to all plan contributions are fully vested and nonforfeitable at all times.
North Georgia College and State University and the covered employees made the required contributions of $653,529.51 (9.65%) and $338,616.32 (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 North Georgia College and State 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 $3,500.00 credited to his/her account, the Board of
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NORTH GEORGIA COLLEGE AND STATE UNIVERSITY EXHIBIT "D" SELECTED FINANCIAL NOTES JUNE 30, 2005
NOTE 8: RETIREMENT PLANS
GEORGIA DEFINED CONTRIBUTION PLAN
Benefits Trustees has the option of requiring a lump sum distribution to the member in lieu of making periodic payments. Upon the death of a member, a lump sum distribution equaling the amount credited to his/her account will be paid to the member's designated beneficiary. Benefit provisions are established by State statute.
Contributions and Vesting Member contributions are seven and one-half percent (7.5%) of gross salary. There are no employer contributions. Contribution rates are established by State statute. Earnings are credited to each member's account in a manner established by the Board 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 2004 amounted to $57,117.96 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.
NOTE 9: 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 which are disallowed under grant terms. The amount of expenditures which may be disallowed by the grantor cannot be determined at this time although North Georgia College and State University expects such amounts, if any, to be immaterial to its overall financial position.
Litigation, claims and assessments filed against North Georgia College and State 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 Comprehensive Annual Financial Report for the fiscal year ended June 30, 2005.
NOTE 10: AFFILIATED ORGANIZATION
North Georgia College and State University Foundation, Inc. is a legally separate, tax exempt organization whose activities primarily support North Georgia College and State University. North Georgia College and State University Foundation, Inc. is considered a potential component unit of the State of Georgia in accordance with GASB Statement No. 39, Determining Whether Certain Organizations are Component Units. Therefore, the financial
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NORTH GEORGIA COLLEGE AND STATE UNIVERSITY EXHIBIT "D" SELECTED FINANCIAL NOTES JUNE 30, 2005
NOTE 10: AFFILIATED ORGANIZATION statements of North Georgia College and State University Foundation, Inc. are not included in these financial statements. Copies of the foundation's financial statements may be obtained from North Georgia College and State University.
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SUPPLEMENTARY INFORMATION - 19 -

NORTH GEORGIA COLLEGE AND STATE UNIVERSITY BALANCE SHEET- (STATUTORY BASIS} "A" RESIDENT INSTRUCTION JUNE 30. 2005
ASSETS
Cash and Cash Equivalents Accounts Receivable
Federal Financial Assistance Other Prepaid Expenditures Inventories
Total Assets
LIABILITIES AND FUND EQUITY
Liabilities: Accrued Payroll Payroll Withholdings Accounts Payable Deferred Revenue Other Liabilities
Total Liabilities
Fund Balances: Reserved Inventories Continuing Education Indirect Cost Recoveries Technology Fees Restricted Funds Uncollectible Accounts Receivable Unreserved Undesignated Surplus Regular
Total Fund Balances
Total Liabilities and Fund Balances

SCHEDULE "1"

$ 2.410.927.07 63.641.29
1,060,786.49 779,819.29 47,351.64
$ 4,362,525.78

$

128,888.35

21.428.86

1,691,115.60

1,908,550.69

229,500.00

$ 3,979.483.50

$

47,113.06

36,439.46

134,889.32

96.421.95

40,009.97

20,923.20

7,245.32

$

383,042.28

$ 4,362,525.78

Statutory Basis financial information was 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.
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NORTH GEORGIA COLLEGE AND STATE UNIVERSITY ANALYSIS OF CHANGES IN FUND BALANCE- (STATUTORY BASIS)
"A" RESIDENT INSTRUCTION YEAR ENDED JUNE 30, 2005

SCHEDULE "2"

FUND BALANCE - JULY 1, 2004 Reserved Surplus
ADDITIONS Adjustments to Prior Year's Expenditures/Payables Excess of Funds Available over Expenditures Schedule "3"
DEDUCTIONS Unreserved Fund Balance (Surplus) Returned to Board of Regents - Administrative Central Office Year Ended June 30, 2004 Adjustments to Prior Year's Revenues/Receivables Mandatory Transfers
FUND BALANCE - JUNE 30, 2005

$

236,547.74

3 781.49

$

240,329.23

$

1,854.50

152,335.98

$

154,190.48

$

3,781.49

-7,364.60

15,060.54

$

11,477.43

$ ===3=8=3=,0=4=2.=28=

Statutory Basis financial information was 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.
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NORTH GEORGIA COLLEGE AND STATE UNIVERSITY SCHEDULE OF REVENUES AND EXPENDITURES COMPARED TO
BUDGET- (STATUTORY BASIS) "A" RESIDENT INSTRUCTION YEAR ENDED JUNE 30. 2005

SCHEDULE "3"

REVENUES State Appropriations Other Revenues Retained
EXPENDITURES Personal Services:
Education, General and Departmental Services Sponsored Operations Operating Expenses: Education, General and Departmental Services Sponsored Operations Capital Outlay Special Funding Initiative
Excess of Revenues over Expenditures

BUDGET

ACTUAL

VARIANCEFAVORABLE (UNFAVORABLE)

$ 19,891,781.00 $ 19,891,781.00 $ 19,926,712.00 16,961,468.58

0.00 -2,965,243.42

$ 39,818,493.00 $ 36,853,249.58 $ -2,965,243.42

$ 25,451,019.00 $ 25,341,783.82 $

705,896.00

668,874.38

6,157,158.00 2,867,810.00 3,913,971.00
722,639.00

6,174,642.73 2,794,357.60
998,971.07 722,284.00

109,235.18 37,021.62
-17,484.73 73,452.40 2,914,999.93
355.00

$ 39,818,493.00 $ 36,700,913.60 $ _ _3'-,1_17-'-,5_7_9_.4_0

$

152,335.98 $ ===1=52:!.,3=3=5=.9=8

Statutory Basis financial information was 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.
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NORTH GEORGIA COLLEGE AND STATE UNIVERSITY RECONCILIATION OF SALARIES AND TRAVEL YEAR ENDED JUNE 30, 2005

SCHEDULE "4"

Totals per Annual Supplement
Accruals June 30, 2005 June 30, 2004
Compensated Absences June 30, 2005 June 30, 2004
Prepaid Salaries June 30, 2005 June 30, 2004
Adjustments Shared Services on Jointly Staffed Personnel Coastal Georgia Community College Chapman, Joe Dalton State College Chapman, Joe South Georgia College Chapman, Joe
Unidentified Variance

SALARIES

TRAVEL

$ 23,038,786.54 $ 404,052.82

147,942.52 -132,272.39

1,148,875.34 -1,097,512.97

-662,826.62 575,423.27

-1,114.73 -557.37 -306.50

928.36

$ 23,016,437.09 $ 404,981.18

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SECTION II FINDINGS AND QUESTIONED COSTS

NORTH GEORGIA COLLEGE AND STATE UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2005
FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported. FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.